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Physicians’ Compensation For Certain Referrals Could Violate Anti-Kickback Statue

Anti-KickbackOIG Reminds Physicians That They Will Be Held Liable For Illegal Payments Under The Anti-kickback Statute

On June 9, the Department of Health and Human Services Office of Inspector General (OIG) issued a Special Fraud Alert warning against potential liability for physicians who enter into certain financial arrangements with healthcare institutions.

The Fraud Alert states that “if even one purpose of the arrangement is to compensate a physician for his or her past or future referrals” the compensation arrangement would violate the federal Anti-kickback statute.

The Fraud Alert discussed a recent settlement regarding an arrangement between several physicians and a healthcare institution. It emphasized that the following factors resulted in an OIG determination that there was improper remuneration:

  • Payments to physicians took into account the physician’s volume or value of referrals and did not reflect fair market value for the services performed
  • Physicians did not actually provide the services called for under the arrangement
  • The arrangement relieved the physician of a financial burden that such physician would have otherwise incurred, e.g., a healthcare institution paid for the physician’s office staff at his or her practice

Although the Fraud Alert does not change any existing laws, it is a reminder that physicians (not just the hospitals) will be held liable for illegal payments. Physicians should heed OIG’s warning and ensure that arrangements with healthcare institutions do not violate any laws. All arrangements must not only comply with the federal Anti-kickback statute, but also other fraud and abuse laws such as the Stark Law, the Civil Money Penalties Law (CMP Law), and the state law Stark and Anti-kickback counterparts.

The Special Fraud Alert can be found here.

If you are a physician with questions about a current or proposed arrangement with a healthcare institution, please call Danielle Hildebrand or DJ Jeyaram at 678-325-3872 for legal counsel.

What To Do If You Receive A Medicaid Fraud Subpoena In Georgia

medicaid fraudThe Georgia Medicaid Fraud Control Unit (MFCU) investigates and prosecutes fraud and abuse by providers in the Georgia Medicaid program.  One of the first steps MFCU takes when it opens up a case against a provider is often the issuance of an investigative subpoena, requesting specific patient records.

Often the provider has already been looked at by the Georgia Department of Community Health’s Medicaid Program Integrity Unit which handles intake and triage of cases before turning them over to MFCU. In other words, the provider has somehow managed to get on the State’s radar, and it is serious.

Please keep the following in mind if you receive a Medicaid Fraud subpoena:

1. CALL AN EXPERIENCED HEALTHCARE FRAUD ATTORNEY. This is a highly specialized area of the law, and you need someone to represent you that has experience both in defending criminal matters AND in healthcare law. This area of law is like a hybrid car. Just like it takes gas and electric batteries to power a hybrid car, it takes knowledge of criminal and healthcare law to successfully represent a provider facing a Medicaid fraud investigation.

2. Call an attorney BEFORE you respond to the subpoena or talk to an investigator.

3. Remember: the Investigator is NOT your friend. They are doing a job, and their job is find evidence against you. We recently represented a client who was complying with a subpoena from MFCU. Five investigators showed up to get the documents. Since there was no threat of an armed suspect, one can only guess that the use of five investigators to collect documents had to be an intimidation tactic. Likewise, these investigators tried desperately to butter up the employees to get them to talk, and this was with an attorney standing there. Remember: the investigator is NOT your friend.

4. Be Polite and cooperative. If your attorney determines that the subpoena is lawful and enforceable, you have to turn over the documents requested. This can be quite labor- intensive, but you must comply and polite cooperation can only help you in establishing the tone for whatever next steps will be taken.

5. Make copies of every document and electronic file you turnover to MFCU PRIOR to turning them over.

6. DO NOT provide MFCU with anything more than what they have requested in the subpoena- not one document more. And remember, they are only entitled to the records of Medicaid members.

7. Neither you nor your employees are required to speak with the investigator unless individually subpoenaed. Have an attorney present during any interviews.

8. Don’t panic. While a MFCU subpoena should be taken seriously, in Georgia, in 2014, there were 410 Medicaid Fraud Investigations. Of those investigations, only 4 led to indictment.1 The math indicates that MFCU investigates often but indicts with much less frequency.

If you are receive a subpoena from the Georgia Medicaid Fraud Unit, Jeyaram & Associates can help. Contact Kimberly Sheridan at ksheridan@Jeylaw.com or 678.325.3872.

