1. © 2009 Cengage Learning. All Rights Reserved. Healthcare Fraud and Abuse

2. © 2009 Cengage Learning. All Rights Reserved. Agenda  False Claims Act (FCA)  Anti-Kickback Statute (AKS)  Self-Referral Law (“Stark”)  Health Insurance Portability and Accountability Act (HIPAA)  Criminal and Civil Penalties  Roles of Agencies  Corporate Compliance Programs

3. © 2009 Cengage Learning. All Rights Reserved. Basic Rule in Healthcare Billing “No payment shall be made for services or items which are not reasonable and necessary for the diagnosis and treatment of the patient.” Don’t bill for wrong side surgeries, for dead patients, for services of unlicensed doctors, for lab equipment you don’t have, for surgeries if surgeon is out of the country, etc.

4. © 2009 Cengage Learning. All Rights Reserved. False Claims Act (FCA) 32 U.S.C. 3279 et seq  A false claim is a request for payment for a service or item that is not reasonable or necessary for the diagnosis or treatment of the patient.  FCA applies to any person or entity (e.g. doctor, hospital, etc.) who knowingly presents a fraudulent or false claim to the government for approval or payment

5. © 2009 Cengage Learning. All Rights Reserved. False Claims Act contd.  Misconduct related to the submission of claims to federal healthcare programs can be grounds for civil suit, criminal prosecution, or administrative remedies.  Civil suits under the FCA may be brought by the federal government or by private individuals, known as qui tam relators.

6. © 2009 Cengage Learning. All Rights Reserved. Anti-Kickback Statute (AKS) 42 U.S.C. 1320a-7(b) AKS makes it a felony to knowingly and willfully solicit or receive remuneration “in return for referring an individual to a person for the furnishing or arranging for the furnishing of an item or service” or “for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or for which payment may be made in whole or in part under a Federal healthcare program.”

7. © 2009 Cengage Learning. All Rights Reserved. Anti-Kickback Statute contd.  Congress established statutory exceptions, known as “safe harbors,” for certain payment practices that it considers not to be prohibited referrals.  Criteria: (1) if the purpose of the payment is to induce referrals and (2) if the defendant’s conduct is knowing and willful. (see U.S. v. Greber)  AKS applies to any person or entity (e.g. ambulance, DME. etc.)

8. © 2009 Cengage Learning. All Rights Reserved. Self-Referral Law (“Stark”)  Stark prohibits certain physician referrals to other entities.  Stark deals directly with over-utilization of services by targeting referrals by “financially-interested” physicians.  Stark applies to certain designated health services (DHS).  Congress created exceptions to legitimize some financial relationships.  Stark applies only to physicians.

9. © 2009 Cengage Learning. All Rights Reserved. Health Insurance Portability and Accountability Act (HIPAA) 18 U.S.C. 1035  HIPAA is not just about patient confidentiality!  HIPAA expanded healthcare fraud and abuse criminal prosecutions and enhanced criminal penalties.

10. © 2009 Cengage Learning. All Rights Reserved. Criminal and Civil Penalties  Criminal laws include: section 1128B of the Social Security Act false claims, or applications to the government or payment (18 U.S.C. 287) false statements or representations or disclosures made to the government (18 U.S.C. 1001), and mail fraud and wire fraud (18 U.S.C. 1341 et seq).

11. © 2009 Cengage Learning. All Rights Reserved. Criminal and Civil Penalties  Civil penalties include: exclusions from federal healthcare programs civil monetary penalties, and other administrative sanctions.

12. © 2009 Cengage Learning. All Rights Reserved. False Claim Penalties Punishable by treble damages (3 times amount of claim or loss to federal government) PLUS fines of up to $11,000 per claim

13. © 2009 Cengage Learning. All Rights Reserved. Roles of Agencies  DHHS has oversight over federally funded healthcare programs.  DHHS/OIG investigates fraud and abuse, issues fraud alerts, provides compliance guidance, participates in settlements, and oversees Corporate Integrity Agreements.  DOJ prosecutes criminal healthcare fraud and abuse and institutes civil proceedings.

14. © 2009 Cengage Learning. All Rights Reserved. Corporate Compliance Programs  Every healthcare organization should have a corporate compliance program.  Federal Sentencing Guidelines are legal source of authority. Main elements are: compliance standards high level responsibility education communication monitoring and auditing enforcement and discipline response and prevention.

15. © 2009 Cengage Learning. All Rights Reserved. Corporate Compliance Programs contd.  Corporate Integrity Agreements mandate certain requirements for offending organizations.  CIAs are usually 5 years.  CIAs are used in negotiation settlements in fraud and abuse cases.