© 2007 Husch & Eppenberger, LLC1 L-3: New Government Source of Revenue: Fraud & Abuse Actions Expanded MARK REAGAN Hooper, Lundy & Bookman, Inc. San Francisco, California HARVEY M. TETTLEBAUM, Esq. Husch & Eppenberger, LLC Jefferson City, Missouri

© 2007 Husch & Eppenberger, LLC 2 Deficit Reduction Act of 2005: Organizations Affected  Any organization or individual that receives or makes payments of at least $5,000,000 annually under a Title XIX State Plan, a State Plan Waiver, or a Title XIX demonstration.

© 2007 Husch & Eppenberger, LLC 3 Deficit Reduction Act of 2005: Organizations Affected (cont.)  Period for calculating the $5,000,000 threshold is the previous federal fiscal year. If organization met the threshold, it will have to comply with the Deficit Reduction Act provisions at the beginning of the next calendar year.

© 2007 Husch & Eppenberger, LLC 4 Deficit Reduction Act of 2005: Requirements  Organizations must: Establish policies explaining the Federal False Claims Act, state false claims laws, and the rights of whistle blowers under those laws; Establish polices to detect and prevent fraud, waste, and abuse; and Include such policies in an employee handbook.

© 2007 Husch & Eppenberger, LLC 5 Provide Information Regarding  Federal Civil False Claims Act, 31 U.S.C. §§ Prohibits submission of false claims to government Does not require intent to defraud government Includes qui tam provisions

© 2007 Husch & Eppenberger, LLC 6 Provide Information Regarding (cont.)  Administrative Remedies for False Claims and Statements, 31 U.S.C. §§ Substantially similar to the Federal Civil False Claims Act

© 2007 Husch & Eppenberger, LLC 7 Provide Information Regarding (cont.)  State False Claim Acts

© 2007 Husch & Eppenberger, LLC 8 Provide Information Regarding (cont.)  Medicaid Integrity Program  Recovery Audit Contractors  MediMedi: Target area: Inappropriate Psychotherapy Services Data Matching  Payment Error Rate Measurement (PERM) project  Ten Fold Increase in Funds

© 2007 Husch & Eppenberger, LLC 9 Provide Information Regarding (cont.)  False Claims, Anti-kickback, Illegal Patient Admittance and Retention Provisions, 42 U.S.C. § 1320a-7b(a)-(b), (d)  False Statement, 42 U.S.C. § 1320a–7b(c)  Conspiracy to Defraud the Government, 18 U.S.C. § 286  Federal False Claims, 18 U.S.C. § 287 (not just healthcare)  Mail and Wire Fraud Provisions, 18 U.S.C. §§ 1341, 1343  Obstruction of Justice Provisions, 18 U.S.C. § 1505  RICO Provisions, 18 U.S.C. § 1962

© 2007 Husch & Eppenberger, LLC 10 Deficit Reduction Act of 2005: Why Comply?  Non-compliance could result in: Government may deem Medicaid claims submitted during the period of non-compliance as “false” Corporations then could be liable under the False Claims Act and suffer:  Forfeiture of payments received under Medicaid  Exclusion from participation in the Medicaid Program

© 2007 Husch & Eppenberger, LLC 11 Deficit Reduction Act of 2005: Why Comply? (cont.)  A corporate compliance program lessens the grade of punishment under the Federal Sentencing Guidelines Reduces a corporation’s culpability score, reducing the corporation’s criminal fine

© 2007 Husch & Eppenberger, LLC 12 Deficit Reduction Act of 2005: Why Comply? (cont.)  Demonstrates the facility’s commitment to honest and responsible provider and corporate conduct  Formulates effective internal controls  Creates a centralized source to distribute information regarding waste, fraud, and abuse  Provides a facility with an accurate view of employee behavior  Prevents, identifies, and corrects unlawful and unethical behavior

© 2007 Husch & Eppenberger, LLC 13 Deficit Reduction Act of 2005: How to Comply  Publish policies in hard copy or electronic format  Publish policies in employee handbook  Distribute policies to employees, agents, and contractors

© 2007 Husch & Eppenberger, LLC 14 Corporate Compliance Programs and Process  Create or revise a corporate compliance program 1. Establish written policies to prevent and detect waste, fraud, and abuse 2. Designate a compliance officer to oversee compliance program 3. Implement effective training and education procedures regarding corporate compliance

© 2007 Husch & Eppenberger, LLC 15 Corporate Compliance Programs and Process  Create or revise a corporate compliance program (cont.) 4. Ensure effective lines of communication between the compliance officer and employees 5. Audit and monitor company operations to detect waste, fraud, and abuse 6. Enforce the compliance program through disciplinary standards 7. Respond to non-compliance with immediate and reasonable steps

© 2007 Husch & Eppenberger, LLC 16 Medicare Integrity – Government Perspectives  Testimony of Gregory Demske, Assistant Inspector General for Legal Affairs  Testimony of Tim Hill, Director, Office of Financial Management, CMS  Testimony of Daniel R. Levinson, Inspector General  Testimony of Alex Acosta, U.S. Attorney, Southern District of Florida

© 2007 Husch & Eppenberger, LLC 17 Questions