Transcript www.njpca.org

Region II Annual Primary
Health Care Conference
CORPORATE COMPLIANCE
HOT TOPICS 2010
Presented by:
Jacqueline C. Leifer, Esq.
Senior Partner
Feldesman Tucker Leifer Fidell LLP
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Copyright © 2010 Feldesman Tucker Leifer Fidell LLP
HOT TOPICS IN 2010
Billing
 Federal Procurements
 Federal Property
 Patient Inducements
 Executive Compensation
 FTCA
 Section 330
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Copyright © 2010 Feldesman Tucker Leifer Fidell LLP
Billing Risks
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Improper billing may include:
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Service does not constitute a “visit” for Medicare or Medicaid
purposes
Billing under the name of a provider who did not furnish the
services
Failure to bill other responsible third parties
Medical record not signed by physician or correctly dated
No documentation of service or required supervision
Service provided by unlicensed provider (or provider licensed in
a different jurisdiction)
Service site not separately enrolled in Medicare
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Copyright © 2010 Feldesman Tucker Leifer Fidell LLP
Billing Risks
Employing or contracting with suspended or
excluded providers
CHECK:
http://www.oig.hhs.gov/fraud/exclusions.html
http://www.gsa.gov
http://www.npdb-hipdb.com
 Failure to perform sufficient background and
reference checks on all employees
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False Claims Act (FCA)
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Liability arises when a provider
 ‘‘knowingly
makes, uses, or causes to be made or
used, a false record or statement material to an
obligation to pay or transmit money or property to the
Government, or knowingly conceals or knowingly and
improperly avoids or decreases an obligation to pay
or transmit money or property to the Government”
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31 U.S.C. § 3729(G)
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Federal Civil False Claims Act
31 U.S.C. §§ 3729-3733
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Knowingly =
 Actual
awareness of falsity
 Deliberate ignorance of the truth or falsity
 Reckless disregard of truth of falsity
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Not a billing error or honest mistake
© 2010 Feldesman Tucker Leifer Fidell LLP
Copyright © 2010 Feldesman Tucker Leifer Fidell LLP
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Federal Civil False Claims Act
31 U.S.C. §§ 3729-3733
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Who can initiate a FCA law suit?
 Attorney General
 Qui tam relator:
may bring an action
Private person can bring an action in name of
government
 Must be the original source of the information
(not something you read in the news)
 Government decides whether to intervene
 The relator gets a portion of the recovery
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© 2010 Feldesman Tucker Leifer Fidell LLP
Copyright © 2010 Feldesman Tucker Leifer Fidell LLP
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Procurement Standards
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Procurement
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The acquisition by purchase, lease, or barter of property or
services for the direct benefit of the grantee
Procurement Standards
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Circular A-110 and Circular A-122
2 C.F.R. Parts 215 and 230
45 C.F.R. Part 74 (incorporating OMB Circular A-110 and A-122)
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Applies to all contracts executed by nonprofit health centers
that are paid for in whole or in part by Federal funds
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Copyright © 2010 Feldesman Tucker Leifer Fidell LLP
Procurement Standards
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Written standards of conduct
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Including conflict of interest provisions
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Definition and management of conflicts of interest
(i.e., disclosure and recusal)
Prohibition against soliciting/accepting gratuities, favors or anything
of monetary value from parties to agreements
Specific disciplinary actions for violation of the standards
Open and free competition (to maximum extent possible)
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Be alert to noncompetitive practices that restrict competition
Contractors that develop or draft grant applications, contract
specifications or RFPs must be excluded from competition
Review for bid or offer that is responsive to solicitation and most
advantageous to health center
Health center should reserve right to reject any and all bids
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Copyright © 2010 Feldesman Tucker Leifer Fidell LLP
Procurement Standards
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Written procurement procedures
 Avoid
purchasing unnecessary items
 Analyze lease versus purchase options
 Address the information to be provided in solicitations
issued by the grantee and in the responses
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Contract administration system that ensures
contractor compliance and includes monitoring
and oversight of contractor performance and
appropriate contract dispute provisions
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Procurement Contracts
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Contract provisions required in all Federally-funded
contracts
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Contractor’s recordkeeping and reporting responsibilities
consistent with the health center’s grant obligations
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Define necessary records the contractor will be required to keep
and how long records should be retained
Define reports necessary for oversight and monitoring
Notice and prior approval of the grantee if material change in
