Posts about avoiding going to jail. (or how to get there if you need a "paid vacation.")
I received an e-mail today form OIG's list serve regarding "technical difficulties" with the exclusion list search on their web site. They e-mail stated that the list has "been intermittently not working for the last week or so." So if you have been trying to check the list on line and been unable to do so, you were not making a mistake, their website is broken. They are working on fixing it and have stated they hope it is back on line by the end of today. (As of 7:20 p.m. eastern I have not received any further e-mails, I will leave you to draw your own conclusions gentle reader.) The e-mail suggests using the downloading the exclusions list database. This feature allows you to download the list, open it in an excel spreadsheet and search it that way. I have never used this feature, but when the OIG website is not working, it does provide an alternative. If you are interested, I am attaching the instructions to this post.
Attachments:
DownloadableLEIEInstructions.doc
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I read an interesting article in this weeks home health line. It was a follow up to a recent pre-conference HHL sponsored. The subject of the article was renting space from ALFs. Because ALFs are an excellent source of referrals, rental arrangements are definitely an area that can be abused. (Of course renting space from any potential referral source can be a source for abuse.) I thought the article made some good points, but it failed to address some other potential risk areas for fraud and abuse with assisted living facilities.
One arrangement I have seen is the ALF that has a related therapy company (perhaps an outpatient therapy company conveniently located to the facility). The ALF will ?suggest? the agency contract with its therapy company for therapists to provide services to patients in the ALF. Contracting for therapists in and of itself is not a problem, in fact, many agencies need to, because they are unable to find enough therapists to hire. However, contracting for therapists with a company that is part of or owned by the ALF can create problems.
The question I always ask clients is, do you need therapists? In other words, could you staff the patients in the facility without the contract? If you can, you will have a hard time justifying your relationship with the ALF's "sister company." Contracting for unnecessary staff almost guarantees the arrangement is not fair market value. If it is not fair market value, you are outside of the safe harbor and may end up being asked a lot of uncomfortable questions.
Another question I have asked when a "therapy contract" is offered is, can you use these therapists to staff your patients outside the facility? Often, the answer to that question is no. In these cases, the government is likely to consider the "staffing contract" simply a quid pro quo to the facility. You get the home health business, but they get a piece of the action for their therapists.
This can become even more complicated if you add in the facility's offer to make the HHA a "preferred provider." Now, a preferred provider agreement, if done properly can be acceptable. (Disclaimer: You should always discuss this kind of arrangement with knowledgeable legal counsel.) But when a lease or therapy contract is involved along with a preferred provider agreement, it may appear that the contract was a quid pro quo for the designation, because everyone knows being the preferred provider is usually good for business.
Home health is very competitive and providers are willing to try many angles to increase business. However, when looking at ways to increase referrals from ALFs, providers should be wary of offers to rent space or staff. Rewarding a referral source with an unnecessary or inflated contract may improve business, but it is also likely to land you in jail. Remember the anti-kickback statute is a felony.
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OIG has posted its updated exclusion list. This list contains the full exclusion database and is meant to replace the one issued last month. You can download it here: updated exclusion list .
If you have not heard of the exclusion list and you provide any federally reimbursable services, you should probably browse this post: Have you checked the exclusion list lately?
If you did not realize it, the OIG list is updated monthly. This is because individuals are added to or removed from the list each month. (I suspect more are added to it then removed from it, but I have never really checked the totals.)
OIG and its counterparts at the various state Medicaid Fraud Control Units recommend checking this list every month. This is great advice if you have a lot of staff with time on their hands. (If you are reading this and have such a person, you are either overstaffed or not a home health or hospice company.) However, for the home health and hospice industry, this is not practical.
Many providers only perform these checks upon hiring. It is advisable to occasionally ?recheck?. How often you recheck can depend upon a number of factors, including number of employees to check and number of staff available. The bottom line is that if you have an employee who becomes excluded while employed by you (trust me, it can happen), you may end up owing the government a lot of money. The longer you go between checks, the bigger the check you may have to write. Of course, the more frequently you check, the greater the burden on you and your staff.
Ultimately, the important point is that you do perform ?rechecks? and do so enough to protect yourself.
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Tri Centurion has announced that it is going to start automatically denying certain plans of care in central Florida. According to an article in this week's edition of Home Health Line, this is a response to the rise in aide visits which Tri-Centurion termed wholesale abuse. The article stated that patients were receiving in excess of three aide visits a week. Apparently, in some case patients are routinely receiving multiple visits per day. Of course, Tri-Centurion's response is to simply deny any claim, rather than evaluate every case to determine if a request is medically necessary. I am not going to comment on the merits of Tri-Centurion decision, but I mention this case, because it raises another question for me. According to the report, many agencies in Miami and surrounding counties offer excessive numbers of aide vists because patients demand them. Agencies, in an effort to get the cases, will provide them to the patient. This of course means agencies are providing unnecessary homecare visits in order to secure patients. Nothing like a little fraud to improve your marketing results. (Until OIG shows up and starts asking pointe questions.) Tri-Centurion stated that aides are being used as "marketing tools" in other words, an inducement to choose a particular provider. It seems like this practice should have been obviously problematic, but yet it was rather prevalent in Miami, which has had its share of fraud and abuse issue lately. Everyone is focused on the automatic denial issue, but I think that, given what went on, an OIG investigation does not seem far behind. I can't help but wonder if this is a case of some agencies having success and not getting in trouble and others following suit, the classic "everyone else is doing it so why don't we". (Insert reference to the Cranberries here, not the vegetable, the rock band.) Of course, that is not going to be of much help to providers when they start getting audited or worse. Just because everyone else is doing it doesn't mean you won't get prosecuted. The fact that the abuse became so widespread simply means everyone else was doing it guarantees it will come to the regulators' attention. The way the regulators responded in this case brings up one other point, the government's response to fraud almost always makes it more difficult for everybody to provide care. In this case, patients that legitimately need three or more visits a week will not receive them without additional efforts by the provider. This creates more work for the providers who did not engage in the conduct. Perhaps, rather than a denial policy, there should have been some other enforcement action. Why punish everyone, even those who didn't do anything wrong?
