Articles Posted in Compliance

The Office of Inspector General (OIG) of the Department of Health & Human Services (HHS) issued two advisory opinions.

The first advisory opinion released by the OIG involves a continuing care retirement community’s proposed rewards program for referrals by current residents and employees. The OIG determined that the proposed arrangement would not be a violation of the Anti-Kickback Statute, and thus would not subject the requestor to administrative sanctions.

The requestor for the OIG’s opinion on the proposed arrangement operates continuing care retirement communities (CCRCs). The CCRCs provide three levels of care: independent living, assisted living, and skilled nursing. Although continuing care residents have a contractual right to move to a higher level of care, a 2005 actuarial study conducted by the requestor found that two-thirds of those who enter the CCRCs at the independent living level are not expected to become residents of the community’s skilled nursing units. The CCRCs do not provide health care, nor do they participate in Federal health care programs.

Section 6401 of the Patient Protection and Affordable Care Act (PPACA) grants the Secretary of the Department of Health and Human Services (the “Secretary”) the authority to require health care providers to adopt compliance programs as a condition of participation in the Medicare, Medicaid and CHIP programs. Before the PPACA, a corporate compliance program was only mandatory for a healthcare provider or supplier that was operating under a Corporate Integrity Agreement or had a contract with the federal government that exceeded $5 million and lasted longer than 120 days.

Although section 6401 lacks specific direction to the Secretary with regard to the health care providers that will be subject to the mandatory compliance programs and the core elements of the programs, the section gives the Secretary the authority to make these decisions. One exception to the lack of specific direction is found in section 6102 of PPACA. That section requires skilled nursing facilities (SNFs) and other nursing facilities to establish compliance programs. According to the language in section 6102, the SNF program must be “reasonably designed, implemented, and enforced so that it will be generally effective in preventing and detecting criminal, civil and administrative violations under this Act and in promoting quality of care.” The section lists eight required components of the compliance program, and requires that the programs be in place by March 2013. The eight required components include:

A bill in Florida’s Senate would target Medicaid fraud through the creation of a Fraud Strike Force and the expansion of the Medicaid Fraud Control Unit (MFCU) within the Florida Attorney General’s (AG’s) office. The Fraud Strike Force would direct state and local authorities to work together to more effectively investigate and prosecute Medicaid fraud and abuse. The strike force’s work begins in January 2011. It will consist of eleven state officials that will eventually recommend the best measures to coordinate state resources. The MFCU’s expansion in the Attorney General’s office includes the creation of positions committed to identifying and prosecuting Medicaid managed care fraud.

For more information, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888.

The U.S. Department of Justice (DOJ) and Rush University Medical Center agreed to settle a qui tam lawsuit alleging that Rush violated the Federal False Claims Act (FCA). The lawsuit, filed on July 12, 2004, alleged that Rush had violated the FCA by submitting certain false claims for payment to the Medicare and Medicaid programs. The DOJ intervened in the action and argued that Rush’s violation of the FCA occurred through the submission of claims for services referred by physicians with whom Rush had impermissible financial relationships. The alleged impermissible financial relationships were rent concessions on medical space leased to certain physicians. The government argued that these financial relationships were in violation of Stark Law and thus, Rush was prohibited from billing Medicare and Medicaid for services referred from those physicians. Pursuant to the settlement Rush will pay the federal government $1,547,200.00, and the relators will be awarded $270,760.00.

If you would like your financial relationship reviewed for Stark compliance or for more information, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888.

On January 27, 2010, leaders of the American Dental Association (ADA), American Medical Association (AMA), American Osteopathic Association (AOA), and the American Veterinary Medical Association (AVMA) sent a letter to the Federal Trade Commission (FTC) Chairman Jon Leibovitz requesting that health professionals be excluded from the “Red Flags” Rule, a new regulation intended to combat identity theft.

The letter was prompted by a recent decision from the U.S. District Court for the District of Columbia involving a suit was brought by the American Bar Association (ABA) against the FTC. The court ruled that lawyers should be excluded from the requirements of the Red Flags Rule. The court stated that the application of the Red Flags Rule to attorneys “is both erroneous and inconsistent with the purpose underlying enactment of the [Fair and Accurate Credit Transactions Act of 2003 (FACT Act)].”

Similarly, the leaders of these health professional organizations called upon the FTC to exclude health professionals from the Red Flags Rule. The joint letter to the Chairman requests that the FTC take two actions: (1) announce that the Rule will not be applied against licensed healthcare professionals (LHCPs) until at least ninety days after final resolution of the ABA litigation; and (2) confirm that if the final resolution of the ABA litigation is that the Rule will not be applied to attorneys, the Rule will also not be applied to LHCPs.