OFFICE OF INSPECTOR GENERAL WORK PLANOFFICE OF INSPECTOR GENERAL WORK PLAN

FISCAL YEAR 2006FISCAL YEAR 2006MEDICARE HOSPITALSMEDICARE HOSPITALS

GABRIEL L. IMPERATO, Esq.GABRIEL L. IMPERATO, Esq.Broad & CasselBroad & Cassel

Fort Lauderdale, Fl.Fort Lauderdale, Fl.

Medicare Hospitals Medicare Hospitals –– Areas of Areas of Focus for OIG Work Plan 2006Focus for OIG Work Plan 2006Adjustments for Graduate Medical Education PaymentsAdjustments for Graduate Medical Education PaymentsPayments for Observation Services versus Inpatient Admissions foPayments for Observation Services versus Inpatient Admissions for Dialysis Servicesr Dialysis ServicesMedical Education Payments for Dental and Podiatry ResidentsMedical Education Payments for Dental and Podiatry ResidentsNursing and Allied Health Education PaymentsNursing and Allied Health Education PaymentsInpatient Prospective Payment System Wage IndicesInpatient Prospective Payment System Wage IndicesInpatient Rehabilitation Facilities PaymentsInpatient Rehabilitation Facilities PaymentsInpatient Hospital Payments for New TechnologiesInpatient Hospital Payments for New TechnologiesInpatient Psychiatric HospitalsInpatient Psychiatric HospitalsInpatient Rehabilitation Payments Inpatient Rehabilitation Payments –– Late AssessmentsLate AssessmentsLong Term Care Hospital PaymentsLong Term Care Hospital PaymentsCritical Access HospitalsCritical Access HospitalsOrgan Acquisition CostsOrgan Acquisition CostsRebates Paid to HospitalsRebates Paid to HospitalsCoronary Artery Coronary Artery StentsStentsOutpatient Outlier and Other ChargeOutpatient Outlier and Other Charge--Related IssuesRelated IssuesOutpatient Department PaymentsOutpatient Department PaymentsUnbundling of Hospital Outpatient ServicesUnbundling of Hospital Outpatient Services“Inpatient Only” Services Performed in an Outpatient Setting“Inpatient Only” Services Performed in an Outpatient SettingDiagnosisDiagnosis--Related Group CodingRelated Group CodingHospital Reporting of RestraintHospital Reporting of Restraint--Related DeathsRelated Deaths

Medicare Hospitals Medicare Hospitals –– Area of Area of FocusFocus

Added to OIG Work Plan 2006Added to OIG Work Plan 2006Adjustments for Graduate Medical Education PaymentsAdjustments for Graduate Medical Education Payments

Payments for Observation Services versus Inpatient Admissions foPayments for Observation Services versus Inpatient Admissions for r Dialysis ServicesDialysis Services

Inpatient Hospital Payments for New TechnologiesInpatient Hospital Payments for New Technologies

Inpatient Psychiatric HospitalsInpatient Psychiatric Hospitals

Outpatient Department PaymentsOutpatient Department Payments

Unbundling of Hospital Outpatient ServicesUnbundling of Hospital Outpatient Services

“Inpatient Only” Services Performed in an Outpatient Setting“Inpatient Only” Services Performed in an Outpatient Setting

Medicare Hospitals Medicare Hospitals –– Areas of FocusAreas of FocusContinued from OIG Work Plan 2005Continued from OIG Work Plan 2005

Medical Education Payments for Dental and Podiatry ResidentsMedical Education Payments for Dental and Podiatry ResidentsNursing and Allied Health Education PaymentsNursing and Allied Health Education PaymentsInpatient Prospective Payment System Wage IndicesInpatient Prospective Payment System Wage IndicesInpatient Rehabilitation Facilities PaymentsInpatient Rehabilitation Facilities PaymentsLong Term Care Hospital PaymentsLong Term Care Hospital PaymentsCritical Access HospitalsCritical Access HospitalsOrgan Acquisition CostsOrgan Acquisition CostsRebates Paid to HospitalsRebates Paid to HospitalsCoronary Artery Coronary Artery StentsStentsOutpatient Outlier and Other ChargeOutpatient Outlier and Other Charge--Related IssuesRelated IssuesDiagnosisDiagnosis--Related Group CodingRelated Group CodingHospital Reporting of RestraintHospital Reporting of Restraint--Related DeathsRelated Deaths

