1. Hit the Ground Running: How to be a Healthcare Lawyer

2. Today’s speakers Sean McKenna
Shareholder, Greenberg Traurig, LLP (Dallas, Texas)
Sarah Frazier
Partner, Berg & Androphy (Houston, Texas)
Jessica Parker-Battle
Compliance Officer, Biogen (Weston, Massachusetts)

3. OUTLINE Role of Compliance and Legal Partners in a Company
Analyzing Proposed Transactions for Fraud & Abuse Concerns
Data Breaches & HIPAA Concerns
Repayment and Disclosure
The Enforcement Landscape – Civil and Criminal
Statutory considerations
Concluding thoughts

4. Hypothetical
You are outside counsel for a jointly-owned medical practice and toxicology lab with no GC
The physician customers for the lab have patients with a mix of Medicare, Medicare Advantage, Medicaid, and commercial insurance
A manager for the lab, responsible for marketing, reports concern regarding:
Salespeople violating HIPAA with customers
Inducements to customers
Medically unnecessary testing
Physician investors in the lab profiting from self-referrals

5. Role of Compliance and Legal Partners at a Company

6. 7 Elements of an Effective Compliance Program
Oversight & Governance
Risk Assessment & Issue Identification
Written Standards
Training & Communication
Monitoring & Auditing
Response & Corrective Actions
Culture of Integrity

7. DOJ Issues New Corporate Compliance Guidelines
Analysis and Remediation of Underlying Conduct
Senior and Middle Management
Compliance Autonomy and Resources
Policies and Procedures
Risk Assessment
Training and Communication
Confidential Reporting and Investigations

8. DOJ Issues New Corporate Compliance Guidelines
Incentives and Disciplinary Measures
Continuous Improvement, Periodic Testing, and Review
3rd Party Management
Mergers and Acquisitions
Reference: “Evaluation of Corporate Compliance Programs,” U.S. Department of Justice, Criminal Division, Fraud Section, available at
OIG Compliance Guidance: guidance/

9. Analyzing Proposed Transactions for Fraud and Abuse Concerns

10. Data Breaches and HIPAA Considerations
Consent

11. Repayment and Disclosures
First, Fix Any Problems to Reduce Exposure
CMS Final Rule
60 Day deadline to repay known Medicare and Medicaid overpayments
Failure to repay is a FCA and/or potential criminal violation!
Disclosure to Payors
Disclosure to DOJ
HHS-OIG Self-Disclosure Protocol
CMS Voluntary Self-Referral Disclosure Protocol

12. The Enforcement Landscape
Big budget for enforcement - $672 million for Health Care Fraud and Abuse Program
DOJ Recovery in 2016
Total $4.7 billion (up from $3.8 billion in 2015).
$2.5 billion paid from healthcare industry.
$2.9 billion from whistleblower cases. Whistleblowers received a record $519 million.

13. Enforcement Outlook in 2017
Federal and State Budget Shortfalls
State and Federal Scrutiny of Arrangements Increasing
Repeal and Replace ACA?
Greater Enforcement Actions By U.S. Attorneys, DOJ, States, and OIG-HHS
Investment and Use of Data Analytics Will Continue to Drive Enforcement
Increased Focus on Individual Actors by DOJ and HHS-OIG

14. Company and Officer Conflicts Under the Yates Memo
On September 9, 2015, Deputy DOJ AG, Sally Yates issued a memo encouraging prosecutors to focus on individual actors, not just legal entities. The memo also provided guidelines for all investigations of corporate wrongdoing.

15. Internal Investigations at a Company

16. Parallel Investigations
Knowing who and what you are facing
Determining if investigation is criminal, civil, administrative, and/or multi-state
Practices to address government’s concerns
Licensing and private liability

17. Whistleblowers Prevention Handling Misconduct Privilege Trade Secrets
Litigation

18. Federal Enforcement Agencies
United States Department of Justice (DOJ)
Commitment to prosecute healthcare fraud
Criminal/Civil/Antitrust Divisions
Consumer Protection Branch
Healthcare fraud coordinators within 94 United States Attorneys' Offices
Federal Bureau of Investigation
Drug Enforcement Agency
Partnerships with private payors
Distinct funding sources
Federal actions have collateral consequences

19. Government Investigations
Sources
Whistleblowers
Competitors
Government reports
Payor audits
Media
Patient and Family Complaints
Common Risk Areas
Lack of compliance with exceptions and safe harbors
Fair Market Value (FMV)
Commercial reasonableness
Overutilization

20. Statutory Considerations

21. Common Healthcare Enforcement Statutes
Title 18 U.S.C.
Healthcare, wire, and mail fraud
Commercial Bribery
Anti-Kickback Statute (AKS)
Stark Law
False Claims Act (FCA)
Whistleblowers under Qui tam provisions
Civil Monetary Penalties Law
Each State May Have Own Version
And limit certain physician ownership

