THE LAW OFFICES OF JOSEPH J. LaBARBERA, P.C.
Newsletter: November, 2010
SPECIAL
EDITION:
IMPORTANT
CHANGES TO LAWS REGARDING FRAUD AND FALSE CLAIMS UNDER MEDICARE AND MEDICAID
WARNING: The Office of the
Inspector General of HHS (OIG) and the NYS Office of the Medicaid Inspector
General (OMIG) have indicated intent to commence aggressive pursuit of the tools
afforded them to recover money for the Medicare and Medicaid programs. The NYS OMIG has indicated that January 2011 will
see an increased effort to address the changes discussed below, including amendments
in the Federal Health Reform Law. Note, even the well intentioned are targeted
and mere clerical record keeping errors can be compounded into penalties,
violations and fines if not addressed.
Even Unknowing Violations of the Anti-kickback Law (the AKL)
Are Now Prosecutable
The anti-kickback law (AKL) has been amended to
provide that a violation may be established without evidence that the potential
violator knew of the law and/or intended to violate it. The AKL makes it a
crime or civil violation, to accept or receive remuneration (cash or in kind)
in connection with the ordering or provision of any services for which payment
is sought under Medicare, Medicaid and/or other Federally funded health care
programs. Something as simple as a cross referral arrangement could constitute
illegal remuneration. Now, even
unknowing violations of the AKL could result in penalties including
imprisonment, significant fines and program exclusion. This makes it paramount
that all contracts and arrangements be reviewed for compliance with the
statute. The amendment effectively eliminates holdings in previous court
decisions requiring proof of knowledge and intent, such as in the now famous
Hanlester case.
In a similar vein, the intent and knowledge
requirement has been eliminated from the Health Care Fraud Criminal Statutes
which have been amended to include violations of the AKL, some provisions of
ERISA and the Food Drug and Cosmetic Act. Eff. 3/23/2010
Anti-kickback Law Violation Becomes a Violation of the
False Claims Act (the FCA)
Codifying what most believed to be the prevailing
interpretation of the law on the subject, the amendment specifically provides
that a violation of the Anti-kickback Laws qualifies as a false or fraudulent
claim under the FCA. The FCA centers upon the submission of claims seeking
payment from Federal health care programs. Not only does the FCA (most states
including new York have adopted their own version of the FCA) call for
significant penalties such as minimum fines, treble damages and exclusion, it
also has the much feared qui tam provisions where private citizens (called qui
tam relators) can initiate actions for false claims against potential
violators and share in the recovery of monies from false or fraudulent claim
actions. Violation of the AKL is now officially extended as an available action
for qui tam relators.
Limitation on FCA Prosecution by Qui Tam Relators
Previously a qui tam relators action under the FCA was
barred and subject to automatic dismissal, as a jurisdictional matter, if there
was public disclosure of the subject matter (e.g. the qui tam relators
knowledge was other than as an original source from direct and independent
knowledge of the facts and not previously disclosed by or derived from a public
disclosure). The amendment modifies the bar so that it will not operate
automatically where the government opposes dismissal. The amendment also
modified the direct and independent requirement so that knowledge no longer
need be direct and independent. It is now sufficient if the relator provides
the information to the government before public disclosure or discloses
information not previously disclosed, but which is independent of and materially
adds to previously publicly disclosed information. In conjunction with this,
public disclosures were defined not to include State audits, reports, actions
and proceedings and private legal actions. This of course increases materially
the number of information sources and potential qui tam relators in an area of
the law already saturated with law firms specializing in representing qui tam
relators. Eff. 3/23/2010
Failure to Disclose Overpayments for more than 60 Days
Constitutes a False Claim Violation.
The amendments specify that any identified
overpayments not disclosed within 60 days will be subject to prosecution as
separate and distinct violations of the False Claims Act. The term identified
still awaits further clarification, but it is unmistakable that the government
(Federal and State) intends to pursue delays in processing overpayments as FCA
violations and the panoply of resulting remedies available to it in such
regard. This makes the establishment of an effective internal compliance plan,
including audits to discern overpayments, a necessity in every medical practice
seeing Medicare and/or Medicaid patients. Eff. 3/23/2010.
Self Referral Disclosure Protocol
A new protocol was promulgated by CMS in the latter
part of September of 2010 providing a system for mandatory disclosure by providers of
actual or potential violations of the Federal Physician Self -Referral Law (Stark).
Disclosure for In-office Ancillary Services
Federal law now requires that when referring
patients for in-office ancillary radiology or imaging services (as defined
under the Stark Law and including Medicare and Medicaid), that the patient be
informed: 1) in writing at the time of referral that the patient may obtain the
services other than the in-office source; and 2) the patient be provided with a
list of other sources of the services "in the area in which the patient
resides" (the latter phrase being as yet undefined). Eff. 3/23/2010
Payments by Manufacturers to Physicians and Teaching
Hospitals Must be Reported
Payments or transfers of value e.g. consulting fees,
other compensation, honoraria, gifts, entertainment, food, travel, education,
research, royalties, license fees, current or prospective ownership or
investment interests, CME fees, grants, etc
eff. 3/13/2013
Self Disclosure Programs
Federal and State self disclosure protocols for reporting
actual or potential violations of applicable Federal and State health care laws
have been promulgated. The use of these programs can be the difference between
simple reimbursement and a prosecution both criminally and civilly with
resultant fines, imprisonment and program exclusion. Where problems are found,
these programs should be given immediate consideration.
How Do Practices Protect Themselves?
The best protection is having an active
compliance plan in your practice requiring annual internal reviews and
including compliance with both voluntary and mandatory disclosure programs. Further,
if you have a compliance plan in place, it is incumbent upon compliance
officers to assure that it is functioning in a meaningful and effective manner
and to document same.
In NYS any practice generating $500,000 or more in
billing in a 12 month period to Medicaid in NYS a qualified compliance plan is
mandatory. NOTE: The $500,000 minimum to require a compliance plan under
NYS Medicaid is interpreted to include both direct payments and payments
precipitated through orders written for which Medicaid pays, such as
pharmaceuticals, lab tests, specialist services, radiology, referrals for home health
care, etc
It is therefore not difficult for a physicians practice to exceed
the minimum, even where actual direct reimbursement to the practice, whether
fee for service and/or managed care, falls well below the minimum.
The OIG and the OMIG in NYS both have access to new
and more efficient software making it easier to indentify inconsistencies and
errors. Further, NYS OMIG representatives have indicated that OMIG will
consider any practice which has not refunded an overpayment to be suspicious.
The information
in this newsletter is for educational purposes only and not intended to
constitute legal advice. Each issue or matter should be analyzed with respect
to the readers individual requirements, facts and circumstances with
experienced legal counsel.
Contributing writers: Joseph J. LaBarbera, Esq. and Joseph C. LaBarbera, Esq.
The Law Offices of Joseph J. LaBarbera, P.C. 55 Washington Street, Suite 602 Brooklyn, New York 11201 Voice: 718 596-9366 / Fax: 718 596-9167
Email to: jlb@nyhealthlawyers.com
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