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On Monday, the Department of Health and Human Services and the Department of Justice announced another test project designed to prevent fraudulent providers from operating in the Medicare system. This time the government is targeting fraudulent infusion therapy providers operating in South Florida.
As described by the press release, the new demonstration project will operate in a manner similar to the home health fraud enforcement project announced for Houston and L.A. Infusion providers in designated south Florida counties will be required immediately resubmit applications for enrollment. Failure to reapply within thirty days of receiving a notice to reapply will result in having your billing privileges revoked.
If an infusion therapy provider is discovered to have owners, partners, directors, or managing employees who have a felony conviction, the provider will have its privileges revoked. If the provider failed to report a change of ownership, it will have its billing privileges revoked. If a provider no longer meets each and every provider enrollment requirement, they will have their privileges revoked.
The providers that successfully reapply may find themselves subject to greater review, including site visits, depending upon the government?s determination of the potential risk for more fraud. For many providers, this is a potentially onerous outcome. The announcement does not make it clear what factors will become part of the ?risk assessment.? More audits and site visits will translate into more work for providers.
The press release went on to detail the successes of the South Florida Medicare fraud ?strike force?. This effort uses real time access to Medicare billing records to assist the government?s efforts to identify and prosecute Medicare fraud. It has resulted in a large number of indictments and convictions over the last eighteen months.
As with all other ?demonstration? projects, I would expect this project to spread and to become a standard operating practice for the government. Given the success of the strike force in south Florida, I would not be surprised to discover similar efforts initiated in other parts of the country as well.
Over the last few months, the government has announced a number of efforts to combat fraud in the home health and related industries. Providers should be aware of these efforts, because they could very quickly become standard enforcement techniques. Although many of these efforts are aimed at over fraud, it is still drawing enforcement attention back to home health.
The government has not taken a hard look at fraud in the home health and hospice industries in a number of years. This has led many providers to become lax in their fraud and abuse compliance efforts. It seems that they are beginning to look again. Providers need to be aware that this is coming and prepare for it. Those providers who are engaged in questionable activities simply because others are doing the same, may be very surprised to find they are being prosecuted when the government starts to pursue fraud and abuse prosecutions in the home health and hospice industries more vigorously.
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The OIG issued another opinion letter this week on providing free stuff to beneficiaries before the beneficiary has a need for your services. (In other words, free services as a way to get your foot into the door.) Once again, OIG?s opinion was that providing free stuff to beneficiaries is a potential violation of the fraud and abuse laws. (They say potential, because they will not offer an opinion on intent, but remember, intent is governed by the overly broad one-purpose test.)
The opinion was sought by another DME provider. The requestor provided home medical equipment, including home oxygen and sought an opinion regarding its practice of providing certain items to patients diagnosed with congestive heart failure. As you may know, Medicare requires an oximetry test to confirm a patients need or in home oxygen. This test cannot be performed by the provider who will supply the in home oxygen.
The provider in this letter was providing patients diagnosed with congestive heart failure with a ?clinical assessment? and an oximetry test. (For those of you who think this sounds familiar, OIG issued an opinion on a very similar arrangement last year.) The clinical assessment consisted of ? a subjective functional assessment; heart rate, respiratory rate, and blood pressure measurements; assessment of breath sounds and level of dyspnea; a check for peripheral edema, abdominal pain or swelling; and a medication profile and mobility analysis.?
The requestor also provided the patient with education regarding his/her condition and tips in the recognition and self-management of symptoms. Finally, as part of the assessment, the requestor would perform pulse oximetry tests on the patient while the patient was at rest, while active, and overnight.
The requestor argued that such testing was appropriate, because it provided useful data about the patient?s breathing. They also noted that it could be days or weeks before and independent company was able to perform the patient?s oximetry test.
The provider was not providing free home oxygen. These clinical assessment were potentially reimbursable by Medicaid or if performed by an IDTF, but the DME provider would not bill anyone for them. The DME provider would only perform these assessments on patients after they received a doctor?s order (for the assessment, but not a referral for home oxygen). The requestor would not advertise or market that it provided these free assessments and the patients would be advised that they were free to choose any provider for the supplies, equipment, or services they would ultimately need.
In determining whether the free CHF assessment and oximetry testing was a valuable service, OIG again applied the reasonable beneficiary test. OIG opined that a reasonable beneficiary would believe that the CHF assessment and oximetry test was a valuable medical service that would speed access to home oxygen and lead to improved clinical outcomes. Thus, even though the assessment had a reimbursable value of $22.00, the beneficiary?s perception made it a valuable service.
