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THE STARK TRIFECTA
How Legal, Compliance, and Outside Counsel Work Together
on Stark Compliance
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1. Understand the risks posed by any financial relationship between a
hospital and a physician group, and how even well‐intentioned
arrangements can cost you millions.
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2. Learn how to develop and implement a comprehensive, multi‐disciplinary program to prevent and detect Stark violations at your facilities.
3. Be prepared to take action once Stark issues are identified, including conducting an internal investigation and making repayment or disclosing
to CMS via the SRDP process.
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IDENTIFYING THE RISK
Leverage in‐house counsel’s knowledge of the company with outside counsel’s multi‐client
experience to help frame the risk.
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Have you heard of these?
► U.S. ex rel. Drakeford v. Tuomey (Oct. 16, 2015) – $72.4 million settlement before sale following protracted litigation related
to improper 10-year employment contracts to 19 specialists in exchange for performing all outpatient procedures at the Hospital or its other facilities
► U.S. ex rel. Baklid-Kunz v. Halifax Hosp. Med. Ctr. (M.D. Fla.) – $85 million settlement to resolve FCA allegations that the hospital violated
the Stark Law by entering into employment contracts with six oncologists above FMC and containing improper incentive bonus
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Hospital Whistleblowers► SOME RECENT HOSPITAL TARGETS:
– Whistleblower: consultant hired by hospital • Integris Baptist Medical Center ($12.2 million)
– Whistleblower: co-chair of cardiothoracic surgery• University Hospital’s Health System ($14 million)
– Whistleblowers: compliance specialist and head of operations • Raritan Bay Medical Center ($7.5 million)
– Whistleblowers: former CEO and billing manager • Northside Hospital (Atlanta) ($6.9 million)
– Whistleblowers: supervisor of home health services • Colquitt County Hospital Authority ($475,000 plusoutstanding employment retaliation lawsuit)
I know you don’t want to hear this, but…► Recoupment of Medicare reimbursements for all referred DHS during period
of non-compliance
► $15,000 CMPs per referral
► False Claims Act damages, fines (whistleblower and government)– $11,000 fine per claim
– Treble damages
– Attorneys’ fees
► New CMPs under PPACA (similar to FCA damages, fines)
► 5 years prison
► Public relations nightmare
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DEVELOPING OUR PROGRAM
In‐house counsel serves as an expert and conduit for translating legal risk for an
organization based on its operations. But an effective risk‐mitigation strategy requires an effective process to guide
success.
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Leverage Compliance’s operational expertise to identify areas for process
improvement to minimize risk. Compliance is an organization’s first line of defense, and offence, for creating a
best‐practice organization.
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June 2015: Second Revised Provider Arrangements Policy approved by Allina Health governance; separate process created for employed physicians
2012 – 2014: Ongoing training, monitoring, data gathering, and process improvement
2011: Legal performs comprehensive review and rewriting of Policy. Allina Health stakeholders begin meeting to develop a comprehensive Provider Arrangements Process.
July 2014: System‐wide follow‐up training; revised process documents released
April 2012: First Provider Arrangements Policy and Process Training
March 2012: Revised Provider Arrangements Policy approved by Allina Health governance
March 2010: Patient Protection and Affordable Care Act Passed
Developing our Program:
201520142013201220112010
Allina Health Audit and Compliance Committee (ACC)
Executive Compliance Oversight Committee (ECOC)
Provider Arrangements Executive Steering Committee (PAESC)
VP Audit; General Counsel; Chief Compliance Officer; President‐Hospital Business Unit; VP Medical Affairs; SVP Clinical Service Lines;
VP Finance and Business Development Allina Health Group
System Office (SO)
Contract Coordinator
Provider Arrangements
Process Owners
SO VP Audit; SO Provider Arrangements Manager
Provider Arrangements Core Team
Vice President Audit; Manager Provider Arrangements; Director Financial Reporting; Manager Accounts Receivable; Legal; Director Organizational Integrity; Business Associate
Compliance 360 Support; VP Finance – Hospital Business Unit
Contract Admin Designee
(CAD) Workgroup
Hospital, Clinic, Specialty, and
System Office CADs
PA Core Team
Provider Arrangement ProcessOversight & Administration
Contract Admin Designee
(CAD) Workgroup
Hospital, Clinic, Specialty, and
System Office CADs
PA Core Team
Contract Admin Designee
(CAD) Workgroup
Hospital, Clinic, Specialty, and
System Office CADs
PA Core Team
Provider Arrangements Core Team
Vice President Audit; Manager Provider Arrangements; Director Financial Reporting; Manager Accounts Receivable; Legal; Director Organizational Integrity; Business Associate
Compliance 360 Support; VP Finance – Hospital Business Unit
Provider Arrangements Core Team
