program iiintegrity piiprovisions off thhe...

Presenting a live 90‐minute webinar with interactive Q&A

P I i P i i f h PPACAProgram Integrity Provisions of the PPACAMeeting the New Requirements for Compliance, Disclosure, Transparency and Quality of Care

T d ’ f l f

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

THURSDAY, FEBRUARY 17, 2011

Today’s faculty features:

Linda A. Baumann, Partner, Arent Fox, Washington, D.C.

Lisa A. Estrada, Partner, Arent Fox, Washington, D.C.

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Healthcare Reform's Program Integrity Provisions Change the Game: Key

Requirements You Need to Know As qImplementation Begins

Presented by

Linda A. [email protected]

Lisa A Estrada

Feb. 17, 2011

Arent Fox LLP1050 Connecticut Ave., NWWashington, DC 20036 | (202) 857-6000

Lisa A. [email protected]

Topics Covered More Funding to Fight Fraud and Abuse

Changes to the False Claims Act’s Public Disclosure Bar

Mandatory Return of Overpayments Provision Mandatory Return of Overpayments Provision

Amendments to the Anti-kickback Statute

New Penalties Under CMP/Exclusion Statutes

Revised Definition of “Remuneration” under CMP Statute

New Self-Disclosure Protocol and Other Stark Law Changes

Expansion of RAC Program to Medicaid and Medicare Part C Expansion of RAC Program to Medicaid and Medicare Part C

New Mandatory Compliance Program and other Provider/ Supplier Enrollment Provisions

New Medicaid Termination and Exclusion Provisions

Physician Payment Sunshine Provisions

Healthcare Reform's Program Integrity Provisions Change the Game: Key Requirements You Need to Know As Implementation Begins

5

The Healthcare Reform Statutes

● The Patient Protection and Affordable Care Act (PPACA), Pub. L. 111-148( ),

Enacted on March 23, 2010 Paid for, in part, by eliminating fraud, abuse and waste in

Federal health care programsFederal health care programs

● The Health Care and Education Reconciliation A t f 2010 (R ili ti A t) P b L 111 152Act of 2010 (Reconciliation Act), Pub. L. 111-152

Enacted into law on March 30, 2010

Makes changes to PPACA Makes changes to PPACA


6

Increased Funding

● Omnibus Appropriations Act of 2009 provided a one-time additional $198 million

● 2010 Budget invests $311 million in 2-year funding (a 50% increase over FY09)

● 2011 Budget seeks $250 million to expand HEAT

S ti 6402(i) f th PPACA i H lth C● Section 6402(i) of the PPACA increases Health Care Fraud and Abuse Control (HCFAC) Account for FY2011-2020 by $10 million a year

● Section 1303 of the Reconciliation Act adds $250M over 6 years


7


● Prior to PPACA, a whistleblower suit had to be dismissed for lack of jurisdiction if it was based upon the public disclosure of information in

a criminal, civil, or administrative hearing in a congressional, administrative, GAO report, hearing, audit,

or investigation; or the news media the news media

● Unless the Gov’t intervened or

the whistleblower qualified as an “original source” of the information upon which the FCA allegations were based

● PPACA makes 3 significant changes to the public● PPACA makes 3 significant changes to the public disclosure bar


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● Under PPACA, Public Disclosure Bar is no longer jurisdictional● PPACA provides that where public disclosure bar p pis properly invoked the court will dismiss the suit unless the Government objects

If Gov’t objects does court have any discretion to dismiss?

● What will the changes to the public disclosure bar mean?

Many more suits? Gov’t objections to suits? Will courts be more inclined or less inclined to extend time for

Gov’t to decide to intervene? How will government exercise the power to “save”

whistleblower suits from dismissal?


9


● Under PPACA, State or Local administrative reports, hearings, audits or investigations are not “public disclosures”not public disclosures

Prior to PPACA, split in circuits as to whether State proceedings and reports triggered the public disclosure bar

One week after PPACA, Supreme Court held that under pre-PPACA version of FCA, State administrative reports, hearings audits and investigations could trigger the publichearings, audits and investigations could trigger the public disclosure bar

o Graham County Soil and Water Conservation District v. U.S. ex rel. Wilson 08-304 2010 WL 1189557 (March 30 2010)Wilson, 08 304, 2010 WL 1189557 (March 30, 2010)

o Included a holding that PPACA change does not have retroactive effect


10


● Under PPACA, the standards for a whistleblower to qualify as an “original source” are loosened significantly

