Recipe for a Healthy Compliance Diet

John H. Fisher, II, JD, CHC

Health Law/Labor & Employment Law InstituteAugust 23, 2012

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Pictures from the National Archives

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Attributes of a Healthy Diet Healthy/Nutritious Appropriate Portions Delicious Sustainable Organic Consistent Exercise

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Consequences of Unhealthy Diet Bad Health Increased Risk Factors More Illness Trips to the Doctor Eventually Catches Up Serious Illness Morbidity

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What?

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What? Guilty of a kickback without specific intent? Individual criminal/exclusion liability based on position? Suspension of payment on “any credible allegation of

fraud?” False Claims Act applied to health care? FCA penalties applied to overpayments you should have

known about but didn’t Use of data mining and extrapolation back for 10 years? What is going on here?

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CMS Statement – 60 Day Rule

We believe defining ‘‘identification’’ in this way gives providers and suppliers an incentive to exercise reasonable diligence to determine whether an overpayment exists. Without such a definition, some providers and suppliers might avoid performing activities to determine whether an overpayment exists, such as self-audits, compliance checks, and other additional research.

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What is a Compliance Program?

Prevention, detection, collaboration, and enforcement

System of policies and procedures Systems to detect compliance problems Proactive risk identification Knitted into the fabric of the organization

commitment to an ethical way of conducting business system for doing the right thing

Not a guarantee of perfect compliance Builds upon itself

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If you take your compliance plan off of the shelf and the dust triggers your allergies, you might just have a compliance problem.

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Federal Sentencing Guidelines

Aggravating factors- Upper-level employee- Repeat offense- Hindrance during

investigation- Awareness and tolerance of

the violation was pervasive.

Mitigating factors- Effective compliance

program- Self-reported violation

promptly- Cooperated in investigation- Accepted responsibility

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Importance To Regulators Health Care Fraud is a very high priority to regulators Return on Investment Mentality OIG Annual Work Plan – source of modification and

focus for compliance plan Trend Toward Holding Individuals Responsible Suspension of Payment – Reasonable Allegation of

Fraud 60 Day Repayment - Knowledge

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“Legal” Motivators False Claims Act Liability

3X plus up to $11,000 per claim 60 day return of overpayments

Failure = False Claim Whistleblowers Park Doctrine Caremark Decision

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CMS Statement – 60 Day Rule

We believe defining ‘‘identification’’ in this way gives providers and suppliers an incentive to exercise reasonable diligence to determine whether an overpayment exists. Without such a definition, some providers and suppliers might avoid performing activities to determine whether an overpayment exists, such as self-audits, compliance checks, and other additional research.

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Top Ten Reasons To Create a Compliance Program

10. Compliance Programs Are Cost Effective

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Top Ten Reasons To Create a Compliance Program

9. Risk Prevention

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Top Ten Reasons To Create a Compliance Program

8. Identification of Under-billing

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Top Ten Reasons To Create a Compliance Program

7. Enhancement of Quality of Care

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Top Ten Reasons To Create a Compliance Program

6. Communicate Commitment to Compliance

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Top Ten Reasons To Create a Compliance Program

5. Avoid Government Imposed CIA

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Top Ten Reasons To Create a Compliance Program

4. Reduce threat of whistleblower lawsuits

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Top Ten Reasons To Create a Compliance Program

3. Avoid Astronomical Fines & Penalties

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Top Ten Reasons To Create a Compliance Program

2. Protect individuals from liability

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# 1 Reason – Compliance Programs are Mandatory PPACA Made Compliance Programs Mandatory Nursing Facilities Beginning March 2013 Condition of Participation Certify Effective Compliance Program CMS to Issue Regulations Will providers get the message?

New York experience

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60 Day Knowledge Requirement Overpayment Becomes a False Claim 60 Days After Knowledge “Reckless Disregard” If No Compliance Program and Program Would Have

Identified The Problem? Is this a reckless disregard? We will see a case like this

ZPIC Practices Like a scene from an old gangster movie

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Regulatory Agencies

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“No Compliance officer can master all applicable rules, regulations, codes”

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“All providers will eventually be called upon to defend the effectiveness of their compliance program.”