Deleted From OIG Work Plan 2005 and Not Deleted From OIG Work Plan 2005 and Not Included in OIG Work Plan 2006Included in OIG Work Plan 2006

Quality of Improvement Organization Mediation of Beneficiary ComQuality of Improvement Organization Mediation of Beneficiary Complaintsplaints

Graduate Medical Education Voluntary Supervision in NonGraduate Medical Education Voluntary Supervision in Non--hospital Settingshospital Settings

PostacutePostacute Care TransfersCare Transfers

Inpatient Outlier and Other ChargeInpatient Outlier and Other Charge--Related IssuesRelated Issues

Consecutive Inpatient StaysConsecutive Inpatient Stays

Level of Care in LongLevel of Care in Long--Term Care HospitalsTerm Care Hospitals

Outpatient Cardiac Rehabilitation ServicesOutpatient Cardiac Rehabilitation Services

Lifetime Reserve DaysLifetime Reserve Days

Office of Inspector GeneralOffice of Inspector GeneralOffice of Investigations (“OI”)Office of Investigations (“OI”)

OI Conducts Investigations of Fraud and Misconduct and Health CaOI Conducts Investigations of Fraud and Misconduct and Health Care re FraudFraud

Identifies Systematic Weaknesses in Vulnerable Program Areas andIdentifies Systematic Weaknesses in Vulnerable Program Areas andRecommends Management, Regulatory and Legislative Corrective ActRecommends Management, Regulatory and Legislative Corrective Actionion

Provides Investigative Assistance in Criminal and Civil False ClProvides Investigative Assistance in Criminal and Civil False Claims, aims, Civil Money Penalty and Exclusion CasesCivil Money Penalty and Exclusion Cases

Responds to Thousands of Complaints of Health Care Fraud from Responds to Thousands of Complaints of Health Care Fraud from Various Sources, including “Whistleblowers”Various Sources, including “Whistleblowers”

Provider SelfProvider Self--Disclosure ProgramDisclosure Program

False Claims and AntiFalse Claims and Anti--Kickback ViolationsKickback Violations

Office of Inspector GeneralOffice of Inspector GeneralOffice of Legal Counsel (“OCIG”)Office of Legal Counsel (“OCIG”)

Resolution of Civil False Claims Act cases and negotiation of Resolution of Civil False Claims Act cases and negotiation of Corporate Integrity Agreements (“CIA”)Corporate Integrity Agreements (“CIA”)Providers compliance with Corporate Integrity AgreementsProviders compliance with Corporate Integrity AgreementsIndustry Guidance: Advisory Opinions and Fraud AlertsIndustry Guidance: Advisory Opinions and Fraud AlertsDevelopment of regulations, including safe harbors to the Development of regulations, including safe harbors to the AntiAnti--Kickback StatuteKickback StatuteEnforcement of the Civil Money Penalty and Exclusion Enforcement of the Civil Money Penalty and Exclusion StatutesStatutesEnforcement of the Patient AntiEnforcement of the Patient Anti--Dumping StatuteDumping Statute

OverviewOverview

The AntiThe Anti--Kickback StatuteKickback Statute

The Stark LawThe Stark Law

The False Claims ActThe False Claims Act

Recent Trends in OIG and DOJ EnforcementRecent Trends in OIG and DOJ Enforcement

I. The AntiI. The Anti--Kickback StatuteKickback Statute

42 USC § 1320a42 USC § 1320a--7b(b)(2)7b(b)(2)

It is unlawful to knowingly and willfully offer or pay any It is unlawful to knowingly and willfully offer or pay any remuneration (including any kickback, bribe, or rebate) remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind directly or indirectly, overtly or covertly, in cash or in kind to any person to induce such personto any person to induce such person——(A) to refer an individual to a person for the furnishing or (A) to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal payment may be made in whole or in part under a Federal health car program, orhealth car program, or(B) to purchase, lease, order, or arrange for or recommend (B) to purchase, lease, order, or arrange for or recommend purchasing, leasing, or ordering any good, facility, service, purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part or item for which payment may be made in whole or in part under a Federal health care program.under a Federal health care program.