In addressing whether the free service would be likely to influence the beneficiary?s decision, the OIG recited the same factors it used in the last two free services opinions. OIG noted that the physician order for the assessment would be perceived as an endorsement of the provider; providing the free services gave the provider a chance to establish a relationship with the patient; once the relationship was established, the patient would likely choose the provider in the future; offering the services for free ?maximized? the opportunity to initiate the relationship. For these reasons, the arrangement was likely to influence the beneficiary?s decision.
The final question was whether the provider should know the arrangement would influence the beneficiary?s decision. The OIG noted that CHF patients are likely to need other services in the future; the requestor offered them free services; the requestor provided them in the home. These factors led OIG to conclude not only that the provider should know the arrangement would influence beneficiaries, but that the arrangement was calculated to generate business for the requestors. They did not mention it, but the free oximetry test provided the requestor with advance notice whether the patient would be eligible for home oxygen. Which helped the provider to further identify patients with a need for future services.
Once again, we see OIG finding on offer of free services to beneficiaries to be a potential violation of the CMP and anti-kickback statutes. Because of the focus on the beneficiaries perception of value, it will be very difficult for any arrangement that ?gets your foot in the door? before an actual referral for services, like free safety or other assessments, to pass OIG?s scrutiny. Before you begin providing pre-referral in home services or assessments, you should seek the advice of counsel. The penalties for violating the CMP statute are quite steep.
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I have been remiss in posting lately, because of speaking engagements. When I am away from the office, work piles up and it is hard to get back to the blog.
When I was speaking at the Indiana Association for Home and Hospice Care a few weeks ago, I was asked an interesting question. A provider asked whether it was a fraud and abuse problem to redistribute supplies from a deceased patient.
The situation the provider relayed was the following: a patient passes away and afterwards the patient?s family contacts the agency about equipment and supplies the family purchased for the patient. Because the patient has passed, the family has not need for the supplies, but they do not want to simply throw them away. The family asks the agency if they can donate the supplies to the agency so that the agency can give the supplies to another family who could use them.
Of course, this results in the agency giving ?free items? to beneficiaries, which implicates the Civil Monetary Penalty statute. Whenever a provider gives free stuff to Medicare or Medicaid beneficiaries, there is the potential that this is a violation. There is the nominal value exception which allows a provider to give items valued at $10 each up to a maximum of $50 each year.
There is also the practical thought that OIG might not object to a ?charitable effort? such as this. The agency is simply helping patients pass along items that might be of value to someone else. Of course, they might not.
There is a more practical consideration here ? why do it at all? There are a number of charitable organizations that would be willing to accept the items and provide them to needy patients or their families. You can direct the patient?s family to such an organization and remove yourself completely from any potential problem. If you are aware of a patient that needs the charity, you can direct them to the organization. If your area does not have such a program, you should talk to the local charitable organizations about such a program.
There was one other issue raised about this hypothetical and that was the potential issues related to infection control. Again, an such concerns are eliminated by directing the patient?s family to a charitable organization that accepts and distributes such items.
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For those of you that have been following the Aging Care case down in Louisiana, the district court recently ruled on the government?s motion for summary judgment. The district court found in favor of the government and awarded judgment against the agency. The main issue in the case was Aging Care?s relationship with its medical directors. (Yes, I said Medical Directors, plural.)
For those of you who are unaware of the details of the case, Aging Care was sued by a whistleblower under the false claims act. The case focused on Aging Care?s relationship with 5 or 6 physicians it had designated as Medical Directors. Aging Care claimed that each of the physicians was paid to provide certain services, including chart review to the agency. The agency had medical director agreements in place with each physician, but they did not meet all of the Stark exception requirements for personal services agreements. The physicians themselves, however, provided the worst evidence. A number of them testified that they were basically paid by the agency for doing little or nothing.
Aging Care argued that it had done nothing wrong, because it complied with 42 CFR ? 424.22(d). This regulation predated Stark and allowed a home health agency to bill for services referred by a ?financially related? physician as long as the physician was paid less than a certain amount. This was not an exception contained within the Stark Law and Aging Care argued that this regulation provided an additional exception and that as long as they complied with it, they were safe.
Unfortunately for Aging Care, the Court ruled that the regulation was trumped by Congress passing the Stark physician self referral prohibition. The Court held that Stark II was effective and that the provider should have complied with the Stark II requirements as well as the other regulation. The court then went on to examine how Stark II applied to the situation and found in favor of the government, due to the failure of the provider to comply with Stark II.
If you have medical director agreements, you should be sure they comply with the personal services exception to the Stark law. In order to comply, the contract should meet all of the requirements of the exception. There are a number of specific requirements to this exception. The agreements in this case failed to specify the services provided and were not for a term of one year.
If you are going to have a medical director under contract, explain in the contract what he is supposed to be doing, otherwise, you are not complying with Stark. This is also a good idea as a matter of contract law. The purpose of a contract is to define the relationship between the parties. A professional services contract should define the services for which you are paying. How can you object to a physician?s failures, if the contract does not specify what he is supposed to be doing for you. Expanding upon this concept, the contract should state how he documents the services provided, etc., this is not ?required? by Stark, but allows you to document that you are getting something for what you are paying the physician.
