Transcript Electronic Health Record Incentive Programs

Medicare Appeals, OIG Issues,
Fraud & Abuse Developments
HFMA Western Michigan
Annual Reimbursement Update
September 24, 2014
Neal A. Cooper, JD, CPA, CHC
Seyburn Kahn
Medicare Appeals, OIG Issues, Fraud &
Abuse Developments
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Roadmap
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Medicare Appeals
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OIG Issues
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Administrative developments
Recent court decisions on Medicare appeal issues
Resources
Reports
Advisory Opinions
Fraud & Abuse Developments
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Intro
Recent cases and settlements
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Medicare Appeals
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PRRB Website redesign
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PRRB now publishes final jurisdictional
decisions
www.cms.gov/Regulations-andGuidance/Review-Boards/PRRBReview/List-ofPRRB-Jurisdictional-Decisions.html
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Medicare Appeals
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April 1, 2014: Allina Health Svs. v. Sebelius
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DC Circuit Court found in favor of hospitals
Part C days should be counted in Medicare
fraction for DSH
Prior to 2003 HHS included Part C days in the
Medicaid fraction
Proposed Rule in May 2003 "to eliminate
confusion": Part C days should be included in the
Medicaid fraction
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Medicare Appeals
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April 1, 2014: Allina Health Svs., cont'd
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But in a 2004 final regulation: Part C days should
be included in the Medicare fraction
Hospitals challenged rulemaking procedure
 not
a logical outgrowth of the Proposed Rule
 did not acknowledge/justify Secretary's change in policy
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No merit to Secretary's claim of harmless error
Should have remanded to HHS to recalculate
after finding that rulemaking was invalid
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Medicare Appeals
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January 2014: Federal court in Nebraska upheld a
ZPIC's overpayment extrapolation
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Chiropractic provider appealed ZPIC's extrapolation of
$126,041.31 from actual overpayment finding of
$11,376.13
At ALJ hearing, 2 statistical experts opined that WPS'
statistical sampling method, extrapolation, results were
unreliable, and sample size (445 out of universe of 5,098
services) was too small
MAC reviewed ALJ's decision and concluded sampling
methodology and extrapolation were acceptable
"Substantial deference" to manual instructions
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Medicare Appeals
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ZPIC overpayment extrapolation, cont'd
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District Court found for HHS, noting:
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PIM allows smaller statistical samples, less-precise results
contractors assess overpayments at lower level of confidence
ALJ's decision was "thorough and well-reasoned"
substantial evidence that provider failed prove that sampling
methodology and extrapolation were invalid
provider had not presented evidence of a different random sample
that would have yielded a lower rate of denials
provider had not established the validity of all or a sufficient
number of actual claims to prove projection "factually impossible
of correctness"
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Medicare Appeals
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Topics for recent PRRB Decisions
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FTE Counts and IME/GME calculation
DSH (where do the days go, what days count –
state plans, SSI, observation bed days)
Bad debts (crossovers, moratorium, reasonable
collection effort, presumption of
noncollectability, timing of write-off, etc.)
MDH/SCH/rural eligibility and calculation
RHQDAPU 2% penalties from market basket
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Medicare Appeals
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Topics for recent PRRB Decisions, cont’d
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Hospital wage index (regulatory challenges,
reclassifications, MSA-wide calculations, closed
hospitals’ data, pension costs, etc.)
Therapy caps
Capital cost HSR vs. FR
SNF limits and RCL
ESRD composite rate exceptions
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Medicare Appeals
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Topics for recent PRRB Decisions, cont’d
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Outlier calculations
Low-volume adjustments
Nursing and allied health programs
IRF blended rate vs. 100% PPS
Jurisdiction
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Medicare Appeals
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Recent PRRB Decisions of Note
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2013-D12: Battle Creek HWI Group Appeal
 CMS
improperly included Trillium Hospital’s wage
data in calculating HWI for MSA
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2013-D21: UMHC DSH Appeal re MI GA Days
 General
assistance days are not eligible under state plan,
and thus are excluded from Medicaid ratio
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OIG Issues
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OIG has resources
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OIG news
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OIG guidance
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http://oig.hhs.gov/fraud/enforcement/criminal/index.asp
http://oig.hhs.gov/compliance/compliance-guidance/index.asp
OIG Advisory Opinions
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http://oig.hhs.gov/compliance/advisory-opinions/index.asp
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OIG Issues
Medicare Part D Drugs
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Manufacturers have Antikickback Statute exposure for
coupons
Pharmacy False Claims Act
exposure??