Vice President Audit; Manager Provider Arrangements; Director Financial Reporting; Manager Accounts Receivable; Legal; Director Organizational Integrity; Business Associate
Compliance 360 Support; VP Finance – Hospital Business Unit
System Office (SO)
Contract Coordinator
System Office (SO)
Contract Coordinator
Provider Arrangements
Process Owners
SO VP Audit; SO Provider Arrangements Manager
Provider Arrangements
Process Owners
SO VP Audit; SO Provider Arrangements Manager
Provider Arrangements Executive Steering Committee (PAESC)
VP Audit; General Counsel; Chief Compliance Officer; President‐Hospital Business Unit; VP Medical Affairs; SVP Clinical Service Lines;
VP Finance and Business Development Allina Health Group
Provider Arrangements Executive Steering Committee (PAESC)
VP Audit; General Counsel; Chief Compliance Officer; President‐Hospital Business Unit; VP Medical Affairs; SVP Clinical Service Lines;
VP Finance and Business Development Allina Health Group
Executive Compliance Oversight Committee (ECOC)Executive Compliance Oversight Committee (ECOC)
Allina Health Audit and Compliance Committee (ACC)Allina Health Audit and Compliance Committee (ACC)
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Transaction Owner
(President, SVP, VPMA, VP Ops, Chief
Medical Officer, Site Director)
Contract Admin
Designee (CAD)(Dir, Mgr, or Sr)
Finance Lead(Finance VP – Metro/SO,
Fin Dir – Regional/Specialty)
Senior Accountable Executive (SAE)
Transaction Owner
President, SVP, VPMA, VP Ops, Chief
Medical Officer, Site Director)
SO Contract Manager/SO Contract Coordinator
Authorized Signatory (per Policy)
Business Unit Role in Provider Contracting
SO Contract Manager/SO Contract CoordinatorSO Contract Manager/SO Contract Coordinator
Transaction Owner
President, SVP, VPMA, VP Ops, Chief
Medical Officer, Site Director)
Transaction Owner
President, SVP, VPMA, VP Ops, Chief
Medical Officer, Site Director)
Transaction Owner
(President, SVP, VPMA, VP Ops, Chief
Medical Officer, Site Director)
Transaction Owner
(President, SVP, VPMA, VP Ops, Chief
Medical Officer, Site Director)
Contract Admin
Designee (CAD)(Dir, Mgr, or Sr)
Contract Admin
Designee (CAD)(Dir, Mgr, or Sr)
Finance Lead(Finance VP – Metro/SO,
Fin Dir – Regional/Specialty)
Finance Lead(Finance VP – Metro/SO,
Fin Dir – Regional/Specialty)
Senior Accountable Executive (SAE)Senior Accountable Executive (SAE)
Authorized Signatory (per Policy)Authorized Signatory (per Policy)
1. Identify contract need and perform initial due diligence
Contracting Process
7. Complete Certificate of Compliance – obtain Legal sign off if not a standard template
6. Finalize contract terms; obtain final fair market value opinion
11. Perform ongoing monitoring of arrangement
2. Internal stakeholders discuss concept terms and receive initial approval
3. Determine appropriate contract; engage Legal if appropriate
5. Finalize business plan and obtain all necessary committee and capital approvals
4. Initiate Fair Market Value process
8. Obtain authorized signatures on checklist; attest to compliance with the Policy
9. Execute Agreement
10. Submit contract and all supporting documents to contract database
1. Identify contract need and perform initial due diligence
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1. Identify contract need and perform initial due diligence
Contracting Process
7. Complete Certificate of Compliance – obtain Legal sign off if not a standard template
6. Finalize contract terms; obtain final fair market value opinion
11. Perform ongoing monitoring of arrangement
2. Internal stakeholders discuss concept terms and receive initial approval
3. Determine appropriate contract; engage Legal if appropriate
5. Finalize business plan and obtain all necessary committee and capital approvals
4. Initiate Fair Market Value process
8. Obtain authorized signatures on checklist; attest to compliance with the Policy
9. Execute Agreement
10. Submit contract and all supporting documents to contract database
1. Identify contract need and perform initial due diligence
Contracting Process
7. Complete Certificate of Compliance – obtain Legal sign off if not a standard template
6. Finalize contract terms; obtain final fair market value opinion
11. Perform ongoing monitoring of arrangement
2. Internal stakeholders discuss concept terms and receive initial approval
3. Determine appropriate contract; engage Legal if appropriate
5. Finalize business plan and obtain all necessary committee and capital approvals
4. Initiate Fair Market Value process
8. Obtain authorized signatures on checklist; attest to compliance with the Policy
9. Execute Agreement
10. Submit contract and all supporting documents to contract database
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1. Identify contract need and perform initial due diligence
Contracting Process
7. Complete Certificate of Compliance – obtain Legal sign off if not a standard template
6. Finalize contract terms; obtain final fair market value opinion
11. Perform ongoing monitoring of arrangement
2. Internal stakeholders discuss concept terms and receive initial approval
3. Determine appropriate contract; engage Legal if appropriate
5. Finalize business plan and obtain all necessary committee and capital approvals
4. Initiate Fair Market Value process
8. Obtain authorized signatures on checklist; attest to compliance with the Policy
9. Execute Agreement