This leads to the second point: fair market value means you should be paying for something, not just giving the physician money to do things she already does. OIG will not think you are paying ?fair market value? if the physician is providing unnecessary services or duplicative services or services they would provide to patients anyways. In the Aging Care case, a number of the Medical Directors testified that they received payment for doing nothing.
One witness testified that the Physicians were paid to ?keep current on what was happening at Aging Care? and were not asked to offer anything in return. Other physicians testified that they were being paid to provide services the provided to all of the other patients as well. Aging care was paying for nothing or paying too much for the services it was getting from referring physicians. This was one of the reasons the court found the relationship did not meet the exception-the court found there was no fair market value.
One final point, it is not just enough to say the doctor provided the services, you should be able to prove it. This means the physician should document the services she provides. If the physician is reviewing charts, the physician should document time spent, findings, etc. If the physician is providing clinical education, they should document this. This documentation will be proof of the services provided if the government ever has a question about the legitimacy of your medical director relationships. Aging Care was unable to produce any evidence of the services provided by the Medical Directors. (Although the testimony of the physicians indicated there were no services provided to document.)
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I read an interesting article over the weekend on False Claims Act Liability. It discussed a number of new theories under which an entity that receives government funds can be found liable under the False Claims Act. The main point of the article was that the potential for liability under the False Claims Act is expanding and entities involved in government contracting need to be more careful than ever. For home care, given the limited financial rewards of participating in Medicare and Medicaid, it makes fraud prevention even more important.
The article discussed potential theories of liability beyond the traditional false claims theories including ?worthless services?; ?inadequate quality of care? and others. The article pointed out that only one court had allowed an ?inadequate quality of care? claim to proceed past dismissal, but that still means there is a possibility to raise some of these claims.
This trend is more troubling if considered in light of state false claims acts. Many states have modeled their false claims act on the federal False Claims Act. Often, when a state models legislation on federal legislation, state courts will look to federal courts? interpretations of the federal law. (As will Plaintiffs? and Defendants? attorneys.) This means that as the federal statute expands, the state false claims act statutes may expand as well.
One example would be in the realm of ?inadequate quality of care? claims. The federal courts have been reluctant to recognize this type of claim, for fear of federalizing medical malpractice. State courts, which are the traditional medical malpractice forum, might not have the same reservation. (Of course, for states like Indiana with comprehensive medical malpractice statutes, there may be a similar hesitation to allow an FCA end run around Medical Malpractice acts.) The real point here is that potential liability under the federal False Claims Act continues to expand and home health agencies should be aware that a similar trajectory is likely under state false claims acts.
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Over the Christmas break there was some buzz about the need to ?update? your compliance plans as a result of the Deficit Reduction Act. As I have noted in the past, part of the DRA directed states to beef up their false claims act laws. Congress hoped to tighten down on fraud and abuse further by encouraging states to develop their own ?mini false claims acts? to be used to pursue Medicaid fraud.
In addition to this requirement, the DRA amended the statutory requirements for a state Medicaid plan. One of the new requirements was that by January 1, 2007, state Medicaid plans would require providers who receive more than $5 Million annually to provide additional information to employees about the false claims act provisions. Effectively, providers subject to this requirement will be telling employees how to pursue a false claims act action.
At this point, providers do not need to panic. Although the January 1, 2007 deadline has now passed, the deadline applied to states, not Medicaid providers. Most states have not yet taken any action to implement this provision. At a minimum, the states will need to amend their Medicaid plans, which is no small effort. Depending upon the state, there may even need to be legislation enacted to effect the change.
For providers, this means that you can start to implement the requirement, based upon the language of the DRA, but you might consider waiting. Obviously, states will be varied in their implementation and their may be specific state law requirements that you will need to incorporate into any policy or procedure. The bottom line is that if you have not amended you policies and procedures you are not only not alone, but you are not going to be in any trouble. Technically, until the states amend their plans, providers are in compliance.
Of course, if you receive less than $5 Million a year in reimbursements, this requirement will not apply to you at all and you are free tocontinue on as before. Frankly, my experience in home care leads me to the conclusion that the vast majority of home health agencies will not be subjected to this new requirement.
Regardless of whether you are subjected to this requirement or not, this provides an additional reminder that there will be a renewed focus on Medicaid fraud and abuse claims. Because the state agencies have fewer providers to monitor, you may expect more enforcement activity, especially if your state implements a tougher false claims act statute.
This should cause all providers home health, hospice, or otherwise to revisit their fraud and abuse compliance plans. Providers who will need to implement the new requirements of the state plan will want to review their compliance plan to make the new policies ?fit into? their current policies and procedures. While you have the manual down, you should review everything in the manual to see if anything needs to be revised. Given that most providers drafted these policies years ago and have not looked at them since, revisions will be appropriate. It is also worthwhile to go over the compliance plan with your employees. As I repeat frequently, policies and procedures of which the employees are unaware are not policies and procedures at all.
For providers who are below the $5 Million threshold, it would still be a good idea to review your policies and procedures as you prepare for the ?heightened? state level fraud and abuse enforcement. This is the time of year for New Year?s resolutions. Make yours to revisit your compliance plan and follow it in the coming year.
