Regulatory Control of Providers Financial Relationships

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Regulatory Control of Providers Financial
Relationships

• Civil False Claims
• The Act

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Civil liability may occur when a person or
corporation

• Knowingly presents or causes to be presented a
  false or fraudulent claim for payment to the
  United States.
• Knowingly uses a false record or statement to
  obtain payment on a false or fraudulent claim
  paid by the United States.
• Engages in a conspiracy to defraud the United
  States to obtain allowance for payment of a false
  or fraudulent claim

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What constitutes knowing or knowingly

• Having actual knowledge of the falsity of a claim
• Acting in deliberate ignorance of the truth or
  falsity of the claim.
• Acting in reckless disregard of the truth or
  falsity of the claim.
• Specific intent to defraud is not required.

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Monetary Penalties

• 5,000 to 10,000 civil monetary penalties, per
  claim.
• Treble damages, i.e. three times actual improper
  payments collected by a provider.
• A claim is each HCFA 1500 from submitted, not
  each CPT Code contained on the form.
• Permissive exclusion from Medicare/Medicaid
  programs.

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Statute of Limitations

• Six year of statute of limitations
• Prosecutors often insist on voluntary waiver of
  the statute of limitations by the provider as a
  condition of negotiating settlement of a claim.

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Regulation of Providers Financial Relationships

• Civil False Claims
• Qui Tam or Whistleblower Actions

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General Criteria

• Cases are initiated by a private individual who
  brings the claim against a provider to the
  attention of the federal government.
• The claim or issue must not have been previously
  disclosed to the public.
• The Department of Justice has 60 days to
  investigate or obtain additional.

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Quit Tam Actions -- Continued

• If after investigation, the Department of Justice
  declines to pursue the claim, the individual
  whistleblower may do so.
• The whistleblower may receive from 25 to 30
  percent of any recovery if the government does
  not intervene, 15 to 25 percent if the government
  does intervene.

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Regulation of Providers Financial Relations

• Civil False Claims
• Enforcement Actions

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National Investigations and Initiatives

• The physician at Teaching Hospitals Audit Program
  (PATH)
• DRG Payment Window Recovery Initiative (72 Hour
  Window Project)
• Lab Unbundling Project
• national Discharge/Transfer Claims Recovery
  Program.
• Pneumonia Upcoding

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National Investigations and Initiatives

• The physician at Teaching Hospitals Audit Program
  (PATH)
• DRG Payment Window Recovery Initiative (72 Hour
  Window Project)
• Lab Unbundling Project
• national Discharge/Transfer Claims Recovery
  Program.
• Pneumonia Upcoding

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Regulation of Providers Financial Relations

• Medicare/Medicaid Fraud and Abuse
• The Safe Harbors

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Regulation of Providers Financial Relations

• Medicare/Medicaid Fraud and Abuse
• Civil Money Penalties

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Civil Money Penalties Law

• A civil statute that parallels the antikickback
  statute, but is more expansive.
• It prohibits and imposes civil penalties on
• Various types of improperly filed claims
• Payments for inducing reduction or limitation of
  services
• The criminal conduct also punished as crimes.
• Simple negligence standard of proof rather than
  criminal intent required.

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Civil Monetary Penalties

• Penalties
• Fines up to 50,000
• Repayment of up to three times the amount of
  improper reimbursement paid by the government
• Exclusion from federal health programs
• May be mandatory or permissive, depending on a
  number of factors

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The Stark Law

• Prohibitions Against Physician Self-Referral

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Overview

• Stark I --The statute generally prohibits a
  physician form referring Medicare patients to a
  clinical laboratory in which that physician or a
  member of that physicians immediate family has a
  financial relationship. In addition, the
  clinical laboratory may not file a Medicare claim
  for services rendered at the laboratory.
• Stark II -- Expanded the Stark I referral
  prohibition to include other designated health
  services and broadens the self-referral
  prohibition to Medicaid services.

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Designated Health Services

• Clinical laboratory services
• Occupational therapy services
• Radiation therapy services
• Parenteral and enteral nutrients, equipment and
  supplies
• Prosthetics, orthotics and prosthetics devices

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Designated Health Services -- Continued

• Physician therapy services
• Radiology services
• Durable medical equipment
• Outpatient prescription services
• Home health services
• Inpatient/outpatient hospital services

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Financial Relationship

• An ownership or investment interest in the entity
  to which the referrals may be made -- this
  includes ownership through debt, equity, or
  similar means. Also includes an interest in an
  entity that holds an ownership or investment
  interest in any entity providing the designated
  health service to which a referral may be made.

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Financial Relationship -- Continued

• A compensation arrangement between the physician
  (or immediate family member) and the entity is
  any arrangement involving remuneration between a
  physician (or immediate family member) and an
  entity. Remuneration is defined as anything of
  value, with certain technical exceptions.

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General Exceptions to Both Ownership and
Compensation Arrangement Prohibitions

• Ownership in publicly traded securities and
  mutual funds.
• Ownership interests in hospitals in Puerto Rico
  and in rural areas -- The rural area exception
  requires that substantially all of the services
  be provided to residents of the rural area.

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Exceptions Related to Compensation Arrangements

• Rental of office space and equipment
• Bone fide employment
• Personal services arrangement
• Physician incentive plan

• Physician recruitment
• Group practice arrangements with a hospital
• Physician payments

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Reporting Requirements

• The Stark Law requires providers to disclose the
  names and unique physician identification number
  of physicians who have financial relationships
  with the entity or family member with such
  relationships.
• The reporting requirements may not be implemented
  until HCFA develops and issues a form and
  instruction booklet addressing the reporting
  requirements.
• The form has not been created in the over
  half-decade since the law was enacted.