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IOWA ASSOCIATION OF COMMUNITY PROVIDERS
2015 CONVENTION
BrownWinick Law Firm666 Grand Avenue, Suite 2000Des Moines, IA 50309-2510
Website: www.brownwinick.com BLOG: www.brownwinick.com/BLOGHealthLaw
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COST REPORTING PITFALLS
Jim WilkesBrighton Consulting Group
E-mail: [email protected] 319-626-4710 Ext. 232
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Proper Cost Reporting
Cost reports supply valuable information not only to CMS, but the provider as well Calculates costs per visit including all provider
costs. Highlights the required charge structure to cover total cost of services
Some services may be cost settled (vaccines) CMS utilizes cost report data for decision making.
Rebasing of the PPS payments can be affected by poor cost report data
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Who has to file?
Medicare Certified Iowa Medicaid?
If providing EPSDT, a new cost report format has been created by IME
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1. Accrual Basis of Accounting
Revenue is recorded in the period when it is earned, regardless of when payment is received. (reporting accounts receivable)
Expenses are recorded in the period in which they are ordered and utilized, regardless of when they are paid.
CMS-Pub. 15-1
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2. Chart of Accounts The provider’s chart of accounts should be complete and extensive enough to
cover all different types of services the provider performs The provider should not try to “fit” revenue or expenses into categories. Separate services should have complete expense and revenue accounts to
identify all revenue and costs related to a common service type.Skilled NursingPhysical TherapyOccupational TherapySpeech therapyMedical SuppliesPharmacyMedical Social ServicesHome Health AidePrivate DutyHomemaker
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3. Identify Supplies by Routine or Non-Routine
RoutineSupplies ordered in bulk & utilized for patients in small
quantities not patient specificNot charged out on claims
Non-Routine Specifically ordered for a particular patient’s illness or injuryIdentified for use on the particular patient in medical recordsOrdered by the physicianCharged on patient’s claimExamples: Wound Care Dressings, I.V. Supplies, Ostomy
Supplies, Catheters
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4. Proper Segregation of Revenue, Costs, and Service Visits
Revenue should be identified by payer source and service typeMedicare PPSMedicaid PPS, Waiver, EPSDT, etc…Private Pay visits – Nurse, HHA, Homemaker, live inTherapySupplies
Expenses identified by service typeSkilled Nursing – wages, benefits, travel, contract staffHHA – wages, benefits, travel, contract staffContract services split – PT, OT, STSupplies – routine, billable (non-routine), prescription meds, over the counter
Accurate Visit RecordsStatistics regarding visits by service types very importantVisit statistics should match claim data
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5. Related Party Disclosure Transparency regarding the certified agency’s business practice very important Avoid fraud, waste, & abuse!
CMS looking for non-competitive wages/prices paid to related parties Are there any expenses recorded on the agency’s cost report that are related to ownership
or management of the agency? Is an owner an employee or contracted vendor? Payments directly to an owner,
director, or anyone related to an owner or director?Spouse, ex-spouseChild, step childGrand childSibling, Step siblingParent, step parentIn-law?
Any Vendor related to an owner or director in any way?Related individual own the therapy company, medical supplier, pharmacy,
others? If you are wondering, report it!
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Cost Report Certification
Individual certifying the cost report is attesting to:Being familiar with the laws and regulations
regarding the provision of health services and that the services reported in the cost report were provided in compliance with such laws and regulations.
The cost report was examined by the person certifying and accurately reflects the revenue, expenses, and services performed by the provider
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Change is normal
Education is Important
Jim Wilkes
Brighton Consulting Group
319-626-4710 ext 232
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QUESTIONS
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MEDICAID FRAUD, WASTE, AND ABUSE
Catherine C. Cownie: [email protected] Adam J. Freed: [email protected]
Kelly D. Hamborg: [email protected] Michael E. Jenkins: [email protected]
Website: www.brownwinick.com BLOG: www.brownwinick.com/BLOGHealthLaw
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THE MEDICAID FRAUD, WASTE AND ABUSE REGULATORY ENFORCEMENT LANDSCAPE
--RESPONDING TO INVESTIGATIONS
Catherine C. Cownie and Adam J. FreedBrownWinick
666 Grand Avenue, Suite 2000Des Moines, IA 50309-2510Telephone: 515-242-2400
E-mail: [email protected] [email protected]
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Overview
The problem of healthcare fraud, waste, and abuse (“FWA”)
Iowa’s regulatory framework
Observations on enforcement actions
Responding to investigations
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Increasing Enforcement Action Nationwide
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Prevalence of Fraud in American Health Care
The National Health Care Anti-Fraud Association (NHCAA) estimates that
between 3 and 10 percent of the nation’s annual benefits paid for health care were
paid for fraudulent or abusive submissions.
