Provider Compliance Agreements: Preventing Future Wrongdoing

1. Corporate Integrity Agreements American Health Lawyers Association 2001 Institute of Medicare and Medicaid Payment Issues Gary W. Eiland W. McKay “Mac” Henderson March 29, 2001

2. Purpose To establish provider compliance with applicable rules and laws (and now with the provider’s internal policies and procedures).

3. Purpose Generally, settlement of health care fraud issues should have an accompanying compliance agreement . . . aimed at preventing future wrongdoing. . . . It is the responsibility of HHS to negotiate an agreement where the Medicare or Medicaid program is implicated. Source: OIG/USAG Joint Report, Coordination of Fraud and Abuse Enforcement Programs (January 24, 1997)

4. Purpose A global settlement agreement between a USAO and a provider or supplier entered into for the purpose of resolving civil and/or criminal responsibility for past conduct, should not include within it any section designed to regulate future billing procedures and policies, unless those provisions have been reviewed by the HHS Office of Counsel to the IG. Source: OIG/USAG Joint Report, Coordination of Fraud and Abuse Enforcement Programs (January 24, 1997)

5. Penalties Violations Triggering the Stipulated Penalties: • Failure to timely implement the compliance provisions of the CIA • Failure to timely submit an implementation report or annual report

6. Penalties Violations Triggering the Stipulated Penalties: • Improper hiring/employing of ineligible persons • Failure to grant access to information required by the CIA • Failure to comply with any obligation of the CIA

7. Exclusion • Material breach is an independent basis for exclusion • Material breach is defined to include: • Failure to report material deficiencies • Failure to respond to stipulated penalties • Failure to retain an IRO for review obligations • Repeated violations of CIA

8. Exclusion • Stipulated penalties accrue for each day of a violation, usually ranging from $500 to $3,000 • Providers are given an opportunity to cure any violation that would result in exclusion

9. Necessity of a CIA • Provider typically has already negotiated settlement in principle with the DOJ/USAO • OIG quid pro quo for joining settlement agreement and providing release under OIG’s permissive exclusion and CMP authorities

10. Necessity of a CIA • No statutory requirement for a CIA • Duplicative of provider’s corporate compliance program

11. Necessity of a CIA • Settlements without a CIA • No release of federal False Claims Act liability • No release of OIG permissive exclusion authority

12. Negotiating with OIG • Potential for “standard draft” • Understand OIG’s position on issues • Demonstrate “how this problem will not happen again” • Establish communications

13. Negotiating with OIG • Prepare for negotiations • Involve client’s compliance team • Involve IRO in scope development • Involve legal advisor on contractual issues

14. Negotiating with OIG • Present current compliance structure • Use to reduce scope of IRO review • Shift monitoring to internal resources • Present alternative to address OIG concerns

15. Negotiating with OIG • Incorporate re-negotiation options • Pick your battles- standard clause • Frequently asked questions • Annual report checklist

16. Typical Provisions • Definitions • Appointment of individual responsible for compliance • Written standards such as policies and procedures and a code of conduct • Training and education for employees

17. Typical Provisions • Review measures • Validation review • Reporting requirements • Material deficiency defined • Reporting material deficiency

18. Typical Provisions • Reporting of misconduct • Ineligible persons • Inspection, audit, review • Implementation report • Confidential disclosure

19. Typical Provisions • Stipulated penalties • Claims review • Third party billers • Dispute resolution

20. Current Trends • OIG performing on-site audits • OIG has authorization and funding to conduct audits • OIG using on-site audits to re-audit providers whose annual reports appeared insufficient

21. Current Trends • Cost of CIA to an organization • Potential for modifying the number of years for compliance and billing engagements • Allowing entities to reduce scope of IRO review in later years

22. Current Trends • Importance of OIG acknowledgement of procedures and communication with IRO (compliance vs. billing engagements) • If IRO procedures deemed inadequate, OIG will look to client • An agreement on coding criteria prior to initiation of billing revenue

23. Current Trends • Use of IRO for other engagements • It all depends • Disclose work in annual/IRO report • Audit worksheet and overpayment form

24. Current Trends Sampling Issues: Missing Records “Often sample items cannot be located. How missing sample items are handled depends on the objectives of the audit and the characteristics being analyzed. The sampling plan must include a discussion of how missing sample items are to be handled and the rationale.” Source: OIG Chapter 6-20, OAS Audit Policies and Procedures, OAS Chapter 20-02, OAS Transmittal 96:04 (08-05-96)

25. Current Trends Sampling Issues: Missing Records “The sampling plan must include a discussion of how missing sampling items were handled and the rationale.” Source: OIG Provider Self-Disclosure Protocol, 63 Fed. Reg. 58399 (October 20, 1998)

26. Current Trends Sampling Issues: Missing Records “Question 18: When performing a billing review, if supporting documentation for the unit that was randomly selected is not available, how should this unit be evaluated.” Source: Frequently Asked Questions Related to OIG Corporate Integrity Agreements (November 6, 2000)

27. Current Trends “Answer 18: If the provider cannot produce supporting documentation for a unit that was selected, this unit should be considered an error in the amount paid. It is NOT permissible for the provider to remove this unit from the sample, to replace this unit with spare or to consider that the service was properly coded, billed, and reimbursed.” November 6, 2000

28. Current Trends Sampling Issues: Missing Records For the purpose of appraising Items included in the Claims Review and/or the Probe Sample, any Paid Claim for which Provider cannot produce any documentation (i.e., missing medical records) to support the Paid Claim shall be reported as an error and the total reimbursement received by Provider for such Paid Claim shall be reported and repaid as an Overpayment. Replacement sampling for Paid Claims with missing documentation is not permitted.” Source: Provision from recently proposed CIA (2001)

29. Current Trends Sampling Issues: Missing Records Proper “statistical” procedure would be to: • Determine the objectives of the audit and the characteristics being analyzed • Consider the facts and circumstances regarding the missing record(s) • Identify the appropriate treatment for purposes of the extrapolation

30. Current Trends • Variability of IRO implementation • IRO fees related to sampling • Issues related to sampling results Sampling Issues

31. Current Trends • New options related to probe scope • Probe sample of 30 claims and a statistically valid “Claims Review Sample” • Two probe sample of 30 claims • Probe sample of 50 claims

32. Current Trends Sample Language • Probe Sample with Minimum Size of 30 Items: The probe sample shall include at least 30 items…. If no over payments are found in the probe sample, then a second probe sample, of at least 30 items, must be selected and received. …If no overpayments are found in this second probe sample, then the claims review can be terminated.

33. Current Trends Sample Language • Probe Sample with Minimum Size of 50 Items If no overpayments are found in this 50 item probe sample, then the claims review can be terminated with review of the probe sample.

34. Current Trends • Trigger Clause • Use 30 claim probe • If gross dollar overpayment does not exceed a 5% error rate, then a full statistical sample is not required • This is not a standard clause

35. Current Trends Scope and Intent of System Reviews System Review. The IRO shall review billing and coding system and/or operations and cost report preparation process (the “System Review”)

36. Current Trends • The system review can include: • Review of billing system procedures, controls, safeguards, etc., related to billing and coding • Review of systems and controls over preparation of cost reports • Report on system and weaknesses of the system

37. Current Trends Retention of Drafts Retention of Records. The IRO and Provider shall retain and make available to OIG upon request, all work papers, supporting documentation and draft reports related to the engagement.

38. Current Trends • Becoming a more common element in CIAs with nursing homes and other long term care providers • Potential for expansion to acute care facilities Quality of Care Initiative