COMPLIANCE PROGRAM EDUCATION Assessment & Identification of Hot Spots & Opportunities

1. COMPLIANCE PROGRAMEDUCATIONAssessment & Identification of Hot Spots & Opportunities

2. Hospitals should focus compliance efforts on relevant areas of concern or risk

3. Benefits of a Compliance Program Decrease Cost Hospitals, taxpayers, and the government detect problems early and minimize financial loss Increase Efficiency Hospitals encourage employees to report potential problems Increase Quality Hospitals demonstrate commitment to honest conduct by identifying, preventing, and correcting unlawful behavior Encouraging employees to report potential problems Promoting internal inquiries and corrective action

4. Submission of Accurate Claims & Information Referral Statutes Payments to Reduce or Limit Services: Gainsharing Arrangements Emergency Medical Treatment & Labor Act (EMTALA) Substandard Care Relationships With Federal Health Care Beneficiaries HIPAA Privacy & Security Rules Excessively Billing Medicare & Medicaid Areas of General Interest Compliance Program Guidance The following nine (9) target areas are of concern to the enforcement community for Medicare fraud and abuse risk:

5. Submission of Accurate Claims & Information

6. Submission of Accurate Claims & InformationThe preparation and submission of claims or other requests for payment from the federal health care programs are the biggest risks area for hospitals. • Rule 1: Proper Medicare claims or requests (A) Must be complete and accurate (B) Ordered by an appropriately licensed medical professional (C) Who is a participating Medicare provider • Rule 2: A hospital may disclose and return discovered over-payments • Rule 3: A hospital should provide consistent and documented assumptions for claim submission • Rule 4: A hospital must keep medical records with documentation to support the claim

7. Common Risks Inaccurate/incorrect coding Unbundling of services Billing for medically unnecessary services Billing for services not provided Duplicate billing Insufficient documentation False or fraudulent cost reports Under-Appreciated Risks Outpatient Prospective Payment System (OPPS) Admissions & Discharges Supplemental Payment Considerations Using Information Technology Submission of Accurate Claims & Information Risks Associated with Claim Preparation and Association

8. Submission of Accurate Claims & Information Outpatient Procedure Coding • Rule 1: A hospital needs to make sure coders are well-trained and qualified since incorrect procedure coding may lead to overpayment AND liability • Rule 2: Do not bill on an outpatient basis for “inpatient only” procedures • Rule 3: Do not submit claims for medically unnecessary services by failing to follow the FI’s local policies • Rule 4: Individual FI policies should be incorporated into a hospital’s regular coding and billing operations

9. Submission of Accurate Claims & Information Outpatient Procedure Coding • Rule 1: A hospital should follow the national Correct Coding Initiative (NCCI) guidelines by preventing duplicate claims and by having up-to-date NCCI edit files • Rule 2: A hospital should regularly update Charge Description Masters (CDMs) to ensure that outpatient claims have correct codes • Rule 3: Review CMS’s multiple procedure discount rule and provide procedure codes for the actual procedures provided • Rule 4: A hospital should use proper evaluation and management codes • Rule 5: A hospital must know CMS’s policies for the submission of claims for observation services

10. Submission of Accurate Claims & Information Admissions & Discharges Patient Admission Status should be reviewed Evaluate the Medical Record documentation Review Interqual or Milliman Criteria Reconcile the Bill with the Documentation and Orders The status of patients at the time of admission or discharge significantly influences the amount and method of reimbursement that hospitals receive

11. Initial Complex Target Areas - $$$

12. Referral Statutes

13. Physician Self-Referral Statute (Stark law) ▼ A federal civil statute prohibiting hospitals from submitting a claim for a Designated Health Service (DHS) if the referral of the DHS comes from a physician with whom the hospital has a prohibited financial relationship Federal Anti-Kickback Statute ▼ Federal criminal statute which prohibits knowing or willful solicitation or acceptance of any type of remuneration to induce referrals for health services that are reimbursable by the Federal government Referral Statutes

14. Referral StatutesPhysician Self-Referral Statute (Stark Law) • Rule 1: A hospital must review all financial relationships with referring physicians for compliance with the Stark Law • Rule 2: A hospital should perform the following 3-part inquiry • Is there a referral from a physician for a DHS? • Does the physician (or an immediate family member) have a financial relationship with the hospital furnishing the DHS? • Does the financial relationship fit within an exception? • Rule 3: Any financial relationship between a hospital and a physician who refers to the hospital must fit in an exception.

15. Referral StatutesFederal Anti-Kickback Statute • The following inquiries may be useful when assessing arrangements: • Does the hospital have any remunerative relationship between itself and persons or entities in a position to generate federal health care program business for the hospital? • If there is a remunerative relationship, could one purpose of the remuneration be to induce/reward the referral/recommendation of business payable partially/wholly by the federal healthcare program? • Does the arrangement or practice have a potential to interfere with, or skew, clinical decision-making? • Does the arrangement or practice have a potential to increase costs to federal healthcare programs, beneficiaries, or enrollees? • Does the arrangement or practice raise patient safety or quality of care concerns?

