The State Bar of California Business Law Section 2012 Hot Topics in Health Law

Michelle L. Knowles, Esq. and Craig B. Garner, Esq. �

Health Care and Its Burdens

In a country of more than 313 million people, the pressures placed on the health care system in the United States are both enormous and complex, as Americans expect a fundamental right to first rate health care without much regard for its cost. 

However, the Federal and California governments are mindful of this expense and take pride in their important role in regulating health care on the West Coast.

•  We know we work in a heavily regulated business sector; our clients must be ready to deal with the regulating agencies.

•  Today we’ll touch on a few specific and practical suggestions for doing just that…

Alphabet Soup

HEAT�

ACHC�

OSHA �

OIG �

DOJ � DEA �

DOL �

IRS �

CMS�

CDHCS�

BOP�

�CLIENT �

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•  The question today, “Are our clients prepared for the agency on-site visits?”

•  As lawyers we advise our clients: “Be ready for these agencies to visit you.”

•  Maybe they need coaching…

“Be Ready”…

What does that mean?

•  Who is the first person the agency will encounter?

•  Does that person know what to do?

•  Does the person know who to call?

•  Who will coach them?

•  How do you get the best results?

•  Functional Area Readiness

•  Logistical Plans

•  Who will be the client contact?

•  “How to” training

•  Goal Setting

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•  Proactive verse Reactive

- Operating on Logic verse Emotion

•  Leads and Functional Area Assists

- Who are your best advocates?

•  Efficiency

- Where to find what you’re looking for

•  How to’s

- Checklists

•  Rules of Engagement

- Minimum Necessary

- Documentation

•  Post Visit Work

- Memos and Files

They’re Here To understand the scope of issues health care facilities must face on any given day, it is important to become familiar with the building blocks that make up today’s health care hierarchy. This includes the assortment of individuals involved with regulation who may pop up from time to time at a hospital near you.

This is the group that constitutes the “they” who are “here.”

Some of Our Welcome Guests

•  Office of the Inspector General

•  Centers for Medicare & Medicaid Services

•  Joint Commission

•  Board of Pharmacy

•  California Department of Public Health

•  OSHPD

•  Food and Drug Administration

•  Department of Justice

•  Centers for Disease Control and Prevention

•  Department of Homeland Security

•  Internal Revenue Service

•  Medical Board of California

•  Office of Audit Services

•  Office of Evaluation and Inspections

•  Licensing and Certification

•  Laboratory Field Services

•  Food, Drug and Radiation Safety

•  Office of the State Fire Marshall

•  Sheriff’s Department

•  Police Department

•  Board of Registered Nursing

•  Physician Assistant Committee

•  Indian Health Service

...And Others

Remember the Primary Rule: Patients Come First

•  When any federal or state agency, or another accrediting entity, arrives for an onsite inspection, always ask for proper identification.

•  It is important to remember that patient care comes first. At any time during an onsite investigation, a medical emergency always takes priority.

Know Your Compliance Organizational Structure

Follow the Leader...

The Compliance Officer (or Chief Compliance Officer) is the primary supervisor of the Hospital’s Compliance Program.

The Compliance Officer is responsible for overseeing the administration of the Hospital’s Compliance Program so as to ensure that the Hospital at all times maintains the business integrity required of a health care provider.

...and the Leaders

The Compliance Committee advises the Compliance Officer and assists in monitoring the Compliance Program.

The Compliance Committee affords the Hospital the perspectives of individuals with diverse knowledge and responsibilities within the health care field.

Know the Basic Purposes of a Compliance Program • Promote Standards and Procedures • Ensure Proper Oversight • Educate and Train • Report Infractions as Appropriate • Enforce Compliance and Disclose/Discipline as Appropriate • Monitor and Audit • Investigate and Correct

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The Role of the Employee

• Discuss, as applicable, the compliance policies and legal requirements described in this Compliance Program with all supervised personnel.

• Inform all supervised personnel that strict adherence to this Compliance Program is a condition of continued employment.

• Inform all supervised personnel that disciplinary action will be taken, including possible termination of employment or contractor status, for violation of this Compliance Program.

A Hospital employee’s familiarity with the required Compliance Program is an important factor in evaluating his or her performance. Hospital is committed to periodically training employees regarding its Compliance Program, including specifically Hospital managers and supervisors involved in any medical claims processes. To further this goal, Hospital will:

Code of Conduct

Hospital’s Code of Conduct is the keystone of its corporate integrity philosophy and communicates its ethical business standards.

The Code of Conduct serves as a cultural compass for staff, management, vendors, volunteers and others who interact with Hospital.

While the Compliance Program is a partnership within the Hospital community designed to help employees make the right business choices, the Code of Conduct serves as its centerpiece.

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Search Warrants

Search Warrant Guidelines

Any employee receiving notice of a search warrant should immediately contact the Office of General Counsel and the Compliance Officer, as well as the designated person responsible for the facility.