Pre PPACA a whistleblower seeking status as an original Pre-PPACA, a whistleblower seeking status as an original source had to demonstrate

o “direct” knowledge of the information on which the allegations are based

“i d d ” k l d f h i f i hi h h ll io “independent” knowledge of the information on which the allegations are based; and

o That he/she voluntarily provided the information to the Government before filing an actionfiling an action

Post-PPACA, a whistleblower seeking status as an original source must demonstrate that he/she

h k l d th t i “i d d t f” th bli l di l d i f tio has knowledge that is “independent of” the publicly disclosed information;o has knowledge that materially adds to the publicly disclosed allegations;

ando Voluntarily provided the information to the government before filing the

action


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Mandatory Return of Overpayments Provision

S f C• Section 6402 of PPACA adds section 1128J to the Social Security Act (“Medicare and Medicaid Program Integrity Provisions”)

• Among those provisions is new section 1128J(d) “Reporting and Returning of Overpayments”• The provision provides that a person or entity receiving• The provision provides that a person or entity receiving an “overpayment” is required to

– report and return it to the Secretary or the State Medicaid Agency or the appropriate contractor; andpp p

– notify the agency or contractor of the reason for the overpayment

• Overpayment must be reported and returned within 60 days of the date on which it was identified, or the date anydays of the date on which it was identified, or the date any corresponding cost report is due (if applicable), whichever is later

• No regulations or guidance to date


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No regulations or guidance to date

Mandatory Return of Overpayments Provision

• “Overpayment’’ is defined in section 6402 of the PPACA as any funds a person receives or retains under Medicare orreceives or retains under Medicare or Medicaid to which the person, “after applicable reconciliation,” is not entitled• Any overpayment retained past the deadline is an “obligation” (as defined in, and for purposes of, the reverse false claims p p ,provision of the False Claims Act)• Examples: Credit balances, later-

Sdiscovered Stark violations, billing errors discovered during compliance audits


13

Amendments to the Anti-Kickback Statute

● Intent Standard Section 6402 of PPACA amends section 1128B of the SS Act (which contains AKS as well as other criminal statutes) to provide “With respect to violations of thisto provide With respect to violations of this section, a person need not have actual knowledge of this section or specific intent to commit a violation of this section”

Overrules Hanlester Network v. Shalala, 51 F.3d 1390 (9th Cir. 1995

Resolves split in circuits and makes it easier for Gov’t to Resolves split in circuits and makes it easier for Gov t to gain convictions or extract settlements in the 9th Circuit

● Section 10606 of PPACA makes the same amendment to 18 USC 1347, the criminal “Health Care Fraud” statute


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Amendments to the Anti-Kickback Statute

● AKS Violation Now Per Se False Claim Section 6402 of PPACA also provides that “I dditi t th lti id d f i thi“In addition to the penalties provided for in this section or section 1128A, a claim that includes items or services resulting from a violation of thi ti tit t f l f d l tthis section constitutes a false or fraudulentclaim for purposes of [the False Claims Act]”

Amendment applies to AKS and all other criminal statutes in section 1128B of the SS Act


15

New Penalties Under CMP and Exclusion Statutes

● Section 1128A of the Social Security Act (“SSA”) contains a long list of prohibited activities that subject the actor to civilactivities that subject the actor to civil monetary penalties (“CMPs”), assessments and exclusion from federal and state health care programs (“fhcps”)care programs ( fhcps )

Depending on the act, the maximum CMP is $10K, $15K or $50K, and the maximum assessment is 3 times the amount claimed for each such item or service

M b t t ll f th hibit d t l bj t th Many, but not all, of the prohibited acts also subject the actor to exclusion (Section 1128 of the SSA)


16


Sections 6402 and 6408 of PPACA add more grounds for imposing penalties●Section 6402●Section 6402 --

■(1) Knowingly making false statements in an application, bid or contract to participate or enroll as a supplier or

id (i l di M di Ad t lprovider (including Medicare Advantage plans, Prescription Drug Plan sponsors and Medicaid managed care organizations and providers and suppliers that apply to participate under them)suppliers that apply to participate under them)

o CMP of up to $50,000 and potential for exclusion


17


Sections 6402 and 6408 of PPACA add more grounds for imposing penalties●Section 6402 --

(2) Ordering or prescribing items or services during a period when the prescriber was excluded from a federal or state health care program and the person knows or p g pshould know that a claim will be made for the item or service under such program o CMP of up to $10K, assessments and potential for

exclusionexclusion

(3) Failing to report and return a known overpayment

$o CMP of up to $10K, and potential for exclusion


18


●Section 6408 --■(4) Knowingly makes, uses, or causes to be made/ used,

a false record or statement material to a false claim fora false record or statement material to a false claim for fhcp items or services

o $50K CMP, plus assessment, and potential foro $50K CMP, plus assessment, and potential for exclusion

