Hot Button Issues and Regulatory Pitfalls: Avoid Getting in Over Your Head

1. Hot Button Issues and Regulatory Pitfalls:Avoid Getting in Over Your Head Andrea Stark Reimbursement Specialist MiraVista, LLC 803-462-9959 x 0240 andrea@miravistallc.com www.miravistallc.com Denise Leard Attorney Brown & Fortunato 806-345-6318 dleard@bf-law.com www.bf-law.com

2. Please Complete Your Evaluation Everyone should have received an evaluation form upon entering the session. Please complete evaluation form and turn in to room monitor as you exit the session. Or, you can complete your evaluation in the mobile app. Locate the session in the app and tap on the clipboard icon to begin the survey. Please help us keep the Medtrade Spring Education sessions the best in the industry by completing an evaluation for every session you attend! Your feedback is very valuable to us and will be used in planning future Medtrade Spring events! Connect with us on Social Media Twitter: @MedtradeConnect Instagram: @MedtradeConnect Facebook: facebook.com/medtrade #MedtradeSpring19

3. Agenda Providers need continuity and stability. Today’s session will focus on keeping organizations ahead of the following known risks: • Current Enforcement and Audit Initiatives • Payment Suspension Initiatives • National Supplier Clearinghouse Initiatives • New Regulations

4. Current Enforcement and Audit Initiatives

5. Staying Ahead of TPEs • Two recent CMS initiatives make Targeted Probe and Educate (“TPE”) programs more manageable for DME suppliers: • A new pilot program allows MACs to start the first round of TPE with a smaller, 10-claim sample. • For Rounds 2 and 3 of TPE, the MACs must audit service dates that occur 45-56 days after one-on-one education. • It pays to get it right out of the gate: one-year audit exemption.

6. Staying Ahead of SMRC Audits • The SMRC finally updated the Current Projects page to include Project ID 01-010 Replacement PAP Device Supplies and Accessories • The SMRC is requesting documentation to establish compliance with the following requirements: • Valid physician or non-physician practitioner order for the PAP supplies and accessories billed. • Medical record documentation to support the beneficiary’s continued need for PAP device or PAP device supplies and accessories. • Timely refill request documentation for each accessory or supply billed. • Proof of delivery showing sufficient content to identify the beneficiary’s receipt of each supply or accessory billed. • Legible handwritten or valid electronic signature and signature log, if acceptable. • Advance Beneficiary Notice of Noncoverage (ABN), if applicable. • Contact the SMRC at 1-833-860-4133.

7. Staying Ahead of Telehealth Order Risks

8. Payment for Orthotics Resulting From Telehealth Encounters • CMS has stated that it will not pay for orthotics, in which physician orders arise from telehealth encounters, unless the following conditions are met: • the Medicare beneficiary resides in (i) a rural Health Professional Shortage Area located either outside of a Metropolitan Statistical Area or in a rural tract or (ii) a county outside of an MSA; • the telehealth encounter must occur at an “originating site;” according to CMS, the following are originating sites: (i) physician offices, (ii) hospitals, (iii) Critical Access Hospitals (“CAHs”), (iv) Rural Health Clinics, (v) Federally Qualified Health Centers, (vi) hospital-based or CAH-based Renal Dialysis Centers (including satellites), (vii) Skilled Nursing Facilities, and (viii) Community Mental Health Centers; and • the telehealth encounter must be both visual and audio.

9. Kickback Issues • The orthotics phenomenon has been driven by lead generation companies (“LGC”) that can produce large “buckets” of leads. • LGCs approach “standard” DME suppliers (oxygen concentrators, beds, etc.) and show them how they can make money selling braces throughout the U.S.

10. Kickback Issues • While it is relatively easy for a LGC to convince a prospective customer (usually a Medicare beneficiary) that he needs a brace, it is harder to motivate the prospective customer to drive to his physician’s office to obtain an order. • And so LGCs have hooked up with telehealth companies. Unfortunately, a number of these telehealth companies are suspect. • A standard telehealth company receives its income from patients, patients’ employers, and patients’ insurance plans.

11. Kickback Issues • A suspect telehealth company receives its money (usually indirectly) from the DME suppliers selling the braces. • Here is how a suspect telehealth arrangement works: (i) DME supplier pays the LGC; (ii) the LGC pays some of the money to the telehealth company; (iii) the telehealth company pays some of the money to the telehealth physician; and (iv) the telehealth physician writes the order for the brace … with the order going to the DME supplier. • In reality, the DME supplier is paying the telehealth physician who is writing the order.