The AntiThe Anti--Kickback StatuteKickback Statute

What it All Means? What it All Means? –– Prohibits anyone from purposefully Prohibits anyone from purposefully offering, soliciting, or receiving anything of value to offering, soliciting, or receiving anything of value to generate referrals for items or services payable by any generate referrals for items or services payable by any Federal health care program.Federal health care program.

42 States and D.C. have enacted anti42 States and D.C. have enacted anti--kickback statuteskickback statutes

Purpose of the LawPurpose of the Law

Prevent the corruption of medical Prevent the corruption of medical decisiondecision--makingmakingPrevent the over utilization of items or Prevent the over utilization of items or servicesservicesPrevent unfair competitionPrevent unfair competition

ElementsElements

RemunerationRemunerationOffered, Paid, Solicited, or ReceivedOffered, Paid, Solicited, or ReceivedKnowingly & WillfullyKnowingly & WillfullyTo Induce or In Exchange for Federal To Induce or In Exchange for Federal Program ReferralsProgram Referrals

RemunerationRemuneration

Anything of valueAnything of value“In“In--cash or incash or in--kind”kind”Paid directly or indirectlyPaid directly or indirectlyExamples: cash, free goods or services, Examples: cash, free goods or services, discounts, below market rent, relief of financial discounts, below market rent, relief of financial obligationsobligations

Offered, Paid, Solicited, or ReceivedOffered, Paid, Solicited, or Received

Different Perspectives Different Perspectives –– Payors and PayeesPayors and Payees“It Takes Two to Tango”“It Takes Two to Tango”Old Focus: Payors Subject to ProsecutionOld Focus: Payors Subject to ProsecutionNew Focus: Payees (usually doctors)New Focus: Payees (usually doctors)

To Induce Federal Program ReferralsTo Induce Federal Program Referrals

Any Federal health care programAny Federal health care programA nexus between payments and referralsA nexus between payments and referralsCovers any act that is intended to influence and Covers any act that is intended to influence and cause referrals to a Federal health care programcause referrals to a Federal health care programOne purpose testOne purpose test

Knowingly & WillfullyKnowingly & Willfully

The AntiThe Anti--Kickback law requires that the individual Kickback law requires that the individual have a particular “state of mind”, acting with have a particular “state of mind”, acting with knowledge and purpose when committing the knowledge and purpose when committing the offenseoffenseThis “Knowingly & Willfully” requirements has This “Knowingly & Willfully” requirements has been interpreted differently by the various Circuit been interpreted differently by the various Circuit Courts:Courts:•• 99thth Circuit: Must have knowledge of the AntiCircuit: Must have knowledge of the Anti--Kickback Kickback

Statute and have specific intent to violate the statuteStatute and have specific intent to violate the statute•• 88thth Circuit: Mere knowledge that the conduct was Circuit: Mere knowledge that the conduct was

“wrongful” satisfies the “Knowingly & Willfully” standard“wrongful” satisfies the “Knowingly & Willfully” standard•• 1111thth Circuit: Must show that one acted with an intent to Circuit: Must show that one acted with an intent to

“disobey or disregard” the law“disobey or disregard” the law

Fines and PenaltiesFines and Penalties

The Government may elect to proceed:The Government may elect to proceed:

CriminallyCriminally::•• Felony, Imprisonment up to 5 Years & a fine up to $25,000, or boFelony, Imprisonment up to 5 Years & a fine up to $25,000, or bothth•• Mandatory exclusion from participating in Federal health care prMandatory exclusion from participating in Federal health care programsograms•• Brought by the DOJBrought by the DOJ

CivillyCivilly::•• Violation is based on express or implied certification of compliViolation is based on express or implied certification of compliance with ance with

violations of the Antiviolations of the Anti--Kickback and Stark StatutesKickback and Stark Statutes•• Penalties are same as under False Claims Act (more later)Penalties are same as under False Claims Act (more later)•• Controversial, yet expanding use of the FCAControversial, yet expanding use of the FCA

AdministrativelyAdministratively::•• Monetary penalty of $50,000 per violation & assessment of up to Monetary penalty of $50,000 per violation & assessment of up to three times the three times the

remuneration involvedremuneration involved•• Discretionary exclusion from participating in Federal health carDiscretionary exclusion from participating in Federal health care programse programs•• Brought by the OIGBrought by the OIG

Exceptions and Safe HarborsExceptions and Safe Harbors

Many harmless business arrangements may be Many harmless business arrangements may be subject to the Statutesubject to the StatuteApproximately 24 exceptions (“Safe Harbors”) Approximately 24 exceptions (“Safe Harbors”) have been created by the OIGhave been created by the OIGCompliance is voluntaryCompliance is voluntaryMust meet all conditions to qualify for Safe Must meet all conditions to qualify for Safe Harbor protectionHarbor protectionIs substantial compliance enough?Is substantial compliance enough?

