The Effect of Exclusion from Participation in Federal Health Care Programs

1. The Effect of Exclusion from Participation in Federal Health Care Programs AHLA/HCCA FRAUD AND COMPLIANCE FORUM September 29 – October 1, 2013 Baltimore, MD

2. Presenters: Gabriel Imperato Managing Partner, Broad and Cassel Fort Lauderdale, FL. Jim Sheehan Chief Integrity Officer / Executive Deputy Commissioner New York City Human Resources Administration New York, NY.

3. Agenda: • Updated Advisory Bulletin from the OIG • What is the Effect of an Exclusion? • Payment Prohibition • Civil Money Penalties • Assessments • What Constitutes a Violation of the Payment Prohibition? • Examples • How to Avoid Violating the Payment Prohibition • Screening • How to Limit Liability for a Violation • Self-Disclosure

4. Update from the Office of Inspector General • OIG issued an Updated Advisory Bulletin on May 8, 2013 addressing the scope and effect of the legal prohibition on payment by Federal health care programs for items and services furnished by: • An excluded person, or • At the medical direction or on the prescription of an excluded person.

5. Why are Persons Excluded? • Sexual assault • Patient abuse • Failure to repay HEAL loans • Criminal convictions related to programs • Criminal convictions related to controlled substances

6. What is the Effect of an Exclusion? • The OIG has the authority to exclude persons (individuals and entities) from participation in Federal health care programs if the person has engaged in fraud or abuse of these programs. • Ex: • A health care fraud felony conviction results in a 5-year mandatory exclusion from participation in Federal health care programs • A license revocation or suspension may result in exclusion for at least the period imposed by the state licensing authority.

7. What is the Effect of an Exclusion? (cont.) • Payment prohibition • No payment may be made by a Federal health care program for items or services furnished by or at the medical direction or prescription of an excluded person. • The payment prohibition continues to apply even if the person changes from one health care profession to another while excluded.

8. What is the Effect of an Exclusion? (cont.) • The payment prohibition applies: • To providers such as health care providers, managed care entities, or suppliers who contract with or employ excluded persons! • Whether the Federal program payment is based on a cost report, fee schedule, capitated rate, or other payment methodology

9. What is the Effect of an Exclusion? (cont.) • Civil Money Penalties • OIG has the authority to impose Civil Money Penalties for violations of the payment prohibition • Civil Money Penalties up to $10,000 may be imposed per service or item furnished by an excluded person

10. What is the Effect of an Exclusion? (cont.) • Assessments • OIG has the authority to assess a provider for a violation of the payment prohibition • Assessments may be up to three times the amount of the claim submitted in violation of the payment prohibition

11. What is the Effect of an Exclusion? (cont.) • Best practice tips: • Pay attention to exclusions because the payment prohibition applies indirectly to a provider who contracts with or employs an excluded person …. continued….

12. What is the Effect of an Exclusion? (cont.) • Best practice tips (cont.): • Understand how industry practices or arrangements could violate the payment prohibition. • Be aware that the payment prohibition extends to services and items beyond direct patient care, i.e. administrative or management services.

13. What Constitutes a Violation? • There is little to no case law – it is all interpretation • OIG provides the following examples of scenarios beyond direct patient care that violate the payment prohibition: • An excluded pharmacist who is involved in any way in filling prescriptions for drugs that are billed to Federal health care programs. • An excluded individual who inputs prescription information for pharmacy billing. …continued….

14. What Constitutes a Violation? (cont.) • Examples of scenarios beyond direct patient care that violate the payment prohibition (cont.): • An excluded person who serves as chief financial officer, physician practice office manager, general counsel, or director of health information management at a provider that furnishes items or services paid for by Federal health care programs. …continued….

