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Transcript of 1 HEALTH CARE INDUSTRY PERSPECTIVES ON HEALTH CARE REFORM Mississippi Chapter Healthcare Financial...
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HEALTH CARE INDUSTRY PERSPECTIVES ON HEALTH CARE REFORM
Mississippi ChapterHealthcare Financial Management
Association
2010 Ethics, Accounting & Auditing and PFS Workshop
June 11, 2010Hilton Hotel, Jackson MS
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Health Care Delivery System Reform
The Senate Finance Committee Legislation Will Include Payment Reforms Aimed at Improving the Delivery System
Red
uce P
reventab
le
Read
mis
sion
s
Valu
e-Based
P
urch
asin
g
Bu
nd
led P
aymen
ts
Acco
un
table C
are O
rgan
ization
s
Man
ag
e Rad
iolo
gy
B
ene
fits
Improve Quality Reduce Costs
Increase Health Care “Value”
Electronic Health RecordsPrerequisite
Tactics
The Goal
3.
2.
1.
4
A Roadmap to Reform
Most of President Obama’s Ambitious Health Care Goals Depend on Bending the Cost Curve
Source:
1) http://www.whitehouse.gov/issues/health_care/
Catalyst Primary Outcome
Secondary Outcome
Tertiary Outcome
Causal Relationship Between the President’s Health Care Goals
Assure Affordable Coverage
Reduce Cost
Growth
Invest in Prevention and
Wellness
Improve Safety and
Patient Care
Maintain Coverage During Job Transitions
End Barriers for Pre-Existing
Conditions
Protect Families from
Medical Bankruptcy
Guarantee Choice of Docs
and Health Plans
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Selected Provisions
Administrative Simplification Moving to standardized processes by evaluation of systems every 3 years using input
from the National Committee on Vital Statistics, the Health Information Technology Policy Committee, the Health Information Standards Committee, standard setting organizations and stakeholders -Public Health Services Act Sec. 399HH(a)), as added by Act Sec. 3011 of the Patient Protection and Affordable Care Act (P.L. 111-148)).
Delivery System Changes Bundling – beginning 2013 pilots thru 2015 (Social Security Act Sec. 1866D, as added
by Act Sec. 3023 of the Patient Protection and Affordable Care Act (P.L. 111-148)). Readmissions – 2013 penalties for “excessive re-admissions” (SSA Sec. 1886(q)(3),
as added by Act Sec. 3025 of the Affordable Care Act). Hospital acquired conditions -Act Sec. 2702 Accountable Care Organizations – 2012, allows hospitals and physicians to provide
leadership in voluntary ACOs. Some savings to be shared Section 3022 of the Patient Protection and Affordable Care Act (P.L. 111-148) adds Social Security Act Sec. 1899
Innovation Center – 2011 creates a Center for Medicare and Medicaid Innovation designed to improve quality and reduce program expenditures- Section 3021 of the Patient Protection and Affordable Care Act (P.L. 111-148) amends Title XI of the Social Security Act by adding the new SSA Sec. 1115A
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Global Payments
The Legislation Will Include Expanded Bundled Payment Demonstration Projects
Proposed Bundled Payment System:
Current Payment Methodology:1:
2:
- 3 Days Admit Discharge + 7 days + 14 days + 19 days + 30 days
MS-DRG Pmt Physician Fee Schedule
Home Health PPS Episode
Readmission:MS-DRG Pmt
+ 27 days
30 Day Episode of Care
Sample Inpatient Stay
MAC
MS-DRG + Avg. PAC Cost – “Efficiencies”
Hospital Negotiated Pmts
Payment
7
Selected Provisions
Independent Payment Advisory Board (IPAB) Section 3403 of the Patient Protection and Affordable Care Act (P.L. 111-148) Binding payment recommendations on Medicare and non-binding on private insurers
payments to providers Exclusion such as hospitals (except CAH) until 2019
340B drug program extended Act Sec. 7101(a) of the Patient Protection and Affordable Care Act (P.L. 111-148), amending Public Health Service Act Sec. 340B(a)(4) by adding subparagraphs (M) through (O)
Market basket update adjustments -Affordable Care Act Sec. 3401
RAC expansion -Affordable Care Act Sec. 6411
Graduate Medical Education – no reductions in IME payments but re-distributes 65 percent of unused residency to primary care and surgeons SSA Sec. 1886(h)(8)(B), as added by Act Sec. 5503(a)(4) of the Affordable Care Act
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Something To Think About
Be proactive, explore how to make the new legislation work in your organization
Ignoring the delivery and payment system changes will be detrimental