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Effective Compliance Programs

Can you convince a third party? Comprehensive (Scaled) Up to date – Laws change rapidly Integrate OIG Compliance Guidance Continued “living and breathing” process Provide for continuous process of feedback and

integration

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Effectiveness Cycle

Program

External Review

Outcome

Corrections

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Measuring Effectiveness Process Review

All seven 8 elements included in the program Structure in place Compliance officer, qualified, no conflicts etc. Compliance work plan Compliance budgeting process Compliance topics on department/organization agendas Employees being trained Risks being identified Hotline in place Reports being addressed Board engagement

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Measuring Effectiveness Outcomes Review

Indications that the process is working New risk areas identified Comparing issues year to year Tracking corrective actions Reviewing concurrent audits Educational session pre-and post-tests Tracking “bill denials” Organizational survey results Audit results

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Effectiveness Self Assessments Time limitations Resource limitations “We have good people” It couldn’t happen here Fox guarding the hen-house It is legal’s job Auditor independence

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External Program Review

Independence Detailed Due Diligence Process Management/Director Interviews Gap Analysis

Beware of creating a roadmap What is reasonable for the size and nature of the

organization

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Due Diligence ChecklistDOCUMENT EXISTS COPIED INDEXEDSTANDARDS & OVERSIGHTCode of Conduct YES

NO YES

NO YES

NO

Compliance Budgeting Process/Line Items YES NO

YES NO

YES NO

Compliance Committee Structure YES NO

YES NO

YES NO

Compliance Officer Appointment YES NO

YES NO

YES NO

Compliance Officer Job Description YES NO

YES NO

YES NO

Compliance Plan Document YES NO

YES NO

YES NO

Compliance Reporting Structure YES NO

YES NO

YES NO

Education of Board on Compliance Duties YES NO

YES NO

YES NO

Historic Compliance Reports to Board/Compliance Committee YES NO

YES NO

YES NO

Initial Baseline Audits YES NO

YES NO

YES NO

Process for Communicating Code of Conduct YES NO

YES NO

YES NO

Records Relating to the Development of a Compliance Program YES NO

YES NO

YES NO

Risk-Scoring Process YES NO

YES NO

YES NO

Statements from Administration re: Compliance YES NO

YES NO

YES NO

YES NO

YES NO

YES NO

HOTLINE/COMPLIANT PROCESSAlternative Communication of Hotline (i.e., newsletters, etc.) YES

NO YES

NO YES

NO

Call Logging Process & Forms YES NO

YES NO

YES NO

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Effectiveness ChecklistYES NO EVIDENCE OF

COMPLIANCE DISCUSSION

1. WRITTEN POLICIES & PROCEDURESCODE OF CONDUCT/ETHICS – embodies compliance expectations

1.1 Are compliance expectations included in a written code of conduct or code of ethics?

Code approved by governing board?

Code created under auspices of person designated by the board?

Clear & non-technical to be understood by all?

Details fundamental principles, values, and framework for action

Articulates compliance commitment

Brief, easily readable, and broadly applicable

Identifies expectations and mechanisms for employees and managers to report in response to violations

Identifies consequences of failures

Includes compliance goals and performance expectations for managers

Does code include these major topics? Billing/Claim Filing

Payments

Quality of Care

Governance

Mandatory Reporting

Credentialing

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Written Effectiveness Report Define Scope Identify Weaknesses Suggest Enhancements Attorney/Client Privilege Issues Be Careful of the “Roadmap” Suggesting Everything Is Easy

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7 Key Elements – Process Assessment Focus

1. Policies & procedures2. Oversight & leadership3. Education & training4. Auditing & monitoring5. Reporting & investigating6. Enforcement & discipline7. Response & prevention

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8th - Risk Assessment Federal Sentencing Guidelines

The organization shall…[a]ssess the risk that criminal conduct will occur

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Identifying Risk Proactive not Reactive Compliance Cycle Interviews and Questionnaires Declined Reimbursement External Sources

OIG Work Plans Fraud Alerts Compliance Guidance Advisory Opinions Etc.

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Ranking and Prioritizing Risk Scoring

Likelihood vs. Consequences Clearly Illegal Activities

Prioritize Risk Areas Place In Yearly Compliance Work Plan

Review or Audit

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Compliance Timeline Based On Prioritized Risk Schedule Out Activities Estimate Costs – Budget Impossible To Do Everything

Be Prepared To Show Risk Area Is On Your Schedule Need To Show Process Not That Every Problem Discovered

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BudgetingSeparate Compliance Budget

Costs Can Be Ascertained Through a Process

Savings Are Less Tangible

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Budgeting Process

Scope and Goals of Plan Known Risk Areas Risk Scoring and Prioritization Annual Compliance Plan

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Who should be included in the Compliance Program?