12. Documentation Issues • Physician progress notes are often not specific enough to meet the local coverage determination requirements. • Recommend obtaining medical records upfront and reviewing prior to dispensing.

13. Orthotic Bracing • https://www.justice.gov/opa/pr/federal-indictments-and-law-enforcement-actions-one-largest-health-care-fraud-schemes

15. Orthotic Bracing Copies of Indictments can be found at: https://www.justice.gov/opa/documents-and-resources-april-9-2019-press-release-health-care-fraud

16. Supplier Involvement in HST – The CPAP Payment Prohibition

17. Supplier Involvement in HST The CPAP Payment Prohibition • 42 CFR 424.57(f) states: • (f) Payment prohibition. No Medicare payment will be made to the supplier of a CPAP device if that supplier, or its affiliate, is directly or indirectly the provider of the sleep test used to diagnose the beneficiary with obstructive sleep apnea. This prohibition does not apply if the sleep test is an attended facility-based polysomnogram.

18. Supplier Involvement in HST The CPAP Payment Prohibition • By adopting this rule, the Centers for Medicare and Medicaid Services established “a specific payment prohibition that would not allow the supplier to receive Medicare payment for a CPAP device if that supplier or its affiliate . . . is directly or indirectly related to the provider of the sleep test that would be used to diagnose the beneficiary with OSA.”

19. Supplier Involvement in HST The CPAP Payment Prohibition • “Affiliate” and “provider” are defined terms. “Indirect” is also defined in the preamble to the final rule. • “Affiliate” means a person or organization that is related to another person or organization through a compensation arrangement or ownership.

20. Supplier Involvement in HST The CPAP Payment Prohibition • “Provider of the sleep test” is the individual or entity that directly or indirectly administers and/or interprets the sleep test and/or furnishes the sleep test device used to administer the sleep test.

21. Supplier Involvement in HST The CPAP Payment Prohibition • “Indirect” in this context means “that one or more intermediary actors are used to accomplish the sleep test to its end.  For example, if a DME supplier contracted with a sleep test provider to furnish a HST, that supplier would indirectly provide the HST.”

22. Takeaways from the Office of Inspector General (“OIG”) Ventilator Probe

23. Takeaways from the OIG Ventilator Probe • Ventilators and respiratory assist devices are covered for similar diagnoses but equipment selection is based on severity of condition. • Ventilators have more used reimbursement and no cap. • Competitive bidding further reduced their rates. • OIG report indicated the massive growth was driven largely by these supplies who accounted for 54% growth in E0464. • 196 beneficiaries in 2012 to 16,073 in 2015. • Shift in diagnoses from neuromuscular to respiratory. • Some of the claims that were submitted for accessories were unbundled.

24. Payment Suspension Initiatives

25. Payment Suspension Initiatives • 42 CFR 405.371 • Reliable evidence of an overpayment; or • Credible allegation of fraud • Duration of 180 days and can be continued for additional 180-day periods. • Most recent payment suspensions center around orthotic bracing.

26. Lessons from The Arriva Case …

27. Underlying Facts • Department of Justice (“DOJ”) joined a Qui Tam lawsuit filed in 2013 by a former employee alleging Arriva and its parent Alleve routinely submitted false claims for unnecessary glucometers. • Also alleged the companies paid kickbacks to Medicare beneficiaries in the form of copayment waivers and provision of free glucometers. • In October 2016, Medicare revoked Arriva’s PTAN allegedly due to submission of a claim for a patient who was deceased for over 2 weeks. • Arriva ceased operations in December 2017.

28. Qui Tam Lawsuit • What is it? • Who filed it? • How do you avoid such an action?

29. What Can Suppliers Learn From the Pending Arriva Case? • The DOJ recently joined a pending lawsuit against Arriva Medical. • The allegations are still being litigated, but the charges include several notable takeaways: • PTAN suspension for billing greater than 14 days after beneficiary date of death. • Medically unnecessary product accusation for mandatory replacement meters. • Waivers of co-payments equates to beneficiary inducements.

30. NSC Initiatives

31. Manage Revalidation Risk • Check to see if your revalidation is due by using the CMS tool here: https://data.cms.gov/revalidation • Failure to revalidate will revoke billing privileges and freeze Medicare payments. • The NSC will not accept revalidations received more than seven months before the CMS posted revalidation date. • Pay the $586 fee here. • Complete the online application through PECOS. • Confirm the NSC is processing your (revalidation) application here. • Check back to ensure they do not need more information to complete processing.

