Compliance

Published on: September 22, 2010

The OIG Publishes an Unfavorable Advisory Opinion Involving a Manufacturer’s Proposal to Compensate Providers for Warranty-Covered Services

A manufacturer of cochlear implants (“Requestor”) inquired whether a Proposed Arrangement would violate the Anti-Kickback Statute and result in civil monetary penalties. The Office of the Inspector General for the Department of Health and Human Services (OIG) concluded that the Proposed Arrangement presents more than a minimal risk of violation of the Anti-Kickback Statute.

Cochlear implants are devices, covered by the Medicare and Medicaid programs, which assist patients’ ability to hear. The implants consist of both internal and external components. The internal component of the device is surgically implanted and following the implantation an audiologist must program the external sound processor. Patients may choose the cochlear implant device and this choice may be influenced by the patient’s audiologist or surgeon. The Requestor warranties the external component and operates a toll-free telephone line for customer’s questions and concerns about their product. However, since customers often contact the Clinics for assistance with their devices, Clinics will provide troubleshooting services (Services) pursuant to the Requestor’s established process.

The Proposed Arrangement would operate pursuant to a written agreement between the Requestor and the Clinics. The Requestor would compensate the Clinics $37 per occurrence for the Services. The compensated Services would include those provided the Requestor under the customer’s warranty. The Requestor affirmed that the fee was consistent with the fair market value and that Clinics would be prohibited from billing third-party payors or patients for the services. These services would not be marketed to the patients.

Published on: September 8, 2010

The OIG Publishes Two Advisory Opinions

by Wachler & Associates, P.C.

The U.S. Department of Health and Human Services Office of Inspector General (OIG) recently issued two Advisory Opinions. The first Advisory Opinion, AO 10-12, found that an arrangement between a grant program operated by a nonprofit, tax exempt charitable organization that provides grants to brain tumor patients who require financial assistance for the costs of drugs and/or devices would not result in civil monetary penalties (CMPs) even though the arrangement could cause prohibited remuneration under the Anti-Kickback Statute.

Although the funding for the grants comes from manufacturers of drugs and devices used to treat brain tumors and other conditions covered by the program, the OIG found sufficient safeguards in the system that mitigate the risk of improper influence. First, the grant program will award assistance to beneficiaries based on objective criteria. The assistance will not limit the patient’s ability to choose a provider, practitioner or supplier because the patient will have already made these choices prior to receiving the assistance. In addition, no donor will exert control over the Foundation or affect the Foundation’s decision to award assistance. Donors will not receive data that would allow it to determine the correlation between its donations and the use of its products or services.

In the second Advisory Opinion, AO 10-13, the OIG determined that it would not impose administrative sanctions for the provision of free insurance pre-authorization services because the arrangement included sufficient safeguards to reduce the risk that the free services would be inducements for referrals. The proposed arrangement involved a hospital addressing requests from insurers for the pre-authorization of diagnostic imaging services before they are completed by the hospital. The pre-authorization services would be provided by the hospital free of charge and without regard to the volume and/or value of any physician referrals.

Published on: August 12, 2010

OIG LEIE Search Errors

by Wachler & Associates, P.C.

The Office of Inspector General (OIG) for the Department of Health and Human Services recently announced a discovery that during the time period from July 15, 2010 through August 4, 2010 the search/verification function on the online searchable List of Excluded Individuals/Entities (LEIE) was not working properly. Therefore, health care providers who conducted searches during this time period are advised to repeat the searches because it is possible that searches may have resulted in false negative results, i.e. individuals and/or entities that are actually excluded may have shown up as not excluded.

Medicare providers who contract with or employ excluded providers are subject to civil monetary penalties, nonpayment for services and possible exclusion themselves.

For more information regarding obligations to search the excluded providers list as well as other compliance issues, please contact a Wachler & Associates attorney 248-544-0888.

Published on: August 11, 2010

The OIG Releases an Advisory Opinion Regarding the Anti-Kickback Statute

by Wachler & Associates, P.C.

The Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) published an advisory opinion regarding the Anti-Kickback Statute. The OIG concluded that the Anti-Kickback Statute would not be implicated where a charitable donation is made in the name of a healthcare provider, so long as the healthcare provider does not receive a tax deduction or other monetary benefit from the donation.

The request of the advisory opinion created an online scheduling website for certain manufacturers (pharmaceutical, medical and diagnostic) to schedule a time to meet with healthcare providers to educate the providers about new products. Although the manufacturers would pay a fee for the time, healthcare providers would not be paid for their availability, nor would they have to pay to participate. Rather, healthcare providers would designate a public charity to receive donations “in name of” the healthcare provider. Restrictions on the donation include, the healthcare provider will not be entitled to a tax deductions or other monetary benefit from the donation and neither the healthcare provider nor a member of the healthcare provider’s family may be closely affiliated with the charity (i.e. serve on the charity’s board or be employed by the charity).

In its conclusion that this arrangement would not violate the Anti-Kickback Statute, the OIG stressed that the healthcare provider must not receive any form of remuneration, including tax incentives. In addition, the OIG noted that the requestor had put in place several safeguards to ensure that the program was not abused.

Published on: June 3, 2010

The OIG Releases Two Advisory Opinions

by Wachler & Associates, P.C.

The Office of Inspector General (OIG) of the Department of Health & Human Services (HHS) issued two advisory opinions.