10. Submit contract and all supporting documents to contract database
1. Identify contract need and perform initial due diligence
Contracting Process
7. Complete Certificate of Compliance – obtain Legal sign off if not a standard template
6. Finalize contract terms; obtain final fair market value opinion
11. Perform ongoing monitoring of arrangement
2. Internal stakeholders discuss concept terms and receive initial approval
3. Determine appropriate contract; engage Legal if appropriate
5. Finalize business plan and obtain all necessary committee and capital approvals
4. Initiate Fair Market Value process
8. Obtain authorized signatures on checklist; attest to compliance with the Policy
9. Execute Agreement
10. Submit contract and all supporting documents to contract database
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1. Identify contract need and perform initial due diligence
Contracting Process
7. Complete Certificate of Compliance – obtain Legal sign off if not a standard template
6. Finalize contract terms; obtain final fair market value opinion
11. Perform ongoing monitoring of arrangement
2. Internal stakeholders discuss concept terms and receive initial approval
3. Determine appropriate contract; engage Legal if appropriate
5. Finalize business plan and obtain all necessary committee and capital approvals
4. Initiate Fair Market Value process
8. Obtain authorized signatures on checklist; attest to compliance with the Policy
9. Execute Agreement
10. Submit contract and all supporting documents to contract database
1. Identify contract need and perform initial due diligence
Contracting Process
7. Complete Certificate of Compliance – obtain Legal sign off if not a standard template
6. Finalize contract terms; obtain final fair market value opinion
11. Perform ongoing monitoring of arrangement
2. Internal stakeholders discuss concept terms and receive initial approval
3. Determine appropriate contract; engage Legal if appropriate
5. Finalize business plan and obtain all necessary committee and capital approvals
4. Initiate Fair Market Value process
8. Obtain authorized signatures on checklist; attest to compliance with the Policy
9. Execute Agreement
10. Submit contract and all supporting documents to contract database
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1. Identify contract need and perform initial due diligence
Contracting Process
7. Complete Certificate of Compliance – obtain Legal sign off if not a standard template
6. Finalize contract terms; obtain final fair market value opinion
11. Perform ongoing monitoring of arrangement
2. Internal stakeholders discuss concept terms and receive initial approval
3. Determine appropriate contract; engage Legal if appropriate
5. Finalize business plan and obtain all necessary committee and capital approvals
4. Initiate Fair Market Value process
8. Obtain authorized signatures on checklist; attest to compliance with the Policy
9. Execute Agreement
10. Submit contract and all supporting documents to contract database
1. Identify contract need and perform initial due diligence
Contracting Process
7. Complete Certificate of Compliance – obtain Legal sign off if not a standard template
6. Finalize contract terms; obtain final fair market value opinion
11. Perform ongoing monitoring of arrangement
2. Internal stakeholders discuss concept terms and receive initial approval
3. Determine appropriate contract; engage Legal if appropriate
5. Finalize business plan and obtain all necessary committee and capital approvals
4. Initiate Fair Market Value process
8. Obtain authorized signatures on checklist; attest to compliance with the Policy
9. Execute Agreement
10. Submit contract and all supporting documents to contract database
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1. Identify contract need and perform initial due diligence
Contracting Process
7. Complete Certificate of Compliance – obtain Legal sign off if not a standard template
6. Finalize contract terms; obtain final fair market value opinion
11. Perform ongoing monitoring of arrangement
2. Internal stakeholders discuss concept terms and receive initial approval
3. Determine appropriate contract; engage Legal if appropriate
5. Finalize business plan and obtain all necessary committee and capital approvals
4. Initiate Fair Market Value process
8. Obtain authorized signatures on checklist; attest to compliance with the Policy
9. Execute Agreement
10. Submit contract and all supporting documents to contract database
1. Identify contract need and perform initial due diligence
Contracting Process
7. Complete Certificate of Compliance – obtain Legal sign off if not a standard template
6. Finalize contract terms; obtain final fair market value opinion
11. Perform ongoing monitoring of arrangement
2. Internal stakeholders discuss concept terms and receive initial approval
3. Determine appropriate contract; engage Legal if appropriate
5. Finalize business plan and obtain all necessary committee and capital approvals
4. Initiate Fair Market Value process
8. Obtain authorized signatures on checklist; attest to compliance with the Policy
9. Execute Agreement
10. Submit contract and all supporting documents to contract database
11. Perform ongoing monitoring of arrangement
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How do you
promote reporting
of old issues while
also ensuring
compliance in new
arrangements?
