1. REGULATORY CONCERNS IN TRANSITIONAL CARE
BRIDGE 2017 TRANSITIONAL CARE SUMMIT
November 10, 2017
Presented By
David J. Castleton

2. OVERVIEW
Fraud and Abuse
HIPAA

3. Fraud and Abuse Laws
All transactions and relationships involving health care providers or suppliers (e.g., physicians, hospitals, ASCs, clinical labs, home health, SNFs, ALFs, GPOs, physical therapy, medical device or pharmaceutical companies) implicate fraud and abuse laws and regulations.

4. Overview of Federal Heath Care Laws (Fraud and Abuse)
Primary statutes addressing fraud and abuse risks to federal health care programs
Stark Law
Anti-Kickback Statute
False Claims Act
Civil Monetary Penalties Law

5. Stark Law
Prohibits physicians from “referring” Medicare patients for “designated health services” (“DHS”) to entities with which they, or any family member, have a “financial relationship.”
Includes captive referrals within group practices
Covers inbound and outbound referrals
Requires study of relationships (direct and indirect) involving ownership or compensatory interests
Strict liability statute (therefore must comply with a Stark “exception”)

6. Stark Law DHS Clinical laboratory services
Inpatient and outpatient hospitalization services
Outpatient prescription drugs
Radiology services, including MRI, CAT scans and ultrasound
Physical therapy services
Occupational therapy services

7. Stark Law DHS (cont’d) Radiation therapy services and supplies
Durable medical equipment and supplies
Parenteral and enteral nutrients, equipment and supplies
Prosthetics, orthotics and prosthetic devices and supplies
Home health services

8. Exceptions to Stark Law
In-office ancillary services
Bona fide employment relationship
Persons services
Office space and equipment rental
Risk-sharing arrangements
Physician/non-physician recruitment
Timeshare lease arrangements

9. Stark Self-Referral Disclosure
Established by Affordable Care Act
Process for self-disclosing actual or potential violations
Gives CMS the authority to reduce amounts owed

10. Stark Law Penalties Denial of payment/refund obligation
Up to $15,000 per claim
$159,089 per arrangement
False Claims Act liability (Stark violations can be the basis of government or qui tam (whistleblower) FCA claims)
Exclusion from Medicare/Medicaid Participation

11. Recent Stark Law Developments
CMS Golden Rule: Surest means of complying with Stark Law is to reduce the transaction/relationship to a single signed writing (Stark exception compliant) before either party provides items, services, space or compensation to the other party.

12. Anti-Kickback Criminal offense
Offer to pay or receive (and even offer or solicit) remuneration to induce or reward referrals of items or services reimbursed by federal healthcare programs

13. Remuneration
Anything of value, directly or indirectly, overtly or covertly, in cash or in kind.

14. Anti-Kickback Violations
Felony
$25,000 fine per violation
Imprisonment up to five years per violation
Exclusion from Medicare/Medicaid participation

15. Anti-Kickback Statute
One purpose rule:
AKS prohibits any arrangement where one purpose of remuneration is to obtain money for the referral of services or to induce further referrals. United States v. Kats, 871 F. 2d 105 (9th Cir. 1989); United States v. Greber, 706 F 2nd 68 (3rd Cir.) cert. denied, 476 U.S (1085).

16. Statutory Exceptions to AKS
Payments to bona fide employees
Properly disclosed discounts
Certain payments to group purchasing organizations
Waivers of coinsurance for individuals who qualify for certain Public Health programs
Certain risk sharing and other arrangements with managed care organizations

17. AKS Safe Harbors Investment interests Space rentals Employee
Personal services
Practitioner recruitment
Group purchasing
ASC
Free or discounted transportation

18. Stark/Anti-Kickback Differences
AKS
Referrals
Physician
Anyone
Services
DHS
All
Liability
Strict
Intent
Safety
Exceptions
Safe Harbors

