Articles Posted in Compliance

CMS Recently released a proposed rule which would reverse the policy of heightening restrictions on suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS).  The proposed rule relaxes previously onerous rules regarding the prohibition of telemarketing and beneficiary solicitation which were implemented on September 27, 2010.  If you have any questions about how this proposed rule will affect your current compliance program, please contact a Wachler & Associates attorney at 248-544-0888.

The Department of Health and Human Services Office of Inspector General (OIG) released an unfavorable Advisory Opinion involving a transportation supplier’s proposal to offer skilled nursing facilities (SNFs) two payment plans for transportation of the SNF’s Medicaid-covered residents.  The OIG determined that the arrangement could potentially violate the Anti-Kickback Statute and that administrative sanctions could be imposed.

The transportation supplier (Requestor) provides transportation services in a state where SNFs receive a per-resident daily rate for ancillary and support services form the state Medicaid program.  SNFs that have residents which are eligible for Medicare and Medicaid are responsible for the amount not covered by Medicare that would otherwise be covered by Medicaid as a secondary payor.  The Requestor will offer two payment plans that respond to SNFs’ responsibilities:

(1) The first payment plan would be a capitated rate per resident per day for Medicaid transports regardless of whether the services were needed and whether Medicaid is the responsible payor.  For residents covered under Medicare and Medicaid, the payment would release the SNF from any further liability (including Medicaid deductibles).  The capitated payment would be less than the Requestor’s cost of transportation for Medicaid patients and more for Medicare patients. 

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) reported $25.9 billion of expected recoveries and savings in fiscal year (FY) 2010.  The large amount is a combination of audit receivables, investigative receivables and other legislative and cost-saving actions that OIG recommended. 

In addition, the OIG’s semiannual report documented that it initiated 647 criminal actions and 378 civil actions against individuals or entities that engaged in crimes against departmental programs.  These actions included lawsuits under the False Claims Act (FCA), the Civil Monetary Penalties Law (CMPL) settlement and other administrative recoveries related to self-disclosure. 

Finally, the report indicated the Health Care Fraud Prevention and Enforcement Action Team’s (HEAT) success in fighting fraud.  That program alone recovered $71.3 million in investigative receivables.  

Last week, the House and Senate passed the “Red Flag Program Clarification Act of 2010.”  The Act limits the definition of “creditor” to a person who obtains or uses consumer reports in connection with a credit transaction, furnishes information to consumer reporting agencies in connection with credit transactions, or advances funds based on the recipients’ obligation to repay.  The bill excludes from the definition persons, such as health care providers, who “advance funds” by providing services before receiving payment.  Relevant government agencies, however, are permitted to designate creditors that will be subject to the Rule.  The Agencies will designate based upon the determination that the person manages accounts that are subject to a reasonably foreseeable risk of identity theft.  These designations must be made through agency rule making. 

The enforcement of the Red Flags rule has been delayed several times, with the most recent delay expiring on January 2011.  The FTC previously determined that health care providers met the definition of “creditor.”  While the Clarification Act’s revised definition would not include most health care providers, the FTC could still designate health care providers as “creditors” through the rule making process based on the risk of medical identity theft concerns previously voiced by the FTC. 

For more information on the Red Flags rule, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888. 

The device manufacturer, ELA Medical, Inc. agreed to pay the United States $9,178,000 to settle allegations that it violated the False Claims Act by giving kickbacks to cardiologists in exchange for the cardiologists ordering and causing hospitals to order ELA’s cardiac devices.  The settlement resolves a qui tam action from 2006 that was filed by a former ELA employee.  According to the allegations the cardiologists were given gifts, meals and entertainment, tickets to sporting events, travel to medical conferences, travel to Costa Rica, fishing and boating trips and payment of travel expenses for the physicians’ spouses.  In addition to the settlement payment, ELA agreed to pay $485,000 to the relator’s attorneys and ELA also agreed to enter into a Corporate Integrity Agreement with the Officer of Inspector General of the U.S. Department of Health and Human Services (OIG).  The relator’s share of the settlement amount is approximately $1.9 million.

There is also a second qui tam action pending against ELA.  The relator in that action alleges that ELA paid kickbacks to cardiologists by paying excessive compensation for training services.  The parties in the second qui tam action have reported that they are engaged in settlement discussions and that the case has been administratively closed due to those discussions. 

For more information on the False Claims Act and Anti-Kickback Statute, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888.

On September 23, 2010 the Centers for Medicare and Medicaid Services (CMS) published the Medicare self-referral protocol (SRDP).  The SRDP was established by sec. 6409 of the Affordable Care Act (ACA) which required the Secretary of Health and Human Services to establish a Medicare self-referral program that affords providers of services and suppliers the opportunity to self-disclose actual or potential violations of the physician self-referral statute.  The SRDP is open to all health care providers of services and suppliers, whether individuals or entities, and is not limited to a particular industry, medical specialty or type of service.  The purpose of the SRDP is to facilitate the resolution of matters that the disclosing party reasonably assesses are actual or potential violations of the Stark Law.  Thus, disclosing parties should make a submission to the SRDP only with the intention of resolving its overpayment liability exposure for conduct it identified.  CMS will evaluate the facts and circumstances surrounding the disclosed conduct to determine an appropriate solution.  It is important to note that CMS is not obligated to follow conclusions made by a disclosing party regarding the matter and has no obligation to resolve the matter in a particular way.

The disclosing party must submit the disclosure electronically and submit an original and 1 copy by mail to the Division of Technical Payment Policy.  Information required to be in the disclosure includes: (1) description of actual or potential violation(s); (2) financial analysis; (3) a signed certification stating that best to the individual’s knowledge, the information provided contains truthful information and is based on a good faith effort to bring the matter to CMS’s attention.

For more information on the SRDP or for assistance with Stark compliance measures please call a Wachler & Associates attorney at 248-544-0888.