Mistakes Happen: The Nuts and Bolts of a Voluntary ......–Query System for Specific Encounters •...

Mistakes Happen: The Nuts

and Bolts of a Voluntary

Medicare RepaymentJeffrey FitzgeraldFaegre & Benson [email protected]

Christopher RehmThe Pinnacle Group [email protected]

HCCA Compliance Institute 2010

Auditing & Monitoring 107

April 19, 2010

Case Study One – Coumadin Clinic

• Typical Health System

– Operates several physician clinics through a for-profit subsidiary

– System’s Edge of Suburbia clinic operates a coumadin clinic

– Coumadin clinic supervised by an Advanced Practice Nurse (APN) who has not enrolled as a Medicare provider (does not have a billing number)

– After a schedule change years ago, no physicians have been scheduled at the clinic on Thursday afternoons or Friday

– New clinic director reviews the coumadin clinic operations and concludes that the clinic’s billing and supervision process does not comply with Medicare’s “incident to” rules

2

Scoping the Problem

• What are the services in question?

– Professional Fees

– Ancillaries

– Drugs and Supplies

• Are there downstream concerns, referrals, tests ordered etc.?

• What are the Breakpoints?

– Scheduling Change/Billing Policy Change

– Provider Enrollment

• Identifying the Encounters

– Explicit Identification

– Estimates and Extrapolation

3

Scoping the Problem

4

Determining the Overpayment

• Explicit Identification:

– Measure the cost of the investigation with the $ in question.

– Available through current system reporting capabilities

– Only the payments for the dates, services, and providers in question

– Query System for Specific Encounters

• Identify all payments for services

– Clinic billed under same provider for all services

– Able to run service history for relevant encounters

– Amount of Overpayment

• Total paid amount for line item procedures (minus) allowable amount for line item procedures.

– In this case allowable = zero

5

Disclosure Issues

• Is a disclosure legally required?

– The Fifth Amendment provides in part that “No

persons. . .shall be compelled in any criminal case to be a witness against himself. . . .”

– This protection has been held to apply to criminal or

civil proceedings, whether formal or informal,

wherever such answers might incriminate the

individual in future criminal proceedings. See, McCarthy v. Arndstein, 266 U.S. 34, 40 (1924).

– Corporations and other fictitious “persons” are not

protected by the Fifth Amendment

6

Legal Duty to Refund

• The failure to disclose an overpayment could be seen as an unlawful effort to conceal or perpetuate a fraud

– 18 U.S.C. § 371 (conspiracy to defraud by obstructing and impairing a government program)

– 18 U.S.C. § 1001 (concealment of and covering up a material fact)

• The Medicare Fraud and Abuse Statute 42 U.S.C. § 1320a-7b(a)(3) may impose a duty to disclose.

Whoever-- having knowledge of the occurrence of any event affecting . . .his initial or continued right to any such benefit or payment. . . conceals or fails to disclose such event with an intent fraudulently to secure such benefit or payment either in a greater amount or quantity than is due or when no such benefit or payment is authorized,. . .shall. . .be guilty of a felony. . .

• Health Care Fraud, 18 U.S.C. § 1347

– Criminal fraud related to health care (all payer)7

Legal Duty to Refund

• Stark II, Phase II regulations require refund of payments made under a prohibited referral. 42 C.F.R. § 411.353(d)

• Medicare secondary payer and credit ballance regulations

• Medicare proposed a regulation that would require repayment of known overpayments within 60 days of identifying the overpayment. 67 Fed. Reg. 3662 (Jan. 2002)

– Regulations was never finalized

• Fraud Enforcement and Recovery Act of 2009

– Amended the False Claims Act to create liability for a knowingly and improperly “conceal, avoid or decrease”an obligation to repay the government

• Obligation includes an overpayment

8

Other Legal Risks

• Whistleblowers

• Employees Past and Former

• Members

• Beneficiary Complaints

• Fraud & Abuse (Hotline)

• Quality & Utilization (BCRP)

9

10

Other Legal Risks

• Whistleblowers

–False Claims Act includes incentives for

whistleblowers

• Can be rewarded up to 25% of the government’s

recovery, plus lost wages, attorney fees

–Disclosure can be a tool to prevent to prevent

whistleblowers

• Demonstrates that company is acting in good faith

• After disclosure, there is nothing for the whistleblower

to report

• Allows company to address issues on its own terms

11

Case Study One–Repayment Strategy

• Revise operational practice to comply with incident to rules

– Enroll the APN and bill under the APN’s number *, or

– Adjust schedule so that coumadin clinic only operating when a physician is at the clinic