19. Utah Anti-Kickback Utah Code § 26-20-4
Any person who pays or receives kickback
Services paid for by state healthcare program funds
Violators subject to criminal and civil penalties
Felony or misdemeanor based on size of kickback
Fines

20. False Claims Act
Prohibits knowingly presenting (or causing to be presented) a false or fraudulent claim to the federal government.
No proof of specific intent to defraud is required.
The provider need only “knowingly” present a false or fraudulent claim in the manner described above.
Tainted claims (Stark/AKS violations) trigger FCA/whistleblower claims

21. False Claims Act (cont’d)
“Knowingly”
Actual Knowledge
Deliberate Ignorance
Reckless Disregard

22. Examples of Potential False Claims
Claim for service or supply that was not provided
Wrong diagnosis code
Upcoding
Service provided by unlicensed individual
Service provided was not medically necessary

23. False Claims Act $10, 781.40 - $21,562.80 for each false claim
Damages up to three times amount claimed

24. False Claims Act Developments
Reverse False Claims: ACA 60-day refund obligation begins when provider “is put on notice of potential overpayment”

25. Civil Monetary Penalties Law
Prohibition against
Presenting a false claim
Presenting a claim where requirements not met
Presenting a claim for a provider not qualified
Offering or transferring remuneration to a Medicare or Medicaid beneficiary that the person knows or should know is likely to influence beneficiary selection of a particular provider

26. Civil Monetary Penalties
Civil fine of $10,000 per violation
Assessment of up to three times the amount falsely or fraudulently claimed
Exclusion from Medicare/Medicaid participation

27. Civil Monetary Penalties Law
Rebates
Incentive gifts
Free services (transportation)
Providing one free service in hopes patient will request another compensated service

28. CMPL Exceptions
Nominal incentives ($10.00 per item or $50.00 per year)
Certain remuneration that poses a low risk of harm and promotes access to care
Coupons, rebates or other retailer reward programs that meet specified requirements
Certain remuneration to financially needy individuals

29. HIPAA and HITECH
Health Insurance Portability and Accountability Act of 1996 (“HIPAA”)
Health Information Technology for Economic and Clinical Health Act (“HITECH”)

30. Personal Health Information
Includes any information (whether oral or written) about an individual
created or received by a health care provider; and
relating to past, present, or future physical or mental health, the provision of healthcare, or payments for provision of healthcare
That identifies the individual
or can reasonably be used to identify the individual
includes name, city/county/ZIP, birth date, age, and more

31. HIPAA – General Prohibition
Requires patient’s written authorization before use or disclosure of PHI for marketing purposes
Prohibits selling PHI to business associates or other third parties without prior authorization

32. Exceptions Communications about a provider’s own products or services
E.g., hospital uses patient list to announce arrival of new specialty group or acquisition of new equipment
Communication made for treatment of the individual
E.g., prescription refill reminders; referral to specialist for follow-up test; free samples of prescription drugs

33. Exceptions (cont’d)
Communication for case management or care coordination
E.g., sharing records with outside programs to determine which best suits the patient’s ongoing needs
Face-to-face communications
Not over the phone

34. Exceptions (cont’d)
Communications about free health fair, wellness activity or discussion group
As long as the provider does not “sell” any products or services
De-identified PHI

35. Examples: Third-Party Marketing
Provider discloses PHI to third-party marketer (for pay) and third-party recommends its own products or services
Requires prior authorization!
Drug manufacturer pays provider for list of patients, then uses that list to send discount coupons for new medication directly to patients

36. Other HIPAA Violations in Marketing
Videos, newsletters, photos
Testimonials
Complete P.T.

37. HIPAA Violations Breach notification Failure to notify Individual
Media
HHS
Failure to notify

38. RESPONSES TO REGULATION
Head in the sand
Education
Train

39. Contact David J. Castleton Ray Quinney & Nebeker P.C.
36 South State Street, #1400
Salt Lake City, UT 84111
(801)