OFFICE OF INSPECTOR GENERAL WORK PLANOFFICE OF INSPECTOR GENERAL WORK PLAN

FISCAL YEAR 2006FISCAL YEAR 2006 MEDICARE HOSPITALS MEDICARE HOSPITALS

GABRIEL L. IMPERATO, Esq.GABRIEL L. IMPERATO, Esq.Broad & CasselBroad & Cassel

Fort Lauderdale, Fl.Fort Lauderdale, Fl.

Medicare Hospitals – Areas of Medicare Hospitals – Areas of Focus for OIG Work Plan 2006Focus for OIG Work Plan 2006

Adjustments for Graduate Medical Education PaymentsAdjustments for Graduate Medical Education Payments Payments for Observation Services versus Inpatient Admissions for Dialysis ServicesPayments for Observation Services versus Inpatient Admissions for Dialysis Services Medical Education Payments for Dental and Podiatry ResidentsMedical Education Payments for Dental and Podiatry Residents Nursing and Allied Health Education PaymentsNursing and Allied Health Education Payments Inpatient Prospective Payment System Wage IndicesInpatient Prospective Payment System Wage Indices Inpatient Rehabilitation Facilities PaymentsInpatient Rehabilitation Facilities Payments Inpatient Hospital Payments for New TechnologiesInpatient Hospital Payments for New Technologies Inpatient Psychiatric HospitalsInpatient Psychiatric Hospitals Inpatient Rehabilitation Payments – Late AssessmentsInpatient Rehabilitation Payments – Late Assessments Long Term Care Hospital PaymentsLong Term Care Hospital Payments Critical Access HospitalsCritical Access Hospitals Organ Acquisition CostsOrgan Acquisition Costs Rebates Paid to HospitalsRebates Paid to Hospitals Coronary Artery StentsCoronary Artery Stents Outpatient Outlier and Other Charge-Related IssuesOutpatient Outlier and Other Charge-Related Issues Outpatient Department PaymentsOutpatient Department Payments Unbundling of Hospital Outpatient ServicesUnbundling of Hospital Outpatient Services ““Inpatient Only” Services Performed in an Outpatient SettingInpatient Only” Services Performed in an Outpatient Setting Diagnosis-Related Group CodingDiagnosis-Related Group Coding Hospital Reporting of Restraint-Related DeathsHospital Reporting of Restraint-Related Deaths

Medicare Hospitals – Area of FocusMedicare Hospitals – Area of FocusAdded to OIG Work Plan 2006Added to OIG Work Plan 2006

Adjustments for Graduate Medical Education PaymentsAdjustments for Graduate Medical Education Payments

Payments for Observation Services versus Inpatient Admissions for Dialysis Payments for Observation Services versus Inpatient Admissions for Dialysis ServicesServices

Inpatient Hospital Payments for New TechnologiesInpatient Hospital Payments for New Technologies

Inpatient Psychiatric HospitalsInpatient Psychiatric Hospitals

Outpatient Department PaymentsOutpatient Department Payments

Unbundling of Hospital Outpatient ServicesUnbundling of Hospital Outpatient Services

““Inpatient Only” Services Performed in an Outpatient SettingInpatient Only” Services Performed in an Outpatient Setting

Medicare Hospitals – Areas of FocusMedicare Hospitals – Areas of FocusContinued from OIG Work Plan 2005Continued from OIG Work Plan 2005

Medical Education Payments for Dental and Podiatry ResidentsMedical Education Payments for Dental and Podiatry Residents Nursing and Allied Health Education PaymentsNursing and Allied Health Education Payments Inpatient Prospective Payment System Wage IndicesInpatient Prospective Payment System Wage Indices Inpatient Rehabilitation Facilities PaymentsInpatient Rehabilitation Facilities Payments Long Term Care Hospital PaymentsLong Term Care Hospital Payments Critical Access HospitalsCritical Access Hospitals Organ Acquisition CostsOrgan Acquisition Costs Rebates Paid to HospitalsRebates Paid to Hospitals Coronary Artery StentsCoronary Artery Stents Outpatient Outlier and Other Charge-Related IssuesOutpatient Outlier and Other Charge-Related Issues Diagnosis-Related Group CodingDiagnosis-Related Group Coding Hospital Reporting of Restraint-Related DeathsHospital Reporting of Restraint-Related Deaths