■(5) Fails to grant timely access, upon reasonable ( ) g y , prequest, to the OIG for the purpose of audits, investigations, evaluations, or other OIG statutory functions

o $15K per day CMP, plus potential for exclusion


19


Section 6402 of PPACA adds new exclusions to the CMP Statute definition of “remuneration”

● Remuneration which promotes access to care, poses a low risk of harm to patients and fhcps and is designated in regulations ≠ CMP remuneration (gainsharing)

● Items or services ≠ remuneration if offered or transferred for free or less than FMV if— they are coupons rebates or other retailer rewardsthey are coupons, rebates, or other retailer rewards

they are provided on terms available to the general public, regardless of health insurance status

the offer/transfer is not tied to the provision of other items/services reimbursed, in whole or in part, by fhcps


20


● Items or services provided for free or less than FMV ≠ remuneration if:

they are not offered as part of any advertisement or solicitation

they are not tied to the provision of other services reimbursed, in whole or in part, by a fhcp

there is a reasonable connection between the items orthere is a reasonable connection between the items or services and the medical care of the individual, and

they are provided after a good faith determination that th i i t i i fi i l dthe recipient is in financial need


21


● The waiver of copayments for the first● The waiver of copayments for the first fill of a covered generic Part D drug by a PDP sponsor under part D or an MA organization offering an MA PD planorganization offering an MA–PD plan under part C ≠ remuneration


22

New Stark Self-Disclosure Protocol

Physician Self-Referral Disclosure Protocol

● Section 6409 requires HHS to establish a self● Section 6409 requires HHS to establish a self-referral disclosure protocol (“SRDP”) to enable disclosures of actual or potential violation of the Stark rulesthe Stark rules

● On September 23, 2010, CMS publised “CMS Voluntary Self Referral Disclosure Protocol”Voluntary Self-Referral Disclosure Protocol available at:

https://www cms gov/PhysicianSelfReferral/Dohttps://www.cms.gov/PhysicianSelfReferral/Downloads/6409_SRDP_Protocol.pdf.


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● Required Elements of an SRDP Disclosure

Detailed description of the matter

Legal analysis why the disclosing party believes a Stark violation may have occurredy

The circumstances under which the disclosed matter was discovered

Any corrective action that has been takenAny corrective action that has been taken

Description of the existence/adequacy of any pre-existing compliance program

A statement on whether the disclosing party has a history of A statement on whether the disclosing party has a history of similar conduct or other enforcement actions being taken against it


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●Required Elements of an SRDP Disclosure (con’t)

A description of notices provided to other government agencies in connection with the disclosed matter

An indication of whether the disclosing party hasAn indication of whether the disclosing party has knowledge that this matter is under current inquiry by a government agency or whether the disclosing party is under investigation for any other matters

Financial analysis of the disclosed conduct, including the total amount that is potentially due, the methodology used to determine the amount, and a summary of the auditing to dete e t e a ou t, a d a su a y o t e aud t gactivity undertaken and documents relied upon


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●SRDP disclosures must be submitted both electronically and by mail to CMS

●SRDP disclosures must include a signed certification that the submission contains truthfulcertification that the submission contains truthful information and is submitted in good faith for the purpose of resolving potential liabilities

●If CMS uncovers additional violations outside of the scope of the matter disclosed to CMS during its verification process, CMS may treat these matters

id f h SRDPp y

as new matters outside of the SRDP


26


● In determining whether to reduce the amounts owed by the disclosing party under the SRDP, CMS will considerCMS will consider

the nature and extent of the improper/illegal practiceth ti li f th lf di lthe timeliness of the self-disclosurethe cooperation in providing additional informationthe litigation risk associated with the matter disclosedthe financial position of the disclosing partythe financial position of the disclosing party

● An SRDP disclosure tolls the obligation to return overpayments within 60 days underreturn overpayments within 60 days under section 6402 of PPACA

● CMS has no obligation to reduce amounts due


27

g

Other Stark Law Changes

Physician-Owned Hospitals – Changes to the “WholeHospital” Exception and the Rural Provider Exception●PPACA Section 6001 as amended by section 10601 and●PPACA Section 6001, as amended by section 10601 and

section 1106 of the Reconciliation Act, puts an end to new users of the whole hospital and rural provider exceptions