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I spoke at the Kentucky Home Health Association?s annual conference last Thursday. During a break, I had the opportunity to speak to some of the attendees. One of the topics that came up in the conversation was fraud and abuse. That is not so surprising, given the broad reach of the fraud and abuse laws and the myriad ways they can hamper marketing activities.
During the conversation, one of the attendees asked about a letter I had mentioned during my talk. The letter I refer to is a letter that was sent out by a Cincinnati area hospital. The letter was warning home health providers that the hospital had heard of certain practices in the home health market in Cincinnati that it found intolerable. Having read the letter, I would agree that most of what the letter listed were obviously illegal ?arrangement?.
I had suspected the letter was an overreaction by the hospital, but according to the attendees, most of the practices listed in the letter were common amongst agencies in that area. For example, the letter specifically addressed one of my favorites topics ? providing free services to clients. Even though OIG has been overly clear on this one, it is apparently still a very common practice. Other practices that were mentioned as common included, home health agencies having multiple medical directors and home health agencies completing claims paperwork for physicians. For those of you who read this blog, you already know those are prohibited practices under fraud and abuse.
From what the attendees said, this ?aggressiveness? is a result of how competitive the home health marketplace can be. Agencies are willing to cross the line, in order to generate business. Also, it seems some of the agencies marketing personnel disagree with OIG?s position on certain arrangements.
Although I often disagree with how broadly the fraud and abuse laws are applied, that does not change OIG?s enforcement position. If OIG has declared a practice to be a violation, you may disagree with them and argue your point during the investigation and prosecution, but don?t expect to win. (At least not without a long and costly legal battle.) You have been put on notice and you should avoid arrangements that violate OIG?s stated position.
That is not to say some relationships could not be structured or restructured to avoid OIG?s concerns, but that is a course of action best taken with the clear, written advice of knowledgeable legal counsel. Unfortunately, in many cases, it appears agencies are simply responding to ?what everyone else is doing.? If some agencies are pushing the envelope, others feel pressured to do the same to keep up. As I have said many times in the past, everyone else is doing it is not a defense.
If you are in a market where you competitors are using remunerative arrangements to generate referrals, fight the urge to do the same thing. Instead, find other ways to market and discuss with your attorneys other ways you might compete legally. If referral sources want similar perks from you, just say no. In the long run, you will be better off, because if you are violating fraud and abuse laws, you are likely to pay far more in recoupments, penalties and legal fees than the illegal remuneration generated in referrals in the first place.
In short, engaging in these kinds of relationships because of market pressure is ?penny wise, but pound foolish.?
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Continuing to clarify its long held position that free stuff to beneficiaries is bad, OIG issued an opinion today regarding a DME company?s practice of providing free interim oxygen to Medicare beneficiaries. The opinion letter also addressed the DME company?s proposal to provide free overnight oximetry testing to Medicare beneficiaries. If you would like to read the opinion, it is attached to this article.
According to the requestor, they would provide patients with free oxygen while waiting for Medicare to approve the home oxygen. Even though the patient?s physician orders home oxygen, Medicare will not reimburse for the home oxygen until the need for it is confirmed by an independently provided oximetry test. The test cannot be provided by the DME company. According to the requestor, there is often a delay between the receipt of the doctor?s order and the completion of the required test. The requestor stated that DME companies routinely provide the home oxygen for free while awaiting the oximetry test result.
The DME company stated that it did not advertise the free home oxygen to potential patients or to physicians. The company said that it does truthfully respond to inquiries about the free home oxygen. The company also stated that beneficiaries likely learn about the free home oxygen ?offer? from their physicians.
In addition to the free home-oxygen, the DME company proposed to provide beneficiaries with a free overnight oximetry test. The DME company acknowledged that the test could not be used to obtain approval for home oxygen, but stated a great deal of useful information could be gained from the test. The DME company estimated the value of the test at $22, based upon the Medicare Physician Fee Schedule.
Needless to say, OIG found both proposals to violate the Civil Monetary Penalties statute. OIG stated, without discussion or argument, that interim oxygen has a ?clear and substantial value? to the beneficiary. That is not a surprising position for them to take.
However, OIG also found that the overnight oximetry test, valued at $22, was of more than minimal value. Although this ismore than $10, $22 still seems like a pretty minimal value, especially given the dollar amounts defined as nominal under Stark II. OIG went on to describe how the test would be ?deliver[ed] ? to beneficiaries in a manner that would lead a reasonable beneficiary to believe that he or she is receiving a valuable
service that may expedite access to covered oxygen supplies and contribute to a successful clinical outcome.? Much like in the free home safety assessment opinion, the OIG points out that the beneficiary will view this as valuable. Because a reasonable beneficiary would view this as a valuable service, OIG opined that it is remuneration.
This should reinforce for all Medicare home health and DME providers that if you are providing a service to the patient for free, it will most likely be viewed by OIG as having value, no matter how minimal your costs are in providing it or how trivial a service you think it is.
Having determined that these items amounted to remuneration the OIG then discussed whether this remuneration would lead to referrals. Again, as in the free home safety assessment opinion, OIG pointed out that the free home oxygen gave the provider an opportunity to initiate a relationship with the patient. OIG also stated that a beneficiary was likely to obtain other needed services from a provider with whom the beneficiary was already familiar.
