1. Physicians Regulatory Insurance Program Presenter: Jay Lynch President Presenter: Jay Lynch President

2. Misconception in the marketplace The government has moved on to more important concerns (homeland security, war on terror, Iran, Iraq, etc……. Recoveries total over $20 billions since 1986 = 19 mile high stack of $100 $3.2 billion in 2007 = all time record for one yr ROI = $15 recovered for every $1 spent

3. OIG reports that nearly $1 billion in recoveries were reported for the first quarter of 2007

4. Todays Agenda Liability Exposure Limiting Exposure Liability Exposure Limiting Exposure

5. Agenda Liability Exposure Limiting Exposure Liability Exposure Limiting Exposure

6. Liability Exposure A contractor falsifies test results or other information regarding the quality or cost of products it sells to the Government; A health care provider bills Medicare for services that were not performed or were unnecessary, or; Performing inappropriate or unnecessary medical procedures in order to increase Medicare reimbursement. Unbundling - Using multiple billing codes instead of one billing code for a drug panel test in order to increase remuneration. Bundling -- Billing more for a panel of tests when a single test was asked for. Upcoding - Inflating bills by using diagnosis billing codes that suggest a more expensive illness or treatment. Billing for brand -- Billing for brand-named drugs when generic drugs are actually provided. A contractor falsifies test results or other information regarding the quality or cost of products it sells to the Government; A health care provider bills Medicare for services that were not performed or were unnecessary, or; Performing inappropriate or unnecessary medical procedures in order to increase Medicare reimbursement. Unbundling - Using multiple billing codes instead of one billing code for a drug panel test in order to increase remuneration. Bundling -- Billing more for a panel of tests when a single test was asked for. Upcoding - Inflating bills by using diagnosis billing codes that suggest a more expensive illness or treatment. Billing for brand -- Billing for brand-named drugs when generic drugs are actually provided.

7. Liability Exposure Upcoding employee work: Billing at doctor rates for work that was actually conducted by a nurse or resident intern. Billing for research that was never conducted; falsifying research data that was paid for by the U.S. government. Prescribing a medicine or recommending a type of treatment or diagnosis regimen in order to win kickbacks from hospitals, labs or pharmaceutical companies. Billing for unlicensed or unapproved drugs. Forging physician signatures when such signatures are required for reimbursement from Medicare or Medicaid. Upcoding employee work: Billing at doctor rates for work that was actually conducted by a nurse or resident intern. Billing for research that was never conducted; falsifying research data that was paid for by the U.S. government. Prescribing a medicine or recommending a type of treatment or diagnosis regimen in order to win kickbacks from hospitals, labs or pharmaceutical companies. Billing for unlicensed or unapproved drugs. Forging physician signatures when such signatures are required for reimbursement from Medicare or Medicaid.

8. Liability Exposure False Claims Act Application to Healthcare $1 Billion Budget Expanding Investigations False Claims Act Application to Healthcare $1 Billion Budget Expanding Investigations

9. Liability Exposure Complex Regulations Medicare/Medicaid Commercial Payor Stark Law HIPAA EMTALA Complex Regulations Medicare/Medicaid Commercial Payor Stark Law HIPAA EMTALA

10. 100,000 + The government Medicare reimbursement manual includes 100,000 + pages

11. increased The number of commercial Payor audits has increased as a result of successful government investigations

12. $300,000 A New York cardiologist paid $300,000 to resolve OIGs case against him for payment of patient referral incentives

13. new liability exposure New rules governing the restricted use of patient information create a new liability exposure for healthcare providers

14. unfamiliar with recent EMTALA policy changes IOG survey results indicate that most emergency staff members were unfamiliar with recent EMTALA policy changes

15. Liability Exposure Governments ROI 23:1 Over $2.1 Billion Returned Since 1997 Save Medicare Governments ROI 23:1 Over $2.1 Billion Returned Since 1997 Save Medicare