– Adjust charges for denied services

– Send corrected claims for unpaid/processed services*

• Repayment to MAC

– Complete repayment form (each MAC has a form)

– Depending upon total dollar amount, consider sending form with cover letter

– Send check for total overpayment amount with form and/or letter12

Case Study Two – Schedules Gone Bad

• Typical Health System

– Operates a large physician clinic at city center, staffed with internal medicine physicians and physician assistants (PAs)

• Standard practice is to bill PAs incident to a supervising physician

– There has been a lot of friction between the clinic administrator and the lead physician at the clinic

– The clinic administrator sends out several emails to the senior executive team that claim that there is a “massive fraud” in the billing of the PA services

– When contacted by the Compliance Department, the clinic administrator claims to have several emails that prove that she told the lead physician that the billing process did not comply with incident to standards, but the lead physician to her that they needed the extra 15% to hit budget targets

13

Conducting an Internal Review

• When to conduct an internal review

– If there is some reliable information that there may have been a violation of law

– If there is some reliable information or a viable allegation of intentional misconduct

– If there is a basis to believe that an audit of claims will indicate that Medicare or Medicaid were improperly billed

– If there is significant whistleblower potential

• Often the initially available information creates legitimate concerns, but is inadequate to draw final conclusions

14


–Use of the attorney-client privilege

• Determine at the outset if the review is to be

protected by the privilege

– Protect a review when the results of the review are

uncertain, but potentially troublesome

– Unprivileged speculation about the issues can create

incriminating statements / documents

• Reports by consultants hired/directed by an attorney

can fall within the privilege

– Internal fact gathering may also fall within the privilege

• If review is to be privileged, segregate the file and mark all documents as “Confidential - Attorney-

Client Privilege”15


• Goals of an internal review

– Develop an understanding of potential allegations

of noncompliance

– Discover all relevant facts, including both incriminating and exculpatory facts

– Determine if there have been incorrect

Medicare/Medicaid payments

– Avoid potential whistleblower actions / government investigations

16


• Gather information– Interview relevant personnel

– Data analysis

– Chart reviews and other document review – Research Medicare or relevant billing guidance

• Analyze information and create plan

– Analyze whether the conduct is more serious than

a mere billing mistake

• Employee interviews and document review

– Determine if an overpayment exists

• May require coder / consultant expertise

17

Case Study Two – Additional Facts

• Some clinic staff indicate that for a period of time, all PA services were billed under the Medicare number of the clinic director– Recollections vary widely about the window of time

• Supervision of PAs is very informal and there is no process to ensure that the physician’s whose Medicare number is used was in the clinic when the PA furnished the service

• There appears to be some consensus that PAs may have seen patients when no physician was in the clinic

• Current practice has been in place as long as anyone can remember

• Some physicians were aware of the 15% increase in reimbursement when PA service billed as incident to

18

Scoping the Problem

19

Determining The Overpayment

• Must Estimate Overpayment – Can not ID each claim

– Internal vs. External Review

– Statistical Significance

• Selecting the provider(s) locations;

– Clinic Director claims at relevant locations

• Selecting the period to be reviewed;

– Two years determined by:

• Determined by hire date of NPPs not enrolled

• Date Clinic Director began supervising PAs

20


• Defining the universe

– Provider and Locations for claims as outlined

– Period to be reviewed as outlined

– Less;

• Line item services not requiring incident to documentation

– Vaccines, tests, blood draws

• Sampling Unit and Frame

– Unit = claims in this case

– Frame = listing of all claims in the universe

• Sample Selection

– Design, Size

– Resources – RAT STATS

21

A Word About Workpapers

• Document and protect as advised

– Identifiers

• Claim Numbers and Line Items

• Data Set (ie. cluster) Assignment

– Values

• Amount Paid and Audited Value,

• Amount Overpaid/Underpaid

• Reason for Suggested disallowance

22

Case Study Two–Repayment Strategy


• Present reasonable approximation of overpayment amount

– Extrapolation review findings to universe of payments

– Pointe Estimate – Mean overpayment minus mean underpayment


– Complete repayment form

– Send a cover letter that discusses data issues and assumptions made

• Identify years, universe of claims, audit process, key assumptions

– Send check for total overpayment amount with form and/or letter

23

Case Study Three – Even More Facts

• Based upon the initial fact review at the city center clinic, Typical Health System decides to review its “incident to”billings for all System clinics