OIG then offered its opinion that the offers were calculated to influence the beneficiaries selection of services in the future. The OIG felt that the structure of the arrangement, referral by physician, getting the foot in the door with free services, etc. would influence the beneficiary and the DME company should be reasonably aware of this.
Finally the OIG noted that it felt the provision of free oximetry testing appeared to OIG to be a ?thinly veiled scheme to evade the barrier interposed between beneficiaries and oxygen suppliers by the Medicare rule that bars DME suppliers (except hospitals) from performing the oximetry test necessary to qualify a beneficiary for covered oxygen.? In reality, the DME company could not avoid the need for the test and OIG may be a little off base with this comment. It appears that the real purpose of the oximetry test may have been was to give the DME advance confirmation that the home oxygen would ultimately be reimbursable, thus saving the DME from providing free home oxygen for a week or two only to then learn the patient would not qualify.
Once again, this opinion letter should cause any provider or supplier to pause and think carefully and consult with legal counsel, before engaging in any plan to provide items or services to patients for free.
Attachments:
AdvOpn06-20A.pdf
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With the HHABN turmoil quiet for now, there is not much for me to comment on, thus my posts have been a little less frequent. However, I was reading a case involving the false claims act today and thought I would mention it as a reminder and because it makes an interesting point.
The case is U.S. v. Bondar, it is a false claims act prosecution out of Wisconsin. The defendants in the case are three home health workers who submitted time sheets claiming to have provided services on dates that either the worker or the family member was out of town. This is the good old ?false time card? routine.
All three workers were prosecuted criminally and pled guilty. Not surprisingly, the Government then turned around and sued them under the false claims act for the $5,000 per claim and treble damages it was entitled to under the Act.
Because liability was already determined (by the guilty plea), the only question was the amount of damages the defendants would have to pay. This amount, in turn, hinged upon the number of false claims each defendant submitted. The defendants argued that they only made a false claim when their employer submitted a claim to Medicaid for reimbursement. This would result in only one false claim per week no matter how many fraudulent time sheets were submitted that week.
The government, in response, argued that the false claims were the fraudulent time sheets, not the invoices submitted by the home care agency. The court agreed with the government and ruled that each time a home care employee submits a false time sheet, they are making a false claim. This resulted in one employee being liable for 27 false claims, another for 29 false claims, and another for 18 false claims. In other words, each false time sheet cost the employee $5,000.00. I am certain that is far more than the employee received in payment for the false time sheet. This amount was on top of the employees? criminal convictions.
As a final note, the court ruled that the amount sought by the government ($370,00 total) was not unconstitutionally excessive, because, essentially, the statute entitled the government to this amount as well as treble damages of $324,000. This means that the governments actual damages were less than one-third of the forfeiture amount sought in this case.
If you are a Medicare or Medicaid provider, this case should help you educate your employees. The next time you do any education on fraud and abuse, you should inform your employees that submitting a false time card can result in civil forfeiture of $5,000 per false timesheet, regardless of the number of falsified hours. Makes the whole idea of submitting a fraudulent time sheet seem pointless. (You get maybe eight hours of pay, but if caught can end up owing a respectable fraction of your pay for the year.)
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I was reading an article in Home Health Line about medical director relationships and home health agencies. I thought it was an excellent article, but I don?t think it emphasized a couple of key points. Obviously, whenever a home health agency or hospice hires or retains a medical director, the first question you have to ask is whether the director makes any referrals to your agency or hospice. In most cases, the answer is yes. This creates a very real fraud and abuse and/or Stark issue.
That is why it is so important to make sure you relationship with your medical director satisfies the safe harbors to fraud and abuse or Stark. There are two ways to do this. One way is to have the Medical Director be a bonafide employee of the agency/hospice. The other way is to have a properly drafted contract outlining the personal/management services relationship with the physician, (You could, perhaps arrange to never receive referrals from the physician, but you would still want a contract with the physician, so why not just take the steps necessary to meet the safe harbors.)
Whether an individual is a ?bonafide employee? or independent contractor is governed by the test used by the IRS. You should be sure to see how this test applies to your relationship, before you determine which safe harbor applies. (Also to be sure you don?t mistakenly fail to withhold employment taxes, etc.) For most home health agencies and hospices, the Medial Director is under contract and treated like an independent contractor.
If the Medical Director is in fact an employee, youwill be limited in the circumstances under which you can refuse to pay him. (For more on this topic, I refer you to the homecareemploymentlawblog.com) If he is a contractor, the contract can define the terms of when the Director gets paid.
Most agencies and hospices will determine the Medical Director is an independent contractor. If so, you will need to meet the personal services safe harbor. There are many reasons to have a written contract with the Medical Director, but for this safe harbor to apply, you must have a written contract. The written contract must contain specific terms required by the safe harbor. There are a number of additional terms that a well written contract will include, beyond the basic safe harbor provisions.
Beyond the requirements of the safe harbor, it is always a good idea to have a written contract in this kind of professional services relationship, even if your Medical Director is an employee. There are so many things that can become a problem and the contract is supposed to provide avenues for addressing or preventing those problems. If the Medical Director is an employee, you will want to be sure the contract does not alter the employment at will status of the employee, amongst other things.