September 2014 OIG report
and SAB
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OIG Issues
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Polysomnography Report
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2011 Medicare claims data
Medicare inappropriately
paid approximately $17
million for claims
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inappropriate diagnosis code
(85% hospital OPD)
duplicative
invalid NPI.
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OIG Issues
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OIG Advisory Opinions
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AO 14-07: "Preferred hospital" network in "Medigap"
plan design – discount on patient deductibles up to 100%
+ premium credit (favorable)
AO 14-06: Specialty pharmacy fee for support services
furnished by local retail pharmacies (unfavorable)
AO 14-05: Pharmaceutical manufacturer's direct-topatient product sales program – fixed price for name
brand outside insurance (favorable)
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OIG Issues
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OIG Advisory Opinions
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AO 14-04: "Preferred hospital" network in "Medigap"
plan design – waiver of patient deductibles up to 100% +
premium credit (favorable)
AO 14-03: Laboratory arrangement with EHR vendor for
practices to pay new per-order fee for non-par
(unfavorable)
AO 14-02: "Preferred hospital" network in "Medigap"
plan design – discount on patient deductibles up to 100%
+ premium credit (favorable)
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OIG Issues
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OIG Advisory Opinions
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AO 14-01: Placement agency fee for referring new
residents to senior (but non-Medicare) communities
(favorable)
AO 13-19: Patient assistance for premium assistance and
medical expenses from NFP foundation based on need
(favorable)
AO 13-18: Ambulance supplier response to RFP to
furnish services below fair market value in exchange for
exclusive insured services arrangement (unfavorable)
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OIG Issues
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OIG Advisory Opinions
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AO 13-17: Tax revenues used to cover out-of-pocket
amounts for county-operated emergency ambulance
services received by non-residents (favorable)
AO 13-16: Health insurer to pay Part B premium costs for
individuals with ESRD enrolled in plan offered by the
insurer and receiving dialysis services (favorable)
AO 13-15: Anesthesia services provider BUA with a
psychiatry practice group for ECT services at hospital
(unfavorable)
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OIG Issues
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OIG Advisory Opinions
 AO 13-14: County to forgo residents' fees for
emergency ambulance services (local FD and a
volunteer rescue company) offset by tax revenues
(favorable)
 AO 13-13: NFP organization to bill Medicaid for
dental services provided to its patients, with free
dental services to uninsured and underinsured
financially needy children (favorable)
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Other Than OIG Issues
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CMS Advisory Opinions
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AO 2013-03: Physician-owned hospital's proposal to
increase observation beds would comply with Stark
"whole hospital" exception (favorable)
AO 2013-02: Clinical lab's provision of surgical, lowvalue, disposable biopsy device is remuneration
(unfavorable)
AO 2013-01: Clinical lab's provision of non-surgical,
low-value, disposable specimen collection supply is not
remuneration (favorable)
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Fraud and Abuse Developments
"That's where the money is." –Willie Sutton
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Fraud and Abuse Developments
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Key federal laws applicable to healthcare
fraud
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Stark Law: the prohibition against self-referrals
Anti-kickback Statute: the prohibition against inducements to refer
False Claims Act: the prohibition against false claims to the federal
government for payment
Anti-Inducement: the prohibition against gifts to induce beneficiaries
to consume items or services payable under Medicare/Medicaid
HIPAA Violation Penalties: penalties for breach of unsecured
individually-identifiable health information
State Analogs
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Fraud and Abuse Developments
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False Claims Act is the HAMMER
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Overpayments become per se violations of FCA 60 days
after discovery unless repaid
Violation of Anti-kickback Statute may be FCA violation
Violation of Stark Law may be per se violations of FCA
Penalties of all these laws are cumulative
Additional exposure is also cumulative, such as:
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Tax evasion,
Wire fraud,
Mail fraud, etc.
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Fraud and Abuse Developments
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Special Mention: Medicare anti-markup rule
Effective January 1, 2009, Medicare limited payment to a
physician or other billing supplier for certain diagnostic
tests to the lowest of:
 Performing supplier's "net charge" to billing supplier;
 Billing supplier's actual charge; or
 Fee schedule amount
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Fraud and Abuse Developments
"Do Not Gossip!"