Deleted From OIG Work Plan 2005 and Not Deleted From OIG Work Plan 2005 and Not Included in OIG Work Plan 2006Included in OIG Work Plan 2006

Quality of Improvement Organization Mediation of Beneficiary ComplaintsQuality of Improvement Organization Mediation of Beneficiary Complaints

Graduate Medical Education Voluntary Supervision in Non-hospital SettingsGraduate Medical Education Voluntary Supervision in Non-hospital Settings

Postacute Care TransfersPostacute Care Transfers

Inpatient Outlier and Other Charge-Related IssuesInpatient Outlier and Other Charge-Related Issues

Consecutive Inpatient StaysConsecutive Inpatient Stays

Level of Care in Long-Term Care HospitalsLevel of Care in Long-Term Care Hospitals

Outpatient Cardiac Rehabilitation ServicesOutpatient Cardiac Rehabilitation Services

Lifetime Reserve DaysLifetime Reserve Days

Office of Inspector GeneralOffice of Inspector GeneralOffice of Investigations (“OI”)Office of Investigations (“OI”)

OI Conducts Investigations of Fraud and Misconduct and Health Care OI Conducts Investigations of Fraud and Misconduct and Health Care FraudFraud

Identifies Systematic Weaknesses in Vulnerable Program Areas and Identifies Systematic Weaknesses in Vulnerable Program Areas and Recommends Management, Regulatory and Legislative Corrective ActionRecommends Management, Regulatory and Legislative Corrective Action

Provides Investigative Assistance in Criminal and Civil False Claims, Civil Provides Investigative Assistance in Criminal and Civil False Claims, Civil Money Penalty and Exclusion CasesMoney Penalty and Exclusion Cases

Responds to Thousands of Complaints of Health Care Fraud from Various Responds to Thousands of Complaints of Health Care Fraud from Various Sources, including “Whistleblowers”Sources, including “Whistleblowers”

Provider Self-Disclosure ProgramProvider Self-Disclosure Program

False Claims and Anti-Kickback ViolationsFalse Claims and Anti-Kickback Violations

Office of Inspector GeneralOffice of Inspector GeneralOffice of Legal Counsel (“OCIG”)Office of Legal Counsel (“OCIG”)

Resolution of Civil False Claims Act cases and negotiation of Resolution of Civil False Claims Act cases and negotiation of Corporate Integrity Agreements (“CIA”)Corporate Integrity Agreements (“CIA”)

Providers compliance with Corporate Integrity AgreementsProviders compliance with Corporate Integrity Agreements Industry Guidance: Advisory Opinions and Fraud AlertsIndustry Guidance: Advisory Opinions and Fraud Alerts Development of regulations, including safe harbors to the Development of regulations, including safe harbors to the

Anti-Kickback StatuteAnti-Kickback Statute Enforcement of the Civil Money Penalty and Exclusion Enforcement of the Civil Money Penalty and Exclusion

StatutesStatutes Enforcement of the Patient Anti-Dumping StatuteEnforcement of the Patient Anti-Dumping Statute

OverviewOverview

The Anti-Kickback StatuteThe Anti-Kickback Statute

The Stark LawThe Stark Law

The False Claims ActThe False Claims Act

Recent Trends in OIG and DOJ EnforcementRecent Trends in OIG and DOJ Enforcement

I. The Anti-Kickback StatuteI. The Anti-Kickback Statute

42 USC § 1320a-7b(b)(2)42 USC § 1320a-7b(b)(2)

It is unlawful to knowingly and willfully offer or pay any It is unlawful to knowingly and willfully offer or pay any remuneration (including any kickback, bribe, or rebate) remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind directly or indirectly, overtly or covertly, in cash or in kind to any person to induce such person—to any person to induce such person—(A) to refer an individual to a person for the furnishing or (A) to refer an individual to a person for the furnishing or arranging for the furnishing of any item or service for which arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal payment may be made in whole or in part under a Federal health car program, orhealth car program, or(B) to purchase, lease, order, or arrange for or recommend (B) to purchase, lease, order, or arrange for or recommend purchasing, leasing, or ordering any good, facility, service, purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part or item for which payment may be made in whole or in part under a Federal health care program.under a Federal health care program.