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2014 Medicaid Fraud Control Unit Enforcement Actions in Iowa
• 270 Investigations
• 48 Individuals charged/indicted
• 33 for Fraud
• 15 for Abuse or Neglect
• $24.4 Million Total Recoveries
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Recent Enforcement Actions
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Recent Enforcement Actions
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Recent Enforcement Actions
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Causes of Fraud, Waste, and Abuse
Lots of Money in the System
Complex Services Provided
Service Recipients are not the Payors
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Intentional Fraud, Waste, and Abuse
Unscrupulous Owners
Unscrupulous Employees
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Unintentional Fraud, Waste, and Abuse
Complex and/or Ambiguous Rules
Inconsistent Practices among Payors
Different Rules Between States
Confusion/Mistakes that Occur when Transition between Information Technology Systems
Loss of Institutional Knowledge/Staff Turnover
Forays into New Lines of Business
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Types and Examples of Fraudulent and Abusive Practices
Billing for Services Not Performed• Avoiding this problem is often self-explanatory, but
certain situations may be more complicated.• Important to check benefits manual.• Honest disclosure of the situation is best practice for avoiding
any problems with the carrier.
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Types and Examples of Fraudulent and Abusive Practices
Upcoding• Upcoding occurs when a coding procedure with a
more extensive degree of difficulty is used than what was actually provided.
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Types and Examples of Fraudulent and Abusive Practices
Waiver of Co-Payments• Co-payments are considered essential
element of cost structure in the contract between the insured and the insurance carrier.
• Waiving co-payments arguably encourages more usage of the coverage than would normally occur, distorting the cost structure of the insurance.
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Types and Examples of Fraudulent and Abusive Practices
Waiver of Deductibles• As with co-payments, deductibles are
considered an essential element of an insurance carrier’s cost structure.
• Waiver of deductibles arguably encourages more usage of coverage, potentially distorting cost structure.
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Types and Examples of Fraudulent and Abusive Practices
Altering Dates of Service• The date a procedure is performed is
important, as it relates to patient eligibility requirements and waiting periods.
• It is fraudulent to send a claim for treatment using a date other than the actual date of service.
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Types and Examples of Fraudulent and Abusive Practices
Misrepresenting Patient Identities• Providing a service for one patient but
sending in a claim for a different person is fraud.
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Types and Examples of Fraudulent and Abusive Practices
Not Disclosing Existence of Additional Primary Coverage• Patients covered by more than one health
plan may receive benefits from all plans.• Sending in multiple claims to different carriers
as if they were each the primary carrier is considered fraudulent.
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Types and Examples of Fraudulent and Abusive Practices
Performing Unnecessary Services• Performing and billing for services that were
not needed or providing additional services or procedures beyond what is required by the patient’s condition is considered fraudulent.
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Types and Examples of Fraudulent and Abusive Practices
Misrepresentation of Services• Involves changing the code to increase the
amount of the claim.
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State of Iowa Fraud, Waste, and Abuse Regulatory Framework
Laws• Federal Laws• State Laws• Administrative Rules• Guidance
Enforcement Organizations and Offices• Iowa Medicaid Enterprise Program Integrity• Office of Inspector General• DIA Medicaid Fraud Control Unit (“MFCU”)• Attorney General’s Office• US Attorney’s Office• County Attorneys
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Iowa Health Care FWA Laws – The Big Three
Affordable Care Act Iowa False Claims Act S.F. 357
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Affordable Care Act
Shifts focus of oversight from “pay and chase” model to “shut off the tap” model
Tap is Shut off on a “Credible Allegation of Fraud”
Partial Payments can be Restored on a Showing of “Good Cause”
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Affordable Care Act (Cont.)
ACA requires states to suspend payment upon credible allegation of fraud. • States risk losing funding for noncompliance.
“Good cause” is narrowly defined. Providers have administrative appeal
rights and judicial review.• BUT, consider the impact of payment
suspension during appeal.
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Iowa False Claims Act
First enacted on July 1, 2010 (amended effective July 1, 2011)
Mirrors the Federal False Claims Act Penalties for anyone who “knowingly presents, or
causes to be presented, a false or fraudulent claim for payment or approval.”
Triple Damages Civil Monetary Penalties Whistleblower Provisions
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Medicaid Program Integrity (S.F. 357)
Unanimously passed Iowa Legislature, signed by Governor on April 5, 2013.