Most importantly, understand totally where your revenue comes from and how this will change
Tax Exemption
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Financially Positive or Negative for Health Care Providers
Modeling Market Basket Update DSH-UPL Hospital Acquired Conditions Physician Payment Revisions Contracts with other payers
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Being Pro Active
Model impacts of Medicare and Medicaid Estimate income/ volume levels of “new patients” Evaluate service lines Evaluate costs
Direct care Support
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Non Governmental Payers
Impact of Health Insurance Exchanges on traditional insurance Impact of family coverage and shifts to employers Impact of “pay the penalty” un or under insured Remember – “bend the cost curve”
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Being Pro Active
Model impacts of Medicare and Medicaid Estimate income/ volume levels of “new patients” Evaluate service lines Evaluate costs
Direct care Support
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Reviewing Service lines
Outpatient Rehabilitation Services Primarily two services – Occupational & Speech Therapy
Determined the payer mix was unable to sustain the current level of expense.
Due to the competition and availability in the service area, the Hospital elected to discontinue service.
Net increase to contribution margin $600,000 annually.
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Being Pro Active
Model impacts of Medicare and Medicaid Estimate income/ volume levels of “new patients” Evaluate service lines Evaluate costs
Direct care Support
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Analysis of Costs
The Cost structure Direct patient care Components of Overhead
Identified areas for cost savings Invested in premier database to benchmark both cost and quality Expended Information Technology funds for capturing data and
developing standardized processes
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Labor Costs
Productivity standard which was an integration of standards established by a proprietary database and adapted Hospital’s culture
Review of standards began with a bi-weekly process which was historical and reactionary
Moved to a daily matrix which was successful due to the step transition (key – moving from reactionary to integrated)
Savings as a result of the intense use of standards
1. FTE’s decreased from 4.5 to 3.9 per adjusted occupied bed
2. Reduction of salary costs of $6.8 million Other considerations including freezing merit increases and
elimination of contract staffing
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Purchased Services
Retirement Plan – Hospital operated under a defined benefit “Freeze” implemented with alternative retirement plan With matching mechanism through 403(b) savings of $700k
annually Real Estate and other rental agreements
Negotiated through consolidations and space eliminations resulted in $270k savings
Management of professional services Hired a director for key areas including IOP, BIO Med, Rehab
and Housekeeping - savings of $1million
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Quality & Efficiency
Chief Medical Officer established a work group to evaluate the clinical effectiveness of the following programs: Cardiology Pediatrics Orthopedics Behavioral Health Women’s Health Services – including Nursery General medical – Surgical
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Key Finding
Length of Stay – too high With 60% of total expense representing labor costs, the Hospital
began an intense review of daily activities and labor hours Greatest opportunity – Review standards and protocols for delivery
of patient care Intensified use of Hospitalist program Indexed length of stay @ 100% of standard
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Other Considerations
Mindset review of expense Formulary review of Pharmacy - $200k Courier alignment with outpatient - $175k Benefit plan sync with industry - $1.5 mil
Overall, everything is matched up with: Board Policy and Mission Rating Agency – Capital Access Budget constraints
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September 23, 2010 Plan Changes
UNAVOIDABLE AND/OR NON-GRANDFATHERABLE PROVISIONS
1. No Lifetime Limits on “Essential Benefits”
2. Restrictions on Annual Limits for “Essential Benefits”
3. No Pre-Existing Conditions Exclusions for Children Under 19