16. Liability Exposure Determining Who to Audit: Risk Assessment Software Random Selection Qui Tam (Whistle-Blower) –Employee –Patient –Competitor Determining Who to Audit: Risk Assessment Software Random Selection Qui Tam (Whistle-Blower) –Employee –Patient –Competitor

17. Liability Exposure Initiatives Hospitals –Physicians at Teaching Hospitals –Lab Un-Bundling –72 Hour Window –DRGs –Qui Tam Initiatives Hospitals –Physicians at Teaching Hospitals –Lab Un-Bundling –72 Hour Window –DRGs –Qui Tam

18. Liability Exposure Initiatives Physicians –Billing for Services Not Rendered –Upcoding –Quality of Care –Qui Tam –Kickbacks Initiatives Physicians –Billing for Services Not Rendered –Upcoding –Quality of Care –Qui Tam –Kickbacks

19. Liability Exposure Costly Fines: $11,000 per False Claim Penalties: Treble Damages Costly Fines: $11,000 per False Claim Penalties: Treble Damages

20. Liability Exposure Sample Claim Over a three year period Sample Physician over bills Medicare $20,000 in 20 separate billings and settles civil case for reckless conduct. $ 20,000 Over billing $ 60,000 Treble Damages: 3 x over billing amount $220,000 FCA Penalty: 20 false claims @ $11,000 each $300,000 Total - $20,000 No coverage for the actual amount of over billing $280,000 Total Financial Exposure Sample Claim Over a three year period Sample Physician over bills Medicare $20,000 in 20 separate billings and settles civil case for reckless conduct. $ 20,000 Over billing $ 60,000 Treble Damages: 3 x over billing amount $220,000 FCA Penalty: 20 false claims @ $11,000 each $300,000 Total - $20,000 No coverage for the actual amount of over billing $280,000 Total Financial Exposure

21. Agenda Liability Exposure Limiting Exposure Liability Exposure Limiting Exposure

22. Limiting Exposure Managing Risk Compliance Program Software –Billing –Compliance Training/Credentials for Coders Managing Risk Compliance Program Software –Billing –Compliance Training/Credentials for Coders

23. Limiting Exposure Transferring Risk E&O Insurance Protects against allegations of fraud and abuse Transferring Risk E&O Insurance Protects against allegations of fraud and abuse

24. Limiting Exposure Defense Only Programs Restrictive Wording in Policies Low Limit Options Limited Retrospective Coverage Defense Only Programs Restrictive Wording in Policies Low Limit Options Limited Retrospective Coverage

25. Agenda Liability Exposure Limiting Exposure Liability Exposure Limiting Exposure

26. Policy form addresses specific exposures not clearly defined or specifically excluded in other policies Policy form addresses specific exposures not clearly defined or specifically excluded in other policies

27. Indemnification Expanded Regulatory Coverage Higher Liability Limits Prior Acts Indemnification Expanded Regulatory Coverage Higher Liability Limits Prior Acts

28. Scaleable Coverage Hospitals Physicians Other Scaleable Coverage Hospitals Physicians Other

29. Hospitals Application & Risk Assessment Coinsurance/Retentions $50 Million Limit Risk Management Options Hospitals Application & Risk Assessment Coinsurance/Retentions $50 Million Limit Risk Management Options

30. Physicians Application & Risk Assessment $1 - 5 Million Risk Management Options Physicians Application & Risk Assessment $1 - 5 Million Risk Management Options

31. Features Cost Efficiencies in Defense –Experienced Law Firms –Audit team Fines and Penalties Risk Management/Engineering Tools Due Diligence for Mergers and Acquisitions Features Cost Efficiencies in Defense –Experienced Law Firms –Audit team Fines and Penalties Risk Management/Engineering Tools Due Diligence for Mergers and Acquisitions

32. Summary Healthcare providers are at risk E&O insurance transfers risk provides provides flexible and affordable coverage Healthcare providers are at risk E&O insurance transfers risk provides provides flexible and affordable coverage

33. THE PHYSICIANS ADVOCATE, LLC 866-765-1058 Christopher Prestera, JD chris@phyadv.com