What is COMPLIANCE

Conducting business and oneself in an ethical, moral, and legal manner

3

BY FEDERAL AND STATE AGENCIES

AGGRESSIVE STEPS

Enforcement budgets – increasing each year by millions of dollars

The HEAT is on! (Health Care Fraud Prevention and Enforcement Action Team)

• Strike force teams = OIG, DOJ, FBI, state law agencies• Use complex data analytics to uncover fraud• Relators = big source for non-compliance

WHAT THEY’RE LOOKING FOR

Billing for services not rendered

Medically unnecessary services

Solicitation and receipt of kickbacks

Includes illegal payments to physicians and patients

Medically Necessary - Definition

Health-care services or supplies needed to

prevent, diagnose, or treat an illness, injury,

condition, disease, or its symptoms and that

meet accepted standards of medicine.

FALSE CLAIMS ACT

ANTI-KICKBACK STATUTE

STARK LAW INDIVIDUAL STATE LAWS

KEY

LAWS

The False Claim Act is a federal law that makes

it a crime for any person or organization to

make a false record or file a false claim

regarding any federal health care program.

FAL

SE C

LA

IMS

AC

T DEFINITION

FAL

SE C

LA

IMS

AC

TBilling for services not rendered

Altering provider claims to obtain a higher reimbursement

Submitting false information

Sales rep persuades provider to change test ordering pattern – perform unnecessary tests

Lab routinely waives co-payment, deductible or balance obligation

EXAMPLES

FAL

SE C

LA

IMS

AC

T

Forged doctor’s signatures

Coded “medical review” as “pathology services”

Calloway’s president sentenced to 18 months in jail

CASES

CALLOWAY

FAL

SE C

LA

IMS

AC

T

Unnecessary testing: $183 appropriate testing out of a bill for $3,118

CASES

HEALTH DIAGNOSTICS LAB

MILLENNIUM HEALTHSettled $260 million for allegations of unnecessary urine drug testing through use of custom profiles/standing orders and for allegations relating to genetic testing being routinely performed without regard to individualized need assessment

The biggest FCA recovery in 2016 for all of healthcare

FAL

SE C

LA

IMS

AC

T

$4.7 billion – total FCA recoveries in FY 2016 – 3rd highest since the gov’t started tracking these numbers

2016 FCA RECOVERIES

Takeaway: lab testing is a fruitful target for enforcement agencies

Illegal to solicit or receive (directly or indirectly)

any reimbursement or inducement for referral

of services reimbursed by Medicare or

Medicaid

AN

TI-

KIC

KB

AC

K DEFINITION

AN

TI-

KIC

KB

AC

K EXAMPLESCash or rebates of any kind

Fax machines

Altering provider claims to obtain a higher reimbursement

Bio hazard pick-up

Personal computers (unless restricted to lab use)

Gloves and other supplies that are not exclusive to the performance of the laboratory’s work

Over-supply of specimen transport supplies

Paying someone else to recommend LabSolutions

AN

TI-

KIC

KB

AC

K EXAMPLESTrips

Tickets and other types of entertainment

Lavish meals

Gifts

i.e.,……anything of value

Anti-kickback penalties for individuals and

entities on both sides of the prohibited

transaction

AN

TI-

KIC

KB

AC

K IMPORTANT NOTE

AN

TI-

KIC

KB

AC

K CASES

Biodiagnostic Lab Services in Parsippany, NJ

Record number of prosecutions against medical professionals in a bribery case

42 guilty pleas, 28 = physicians

Most have been sentenced to jail and significantly fined (e.g., $250,000) including physicians and sales reps

AN

TI-

KIC

KB

AC

K CASESHEALTH DIAGNOSTICS LAB

MILLENNIUM HEALTH

Free POCT cups provided in exchange for urine testing referrals

Under investigation by Federal Gov’t and Cigna

Paying specimen processing fees

Inducements to order unnecessary tests

STA

RK

LAW

Stark Law = “strict liability” law – can be violated without intention to do so

AKS hinges on intent, Stark does not

DEFINITION

Prohibits physicians from referring Medicare

or Medicaid testing to a designated health

service (e.g. a lab) in which he/she has a

financial interest (ownership, investment, etc.)