4. If a child under 26 is not eligible for enrollment in a separate employer sponsored plan, then plan already providing coverage to children must extend coverage through age 25 regardless of student/marital/dependent status
5. Existing Coverage can’t be rescinded absent fraud
6. Large Employers (200 FTEs) must auto-enroll new employees
7. Non-prescription, over the counter drugs (excluding insulin) can’t be included in a Flexible Spending Account (“FSA”) deduction [For tax years beginning after 12/31/10]
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September 23, 2010 Plan Changes
AVOIDABLE AND/OR GRANDFATHERABLE PROVISIONS FOR PLANS EXISTING BEFORE MARCH 23, 2010
1. Certain Evidence-Based Preventive Care (Including Well-Child Care) and Immunizations Can’t Be Subject to Cost-Sharing
2. Insurance Based/Non-Self Funded Plans Must Comply with Requirements Preventing Favorable Treatment of Highly Compensated Employees
3. Internal/External Appeals Processes
4. Enrolled Employees May Select Any Participating Primary Care Doctor
5. No Pre-Authorization or Increased Out of Network Cost Sharing for emergency services
6. No Pre-Authorization or Mandatory Referral for OB-GYN Services
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Small Employer Tax Credit (2010-2013)
SMALL EMPLOYER (25 FTEs) TAX CREDIT FOR 35% OF HEALTH CARE COVERAGE COST
In order to receive, employer must subsidize at least 50% of employee premiums
50% Credit Is Available for Tax Years 2014-2015 [Technically it’s available for any two years beginning after 12/31/13-presumably the 2014-15, but not necessarily.]
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2011 Calendar Year Changes
1. Aggregate Value of Employer Sponsored Coverage Must Be Identified on 2011 W-2
2. Value of coverage to be identified on W-2 will be determined in the same manner as the 40% excise or “Cadillac” tax, namely, through use of current COBRA valuation and will include employee paid premiums and FSA contributions but exclude stand-alone dental/vision.
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2013 Calendar Year Changes
1. Annual Employee Pre-Tax Contributions to FSA Capped at $2,500
2. Hire-Date/Annual Enrollment Distribution of Standardized Summary of Plan Benefits/Coverage
3. Mandatory Employee Notice of Rights to Health Insurance Exchange Subsidy (Including “Free Choice Voucher”)
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2014 Calendar Year Changes
1. No Pre-Existing Conditions Exclusions or Limitations
2. No Coverage Waiting Period Greater Than 90 Days
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Grandfatherable/Avoidable Changes For Plans Existing Before January 1, 2014
1. Group Insurance Coverage Is Guaranteed for Issue and Renewal (Subject to Annual/Special Enrollment Periods)
2. Group Plans Became Subject to Modified Community Rating Rules: Gender/Health Status Can’t Be Used for Premium
Calculation Age Premium Variations Limited to 3:1 Tobacco Premium Variations Limited to 1.5:1
3. “Essential Health” Benefits Must Be Offered for small group plans [Does not apply to large groups or to self-insured plans]
4. Limits on Out of Pocket Expenses/Deductibles Individual ($5,950) and $2,000 Family ($11,900) and $4,000
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2014 Calendar Year Changes (cont.)
HEALTH INSURANCE EXCHANGES List of Qualified Plans becomes available through either state/federal Administrator Four Levels of Plans Based on Actuarial Value Between 60-90% Exchange Plans Must Offer Essential Benefits Exchange-Based Subsidy Eligibility:
Household Incomes Between 100-400% FPL (88K for Family of Four) Ineligible for government healthcare Employer sponsored plan doesn’t pay at least 60% of actuarial value and
premium exceeds 9.5% of annual household income Exchange Based Employer Penalties
Employers With Over 50 FTEs incur $143/month or $2,000 (annually) per employee (after first 30) for failure to offer “minimum essential coverage” to all FTEs/dependents if ONE receives a subsidy through an Exchange
Employer with Over 50 FTEs incur $250/month or $3,000 annual tax for each employee who opts for Exchange due to “Unaffordable Minimum Essential Coverage” meaning premiums exceeding 9.5% of household income or plan has actuarial value of less than 60%
Note: Mercer study says 38% of employees will meet this threshold
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Health Insurance Exchanges (cont.)