Hospital employees shall cooperate with a search warrant and shall respond in strict accordance with the facility guidelines.

Employees should do nothing to obstruct or interfere with an ongoing search.

Search Warrant Guidelines, Continued

If government agents arrive to conduct a search, they should be in possession of the actual search warrant. The search warrant and any attachments thereto define the areas that may be searched pursuant to the warrant and provide information about the activity the government is investigating. The target of the search warrant (a hospital facility, for example) has an absolute right to immediately obtain a copy of the search warrant documents.

Do Not Interfere With a Search

Under no circumstances should an employee attempt to interfere in any way with the conduct of a search, the examination of any particular area, or the seizure of equipment, documents, or other physical evidence. Should equipment or records necessary to the care of patients be seized, notify the designated facility official immediately. Do not volunteer to escort agents into areas they have not asked to inspect. No effort should be made to obstruct a search, but neither should any employee offer extra services not included in a warrant.

Communicating Compliance Issues

Hospital’s Compliance Hotline:

1-800-123-4567

A disclosure program should always promote the fact that participation can be done anonymously, and without fear of retaliation of any kind whatsoever.

Communicating Compliance Issues, Continued

•  Encourage open lines of communication between the Compliance Officer and the facility or facilities, as well as between the Compliance Officer and the Compliance Committee.

•  Promote an environment at health care facilities where employees can direct questions about a statute, regulation, or compliance policy to the Compliance Officer.

•  Establish telephone “Hotlines” for use by personnel and employees, as well as the Hospital or facility community, to report concerns or possible wrongdoing regarding compliance issues, as well as matters relating to serious concerns about patient care.

•  Afford individuals the opportunity to submit compliance-related questions or complaints in writing.

Communicating Compliance Issues, Continued

•  Compliance programs must prohibit retaliatory action against any person for making a report regarding compliance, whether anonymous or otherwise.

•  However, personnel cannot use complaints to the Compliance Officer to insulate themselves from the consequences of their own wrongdoing or misconduct.

•  Providing false or deceptive reports may be grounds for termination.

•  Self-reporting may be considered a mitigating factor if a person makes a forthright disclosure of an error or violation of this Compliance Program.

Communicating Compliance Issues, Continued

•  Calls to the Compliance Hotline are answered by an independent contractor, not by facility employees.

•  All calls are treated confidentially and are not traced. The caller need not provide his or her name. A Compliance Officer or designee investigates all calls and letters and initiates follow-up actions as appropriate.

•  Communications through the Compliance Hotline and letters mailed to the Compliance Officer are treated as privileged to the extent permitted by applicable law.

•  The possibility does exist that the identity of a person making a report may become known, or that governmental authorities or a court may compel disclosure of the name of the person making the report.

RACs

•  Recovery Audit Contractor (RAC) Program: This program began as a three-year demonstration using RACs to detect and correct improper payments within Medicare.

•  The original goal of the demonstration program was to determine whether the use of RACs would be a cost-effective way to maintain the integrity of Medicare by ensuring that provider payments were correct.

RACs, Continued

•  The original RAC demonstration program was successful, ending with more than $1.03 billion recovered. According to CMS, approximately 96% of these payments were overpayments collected from providers, 85% of which were collected from hospital providers. The remaining 4% were underpayments.

•  Under the Medicare Prescription Drug, Improvement, and Modernization Act (MMA), RACs received a portion of the overpayments they discovered and recovered, even if their determination was ultimately overruled.

•  Additionally, RACs were not required to engage the services of a medical director when assessing medical necessity claims. They could request an unlimited number of medical records from a particular provider, and were only required to perform limited reporting on the problem areas they identified.

MACs

•  Medicare Administrative Contractors (MACs): Groups that process Part A and Part B claims. MACs oversee claim completion and accuracy.

•  Due to the scope of this review, CMS believes MACs will be able to review discrepancies between the two sets of claims, revise payments and/or increase denials.

CMS’ Vision for the Future of MACs: (https://www.cms.gov/MedicareContractingReform/04_VisionofFutureFeeforServiceMedicareEnvironment.asp#TopOfPage)

MICs

Medicaid Integrity Contractors (MICs): MICs review Medicaid claims in search of inappropriate payments or fraud. MICs also audit Medicaid claims and identify overpayments and areas of high risk for payment errors or fraud. Some possible targets include the following:

•  Services provided after the death of a beneficiary

•  Duplicate claims

•  Unbundling of services

•  Outpatient claims with service dates that overlap dates of an inpatient stay

MICs, Continued MICs also review medical records to verify that paid claims were for the following services:

•  Services actually provided and properly documented in accordance with medical necessity

•  Services billed properly, using correct and appropriate diagnosis and procedure codes

•  Covered services

•  Services paid for in accordance with federal and state laws, regulations and policies

ZPICs Zone Program Integrity Contractors (ZPICs): Formerly known as Program Safeguard Contractors (PSCs), ZPICs serve the same jurisdictions as Medicare Administrative Contractors. ZPICs conduct investigations, aid law enforcement and conduct audits of Medicare advantage plans.  The goals of the ZPIC’s data analysis program are to identify provider billing practices and services that pose the greatest financial risk to Medicare. The data analysis program seeks to:

• Identify areas of potential error that pose the greatest risk.