Guidance on the AntiGuidance on the Anti--KickbackKickbackStatuteStatute

Advisory Opinions from the OIGAdvisory Opinions from the OIG•• A party may request advice on the law, concerning 1) A party may request advice on the law, concerning 1)

remuneration within the meaning of the law, 2) whether remuneration within the meaning of the law, 2) whether they are meeting one of the law’s exceptions or safe they are meeting one of the law’s exceptions or safe harbors, or whether their arrangement warrants the harbors, or whether their arrangement warrants the imposition of a sanctionimposition of a sanction

•• Recent Advisory Opinions on Recent Advisory Opinions on GainsharingGainsharing ArrangementsArrangements

Fraud Alerts and Special Advisory BulletinsFraud Alerts and Special Advisory BulletinsPreamble to the Safe Harbor RegulationsPreamble to the Safe Harbor RegulationsCompliance Program Guidance’sCompliance Program Guidance’swww.oig.hhs.govwww.oig.hhs.gov

The Stark LawThe Stark Law

Section 1877 of the Social Security Act, 42 Section 1877 of the Social Security Act, 42 U.S.C. 1395nnU.S.C. 1395nnThe law is complicated and consists of the The law is complicated and consists of the original statute (Stark I) and the amended original statute (Stark I) and the amended provisions (Stark II)provisions (Stark II)Most Stark II regulations went into effect Most Stark II regulations went into effect in 2002, but some are still pendingin 2002, but some are still pending

The Stark LawThe Stark Law

A prohibition on physician selfA prohibition on physician self--referralsreferralsIf a physician (or immediate family If a physician (or immediate family member) has a direct or indirect financial member) has a direct or indirect financial relationship (ownership or compensation) relationship (ownership or compensation) with an entity that provides designated with an entity that provides designated health services (“DHS”), the physician health services (“DHS”), the physician cannot refer the patient to the entity for cannot refer the patient to the entity for DHS and the entity cannot submit a claim DHS and the entity cannot submit a claim for the DHS, unless the financial for the DHS, unless the financial relationship fits in an exceptionrelationship fits in an exception

PenaltiesPenalties

Nonpayment of claimsNonpayment of claimsCivil Money Penalties of $15,000 for each Civil Money Penalties of $15,000 for each service rendered plus an assessment of service rendered plus an assessment of three times the amount claimsthree times the amount claimsPenalty of up to $100,000 for Penalty of up to $100,000 for “Circumvention Scheme”“Circumvention Scheme”Don’t forget FCA liabilityDon’t forget FCA liability

Difference Between AntiDifference Between Anti--Kickback Kickback Statute and the Stark LawStatute and the Stark Law

Physician referrals onlyPhysician referrals onlyNo “knowingly and willfully standard” No “knowingly and willfully standard” ––Strict liabilityStrict liabilityInvolves Designated Health Services Involves Designated Health Services (“DHS”)(“DHS”)

Types of Designated Health Care Types of Designated Health Care Services (DHS)Services (DHS)

Clinical laboratoryClinical laboratoryPhysical therapyPhysical therapyOccupational therapyOccupational therapyRadiology and Imaging Services (MRI, CAT Scan, Radiology and Imaging Services (MRI, CAT Scan, Ultrasound)Ultrasound)Radiation therapy & suppliesRadiation therapy & suppliesDurable medical equipment and suppliesDurable medical equipment and suppliesParenteralParenteral and and enteralenteral nutrients, equipment and suppliesnutrients, equipment and suppliesProsthetics, Prosthetics, orthoticsorthotics, and prosthetic devices and , and prosthetic devices and uppliesuppliesHome health servicesHome health servicesOutpatient prescription drugsOutpatient prescription drugsInpatient and outpatient hospital servicesInpatient and outpatient hospital services

