Fraud & Abuse

Published on: November 20, 2023

OIG Issues New General Compliance Program Guidance

In November 2023, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) released its General Compliance Program Guidance (GCPG). This guidance was released as part of OIG’s Modernization Initiative, which seeks to make compliance program guidance more user friendly and accessible. The document does not include new information but instead summarizes existing guidance regarding fraud and abuse risk, serving as an up-to-date comprehensive reference guide for the general healthcare community and industry stakeholders. OIG also noted that in 2024 it will begin publishing industry segment-specific CPGs (ICPGs) which will address compliance measures for industry subsectors.

The GCPG is not legally binding on any individual or entity, but contains valuable information regarding compliance with federal fraud and abuse statutes and regulations. The OIG guidance includes information regarding key fraud and abuse laws, the primary elements of an effective compliance program, program adaptations for small and large entities, other compliance considerations, and OIG resources and processes.

The GCPG begins with an overview of the principal federal fraud and abuse laws including the Anti-Kickback Statute (AKS), the Physician Self-Referral Law (PSL; also known as the “Stark law”), the False Claims Act (FCA), and the Civil Monetary Penalty law (CMP). Their stated goal in summarizing these laws is to “create awareness and provide tools and resources to aid compliance efforts in both preventing violations and identifying potential red flags early with respect to these laws and regulations.”

Published on: November 8, 2023

WHO Publishes AI Considerations in Healthcare

by Wachler & Associates, P.C.

In light of the rapid technological advancements and increasing utilizations of artificial intelligence (AI), the World Health Organization (WHO) issued a publication outlining key regulatory considerations on AI for healthcare. The publication highlights emerging best practices for the development and use of AI in healthcare and aims to lay out an overview of regulatory considerations on AI for healthcare covering six general topic areas discussed below.

As the publication explains in greater detail, the WHO recommends that stakeholders take into account the following considerations as they continue to develop frameworks and best practices for the use of AI in healthcare:

Documentation and transparency: Pre-specifying and documenting the intended medical purpose and development process should be considered in a manner that allows for the tracing of the development steps as appropriate. A risk-based approach should also be considered for the level of documentation and record-keeping utilized for the development and validation of AI systems.

Published on: October 30, 2023

CMS Expansion of Revocation Authority Requires Increased Diligence in Audit Response

by Wachler & Associates, P.C.

In November 2021, the Centers for Medicare & Medicaid Services (CMS) published a final rule expanding their ability to revoke Medicare billing privileges of providers and suppliers. This rule went into effect January 1, 2022, and has significantly increased the importance of a diligent and careful response when faced with a CMS audit.

Prior regulations required CMS to consider the following three factors when determining whether a provider or supplier was engaged in the type of billing practices which could support a revocation: (1) the reason for any claim denials, (2) the length of time over which any pattern or practice of submitting claims that fail to meet Medicare requirements occurred, and (3) how long the provider or supplier had been enrolled in Medicare.

CMS asserted that these three considerations inhibited their ability to “target brief periods involving a significant percentage of denied claims” and therefore proposed revisions to this framework which it believed would strengthen CMS’ overall program integrity efforts. The new framework now considers the following four factors:

Published on: October 23, 2023

OIG Updates Work Plan for October 2023

by Wachler & Associates, P.C.

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) announced several new changes in its Work Plan update for October 2023. The OIG Work Plan forecasts the projects that OIG plans to implement over the foreseeable future. These projects usually include OIG audits and evaluations. Below are the highlights from the Work Plan update of which providers and suppliers should take notice.

First, OIG will perform an audit of the Morehouse School of Medicine’s National Infrastructure for Mitigating the Impact of COVID-19 (NIMIC) initiative. The NIMIC initiative is a 3-year, $40 million cooperative agreement between HHS’s Office of Minority Health and the Morehouse School of Medicine to fight COVID-19 in racial and ethnic minority, rural, and socially vulnerable communities. The Morehouse School of Medicine is leading the initiative to coordinate a strategic network to deliver COVID-19 related information to communicates hit hardest by the pandemic.

Second, OIG will audit the accuracy of the Child Care and Development Fund (CCDF) attendance records at Minnesota child care centers. The CCDF is the primary federal funding source devoted to subsidizing the child care expenditures of low-income families. OIG has stated that it identified issues with the completeness and accuracy of child care attendance records and with related billings for child care services. Minnesota, as well as possibly additional states, have been selected by OIG for a review to determine whether the state(s) complied with federal and state requirements related to attendance records and whether payments for services at child care centers were allowable.

Published on: October 19, 2023

Employee Safe Harbor Protections Affirmed in Recent OIG Advisory Opinion

by Wachler & Associates, P.C.

