Transcript 2011 FRAUD & ABUSE UPDATE

2011 FRAUD & ABUSE UPDATE
John Hellow
Hooper, Lundy & Bookman, PC
310-551-8155
[email protected]
All views expressed in the seminar materials and in the speakers’
presentation are personal views and do not represent the formal positions
of Hooper, Lundy & Bookman, Inc. or any of its clients. The speakers
expressly reserve the right to freely advocate other positions in
other forums.
Patient Protection and
Affordable Care Act (“PPACA”)
 Public focus on PPACA
insurance reforms, most of them
not effective until 2014
 But PPACA once again
increased fraud and abuse
protections and expanded selfreporting requirements, with
many effective NOW
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PPACA
Fraud & Abuse Provisions
 New 60-day deadline for reporting and
refunding of overpayments
 Revised False Claim Act (FCA) public
disclosure bar
 Clarified knowledge requirement for
health care fraud crimes, including AntiKickback Statute (AKS) violations
 New Stark Law provisions regarding
physician-owned hospitals and voluntary
disclosure protocol
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PPACA
Fraud & Abuse Provisions
 New Civil Monetary Penalties
(CMPs) for various health care law
violations
 New DHHS authority to
temporarily withhold payments to
providers under investigation for
fraud
 New mandatory Medicare &
Medicaid provider exclusion
requirements
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2010 Overpayment
Reporting & Refunding
 Effective March 23, 2010, all
Medicare and Medicaid
overpayments must be reported and
refunded to the applicable payor
within the later of:
• "60 days after the date on which
the overpayment was identified;"
or
• "the date any corresponding cost
report is due."
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2010 Overpayment
Reporting & Refunding
 “Overpayments" are defined as
"any funds that a person receives
or retains under [Medicare] or
[Medicaid] to which the person,
after applicable reconciliation, is
not entitled;”
 An overpayment “retained by a
person after the deadline for
reporting and returning the
overpayment" is also an
"obligation" for purposes of the
federal False Claims Act (FCA).
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From Overpayment
To False Claim
 In 2009, the FCA was revised to impose
civil liability on any person who
“knowingly conceals or knowingly and
improperly avoids or decreases an
obligation to pay or transmit money or
property to the Government;”
 Other FCA revisions defined an
“obligation” as including “retention of an
overpayment” and no longer required any
claim or statement about such obligation to
be submitted to government as an essential
element of a reverse false claim
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2010 Overpayments:
FAQs and Some Answers
 When is an overpayment “identified?” for
purposes of the 60-day clock?
 Does the 60-day rule require an identified
overpayment to be reported if its amount is
still unknown?
 Must any overpayment arising before
March 23, 2010 and identified on or after
March 23, 2010 be reported and refunded
within 60 days?
 How does the 60-day rule apply to interim
payments subject to the cost report
reconciliation process?
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2010 FCA Changes
The PPACA revises the FCA’s “public
disclosure/original source” bar to:
 Limit public disclosure sources to a
federal hearing, administrative report,
audit, or investigation (while retaining
a congressional and Government
Accounting Office report, hearing,
audit, or investigation, and the news
media as public disclosure sources)
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2010 FCA Changes
 Require an “original source” to have
"knowledge that is independent of and
materially adds to the publicly
disclosed allegations“
 Even if “public disclosure/original
source” bar applies, the district court
may not dismiss the action without the
government’s consent
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2010 AKS Changes
 In order to obtain an AKS conviction, the
government must prove that a person
“knowingly and willfully” violated the statute
 The PPACA clarifies that this intent standard
does not require a person to have actual
knowledge that his conduct violates the AKS
or have a specific intent to violate the AKS
 The PPACA also provides that any claim
“resulting from” an AKS violation is a false
claim within the meaning of the FCA
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2010 Stark Changes
 Effective December 31, 2010, the Stark Law
exception permitting some physician-owned
hospitals will be eliminated, no such new
hospitals will be allowed, and existing physicianowned hospitals will be prohibited from
expanding many aspects of the facility including
beds, procedure rooms, and operating rooms, or
increasing the percentage of physician ownership
 DHHS must develop self-disclosure protocols
for Stark violations by no later than September
2010
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2010 Withholding of Payment
 DHHS is now authorized to
withhold payments to a
provider where there is a
“credible allegation” of fraud
 DHHS must promulgate
regulations defining when there
is a “credible allegation of
fraud” for the purpose of a
withhold
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2010 New
Civil Monetary Penalties
 $50,000 + treble damages for knowingly
making false statements, omission,
misrepresentation of a material fact in any
federal healthcare program application, bid, or
contract
 $50,000 for each false record or statement
used for payment from federal healthcare
program (FCA-type provision)
 $15,000 per day for failure to grant timely
access, upon reasonable request, to OIG for
audits, investigations, evaluations, etc.
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2010 Mandatory Exclusions
A state must terminate a provider from its
Medicaid program if:
 The provider is terminated by Medicare or a
Medicaid program in another state; or
 The provider owns, controls, or manages a
provider:
• That has delinquent unpaid overpayments;
• Is suspended, excluded, or terminated from
participation; or
• Is affiliated with a suspended, excluded,
or terminated individual or entity
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2010 Permissive Exclusions
DHHS may now exclude a hospital
from participation in federal healthcare
programs if:
 The hospital knowingly makes a false
statement, omission, or misrepresentation
of material fact in any application,
agreement, bid, or contract to participate
or enroll in a federal healthcare program
 The hospital intentionally obstructs a
Medicare/Medicaid program audit or
investigation
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2010 Mandatory
Compliance Plans
 DHHS can now require
designated providers to have
compliance programs in
place as a condition of
program participation.
 Plan requirement will almost
certainly be applied to
hospitals
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Questions?
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