Another issue that comes up in these situations is what to pay the Medical Director. The HHL article made a good point about checking what other agencies pay. The safe harbor always looks to ?fair market value?, which is the rate that two parties would reach at an ?arms length? transaction. One way to check fair market value, is to actually check the market. If you have a written contract, but are overpaying the Medical Director, you can lose the protection of the safe harbor. (I say can, because you may have legitimate reasons to ?overpay?, unrelated to referrals, the point is fair market value is a key consideration in avoiding fraud and abuse)
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I recently read a letter regarding Medicare and Medicaid fraud that stated the government was looking to enforce the Medicare exclusion list more stringently. This means they are looking for individuals who are excluded who might be providing services.
As you should know, there are a number of reasons an individual may be excluded from participation in the Medicare program. Once they are excluded, they are essentially unemployable by any provider that receives reimbursement from a federal health care program.
In other words, if you provide Medicare, Medicaid, Medicaid waiver services or services through another federal insurance program, you cannot employ excluded individuals. (At least that is OIGs opinion and the fine points of that opinion are beyond the scope of this post.) Although there are ways that a Medicare or other provider could structure things to avoid this problem, it is far simpler to just not employ excluded individuals.
This means that before you hire someone, you should be sure to check the exclusion lists. You can view this list at exlusions list page . When you are checking, be sure to check any maiden names or other names of which you may be aware.
Some of you may be asking, what if we did employ someone who was excluded. If you have, there are a number of potential penalties. First, the government could recover payment for any claims paid for which the excluded person provided services. Second, the government could pursue civil monetary penalties against you. If the government can prove you knew or should have known the individual was excluded, they can recover penalties of $10,000 per claim submitted.
This can become quite expensive for a provider. One way to avoid this is prevention. For example, OIG recommends that an employment application ask the potential new employee to disclose not only criminal convictions, but if they have been subjected to an exclusion action. They also recommend taking action if current employees are subjected to an exclusion action during employment. (Of course check your personnel policies to be sure you take the appropriate action.)They real point here is that Medicaid fraud units may be looking more closely at this issue and you should be sure to ensure you do not hire an excluded individual.
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I was reading in the most recent Home Health Line about the recent Lincare settlement and the Community Home & Health Care prosecutions. While most providers think the kind of abuses in the Lincare case are rampant, that trend ought to be slackening. Lincare demonstrates that if you are engaging in Stark or Anti-Kickback violations because physicians indicate they will not refer if you do not give them something, you should simply look elsewhere for referrals. Everybody in homecare should be clear that giving something of value to a physician to induce referrals is an anti-kickback violation. Even if you think every other provider in your area is giving into the physicians' "request", you should not even consider such an offer. "Everyone else is doing it" was not a defense when you were in grade school and it is not a defense or safe harbor under the fraud and abuse statutes. If a physician approaches you in this manner, you should decline their offer. You should also remind them that they are soliciting a kickback which is a violation of federal law. In addition, I would mention to the provider requesting the "perk" that the penalties they will incur when they do get caught will substantially outweigh the paltry benefit of their deal. One group of physicians in the Lincare case ended up paying $122,000 to the Government. This was more than five times the amount of illegal remuneration they received. The Office of Inspector General is doing more and more to curb these types of abuses. In the short term, you may feel from a business standpoint you have to acceded to the physician?s demands, but you should not. You will be in much better shape in the long term, even without these referrals. Rather than provide the remuneration to the referral source, you could spend the money on print or radio advertising, a website, a new brochure, bonuses to your marketing employees who are "bonafide employees." You are likely to get some benefit from this investment, without the risk of eventual criminal prosecution. Of course, there are numerous situations where you have dealings with a referral source where the referral source receives remuneration for reasons other than providing referrals. In light of OIG?s efforts, when you have such an arrangement, you should be very careful to make it clear that any remuneration provided to a referral source fits within an exception. For example, Medical Directors, they should have contracts, specific duties, and clearly document their activities. When your medical director is documenting his work, he is not just doing it for the surveyors, but for any potential OIG investigators.
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The Department of Health and Human Services Office of Inspector General (“OIG”) issued an open letter to providers on Monday. This letter addresses recent issues raised with the OIG by providers regarding concerns about improper relationships between hospitals and physicians.
Certain providers have discovered through their own internal compliance programs, that they are engaged in inappropriate relationships with physicians. These relationships include renting office space to physicians at less than fair market value. As a result of these contacts, OIG is attempting to “increase awareness” for providers of ways to resolve these issues. It appears that this amounts to supplementing the current self-disclosure program.
Because the letter discusses specific concerns of the hospital industry, it would not be to surprising to discover this “supplementation” has little bearing on the home care industry. However, because home health agencies and hospices do contract with physicians, it may provide some additional guidance to HHAs and Hospices as to what OIG will require from a self disclosure of an anti-kickback or self-referral violation.
It seems quite likely that the major effort here will be in provider education. In other words, OIG will be reminding hospitals that they are free to self disclose to OIG and that a properly performed self-disclosure will potentially lessen the provider’s burden. There may be some clarification as to the protocol for this type of self-disclosure. The main point is that this collaborative effort will be starting soon and aimed at these particular concerns.