scope of work / budget
Contractor’s compliance with certain Federal laws
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Anti-discrimination
Federal government’s right to patents or inventions
Davis-Bacon Act, if required by authorizing statute
Copeland Anti-kickback Act, for construction contracts over $2,000
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Federal Procurements
Additional contract provisions required in contracts in excess of $100,000
(simplified acquisition threshold fixed at 41 USC 403(11) (currently $100,000)
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Maintenance of procurement records, including cost and price analysis and
justification for contractor and award selection
Access to records by the grantee, DHHS and Comptroller General
Remedial actions available to the grantee in event of contractor violation/breach of
contract
Circumstances justifying termination of contract by the grantee, including the manner
of termination and the basis for settlement
Contractor’s compliance with certain Federal laws
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Clean Air Act and Federal Water Pollution Control Act
Byrd Anti-Lobbying Amendment
Contract Work Hours and Safety Standards Act, for construction contracts
Other Requirements
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Debarment and Suspension
Minimum bonding guarantee standards, for construction contracts
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Copyright © 2010 Feldesman Tucker Leifer Fidell LLP
Federal Procurements
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Compliance with procurement standards
does not:
 Make
the Federal government a party to the
contract
 Affect the health center’s overall responsibility
for the federally sponsored project or its
accountability to the government for Federal
funds
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Copyright © 2010 Feldesman Tucker Leifer Fidell LLP
Federal Property
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Property / equipment acquired (or improved), in whole
or in part, with Federal grant funds may not be
encumbered, put to a different use or disposed of
without BPHC approval
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Definition of Equipment / Real Property
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Equipment = tangible, nonexpendable personal property
having a life greater than one year and costing more than
$5,000 per unit
Real Property = land, improvements and structures – not
movable machinery or equipment
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Copyright © 2010 Feldesman Tucker Leifer Fidell LLP
Federal Property
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Title to Equipment / Real Property
 Vests
in health center grantee subject to health
center’s continued use of equipment/real property for
authorized purpose
 Health center should obtain insurance as if it wholly
owns the equipment or property
 Health center must file notice regarding Federal
reversionary interest in real property acquired with
grant funds in local real estate / deeds office
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Federal Property
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Use and Disposition of Real Property / Equipment
 Real property
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must obtain BPHC approval to use in another federally sponsored
project
must obtain disposition instructions from BPHC if health center no
longer needs property or wants to transfer or dispose of it
Equipment
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must continue to use for federally sponsored project as long as it
is needed; however, if no longer needed, may use in another
federally sponsored project or retain title for other uses without
BPHC approval
must obtain disposition instructions from BPHC if it no longer
needs equipment for any use
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Copyright © 2010 Feldesman Tucker Leifer Fidell LLP
Federal Property
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Physical inventory of equipment (and reconciliation with equipment
records) must be taken at least once every two years
Adequate control system to insure adequate safeguards to prevent
loss, damage or theft must be maintained
Adequate maintenance procedures to keep in good condition must
be implemented
Equipment records must be maintained accurately and include:
Description of equipment, with manufacturer’s serial number or other
number
 Source of equipment, including award number
 Whether title vests in the recipient or Federal Government
 Acquisition date and information from which one can calculate
ownership share of Federal government
 Location and condition of equipment
 Unit acquisition cost and ultimate disposition data
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Copyright © 2010 Feldesman Tucker Leifer Fidell LLP
Patient Inducements
Beneficiary Inducement Prohibition
 Prohibits
the offering or transferring of remuneration
and/or inducements to Medicare, Medicaid and CHIP
beneficiaries which are likely to influence the
beneficiaries to choose goods or services from a
particular supplier or provider that is paid for in whole
or in part by such programs
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Remuneration includes waivers or reductions of coinsurance
and deductible amounts as well as items or services for free
or for other than fair market value
 Applies
to claims for services rendered as a result of
an improper inducement
 Includes a few limited exceptions
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Copyright © 2010 Feldesman Tucker Leifer Fidell LLP
Patient Inducements
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Beneficiary Inducements Statutory Exceptions:
 Non-routine,
unadvertised waivers of cost-sharing amounts based on
individualized determinations of financial need or exhaustion of
reasonable collection efforts
 Properly disclosed differentials in a health plan’s copayments or
deductibles
