Mandatory Compliance Plans: Are You Ready?

1. Mandatory Compliance Plans:Are You Ready? 2011 Medical Practice Strategies Conference Montgomery County Medical Society Bill Mathias Ober | Kaler410-347-7667wtmathias@ober.com Kristin Carter Ober | Kaler410-347-7309kccarter@ober.com

2. Agenda • Government Enforcement Environment • Why Develop a Compliance Plan? • Elements of an Effective Compliance Plan • Risk Areas for Physician Practices • New Compliance Obligations

3. Medicare and Medicaid Regulations Remain Incredibly Complex

4. “There can be no doubt but that the statutes and provisions in question, involving the financing of Medicare and Medicaid, are among the most completely impenetrable texts within human experience. Indeed, one approaches them at the level of specificity herein demanded with dread, for not only are they dense reading of the most tortuous kind, but Congress also revisits the area frequently, generously cutting and pruning in the process and making any solid grasp of matters addressed merely a passing phase.” — Chief Judge Ervin United States Court of Appeals for the fourth Circuit in Rehabilitation Association of Virginia v. Kozlowski, 42 F. 3d 1444, 1450 (4th Circuit 1994)

5. Fighting Fraud is a Good Investment • Government continues to view Fraud, Waste, and Abuse as a significant source of revenue • The return-on-investment (ROI) for Health Care Fraud and Abuse Control (HCFAC) program • Since 1997, $4.9 returned for every $1.0 expended. • 3-year average (2008-2010), $6.8 returned for every $1.0 expended

6. Have You Seen the OIG’s Website Lately?

7. Aggressive Enforcement • From new joint DOJ/OIG website www.stopmedicarefraud.gov • “A joint effort by HHS and the Department of Justice recovered a record $4 billion from fraudsters in FY2010.”

8. Why Develop a Compliance Plan? • Federal Sentencing Guidelines • Must be an effective program to prevent and detect violations of the law. • OIG Compliance Guidance • Individual and Small Group Physician Practices, 65 Fed. Reg. 59,434 (Oct. 5, 2000)

9. Why Develop a Compliance Plan? • Health Care Reform • Compliance plans to become mandatory as a condition of participation in Medicare and Medicaid • . . . but only after CMS promulgates implementing regulations to establish the core elements for mandatory compliance programs

10. Need a Plan??

11. Compliance Standards and Procedures Response and Prevention Oversight Responsibilities Enforcement and Discipline Elements of an Effective Compliance Plan Education and Training Open Lines of Communication Monitoring and Auditing

12. Compliance Standards and Procedures Elements of an Effective Compliance Plan

13. Compliance Standards and Procedures • Establish compliance standards and procedures that are reasonably capable of reducing the prospect of erroneous claims and fraudulent activity, while identifying any aberrant billing practices. • Effective compliance standards will identify the organization’s risk areas and establish internal controls to contain those risks.

14. Compliance Standards and Procedures Oversight Responsibilities Elements of an Effective Compliance Plan

15. Oversight Responsibilities • The organization must designate one or more high-level individuals to oversee compliance activities. Responsibilities may include oversight of all compliance activities or be limited to implementation of specific compliance functions. • The organization must use due care not to put individuals who have demonstrated a propensity for violating the law into positions of substantial discretionary authority.

16. Compliance Standards and Procedures Oversight Responsibilities Elements of an Effective Compliance Plan Education and Training

17. Education and Training • The organization must communicate its standards and procedures to all employees, professional staff, and physicians in a meaningful and effective manner by implementing an effective training program that explains the requirements of the compliance program and applicable laws. • Compliance training may involve in-person training sessions, newsletters, other written materials, and/or bulletin boards.