What is a Financial RelationshipWhat is a Financial Relationship

Nearly any type of investment or compensation agreement Nearly any type of investment or compensation agreement between the referring physician and the DHS entity will between the referring physician and the DHS entity will qualify as a financial arrangement under the Stark lawqualify as a financial arrangement under the Stark lawExamples:Examples:•• Stock OwnershipStock Ownership•• Partnership InterestPartnership Interest•• Rental ContractRental Contract•• Personal Service ContractPersonal Service Contract•• SalarySalary

Compensation agreements can be direct or indirectCompensation agreements can be direct or indirect•• Exceptions for certain indirect compensation arrangementsExceptions for certain indirect compensation arrangements

ExceptionsExceptions

Compliance is MandatoryCompliance is MandatoryTypes of Exceptions:Types of Exceptions:•• InIn--office ancillary servicesoffice ancillary services•• Personal physician services by member of Group PracticePersonal physician services by member of Group Practice•• PrePre--paid health planpaid health plan•• Certain publicly traded securitiesCertain publicly traded securities•• Rural provider (investment interests)Rural provider (investment interests)•• Hospital ownership (must be in the “whole” hospital)Hospital ownership (must be in the “whole” hospital)•• Rental of office space and equipmentRental of office space and equipment•• Bona fide employmentBona fide employment•• Personal services arrangementPersonal services arrangement•• Physician recruitmentPhysician recruitment•• Fair market value payment by physiciansFair market value payment by physicians

Additional ExceptionsAdditional ExceptionsAdded in January 2004Added in January 2004

Fair Market Value Fair Market Value compensation arrangementscompensation arrangementsAcademic medical center Academic medical center arrangementsarrangementsImplants provided in an ASC Implants provided in an ASC (Implants are DHS, but are (Implants are DHS, but are not included in the bundled not included in the bundled Medicare ASC payment)Medicare ASC payment)EPO and other dialysisEPO and other dialysis--related related drugs furnished in or by an drugs furnished in or by an ESRD facilityESRD facility

Preventing screening tests, Preventing screening tests, immunizations, and vaccinesimmunizations, and vaccinesEyeglasses and contact lenses Eyeglasses and contact lenses following cataract surgeryfollowing cataract surgeryNonNon--monetary compensation monetary compensation up to $300up to $300Medical staff incidental Medical staff incidental benefits provided by a benefits provided by a hospitalhospitalRisk sharing arrangementsRisk sharing arrangementsCompliance trainingCompliance trainingIndirect compensation Indirect compensation arrangementsarrangements

The False Claims ActThe False Claims Act

31 U.S.C. § 3729, the False Claims Act (“FCA31 U.S.C. § 3729, the False Claims Act (“FCA”” sets forth seven sets forth seven bases for liability. The most common ones are:bases for liability. The most common ones are:

1.1. Knowingly presenting, or causing to be presented, to the Knowingly presenting, or causing to be presented, to the government a false or fraudulent claim for paymentgovernment a false or fraudulent claim for payment

2.2. Knowingly making, using, or causing to be made or used, a Knowingly making, using, or causing to be made or used, a false record or statement to get a false or fraudulent claim paifalse record or statement to get a false or fraudulent claim paidd

3.3. Conspiring to defraud the government by getting a false or Conspiring to defraud the government by getting a false or fraudulent claim allowed or paidfraudulent claim allowed or paid

4.4. Knowingly making, using, or causing to be made or used, a Knowingly making, using, or causing to be made or used, a false record or statement to conceal, avoid, or decrease an false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the obligation to pay or transmit money or property to the government.government.

Elements of an FCA OffenseElements of an FCA Offense

The Defendant must:The Defendant must:•• Submit a claim (or cause a claim to be Submit a claim (or cause a claim to be

submitted)submitted)•• To the governmentTo the government•• That is false or fraudulentThat is false or fraudulent•• Knowing of its falsityKnowing of its falsity•• Seeking payment from the Federal treasurySeeking payment from the Federal treasury•• Damages (maybe)Damages (maybe)