The Anti-Kickback StatuteThe Anti-Kickback Statute

What it All Means? – Prohibits anyone from purposefully What it All Means? – Prohibits anyone from purposefully offering, soliciting, or receiving anything of value to offering, soliciting, or receiving anything of value to generate referrals for items or services payable by any generate referrals for items or services payable by any Federal health care program.Federal health care program.

42 States and D.C. have enacted anti-kickback statutes42 States and D.C. have enacted anti-kickback statutes

Purpose of the LawPurpose of the Law

Prevent the corruption of medical decision-Prevent the corruption of medical decision-makingmaking

Prevent the over utilization of items or Prevent the over utilization of items or servicesservices

Prevent unfair competitionPrevent unfair competition

ElementsElements

RemunerationRemuneration Offered, Paid, Solicited, or ReceivedOffered, Paid, Solicited, or Received Knowingly & WillfullyKnowingly & Willfully To Induce or In Exchange for Federal To Induce or In Exchange for Federal

Program ReferralsProgram Referrals

RemunerationRemuneration

Anything of valueAnything of value ““In-cash or in-kind”In-cash or in-kind” Paid directly or indirectlyPaid directly or indirectly Examples: cash, free goods or services, Examples: cash, free goods or services,

discounts, below market rent, relief of financial discounts, below market rent, relief of financial obligationsobligations

Offered, Paid, Solicited, or ReceivedOffered, Paid, Solicited, or Received

Different Perspectives – Payors and PayeesDifferent Perspectives – Payors and Payees ““It Takes Two to Tango”It Takes Two to Tango” Old Focus: Payors Subject to ProsecutionOld Focus: Payors Subject to Prosecution New Focus: Payees (usually doctors)New Focus: Payees (usually doctors)

To Induce Federal Program ReferralsTo Induce Federal Program Referrals

Any Federal health care programAny Federal health care program A nexus between payments and referralsA nexus between payments and referrals Covers any act that is intended to influence and Covers any act that is intended to influence and

cause referrals to a Federal health care programcause referrals to a Federal health care program One purpose testOne purpose test

Knowingly & WillfullyKnowingly & Willfully

The Anti-Kickback law requires that the individual The Anti-Kickback law requires that the individual have a particular “state of mind”, acting with have a particular “state of mind”, acting with knowledge and purpose when committing the knowledge and purpose when committing the offenseoffense

This “Knowingly & Willfully” requirements has This “Knowingly & Willfully” requirements has been interpreted differently by the various Circuit been interpreted differently by the various Circuit Courts:Courts:• 99thth Circuit: Must have knowledge of the Anti-Kickback Circuit: Must have knowledge of the Anti-Kickback

Statute and have specific intent to violate the statuteStatute and have specific intent to violate the statute• 88thth Circuit: Mere knowledge that the conduct was Circuit: Mere knowledge that the conduct was

“wrongful” satisfies the “Knowingly & Willfully” standard“wrongful” satisfies the “Knowingly & Willfully” standard• 1111thth Circuit: Must show that one acted with an intent to Circuit: Must show that one acted with an intent to

“disobey or disregard” the law“disobey or disregard” the law

Fines and PenaltiesFines and Penalties

The Government may elect to proceed:The Government may elect to proceed:

CriminallyCriminally::• Felony, Imprisonment up to 5 Years & a fine up to $25,000, or bothFelony, Imprisonment up to 5 Years & a fine up to $25,000, or both• Mandatory exclusion from participating in Federal health care programsMandatory exclusion from participating in Federal health care programs• Brought by the DOJBrought by the DOJ

CivillyCivilly::• Violation is based on express or implied certification of compliance with Violation is based on express or implied certification of compliance with

violations of the Anti-Kickback and Stark Statutesviolations of the Anti-Kickback and Stark Statutes• Penalties are same as under False Claims Act (more later)Penalties are same as under False Claims Act (more later)• Controversial, yet expanding use of the FCAControversial, yet expanding use of the FCA

AdministrativelyAdministratively::• Monetary penalty of $50,000 per violation & assessment of up to three times the Monetary penalty of $50,000 per violation & assessment of up to three times the

remuneration involvedremuneration involved• Discretionary exclusion from participating in Federal health care programsDiscretionary exclusion from participating in Federal health care programs• Brought by the OIGBrought by the OIG

Exceptions and Safe HarborsExceptions and Safe Harbors

Many harmless business arrangements may be Many harmless business arrangements may be subject to the Statutesubject to the Statute

Approximately 24 exceptions (“Safe Harbors”) Approximately 24 exceptions (“Safe Harbors”) have been created by the OIGhave been created by the OIG

Compliance is voluntaryCompliance is voluntary Must meet all conditions to qualify for Safe Must meet all conditions to qualify for Safe

Harbor protectionHarbor protection Is substantial compliance enough?Is substantial compliance enough?