● Who is “new” and who is grandfathered in? New §1877(i)(1)(A) of the SS Act says that hospital must New §1877(i)(1)(A) of the SS Act says that hospital must

have physician ownership and Medicare provider agreement as of December 31, 2010, BUT

New §1877(i)(1)(D)(i) of the SS Act says that the percentage New §1877(i)(1)(D)(i) of the SS Act says that the percentage of physician investment interests in the hospital cannot be greater than as of the date of enactment, and new §1877(i)(1)(B) says that the number of operating rooms, procedure rooms and beds for which the hospital is licensedprocedure rooms, and beds for which the hospital is licensed cannot increase after the date of enactment (subject to an exceptions process)


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● No ASC Conversions – Hospitals created through a conversion from an ambulatory surgical center on or after date of enactment cannot use the whole hospital or rural provider exception

● Numerous Restrictions on Hospitals and Physician Owners even where physician ownership in a hospital has been grandfathered e gbeen grandfathered, e.g.,

Disclosure

Investment restrictions

Limited facility expansion


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● Patient Safety Requirements

As a condition of using the whole hospital or rural provider exception, if a hospital does not have any physician available on the premises to provide services during all hours, the hospital must disclose this fact to a patient before admission and obtain amust disclose this fact to a patient before admission and obtain a signed acknowledgment that the patient understands

-Hospitals are already required to disclose physician hi di i f i i i h i idownership as a condition of maintaining their provider

agreements

A hospital must have the capacity to provide an assessment andA hospital must have the capacity to provide an assessment and initial treatment for patients, and to refer and transfer patients to hospitals with the capability to treat the needs of the patient


30


●Exceptions Process – By no later than Feb. 1, 2012, the Secretary is required to have an exceptions process by which an “applicable hospital” or a “high Medicaid facility” can apply for an increase of the number of operating roomsapply for an increase of the number of operating rooms, procedure rooms, and beds for which the applicable hospital is licensed

Increase is limited to 100% over baseline number or, if hospital hasIncrease is limited to 100% over baseline number or, if hospital has applied for and received an exception, increase is limited to 100% over that granted in most recent exception request

o Baseline is March 23, 2010 or in the case of a hospital that did not have a provider agreement in effect as of such date but ot a e a p o de ag ee e t e ect as o suc date butdoes have such an agreement in effect on December 31, 2010, the effective date of such provider agreement

Increase limited to facilities on hospital’s main campusIncrease limited to facilities on hospital s main campus

No administrative or judicial review of the exceptions process is allowed


31

Other Stark Law Changes to the Stark Statute

●“Applicable Hospital”●“Applicable Hospital”

In a county where there has been a substantial population increase over the past five years compared to the overall state population increase during the same period

Has an average or greater percentage of Medicaid patient admissions compared to all other hospital admissions in the same county

Does not discriminate, and does not allow its medical staff to discriminate, against fhcp beneficiaries

Located in a state where the average bed capacity is less than the national average but has a higher than average bed occupancy rate

●“High Medicaid Facility"

Is not the sole hospital in the county in which it is located Does not discriminate (and does not allow its medical staff to

discriminate) against fhcp beneficiaries For each of the most recent years for which data are available the For each of the most recent years for which data are available, the

annual percentage of Medicaid admissions compared to overall admissions is estimated to be greater than such percentage for any other hospital in the same county

●Enforcement may include unannounced site reviews and audits


32

●Enforcement may include unannounced site reviews and audits


●Disclosure Requirement for IOAS Exception -section 6003 of PPACA puts conditions on using the i ffi ill i (“IOAS”) tiin-office ancillary services (“IOAS”) exception

Applies to MRI, CT and PET, and “any other DHS specified d (h)(6)(D) [ di l d th i i ] th t thunder (h)(6)(D) [radiology and other imaging] that the

Secretary determines appropriate”

Physician must inform the patient in writing that the patient may obtain the specified DHS from another entity outside themay obtain the specified DHS from another entity outside the physician's group practice

Requires a physician to provide a written list of suppliers that furnish such services in the area in which the patient residesfurnish such services in the area in which the patient resides

●Effective for services furnished on or after January 1, 2010


33

Expansion of RAC Program to Medicaid

• Section 6411 of PPACA amends the state plan requirements under 1902 of the SS Act to require States to enter into a contract with one or more RACs for the purpose of identifying underpayments and overpaymentspurpose of identifying underpayments and overpayments and recouping overpayments under the State plan (or any waiver under which the State is operating)

– Applies to all services for which the State makes payment

• State must provide satisfactory assurances to the Secretary that payments to the RACs are made only from amounts recovered