• Establish a baseline so contractors can recognize unusual trends, utilization changes, or outright schemes designed to maximize reimbursement unlawfully.

•  Identify a need for local coverage determinations (LCD) (https://www.cms.gov/DeterminationProcess/04_LCDs.asp) (42 U.S.C. § 1395ff).

•  Identify claim review strategies to prevent or address potential errors.

•  Produce innovation in reviewing utilization or billing patterns that highlight potential errors.

•  Identify over-utilization of high volume or high cost services.

•  Identify program areas and/or specific providers for fraud investigations.

ZPICs, Continued

OIG website (http://oig.hhs.gov/)

OIG Organizational Chart (http://oig.hhs.gov/about-oig/organization-chart/index.asp)

The Data Bank (National Practitioner Data Bank and Healthcare Integrity and Protection Data Bank) (http://www.npdb-hipdb.hrsa.gov)

HEAT (Stop Medicare Fraud) (http://www.stopmedicarefraud.gov/)

HHS website (http://www.hhs.gov/)

About the OIG

A Roadmap for New Physicians (Avoiding Medicare and Medicaid Fraud and Abuse) (http://oig.hhs.gov/compliance/physician-education/roadmap_web_version.pdf)

Patient Protection and Affordable Care Act (http://www.gpo.gov/fdsys/pkg/PLAW-111publ148/pdf/PLAW-111publ148.pdf)

Provider Compliance Training Slides (http://oig.hhs.gov/compliance/provider-compliance-training/files/Provider-Compliance-Training-Presentationv2.pdf)

Federal Health Care Fraud and Abuse Laws (http://oig.hhs.gov/compliance/provider-compliance-training/files/HandoutLegalCitations508.pdf)

Additional Resources from the Federal Government

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Comparison of Anti-Kickback and Stark Laws (http://oig.hhs.gov/compliance/provider-compliance-training/files StarkandAKSChartHandout508.pdf)

Common Physician Self Referral Law Exceptions (http://oig.hhs.gov/compliance/provider-compliance-training/files/PhysicianSelfReferralExceptionHandout508r2.pdf)

Common Anti-Kickback Safe Harbors (http://oig.hhs.gov/compliance/provider-compliance-training/files/ListofAKSSafeHarbors508.pdf)

OIG Advisory Opinions (http://oig.hhs.gov/compliance/advisory-opinions/index.asp)

Additional Resources from the Federal Government

Chief Legal Officer, Compliance Officer and Director of Human Resources for A-Med Health Care

Michelle leads the legal, regulatory compliance, and human resource efforts of A-Med Health Care, a privately owned specialty pharmacy and disposable medical supply company based in Huntington Beach, CA.

Michelle has been integral in the development and implementation of corporate strategies taking A-Med Health Care from a small to a medium-sized company with significant share in the California specialty pharmacy and medical supply market, expanding business lines and building national opportunities. Michelle joined A-Med Health Care in 2004, after working in private practice, having spent time as an associate with Friedman Stroffe & Gerard, P.C. in Irvine, CA, and earlier as a Senior Tax Specialist at KPMG. Michelle’s private practice experience spanned general corporate work, intellectual property (trademark and copyright), and health care regulation.

Michelle graduated magna cum laude and valedictorian of the Class of 2000 of Chapman University School of Law, and was the Editor-in-Chief of the Chapman Law Review. She earned her B.A. in Business Management from California State University, Fullerton. Michelle is a member of the Health Care Law Committee, a sub-committee of the Business Law Section of the California Bar, and a Board Member of the California Association of Medical Product Suppliers.

Michelle L. Knowles, Esq.

Craig is an attorney, health care consultant and adjunct professor of law, specializing in issues surrounding modern American health care and the ways it should be managed in its current climate of reform. Between 2002 and 2011, Craig was the Chief Executive Officer at Coast Plaza Hospital, where he was   responsible for administration and oversight of this general acute care hospital providing services to the City of Norwalk and surrounding communities in southeast Los Angeles County. Craig serves on the advisory board for the College of Osteopathic Medicine of the Pacific, Western University of Health Sciences, the Board of Directors of the Los Angeles Opera, and the Board of Visitors of Seaver College at Pepperdine University. Craig is also on the Health Law Committee of the Business Law Section of the State Bar of California, and he is a Fellow Designate with the American College of Healthcare Executives.

Craig B. Garner

1299 Ocean Avenue, Suite 400 Santa Monica, CA 90401 T. (310) 458-1560 E. craig@craiggarner.com W. www.craiggarner.com