Much like the original self-disclosure protocol and the open letter to providers issued in 2000, this letter does not provide a clear statement regarding “amnesty.” OIG leaves itself rather free to decide what to do to providers after a self-disclosure. As a former criminal defense attorney, it strikes me that this provides very little incentive to come forward. If a provider self-discloses, they may simply provide the government the evidence it needs to prosecute the self-disclosing provider.
Of course, in most instances, a proper compliance program is going to discover employees making mistakes or employee fraud. These types of discoveries are likely to lead to the provider simply repaying the overpayment and the employee being prosecuted.
Which leads to a second point – compliance programs. OIG would like every provider to have its own compliance program. In fact, having a compliance program can reduce your liability after a self-disclosure as well as provide a basis for a less restrictive post compliance agreement with OIG.
More importantly, even if you were disinclined to self disclose, having a proper compliance program can help you to catch problems early. The procedures and internal audit functions required by a proper compliance program are likely to catch errors early. This would allow you to correct the problem immediately. In turn, the amount of overpayment and potential penalties would be lessened, because the inappropriate conduct was terminated quickly. That alone is a strong reason to institute a corporate compliance program.
OIG has issue compliance guidances for both home health and hospice. I can only attach one document to each blog post, so I will have both of them posted on our website under health law articles. (This will probably not occur until tomorrow, because my secretary, Mandisa, is out today.) You can link to that page here.
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There continues to be a great deal of discussion about the Office of Inspector General’s Advisory opinion from March 27. The biggest issue seems to be what can we continue to do without violating fraud and abuse. It has been suggested by some that the key concern to OIG was the nature of the visit. This has led to a recurring suggestion that agencies could instead perform a coordination visit, which is a prerequisite to home care.
In my opinion, if you are providing free services to a patient or prospective patient, you are on a very dangerous road. Right or wrong, OIG will most likely not see any difference between free pre-operative assessments and other free services to home care clients. OIG’s concern in the March 27 opinion was not the type of service being provided.
Its concern was that the service was being provided for free and that this was done to maximize the agencies opportunity to meet with the potential patient before surgery (and before they had the opportunity to choose a post operative health care provider). The free service, in turn, was likely to lead the beneficiary to choose the requesting agency as her provider of post operative home care. (Providing free non-covered services to a current patient would implicate the same concerns.)
The facts of the case implied that the doctor referred the patient for an assessment, in order to determine if the patient’s home was an appropriate place for recovery. If it was not, the physician would not be able to order home care. In effect, this visit was a necessary service to determine the appropriateness of home care, but that did not alert OIG’s analysis. (I discussed in an earlier post that OIG may have overlooked a few good reasons to not prosecute this type of arrangement.)
Over the years, OIG has offered a number of advisory opinions regarding free items or services to referral sources and beneficiaries. In the overwhelming majority of cases, OIG has advised the arrangement would violate the Anti-Kickback or Civil Money Penalty Statutes.
There have been exceptions, for example OIG has occasionally found an arrangement to be a violation, but not one it would prosecute. For example, last year OIG offered an opinion on home health agencies offering medic alert pagers for free that found them not to be a violation, because of CMS’s mandate to HHAs to adopt innovative telehealth technologies.
Of course, there is the CMP exception for low value items or benefits, but in light of the “beneficiary’s perception” analysis used by OIG in the March 27 letter, if you are offering a service, it may be impossible to fit within that exception. OIG determined that a service that cost the agency only $10.00 to provide was likely to be perceived by the beneficiary as a valuable service.
In my mind, the bottom line is that if you provide a free service to a beneficiary (or to a referral source for that matter) you are likely engaged in a violation of the anti-kickback and civil money penalty statutes. You should be very hesitant to engage in any form of free visit to a home care client, regardless of what you call it.
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I have been reading a number of the responses to last weeks OIG opinion regarding a home health agency providing free assessments to potential clients. Although some people seemed to be surprised by OIG’s opinion, given the repeated responses from OIG whenever a proposal involved anything free being provided to a potential referral source or beneficiary, their response was not really surprising.
The question that has occurred to me is whether OIG’s concern is misplaced. One of OIG’s repeated concerns in fraud and abuse is over usage of Medicare. In fact, in numerous opinions, OIG has stated a proposed arrangement is a technical violation, but not one it would choose to enforce, because it was not likely to lead to over utilization.
It strikes me that the arrangement put forward in the opinion OIG issued last week is similar. The patient is going to receive surgery. The patient is going to need aftercare. Medicare is going to pay for this aftercare, regardless of whether the patient receives a free assessment. If the doctor refers the agency to determine whether the aftercare can occur at home and the beneficiary can receive this assessment for free, why not allow it?
Yes, OIG was right; the agency was most likely willing to provide the free assessment, because the patient, out of familiarity, was more likely to choose that particular provider. (Hospitals do something similar by opening hospital based home health agencies. In healthcare, familiarity is a good thing.)
But isn’t all good marketing designed to ensure that the customer picks your product. How many attorneys provide free consultations? It is not a problem for any of them ethically, it is simply good business sense and the individual who may need legal services receives some initial advice from the attorney.
Why can’t a potential home health patient receive the same service? Perhaps the referring physician need to allow the patient to choose an entity to receive the assessment from or take some other action to prevent “collusion” between providers, but to eliminate the beneficiaries ability to receive the assessment for free is a waste of an opportunity to provide additional services to beneficiaries without incurring any additional costs to Medicare or the beneficiary.
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