Guidance on the Anti-KickbackGuidance on the Anti-KickbackStatuteStatute

Advisory Opinions from the OIGAdvisory Opinions from the OIG• A party may request advice on the law, concerning 1) A party may request advice on the law, concerning 1)

remuneration within the meaning of the law, 2) whether remuneration within the meaning of the law, 2) whether they are meeting one of the law’s exceptions or safe they are meeting one of the law’s exceptions or safe harbors, or whether their arrangement warrants the harbors, or whether their arrangement warrants the imposition of a sanctionimposition of a sanction

• Recent Advisory Opinions on Gainsharing ArrangementsRecent Advisory Opinions on Gainsharing Arrangements Fraud Alerts and Special Advisory BulletinsFraud Alerts and Special Advisory Bulletins Preamble to the Safe Harbor RegulationsPreamble to the Safe Harbor Regulations Compliance Program Guidance’sCompliance Program Guidance’s www.oig.hhs.gov

The Stark LawThe Stark Law

Section 1877 of the Social Security Act, 42 Section 1877 of the Social Security Act, 42 U.S.C. 1395nnU.S.C. 1395nn

The law is complicated and consists of the The law is complicated and consists of the original statute (Stark I) and the amended original statute (Stark I) and the amended provisions (Stark II)provisions (Stark II)

Most Stark II regulations went into effect in Most Stark II regulations went into effect in 2002, but some are still pending2002, but some are still pending

The Stark LawThe Stark Law

A prohibition on physician self-referralsA prohibition on physician self-referrals If a physician (or immediate family If a physician (or immediate family

member) has a direct or indirect financial member) has a direct or indirect financial relationship (ownership or compensation) relationship (ownership or compensation) with an entity that provides designated with an entity that provides designated health services (“DHS”), the physician health services (“DHS”), the physician cannot refer the patient to the entity for cannot refer the patient to the entity for DHS and the entity cannot submit a claim DHS and the entity cannot submit a claim for the DHS, unless the financial for the DHS, unless the financial relationship fits in an exceptionrelationship fits in an exception

PenaltiesPenalties

Nonpayment of claimsNonpayment of claims Civil Money Penalties of $15,000 for each Civil Money Penalties of $15,000 for each

service rendered plus an assessment of service rendered plus an assessment of three times the amount claimsthree times the amount claims

Penalty of up to $100,000 for Penalty of up to $100,000 for “Circumvention Scheme”“Circumvention Scheme”

Don’t forget FCA liabilityDon’t forget FCA liability

Difference Between Anti-Kickback Difference Between Anti-Kickback Statute and the Stark LawStatute and the Stark Law

Physician referrals onlyPhysician referrals only No “knowingly and willfully standard” – No “knowingly and willfully standard” –

Strict liabilityStrict liability Involves Designated Health Services Involves Designated Health Services

(“DHS”)(“DHS”)

Types of Designated Health Care Types of Designated Health Care Services (DHS)Services (DHS)

Clinical laboratoryClinical laboratory Physical therapyPhysical therapy Occupational therapyOccupational therapy Radiology and Imaging Services (MRI, CAT Scan, Radiology and Imaging Services (MRI, CAT Scan,

Ultrasound)Ultrasound) Radiation therapy & suppliesRadiation therapy & supplies Durable medical equipment and suppliesDurable medical equipment and supplies Parenteral and enteral nutrients, equipment and suppliesParenteral and enteral nutrients, equipment and supplies Prosthetics, orthotics, and prosthetic devices and uppliesProsthetics, orthotics, and prosthetic devices and upplies Home health servicesHome health services Outpatient prescription drugsOutpatient prescription drugs Inpatient and outpatient hospital servicesInpatient and outpatient hospital services

