Fraud & Medicare Compliance

Thomas N. Shorter, Esq., FACHE

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PSOW 28th Annual WorkshopSeptember 23, 2015Tundra Lodge Hotel & Convention CenterGreen Bay, WI

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Overview

• Legal Framework−Governmental Oversight−Other groups to know−Laws to Know

• Recent Fraud Activity

• Compliance Program Guidance

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Legal Framework - Governmental Oversight

FederalOIG – Office of Inspector GeneralDHS - U.S. Department of Health & Human

ServicesDOJ – Department of JusticeCMS – Center of Medicare/Medicaid Services

StateAG - Wisconsin Attorney General’s OfficeDHS - Wisconsin Department of Health ServicesOIG - Office of Inspector General

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Additional Groups to Know

ZPICs – Zone Program Integrity ContractorsPrimary goal – to identify cases of suspected fraud, develop them thoroughly and in a timely manner, and take immediate action to ensure that Medicare Trust Fund monies are not appropriately paid out and that any mistaken payments are recouped.

ZONE 3 – Cahaba Safeguard Administrators−Operational April 24, 2012−IL, IN, KY, MI, MN, OH and WI

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Additional Groups to Know cont.

RACs – Recovery Audit Contractors

To identify and correct Medicare improper payments through the efficient detection and collection of overpayments made on claims of health care services provided to Medicare beneficiaries, and the identification of underpayments to providers so that the CMS can implement actions that will prevent future improper payments in all 50 states.

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Laws to Know

Anti-kickback Statute

False Claims Act

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Laws to Know - Anti-kickback Statute

42 U.S.C. § 1320a-7b.

Unlawful to: knowingly and willfully, solicit or receive any remuneration (directly or indirectly, overtly or covertly, in cash or in kind).

In return for referring any item or service reimbursable by federal health care programs, or purchasing, leasing, ordering or arranging for (or recommending any of the same) any good, facility or service reimbursable by federal health care programs.

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Laws to Know - Anti-kickback Statute

Unlawful to: Knowingly and willfully, offer to pay any remuneration (directly or indirectly, overtly or covertly, in cash or kind).

To induce: Referring for any item or service reimbursable by federal health care programs, or purchasing, leasing, ordering or arranging for (or recommending any of the same) any good, facility or service reimbursable by federal health care programs.

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Law to Know – Anti-kickback Statute

3 necessary elements:• Intentional Act• Direct and Indirect Payment of Remuneration• To Induce the Referral of Patients or Business

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Laws to Know - Anti-kickback Statute

Statutory Exceptions and Safe Harbors• Discounts;• Employees;• Group Purchasing Organizations;• Sale of a practice;• Referral Services;• Warranties;• Investment Interests;• Space Rental;• Equipment Rental;• Personal Services and Management Contracts; and• Waiver of Deductibles and Coinsurance.

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What is Remuneration?

An extremely broad scope, whether in case or in kind, and whether made directly or indirectly, including:

− Kickbacks;− Bribes;− Rebates;− Gifts;− Above or below market rent or lease payments;− Discounts;− Furnishing of supplies, services or equipment either free,

above or below market;− Above or below market credit arrangements; and− Waiver of payment due.

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Laws to Know - False Claims Act

31 U.S.C. §§ 3729-3733 – “Lincoln Law”

Prohibits a person from “knowingly” submitting claims or making a false record or statement in order to secure payment of a false or fraudulent claim by the federal government.

A person:has actual knowledge of the information,

acts in deliberate ignorance of the truth or falsity of the information, and

acts in reckless disregard of the truth or falsity of the information.

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Laws to Know – False Claims Act cont.

Key elements

• False Claims• Intent• Materiality• Causation

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Laws to Know – False Claims Act cont.

Key Healthcare Theories• Upcoding/billing for Services not Rendered• False Certification of Compliance with

Regulations• Quality of Care/Worthless Services• Improper Retention of Overpayments• “Causing” submission of False Claims

Does not cover false tax returns.

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Recent Fraud Activity

Florida - 9 hospitals agreed to a $6.2M settlement for allegations of billing Medicare for unnecessary ambulance transports.

California – 5 ambulance companies agreed to settle kickback allegations for $11.5 M.

Pennsylvania – ambulance company developed a Medicare fraud scheme of $2 million in inappropriate bills.

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Recent Fraud Activity cont.

Connecticut – 2 ambulance services will pay $595,000 to resolve inappropriately

billing Medicare and Medicaid.

Wisconsin – MTM recently audited by DHS after receiving complaints by Medicaid and BadgerCare Plus members throughout the State.

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Compliance Program Guidance for Ambulance SuppliersFederal Register, Vol. 28, No. 56,March 24, 2003, 14245-14255.

Basic Elements:• Development of Compliance Program.• Designate a Compliance Officer and Committee.• Conduct effective training and education.• Develop Internal Monitoring and Reviews.

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Compliance Program• Basic Elements (continued)

• Respond Appropriately to Detected Misconduct.• Develop effective lines of communication.• Conduct internal auditing and monitoring.• Enforce standards through well-publicized

disciplinary guidelines.• Respond promptly to detecting offenses and take

appropriate corrective action.

The presentation and materials are intended to provide information on legal issues and should not be construed as legal advice. In addition, attendance at a Godfrey & Kahn, S.C. presentation does not create an attorney-client relationship. Please consult the speaker if you have any questions concerning the information discussed during this seminar.

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OFFICES IN MILWAUKEE, MADISON, WAUKESHA, GREEN BAY AND APPLETON, WISCONSINAND WASHINGTON, D.C.

Thank YouThomas N. Shorter, Esq., FACHEOne East Main Street, Suite 500

Madison, WI 53703608.284.2239, tshorter@gklaw.com