Provides authority for Iowa Medicaid Program Integrity.
Largely mirrors ACA’s 60-day overpayment report and return requirement.
Failure to report and return an overpayment within 60 days constitutes a false claim.
Establishes statute of limitations (generally 5 years from the date of payment).
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Medicaid Program Integrity (S.F. 357) (Cont.)
State can place provider in receivership.
Third parties can be held liable (cost report preparers, billers, etc.).
Civil monetary penalties of up to $50,000 per claim for specified “intentional and purposeful” acts.
DHS to maintain a website with sanctioned provider list.
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Observations
Heightened enforcement activity.
Some turnover of key staff.
• Departure of Head of Program Integrity
Cooperative environment for unintentional violations.
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Responding to Inquiries and Investigations
You have the right to consent to an interview or to decline to be interviewed.• There is no such thing as an “off-the-record” interview with
the government!
You have right to legal counsel during all interviews. If you consent to interview, provide full and truthful
information.Responding to inquiries and investigations is key –
ignoring inquiries may make matters worse.Cooperation and communication is critical.
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Responding to Inquiries and Investigations (cont.)
Do NOT destroy documents. Instruct employees NOT to alter or
destroy documents. Do NOT threaten, harass, or intimidate
potential witnesses. Do NOT fabricate testimony with
employees to “get the story straight.”
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Avoiding Investigations
Take notice of erratic employee behavior.• Employees insist on controlling files. • Employees fail to follow internal policies. • Employees engage in erratic and secretive
behavior.• Employees refuse to take vacation. • Sudden employee lifestyle changes.
Investigate suspicious activity.
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QUESTIONS
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Anti-Kickback Statute
Kelly D. HamborgBrownWinick
666 Grand Avenue, Suite 2000Des Moines, IA 50309-2510Telephone: 515-242-2447Facsimile: 515-323-8547
E-mail: [email protected]
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Anti-Kickback Statute Elements
Federal Criminal Statute, Prohibits
• Knowingly and willfully
• Soliciting, receiving, offering or paying remuneration
(directly or indirectly, in cash or in kind)
• Overtly or covertly
• In order to induce referrals of goods or services
reimbursable under federal health care programs (i.e.,
Medicare and Medicaid)
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Anti-Kickback Statute
• Referrals• Referral of a patient or the purchasing, leasing,
ordering (or arranging for or recommending the purchasing, leasing, or ordering) of any good, facility, service or item if any portion of that patient’s care or the cost of the good, facility, service or item may be paid in whole or in part by a federal health care program
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Anti-Kickback Statute (cont.)
Remuneration
• Direct payment of cash or loans
• Anything of value, whether tangible or
intangible
• Free items and/or services
• A reduction or discount
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Anti-Kickback Statute - Intent
• A criminal statute, with a specific intent requirement
• Knowing and willful• Affordable Care Act – Intent to violate
the law, but not necessarily an intent to violate the Anti-Kickback statute itself
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Anti-Kickback StatuteFederal Health Care Programs
• Goods or services reimbursable under federal health care programs (Medicare); or
• State health care programs funded by the federal government (Medicaid)
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Anti-Kickback StatutePenalties & Consequences Individuals and corporations are liable under the statute Criminal liability to parties on both sides of an impermissible “kickback”
transaction Criminal Penalties - Felony
• Up to five years imprisonment for each offense• Fine of up to $25,000 (for each illegal payment)
Mandatory exclusion from Medicare and Medicaid programs
False Claims Act Liability
Civil Administrative Penalties
• Civil monetary penalty of $50,000 per violation
• Treble damages in the amount of the kickback
• Qui-Tam (whistle-blower) actions
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Anti-Kickback StatutePublic Interest Concerns
• Increased risk of over-utilization
• Corruption of medical decision-making
• Increased costs to federal health care
programs
• Unfair competition
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Common Transactions Potentially Subject to the Anti-Kickback Statute
Equipment or space leases Personal Services arrangements with physicians or
others in a position to refer Waiver of patient copayments and deductibles Gifts, entertainment and courtesies to referral
sources Marketing arrangements Free use of products
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Anti-Kickback StatuteExceptions and Safe Harbors
Business arrangements which satisfy a statutory exception or regulatory safe harbor are protected from liability under the Anti-Kickback Statute.
Where an arrangement does not satisfy an exception or safe harbor, it may be reviewed to determine whether it is likely to result in the types of abuses the Anti-Kickback Statute is designed to combat.