Knowing & KnowinglyKnowing & Knowingly

No proof or specific intent to defraud is No proof or specific intent to defraud is requiredrequiredThe government need only show person:The government need only show person:•• Had “actual knowledge of the information”; orHad “actual knowledge of the information”; or•• Person acted in “deliberate ignorance” of the truth or Person acted in “deliberate ignorance” of the truth or

falsity of the information; orfalsity of the information; or•• Person acted in “reckless disregard” of the truth or Person acted in “reckless disregard” of the truth or

falsity of the informationfalsity of the information

PenaltiesPenalties

1)1) Civil penalty of no less than $5,500 and Civil penalty of no less than $5,500 and no more than $11,000 per false claimno more than $11,000 per false claim

2)2) Three times the amount of damages Three times the amount of damages which the government sustainedwhich the government sustained

Investigative GuidelinesInvestigative Guidelines

Were false claims submitted by a provider with Were false claims submitted by a provider with knowledge of their falsity?knowledge of their falsity?•• Was there actual or constructive notice of the rule or Was there actual or constructive notice of the rule or

policy on which a potential case would be based?policy on which a potential case would be based?•• Was the rule or policy clear?Was the rule or policy clear?•• Does the size of the false claim support inference of Does the size of the false claim support inference of

knowledge or inference of mistake?knowledge or inference of mistake?•• What plans did the provider make to adhere to the What plans did the provider make to adhere to the

rules?rules?•• Are there any past remedial efforts?Are there any past remedial efforts?•• Did the provider receive guidance by program agents on Did the provider receive guidance by program agents on

the issue?the issue?•• Have there been previous audits to the provider of same Have there been previous audits to the provider of same

or similar billing errors?or similar billing errors?

Qui Tam Actions & Government Qui Tam Actions & Government InterventionIntervention

A private person (“A private person (“RelatorRelator”) may bring a ”) may bring a False Claims Act action under the False Claims Act action under the qui tamqui tamprovisions of the FCAprovisions of the FCA--The WhistleblowerThe WhistleblowerGovernment may intervene in a suit Government may intervene in a suit brought by brought by RelatorRelatorThe relationship between The relationship between RelatorRelator and and governmentgovernment

FCA StatisticsFCA Statistics

If the government intervenes and obtains recovery, the If the government intervenes and obtains recovery, the RelatorRelator receives between 15% and 25% of the proceedsreceives between 15% and 25% of the proceedsSince 1986, of all of the Since 1986, of all of the qui tamqui tam actions filed, the average actions filed, the average yearly intervention rate has been about 25% yearly intervention rate has been about 25% (approximately 300(approximately 300--400 cases)400 cases)About $1.5 billion of the $1.7 billion in health care FCA About $1.5 billion of the $1.7 billion in health care FCA recoveries in FY ’03 were from whistleblowersrecoveries in FY ’03 were from whistleblowersRecoveries have increased (higher penalties and publicity)Recoveries have increased (higher penalties and publicity)Whistleblower protection is provided to those that take Whistleblower protection is provided to those that take lawful actions in furtherance of the lawful actions in furtherance of the qui tamqui tam suit, including suit, including investigation, initiation, testimony for, or assistance in the investigation, initiation, testimony for, or assistance in the actionaction

Role of the OIG in FCA CasesRole of the OIG in FCA Cases

May assist in the investigationMay assist in the investigationSettles as client agency on behalf of HHSSettles as client agency on behalf of HHSPermissive exclusion authorityPermissive exclusion authorityMay waive exclusion authority in exchange May waive exclusion authority in exchange for Corporate Integrity Agreementfor Corporate Integrity Agreement

-- Monitoring and Annual ReportsMonitoring and Annual Reports-- Successor LiabilitySuccessor Liability

Types of FCA CasesTypes of FCA Cases

Unbundling (billing single service as if one service)Unbundling (billing single service as if one service)Services not renderedServices not renderedBilling for items or services that are not coveredBilling for items or services that are not coveredUpcodingUpcodingDuplicate billingDuplicate billingSubmitting false or inflated cost reportsSubmitting false or inflated cost reportsQuality of Care (“standard of care claims” or “worthless Quality of Care (“standard of care claims” or “worthless claims”)claims”)Research Grand and Clinical Trial fraudResearch Grand and Clinical Trial fraudActions under the Food, Drug & Cosmetic ActActions under the Food, Drug & Cosmetic Act•• Misbranding & adulteration of drugs and promotion of off label Misbranding & adulteration of drugs and promotion of off label

useuseFalse Claims Act cases based on violations of the Stark Law False Claims Act cases based on violations of the Stark Law and/or the Antiand/or the Anti--Kickback Statute (“Tainted Claims”)Kickback Statute (“Tainted Claims”)