STA

RK

LAW

DESIGNATED HEALTH SERVICES

Labs

Physical/Occupational Therapy

Home health Services

Radiology Services

Durable Medical Equipment

Prosthetic Devices and Supplies

STARK II

STA

RK

LAW

DESIGNATED HEALTH SERVICES

Cannot exceed aggregate of $398 per year per provider in 2017 (mugs, pens, scratch pads, meals, professional courtesy)

Cannot give a “group gift”

Cannot take into account test volume

Cannot be conditioned on referral of business

Rep cannot circumvent limit by paying out-of-pocket

Not solicited by the physician or any employee (but rep may offer)

NON-MONETARY COMPENSATION

Individual physician dollar amount should be tracked on a yearly basis

PEN

ALT

IES

ANTI-KICKBACK STATUTE

Fines up to $25k per violation

Up to 5 years in prison

Civil monetary penalties: potential $73.5k per violation and Federal program exclusion

Treble damages (up to 3 x amount of kickback)

CRIMINAL FINES

CIVIL FINES

PEN

ALT

IES

STARK LAW

CIVIL FINES

Overpayment/refund obligation

Civil monetary penalties ($24k)

Program exclusion

Treble damages (up to 3 x the amount claimed)

Up to $100,00 for attempting to circumvent the law

PEN

ALT

IES

FALSE CLAIMS ACT

CIVIL PENALTY

Between $11k - $22k for each violation

Treble damages (3x amount of damages which Gov’t sustains)

All FCA whistleblower cases will get criminal reviews

PEN

ALT

IES

NOTE

The government/state can compound laws in one investigation (e.g., combine Stark and AKS penalties)

Lab cannot provide testing for an “excluded” individual ($15k civil monetary penalty)

Sales and MARKETING

Offer bribes

Rep, senior lab management and client are at risk

Promote testing that is unreasonable and/or unnecessary

A substantial number of Federal enforcement activities have stemmed from sales and marketing activities

State LAWS

Private insurance companies can prosecute violating labs and doctors under state law

State laws may also contain their own unique provisions – even tighter than Federal laws

Many states have their own kick-back laws which may be identical to Federal statutes

Paying Clients to DRAW/PROCESS

State law dependent: lab provides someone to process specimens

Gives rise to challenges under both Anti-Kickback Statute and Stark Law

Providing EQUIPMENT

Computers, printers, label-makers must be related to lab services only

Lab should have a written loan agreement signed by client

Lab should maintain inventory

Should be tagged as property of the lab

Equipment retrieved whenever client terminates testing service

Custom PROFILEIf doctor wants custom panel, lab must provide annual written notice that:

Explains Medicare reimbursement for each component of each profile

Informs physicians using a custom profile may result in the ordering of tests which are not covered, reasonable or medically necessary

Obtain physician signature – keep on file

Just So You Know…

Doctors must document they reviewed the results, even if all results are normal

Clinics should review orders and protocols to ensure there is an individual assessment for each patient and test order

Gov’t and private commercial insurance focus on test medical necessity

Test DOCUMENTATION

If “yes”, be careful to document why all tests in the panel are needed

Suggest to providers to ask themselves, “Do I need the entire panel or not?”

Remind and encourage physicians to be cognizant of test documentation …. especially with panels

General Rules of the Road

Be cognizant of medical necessity when discussing test panels

Don’t directly or indirectly pay the provider for referrals

Don’t pay others to recommend or arrange for referrals

SUMMARY

Contact between sales reps and clients = risk for tripping

into laws regulating conduct between those who refer and

those who receive referrals

CMS aggressively on lookout for fraud