FREE CHOICE VOUCHER ELIGIBILITY
1. Household Income Less Than 400% of FPL ($43,200-individual) ($88,200 – family of four)
2. Required to pay between 8 and 9.8% of household income for coverage
Voucher Amount = $ cost of Coverage Under Employer-Based Plan
Vouchers are Deductible by Employers
Vouchers Are Excluded from Employee’s Income
Vouchers Apply to All Employers, Regardless of Size
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2014 Employer Reporting Duties
IF 5O FTEs, THEN:
a. declaration that employer does or does not offer minimum essential coverage to FTEs/dependents;
b. disclosure of coverage waiting period length;
c. disclosure of information on lowest-cost option in each enrollment category;
d. disclosure of employer’s share of total plan costs;
e. disclosure of number and names of employees receiving health care coverage
34
Consequences
Very large employers may drop employer-sponsored coverage AT&T could save $1.8b annually
CBO estimates that employers that drop coverage would substitute wages for premium benefits
Employees would buy in to the Exchange, where reimbursement rates will be lower than with employer group plans (not going well in MA)
35
Consequences
2010 average cost for family of 4 is $18k; 10k funded by employer
Other insurance reforms will result in increased premiums
Credits expire when industry fees escalate
37
TAX-EXEMPT HOSPITAL IMPLICATIONS
Section 9007 of the PPACA added yet another layer of requirements that must be met in order to maintain tax-exempt status and avoid excise tax penalties.
Except for the community health needs assessment requirement and imposition of excise tax penalties, Section 9007 applies to taxable years beginning after March 23, 2010.
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TAX-EXEMPT HOSPITAL IMPLICATIONS, cont.
Section 9007 has five primary components:
§9007(a) adds new requirements for §501(c)(3) hospitals through the addition of Section 501(r)(1)-(7) to the IRC;
§9007(b) amends IRS Section 4959 to impose an excise tax for noncompliance with §501(r)(3);
§9007(c) provides for mandatory federal review of the community benefit activities of §501(c)(3) hospitals;
§9007(d) adds reporting requirements; §9007(e) requires the Secretary of the Treasury to make annual
reports to Congress.
39
TAX-EXEMPT HOSPITAL IMPLICATIONS, cont.
Section 9007(a) adds Section 501(r)(1)-(7) to the IRC and imposes significant new obligations on tax-exempt organizations.
Applicability: Section 9007 applies to organizations that operate facilities required by the state to be licensed/registered/recognized as a hospital and to other organizations with hospital care as a principal function.
Must be tax-exempt under §501(c)(3), so governmental facilities are not included.
For multi-hospital systems, the rules apply separately to each facility.
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TAX-EXEMPT HOSPITAL IMPLICATIONS, cont.
New Section 501(r) has four primary components:
Community health needs assessment - §501(r)(3) Financial assistance policy - §501(r)(4) Limits on charges - §501(r)(5) Changes to billing and collection methods - § 501(r)(6)
Treasury has requested comments on the §501(r) requirements.
41
TAX-EXEMPT HOSPITAL IMPLICATIONS, cont.
New Section 501(r) components:
Component One: Community health needs assessment (§501(r)(3)): Effective date: taxable years beginning after March 23, 2012. Requirements:
Must conduct a community health needs assessment in the taxable year or either of the two prior taxable years.
Must have adopted a strategy to implement the identified needs. The assessment must take into account the input of a broad
spectrum of stakeholders in the community served by the facility and it must be made “widely available to the public”.
42
TAX-EXEMPT HOSPITAL IMPLICATIONS, cont.
…and, for not complying with Section 501(r)(3), Section 9007(b) imposes an excise tax.
Section 9007(b) imposes an excise tax of $50,000 for failing to meet the CHNA requirements in Section 501(r)(3).
