Furnishing Your Compliance House: OIG Risk Areas

Marie C. Infante, Sr. VP, Chief Compliance Officer, Golden Living & Affiliated Companies

Ken Burgess, Esq.Poyner Spruill, LLP

Furnishing Your Compliance House

Our “house” analogy– Structural aspects of compliance program (written)

Compliance officer, committee Employee codes of conduct Training and education Auditing and monitoring Reporting

Compared to the laws and company policies that make up the interior or “guts” of the program

Stated Differently

Think of compliance in 2 parts:– The laws/policies you must comply with– The mechanical systems that help ensure you do

Now, we’re ready to start discussing the “furniture” or, in OIG-speak, the risk areas nursing facilities should focus on in their compliance programs

The Anti-Kickback Statute

Focus: referrals of residents and/or services paid for in whole or in part by any federal health care program (Medicare, Medicaid, TriCare, etc.). Focuses on:– How you make or receive referrals, and– Whether you give, receive, solicit or help arrange

anything of value as part of process of obtaining or making referrals.

Major Sources of Referrals We Get

MDs Other health care professionals Hospital/hospital discharge planners Hospices Home health agencies Other SNFs

Major Referrals We Make

Hospices DME Labs LTC pharmacies Hospitals MDs Other SNFs Therapy companies/therapists

Both Types Must Comply with Anti-Kickback Statute

Places limits on business arrangements relating directly/indirectly to federal health care program business which in any other context would be permissible and/or encouraged

Examples: free computer from pharmacy, free training of certain types, swapping Part B business for the fixed-price Part A

What the Statute Prohibits

1) Giving, accepting, soliciting (asking for) or arranging for 2)items of value, in any form (gifts, certain discounts, cross-referrals, cash), 3) directly or indirectly 4) for purpose of inducing or rewarding another party to make referrals of services 5) paid for in whole or part by any federal health care program.

What It Prohibits

Very broad statute covering:– Referrals of residents or services residents need– And purchasing, ordering, leasing – Or arranging for or recommending purchase,

lease or ordering of services paid for by any federal health care program

– In exchange for any item of value Value is broadly defined and interpreted

Criminal Statute

Prison time, criminal fines, exclusion from federal health care programs

Potential basis for False Claims Act violation Sanctions apply to all parties in transaction

– Giver, receiver, “arranger” of payment for referrals

“Intent” to engage in prohibited act – Not necessarily intent to break the law

If even one purpose of transaction is to induce/reward referrals, that’s sufficient for violation

Highly Scrutinized Transactions

Some transactions have characteristics that essentially lead OIG to presume illegal intent– Does facility or its representatives/affiliates

provide anything of value to persons in position to influence or generate referrals of federal health care program business?

– Does facility or its representatives/affiliates receive anything of value from persons for whom facility generates referrals of federal health care program business?

OIG’s Recommended Queries to Spot “Aggravating Factors”

Does arrangement have potential to skew or interfere with objective clinical decision-making?

Or have potential to increase costs to federal health care program?

Or increase risk of over-utilization or inappropriate utilization (e.g., not medically necessary)?

OIG’s Recommended Queries to Spot “Aggravating Factors”

Or raise patient safety or qualify of care concerns

If arrangement involves appropriate & medically necessary services, is payment made or received consistent with fair market value for similar services?

The “Safe Harbors”

Transactions that fit squarely within one of these will not be prosecuted even if may otherwise seem prohibited by statute

See list in our materials at www.ahcancal.org If it doesn’t fit, they don’t have to acquit Must then prove lack of illegal intent or other

elements of a kickback offense Risk of heightened scrutiny for these

Help Me! I’m Confused!

Re the Anti-Kickback Statute– Ensure your employees are aware of a general prohibition

on items of value exchanging hands between actual or potential referral sources

In either direction or through third parties– Ensure all such arrangements are in writing and reviewed

by legal counsel– When possible, fit it within a safe harbor– All transactions at fair market value (unless permissible

discount applies)– When in doubt, don’t

Sub-Risk Areas Under the Anti- Kickback Statute

OIG has identified several specific types of transactions with heightened risk under the statute

We’ll cover several over next couple of webinar sessions

Today, begin with:– Free goods and services– Services contracts (physician services & non-

physician services)

Strategic Direction

Align Compliance Goals with Business Objectives

More Doing; Less Checking– Decision Support – Consultation– Training & Education

Getting to YES– Identify and remove barriers to compliance– Find solutions to business problems

ComplianceBusiness Asset or Necessary Evil?

Compliance ensures that Golden Living & Affiliates have the appropriate risk and control framework in place to minimize risks

What Risks?

Regulatory Civil Criminal Transactional Operational Financial Ethical

Strategic– Competition– Market Evolution– Brand Image &

reputation– Technology

Innovation

Schizophrenic Role of Compliance Department

Old View: Compliance is Best Procured by Vigorous Enforcement, Oversight

– Police function– Militaristic Adherence to rigid rules and regs– Enforcement will produce compliance - if only there were enough

resources to get the job done– Tattletale– Shadow Effects; Second Guessing

– Learned Helplessness, Disincentives

Old Thinking

“We’ve always done it this way…”“Our hands are tied…”“Learned helplessness”“…A moose around your neck…”

Corporate Compliance Programs – A Work in Progress

Why the Supplemental Guidance Helps a CCO

– Compliance programs are a work in process Changed circumstances New developments Employee turnover New leadership direction

Risk Areas

The Federal Anti-Kickback Statute

– Free Goods and Services– Service Contracts

Physician Services Non-physician Services

Federal Anti-Kickback Statute

Establishes criminal penalties for Offering OROR providing OR receiving

InducementsFor the referral of business paid

forBy Federal healthcare programs

AKS Anxiety

Tends to ensnare harmless or even beneficial business arrangements

Implications for healthcare reform efforts?

– Joint ventures or relationships intended to increase efficiency and produce cost-savings may induce referrals

– May also induce underutilization

Uncertainty of enforcement

– Priorities of the local US Attorneys Office

– Personality of the particular prosecutor

– Uncertainty of the enforcement climate

What is Remuneration?

Remuneration:Can be anything of

value

Money Gifts Vacations Expensive dinners Free or below fair market

value services or rent Event tickets

Also implicated– Rental payments– Number of Medical

Directors– Routine waiver of co-

payments– Pricing arrangements for

goods and services “value added” services Bundled payments

The “One Purpose Test”

If any intent of giving anything of value is to induce a referral it is a crime

– "knowingly and willfully" – "to induce" or "in return for" referring or arranging for

program-subsidized business.

Proof may rest on a lone email about expected revenue benefits of a deal or relationship

Must be able to defend the business purpose for why you provided a referral source with any item of remuneration.

Defensible Arrangements

Fit exactly into a “safe harbor”

OR, Are Clinically sound Arm’s length Based on FMV

Contracting Issues

Legitimate need for the services Services actually performed & documented FMV- $$$ not related to value or volume of referrals;

commensurate with skills, experience Arm’s length transaction

– no conflicts of interest; – manner of selection; – ability to influence referrals

Kickbacks in Sheep’s Clothing

“Value added” services Bundled services De minimus payments or gifts Other excuses

– Our hands are tied– Everybody else is doing it!

From Compliance to Commitment

The Best Approach to Compliance is to Minimize the Need for It

– More Intelligent Use of Data Dissemination of Information Evidence-Based Practices, CPGs Education Partnerships Negotiation

– Alignment of Information Systems– Compliance visibility; Decision support; consultation