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New Health Care Compliance Concerns:

Are You at Risk?

Presented by:

Jean Acevedo, LHRM, CPC, CENTC, CHC

Agenda

• Federal Fraud and Abuse Statutes

• Case Studies

• Implementing an Effective Compliance Program

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Health care fraud

is a serious problem

Fraud includes obtaining a benefit through intentional

misrepresentation or concealment of material facts

Waste includes incurring unnecessary costs as a result of

deficient management, practices, or controls

Abuse includes excessively or improperly using government

resources

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Federal Fraud and Abuse Laws

• False Claims Act

• Anti-Kickback Statute

• Physician Self-

Referral Statute

• Exclusion Statute

• Civil Monetary

Penalties Law

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Anti-Kickback Statute

Prohibits asking for or receiving

anything of value in exchange for

referrals of Federal health care

program business

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Anti-Kickback Statute

Prohibited kickbacks include:

•Cash for referrals

•Free rent for medical offices

•Excessive compensation for medical

directorships

•Waiving co-pays or deductibles (can be

considered an inducement)

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Waiving copayments routinely

Waiving copayments on a case by case

basis for financially needy

Providing free or discounted services to

uninsured patients

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Kickbacks can lead to:

•Overutilization

•Increased costs

•Corruption of medical decision-making

•Patient steering

•Unfair competition

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Program Exclusion

Penalties for Kickbacks

Fines

Prison

Time

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Stark Law

• Physician Self Referral law

• Limits physician referrals when there is a financial relationship with the entity for certain “designated health services”– Clinical lab services

– Imaging

– Physical/occupational therapy

– DME

– Home health

– Among others

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Test if Stark Applies to Your Practice

Three Questions:

1. Is there a referral from a physician for a designated health

service (DHS)?

2. Does the physician (or an immediate

family member) have a financial relationship with the entity

providing the DHS?

3. Does the financial relationship fit in an exception?

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Penalties for Stark Violations

• First, there is no “intent” standard

• Overpayment/refund obligation

• False Claims Act liability

• Civil Monetary Penalties & exclusion for knowing violation

• Potential of $15,000 CMP for each service

• Civil assessment of up to 3 times the amount claimed

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OIG Program Exclusions

• Mandatory Exclusions – Minimum of 5 years for conviction of certain offenses

• Patient abuse

• Felony health care fraud

• Felony convictions relating to controlled substances

• Permissive Exclusions

– 16 different authorities such as• Losing state license to practice

• Failing to repay student loans

• Failing to provide quality care

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Understanding Exclusions

• Who can be excluded?

– Any individual or entity

• What is the impact of program exclusion?

– No payment from any federal payer

– Applies to the person and anyone who employs the

person

How Long Do Exclusions Last?

• From a defined period to indefinite.

– Depends on the type of violation

• Reinstatement is NOT automatic.

– Must re-apply

Self-disclose if you discover you have

employed an excluded individual– Case study: MRI center

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How Do You Check?

• List of Excluded Individuals and Entities

– www.oig.hhs.gov/fraud/exclusions.asp

• Data base is downloadable or searchable online– By name or business name

– Remember to check former names, variations of names

• Maintain documentation of your searches

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Your State

• May have additional laws regarding

– Fee splitting

– Kickbacks

– False Claims

• Or, may have more stringent laws

– Florida’s Patient Self-Referral Act of 1992

• Much stronger than the Stark Law

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Deliberate ignorance

is no defense

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Case Studies To Learn From

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“Daniel Maynard, D.O., has been…”

• Permanently excluded from federal health care programs;

• And will pay $253,00 to resolve allegations that he submitted false claims

to the Tx Medicaid program & Medicare between 1999 and 2003.

• On 32 separate days, Maynard billed for patient encounters that added up

to more than 24 hrs each day seeing & treating patients.

– Yes, that’s just 32 days in a 5 year period in which the doctor probably worked

1250 days - (perhaps 6 or 7 days a year)

www.usdog.gov/usao/txn, June 2008

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California Physician Sentenced for Medicare

Fraud SchemeOn June 27, 2008, U.S. Attorney for the Northern District of California Joseph P. Russoniello announced that the

physician owner and operator of Milpitas Medical Clinic (“MMC”) was sentenced yesterday in United States District

Court Judge for perpetrating a scheme that defrauded Medicare of over $1 million for ultrasound tests that were

based on his falsified physician orders, which claimed the tests were performed because they were medically

necessary.

•Dr. Armond Tennyson Tollete was sentenced to 30 months in prison, followed by three years of supervised

release, and ordered to pay restitution to Medicare amounting to $909,000

•Tollete previously admitted that he participated in the scheme to defraud Medicare by knowingly submitting

claims to Medicare while knowing that the tests for which he billed were not medically necessary, not

legitimately ordered by him nor supervised by any physician, not performed by a certified technician, and in

some cases, never performed at all

http://www.usdoj.gov/usao/can/press/2008/2008_06_27_tollete.sentenced.press.html

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A 20-year prison sentence was handed down in a Medicaid fraud case after the director

of a youth program pleaded guilty to stealing a provider number and using children's

Social Security numbers to fraudulently bill Medicaid for counseling services, according

to the Mississippi Attorney General's Office.

Aaron Pulsifer pleaded guilty Feb. 26 (2009) to seven counts of Medicaid fraud. Court

documents show he already had served a seven-year term for forgery, was considered a

habitual offender by the state and could have received 80 years in prison if he had not pleaded

guilty. In addition to the 20-year sentence, Pulsifer must pay $1,000 to a victim-compensation

fund, a $5,000 fine to Lowndes County and $4,000 to the attorney general's office for

investigative costs.