– Typical Health System operates a total of 15 clinics in 6 different medical specialties

– 10 clinics use PAs or APNs

– All Medicare billing is performed at a central billing office

– Typical Health System closed 3 clinics about 2 years ago as partof a system re-organization

• All documents except medical records related to the closed centers are in off-site storage

24

Scoping the Problem

25


• Universe = All Claims Locations where NPPs practiced

• Sampling Frame

• Sample Selection

– Consider Cluster Sampling

• Significance of cluster sample size vs. overall sample size

• Identify cross sets of data that can be extrapolated to the universe

• Eliminate redundancies

26

The Universe and Clusters

27


28

• Create estimate for each cluster or strata

• Calculate weighted average for pointe estimate

Time Period to Be Reviewed

• Period of conduct / practice in question

– Analyze coding patterns, changes in staffing, changes in personnel, IT changes, coding guidance, consulting advice received, etc.

• Statute of limitation – Medicare recoupment: 4 years

• 42 C.F.R. § 405.980

• Claims Processing Manual Ch. 34 § 10.6

– Criminal conduct: 5 years • 18 U.S.C. § 3282

– False Claims Act: 6 to 10 years• 31 U.S.C. § 3731(b)

29

Disclosure Issues

• Decide what “type” of disclosure to make

– Overpayment refund

• Resolves overpayment issues that are not due to fraudulent

or criminal conduct

– False Claims Act “voluntary disclosure”

• Addresses fraudulent or reckless billing activity

– Criminal conduct

• If a crime has been committed, a group may decide to report

the violation

30

Disclosure Issues

• Decide “to whom” the disclosure is made

– Medicare contractor (MAC) or other payment agent

– U.S. Department of Justice

– HHS Office of the Inspector General

• OIG has a self-disclosure Protocol

– State Medicaid Fraud Unit

– Private insurance companies / HMOs

31

Benefit and Risks of Voluntary Disclosure

• Benefits

– Brings matters closer to resolution

– Element of a compliance program

– Disclosure of Medicare / Medicaid overpayments may satisfy a legal obligation

– Limit False Claims Act and whistleblower exposure

– May limit criminal prosecution exposure

32

Benefit and Risks of Voluntary Disclosure

• Risks

– Could trigger “full blown” investigation

– The OIG guidance makes no promise of forbearance or

leniency

– Adverse publicity and damage to business reputation

– Chilling effect on employee’s willingness to report non-

compliance

– An inaccurate or inept disclosure that fails to adequately describe the problem could be viewed by the

government as a cover-up

33

34

• What happens to a voluntary repayment?

– Carriers keep the payment, but not bound by it

– MACs to track payments in groups:

• Under OIG Self-Disclosure Protocol

• Under a Corporate Integrity Agreement

• Other voluntary refunds

– MAC to report quarterly to CMS Regional Office all voluntary refunds received

• Division of Benefit Integrity also receives a copy

– Each MAC has a form to be used

– Could be referred to the OIG or DOJ

Disclosure Issues

35

Case Study Three–Repayment Strategy


• Complete fact review

• Reasonably approximate an overpayment amount


– Send a cover letter that discusses data issues and assumptions made

– Consider a single letter or one letter per provider number

– If low dollar value for some centers, consider refund without cover letter

• Memorialize decision making process for final repayment strategy

36

• Questions?

37

Mistakes Happen: The Nuts

and Bolts of a Voluntary

Medicare RepaymentJeffrey FitzgeraldFaegre & Benson [email protected]

Christopher RehmThe Pinnacle Group [email protected]

HCCA Compliance Institute 2010

Auditing & Monitoring 107

April 19, 2010

This presentation is for educational purposes only. Nothing in this presentation should be construed as legal advice, and the specific advice of legal counsel is recommended before acting on any matter discussed herein.

Mistakes Happen: The Nuts and Bolts of a Voluntary ......–Query System for Specific Encounters •...

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