Court Finds DCH’s Handling of Mass Reprocessing “Inconsistent and Misleading”

DCHIn a decision last week, the Office of State Administrative Hearings (OSAH) reversed the Department of Community Health’s (DCH) denial of a Request for Administrative Review by a group of Children Intervention Services (“CIS”) providers. The CIS providers had requested a review of recoupment actions that stemmed from two 2014 Mass Reprocessings by the Department, one involving NCCI edits that included claims dating back to 2010.  The Department argued that the providers missed the 30 day deadline to file a Request for Administrative Review.

Attorney Kimberly Sheridan of Jeyaram & Associates represented the group of CIS providers in the administrative hearing and argued that the providers should be granted a review because they followed all the instructions specific to the mass reprocessing posted by the Department in several banner messages and emails, as well as in-person conversations. Through the banner and email message instructions, the Department departed from its standard deadlines in its policy manuals.  The Court found that the Department’s position was “illogical and wholly unfair,” and that its instructions to the providers after the mass reprocessing were “inconsistent and misleading.” The Court also said the providers had justifiably relied on these instructions and could not now be penalized for their reliance.

At this time, the Department has not made it known if it will appeal the decision.

If you are a provider subject to a recoupment and need help, or if you need to appeal DCH’s decisions, Jeyaram & Associates has extensive experience and success with these cases. Contact Kimberly Sheridan at ksheridan@Jeylaw.com or 678.325.3872.

Healthcare Providers Need To Examine Billing Practices To Ensure Compliance

healthcare fraudLast month, the Department of Health and Human Services released its annual report for the Health Care Fraud and Abuse Control Program. According to the report, in 2014 more than 900 new criminal health care fraud investigations were opened by the Department of Justice. There was a slight increase in the number of criminal cases and convictions from last year, with 496 cases and 735 defendants convicted of criminal health care fraud. Civil cases alone resulted in $2.3 Billion in settlements and judgments.

The government’s press release reiterated that detecting and eliminating fraud and abuse continues to be a top priority. The government attributes its high recoveries to a change in strategy which uses real-time data analysis to detect fraud more quickly. The Centers for Medicare and Medicaid currently uses advanced analytics on Medicare fee-for-service claims. The goal of this is to detect aberrant and suspicious billing patterns which would then trigger an investigation or enforcement action by the government.

Now is the time to for Medicare and Medicaid providers to review their billing practices and financial relationships to ensure that they are compliant with federal laws. Charges against providers were made under the False Claims Act, as well as Anti-Kickback Statute, the Stark Law (Physician Self-Referral Law), and other federal laws.

The full annual report is available at www.oig.hhs.gov/publications/hcfac.asp.

If you have any questions about the legality of your billing practices or financial relationships, please contact DJ Jeyaram at DJ@jeylaw.com or Danielle Hildebrand at dhildebrand@jeylaw.com.

 

DJ Jeyaram Recognized for Championing Rights of Intellectually Disabled

UCPDJ Jeyaram has been named United Cerebral Cerebral Palsy of Georgia’s Advocate of the year for his work on behalf of individuals with intellectual disabilities. According to UCP Executive Director, Diane Wilush, “DJ Jeyaram has gone above and beyond to advocate for members of UCP Georgia and we’ve made great strides as a result of his legal work.”

DCH Adopts New Rules for Rural Hospitals

DCH Rural HospitalsA potential solution to rural hospitals’ funding challenges

A few months ago, the Georgia Board of Community Health (DCH) adopted new rules that allow rural hospitals to reduce the scope of services provided and operate as a rural free standing emergency department. This provides an alternative to closing down operations for rural hospitals which may be struggling with funding operations on a full service scale. It also provides an opportunity for rural hospitals that recently ceased operations (and have either maintained a current DCH license or their license expired within the last 12 months) to re-open their doors.

Hospitals interested in pursuing this course of action must meet certain conditions including:

  1. The hospital must be located in a rural county (population under 35,000);
  2. The hospital must be located within 35 miles of a licensed general hospital;
  3. The hospital must be open 24 hours a day, 7 days a week; and
  4. The hospital must provide non-elective emergency treatment for periods continuing less than 24 hours.

Like the general and specialized hospitals, the rural free standing emergency department must obtain a permit to operate, as well as a specific license to operate as a rural free standing emergency department.

The new rules also require that specific operational elements be put in place. For example, a free standing emergency department must attempt to enter into an agreement with the surrounding hospitals and provide in that agreement a mechanism for patient transfer.

