Steven Baruch - Health Care Compliance Association

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December 2010 34 Health care reform and its effect on compliance programs Editor’s note: Cathy Cahill-Egolf is the Chief Compliance and Regulatory Officer, Clinical Practice Management Plan, State University of New York at Stony Brook. She may be contacted by telephone at 631/444-8026 or by e-mail at Cathy.Cahill@sunysb.edu. Recent health care reform has brought significant changes to the American health care system. It is arguably the most important—yet controversial–legislation in the history of health care in our country since President Lyndon Johnson signed the Social Security Act in 1965, which established the Medicare and Medicaid programs. The Patient Protection and Affordable Care Act (PPACA), as amended by the Health Care Reconciliation Act of 2010, contains expansion of access and health insurance coverage for up to 32 million Americans. The cost of this legislation is estimated by the Congressional Budget Office (CBO) at $938 billion. Part of the legislation increased federal funding to fight fraud and abuse by more than $200 million over 10 years. The CBO anticipates $1.75 in savings for every $1 spent to fight fraud. 1 The cost will be largely funded through various taxes and fees. For health care compliance professionals, the statute offers new challenges requiring compliance programs to be revised and updated. It has long been the goal of the federal government to combat waste, fraud, and abuse by health care providers. Numerous mechanisms to combat fraud and abuse are already in place. In the past, the Office of Inspector By Cathy Cahill-Egolf General (OIG) provided guidelines for model compliance programs that identified potential health care fraud and assisted health care organizations in initiating risk assessments. Criminal and civil penalties have been in effect for those health care providers who have committed fraud against a federal health care program. One of the most frequently used tools to combat fraud and abuse is the False Claims Act, which prohibits an individual from knowingly and willfully making a false statement in relation to a claim for payment for items or services furnished under a federal health care program. Under the Health Care Fraud Statute, the term “knowingly” doesn’t require a person to have actual knowledge of the law or intent to violate the law. 2 With the advent of health care reform, the Health and Human Services (HHS) Secretary will have expanded authority for enforcement to reduce fraud and abuse. The Secretary will be able to utilize the Civil Monetary Penalty Statute to prohibit excluded individuals from ordering services and will require reporting and refunding any overpayments to Medicare and Medicaid within 60 days of identifying the overpayments. 3 In addition, the Secretary will now have the authority to suspend a provider’s payments pending an investigation of any credible allegation of fraud and abuse against that provider. 4 The Secretary will share data with other agencies in an effort to identify potential fraud. 5 PPACA made changes to the Federal Sentencing Guidelines (FSG). 6 The FSG were enhanced by requiring the United States Health Care Compliance Association • 888-580-8373 • www.hcca-info.org Sentencing Commission to ensure that: n The FSG and policy statements reflect the serious harms associated with health care fraud, and in appropriate circumstances, provide increased penalties for persons convicted of health care offenses; n As part of the review, consultation occurs with individuals or groups representing health care fraud victims, law enforcement officials, the health care industry, and federal judiciary; n Reasonable consistency exists with other relevant directives and with other guidelines under the FSG; n Any aggravating or mitigating circumstances that might justify exceptions be accounted for, including circumstances for which the FSG provide sentencing enhancements; n Any necessary conforming changes to the FSG are made; and n The FSG adequately meet the purposes of sentencing. The ultimate goal of changing the FSG is to substantially increase the penalties for individuals who commit a federal health care offense that results in more than $1 million in losses. There have already been steep penalties for making false statements; a $10,000 penalty per offense could be imposed with potential triple damages. 7 Under PPACA, the OIG may now impose a $50,000 civil monetary penalty per violation to those who knowingly make false statements. 8 Also, monetary penalties may be imposed on any person, organization, agency, or other entity that fails to grant timely access to books and records when requested by the HHS Inspector General for auditing and inspection purposes. 9 Provider screening is another method the government is using to reduce the risk of fraud, waste, and abuse. Beginning in March 2011, procedures will be in effect to screen new