State must have an adequate process for entities to• State must have an adequate process for entities to appeal any adverse determination made by the RACs• State and its RACs are required to coordinate recovery audit efforts with other contractors or entities performing audits of entities receiving payments under the State planaudits of entities receiving payments under the State plan or waiver in the State, including DOJ, OIG, and the MFCU


34


● CMS issued Proposed Rule published November 10, 2010; comment period closed January 10 2011closed January 10, 2011 Proposes April 1, 2011 implementation deadline (unless

an exception is granted)

Provides that contingency payments must be based on amounts actually recovered after all appeals exhausted

Sets contingency rate ceiling at rate of then highest Sets contingency rate ceiling at rate of then highest Medicare RAC contingency fee rate (currently 12.5%)

States may consider establishing their own i t di d t ti f “ d ”requirements regarding documentation of “good cause”

to reopen a claim


35


●Medicaid RAC Proposed Rule (cont.) States not required to pay on a contingency basis for States not required to pay on a contingency basis for

identification of underpayments BUT payment methodology used must adequately incentivize the detection of underpayments.detection of underpayments.

RACs required to make a report to law enforcement officials whenever they have reasonable grounds to believe that fraud or criminal activity has occurredbelieve that fraud or criminal activity has occurred

States may agree to pay RACs a contingency fee from funds ultimately recovered through a civil or criminal proceedingproceeding


36

New Mandatory Compliance Program and other Provider/Supplier Enrollment Provisions

● Section 6401 of PPACA enacts several significant provisions related to provider and supplier enrollment■Mandatory compliance programs■Mandatory compliance programs

-Every provider and supplier will, as a condition of enrollment in Medicare, Medicaid or CHIP, be required to have a compliance program that contains the appropriate “core elements”

■Screening process – the Secretary is required to:-establish procedures for screening providers and suppliers enrolling in Medicare, Medicaid and CHIP -determine the level of screening according to the risk of fraud, waste, and abuse by category of provider/ supplieraud, aste, a d abuse by catego y o p o de / supp e-Such screening shall include a licensure check and may include:

o a criminal background checko fingerprintingo unscheduled and unannounced site visits, including pre-g p

enrollment site visitso database checks (including checks in multiple States)o such other screening as the Secretary determines

appropriate


37

New Mandatory Compliance Program and other Provider and Supplier Enrollment Provisions

3. Application fees● The Secretary is required to impose an application y q p pp

fee on each “institutional” provider or supplier in the amount of $500, as adjusted for inflation in 2011 and each subsequent year

Section 10603 repealed the requirement for individual– Section 10603 repealed the requirement for individual practitioners

● Exemptions are possible based on financial hardship or State determination that the fee would impede beneficiary access to care

A li ti f ll t d b th S t● Application fees collected by the Secretary are required to be used for program integrity efforts


38


4. Enhanced oversight for new providers and suppliers

● The Secretary is required to establish procedures to provide for a provisional period of p p p pnot less than 30 days and not more than 1 year during which new Medicare, Medicaid and CHIP providers and suppliers would be subject to enhanced oversight such as prepayment reviewenhanced oversight, such as prepayment review and payment caps

Th S t i th i d t t bli h th● The Secretary is authorized to establish the procedures through program instruction


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5. Increased disclosure requirements

● Beginning on or after 1 year from date of enactment, a provider or supplier that submits an initial or revalidation application for Medicare, Medicaid or CHIP is required to disclose (in a form and manner and at such time as d t i d b th S t ) t idetermined by the Secretary) any current or previous affiliation (directly or indirectly) with a provider or supplier that has uncollected debt, has been or is subject to a payment suspension under a fhcp, has been excluded from participation in Medicare Medicaid or CHIP or hasfrom participation in Medicare, Medicaid or CHIP or has had its billing privileges denied or revoked

● If the Secretary determines that such previous affiliation f f

y pposes an undue risk of fraud, waste, or abuse, the Secretary may deny such application denial carries appeal rights


40


6. Authority to Adjust Payments of Providers and Suppliers with same TIN, for Past-due Obligations● The Secretary may make any necessary adjustments to Medicare payments to the “applicable provider or supplier” p y pp p ppin order to satisfy any past-due obligations of an “obligated provider or supplier”

“applicable provider or supplier” is one that has the same tax id tifi ti b (TIN) d IRC 6109 d thidentification number (TIN) under IRC 6109 as does the obligated provider or supplier, regardless of whether they share the same billing number or NPI

“obligated provider or supplier” is one that has a past-due obligation to Medicare, as determined by the Secretary