15. What Constitutes A Violation? (con't) Services by Excluded Persons • “The prohibition on Federal health care program payment for items or services furnished by an excluded individual includes items and services beyond direct patient care.” • For instance, the prohibition applies to services performed by excluded individuals “. . . One . . . example is services performed by excluded pharmacists or other excluded individuals who input prescription information for pharmacy billing or who are involved in any way in filling prescriptions for drugs that are billed to a Federal health care program.” • From “Special Advisory Bulletin on Excluded Services” (OIG 2013)

16. Order or Prescription By Excluded Person • Many providers that furnish items and services on the basis of orders or prescriptions, such as laboratories, imaging centers, durable medical equipment suppliers, and pharmacies, have asked whether they could be subject to liability if they furnish items or services to a Federal program beneficiary on the basis of an order or a prescription that was written by an excluded physician. Payment for such items or services is prohibited.10 To avoid liability, providers should ensure, at the point of service, that the ordering or prescribing physician is not excluded.11 • From “Special Advisory Bulletin on Excluded Services” (OIG 2013)

17. What Constitutes a Violation? (cont.) • Examples of scenarios beyond direct patient care that violate the payment prohibition: • An excluded individual who provides services related to strategic planning, billing, accounting, staff training, and human resources if such services are related to Federal health care programs. • An excluded individual who works for or under arrangement with a hospital, nursing home, or home health agency who performs services related to review of treatment plans or preparation of surgical trays.

18. What Constitutes a Violation? (cont.) • A provider that participates in Federal health care programs may contract with or employ an excluded person under a limited set of circumstances without being liable for Civil Money Penalties. The payment prohibition is not violated when: • The excluded person furnishes items or services solely to non-Federal health care program beneficiaries, and the Federal health care programs do not pay for any items or services, directly or indirectly.

19. What Constitutes a Violation? (cont.) • A provider may be liable for CMPs, even if it does not pay the excluded person for their services. For example: • A nursing home that arranges with an excluded health care professional to volunteer at its facility when those services are included in claims submitted to Federal health care programs.

20. How to Avoid a Violation-Sneaky Footnotes • 10 “Some excluded practitioners will have valid licenses or Drug Enforcement Agency (DEA) numbers. Therefore, it is important not to assume that because a prescription contains a valid license number or DEA number, the practitioner is not excluded.” • 11 “In some cases, pharmacies and laboratories rely on Medicare Part D plans and/or State agencies to ensure that prescribers are not excluded through, for example, computer system edits. These alternative screening mechanisms may effectively identify excluded individuals and prevent the pharmacies or laboratories from submitting claims for services ordered or prescribed by excluded individuals. However, pharmacies and laboratories that rely on a third party to determine whether prescribers are excluded should be aware that they may be responsible for overpayments and CMPs relating to items or services that have been ordered or prescribed by excluded individuals. “ • From “Special Advisory Bulletin on Excluded Services” (OIG 2013)

21. BUT – Every Physician Who Orders Services Must Be Enrolled • Shouldn’t I be able to rely upon edit system at Medicare, Medicaid, or MCO-if enrolled, not excluded-if excluded, not enrolled • Not really- • ACA AND CMS REGULATIONS REQUIRED SIGNIFICANT CHANGES IN STATE ENROLLMENT SYSTEMS IN 2012 • Many states have not systematically reenrolled or verified existing providers in many years-nor had Medicare-and Medicare edits to prevent payment for unenrolled providers delayed again

22. Not Just Excluded Persons • “Billing under” or “ordering under” another provider’s name and number • Unlicensed or restricted providers • Enrollment denied providers See 42 CFR 424. 530 • Enrollment revoked providers See 42 CFR 424.535; See "Medicare Program; Requirements for the Medicare Incentive Reward Program and Provider Enrollment" proposed rule April 29, 2013 • Providers with surrendered DEA numbers • Excluded providers • Excluded person with ownership or control interest • 10-12% of providers do not have valid enrollment records (CMS)

23. Revocation of Enrollment and Billing Privileges • 42 CFR §424.535 • (b)When a provider’s or supplier’s billing privilege is revoked, any provider agreement in effect at the time of revocation is terminated effective with the date of revocation. • (f) Additional review. When a provider or supplier is revoked from the Medicare program, CMS automatically reviews all other related Medicare enrollment files that the revoked provider or supplier has an association with (for example, as an owner or managing employee)to determine if the revocation warrants an adverse action of the associated Medicare provider or supplier. • How often does this happen now?

