1. Copyright © 2010 Feldesman Tucker Leifer Fidell LLP Region II Annual Primary Health Care Conference CORPORATE COMPLIANCE Presented by: Jacqueline C. Leifer, Esq. Senior Partner Feldesman Tucker Leifer Fidell LLP

2. Copyright © 2010 Feldesman Tucker Leifer Fidell LLP Today’s Climate of Accountability, Transparency, and Enforcement New Laws with Expanded Definitions of Fraud Transparency Whistleblowers Self-Disclosure Increased Funding for Enforcement Reduce Fraud, Waste, and Abuse

3. Copyright © 2010 Feldesman Tucker Leifer Fidell LLP Health Reform Law Dedicates Additional Funding to Fraud & Abuse Enforcement  Health Care Fraud and Abuse Control Account received additional $10 million per year for FY 2011- 2020  Reconciliation allocated an additional $250 million to the Account for FY 2011-2016 Enhances Penalties for Fraudulent Conduct  Increases civil monetary penalties imposed by HHS OIG for making a false statement or misrepresentation to $50,000 per claim

4. Copyright © 2010 Feldesman Tucker Leifer Fidell LLP Health Reform Law Expansion of Recovery Audit Contractor (“RAC”) Program to Medicaid Program  States must contract with RAC  Contractor paid on contingent basis from recovered overpayments (essentially a bounty system)  RAC may make program integrity and fraud referrals to law enforcement  States must have appeal process

5. Copyright © 2010 Feldesman Tucker Leifer Fidell LLP Health Reform Law Mandatory Compliance Programs  As a condition of enrollment in Medicare, Medicaid, and CHIP, providers must establish a compliance program  Implementation date to be determined: In setting a date, HHS must consider the current prevalence of compliance programs for each industry sector and provider/supplier category  Core components of compliance program to be established by the Secretary of HHS in consultation with the OIG Likely to be substantially similar to the core elements from previous OIG compliance guidances Specific to particular industry or category of the supplier or provider  Potential for False Claims Liability

6. Copyright © 2010 Feldesman Tucker Leifer Fidell LLP Health Reform Law Mandatory return and reporting of “overpayments” from the Medicare or Medicaid programs  Overpayment: “funds that a person receives or retains under title XVIII or XIX to which the person, after applicable reconciliation, is not entitled under such title”  Return overpayment to HHS, the State, an intermediary, a carrier, or a contractor, as appropriate; and  Report in writing to the entity the reason for the overpayment  By the later of: 60 days; or Due date for corresponding cost report (if applicable)

7. Copyright © 2010 Feldesman Tucker Leifer Fidell LLP Health Reform Law Mandatory Reporting and Refunding of Overpayments  Once the timeline for returning and reporting has elapsed, the provider has an “obligation” to repay for purposes of the False Claims Act The False Claims Act forbids knowingly:  Presenting or causing the presentation of, a false claim for reimbursement by a Federal health care program, including Medicare or Medicaid;  Making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim;  Repaying less than what is owed to the Government;  knowingly and improperly avoiding or decreasing an obligation to pay the Government; and/or  Conspiring to defraud the Federal Government through one of the actions listed above.

8. Copyright © 2010 Feldesman Tucker Leifer Fidell LLP Whistleblower/Qui Tam Lawsuits  If government doesn’t intervene, relator can proceed on own If successful, 25-30% of proceeds  If government takes the case, it makes litigation decisions If successful, person receives 15-25% of proceeds 1986 amendments tried to reduce “parasitic” lawsuits  Previously: Could not be based on public information unless relator was the original source Public record = criminal, civil or administrative hearing, congressional or GAO report, hearing, audit, investigation, or news media Original source = direct and independent knowledge of the info and voluntarily gave to government Health Reform Law

9. Copyright © 2010 Feldesman Tucker Leifer Fidell LLP Whistleblower/Qui Tam Lawsuits  Health Reform Law relaxes Public Disclosure Bar (not retroactive in effect) Public disclosure now just a defense, not jurisdictional bar  Now explicitly excludes state proceedings and private litigation Whistleblower no longer has to have direct knowledge  Relator must voluntarily provide information to the government prior to public disclosure OR  Knowledge must be independent of and materially add to publicly disclosed information Health Reform Law