Pulsifer submitted the Medicaid claims through a "Youth Challenge Program" that he started in

2002 in two school districts. He was expanding the program into another district when he was

arrested in August 2008, the state says. He billed the state for about $1.2 million in Medicaid

claims.

Unintended Consequences of Some Fraud

Schemes

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Unintended Consequences of Some Fraud

SchemesPulsifer was originally charged with 13 counts of Medicaid fraud and one count of identity theft, according to

court documents. The state says he stole the Medicaid provider number belonging to a licensed clinical social

worker who provided services for the Youth Challenge Program in order to submit the false claims.

For example, he submitted claims totaling $14,500 for one student who had not received any services,

according to the state's indictment, which contains about a dozen similar examples.

He also used the provider number to bill for about 170 students that are not mentioned in the indictment, and

submitted claims for more than $980,000, the state says.

In order to bill for the children's treatment, Pulsifer "labeled each child with psychiatric diagnoses to legitimize

the claims," the attorney general's office says.

The state is working to expunge those labels from the students' records so they won't be denied college

entrance or military service later.

Reprinted from the March 16, 2009, issue of REPORT ON MEDICARE COMPLIANCE

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Medicaid Audit & Data Mining

• Some results from the NY OMIG:

– Men who gave birth (OMIG confirmed that managed

care plans were paid for 90 such claims during a 2-

year period)

– Women who gave birth to themselves

– Colonoscopies performed on women the same day

they delivered children

– Babies born twice

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Medicaid Audit & Data Mining

• Some results from the NY OMIG:

– Women who had babies and then gave birth to

another baby 5 months later

– Children under 10 giving birth

– 50-year-old women who gave birth with no

corresponding fertility treatments – “we recovered

$500,000 on this alone.”

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FBI Statistics – FY 2007

• 2,493 cases of health care fraud

– Medicaid & Medicare the most visible

– 635 convictions

– $1.1 Billion in restitution

– $4.4 Million in recoveries

– $34 Million in fines

– 308 seizures of property valued at $61.2M

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FBI Statistics – FY 2007

• Report Estimates….– Fraudulent health care billing accounts for between 3% and 10% of all health

care expenditures.

– Most prevalent schemes identified are• Billing for services not rendered

• Upcoding services or items to a more expensive version

• Filing duplicate claims

• Unbundling

• Billing for services in excess of a patient’s actual needs

• Medically unnecessary services

• Kickbacks

www.fbi.gov/publications/financial/fcs_report2007/financial_crime_2007.htm#health

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Implementing an Effective

Compliance Program

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Compliance Program Basics

Seven Fundamental Elements

1. Written policies and procedures

2. Compliance professionals

3. Effective training

4. Effective communication

5. Internal monitoring

6. Enforcement of standards

7. Prompt response

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Operating an Effective Compliance Program:

Policies and Procedures

• Regularly review and update with Managers, Compliance

Committee

• Assess whether P&P are tailored to the intended audience

and job functions

• Ensure they are written clearly

• Include “real life” examples

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Operating an Effective Compliance Program:

Measuring Effectiveness

• Develop benchmarks and measureable goals

• System to help measure how well you are meeting those

goals

• Involve the doctors, Board; keep them updated on audits,

risk areas, etc.

• Assess whether there are sufficient resources and

funding.

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Operating an Effective Compliance Program:

Training

• Regularly review & update; try different methods

• Make training completion a job requirement

• Test employees’ understanding of topics

• Maintain documentation

• Train the doctors!

• Attend conferences, webinars; subscribe to publications and OIG

email lists, network with peers.

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Ask:

• Who receives

– your Medicare contractor’s eNews?

– CMS emails

• Is it only you?

• What happens to the information

– Is it forwarded to all who need to know

– Easy to read synopsis

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Operating an Effective Compliance Program:

Lines of Communication • Open door policy

• Anonymous “hotline” to report issues

• Enforce a non-retaliation policy for those who report potential

problems

• Establish a direct line to the doctor(s)/Board

• Use surveys to get feedback on training & the program

• Try newsletters, monthly email reminders/alerts

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Operating an Effective Compliance Program:

Enforcement• The “teeth” in your program

• Act promptly & take appropriate action

– What happens to the doctor who continues to code

99214 with a 3-line note?

– The biller who changes a diagnosis to get a claim

paid?

• Create corrective action plans to fix the problem

• Also evaluate what caused the problem.

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Identify Your Risk Areas• OIG Work Plan

• OIG Audits– Modifiers 25, 59

– Physical Therapy in physician practices

– Epidural injections

• CERT Reports– 99232

– Orders & signatures

• Internal and Payer Audits

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2010 CERT Example: 99211

www.wpsmedicare.com

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2010 CERT Example:

All Diagnostic Tests Require an Order

www.wpsmedicare.com

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2010 CERT Example: No order, no payment

for 36415

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New Risk Areas

• CMS Incentive Programs

– eRx

– PQRS (f/k/a/ PQRI)

– EHRs and meaningful use

• New ABN effective 3/11

– Mandatory use date was Jan. 1, 2012

• EMRs and cloning

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Goal:Teflon® Coated Claims

• Do what’s medically necessary

• Document per guidelines

• Keep up: CPT®, ICD-9, encounter forms

• Audit

– Coding versus specialty norms, E/M guidelines

– Follow the money

• Look at your denials as a compliance project

• CCE: continuing coding education

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5 Practical Tips

• Make compliance plans a priority now

• Know your fraud and abuse risk areas

• Manage your financial relationships

• Just because your competitor is doing something

doesn’t mean you can or should

• When in doubt, ask for help.

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Why Should I Comply?

• It’s the right thing to do

• Enhances correct billing

• Reduces denials

• Increases billing efficiency

• Minimizes the risk of a Government audit

• Minimizes the risk of a substantial overpayment.

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