24. Other Enrollment Guidance • Medicare Program Integrity Manual Chapter 15, Medicare Enrollment-cms.gov/regulations and manuals/Manuals (Rev. 12/2012) • Medicaid Program Integrity Manual Chapter 13-provider screening and enrollment • Novitas-solutions.com /enrollment/form-855 (Medicare enrollment contractor instructions) • Exclusions: Required disclosure on 855-otherwise not in Medicare PECOS database (OIG, states)

25. False Claims Act Exposure for Managed Care Subcontractors Using Excluded Persons? • Managed care certifications and subcertifications • Right to payment, compliance with regulations and program instructions

26. United States of America, ex rel. Anthony R. Spay v. CVS Caremark Corp. (E.D. Pa. December 2012) • “[A]s a condition for receiving payment, a Part D sponsor must certify the accuracy, completeness, and truthfulness of all data, . . .related to the requested payment from the government. When that claims data is generated by a subcontractor of a Part D Sponsor, such as a PBM, the subcontractor must similarly certify, as a condition of payment, the truthfulness, accuracy, and completeness of the data.”

27. Spay: Claims Data Accuracy is a Condition of Payment Based on the Prescription Drug Manual • “The plain import of this language suggests that 42 CFR 423.505(k)(3) was designed precisely to make a subcontractor's certification of the truthfulness, accuracy, and completeness of . . . data a condition of payment. Further, it indicates that false certification by a subcontractor of this information, which ‘causes’ the Part D Sponsor to submit a false claim for payment to the government, is grounds for an FCA claim.”

28. How to Avoid a Violation • There is no statutory or regulatory requirement for providers to screen employees and contractors. However, • Centers for Medicare & Medicaid require that states screen their enrolled providers monthly and, • Recommend that states require their enrolled providers to screen their employees and contractors monthly as well. • The easy qui tam? • Match the exclusion list with the MCO provider list

29. How to Avoid a Violation (cont.) • Best practice tips: • Screen your employees and contractors initially upon hiring or contracting, additionally, • Screen employees and contractors every month to determine their exclusion status … coming up next: How to screen…

30. How to Screen Employees and Contractors • OIG maintains the “List of Excluded Individuals and Entities” (LEIE) on its website. http://oig.hhs.gov/exclusions/

31. How to Screen Employees and Contractors(cont.) • The LEIE is a searchable online database of excluded individuals and entities. • The list is updated monthly http://exclusions.oig.hhs.gov/

32. How to Screen Employees and Contractors (cont.) • LEIE provides identifying information about excluded persons, such as: • Name of excluded individual or entity • Provider type • State where person resided at time of exclusion • EIN/SSN verification

33. Verify How to Screen Employees and Contractors (cont.) • The OIG recommends verifying the search results • Match the persons Employment Identification Number or Social Security Number with the information in LEIE.

34. Who Should be Screened? • The OIG recommends a two-step process to determine who should be screened. • First step is to ask: • Is the service or item provided under each contractual relationship or in each job category directly or indirectly, in whole or in part, payable by a Federal health care program? If not, then the payment prohibition is not implicated

35. Who Should be Screened? (cont.) • If the answer to the question in step one is yes, then the provider should limit its CMP liability by proceeding to step two. • Step two: • Screen all persons that perform under that contract or in that job category • Best practice tip: • Maintain documentation of all screenings (i.e. screen shots of the individual LEIE searches)

36. Who Should be Screened? (cont.) • A provider should consider if it is sufficient to screen the contractor’s exclusions status only, or • If the provider should extend its screening practice to include screening the contractor’s employees too. • Keep in mind that the provider is subject to CMP liability regardless of by whom or whether screening is performed!

