IOWA ASSOCIATION OF COMMUNITY PROVIDERS 2015 CONVENTION

1. IOWA ASSOCIATION OF COMMUNITY PROVIDERS 2015 CONVENTION BrownWinick Law Firm 666 Grand Avenue, Suite 2000 Des Moines, IA 50309-2510 Website: www.brownwinick.com BLOG: www.brownwinick.com/BLOGHealthLaw

2. COST REPORTING PITFALLS Jim Wilkes Brighton Consulting Group E-mail: jim@bcgdatanet.net 319-626-4710 Ext. 232

3. Proper Cost Reporting • Cost reports supply valuable information not only to CMS, but the provider as well • Calculates costs per visit including all provider costs. Highlights the required charge structure to cover total cost of services • Some services may be cost settled (vaccines) • CMS utilizes cost report data for decision making. Rebasing of the PPS payments can be affected by poor cost report data

4. Who has to file? • Medicare Certified • Iowa Medicaid? • If providing EPSDT, a new cost report format has been created by IME

5. 1. Accrual Basis of Accounting • Revenue is recorded in the period when it is earned, regardless of when payment is received. (reporting accounts receivable) • Expenses are recorded in the period in which they are ordered and utilized, regardless of when they are paid. CMS-Pub. 15-1

6. 2. Chart of Accounts • The provider’s chart of accounts should be complete and extensive enough to cover all different types of services the provider performs • The provider should not try to “fit” revenue or expenses into categories. • Separate services should have complete expense and revenue accounts to identify all revenue and costs related to a common service type. • Skilled Nursing • Physical Therapy • Occupational Therapy • Speech therapy • Medical Supplies • Pharmacy • Medical Social Services • Home Health Aide • Private Duty • Homemaker

7. 3. Identify Supplies by Routine or Non-Routine • Routine • Supplies ordered in bulk & utilized for patients in small quantities not patient specific • Not charged out on claims • Non-Routine • Specifically ordered for a particular patient’s illness or injury • Identified for use on the particular patient in medical records • Ordered by the physician • Charged on patient’s claim • Examples: Wound Care Dressings, I.V. Supplies, Ostomy Supplies, Catheters

8. 4. Proper Segregation of Revenue, Costs, and Service Visits • Revenue should be identified by payer source and service type • Medicare PPS • Medicaid PPS, Waiver, EPSDT, etc… • Private Pay visits – Nurse, HHA, Homemaker, live in • Therapy • Supplies • Expenses identified by service type • Skilled Nursing – wages, benefits, travel, contract staff • HHA – wages, benefits, travel, contract staff • Contract services split – PT, OT, ST • Supplies – routine, billable (non-routine), prescription meds, over the counter • Accurate Visit Records • Statistics regarding visits by service types very important • Visit statistics should match claim data

9. 5. Related Party Disclosure • Transparency regarding the certified agency’s business practice very important • Avoid fraud, waste, & abuse! • CMS looking for non-competitive wages/prices paid to related parties • Are there any expenses recorded on the agency’s cost report that are related to ownership or management of the agency? • Is an owner an employee or contracted vendor? Payments directly to an owner, director, or anyone related to an owner or director? • Spouse, ex-spouse • Child, step child • Grand child • Sibling, Step sibling • Parent, step parent • In-law? • Any Vendor related to an owner or director in any way? • Related individual own the therapy company, medical supplier, pharmacy, others? • If you are wondering, report it!

10. Cost Report Certification • Individual certifying the cost report is attesting to: • Being familiar with the laws and regulations regarding the provision of health services and that the services reported in the cost report were provided in compliance with such laws and regulations. • The cost report was examined by the person certifying and accurately reflects the revenue, expenses, and services performed by the provider

11. Change is normal Education is Important Jim Wilkes Brighton Consulting Group jim@bcgdatanet.net 319-626-4710 ext 232

12. QUESTIONS

13. MEDICAID FRAUD, WASTE, AND ABUSE Catherine C. Cownie: cownie@brownwinick.com Adam J. Freed: freed@brownwinick.com Kelly D. Hamborg: hamborg@brownwinick.com Michael E. Jenkins: jenkins@brownwinick.com Website: www.brownwinick.com BLOG: www.brownwinick.com/BLOGHealthLaw