Board of Directors Oversight Committee Executive Team Compliance Officer Managers & Supervisors Physicians Staff

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Board of Directors

Critical to the Program success due to their involvement

Duty to oversee compliance Understand the Program background and

approval of program Periodic updates Education Tone from the top should not be ZZZZZzzzzz

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Compliance Oversight Committee

Leverage existing talent Integrates various perspectives:

Operations, finance, audit, HR, utilization review, social work, medicine, coding and legal

Employees and managers of key operating units

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Compliance Oversight Committee

Set goal and objectives Assist in implementation & operation of the

compliance program Advise the Compliance Officer Review reports & recommendations from the

Compliance Officer Annual review & evaluation of the program Meets monthly or quarterly

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Compliance Officer

Reports directly to the Board of Directors Authority to make decisions Communicator Operational responsibility

- Management of daily compliance operations- Implementation of each compliance element

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Dual Role Compliance Officers

Should not be or report through legal or CFO OIG Position Corporate Integrity Agreements Medicare Advantage Regulations Tenet Health Care Ethical Obligations Is The Program Effective?

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“Apparently, neither Tenet nor its General Counsel saw any conflict in his wearing two hats as Tenet’s General Counsel and Chief Compliance Officer…’ “It doesn’t take a pig farmer from Iowa to smell the stench of conflict from that arrangement.” Senator Grassley – July 2004

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Managers & Supervisors

Leverage Enterprise-Wide Talents Written Statement

Goals & objectives for individuals and work units Periodic performance reviews System of rewards & recognition of contribution Corrective action or discipline policies & procedures

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Physicians/Staff

Understand compliance as a necessity Building trust to facilitate change Buy-in is the key to succeed Keep Commitment Communicate both good & bad news Allow frustrations to ventilate

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Policies & Procedures

Guidelines for employees to follow Decision-making structure and guidance Weave standards into everyday practice Elevate principles into business relationships Confirmation of institutional commitment to

compliance

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Policies & Procedures

Plain language to foster clear understanding Multi-lingual Consistency with other policies and procedures Confirmation of Employee understanding Documented education and training Employee attestations

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Education & Training A general session for all employees- to heighten

awareness among all employees, 1 to 3 hours annually, along with code of conduct and attestation (web based)

Second session covering more specific information for appropriate personnel

Written annual education plan Important to be communicated from the top Internal vs. External Mandatory vs. Voluntary Education assessment

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Auditing & Monitoring

On-site visits (Compliance SWAT teams) Interviews and Questionnaires Reviews of Medical and Financial records Reviews of policies and procedures Trend analysis Including Compliance language in job

description Posing compliance-related questions in exit

interviews

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Reporting System

Create an Open Door On Compliance Issues Assurance Against Retaliation Confidentiality to the Extent Possible Hotline Other Methods

Drop Box Difficulty In Small Organization

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Compliance Handling

Prompt and Consistent Assess Seriousness Document – Complaint Log Investigate Follow-up to Resolution Time limited

60 Days Elder Justice (4 hours)

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Response and Prevention

Meet with In-house or outside counsel Develop appropriate plan of action Internal investigation (attorney-client privilege) Team to meet before and after investigation Final report within 60 days but within 30 days

to avoid stricter fines Voluntary disclosure

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Enforcement and Discipline

Fair, equitable, and consistent. Written policy describing discipline Progressive discipline Documentation An outline of disciplinary procedures The parties responsible for appropriate action Discipline must be fair and consistent

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Discipline

For Compliance Breaches Failure to Report Known Compliance Breaches For Violation of Anti-Retaliation Policies

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Unexpected Visits

Procedure In Place Who Is In Charge? Who Should Be Called? Employee Responsibility Spelled Out

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Obstacles to an Effective Compliance Program

We have good, honest people Don’t have time for compliance Commitment and buy-in Lack of funding Too many roles for the compliance officer Interpreting laws and regulations Lack of education and training Resistance to change Fear of retaliation/retribution No internal enforcement

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Living, Breathing Process

A compliance program is never finished; it should always be a work in progress.

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©2012 Ruder Ware, L.L.S.C. Accurate reproduction with acknowledgment granted. All rights reserved. This document provides information of a general nature regarding legislative or other legal developments. None of the information contained herein is intended as legal advice or opinion relative to specific matters, facts, situations, or issues, and additional facts and information or future developments may affect the subjects addressed.

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John H. Fisher, II, JD, CHCHealth Care Counsel

Ruder WareWausau and Eau Claire, Wisconsin

jfisher@ruderware.com