41


7. Temporary Moratoria on Enrollment

● The Secretary is authorized to impose a temporary moratorium on the enrollment of new providers and suppliers under Medicare, p pp ,Medicaid and CHIP if the Secretary determines that a moratorium is necessary to prevent or combat fraud, waste, or abuse

● “There shall be no judicial review under section 1869, section 1878, or otherwise, of a temporary moratorium”CMS h i d ll i i h● CMS has imposed enrollment moratoria in the past for HHAs and specialty hospitals


42


8. 90-Day period for Holding DME Claims

● Section 1304 of the Reconciliation Act provides that, after January 1, 2011, if the Secretary determines that there is a significant risk of fraudulent activity among suppliers of DMEsignificant risk of fraudulent activity among suppliers of DME equipment, either by category or geographic area, the Secretary shall withhold Medicare payment for DME furnished by an initially-enrolling supplier during the 90-day period beginning on the date of the first submission of a claim for DME by such suppliersupplier

9. Requirement that ordering or referring physician be enrolled in Medicare

● PPACA Section 6405, as amended by section 10604, provides that for the billing provider or supplier to receive payment for DME or home health services, the physician or applicable health care professional that ordered the DME/certified the need for home health services must be enrolled in Medicare

● The Secretary is authorized to extend the requirement to other Medicare items/services.


43


●CMS Issues May 5, 2010 Interim Final Rule (75 FR 24437) on (some) PPACA Changes to Enrollment Requirements Requires all providers and suppliers that qualify for an NPI to Requires all providers and suppliers that qualify for an NPI to include their NPI on all applications to enroll in the Medicare and Medicaid programs and on all claims for payment submitted under the Medicare and Medicaid programs (implements the requirement in section 1128J(e) of the SSA, as added by section 6402(a) of PPACA)as added by section 6402(a) of PPACA)

Requires physicians and eligible professionals that order and refer covered items and services for Medicare beneficiaries torefer covered items and services for Medicare beneficiaries to be enrolled in Medicare (implements PPACA section 6405)

Requires a provider or a supplier that furnishes covered ordered DMEPOS or referred home health laboratoryordered DMEPOS or referred home health, laboratory, imaging, or specialist services to maintain documentation for 7 years from the date of service and provide access to CMS


44


● Medicare, Medicaid, and CHIP- Additional Screening Requirements, Application Fees, Temporary Enrollment Moratoria Payment Suspensions and Compliance Plans -Moratoria, Payment Suspensions and Compliance Plans Final Rule published February 2, 2011 (76 Fed. Reg. 5862)

■ Key provisions include:

o Suspension of Medicare, Medicaid and CHIP Payments when a “credible allegation of fraud” exists

o Temporary Moratorium on Potentially High Risk Providers and Suppliers when necessary to prevent FWAand Suppliers when necessary to prevent FWA

o Risk-Based Application Screening Criteriao Require states to terminate providers from Medicaid and

CHIP when terminated by Medicare or another state C

yMedicaid or CHIP program

■ Effective Mar. 25, 2011


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● CMS did not finalize the “core elements” for mandatory compliance programs and will issue a separate proposed rule in the futureproposed rule in the future

● Suspension of Payments With a “Credible Allegation of Fraud”

Eliminates the existing 180-day payment suspension limit with a “credible allegation of fraud” “Credible allegation of fraud” defined as “an allegationCredible allegation of fraud defined as an allegation from any source, including but not limited to fraud hotline complaints, claims data mining, patterns identified through provider audits, civil false claims cases, and law enforcement investigations.”Payments may be suspended unless there is “good cause” not to suspend them


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●Suspension of Medicare, Medicaid and CHIP Payments With a “Credible Allegation of Fraud” (con’t)With a Credible Allegation of Fraud (con t)

■“Good Cause” is-

oWhere law enforcement makes specific requests not to suspend p q ppaymentsoWhere CMS determines that beneficiary access to necessary items or services may be jeopardizedoWhere CMS determines that other remedies would moreoWhere CMS determines that other remedies would more effectively or quickly protect Medicare fundsoWhere CMS determines that suspension is not in the best interests of the Medicare program; andoWhere payment suspension has been in effect for more than 180 days without resolution of the investigation


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●Suspension of Medicare/Medicaid/CHIP Payments With a “Credible Allegation of Fraud” (con’t)

■ CMS must discontinue the payment suspension after 18 months unless-

the case has been referred to and is beingo the case has been referred to, and is being considered by the OIG for administrative action, or such administrative action is pending or

o DOJ submits a written request to CMS that the i f t b ti d b dsuspension of payments be continued based on an

ongoing (or pending) investigation and anticipated filing of criminal or civil action or both