16. Referral StatutesFederal Anti-Kickback Statute “Safe Harbors” for prevailing business arrangements that are common to hospitals Space rental safe harbor Equipment rental safe harbor Referral services safe harbor Discount safe harbor Employee safe harbor Practitioner recruitment safe harbor Obstetrical malpractice insurance subsidies safe harbor Ambulatory surgical centers safe harbor Note: In assessing “safe harbor” laws, the OIG ensures that the written contract and the actual arrangement satisfies safe harbor requirements.

17. Referral StatutesFederal Anti-Kickback Statute Joint Ventures Compensation Agreements With Physicians Relationships With Other Health Care Entities Recruitment Arrangements Discounts Medical Staff Credentialing Malpractice Insurance Subsidies Potential risks under the Anti-Kickback Statute arising from hospitals’ relationships

18. Referral StatutesFederal Anti-Kickback StatuteCompensation Arrangements With Physicians • Rule 1: A hospital cannot have a physician compensation arrangement where at least one purpose of the arrangement is to compensate physicians for past or future referrals • Rule 2: Remuneration flowing between hospitals and physicians should be at fair market value for actual items furnished or services rendered and should not consider past or future referrals or other business generated between the parties Example 1: A hospital provides physicians with items or services free or less than fair market value Example 2: A hospital relieves physicians of financial obligations they would otherwise incur Example 3: A hospital inflates compensation paid to physicians for items or services

19. Referral StatutesFederal Anti-Kickback StatuteMedical Staff Credentialing • Rule 1: A hospital must make sure that their credentialing process does not violate the anti-kickback statute Example 1: A hospital cannot condition privileges on a particular number of referrals

20. Payments to Reduce or Limit Services: Gainsharing Arrangements

21. Payments to Reduce or Limit Services: Gainsharing Arrangements Rule 1: A hospital cannot create an incentive plan to encourage physicians, through payments, to reduce or limit clinical services provided to Medicare or Medicaid fee-for-service beneficiaries Rule 2: Although incentive arrangements such as “gainsharing” are becoming increasingly common, a hospital should consider structuring cost-saving arrangements to fit in the personal services “safe harbor” instead of gainsharing.* Example 1: A hospital may be violating the Act if a gainsharing arrangement is intended to influence physicians to “cherry pick” healthy patients for the hospital offering gainsharing payments and steer sicker (and more costly) patients to hospitals without gainsharing payments Example 2: A hospital may be violating the Act if it offers a cost-sharing program with the intent to foster physician loyalty and attract more referrals *Note: Gainsharing does not fit within the “safe harbor” since it usually involves a percentage payment and the “safe harbor” requires that the aggregate fee will be set in advance

22. Emergency Medical Treatment and Labor Act (EMTALA)

23. EMTALA“Anti-Dumping Law”Medicare-participating hospitals with emergency departments must provide a medical screening exams (MSE) and treat the emergency medical conditions (EMC) of patients in a non-discriminatory manner • A hospital has three (3) obligations under EMTALA: (1) A hospital must provide a MSE to determine whether an EMC exists. A hospital cannot inquire about methods of payment or insurance coverage prior to examination and treatment. An emergency department must post signs notifying patients of their rights to a MSE (2) If an EMC exists, treatment must be provided until the EMC is resolved or stabilized. If the hospital does not have the capability to treat the EMC, the patient is transferred to another hospital in accordance with the EMTALA provisions. A patient is stable for transfer if the treating physician determines that no material deterioration will occur during the transfer. If the patient is unstable, then the hospital may not transfer the patient unless (1) a physician certifies that the benefits outweigh the risks OR (2) the patient makes a transfer request in writing (3) Hospitals with specialized capabilities are obligated to accept transfers from hospitals who lack the capability to treat unstable emergency medial conditions.

24. Substandard Care

25. Substandard Care • A hospital can be excluded form participation in a federal health care program if it provides unnecessary items or services or substandard items or services. • Rule 1: A hospital should create its own quality of care protocols and implement mechanisms for evaluating compliance with those protocols • Rule 2: A hospital should monitor the quality of medical services provided at the hospital by overseeing the credentialing and peer review of the medical staff • Rule 3: Medicare participating hospitals must meet all of the Medicare hospital conditions of participation (COPs)

26. Relationships With Federal Healthcare Beneficiaries

27. Relationships With Federal Healthcare Beneficiaries • Hospitals may not offer valuable items or services to Medicare beneficiaries to attract their services. • Rule 1: Gifts & Gratuities • Hospitals cannot give gifts to Medicare beneficiaries if the hospital knows or should know it is likely to influence the beneficiary’s selection of a particular provider or practitioner • Rule 2: Free Transportation • Hospitals are prohibited from offering free transportation to Medicare beneficiaries to influence their selection of a particular provider, practitioner, or supplier. However, hospitals can offer free local transportation of low value.

28. HIPAA Privacy & Security Rules

29. HIPAA Privacy & Security Rules • All hospitals that conduct electronic transactions are required to comply with the HIPAA Privacy & Security Rules. • The Privacy Rule & Security Rule gives covered hospitals the ability to create their own privacy and security procedures, but they must be compliant with all applicable provisions of HIPAA. • Perform the HIPAA Business Risk Assessment –Security Rule

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