“Why Should I Care about Compliance?”

“Why Should I Care about Compliance?” Compliance Essentials for HHSC Physicians— The Legal Underpinnings of Compliance: FCA, Stark, AKS, EMTALA, HIPAA Prepared by: David Lane, Ph.D., CAPPM, Chief Compliance and Privacy Officer, HHSC May 2010

Key Legal Elements Used in Compliance • False Claims Act • FERA 2009 • Federal anti-kickback statute • Federal physician self-referral law (Stark) • Emergency Medical Treatment and Labor Act (EMTALA) • HIPAA Privacy and Security Rules • Medicare and Medicaid regulations • HITECH (2009) • Patient Protection and Affordability Care Act (2010) • Health Care and Education Affordability Reconciliation Act (2010)

False Claims Act The False Claims Act (FCA) is the key law used to enforce compliance. The FCA is a Civil War era statute that criminalizes “knowing” presentation to government of false or fraudulent claim for payment.

“KNOWINGLY….” • Acting with knowledge of the claim’s truth or falsity • Acting in deliberate ignorance of the claim’s truth or falsity • Acting in reckless disregard of the claim’s truth or falsity.

Knowingly Submitting a Claim…. Medicare claim form 1500 submitted by or for the physician for payment states…. “I certify that the services shown on this form were medically necessary for the health of the patients and were personally rendered by me or were rendered incident to my professional service by my employee under immediate personal supervision, except as otherwise expressly permitted by Medicare or CHAMPUS regulations.”

Stark Law in a Nutshell Prohibits Physician from referring: • Who: Any Medicare/Medicaid patients • What: For the provision of “designated health services” • Where: To a Facility in Which Physician or Physician’s Immediate Family has a “Financial Relationship.”

Strict Liability The Stark law is a “strict liability law.” Under the Stark law, lack of deliberate intent or knowledge is not an excuse. Proof of intent is not needed. If a physician financial arrangement violates Stark, all referrals by that physician are void and possible fines and prosecution could happen.

Stark Law: Covered Services Stark covers the following “Designated Health Services: • clinical laboratory services • physical therapy services • occupational therapy services • radiology or other diagnostic services (including MRI, CT and ultrasound) • radiation therapy services and supplies • durable medical equipment • partenteral and enteral nutrients, equipment and supplies • prosthetics, orthotics and prosthetic devices and supplies • home health services • outpatient prescription drugs • inpatient and outpatient hospital services

Stark: A Financial Relationship? • “Financial Relationship” means: “any arrangement involvingany remunerationbetween a physician and an entity ... directly or indirectly, overtly or covertly, in cash or in kind.” • Includes direct and indirect ownership and compensation arrangements, including ownership through debt as well as equity, stock options and indirect ownership via different entities at any level.

Stark Law: Immediate Family • Spouse or domestic partner • Birth or adoptive parent • Child • Sibling • In-lawas • Grandparents, grandchildren and spouses/partners of either • “Step” relationships

How to Address Stark Law: Exceptions • Stark Law allows referrals by physicians under a financial arrangement with another covered entity IF the financial arrangement clearly meet one of the “exceptions” included in the law.

Stark Law Commonly Used Exceptions • Stark Exceptions: • Bona Fide Employment Arrangements - Must be in writing, for at least a year, at fair market value, and not dependent on value or volume of referrals. • Personal Services Arrangements - Must be in writing, for at least a year, at fair market value, and not dependent on value or volume of referrals. • $355 annual limit for non-monetary gifts • In-Office Ancillary Services • Fair Market Value Lease

Stark Exceptions There are about 35 exceptions….this compliance training for physicians is allowed under a specific Stark Exception…

Stark Law Penalties Both hospital/clinic and physician subject to sanctions: • If the arrangement (a) meets Stark Criteria and (b) does NOT fall within a specific exception then it is illegal per se Sanctions include denial of payment for the service, civil monetary penalties of $15,000 to $100,000 per violation and exclusion from the Medicare and/or Medicaid programs.

Anti-kickback Statute The Anti-Kickback Statute (AKS) prohibits the knowing and deliberate receiving of some remuneration (not just money) in return for referring someone to a person or entity for healthcare that is paid for by any federally funded health care program.

Anti-kickback Law in a Nutshell • Intent Based Statute • Unlike Stark, specific intent to violate AKS must be shown. • However, federal courts have interpreted this statute broadly, ruling that a violation need not include proof of an overt agreement to make referrals and that intent may be inferred from the circumstances. Hanlester Network v. Shalala, 51 F.3d 1390 (9th Cir. 1995).

Addressing the Anti-kickback Law: Safe Harbors Like Stark, the AKS includes exceptions called “Safe Harbors.” If a physician financial arrangement involving remuneration falls under one of these safe harbors, then the referrals are allowed. Commonly used Safe Harbors: Employment, personal services and management exceptions • Arrangements must be fair market value, in writing, etc.

Anti-Kickback Penalties Sanctions - Up to $25,000 and 5 years imprisonment for each violation

Reasons why Contracts Are Important: It is important that referring physicians have legal and compliant written financial agreements in place to comply with Stark and AKS. Such arrangements, when properly executed: • Protect physicians • Protect the hospital

EMTALA • Emergency Medical Treatment and Active Labor Act - 42 USC 1395 (1986) states that if hospital has an emergency department it must: • Provide a medical screening exam within the capability of the hospital’s emergency department for any patient requesting treatment • Include services routinely available to the emergency department.” 42 CFR§ 489.24

EMTALA - On Call • Availability of on-call physicians: “Each hospital must maintain an on-call list of physicians on its medical staff in a manner that best meets the needs of the hospital’s patients. Physicians, including specialists and subspecialists, are not required to be on call at all times. The hospital must have written policies and procedures in place to respond to situations in which a particular specialty is not available or the on-call physician cannot respond because of circumstances beyond the physician’s control. “ 42 CFR § 489.24 (j).

EMTALA Violations • Hospital may lose right to participate in Medicare. • Physician may lose right to participate in Medicare for “gross and flagrant or repeated” violations. • Hospital and Physician may incur administrative fines up to $50,000 per violation, which is not covered by insurance. • Hospital and Physician may be named as defendant in civil lawsuit by injured party.

HIPAA Health Insurance Portability and Accountability Act (HIPAA) passed in 1996 is the Federal law that governs the privacy rights of patients and the confidentiality of protected health information (PHI).

HIPAA and Protected Health Information (PHI) PHI is information that identifies health information on a patient. PHI can be in any form including written, verbal, conversational, or electronic. PHI includes any information that could allow someone to identify the patient such as name, address, phone numbers, social security numbers, room number, medical record number, email addresses, medical notes, medical diagnoses. Maintaining confidentiality of PHI is even a bigger challenge in small communities.

HIPAA: Sharing PHI Physicians are allowed to share protected health information (PHI) of patients under HIPAA for treatment, payment, or healthcare operations without patient approval if it is part of your job duties.

So WHY is Compliance Important to Physicians? • It’s the law • Affects payments for your services • Affects participation in Federal healthcare programs • Has severe fines and consequences for non-compliance

For Further Information: • Regional Compliance Officer: • INSERT NAME AND INFO HERE • HHSC Chief Compliance & Privacy Officer • David Lane, Ph.D. 808-240-2734 dlane@hhsc.org • Report Compliance Issues to HHSC Hotline: 1-877-733-4189

“Why Should I Care about Compliance?”