14. THE MEDICAID FRAUD, WASTE AND ABUSE REGULATORY ENFORCEMENT LANDSCAPE--RESPONDING TO INVESTIGATIONS Catherine C. Cownie and Adam J. Freed BrownWinick 666 Grand Avenue, Suite 2000 Des Moines, IA 50309-2510 Telephone: 515-242-2400 E-mail: cownie@brownwinick.com freed@brownwinick.com

15. Overview • The problem of healthcare fraud, waste, and abuse (“FWA”) • Iowa’s regulatory framework • Observations on enforcement actions • Responding to investigations

16. Increasing Enforcement Action Nationwide

17. Prevalence of Fraud in American Health Care The National Health Care Anti-Fraud Association (NHCAA) estimates that between 3 and 10 percent of the nation’s annual benefits paid for health care were paid for fraudulent or abusive submissions.

18. 2014 Medicaid Fraud Control Unit Enforcement Actions in Iowa • 270 Investigations • 48 Individuals charged/indicted • 33 for Fraud • 15 for Abuse or Neglect • $24.4 Million Total Recoveries

19. Recent Enforcement Actions

20. Recent Enforcement Actions

21. Recent Enforcement Actions

22. Causes of Fraud, Waste, and Abuse • Lots of Money in the System • Complex Services Provided • Service Recipients are not the Payors

23. Intentional Fraud, Waste, and Abuse • Unscrupulous Owners • Unscrupulous Employees

24. Unintentional Fraud, Waste, and Abuse • Complex and/or Ambiguous Rules • Inconsistent Practices among Payors • Different Rules Between States • Confusion/Mistakes that Occur when Transition between Information Technology Systems • Loss of Institutional Knowledge/Staff Turnover • Forays into New Lines of Business

25. Types and Examples of Fraudulent and Abusive Practices • Billing for Services Not Performed • Avoiding this problem is often self-explanatory, but certain situations may be more complicated. • Important to check benefits manual. • Honest disclosure of the situation is best practice for avoiding any problems with the carrier.

26. Types and Examples of Fraudulent and Abusive Practices • Upcoding • Upcoding occurs when a coding procedure with a more extensive degree of difficulty is used than what was actually provided.

27. Types and Examples of Fraudulent and Abusive Practices • Waiver of Co-Payments • Co-payments are considered essential element of cost structure in the contract between the insured and the insurance carrier. • Waiving co-payments arguably encourages more usage of the coverage than would normally occur, distorting the cost structure of the insurance.

28. Types and Examples of Fraudulent and Abusive Practices • Waiver of Deductibles • As with co-payments, deductibles are considered an essential element of an insurance carrier’s cost structure. • Waiver of deductibles arguably encourages more usage of coverage, potentially distorting cost structure.

29. Types and Examples of Fraudulent and Abusive Practices • Altering Dates of Service • The date a procedure is performed is important, as it relates to patient eligibility requirements and waiting periods. • It is fraudulent to send a claim for treatment using a date other than the actual date of service.

30. Types and Examples of Fraudulent and Abusive Practices • Misrepresenting Patient Identities • Providing a service for one patient but sending in a claim for a different person is fraud.

31. Types and Examples of Fraudulent and Abusive Practices • Not Disclosing Existence of Additional Primary Coverage • Patients covered by more than one health plan may receive benefits from all plans. • Sending in multiple claims to different carriers as if they were each the primary carrier is considered fraudulent.

32. Types and Examples of Fraudulent and Abusive Practices • Performing Unnecessary Services • Performing and billing for services that were not needed or providing additional services or procedures beyond what is required by the patient’s condition is considered fraudulent.

33. Types and Examples of Fraudulent and Abusive Practices • Misrepresentation of Services • Involves changing the code to increase the amount of the claim.

