Physicians Regulatory Insurance Program

1. Physicians RegulatoryInsurance Program Presenter: Jay Lynch President

2. Misconception in the marketplaceThe government has moved on to more important concerns (homeland security, war on terror, Iran, Iraq, etc…….Recoveries total over $20 billions since 1986= 19 mile high stack of $100$3.2 billion in 2007 = all time record for one yrROI = $15 recovered for every $1 spent

3. OIG reports that nearly $1 billion in recoveries were reported for the first quarter of 2007

4. Today’s Agenda • Liability Exposure • Limiting Exposure

5. Agenda • Liability Exposure • Limiting Exposure

6. Liability Exposure • A contractor falsifies test results or other information regarding the quality or cost of products it sells to the Government; • A health care provider bills Medicare for services that were not performed or were unnecessary, or; • Performing inappropriate or unnecessary medical procedures in order to increase Medicare reimbursement. • Unbundling - Using multiple billing codes instead of one billing code for a drug panel test in order to increase remuneration. • Bundling -- Billing more for a panel of tests when a single test was asked for. • Upcoding - Inflating bills by using diagnosis billing codes that suggest a more expensive illness or treatment. • Billing for brand -- Billing for brand-named drugs when generic drugs are actually provided.

7. Liability Exposure • Upcoding employee work: Billing at doctor rates for work that was actually conducted by a nurse or resident intern. • Billing for research that was never conducted; falsifying research data that was paid for by the U.S. government. • Prescribing a medicine or recommending a type of treatment or diagnosis regimen in order to win kickbacks from hospitals, labs or pharmaceutical companies. • Billing for unlicensed or unapproved drugs. • Forging physician signatures when such signatures are required for reimbursement from Medicare or Medicaid.

8. Liability Exposure False Claims Act • Application to Healthcare • $1 Billion Budget • Expanding Investigations

9. Liability Exposure Complex Regulations • Medicare/Medicaid • Commercial Payor • Stark Law • HIPAA • EMTALA

10. The government Medicare reimbursement manual includes 100,000 + pages

11. The number of commercial Payor audits has increasedas a result of successful government investigations

12. A New York cardiologist paid $300,000 to resolve OIG’s case against him for payment of patient referral incentives

13. New rules governing the restricted use of patient information create a new liability exposure for healthcare providers

14. IOG survey results indicate that most emergency staff members were unfamiliar with recent EMTALA policy changes

15. Liability Exposure Government’s ROI • 23:1 • Over $2.1 Billion ReturnedSince 1997 • Save Medicare

16. Liability Exposure Determining Who to Audit: • Risk Assessment Software • Random Selection • Qui Tam (Whistle-Blower) • Employee • Patient • Competitor

17. Liability Exposure Initiatives • Hospitals • Physicians at Teaching Hospitals • Lab Un-Bundling • 72 Hour Window • DRG’s • Qui Tam

18. Liability Exposure Initiatives • Physicians • Billing for Services Not Rendered • Upcoding • Quality of Care • Qui Tam • Kickbacks

19. Liability Exposure Costly • Fines: $11,000 per False Claim • Penalties: Treble Damages

20. Liability Exposure Sample Claim Over a three year period Sample Physician over bills Medicare $20,000 in 20 separate billings and settles civil case for reckless conduct. $ 20,000 Over billing $ 60,000 Treble Damages: 3 x over billing amount $220,000 FCA Penalty: 20 false claims @ $11,000 each $300,000 Total - $20,000 No coverage for the actual amount of over billing $280,000 Total Financial Exposure

21. Agenda • Liability Exposure • Limiting Exposure

22. Limiting Exposure Managing Risk • Compliance Program • Software • Billing • Compliance • Training/Credentials for Coders

23. Limiting Exposure Transferring Risk • E&O Insurance Protects against allegations of fraud and abuse

24. Limiting Exposure • Defense Only Programs • Restrictive Wording in Policies • Low Limit Options • Limited Retrospective Coverage

25. Agenda • Liability Exposure • Limiting Exposure

26. Policy form addresses specific exposures not clearly defined or specifically excluded in other policies

27. Indemnification • Expanded Regulatory Coverage • Higher Liability Limits • Prior Acts

28. Scaleable Coverage • Hospitals • Physicians • Other

29. Hospitals • Application & Risk Assessment • Coinsurance/Retentions • $50 Million Limit • Risk Management Options

30. Physicians • Application & Risk Assessment • $1 - 5 Million • Risk Management Options

31. Features • Cost Efficiencies in Defense • Experienced Law Firms • Audit team • Fines and Penalties • Risk Management/Engineering Tools • Due Diligence for Mergers and Acquisitions

32. Summary • Healthcare providers are at risk • E&O insurance transfers risk • provides flexible and affordable coverage

33. THE PHYSICIANS ADVOCATE, LLC866-765-1058Christopher Prestera, JDchris@phyadv.com