Effective Date: The excise tax technically applies for failures to comply occuring after March 23, 2010, but the CHNA requirement doesn’t become effective until taxable years after March 23, 2012.
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TAX-EXEMPT HOSPITAL IMPLICATIONS, cont.
New Section 501(r) components:
Component two: Financial assistance policy (§501(r)(4)): The organization must have a written financial assistance policy and “widely
publicize” the policy within the community served. Policy requirements:
Eligibility criteria, including whether financial assistance offered includes free or discounted care;
The basis for calculating patient charges; If the organization does not have a separate billing and collections
policy, the actions that may be taken in the event of non-payment (i.e., collections actions, credit reporting, etc.).
Additionally, the organization must have a written policy requiring the organization to provide, without discrimination, care for emergency medical conditions to individuals regardless of their eligibility for financial assistance.
44
TAX-EXEMPT HOSPITAL IMPLICATIONS, cont.
New Section 501(r) components:
Component three: Limits on charges (§501(r)(5)):
If a person meets the requirements of the financial assistance policy, then their charges for emergency or other medically necessary care must be limited to not more than amounts generally billed to individuals with insurance coverage.
The use of gross charges is prohibited.
45
TAX-EXEMPT HOSPITAL IMPLICATIONS, cont.
New Section 501(r) components:
Component four: Changes to billing and collection methods (§501(r)(6)):
The hospital cannot engage in ”extraordinary” collection actions until it has made “reasonable efforts” to determine if the individual is eligible for financial assistance under its policy.
Regulations are to be issued to define “reasonable efforts”.
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TAX-EXEMPT HOSPITAL IMPLICATIONS, cont.
Section 9007(c) provides for mandatory federal review:
Section 9007(c) requires that the Secretary of the Treasury review the community benefit activities of each hospital subject to §501(r) at least once every 3 years.
Schedule H implications and a new definition of “community benefit”???
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TAX-EXEMPT HOSPITAL IMPLICATIONS, cont.
…and Section 9007(d) provides for additional reporting requirements:
Section 9007(d) addresses several issues of recent legislative concern by adding to the reporting requirements for §501(c)(3) hospitals.
This section amends the Form 990 reporting requirements to include the following: a description of how the hospital is addressing the needs identified in
the CHNA, a description of any needs not being addressed, and an explanation as to “why not”;
the audited financial statements of the hospital or the consolidated financial statement, if applicable.
Implications
48
TAX-EXEMPT HOSPITAL IMPLICATIONS, cont.
To complete the circle, Section 9007(e) requires the Secretary of the Treasury to provide annual reports to Congress.
Section 9007(e) reports will include information for private, tax-exempt, and governmental hospitals regarding: levels of charity care provided; bad debt expenses; and unreimbursed costs for services provided with respect to non-means
tested programs.
Additionally, §9007(e) reports will include information regarding costs incurred by tax-exempt hospitals for community benefit activities.
Morever, §9007(e) requires that this information will be compiled into a study on trends and submitted to Congress within 5 years.
50
OTHER NOTABLE TAX CHANGES
Section 9001: Excise tax on “Cadillac” plans Section 9002: Inclusion of cost of employer-sponsored health coverage on
W2 Section 9003 and 9004: “Qualified” distributions/reimbursements from
HSAs, FSAs, HRAs and Archer MSAs and increases in taxes on non-qualified distributions
Section 9005: Limits on health flex spending arrangements under cafeteria plans
Section 9012: Elimination of deduction for expenses allocable to Medicare Part D subsidy
Section 9013: Modifies the itemized deduction for medical expenses Section 9015: Changes to FICA Section 9017: (nullified and replaced with §10907(b)): Tax on indoor tanning Section 1402: Tax on net investment income
53
Fraud Enforcement and Recovery Act of 2009 (FERA)
FERA signed into law May 20, 2009
Expands the scope of the False Claims Act (FCA)
Increases funding for enforcement
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False Claims Act Amendments - FERA
Fraud Enforcement and Recovery Act of 2009 (FERA)
Retention of Overpayments Violation to “knowingly and improperly avoid or decrease an
obligation” to pay money to the United States, including an obligation based on “an established duty, whether or not fixed…arising from…the retention of any overpayment.”