What is a Financial RelationshipWhat is a Financial Relationship

Nearly any type of investment or compensation agreement Nearly any type of investment or compensation agreement between the referring physician and the DHS entity will between the referring physician and the DHS entity will qualify as a financial arrangement under the Stark lawqualify as a financial arrangement under the Stark law

Examples:Examples:• Stock OwnershipStock Ownership• Partnership InterestPartnership Interest• Rental ContractRental Contract• Personal Service ContractPersonal Service Contract• SalarySalary

Compensation agreements can be direct or indirectCompensation agreements can be direct or indirect• Exceptions for certain indirect compensation arrangementsExceptions for certain indirect compensation arrangements

ExceptionsExceptions

Compliance is MandatoryCompliance is Mandatory Types of Exceptions:Types of Exceptions:

• In-office ancillary servicesIn-office ancillary services• Personal physician services by member of Group PracticePersonal physician services by member of Group Practice• Pre-paid health planPre-paid health plan• Certain publicly traded securitiesCertain publicly traded securities• Rural provider (investment interests)Rural provider (investment interests)• Hospital ownership (must be in the “whole” hospital)Hospital ownership (must be in the “whole” hospital)• Rental of office space and equipmentRental of office space and equipment• Bona fide employmentBona fide employment• Personal services arrangementPersonal services arrangement• Physician recruitmentPhysician recruitment• Fair market value payment by physiciansFair market value payment by physicians

Additional ExceptionsAdditional ExceptionsAdded in January 2004Added in January 2004

Fair Market Value Fair Market Value compensation arrangementscompensation arrangements

Academic medical center Academic medical center arrangementsarrangements

Implants provided in an ASC Implants provided in an ASC (Implants are DHS, but are (Implants are DHS, but are not included in the bundled not included in the bundled Medicare ASC payment)Medicare ASC payment)

EPO and other dialysis-related EPO and other dialysis-related drugs furnished in or by an drugs furnished in or by an ESRD facilityESRD facility

Preventing screening tests, Preventing screening tests, immunizations, and vaccinesimmunizations, and vaccines

Eyeglasses and contact lenses Eyeglasses and contact lenses following cataract surgeryfollowing cataract surgery

Non-monetary compensation Non-monetary compensation up to $300up to $300

Medical staff incidental Medical staff incidental benefits provided by a benefits provided by a hospitalhospital

Risk sharing arrangementsRisk sharing arrangements Compliance trainingCompliance training Indirect compensation Indirect compensation

arrangementsarrangements

The False Claims ActThe False Claims Act

31 U.S.C. § 3729, the False Claims Act (“FCA” sets forth seven 31 U.S.C. § 3729, the False Claims Act (“FCA” sets forth seven bases for liability. The most common ones are:bases for liability. The most common ones are:

1.1. Knowingly presenting, or causing to be presented, to the Knowingly presenting, or causing to be presented, to the government a false or fraudulent claim for paymentgovernment a false or fraudulent claim for payment

2.2. Knowingly making, using, or causing to be made or used, a false Knowingly making, using, or causing to be made or used, a false record or statement to get a false or fraudulent claim paidrecord or statement to get a false or fraudulent claim paid

3.3. Conspiring to defraud the government by getting a false or Conspiring to defraud the government by getting a false or fraudulent claim allowed or paidfraudulent claim allowed or paid

4.4. Knowingly making, using, or causing to be made or used, a false Knowingly making, using, or causing to be made or used, a false record or statement to conceal, avoid, or decrease an obligation record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the government.to pay or transmit money or property to the government.