18. Compliance Standards and Procedures Oversight Responsibilities Elements of an Effective Compliance Plan Education and Training Monitoring and Auditing

19. Monitoring and Auditing • The organization must evaluate the effectiveness of its compliance program on an ongoing basis by monitoring compliance with its standards and procedures and by reviewing its standards and procedures to ensure they are current and complete. • A review of pending claims not yet submitted can establish a benchmark that will be used in ongoing reviews to chart the success of the organization’s compliance efforts. (Counsel often recommend this be conducted under attorney-client privilege).

20. Compliance Standards and Procedures Oversight Responsibilities Elements of an Effective Compliance Plan Open Lines of Communication Education and Training Monitoring and Auditing

21. Open Lines of Communication • The organization must put in place an accessible system for reporting inappropriate activities and for communicating compliance questions and concerns. • Standards and procedures must emphasize that failure to report erroneous or fraudulent conduct is a violation of the compliance program. • Standards and procedures also must stress that no retaliation may be taken against individuals who in good faith report what reasonably appears to be misconduct or a violation of the compliance program.

22. Compliance Standards and Procedures Oversight Responsibilities Enforcement and Discipline Elements of an Effective Compliance Plan Education and Training Open Lines of Communication Monitoring and Auditing

23. Enforcement and Discipline • The organization must enforce its compliance standards through consistent and appropriate disciplinary action. • Disciplinary procedures should include, as appropriate, discipline of individuals who should have detected an offense but failed to do so.

24. Compliance Standards and Procedures Response and Prevention Oversight Responsibilities Enforcement and Discipline Elements of an Effective Compliance Plan Education and Training Open Lines of Communication Monitoring and Auditing

25. Response and Prevention • If an compliance violation is detected, the organization should take all reasonable steps to respond appropriately to the violation • Take corrective action to rectify any harm resulting from the current offense • Prevent similar offenses from occurring in the future.

26. “Health Care in the New Millennium”

27. Risk Areas for Physician Practices • OIG Compliance Guidance for Physicians • Accurate Coding & Billing • Billing for non-covered services, unbundling, failure to properly use coding modifiers, upcoding • Reasonable & Necessary Services • Medical record & orders should support appropriateness of service • Physician Documentation • Improper Inducements, Kickback and Self-Referrals • Financial arrangements with referrals sources, joint ventures, leases, gifts/gratuities

28. Risk Areas for Physician Practices • OIG Work Plan FY 2012 • Compliance with Medicare Assignment Rules • Physician-Owned Distributorships • “Incident-To” Services • Evaluation & Management Service Coding

29. New Compliance Obligations Did You Know??

30. 60-Day Repayment Requirement • §6402 of PPACA requires reporting and repayment of overpayments within 60 days of identification (or due date of next cost report, if applicable) • Applies to Medicare and other federal health care programs • What’s “identification”? • Failure to repay within 60-days may be a false claim

31. 60-Day Repayment Requirement • Regulatory guidance will be forthcoming... (or so we’ve heard) • Absent guidance, providers must struggle to come up with practical approaches to complying with the 60-day requirement

32. Monthly Exclusion Checking • What is exclusion checking? • Growing number of State Medicaid Programs are requiring monthly screening of current employees and contractors. • State Medicaid Director Letter instructed states to “require providers to search the HHS-OIG website monthly to capture exclusions and reinstatements that have occurred since the last search.” • HHS-OIG CIAs still only require annual screening

33. Monthly Exclusion Checking • Need to have a policy • Before hiring and at least annually • Need to check the websites • http://exclusions.oig.hhs.gov/search.html • http://epls.arnet.gov • Check everyone, including physicians

34. Conclusion – What’s Next? • Increasingly aggressive federal/state enforcement • Alphabet soup of government contractors looking for fraud, waste and abuse • Whistleblowers driving government priorities • Increasing importance of comprehensive and aggressive compliance efforts

35. “Be careful out there”

36. Questions? Bill Mathias Ober | Kaler410-347-7667wtmathias@ober.com Kristin Carter Ober | Kaler410-347-7309kccarter@ober.com