One controversial requirement set forth in the new rules is the requirement to provide certain medical services to patients such as medical screenings and treatment to stabilize without considering the individual’s ability to pay. Jimmy Lewis, CEO of the Georgia Rural Hospital trade organization, has stated that this rule may be unfair to the new stand-alone EDs because the transferee hospital “most often objects if the patient is a no-pay thus keeping the patient in the ED beyond licensure capability.” See http://www.hometownhealthonline.com/blog.

Furthermore, rural free standing EDs will have to bill Medicare and Medicaid at a lower provider rate rather than the current hospital rates. As of May 20, 2014, the application to become a rural free standing emergency department was made available by DCH. See http://dch.georgia.gov/documents/rural-freestanding-emergency-department- application-packet-5192014. According to DCH’s instructions, hospitals should submit a completed application along with supporting documentation at least 6 weeks prior to the planned opening date of the facility. If you are a hospital considering taking this step, the following items should be obtainedand/or completed to support your application:

  1. evidence that the hospital’s Certificate of Need authorization is still active;
  2. an application for a permit;
  3. notarized affidavits regarding ownership identification;
  4. a written request to conduct an initial licensure survey; and
  5. a statement from the local fire safety authority stating that an inspection has been made of the premises and that the state and local fire safety requirements have been met and the facility is approved for occupancy.

If you have any questions or would like legal assistance,  please contact Danielle Hildebrand at dhildebrand@jeylaw.com.

CIS Recoupments Begin – Still Time To Appeal

CIS Recoupment ClaimsThe first Special Remittance Advices (“RA”) pursuant to the Department of Community Health’s CIS Claims Reprocessing were issued this week.  Claims originally processed between November 1, 2010, through June 30, 2012, that billed specific CPT codes are subject to this special reprocessing based on the CMS National Correct Coding Initiative mandated by the Affordable Care Act.

Early reports are that the Special RA’s detailing the voided claims have been several hundred pages long with recoupments reported from $5000 to $100,000.

Some providers have indicated that DCH may be willing to enter into payment plans with providers to space-out the recoupment amount and that the Department may also allow denied claims to be re-billed with the proper CPT modifiers to allow for payment.

Section 202 of DCH’s Part I:  Policies and Procedures Manual requires that claims be received within six (6) months after the month in which service was rendered to be reimbursed unless certain exceptions are met.  It is unclear whether DCH considers the Special Reprocessing as meeting the exception requirements.  If it does not, then providers may be limited to six (6) months for re-billing claims.

If you think the Department’s determination of recoupment is incorrect, you can still appeal the determination as described in Part I of this article. It is extremely important that you satisfy all of the appeal requirements and meet all deadlines.  Failing to do so means that you waive your appeal rights and may not be able to challenge the DCH action.

If you’ve received notice that your practice is subject to the reprocessing recoupment and need help or if you need to appeal DCH’s decisions, Jeyaram & Associates can help. Contact DJ Jeyaram at DJ@Jeylaw.com or 678.325.3872.

Media Coverage for Lawsuit Against the State for Severely Disabled

Class Action Lawsuit Against GeorgiaAdditional media coverage on our class action lawsuit against the state for severely disabled:

http://www.dailyreportonline.com/PubArticleDRO.jsp?id=1202614700896&Class_Action_Seeks_State_Funds_Not_Paid_To_Disabled

http://wabe.org/post/lawsuit-alleges-state-underpaid-providers-who-serve-disabled

http://www.cbsatlanta.com/story/23086886/exclusive-lawsuit-filed-against-state-of-georgia-alleges-funds-withheld-for-disabled

Jeyaram & Associates and Parker, Hudson, Rainer & Dobbs File Class Action Law Suit Against the State

Class Action Law Suit Against GeorgiaJeyaram & Associates and Parker, Hudson, Rainer & Dobbs have filed suit against the state for withholding millions of tax funds earmarked for severely disabled individuals.

Family members representing people with severe disabilities and a group of their health care providers today filed a class action law suit against the Georgia Department of Behavioral Health and Developmental Disabilities and the Georgia Department of Community Health for withholding funds that were designated for the care of those individuals contrary to controlling law.

United Cerebral Palsy of Georgia, Inc., Coastal Center for Developmental Services, Inc., Hope Haven of Northeast Georgia and Creative Community Services, Inc. as well as four families representing nearly 12,000 individuals in the State seek the return of hundreds of millions of dollars that should have been used to care for those individuals since 2008.  The exact amount will be determined at trial.

The families filing suit represent clients who depend on vital services from these healthcare providers every single day. These clients are some of the most vulnerable members of our communities.  Their daily lives have been negatively impacted in real and tangible ways, as have those of their families and caregivers.