34. State of Iowa Fraud, Waste, and Abuse Regulatory Framework • Laws • Federal Laws • State Laws • Administrative Rules • Guidance • Enforcement Organizations and Offices • Iowa Medicaid Enterprise Program Integrity • Office of Inspector General • DIA Medicaid Fraud Control Unit (“MFCU”) • Attorney General’s Office • US Attorney’s Office • County Attorneys

35. Iowa Health Care FWA Laws – The Big Three • Affordable Care Act • Iowa False Claims Act • S.F. 357

36. Affordable Care Act • Shifts focus of oversight from “pay and chase” model to “shut off the tap” model • Tap is Shut off on a “Credible Allegation of Fraud” • Partial Payments can be Restored on a Showing of “Good Cause”

37. Affordable Care Act (Cont.) • ACA requires states to suspend payment upon credible allegation of fraud. • States risk losing funding for noncompliance. • “Good cause” is narrowly defined. • Providers have administrative appeal rights and judicial review. • BUT, consider the impact of payment suspension during appeal.

38. Iowa False Claims Act • First enacted on July 1, 2010 (amended effective July 1, 2011) • Mirrors the Federal False Claims Act • Penalties for anyone who “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval.” • Triple Damages • Civil Monetary Penalties • Whistleblower Provisions

39. Medicaid Program Integrity (S.F. 357) • Unanimously passed Iowa Legislature, signed by Governor on April 5, 2013. • Provides authority for Iowa Medicaid Program Integrity. • Largely mirrors ACA’s 60-day overpayment report and return requirement. • Failure to report and return an overpayment within 60 days constitutes a false claim. • Establishes statute of limitations (generally 5 years from the date of payment).

40. Medicaid Program Integrity (S.F. 357) (Cont.) • State can place provider in receivership. • Third parties can be held liable (cost report preparers, billers, etc.). • Civil monetary penalties of up to $50,000 per claim for specified “intentional and purposeful” acts. • DHS to maintain a website with sanctioned provider list.

41. Observations • Heightened enforcement activity. • Some turnover of key staff. • Departure of Head of Program Integrity • Cooperative environment for unintentional violations.

42. Responding to Inquiries and Investigations • You have the right to consent to an interview or to decline to be interviewed. • There is no such thing as an “off-the-record” interview with the government! • You have right to legal counsel during all interviews. • If you consent to interview, provide full and truthful information. • Responding to inquiries and investigations is key – ignoring inquiries may make matters worse. • Cooperation and communication is critical.

43. Responding to Inquiries and Investigations (cont.) • Do NOT destroy documents. • Instruct employees NOT to alter or destroy documents. • Do NOT threaten, harass, or intimidate potential witnesses. • Do NOT fabricate testimony with employees to “get the story straight.”

44. Avoiding Investigations • Take notice of erratic employee behavior. • Employees insist on controlling files. • Employees fail to follow internal policies. • Employees engage in erratic and secretive behavior. • Employees refuse to take vacation. • Sudden employee lifestyle changes. • Investigate suspicious activity.

45. QUESTIONS

46. Anti-Kickback Statute Kelly D. Hamborg BrownWinick 666 Grand Avenue, Suite 2000 Des Moines, IA 50309-2510 Telephone: 515-242-2447 Facsimile: 515-323-8547 E-mail: hamborg@brownwinick.com

47. Anti-Kickback Statute Elements • Federal Criminal Statute, Prohibits • Knowingly and willfully • Soliciting, receiving, offering or paying remuneration (directly or indirectly, in cash or in kind) • Overtly or covertly • In order to induce referrals of goods or services reimbursable under federal health care programs (i.e., Medicare and Medicaid)

48. Anti-Kickback Statute • Referrals • Referral of a patient or the purchasing, leasing, ordering (or arranging for or recommending the purchasing, leasing, or ordering) of any good, facility, service or item if any portion of that patient’s care or the cost of the good, facility, service or item may be paid in whole or in part by a federal health care program

49. Anti-Kickback Statute (cont.) • Remuneration • Direct payment of cash or loans • Anything of value, whether tangible or intangible • Free items and/or services • A reduction or discount

50. A criminal statute, with a specific intent requirement • Knowing and willful • Affordable Care Act – Intent to violate the law, but not necessarily an intent to violate the Anti-Kickback statute itself Anti-Kickback Statute - Intent