On October 10, 2023, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued an advisory opinion reinforcing the broad protection of physician employees under the safe harbor provision of the Anti-Kickback Statute (AKS). The AKS is a federal criminal law which prohibits payment for the inducement or reward of patient referrals or generation of business where any item or service payable by a federal healthcare program is involved. Remuneration under the law has been interpreted to mean “the transfer of anything of value, directly or indirectly, overtly or covertly, in cash or in kind.” Violation of the AKS can result in severe penalties, including imprisonment of up to 10 years, a maximum fine of $100,000, and exclusions from Medicare and Medicaid reimbursement.

There are several statutory and regulatory exceptions to the AKS, which allow for specific remuneration arrangements when certain criteria are met. One statutory exception protects payments made by employers to employees who are in bona fide employment relationships for providing covered items and services under the employment agreement. Similarly, safe harbor regulations have been promulgated by HHS which clarify that “remuneration” under the AKS does not include payments under the bona fide employer-employee relationship described above.

In the recent advisory opinion, the OIG considered whether employer payment of bonuses based on net profits to employed physicians in a multi-specialty ambulatory surgery center (ASC) would constitute a violation of the AKS. The employer practice operated two separate ASCs – noted to be divisions and not subsidiaries – and planned to compensate physician employees via a bonus structure where employed physicians who performed procedures at the ASCs would receive 30% of the practice’s net profits in addition to base employment compensation. The OIG concluded that this type of arrangement would not violate the terms set forth in the AKS.

Published on: October 2, 2023

OIG Announces Plan to Investigate Managed Care Contracts

by Wachler & Associates, P.C.

In August 2023, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) announced its strategic plan to investigate the life cycle of Medicare and Medicaid managed care contracts. OIG’s plan will scrutinize these contracts from inception through enrollment, reimbursement, services, and renewal. In order to address fraud, waste, and abuse risks, the goal of OIG’s plan is to hold accountable Medicare Advantage organizations (MAOs) and Medicaid managed care organizations (MCOs).

Currently, more than half of Medicare enrollees and more than 80% of Medicaid enrollees are covered by managed care programs. In order to oversee the approximate $700 billion that the federal government spent on managed care programs in 2022, OIG has set out four phases of managed care that it intends to investigate: (1) plan establishment and contracting, (2) enrollment, (3) payment, and (4) provision of services.

In the first phase, OIG intends to review activities that occur when the Centers for Medicare & Medicaid Services (CMS) or states initially establish or renew managed care contracts. In this contract review phase, OIG will evaluate whether MAOs and MCOs are providing the government with accurate information, including in their bids, and abiding by the contract terms for their plan design, service offerings, and coverage area. In the second phase, OIG will review enrollment processes. Specifically, OIG will focus on potentially aggressive marketing campaigns and inaccurate information collection.

Published on: September 8, 2023

CMS Increases Scrutiny on Hospice Providers

by Wachler & Associates, P.C.

The Centers for Medicare & Medicaid Services (CMS) recently announced that it intends to increase scrutiny on hospice providers as a result of increased reports and CMS findings suggesting potential hospice services fraud. CMS stated that it is strengthening its hospice program integrity strategy through actions such as site visits and proposed regulations to minimize impacts to Medicare beneficiaries.

As part of this revitalized focus on hospice integrity, CMS has highlighted several observed situations that it views with heightened scrutiny. Certain reports cited by CMS have supposedly identified instances of hospices certifying patients for hospice care when they were not terminally ill and providing little to no services to patients. CMS has also indicated that the listed address for some hospices appears to be non-operational. One particular alleged trend CMS has focused on is known as “churn and burn,” where a new hospice opens and starts billing, but once that hospice is audited or reaches its statutory yearly payment limit, it shuts down, keeps the money, buys a new Medicare billing number, transfers its patients over to the new Medicare billing number, and starts billing again.

In response to these purported findings, CMS embarked on a nationwide hospice site visit program, making unannounced site visits to every Medicare-enrolled hospice. As of mid-August 2023, CMS has visited over 7,000 hospices, and indicated that nearly 400 hospices are being considered for potential administrative action as a result. While many of these hospices may very well be able to demonstrate compliance with Medicare requirements, if CMS finds grounds to conclude that a hospice is allegedly non-compliant, this may result in significant consequences such as suspension or revocation. Further, CMS has noted that rapid hospice growth trends in four states – Arizona, California, Nevada, and Texas – has led the Centers to implement a provisional period of enhanced oversight in these states. During this provisional period, CMS plans to conduct medical reviews before making payments on claims submitted by newly enrolling hospices.

Published on: August 16, 2023

OIG Final Rule Implementing Information Blocking Penalties

by Wachler & Associates, P.C.