Must be “knowing and improper” Whether or not “fixed” amounts
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FERA Broadens FCA to Reach More Types of Transactions
Pre-FERA, FCA required that allegedly false claims for payment must be presented directly to an officer or employee of the government
FERA eliminates “presentment” requirement
Extends liability to false claims for payment on government-funded projects, regardless of whether the claim is presented to or processed by a government official
Expands definition of a “claim” under the FCA to include any request or demand for money or property
Regardless of whether government has title to the money or property
Includes requests for money to a contractor, grantee, or any other recipient of government funds used to advance a government program
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FERA Permits Non-Employees to Bring Retaliation Claims
Pre-FERA FCA allowed employees to sue employer for damages and other relief if discriminated against as a result of their actions in connection with a false claims lawsuit or investigation
FERA makes retaliation claims available to contractors and agents who contend that they have been discriminated against
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Patient Protection and Affordable Care Act Provisions Affecting False Claims Act
Patient Protection and Affordable Care Act (PPACA) (March 2010)
Public Disclosure bar curtailed Enhanced influence of whistleblower plaintiffs’ bar
60-day Period to Report and Return Overpayments Runs from the point at which the overpayment is “identified” or the
date any corresponding cost report is due, whichever is later After the 60-day period, the overpayment becomes an “obligation “
under the FCA “Identified” is not defined FERA includes expansion of FCA definition of “obligation” to
amounts that are not “fixed” 60-day period for repayment of amounts received in violation of
Stark law already in place (trigger for civil monetary penalties)
58
Patient Protection and Affordable Care Act Provisions Affecting False Claims Act – Anti-Kickback Statute
Claims submitted in violation of Anti-Kickback Statute are False Claims, regardless of certification The intent element of the Anti-Kickback Statute has been revised
to explicitly reject 9th Circuit case law Under current 9th Circuit case law, the government is required to
show that a defendant: Had actual knowledge that the conduct was prohibited, and Had a specific intent to violate the AKS Resolves split among courts
The Act revises the AKS to state that, to meet the “knowing and willing” intent element, “a person need not have actual knowledge” that the AKS prohibits a particular conduct
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Practical Considerations
Implications of Changes
Retention of overpayments/reverse false claims No requirement of falsity or fraudulent conduct No definition of “improper” avoidance of an obligation, so what does
it mean? Is “knowing” retention enough? When is an overpayment “identified” for purposes of the 60-day time
period? Does “identified” mean “quantified”?
Under FERA amendments to the FCA, an “obligation” to return funds need not be “fixed”
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PRACTICAL CONSIDERATIONS
Public Disclosure Jurisdictional Bar Government now controls whether it applies
The bar applies, unless the government objects Enables government to permit private whistleblower counsel to
file and pursue parasitic lawsuits under the FCA Enables government to retain private counsel to pursue these
cases Enhanced influence of whistleblower plaintiffs' bar in government
enforcement Former DOJ counsel comment that should expect to see arguments
that government would not make, and tactics the government would not use
Profit motive only Lack of government oversight of conduct of litigation or of plaintiff’s
counsel
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PPACA Amendments To Stark Law
In-Office Ancillary Services Agreement Exception revised to require referring physician to inform
patients that they may obtain specified services from a person other than the referring physician or his/her practice
Applies to: MRI, CT PET, Other designated health services specified by the HHS Secretary
Written list of suppliers who furnish services in the area in which the patient resides must be provided at the time of the referral
Effective January 1, 2010 (actually date law signed by President, March 24)
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PPACA Revisions to Stark Law “Whole Hospital” and Rural Provider Exceptions
Both exceptions narrowed to apply only to physician-owned hospitals that have physician ownership and provider agreements in operation on December 31, 2010
Must now meet certain other requirements Hospitals must now report to HHS annually to identify physician owners Hospitals must have procedures in place to require physician owner
disclosure ownership to patients Ownership and investment cannot be conditioned on referrals from the
physician
Limited opportunities for further expansion
HHS will conduct audits beginning November 2011 to determine if hospitals are complying with new revisions to the exceptions.
