Physicians RegulatoryInsurance Program

Presenter:Jay LynchPresident

Misconception in the marketplace

The government has moved on to more important concerns (homeland security, war on terror, Iran, Iraq, etc…….

Recoveries total over $20 billions since 1986

= 19 mile high stack of $100

$3.2 billion in 2007 = all time record for one yr

ROI = $15 recovered for every $1 spent

OIG reports that nearly $1 billion in recoveries were reported for the first quarter of 2007

Today’s Agenda

Liability Exposure Limiting Exposure

Agenda

Liability Exposure Limiting Exposure

Liability Exposure A contractor falsifies test results or other information regarding

the quality or cost of products it sells to the Government; A health care provider bills Medicare for services that were not

performed or were unnecessary, or; Performing inappropriate or unnecessary medical procedures in

order to increase Medicare reimbursement. Unbundling - Using multiple billing codes instead of one billing

code for a drug panel test in order to increase remuneration. Bundling -- Billing more for a panel of tests when a single test

was asked for. Upcoding - Inflating bills by using diagnosis billing codes that

suggest a more expensive illness or treatment. Billing for brand -- Billing for brand-named drugs when generic

drugs are actually provided.

Liability Exposure Upcoding employee work: Billing at doctor rates for work

that was actually conducted by a nurse or resident intern. Billing for research that was never conducted; falsifying

research data that was paid for by the U.S. government. Prescribing a medicine or recommending a type of

treatment or diagnosis regimen in order to win kickbacks from hospitals, labs or pharmaceutical companies.

Billing for unlicensed or unapproved drugs. Forging physician signatures when such signatures are

required for reimbursement from Medicare or Medicaid.  

Liability Exposure

False Claims Act Application to Healthcare $1 Billion Budget Expanding Investigations

Liability Exposure

Complex Regulations Medicare/Medicaid Commercial Payor Stark Law HIPAA EMTALA

The government Medicare reimbursement manual includes 100,000 +100,000 + pages

The number of commercial Payor audits has increasedincreased as a result of successful government investigations

A New York cardiologist paid $300,000$300,000 to resolve OIG’s case against him for payment of patient referral incentives

New rules governing the restricted use of patient information create a new liability new liability exposureexposure for healthcare providers

IOG survey results indicate that most emergency staff members were unfamiliar with unfamiliar with recent EMTALA recent EMTALA policy changespolicy changes

Liability Exposure

Government’s ROI 23:1 Over $2.1 Billion Returned

Since 1997 Save Medicare

Liability Exposure

Determining Who to Audit: Risk Assessment Software Random Selection Qui Tam (Whistle-Blower)– Employee– Patient– Competitor

Liability Exposure

Initiatives Hospitals– Physicians at Teaching Hospitals– Lab Un-Bundling– 72 Hour Window– DRG’s– Qui Tam

Liability Exposure

Initiatives Physicians– Billing for Services Not Rendered– Upcoding– Quality of Care– Qui Tam– Kickbacks

Liability Exposure

Costly Fines: $11,000 per False Claim Penalties: Treble Damages

Liability ExposureSample Claim Over a three year period Sample Physician over bills

Medicare $20,000 in 20 separate billings and settles civil case for reckless conduct.

$ 20,000 Over billing$ 60,000 Treble Damages: 3 x over billing amount$220,000 FCA Penalty: 20 false claims @ $11,000 each$300,000 Total- $20,000 No coverage for the actual amount of over billing$280,000 Total Financial Exposure

Agenda

Liability ExposureLimiting Exposure

Limiting Exposure

Managing Risk Compliance Program Software– Billing– Compliance

Training/Credentials for Coders

Limiting Exposure

Transferring Risk E&O Insurance

Protects against allegations of fraud and abuse

Limiting Exposure

Defense Only Programs Restrictive Wording in Policies Low Limit Options Limited Retrospective Coverage

Agenda

Liability Exposure Limiting Exposure

Policy form addresses specific exposures not clearly defined or specifically excluded in other policies

Indemnification Expanded Regulatory Coverage Higher Liability Limits Prior Acts

Scaleable Coverage Hospitals Physicians Other

Hospitals Application & Risk Assessment Coinsurance/Retentions $50 Million Limit Risk Management Options

Physicians Application & Risk Assessment $1 - 5 Million Risk Management Options

Features Cost Efficiencies in Defense– Experienced Law Firms– Audit team

Fines and Penalties Risk Management/Engineering Tools Due Diligence for Mergers and

Acquisitions

Summary

Healthcare providers are at risk E&O insurance transfers risk provides provides flexible and

affordable coverage

THE PHYSICIANS ADVOCATE, LLC

866-765-1058Christopher Prestera, JD

chris@phyadv.com