37. Who Should be Screened? (cont.) • A provider can choose to rely on screening conducted by a contractor, i.e: • a staffing agency, • a physician group, or • a third-party billing contractor. However, CMP liability remains with the provider! …continued…

38. Who Should be Screened? (cont.) • Best practice tip: Providers relying on a contractor to conduct the screening should: • Include the screening requirement in their contractual agreement, and • request and maintain screening documentation from the contractor in order to possibly reduce CMP liability.

39. Exclusion example: Dr. Ioni Sisodia • New York psychiatrist entered a plea of guilty to petty larceny related to submission of Medicaid claims and paid $75,645.83 in fines and restitution (People of the State of New York v. Ioni Sisodia, Kingston City Court) • At sentencing Dr. Sisodia asked the court for “added protection for [her]self . . That through institution there will be billing or company billing that it would be allowed.” • Court responded: “that’s going to be between you and your employer, they’re going to have to do the best they can.” . . . continued . . .

40. Exclusion example: Dr. Ioni Sisodia(cont.) • OIG notice of exclusion: • “the plain language of section 1128(c)(3)(B) of the [Social Security] Act requires the duration of Petitioner’s exclusion to be no less than five years.” • Dr. Sisodia was excluded April 20, 2008 by OMIG, as required by federal law. • March 30, 2009, consent censure and reprimand by NY Office of Professional Medical Conduct. Dr. Sisodia was permitted to retain her medical license.

41. Exclusion example: Dr. Divesh Patel • Dr. Divesh Patel of Orange, Ohio pleaded guilty to Medicare/Medicaid fraud • Dr. Patel knowingly employed and excluded person, Mabel Bush, to submit claims to Medicare and Medicaid • “Was aware that Bush falsified documents . . . Where the services were provided by home health aides that had previous criminal convictions . . “ resulting in exclusion.

42. Limiting Liability by Self-Disclosure • A provider that discovers it has contracted with or employed an excluded person may self-disclose this to the OIG through the Provider Self-Disclosure Protocol. (SDP). • Excluded persons ordering or providing services is the top-reason for self-disclosure to OIG/HHS • The SDP provides a process to voluntarily identify, disclose, and resolve potential fraud involving Federal health care programs.

43. Provider Self-Disclosure Protocol • The SDP provides guidance on how to: • Investigate conduct, • Quantify damages, and • Report conduct to the OIG. • When the OIG settles with a self-disclosing provider it generally releases the disclosing provider from permissive exclusion without requiring any integrity agreement obligations.

44. Summary of Best Practice Tips: • The payment prohibition applies indirectly to a provider who contracts with or employs an excluded person • Understand how industry practices or arrangements could violate the payment prohibition. • Be aware that the payment prohibition extends to services and items beyond direct patient care, i.e. administrative or management services.

45. Summary of Best Practice Tips (cont.) • Screen your employees and contractors initially upon hiring or contracting, and: • Screen employees and contractors every month to determine their exclusion status • Maintain documentation of all screenings (i.e. screen shots of the individual LEIE searches) • Providers relying on a contractor to conduct the screening should include the screening requirement in their contractual agreement and request and maintain screening documentation to possibly reduce CMP liability. • Consider using the Self-Disclosure Protocol

46. Questions? Sources: • U.S. Department of Health & Human Services, Office of Inspector General, Updated: Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs (2013) • U.S. Department of Health & Human Services, Office of Inspector General, Exclusions Program, Background Informationavailable at http://oig.hhs.gov/exclusions/background.asp • See generally 42 U.S.C. § 1320a-7. • 42 C.F.R. §§ 1003.102(a)(2), 102(b)(12). • See 42 C.F.R. § 455.436. • U.S. Department of Health & Human Services, Office of Inspector General, Updated: OIG’s Provider Self-Disclosure Protocol (2013). • For further information concerning the Self-Disclosure Program, see http://oig.hhs.gov/compliance/self-disclosure-info/index.asp.