Elements of an FCA OffenseElements of an FCA Offense

The Defendant must:The Defendant must:• Submit a claim (or cause a claim to be Submit a claim (or cause a claim to be

submitted)submitted)• To the governmentTo the government• That is false or fraudulentThat is false or fraudulent• Knowing of its falsityKnowing of its falsity• Seeking payment from the Federal treasurySeeking payment from the Federal treasury• Damages (maybe)Damages (maybe)

Knowing & KnowinglyKnowing & Knowingly

No proof or specific intent to defraud is No proof or specific intent to defraud is requiredrequired

The government need only show person:The government need only show person:• Had “actual knowledge of the information”; orHad “actual knowledge of the information”; or• Person acted in “deliberate ignorance” of the truth or Person acted in “deliberate ignorance” of the truth or

falsity of the information; orfalsity of the information; or• Person acted in “reckless disregard” of the truth or Person acted in “reckless disregard” of the truth or

falsity of the informationfalsity of the information

PenaltiesPenalties

1)1) Civil penalty of no less than $5,500 and Civil penalty of no less than $5,500 and no more than $11,000 per false claimno more than $11,000 per false claim

2)2) Three times the amount of damages Three times the amount of damages which the government sustainedwhich the government sustained

Investigative GuidelinesInvestigative Guidelines

Were false claims submitted by a provider with Were false claims submitted by a provider with knowledge of their falsity?knowledge of their falsity?• Was there actual or constructive notice of the rule or Was there actual or constructive notice of the rule or

policy on which a potential case would be based?policy on which a potential case would be based?• Was the rule or policy clear?Was the rule or policy clear?• Does the size of the false claim support inference of Does the size of the false claim support inference of

knowledge or inference of mistake?knowledge or inference of mistake?• What plans did the provider make to adhere to the What plans did the provider make to adhere to the

rules?rules?• Are there any past remedial efforts?Are there any past remedial efforts?• Did the provider receive guidance by program agents on Did the provider receive guidance by program agents on

the issue?the issue?• Have there been previous audits to the provider of same Have there been previous audits to the provider of same

or similar billing errors?or similar billing errors?

Qui Tam Actions & Government Qui Tam Actions & Government InterventionIntervention

A private person (“Relator”) may bring a A private person (“Relator”) may bring a False Claims Act action under the False Claims Act action under the qui tamqui tam provisions of the FCA-The Whistleblowerprovisions of the FCA-The Whistleblower

Government may intervene in a suit Government may intervene in a suit brought by Relatorbrought by Relator

The relationship between Relator and The relationship between Relator and governmentgovernment

FCA StatisticsFCA Statistics

If the government intervenes and obtains recovery, the If the government intervenes and obtains recovery, the Relator receives between 15% and 25% of the proceedsRelator receives between 15% and 25% of the proceeds

Since 1986, of all of the Since 1986, of all of the qui tamqui tam actions filed, the average actions filed, the average yearly intervention rate has been about 25% yearly intervention rate has been about 25% (approximately 300-400 cases)(approximately 300-400 cases)

About $1.5 billion of the $1.7 billion in health care FCA About $1.5 billion of the $1.7 billion in health care FCA recoveries in FY ’03 were from whistleblowersrecoveries in FY ’03 were from whistleblowers

Recoveries have increased (higher penalties and publicity)Recoveries have increased (higher penalties and publicity) Whistleblower protection is provided to those that take Whistleblower protection is provided to those that take

lawful actions in furtherance of the lawful actions in furtherance of the qui tamqui tam suit, including suit, including investigation, initiation, testimony for, or assistance in the investigation, initiation, testimony for, or assistance in the actionaction

Role of the OIG in FCA CasesRole of the OIG in FCA Cases

May assist in the investigationMay assist in the investigation Settles as client agency on behalf of HHSSettles as client agency on behalf of HHS Permissive exclusion authorityPermissive exclusion authority May waive exclusion authority in exchange May waive exclusion authority in exchange

for Corporate Integrity Agreementfor Corporate Integrity Agreement-- Monitoring and Annual ReportsMonitoring and Annual Reports

-- Successor LiabilitySuccessor Liability

Types of FCA CasesTypes of FCA Cases

Unbundling (billing single service as if one service)Unbundling (billing single service as if one service) Services not renderedServices not rendered Billing for items or services that are not coveredBilling for items or services that are not covered UpcodingUpcoding Duplicate billingDuplicate billing Submitting false or inflated cost reportsSubmitting false or inflated cost reports Quality of Care (“standard of care claims” or “worthless Quality of Care (“standard of care claims” or “worthless

claims”)claims”) Research Grand and Clinical Trial fraudResearch Grand and Clinical Trial fraud Actions under the Food, Drug & Cosmetic ActActions under the Food, Drug & Cosmetic Act

• Misbranding & adulteration of drugs and promotion of off label Misbranding & adulteration of drugs and promotion of off label useuse