■ States may not receive federal financial participation in h th f il t d M di id t

y p pcases where they fail to suspend Medicaid payments during any period when there is a pending investigation of a credible allegation of fraud against an individual or entity, absent good cause


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●Temporary Moratorium on Potentially High Risk Providers/Suppliers when necessary to prevent FWA■ CMS may impose a moratorium on enrollment of■ CMS may impose a moratorium on enrollment of

new providers/suppliers in Medicare in 6-month increments in the following circumstances:

o CMS identifies a trend associated with a high risk of FWAo a state has imposed a moratorium on enrollment in a

particular geographic area and/or on a particular provider or supplier type

o CMS has identified a particular provider or supplier type and/or a particular geographic area that has a significantand/or a particular geographic area that has a significant potential for fraud

■ Providers and suppliers may appeal a moratorium determination to CMS-designated body up to and including the Departmental Appeal Boardincluding the Departmental Appeal Board

■ Medicaid programs must comply with such temporary moratoria unless beneficiary access would be adversely impacted


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● Risk-Based Application Screening Criteria

All providers and suppliers will be placed in one of three risk levels (i.e., limited, moderate and high) based on an assessment of the overall risk of fraud, waste and abuse

Based on data and reports from OIG and GAO

Applies to new providers and suppliers as of March 25, 2011 and to currently enrolled providers and suppliers on March 23, 2012


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RISK LEVEL DESIGNATED PROVIDER / SUPPLIERRISK LEVEL DESIGNATED PROVIDER / SUPPLIER

Limited Physician or non-physician practitioners and medical groups or clinics, with the exception of physical therapists and physical therapist groupsAmbulatory surgical centers; competitive acquisitiony g p qprogram/Part B vendors; end-stage renal diseasefacilities; federally qualified health centers;histocompatibility laboratories; hospitals, including criticalaccess hospitals; Indian Health Service facilities;mammography screening centers; mass immunizationroster billers; organ procurement organizations;pharmacies newly enrolling or revalidating via the CMS855B; radiation therapy centers; religious non-medicalhealth care institutions; rural health clinics; and skillednursing facilities.

Moderate Ambulance suppliers; community mental health centers; comprehensive outpatient rehabilitation facilities; hospice organizations; independent diagnostic testing facilities; independent clinical laboratories; physical therapy including physical therapy groups; and portable x-ray suppliers

Currently enrolled (revalidating) home health agencies

High Prospective (newly enrolling) home health agencies and prospective (newly enrolling) suppliers of DMEPOS


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SCREENING REQUIREMENTS LIMITED MODERATE HIGH

Verification of any provider/supplier specific X X XVerification of any provider/supplier-specific requirements established by Medicare

X X X

Conduct license verifications (may include licensure checks across states)

X X X

Database checks (to verify Social Security Number (SSN); the National Provider Identifier (NPI); the National Practitioner Data Bank (NPDB) licensure; an OIG exclusion; taxpayer identification number;

X X X

death of individual practitioner, owner, authorized official, delegated official or supervising physician

Unscheduled or unannounced site visits X X

Fi i t b d i i l hi t d h k f XFingerprint-based criminal history record check of law enforcement repositories

X


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● States required to terminate providers from Medicaid and CHIP when terminated by Medicare or another state Medicaid or CHIPMedicare or another state Medicaid or CHIP program on/after Jan. 1, 2011

● “Termination” means that Medicaid or M di h t k ti t k thMedicare has taken action to revoke the provider, supplier or eligible professional’s billing privileges, and appeal rights have been exhausted


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New Medicaid Termination and Exclusion Provisions

• Section 6501 of PPACA provides that a State is required to terminate a person or entity from participation in Medicaid if the person or entity has been terminated from Medicare or another State’s Medicaid program• Section 6502 also requires Medicaid programs to exclude an individual or entity that owns, controls or manages another entity (or to exclude an entity if it is owned, controlled or managed by an individual or entity) h h id h b d d

, g y y)that has unpaid overpayments, has been suspended, terminated or excluded from Medicaid participation or is affiliated with any such entity

• But see OIG comments regarding recent Synthes/ Norian Settlement and Divestiture agreement:

•“In the past a lot of these cases have been resolved with the conviction of basically a shell subsidiary where our exclusion hadconviction of basically a shell subsidiary where our exclusion had no impact on the company’s business,” he said. Here, however, “[w]e didn’t allow the parent company to essentially shift operations of the convicted entity to another part of the corporate family.”