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Fraud and Abuse Developments
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Penalties associated with noncompliance and
recent examples
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Stark Example:
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US ex rel. Drakeford v. Tuomey Healthcare System
Judgment in October 2013 for $237,454,195
Physician compensation in excess of fair market value
Prosecuted under Stark, but penalties calculated under
FCA only (excluded additional $39M from Stark)
Unusual: litigated, where most are settled
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Fraud and Abuse Developments
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Penalties associated with noncompliance and
recent examples
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Anti-kickback Statute Example:
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Johnson & Johnson settlement November 2013
$2.2 billion relating to Risperdal, Invega and Natrecor
Allegations of kickbacks, among other things
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Fraud and Abuse Developments
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Penalties associated with noncompliance and
recent examples
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HIPAA Example
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Affinity Health Plan settlement, August 2013
Used copier transferred to CBS contained PHI
Paid $1,215,780 (involved up to 345,000 individuals)
No, really, that CBS
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Fraud and Abuse Developments
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Other HIPAA settlements involve
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Compromised IT system security
Loss/theft of unencrypted thumb drives
Loss/theft of unencrypted hard drives
Boxes of medical records left on a driveway
Use of publicly-available internet calendaring
www.hhs.gov/ocr/privacy/hipaa/enforcement/examples/index.html
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Fraud and Abuse Developments
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Second Round of HIPAA Audits
 February 24, 2014, OCR announced a survey of
800 covered entities and 400 business associates
 first step toward selecting organizations to be
audited
 will verify entities suitable for HIPAA audit by
asking:
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"Is the organization still in business?"
"Is the organization the healthcare entity indicated by
the database?"
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Fraud and Abuse Developments
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Penalties associated with noncompliance and
recent examples
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Look at the OIG and CMS websites
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https://oig.hhs.gov/fraud/enforcement/index.asp
www.cms.gov/Medicare/Fraud-andAbuse/PhysicianSelfReferral/Self-ReferralDisclosure-Protocol-Settlements.html
Many examples are self-disclosed
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OIG and CMS both have self-disclosure protocols
Self-disclosure is not only wise, it is necessary
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Fraud and Abuse Developments
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January 2014: RehabCare to pay $30 million to
resolve FCA claims
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Alleged kickback scheme for nursing home referrals.
5-year arrangement connected to business acquisition to
pay for contracts to provide therapy to patients in 60
nursing homes
"Subcontract Agreement" had RehabCare pay seller
$600,000 plus 10% to 15% of the profit from ongoing
therapy services performed under contracts
Goodwill extraction
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Fraud and Abuse Developments
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US ex rel. Fair Laboratory Practices Assoc. v. Quest
Diagnostics Inc., October 25 2014
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Alleged Anti-kickback Statute violation by charging
managed care organizations and IPAs prices below cost to
induce referral of Medicare and Medicaid business
Second Circuit affirmed dismissal of complaint and
disqualification of relator, partners, and outside counsel
Action relied on privileged information disclosed by
former general counsel to relator
Disclosure violated obligation to maintain confidences
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Fraud and Abuse Developments
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Nov. 13, 2013: $85M settlement of US ex rel. Baklid-Kunz v.
Halifax Hospital Medical Center and Halifax Staffing, Inc.
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Federal Court in FL ruled that hospital bonus pool for employed
oncologists took into account volume or value of referrals under the
Stark law (brought under FCA)
Bonus pool was 15% of hospital's oncology program's operating
margin, including fees for DHS not personally performed by the
physicians (e.g., administration of chemotherapy)
Hospital disbursed pool in proportion to physicians' personally
performed services.
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Fraud and Abuse Developments
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March 13, 2014: $8.5M Settlement with DOJ
and Memorial Hospital (Fremont, OH)
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Alleged violations of FCA, Anti-Kickback
Statute, and Stark
Self-disclosed financial relationships with
referring physicians
 Joint
venture with pain management physician
 Arrangement with ophthalmologist for resale to
Memorial of intraocular lenses at increased price
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Questions?
Medicare Appeals, OIG Issues,
Fraud & Abuse Developments
HFMA Western Michigan
Annual Reimbursement Update
September 24, 2014
Neal A. Cooper, JD, CPA, CHC
[email protected]; 248-353-7620