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PPACA - Stark Law Self-Disclosures and Settlements
Within six months, HHS must develop and implement a disclosure protocol for actual and potential Stark violations in collaboration with the OIG.
Secretary now has authority to reduce the amount due for a Stark violation by considering: the nature/extent of the improper/illegal practice the timeliness of self-disclosure the cooperation in providing additional information related to the
disclosure
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Presidential Memorandum
“Finding and Recapturing Improper Payments” Issued March 10, 2010 To heads of executive departments and agencies
References Executive Order 13520, November 20, 2009, “Reducing Improper Payments”
Obama Administration focuses on hospital billing to Medicare: Announces expansion of “Payment Recapture Audits”
Directs heads of executive departments and agencies to expand use of Payment Recapture Audits: To the extent permitted by law When cost effective
Directs Office of Management and Budget to development guidance and coordinate with Council for Inspectors General on Integrity and Efficiency
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Expansion of RAC Program
Patient Protection and Affordable Care expands scope of RAC program to: State Medicaid programs by 12/31/2010 Medicare Parts C and D by 12/31/2010 State Divisions of Medicaid must contract with auditing firms by
12/31/2010
HHS required to submit annual report on RAC program to Congress
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Stark Law & Anti-Kickback Enforcement Under The False Claims Act
Recent cases highlight aggressive DOJ litigation policy to seek massive damages
PPACA redefined kickbacks (overpayments by the government = obligations owed to the government) as predicates for FCA violations
CMS required to offer a self-disclosure protocol before the end of 2010
WHAT TO DO?
Review physician agreement negotiation process for: Documentation on valuation issues Timeliness of execution Understand the enormous whistleblower risk presented by
physicians (and disgruntled employees)
69
Stark Law & Anti-Kickback Enforcement Under The False Claims
Nexus between Stark and False Claims has become tighter
DOJ and OIG are pursuing Stark and Anti-kickback qui tams against hospitals as False Claims cases without regard to size of the facility
An entity may not present or cause to be presented a Medicare claim or a bill to any individual, third party payor, or other entity for Stark DHS furnished pursuant to a Stark-prohibited referral (42 U.S.C. 1395nn(a)(1)
70
Stark Law & Anti-Kickback Enforcement Under The False Claims
Excerpt from BNA Health Care Report – April 13, 2010
Federal Jury Finds Hospital Violated Stark, Not FCA: Possible Liability Cut to $45 Million
A jury for a federal district court March 29 reached a split verdict by finding a South Carolina hospital violated the Stark physician self-referral law but did not violate the False Claims Act, which reduced the potential liability of defendants from $300 million to about $45 million (United States ex rel. Drakeford v. Tuomey, D.S.C., No. 3:05-cv-02858-MJP, jury verdict 3/29/10).
71
Stark Law & Anti-Kickback Enforcement Under The False Claims
Tuomey Takeaways Big case for DOJ
Attempt to establish massive FCA damages regardless of size of defendant’s operations
Tuomey is 200 bed hospital Strong follow up by DOJ to maximize Stark damages to be
assessed by Court Physician whistleblower
72
Summary of False Claims Focus
No case too small or too large for attention
“Technical” violations do not get a “pass” but focus in moving towards Fair Market Value
Importance of understanding Self-disclosure options now and in the future
Trend toward physician whistleblowers – uniquely positioned to bring damaging allegations
Focusing on Fair Market Value documentation Purpose to create inference that physician had incentive to refer
patients
73
THANK YOU
Dinetia M. Newman, [email protected]
E. Russell Turner, [email protected]
Eugenia Stark Thomas, [email protected]
David A. Williams, CPA, [email protected]
1020 Highland Colony ParkwaySuite 400Ridgeland, MS 39157
401 East Capitol Street Suite 200Jackson, MS 39201