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued a final rule (Final Rule) on June 27, 2023, which implements statutory provisions for specific individuals or entities subject to the information blocking requirements established by the 21^st Century Cures Act (Cures Act). The Cures Act imposes civil money penalties (CMP) of up to $1 million per violation of information blocking, which is defined as “a practice that interferes with, prevents, or materially discourages access, exchange, or use of electric health information,” except as required by law or covered by an exception.

The Final Rule authorizes HHS to impose CMPs, assessments, and exclusions on individuals and entities that engage in alleged fraud or other misconduct related to HHS grants, contracts, and other agreements, as well as increases the maximum penalties for certain CMP violations. OIG may impose CMPs of up to $1 million per violation of information blocking on a health information technology (Health IT) developer of certified health IT or a health information network or health information exchange (HIN/HIE), as those terms are defined by OIG.

Penalties may be imposed on certified Health IT developers and HIN/HIEs that do not actually interfere with access, exchange, or use of electronic health information (EHI) if the requisite intent is present. Specifically, such individual or entity may have CMP exposure under the Final Rule if it knew or should have known that a practice was likely to interfere with access, exchange, or use of EHI. Additionally, OIG has clarified that a discrete action by an actor that implicates information blocking would be viewed as a single violation. Thus, it appears that the number of violations will be directly connected to the number of discrete acts.

Published on: August 9, 2023

OIG Declines to Impose Sanctions on Online Healthcare Directories

by Wachler & Associates, P.C.

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) released Advisory Opinion 23-04 (Advisory Opinion) on July 11, 2023, addressing arrangements between online healthcare directories and certain third-party websites (Directories) with federal healthcare program beneficiaries. In the Advisory Opinion, the OIG declined to impose sanctions on healthcare provider Directories offering these sort of advertising services to providers.

Under the proposed arrangement, healthcare provider Directories are serving as marketplaces in which users and potential patients can book medical appointments with physicians and other healthcare providers (Providers) who are listed on the online Directories. Patients can filter their results by searching for different types of medical providers, and the Directories generate personalized results using a proprietary algorithm.

Although no fee is charged to the patients for using the directory, Providers pay a fee to be included in the directory through an array of payment methods. Whenever potential patients click on a Provider’s profile during their searches, a “per-click” fee is charged to Providers. A “per-booking” fee is also charged to Providers for each new patient the Providers receive through the Directory which may vary in amount based on location, specialty, and other factors impacting the fair market value of the marketing service. Providers can also set spending caps, which would remove the Providers from the directory once a certain amount of booking fees has been met.

Published on: June 28, 2023

U.S. Supreme Court Expands Scope of the False Claims Act, Includes What Provider Believed When It Submitted the Claim

by Wachler & Associates, P.C.

The False Claims Act (FCA) was enacted during the Civil War to impose civil liability on anyone who knowingly acts in defrauding governmental programs. Healthcare fraud has been a leading source of FCA violations for several years, leading to $1.7 billion in settlements and judgments in the last fiscal year alone. Healthcare providers and suppliers who participate in Medicare and Medicaid programs are at risk for FCA violation allegations and must take measures to ensure compliance with these programs by following proper billing procedures. Notably, violations can carry significant consequences, as they impose treble damages and significant per-claim penalties which increase each year with inflation. Cases for violations of the Anti-Kickback Statute (AKS), Physician Self-Referral Law (Stark Law), and other regulatory and compliance requirements are often brought as FCA cases.

Healthcare providers and suppliers who knowingly submit false claims or fail to pay back money owed to the government may be in violation of the FCA. The FCA also carries a whistleblower provision, which allows private citizens to bring qui tam actions against providers and suppliers who have allegedly violated the Act. The government then may intervene in the action, allowing the whistleblower to recover a portion of the recovery. Qui tam actions encompass a considerable portion of FCA litigation and have broadened the scope of the FCA significantly, increasing the risk of violation allegations for healthcare providers and suppliers.

On June 1^st, 2023, the Supreme Court issued a unanimous decision in two consolidated FCA cases, U.S. ex rel. Schutte v. Supervalu Inc. and U.S. ex rel. Thomas Proctor v. Safeway, Inc., ruling that a defendant’s knowledge of a claim’s falsity refers to a subjective standard regarding what the defendant believed at the time it submitted the claims- not what an objectively reasonable person might have known or believed or what may later become reasonable in light of later facts or analysis. This ruling can generally be seen as an expansion of the “knowing” standard under the FCA and should caution healthcare providers and suppliers to take steps to ensure their knowledge and beliefs surrounding submission of claims to Medicare and Medicaid are compliant with these programs and are documented at the time claims are submitted, especially where there is a question of regulatory interpretation or ambiguity. Documentation of this knowledge in the form of written policies and procedures may be especially salient in ensuring compliance. Furthermore, if compliance issues or potential violations are raised, healthcare providers and suppliers should take immediate action to address and rectify them.