The first advisory opinion released by the OIG involves a continuing care retirement community’s proposed rewards program for referrals by current residents and employees. The OIG determined that the proposed arrangement would not be a violation of the Anti-Kickback Statute, and thus would not subject the requestor to administrative sanctions.

The requestor for the OIG’s opinion on the proposed arrangement operates continuing care retirement communities (CCRCs). The CCRCs provide three levels of care: independent living, assisted living, and skilled nursing. Although continuing care residents have a contractual right to move to a higher level of care, a 2005 actuarial study conducted by the requestor found that two-thirds of those who enter the CCRCs at the independent living level are not expected to become residents of the community’s skilled nursing units. The CCRCs do not provide health care, nor do they participate in Federal health care programs.

Published on: May 16, 2010

PPACA Grants Authority to the Secretary of the Department of Health & Human Services to Require Health Care Providers to Adopt Compliance Programs

by Wachler & Associates, P.C.

Section 6401 of the Patient Protection and Affordable Care Act (PPACA) grants the Secretary of the Department of Health and Human Services (the “Secretary”) the authority to require health care providers to adopt compliance programs as a condition of participation in the Medicare, Medicaid and CHIP programs. Before the PPACA, a corporate compliance program was only mandatory for a healthcare provider or supplier that was operating under a Corporate Integrity Agreement or had a contract with the federal government that exceeded $5 million and lasted longer than 120 days.

Although section 6401 lacks specific direction to the Secretary with regard to the health care providers that will be subject to the mandatory compliance programs and the core elements of the programs, the section gives the Secretary the authority to make these decisions. One exception to the lack of specific direction is found in section 6102 of PPACA. That section requires skilled nursing facilities (SNFs) and other nursing facilities to establish compliance programs. According to the language in section 6102, the SNF program must be “reasonably designed, implemented, and enforced so that it will be generally effective in preventing and detecting criminal, civil and administrative violations under this Act and in promoting quality of care.” The section lists eight required components of the compliance program, and requires that the programs be in place by March 2013. The eight required components include:

Compliance standards and procedures must be adopted and followed by employees and other agents in a position to reduce criminal, civil and administrative violations under the PPACA.

Published on: March 24, 2010

Florida Legislation to Increase Medicaid Antifraud Efforts

by Wachler & Associates, P.C.

A bill in Florida’s Senate would target Medicaid fraud through the creation of a Fraud Strike Force and the expansion of the Medicaid Fraud Control Unit (MFCU) within the Florida Attorney General’s (AG’s) office. The Fraud Strike Force would direct state and local authorities to work together to more effectively investigate and prosecute Medicaid fraud and abuse. The strike force’s work begins in January 2011. It will consist of eleven state officials that will eventually recommend the best measures to coordinate state resources. The MFCU’s expansion in the Attorney General’s office includes the creation of positions committed to identifying and prosecuting Medicaid managed care fraud.

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

Published on: March 24, 2010

Rush University Medical Center Agrees to $1.5 Million Settlement to Resolve Alleged FCA Violations

by Wachler & Associates, P.C.

The U.S. Department of Justice (DOJ) and Rush University Medical Center agreed to settle a qui tam lawsuit alleging that Rush violated the Federal False Claims Act (FCA). The lawsuit, filed on July 12, 2004, alleged that Rush had violated the FCA by submitting certain false claims for payment to the Medicare and Medicaid programs. The DOJ intervened in the action and argued that Rush’s violation of the FCA occurred through the submission of claims for services referred by physicians with whom Rush had impermissible financial relationships. The alleged impermissible financial relationships were rent concessions on medical space leased to certain physicians. The government argued that these financial relationships were in violation of Stark Law and thus, Rush was prohibited from billing Medicare and Medicaid for services referred from those physicians. Pursuant to the settlement Rush will pay the federal government $1,547,200.00, and the relators will be awarded $270,760.00.

If you would like your financial relationship reviewed for Stark compliance or for more information, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888.

Published on: February 3, 2010

Health Professionals Petition the FTC for Relief from Red Flags Rule

by Wachler & Associates, P.C.

On January 27, 2010, leaders of the American Dental Association (ADA), American Medical Association (AMA), American Osteopathic Association (AOA), and the American Veterinary Medical Association (AVMA) sent a letter to the Federal Trade Commission (FTC) Chairman Jon Leibovitz requesting that health professionals be excluded from the “Red Flags” Rule, a new regulation intended to combat identity theft.

The letter was prompted by a recent decision from the U.S. District Court for the District of Columbia involving a suit was brought by the American Bar Association (ABA) against the FTC. The court ruled that lawyers should be excluded from the requirements of the Red Flags Rule. The court stated that the application of the Red Flags Rule to attorneys “is both erroneous and inconsistent with the purpose underlying enactment of the [Fair and Accurate Credit Transactions Act of 2003 (FACT Act)].”

Similarly, the leaders of these health professional organizations called upon the FTC to exclude health professionals from the Red Flags Rule. The joint letter to the Chairman requests that the FTC take two actions: (1) announce that the Rule will not be applied against licensed healthcare professionals (LHCPs) until at least ninety days after final resolution of the ABA litigation; and (2) confirm that if the final resolution of the ABA litigation is that the Rule will not be applied to attorneys, the Rule will also not be applied to LHCPs.