False Claims Act cases based on violations of the Stark Law False Claims Act cases based on violations of the Stark Law and/or the Anti-Kickback Statute (“Tainted Claims”)and/or the Anti-Kickback Statute (“Tainted Claims”)

Trends in Government EnforcementTrends in Government Enforcement

Health care fraud enforcement continues as a Health care fraud enforcement continues as a priority and includes anything whistleblowers may priority and includes anything whistleblowers may targettarget

Medicare Reform Act – Expansion of prescription Medicare Reform Act – Expansion of prescription drug benefit – new fraud opportunitiesdrug benefit – new fraud opportunities

Corporate liability and complianceCorporate liability and compliance Quality of CareQuality of Care Stark Law and Anti-kickback violationsStark Law and Anti-kickback violations

Hot TopicsHot Topics

Physician recruitmentPhysician recruitment Medical directorshipsMedical directorships Joint venturesJoint ventures Pharma and medical device marketingPharma and medical device marketing Clinical researchClinical research Quality of CareQuality of Care

Corporate Liability, Compliance and Corporate Liability, Compliance and GovernanceGovernance

HIPPA ’96 and corporate scandalsHIPPA ’96 and corporate scandals The new era of corporate responsibilityThe new era of corporate responsibility Sarbanes-Oxley Act of 2002Sarbanes-Oxley Act of 2002 United States Sentencing Guideline Amendments United States Sentencing Guideline Amendments

of 2004of 2004 Department of Justice principles of Federal Department of Justice principles of Federal

prosecution of business organizationsprosecution of business organizations

Sarbanes-Oxley and the Sentinel Effect Sarbanes-Oxley and the Sentinel Effect on Health Care Organizationson Health Care Organizations

Public CompaniesPublic Companies – Governance and integrity of – Governance and integrity of reporting financial informationreporting financial information

Private CompaniesPrivate Companies – Fiduciary obligations and – Fiduciary obligations and shareholder derivative liabilityshareholder derivative liability

Not-for-Profit OrganizationsNot-for-Profit Organizations – Fiduciary – Fiduciary obligations and Attorney General oversightobligations and Attorney General oversight

Caremark DecisionCaremark Decision

Sentencing Guideline Amendments Raise Sentencing Guideline Amendments Raise the Stakes for Business Organizationsthe Stakes for Business Organizations

Codification of principles of Caremark DecisionCodification of principles of Caremark Decision Oversight and responsibility of the Board of Directors and Oversight and responsibility of the Board of Directors and

high level personnel of the organizationhigh level personnel of the organization Board knowledge about the content and operation of the Board knowledge about the content and operation of the

compliance program to prevent and detect violations of the compliance program to prevent and detect violations of the lawlaw

Board exercises reasonable oversight with respect to Board exercises reasonable oversight with respect to implementation and effectiveness of the compliance implementation and effectiveness of the compliance programprogram

Risk assessment as an essential component of design Risk assessment as an essential component of design implementation of an effective compliance programimplementation of an effective compliance program

Assessment of likely compliance risks given an Assessment of likely compliance risks given an organization’s business activitiesorganization’s business activities

United States Sentencing Guideline Amendments and United States Sentencing Guideline Amendments and Department of Justice Principles of Federal Prosecution of Department of Justice Principles of Federal Prosecution of

Business OrganizationsBusiness Organizations

“Cooperation” or “Unconditional Surrender”“Cooperation” or “Unconditional Surrender”

Voluntary disclosure and self-reporting as quasi mandatory Voluntary disclosure and self-reporting as quasi mandatory function of cooperationfunction of cooperation

Cooperation in investigating business organizations own Cooperation in investigating business organizations own wrongdoingwrongdoing

Effects charging decision against business organizationEffects charging decision against business organization Effects scope of liability for business organizationEffects scope of liability for business organization Effects sentence under Sentencing GuidelinesEffects sentence under Sentencing Guidelines Business organization’s cannot run the risk of failing to Business organization’s cannot run the risk of failing to

have an effective compliance and governance programhave an effective compliance and governance program Failure to detect and prevent wrongful conduct will result in Failure to detect and prevent wrongful conduct will result in

consequences for any business organization in current consequences for any business organization in current compliance environmentcompliance environment

The EndThe End