Safe Harbor Concepts: Written agreements Remuneration based on fair market value
• Value that would be assigned to the service or item in question by individuals or entities who have an arms-length relationship
Not based on volume or value of referrals
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Anti-Kickback StatuteRegulatory Safe Harbors
Space rental Equipment rental Personal service and
management contracts Investment interests in
publicly traded companies Sale of practice Referral services Warranties Discounts Employees
Group purchasing arrangements
Certain waivers of Part A coinsurance
Increased coverage, reduced cost sharing amounts or reduced premium amounts offered by certain health plans
Price reductions offered to certain health plans
Investment interests in underserved areas
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Anti-Kickback StatuteRegulatory Safe Harbors (cont.)
Investment interests in ambulatory surgery centers
Investment interests in group practices composed exclusively of active investors who are licensed health care professionals
Rural practitioners recruitment incentives
Obstetrical malpractice insurance subsidiaries
Referral agreement for specialty services
Cooperative hospital service organizations
Ambulance replenishment arrangements
Electronic prescribing and electronic medical records;
Federally Qualified health centers
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Anti-Kickback StatuteFacts and Circumstances Analysis
How does the arrangement harm federal programs or patients?
Does it increase costs? Does it negatively affect medical judgment? Does it hinder proper reporting of costs?
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QUESTIONS
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Investigating and Reporting an Overpayment
A Case StudyMichael E. Jenkins
666 Grand Avenue, Suite 2000Des Moines, IA 50309
Telephone: 515-242-2418Facsimile: 515-323-8518
Email: [email protected]
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Overview
Discovery of Possible Overpayment Investigation of Overpayment Developing Reporting Plan Negotiating with the State Reporting and Repayment
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Profile of Fictional Behavioral Health
Nonprofit, multi-function, behavioral health provider serving several hundred clients and their families in northeast Iowa
Staff of approximately 200 employees and contractors
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Discovery of Potential Overpayment
Psychiatrist retires in 2012 and Fictional Behavioral Health uses telemed psych services for all of 2013
Organization merges with another provider with a different federal tax id number in early 2014
Merged Organization hires new psychiatristRelatively new billing manager instructs all staff to
bill new doctor’s first visits with patients as “new” patient visits instead of “established” patient visits (CPT Code 99204 rather than 99214)
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Discovery of Potential Overpayment (cont.)
Billing manager attends correct coding seminar in July 2014 and learns that the method used to bill these E/M codes for “new” patients was incorrect; CMS publishes clear guidelines on “new” vs. “established” patients, https://questions.cms.gov/faq.php?id=5005&faqId=1969
Billing manager alerts executive management that this mistake has been made
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Investigation
Billing manager puts a hold on the submission of any new claims pending the outcome of the investigation
Provider reviews billing claims and remittance advices to determine the extent of the overpayment
For each patient, the overpayment equals the difference in the amount paid by Medicaid for the incorrectly billed code and the correct code
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Investigation (cont.)
Fictional Behavioral Health had billed 400 encounters with the incorrect code
The difference in payment between the incorrect code and the correct code is $20
Fictional Behavioral Health has identified an overpayment of $8,000
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Developing a Reporting Plan
Know that 60 day clock is ticking, and whistleblower actions can be initiated up until the point of settlement or acceptance of the overpayment
Consider impact of overpayment on cash flow of the organization
Consider whether organization can definitely identify the extent of the overpayment
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Developing a Plan of Correction
What written policies and procedures need to be put in place to prevent a similar overpayment
How will the organization monitor compliance with the new policies and procedures
Are there other payors that may have overpaid?
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Engage State Officials
Anonymously discuss proposed terms of reporting and repaying of the overpayment with attorneys for the state
Begin to engage staff in Medicaid Program Integrity
Prepare for a possible investigation by the Medicaid Fraud Control Unit
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Report and Repay Overpayment
Prepare overpayment cover letter Submit overpayment report and
repayment
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QUESTIONS
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Website: www.brownwinick.comToll Free Phone Number: 1-888-282-3515
OFFICE LOCATIONS:
666 Grand Avenue, Suite 2000Des Moines, Iowa 50309-2510
Telephone: (515) 242-2400Facsimile: (515) 283-0231
616 Franklin PlacePella, Iowa 50219
Telephone: (641) 628-4513Facsimile: (641) 628-8494
DISCLAIMER: No oral or written statement made by BrownWinick attorneys should be interpreted by the recipient as suggesting a need to obtain legal counsel from BrownWinick or any other firm, nor as suggesting a need to take legal action. Do not attempt to solve individual problems upon the basis of general information provided by any BrownWinick attorney, as slight changes in fact situations may cause a material change in legal result.
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