Trends in Government EnforcementTrends in Government Enforcement

Health care fraud enforcement continues as a Health care fraud enforcement continues as a priority and includes anything whistleblowers priority and includes anything whistleblowers may targetmay targetMedicare Reform Act Medicare Reform Act –– Expansion of prescription Expansion of prescription drug benefit drug benefit –– new fraud opportunitiesnew fraud opportunitiesCorporate liability and complianceCorporate liability and complianceQuality of CareQuality of CareStark Law and AntiStark Law and Anti--kickback violationskickback violations

Hot TopicsHot Topics

Physician recruitmentPhysician recruitmentMedical directorshipsMedical directorshipsJoint venturesJoint venturesPharmaPharma and medical device marketingand medical device marketingClinical researchClinical researchQuality of CareQuality of Care

Corporate Liability, Compliance and Corporate Liability, Compliance and GovernanceGovernance

HIPPA ’96 and corporate scandalsHIPPA ’96 and corporate scandalsThe new era of corporate responsibilityThe new era of corporate responsibilitySarbanesSarbanes--Oxley Act of 2002Oxley Act of 2002United States Sentencing Guideline Amendments United States Sentencing Guideline Amendments of 2004of 2004Department of Justice principles of Federal Department of Justice principles of Federal prosecution of business organizationsprosecution of business organizations

SarbanesSarbanes--Oxley and the Sentinel Effect Oxley and the Sentinel Effect on Health Care Organizationson Health Care Organizations

Public CompaniesPublic Companies –– Governance and integrity Governance and integrity of reporting financial informationof reporting financial informationPrivate CompaniesPrivate Companies –– Fiduciary obligations and Fiduciary obligations and shareholder derivative liabilityshareholder derivative liabilityNotNot--forfor--Profit OrganizationsProfit Organizations –– Fiduciary Fiduciary obligations and Attorney General oversightobligations and Attorney General oversightCaremark DecisionCaremark Decision

Sentencing Guideline Amendments Raise Sentencing Guideline Amendments Raise the Stakes for Business Organizationsthe Stakes for Business Organizations

Codification of principles of Caremark DecisionCodification of principles of Caremark DecisionOversight and responsibility of the Board of Directors and Oversight and responsibility of the Board of Directors and high level personnel of the organizationhigh level personnel of the organizationBoard knowledge about the content and operation of the Board knowledge about the content and operation of the compliance program to prevent and detect violations of the compliance program to prevent and detect violations of the lawlawBoard exercises reasonable oversight with respect to Board exercises reasonable oversight with respect to implementation and effectiveness of the compliance implementation and effectiveness of the compliance programprogramRisk assessment as an essential component of design Risk assessment as an essential component of design implementation of an effective compliance programimplementation of an effective compliance programAssessment of likely compliance risks given an Assessment of likely compliance risks given an organization’s business activitiesorganization’s business activities

United States Sentencing Guideline Amendments and United States Sentencing Guideline Amendments and Department of Justice Principles of Federal Prosecution of Department of Justice Principles of Federal Prosecution of

Business OrganizationsBusiness Organizations

“Cooperation” or “Unconditional Surrender”“Cooperation” or “Unconditional Surrender”

Voluntary disclosure and selfVoluntary disclosure and self--reporting as quasi mandatory reporting as quasi mandatory function of cooperationfunction of cooperationCooperation in investigating business organizations own Cooperation in investigating business organizations own wrongdoingwrongdoingEffects charging decision against business organizationEffects charging decision against business organizationEffects scope of liability for business organizationEffects scope of liability for business organizationEffects sentence under Sentencing GuidelinesEffects sentence under Sentencing GuidelinesBusiness organization’s cannot run the risk of failing to Business organization’s cannot run the risk of failing to have an effective compliance and governance programhave an effective compliance and governance programFailure to detect and prevent wrongful conduct will result in Failure to detect and prevent wrongful conduct will result in consequences for any business organization in current consequences for any business organization in current compliance environmentcompliance environment

The EndThe End