It’s a balancing act…
The completion of the following were tied to Leaders merit increases:
• Complete Policy Training
• Compliant with Provider Arrangements Policy
• Compliant with Stark and anti‐kickback laws
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TAKING ACTION WHEN AN ISSUE ARISES
An effective process doesn’t end when the contract is signed. Compliance is integral for helping assess ongoing compliance and identifying risks that
require Legal involvement.
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Provider Arrangement (PA) PolicyViolation Reporting Workflow
Where a potential provider contract issue may be surfaced:
• BU Department• BU CAD/Finance Lead• SO Contract Manager/Contract Coordinator• Legal Department• A/P, A/R, or other Finance Department• Audit or Compliance Department
Notification should include:
• Legal Department• BU CAD/Finance Lead• SO Contract Manager
Legal Department conducts analysis:
• Determine if regulatory impact• Determine if PA Policy Violation
BU CAD/Finance Lead provides Legal any requested additional information
SO Contract Manager determines if reportable on PA KPIs
If KPI Reportable and/or Process Violation only, SO Contact manager notifies:
• Reporter• BU CAD/Finance Lead
Legal Department sends determination o PA Policy Violation to:
• Reporter• BU CAD/Finance Lead• SO Contract Manager
If Policy violation, SO Contract Manager contracts BU Senior Accountable Executive to report PA Policy Violation
Abbreviation Key
BU = Business UnitCAD = Contract Admin DesigneeSO = System OfficeKPI = Key Performance Indicator
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It’s Not Complicated!
Hello, Legal?I think we have a problem…
• Physicians’ Group, PA submitted an invoice for medical director services performed 4 months ago.
• The business unit completed a check request and submitted it for payment.
• Accounts Payable did not see a C360 number on the form so returned it to the business unit, called Compliance, and did not issue payment.
• The business unit believed an agreement was signed but no one can find it.
• Compliance called Legal and, at Legal's request, reached back out to the business unit to see if they could find any emails or other writings.
• They found an email to the group (dated 5 months ago) asking for the services and including a job description for the medical director role.
• They also found the draft agreement with the terms on Hospital VP's desk, including the compensation amount, but it wasn't signed by either party and no one can confirm whether it was sent to the group
• The invoice was for the amount that was reflected in the draft agreement.
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CMS’ SRDP https://www.cms.gov/PhysicianSelfReferral/.../6409_SRDP_Protocol.pdf
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SRDP settlement experience to-date► Settlements posted at:
– http://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/Self-Referral-Disclosure-Protocol-Settlements.html
► 740 submissions to-date
► 69 settlements:– High = $584,000
• 19 violations by hospital/hospice in NC (Oct. 2012)
– Low = $60• Single IOAS violation by physician practice in OH (Sept. 2012)
– Average = $110,000
The Lady or the Tiger?
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Stark II, Phase … Never mind.
► Recent amendments and clarifications to the Stark regsprovide new flexibility– CY 2016 PPS Final Rule, 80 Fed. Reg. 7086 (Nov. 16, 2015)
• “Arrangement” rather than “agreement”
• Expired agreements may not be expired arrangements
• Writings rather than a [single] writing
• 90 days for signature—which can relate to other (earlier?) writings
► 52 SRDP submissions withdrawn as of 12/31/15
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