providers who participate in the Medicare, Medicaid, and CHIP programs. Providers already participating in these programs will be subject to these procedures in March 2012. The level of screening will be conducted commensurate with the category of provider and the potential risk of fraud for this type of health care provider. The screening must include a licensure check, which may include licensure validation across multiple states. Depending on the level of risk for the category of provider, additional screening levels may include a criminal background check, fingerprinting, unscheduled and unannounced site visits (including pre-enrollment site visits), database checks, as well other screening as determined by the Secretary. 10 Additional safeguards have been put in place to protect the Medicare and Medicaid programs against fraud and abuse. As a condition of enrollment, some providers will be required to establish a compliance program. 11 Any physician who renders services or refers a patient for services must be enrolled in the Medicare Internet-based Provider Enrollment, Chain and Ownership System (PECOS) program. 12 The Secretary has the authority to exclude from participation any health care provider who makes a false statement on an enrollment application or any other documents submitted to a federal health care program. Effective January 1, 2011 suppliers and providers of medical services or equipment who qualify for a National Provider Identifier (NPI) must include this NPI number on all claims. 13 Over the past few years, Recovery Audit Contractors (RACs) were hired by the government to investigate Medicare fee-for-service claims to identify past improper payments. PPACA has expanded their jurisdiction to include claims associated with the Medicare Advantage plans and the Medicare Part D programs. 14 We can expect these audits to ramp up before the end of the year. With the increase in jurisdiction will come an increase in government scrutiny. In response to a report issued by the Government Accountability Office in March of 2010, CMS has adopted numerous measures to oversee the accuracy of RAC claims’ reviews. Compliance professionals need to keep ahead of the curve. The following are some steps a compliance officer may take to maintain their commitment to compliance, identify potential vulnerabilities, and reduce their risk of fraud and abuse: n Provide annual training to the board of directors regarding changes in the law and their responsibility in overseeing the compliance program; n Review your current Code of Conduct and incorporate the FSG changes into your compliance program, n Ensure that annual risk assessments are done to identify areas of potential vulnerabilities by reviewing the OIG’s annual Work Plan and by monitoring articles published by your MAC to announce forthcoming prepayment reviews; n Ensure that the organization routinely checks the government exclusion lists for all current and prospective employees; n Ensure that providers and staff receive ongoing training; and n Audit medical record documentation and provide regular feedback to physicians. Conclusion Health care reform will take years to implement. HHS intends to aggressively expand their efforts to reduce fraud, waste, and abuse. Compliance officers will need to carefully examine the many facets of PPACA. They will need to keep abreast of–and even participate in–the regulatory process. Assessing how these changes will impact the organization will be crucial. Compliance officers must Health Care Compliance Association • 888-580-8373 • www.hcca-info.org take the lead and be proactive. The analysis of the potential impacts of health care reform and sound strategy will ensure that the organization is prepared for these changes. A comprehensive compliance program will always be the most effective tool in managing the regulatory landscape ahead. n 1. See “Affordable Health Care for America Act; Preventing Waste, Fraud, and Abuse,” Fact Sheet Prepared by the House Committees on Ways and Means, Energy and Commerce, and Education and Labor; October 29, 2009, available at http://edlabor.house.gov/documents/111/pdf/ publications/AHCAA-FRAUDABUSE-102909.pdf. 2. 31 U.S.C. § 3729(b); The Patient Protection and Affordable Care Act $ 10606 (Pub.L. No. 111-148)(2010), amending 18 U.S.C. § 24(a). 3. PPACA § 6402. 4. Id. at § 6402(h)(1). 5. Id. at §§ 6402, 6403 and 6504. 6. PPACA § 10606. 7. The False Claims Act, 31 U.S.C. §3729. 8. PPACA § 6402(d). 9. Id. at § 6408. 10. Id. at § 6401. 11. PPACA at §6401 12. Id. at § 6405(a) 13. Id. at § 6402(a). 14. Id. at § 6411(b). Be Sure to Get Your CHC CEUs Articles related to the quiz in this issue of Compliance Today: n Mobility disabilities: A technical assistance manual for health care providers—By David H. Ganz and Gary W. Herschman, page 8 n The complexity of compliance basics: A CCO’s pursuit of knowledge—By H. Rebecca Ness, page 20 n Federal medical record requests: Setting up a RAC and CERT response team— By Michael G. Calahan, page 39 To obtain one CEU per quiz, go to www. hcca-info.org/quiz and select a quiz. Fill in your contact information, read the articles, and take the quiz online. Or, print and fax the completed form to CCB at 952/988-0146, or mail it to CCB at HCCA, 6500 Barrie Road, Suite 250, Minneapolis, MN 55435. Questions Please call us at 888/580-8373. Compliance Today readers taking the CEU quiz have one year from the published date of the CEU article to submit their completed quiz. December 2010 35
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Steven Baruch - Health Care Compliance Association

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