32. Manage Licensure Risk • The NSC maintains a State Licensure Directory that indicates known licensure requirements by product and state. • The database include contact information for the licensing agencies for clarification on detailed requirements and possible exemptions. • Failure to keep up with state licensure requirements will result in PTAN revocation and will jeopardize competition bids.

33. 60-Day Rule

34. 60-Day Rule: Provider Self Audit • Between 2014-2015 Medicare processed over 7 million claims for replacement PAP accessories. • The OIG audited 110 (.0015%) of these replacement PAP claims and found 86 claims with errors. • Based on this audit, the report suggests Medicare overpaid $631 million for PAP resupplies. Tiny audit. Big ramifications. • 60-day rule is cited to compel self-audit.

35. Sample • The Office of Inspector General used the following sample time frame: 1/1/2014 – 12/31/2015. • The OIG sampled 110 claims out of a universe of 7,279,625 claims. • Total amount paid in the sample was $16,872 vs. the universe of $847,462,971.

36. Sample (Cont’d) • Stratified Random Sample:

37. Findings • According to the OIG, out of 110 claims in the sample, 86 claims did not meet Medicare requirements. • Total overpayment in the sample: $13,414 • Extrapolated overpayment: $631.3 million • OIG: “These overpayments occurred because CMS oversight of replacement PAP supplies were not sufficient to ensure that suppliers complied with Medicare requirements or to prevent payment of claims that did not meet those requirements.”

38. Recommendations • The OIG instructed the Medicare contractors to notify the 82 suppliers associated with the 86 denied claims to “exercise reasonable due diligence to investigate and return any identified overpayments, in accordance with the 60 day rule, and to identify and track any returned overpayments as having been made in accordance with this recommendation.”

39. Legal Implications • Section 6402 of the Affordable Care Act states that any provider or supplier that receives an overpayment must (i) report to CMS and (ii) provide written notice of the reason for the overpayment. • The overpayment must be reported and returned no later than 60 days after it is identified. Failure to do so may result in civil monetary penalties under the Federal False Claims Act.   • In its previously published Final Rule, CMS provided guidance regarding the obligations of providers and suppliers to report and repay overpayments.

40. Legal Implications • The Final Rule addressed the “lookback period.” This is the time period for which a DME supplier must examine its patient files for overpayment obligations. CMS originally proposed a 10-year-lookback period. However, the Final Rule shortened the lookback period to six years. • The Final Rule stated that, as a general rule, a supplier will have 6 months to investigate possible overpayments before the 60 day clock starts running. Compare this to the initial Proposed Rule which said that the investigation should be conducted with “all deliberate speed.”

41. Legal Implications • The Final Rule addressed what it means to “identify an overpayment.” According to the Final Rule, identification occurs when a supplier “has or should have, through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment.”

42. Legal Implications • What makes the Noridian and CGS letter ominous is that under the “60 Day Rule,” the letter sets up the supplier for potential liability under the False Claims Act. Assume that (i) the supplier ignores the letter, the supplier does not respond, and the contractor audits the claims described in the letter; or (ii) the supplier does not audit its files but simply reports to the contractor that the claims are proper, and the contractor audits the claims described in the letter; or (iii) the supplier audits its files, the supplier reports to the contractor that the claims are proper, and the contractor audits the claims described in the letter.

43. Legal Implications • Assume that in any of these scenarios, the contractor concludes that all or some of the claims are improper. There is a risk that the contractor will turn its findings over to the OIG. If this occurs, then there is a risk that the OIG and the DOJ will instigate an investigation of the supplier under the False Claims Act.  

44. Questions?

45. Thank you! Please Complete Your Evaluation Everyone should have received an evaluation form upon entering the session. Please complete evaluation form and turn in to room monitor as you exit the session. Or, you can complete your evaluation in the mobile app. Locate the session in the app and tap on the clipboard icon to begin the survey. Please help us keep the Medtrade Spring Education sessions the best in the industry by completing an evaluation for every session you attend! Your feedback is very valuable to us and will be used in planning future Medtrade Spring events! Connect with us on Social Media Twitter: @MedtradeConnect Instagram: @MedtradeConnect Facebook: facebook.com/medtrade #MedtradeSpring19