 Waiver by health centers of coinsurance and deductible amounts for
patients who qualify for the center’s sliding fee scale (individuals or
families with annual incomes at or below 200% of FPG)
 Incentives to promote the delivery of preventive care, defined as:
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Items or services covered by Medicare or Medicaid and are either pre-natal /
post-natal well-baby services
Services described in the Guide to Clinical Preventive Services (published
by the US Preventive Services Task Force
 Waivers
of copayment amounts that exceed the minimum copayment
amount under the Medicare hospital outpatient fee schedule
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Copyright © 2010 Feldesman Tucker Leifer Fidell LLP
Patient Inducements
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Health Reform Law Adds Three New Statutory Exceptions to
Beneficiary Inducement Prohibition, effective March 23, 2010
without regulations by OIG:
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Remuneration that promotes access to care and poses a low risk of
harm to patients and Federal health care programs
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Offer or transfer of items or services for free or less than fair market
value by a person if
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Items or services consist of coupons, rebates, or other rewards from a
retailer;
Items or services are offered or transferred equally to the general public,
regardless of health insurance status; and
Offer or transfer not tied to the provision of other items or services
reimbursed under Medicare or Medicaid
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Copyright © 2010 Feldesman Tucker Leifer Fidell LLP
Patient Inducements
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Health Reform Law Adds New Exceptions (cont.)
Offer or transfer of items or services for free or less than fair market
value by a person if
Items or services are not offered as part of any advertisement or
solicitation;
 Items or services are not tied to the provision of other services
reimbursed under Medicare or Medicaid;
 Existence of a reasonable connection between the items or services and
the medical care of the individual; and
 Good faith determination by provider that recipient in financial need
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 Effective
1/1/11 or later as determined by OIG:
Waiver
by a prescription drug plan sponsor of a prescription drug
plan under Medicare part D or an MA organization offering an MA–
PD plan Medicare part C of any copayment for the first fill of a
covered part D generic drug for individuals covered by the
prescription drug plan
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Copyright © 2010 Feldesman Tucker Leifer Fidell LLP
Executive Compensation
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IRS Executive Compensation Compliance Initiative
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IRS sampled 1826 tax-exempt organizations (public charities
and private foundations)
Some led to audits and compliance checks, resulting in
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Numerous organizations amending their annual returns
(Form 990s) because of initial failure to correctly and fully report
compensation
To date, collection of more than $21 million in excise taxes
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Public charities, including health care organizations = more than $4
million of the total
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Copyright © 2010 Feldesman Tucker Leifer Fidell LLP
Executive Compensation
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In general, health centers and other tax-exempt
organizations may pay reasonable compensation
for services provided
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Reasonable compensation is determined by what
comparable organizations pay to similarly qualified and
experienced persons for comparable services, e.g.,
salary comparability studies
All compensation received must be considered, e.g.,
fringe benefits, life insurance, auto allowance, etc.
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Copyright © 2010 Feldesman Tucker Leifer Fidell LLP
Executive Compensation
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Overall, IRS reported no widespread concerns other
than reporting errors
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Of 1233 organizations that received compliance check letters
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31% had significant reporting issues that required filing of amended
returns
15% were selected for examination
Where high compensation amounts were found, generally they
were substantiated based on comparability data
However, only 51% of organizations followed all 3 prongs of
“rebuttable presumption” process for justifying compensation in
accordance with guidance re: intermediate sanctions
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Copyright © 2010 Feldesman Tucker Leifer Fidell LLP
HOT TOPICS IN 2010
Billing
 Federal Procurements
 Federal Property
 Patient Inducements
 Executive Compensation
 FTCA
 Section 330

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Copyright © 2010 Feldesman Tucker Leifer Fidell LLP
Corporate Compliance
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Seven Elements of Effective Compliance
Programs
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Designate a compliance officer/contact
Conduct internal monitoring and audits
Develop written standards and policies to implement the
Compliance Program and govern health center operations
Conduct culturally and linguistically competent training and
education programs
Develop effective, clear, open lines of communication
between compliance and health center personnel - open door
policy and policy prohibiting retaliation
Investigate detected problems and develop corrective action
Publicize and enforce disciplinary standards
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Copyright © 2010 Feldesman Tucker Leifer Fidell LLP