“My daughter Tammy wants and needs activity.  Sitting in front of a TV set is counterproductive for her,” says Angela Tulloh of Kennesaw.

Marilyn Harvill worries about the ongoing and future care of her son, 53 year old Matt Windham.  “Matt has severe brain damage and needs 24 hour one-on-one care.  I am worried about the services Matt will receive in the future because I wasn’t given any notice of the cuts.”

None of the families affected was notified by the state of the pending cuts and none was given any recourse.

Additionally, an undetermined number of other individuals requiring new services have been turned away due to the improper budget cuts.

Those organizations filing suit are designated Medicaid providers. The two state agencies being sued have failed to reimburse the plaintiffs for services provided under contract to clients with profound intellectual and developmental disabilities. That has led to severe financial harm to these providers. The state has very specific rules and procedures it must follow before reducing already agreed upon payments to providers and families.  None of those procedures has been followed.

These cuts in Medicaid funds were not tied to the recent economic downturn; rather the funds were allocated by the state legislature and simply not paid in full to the providers and clients who depend on them.

“We have gone through our financial resources to keep serving our existing clients, but we have had to turn away other people with severe developmental, medical and behavioral needs.  I don’t know what happens to those people,” says Sally Buchanan, CEO of Creative Community Services of Norcross.

Curt Harrison, Associate Executive Director of United Cerebral Palsy Georgia and South Carolina, says

“So many people rely on us and we’re doing the best we can.  But development of new services and additional employee training have really suffered.  However, we don’t think it’s morally appropriate to cut services.”

 To view this story on Channel 46: http://www.cbsatlanta.com/story/23086886/exclusive-lawsuit-filed-against-state-of-georgia-alleges-funds-withheld-for-disabled

Is it O.K. to Waive Medicare and Medicaid Beneficiary Co-Pays?

AntiKickback Medicaid MedicareThe answer is sometimes.  However, providers must be very careful to consider the implications of waiving beneficiary co-pays.  Primarily, waiving co-pays may trigger The Anti-Kickback Statute.

The Anti-Kickback Statute provides in relevant part:

Whoever knowingly and willfully offers or pays any remuneration (including any kickback, bribe, or rebate) directly or indirectly…, in cash or in kind, to any person to induce such person to refer an individual [for] any item or service for which payment may be made … under a Federal health care program, … shall be guilty of a felony.42 U.S.C. § 1320a-7b(b).

Basically, the statute prohibits giving anything of value in order to induce referrals for business covered by Medicaid and other federally funded health care programs, and may apply to any transaction between providers and program beneficiaries.

However, the statue does not apply if a health care provider acts without any intent to induce improper referrals. In addition, the provider must know about the law, and act “with the specific intent to violate the law.” Hanlester Network v. Shalala, 51 F.3d 1390 (9th Cir. 1995).

Thus, actions taken in good faith for the benefit of patients or program beneficiaries without any improper intent to generate referrals or violate the law do not implicate Anti-Kickback.

The Department may examine any transaction that could generate improper referrals, especially those in which a provider offers free or discounted items or services to program beneficiaries, or those that would otherwise promote over-utilization or create a risk of fraudulent claims. See OIG Special Advisory Bulletin, Offering Gifts and Other Inducements to Beneficiaries (8/02).

Copays and deductibles help discourage unnecessary services and lower the cost of government programs. A provider’s routine waiver of copays and deductibles may create an incentive to over-utilize program resources and violate the Anti-Kickback Statute. See OIG Special Fraud Alert (12/94).

The OIG has set out some safe harbor guidelines.  Waiving Medicaid and Medicare copays or deductibles does not violate the Anti-Kickback Statute if:

  • the waiver is not offered as part of any advertisement or solicitation;
  • the provider does not routinely waive coinsurance or deductibles; and
  • the provider waives the coinsurance and deductibles after determining in good faith that the individual is in financial need or reasonable collection efforts have failed.

The beneficiary’s “financial need” will depend on the individual’s circumstances.  Providers should have a written policy and guidelines in place showing consideration of factors such as the local cost of living, the patient’s income, assets and expenses, and the scope and extent of the patient’s medical bills. The documentation of financial need should be placed in that patient’s file to prove that the analysis was undertaken and the policy was followed.  In addition, collection should always be attempted.

By taking these factors into consideration, a Provider may greatly reduce the risk of being flagged for fraudulent waiver of copays.

For more information, contact DJ Jeyaram at DJ@Jeylaw.com or  678.325.3872.