Asst Inspector General Greg Demske New York Times


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• Asst. Inspector General Greg Demske, New York Times

OIG’s Guidelines for Implementing Permissive Exclusion Authority

●OIG recently issued “Guidelines for Implementing Permissive Exclusion Authority”

• Establish a presumption in favor of exclusion of owners and managing• Establish a presumption in favor of exclusion of owners and managing employees if evidence supports a finding that the owner knew or should have known of the improper conduct

• Announces factors to be considered including• Announces factors to be considered, including

• Whether the individual took action to stop or mitigate the harm of the improper conduct and, if so, when (pre- or post-investigation)

• Whether the individual disclosed the improper conduct to “the appropriate Federal and State authorities”

• Whether the individual cooperated with investigators and• Whether the individual cooperated with investigators and prosecutors by responding in a timely manner to lawful requests for documents and evidence regarding others’ involvement


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●PPACA Section 6002 incorporates the Physician Payment Sunshine Act (new section 1128G of the SSA)●Beginning March 31, 2013 and the 90th day of each calendar year thereafter drug device biological andcalendar year thereafter, drug, device, biological and medical supply manufacturers are required to report a payment or other transfer of value to a “covered recipient” (or to an entity or individual at the request of or designated on behalf of a covered recipient) including the following information with respect to the precedingfollowing information with respect to the preceding calendar year:

the name, address, and, if applicable, the NPI of the covered recipient the amount of the payment or other transfer of value, the date(s) on p y ( )

which it was provided, and a description of the type of remuneration (e.g., cash or a cash equivalent, in-kind items or services, stock, stock option)

interest, dividend, profit, or other return on investment, or any other form of payment or other transfer of value (as defined by theform of payment or other transfer of value (as defined by the Secretary)

a description of the nature of the payment or other transfer of value, (e.g., consulting fees, honoraria, gift, entertainment, travel, education, research grant etc)


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research, grant, etc).


● Applicable manufacturers and group purchasing organizations (“GPOs”) are also required to submit the following information regarding ownership orthe following information regarding ownership or investment interests held by a physician (or immediate family member in the manufacturer or GPO during the preceding year:

the dollar amount invested by each physician holding such an ownership or investment interest, and the value and terms of each ownership or investment interest

Any payment or other transfer of value provided to a physician holding such an ownership or investment interest (or to an entity or individual at the request of or designated on behalf of a physician holding such an ownership or investment interest)

any other information regarding the ownership or investment interest the Secretary determines appropriate


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● Definitions “applicable manufacturer” means a manufacturer of a applicable manufacturer means a manufacturer of a covered drug, device, biological, or medical supply which is operating in the US (including territories, possession and commonwealth) “covered recipients” are physicians and teaching covered recipients are physicians and teaching hospitals “covered drug, device, biological, or medical supply” means any drug, biological product, device, or medical supply for which payment may be made under Medicaresupply for which payment may be made under Medicare, Medicaid or CHIP “payment or other transfer of value” means a transfer of anything of value, but does not include a transfer made indirectly to a covered recipient through a 3rd party inindirectly to a covered recipient through a 3rd party in connection with an activity or service where the applicable manufacturer is unaware of the identity of the covered recipient


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● Transfers of value include: consulting fees, g , compensation for services other than consulting, honoraria, gifts, entertainment food travel entertainment, food, travel, education, research, charitable contributions, royalty or license, current or prospective ownership or investment

interest, direct compensation for serving as faculty or as a direct compensation for serving as faculty or as a

speaker for a medical education program, grants, others defined by the Secretary


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● Exclusions include: gifts under $10 gifts under $10 product samples educational materials loan of a device for up to 90 daysloan of a device for up to 90 days a transfer of anything of value if the recipient is a

patient discounts in-kind items for charity care a dividend or other profit distribution


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●Penalties for Failing to Report For inadvertent failure to report, the manufacturerFor inadvertent failure to report, the manufacturer

or GPO is subject to a CMP of not less than $1,000 nor more than $10,000 for each payment or other transfer of value not reported as required up to an annual cap of $150 000required, up to an annual cap of $150,000

For knowing failure to report, the manufacturer or GPO is subject to a CMP of not less than $10 000GPO is subject to a CMP of not less than $10,000 nor more than $100,000 for each payment or other transfer of value knowingly not reported as required, up to an annual cap of $1 million


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● Product samples - Beginning April 1, 2012, drug manufacturers must report annually on g p ydistributions of drug samples (PPACA section 6004 adding new section 1128H to the SSA)

● Preemption – The federal physician payment sunshine provisions preempt comparable state law with certain limited exceptions.


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