22. Statutory Considerations: Anti-Kickback Statute (AKS)
Prohibits knowingly and willfully soliciting or receiving, offering or paying:
Any remuneration directly or indirectly, overtly or covertly, in cash or kind;
To induce or reward the referral, purchase, order, lease, or recommendation of; or
Any item or service that may be paid for under the federal healthcare program.
Severe Penalties
$25,000 per violation
Up to 5 years imprisonment
Exclusion
Statutory and Regulatory Safe Harbors
Certain types of payments
OIG identified business and financial practices

23. Statutory Considerations: Stark Law
“If a physician (or an immediate family member of such physician) has a financial relationship with an entity…then the physician may not make a referral to the entity for the furnishing of designated health services for which payment otherwise may be made under Medicare.”
Exceptions
Ownership/Investment interests (42 C.F.R. § )
For compensation arrangements (42 C.F.R. § )
For certain “services” (42 C.F.R. § )
Penalties
Automatic overpayment or disallowance
Knowing violation can result in CMP liability of up to $15k per violation plus treble damages and/or $100k per circumvention scheme
Exclusion from healthcare programs

24. Statutory Considerations: False Claims Act, Escobar, and State Equivalents
Civil (31 U.S.C. § 3729)
Either USAG or a relator (whistleblower) may bring FCA cases
Qui tam provisions filed under seal
DOJ has 60 days to intervene
Awards relator 15-30% recovery + attorneys fees
6 year SOL and 3 year tolling provision
29 states and D.C. have adopted a statute equivalent to FCA
Remedies: Mandatory treble damages and civil monetary penalties between $10,781 and $21, 563 per false claim
Criminal

25. Stark Law vs. Anti-Kickback Statute (AKS)
Civil v. Criminal v. Administrative
Strict Liability v. Criminal Intent
Exceptions v. Safe Harbors
What must be satisfied?
Which Applies?
Hospital renting x-ray at physician’s office
Group practice

26. Types of False Claims Act Cases – Health Care
Fraudulent Billing
Anti-Kickback Statute Violations & Stark schemes – physician salaries, discounted office space, etc.
Pricing fraud - “Best Price” AWP fraud, best value, 340(b) diversion
“Off-Label” marketing
Switching schemes
Hospice – ineligibility
Nursing home worthless services
Nursing home inflation of RUG scores/medically unnecessary
Unnecessary lab testing – especially urine testing for opioids
Manufacturing standards
Other medical necessity claims
Ambulance
DME rentals
Home health

27. Changing Political Makeup and the Potential Effect on False Claims and Anti-Kickback
A new administration could ease Yates policy and other agencies could follow lessening individual liability
Change in Supreme Court
Could weaken interpretation of Escobar and what is “material” to a false claim
100 vacancies for federal judges

28. Changing Political Makeup and the Potential Effect on False Claims and Anti-Kickback (Continued)
Congress recently passed repeal of ACA, but outcome on FCA remains uncertain
Public Disclosure Bar
Removed express reference to jurisdictional nature of public disclosure bar
Gave government the ability to object to dismissal due to the public disclosure bar
Narrowed categories of what constitutes as “public” disclosure
Repeal could expand the protections of this defense
Provided relator with a lower standard to qualify as an “original source”

29. Changing Political Makeup and the Potential Effect on False Claims and Anti-Kickback (Continued)
Congress recently passed repeal of ACA, but outcome on FCA remains uncertain
60-Day Rule: A person who has received an overpayment must report and return such overpayment within 60 days after overpayment was identified
Repeal could cause confusion over timing and what qualifies as “overpayment”
Provided violation of Anti-Kickback constitutes a false claim
Repeal could weaken government’s implied certification argument

30. HHS Inspector General Policy on Exclusion Rule
Statute of Limitations: Exclusions will only apply to misconduct from the past 6 years (proposed 10-years)
Early Reinstatement Process
Audit Obstruction
Mitigating Factor for Exclusions
Aggravating Factor Threshold
Now $50,000 in certain circumstances

31. Statutory Considerations: Dodd Frank
Dodd-Frank Wall Street Reform and Consumer Protection Act, was signed into law July 21, 2010
Dodd-Frank established a bounty for reports, 15 U.S.C. § 78u-6(b)(1), whereby whistleblowers can receive 10-30% of the monetary sanctions over $1,000,000 collected based on the original information provided by the whistleblower.
Section 15 U.S.C. § 78u-6(a)(6) of the Dodd-Frank Act defines "whistleblower" as "any individual who provides, or 2 or more individuals acting jointly who provide, information relating to a violation of the securities laws to the Commission [SEC], in a manner established, by rule or regulation, by the Commission [SEC]."

32. Statutory Considerations: Foreign Corrupt Practices Act
Key elements of an anti-bribery violation:
Offer, promise, or payment of anything of value;
To a Foreign Official;
With corrupt intent; and
To assist in obtaining or retaining business or directing business to any person or obtaining any improper business advantage.

33. Concluding Thoughts

34. CONTACT INFORMATION
Sean McKenna
Sarah Frazier
Jessica Parker-Battle