10. Copyright © 2010 Feldesman Tucker Leifer Fidell LLP Civil Monetary Penalties Law 42 U.S.C. § 1320a-7a Health Reform Law allows the OIG to impose CMPs when a provider:  Fails to report and return an overpayment, as required under the new Health Reform Law requirement  Orders or prescribes a medical or other item or service during a period in which the provider was excluded from a federal healthcare program, if the provider knows or should have known that a claim for such medical or other item or service will be made.  Knowingly makes false statements, omissions, or misrepresentations of a material fact in any application, bid or contract to participate or enroll in a Federal health care program  Fails to grant to the OIG timely access to documents for the purpose of audits, investigations, evaluations, or other statutory functions

11. Copyright © 2010 Feldesman Tucker Leifer Fidell LLP Civil Monetary Penalties Law 42 U.S.C. § 1320a-7a Health Reform Law increases Civil Monetary Penalties:  Increases the penalty for a false statement or misrepresentation to $50,000  Allows up to $15,000 per day that provider refuses access to OIG

12. Copyright © 2010 Feldesman Tucker Leifer Fidell LLP Health Reform Law Federal Anti-Kickback Statute Prohibits persons and entities from knowingly or willingly  Soliciting or receiving remuneration directly or indirectly, in cash or in kind  To induce patient referrals or the purchase or lease of equipment, goods or services  Payable in whole or in part by a Federal health care program. Health Reform Law eliminates specific intent requirement and establishes it as a false claim  “With respect to violations of this section, a person need not have actual knowledge of this section or specific intent to commit a violation of this section.’’  A false claim shall include “claims including items or services resulting from a violation” of the Anti-Kickback Statute

13. Copyright © 2010 Feldesman Tucker Leifer Fidell LLP Health Reform Law Program Integrity Provisions  Data Sharing to identify fraud, waste and abuse by Medicare and Medicaid providers Medicare and Medicaid claims data will be shared between HHS and other agencies, including the Department of Defense, the Department of Veterans Affairs, the Social Security Administration, and the Indian Health Service  For enforcement and oversight purposes, both HHS OIG and the Attorney General will have real-time access to these data

14. Copyright © 2010 Feldesman Tucker Leifer Fidell LLP Recent Enforcement Activities OIG Workplan FY 2010 – ARRA Audits  Health Centers Capacity of ARRA New Access Point grantees’ to manage and account for Federal funds and to operate new community health service delivery sites in accordance with Federal regulations HIT security controls to protect sensitive EHR and personal information at health centers funded by HRSA HIT grants Reports by HRSA HIT grantees of EHR and other HIT initiative implementation

15. Copyright © 2010 Feldesman Tucker Leifer Fidell LLP American Recovery and Reinvestment Act Mandatory Self-Disclosure  Recipients must disclose credible evidence that a principal, employee, agent, contractor, sub-recipient, subcontractor or other person has (in connection with ARRA funds) Submitted a false claim under the False Claims Act Committed a criminal or civil violation of laws pertaining to fraud, conflict of interest, bribery, gratuity, similar misconduct

16. Copyright © 2010 Feldesman Tucker Leifer Fidell LLP American Recovery and Reinvestment Act Whistleblower Protections  Non-Federal employers (such as health centers) that receive ARRA funds cannot discriminate against any employee as reprisal for that individual’s disclosure of information that he/she reasonably believes is evidence of: Gross mismanagement or gross waste of funds Substantial and specific danger to public health / safety Abuse of authority Violation of law, rule or regulation  Unlike False Claims Act protections, ARRA protections only apply to employees, not contractors or agents

17. Copyright © 2010 Feldesman Tucker Leifer Fidell LLP HOT TOPICS IN 2010 Billing Federal Procurements Federal Property Patient Inducements Executive Compensation FTCA Section 330

18. Copyright © 2010 Feldesman Tucker Leifer Fidell LLP Questions? Jacqueline C. Leifer, Esq. jleifer@ftlf.com Feldesman Tucker Leifer Fidell LLP 2001 L Street, NW – 2nd Floor Washington, DC 20036 (202) 466-8960 www.ftlf.com