Regulatory and Contractual Liability Risk Optimal Structuring, - - PowerPoint PPT Presentation

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Regulatory and Contractual Liability Risk Optimal Structuring, - - PowerPoint PPT Presentation

Jan 29, 2023 185 likes •550 views

Presenting a live 90-minute webinar with interactive Q&A Healthcare Supply Chain Compliance: Minimizing Regulatory and Contractual Liability Risk Optimal Structuring, Negotiating and Managing Supply Chain Contracts and Vendors WEDNESDAY, MAY

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have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.

Presenting a live 90-minute webinar with interactive Q&A

Healthcare Supply Chain Compliance: Minimizing Regulatory and Contractual Liability Risk

Optimal Structuring, Negotiating and Managing Supply Chain Contracts and Vendors

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific WEDNESDAY, MAY 31, 2017

Ira Berkowitz, Senior Counsel, Dignity Health, Phoenix William T . Mathias, Shareholder, Baker Donelson Bearman Caldwell & Berkowitz, Baltimore Stephen K. Phillips, Partner, Hooper Lundy & Bookman, San Francisco

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HEALTHCARE SUPPLY CHAIN COMPLIANCE: MINIMIZING REGULATORY AND CONTRACTUAL LIABILITY RISK

Optimal Structuring, Negotiating and Managing Supply Chain Contracts and Vendors Ira Berkowitz, William Mathias & Stephen Phillips

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Scope of Presentation

  • Supply chain risks for healthcare

companies

  • Mitigating supply chain risks
  • Policies and procedures to have in place
  • Vetting and selection of vendors
  • Identifying vendors as business associates
  • Negotiating, drafting and managing supply

chain contracts

  • Strategies for ensuring regulatory

compliance

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Panel Speakers

  • Ira Berkowitz, Senior Counsel, Dignity Health,

Phoenix

  • William T. Mathias, Shareholder, Baker

Donelson Bearman Caldwell & Berkowitz, Baltimore

  • Stephen K. Phillips, Partner, Hooper Lundy &

Bookman, San Francisco

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What is Supply Chain Management?

  • SCM is the oversight of materials, information

and finances as they move from supplier, to manufacturer, to wholesaler to retailer to consumer.

  • In the modern healthcare context SCM covers

an incredibly large variety of products and services acquired by varied means from numerous different entities.

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Why is supply chain contracting important?

Cost

  • Supply chain spending by providers represents 40-45% of hospital
  • r healthcare system operating cost.
  • A number of leading healthcare organizations project supply costs

will supersede labor costs by 2022.

  • According to Gartner Research, many providers can reduce supply

chain costs by 5-15%, and increase profit by 2-7%, if they better analyze, plan and control the purchase and use of goods and services. [Jasmine Pennic, 5 Ways Supply Chain Can Reduce Rising Healthcare Costs (05/13/2013 ) (http://hitconsultant.net/2013/05/13/5-ways- supply-chain-can-reduce-rising-healthcare-costs/)]

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Why is supply chain contracting important?

Fraud and abuse risk

  • Physician self-referral

(i.e., Stark) risks

  • Anti-kickback risks
  • False claim risks
  • Increased fraud and abuse

penalties and enforcement

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Fraud and Abuse Laws

Physician Self-Referral Law (“Stark”) Anti-kickback Statute False Claims Act

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Stark Self-Referral Law

  • The federal Stark physician self-referral law

generally prohibits a physician from making referrals to an entity for any of eleven (11) designated health services if the physician (or an immediate family member) has a “financial relationship” with the entity.

– 42 U.S.C. § 1395nn

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Stark - Physician Relationships

  • Only applies to physician financial relationship

– Ownership – Compensation

  • Strict liability
  • Form and substance

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Anti-Kickback Statute

  • Federal anti-kickback law generally prohibits the

provision of any economic benefit in exchange for the referral of patients or business that will be reimbursed under any Federal health care program.

– 42 U.S.C. § 1320a-7b(b)

  • Not just referring patients

– Recommending or arranging for purchasing, leasing,

  • r ordering any good, facility, service, or item for

which payment may be made in whole or in part under a Federal health care program

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Anti-Kickback Statute (cont’d)

  • Applicable to any anyone

– NOT just physicians and providers

  • Remuneration = anything of value
  • “Two-way Street”

– Paying a kickback is illegal – Accepting a kickback is illegal

  • Payment not required

– Offering a kickback is illegal – Soliciting a kickback is illegal

  • Intent-based statute

– “Why” question?

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False Claims Act

  • Prohibits:

– “Filing, or causing to be filed” false or fraudulent claims – Using false statement to “conceal, avoid or decrease” a government obligation – Claims in violation of the Anti-kickback Statute or the Stark Statute

  • Intent

– Specific “intent to defraud” not required – Filing claims with “reckless disregard” of their truth or falsity is sufficient

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Areas of Government Concern in Fraud & Abuse Law

  • Additional Cost
  • Over, Under, and Mis-Utilization
  • Quality of Care
  • Access to Care
  • Patients’ Freedom of Choice
  • Competition
  • Exercise of Professional Judgment

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Why is supply chain contracting important?

Privacy risks

  • Cloud migration and expanded

definition of business associates

  • Hosting companies as additional layer
  • f subcontractors
  • SaaS and the distinction between

products and services

  • Enhanced penalties and enforcement

resources at federal law

  • Activist states and Attorney General

enforcement

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Why is supply chain contracting important?

Medicare compliance risk

  • Use of barred personnel
  • Requirement to allow HHS

audits

  • HHS recordkeeping

requirements

  • CMS meaningful use

requirements

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Exclusion

  • Exclusion applies to Medicare, Medicaid, and
  • ther federal health care programs
  • No payment for items or services provided by

an excluded individual or entity

– More expansive than direct patient care

  • No payment for administrative and

management services

  • No payment for items or services ordered or

prescribed by excluded individual

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Screening for Excluded Persons

  • Need to check employees and most

contractors against exclusions lists

  • OIG List of Excluded Individuals/Entities

– exclusions.oig.hhs.gov

  • GSA List of Debarred Contractors

– www.sam.gov

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Monthly Exclusion Checking

  • Seriously.... every month
  • Growing number of State Medicaid Programs

are requiring monthly screening of current employees and contractors

  • Minimize overpayments and CMP liability

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HHS Audits and Access to Records

  • Section 1861(v)( l )(I) of the Social Security Act
  • Make available, upon written request, to the Secretary
  • f the United States Department of Health and Human

Services, or upon request to the Comptroller General

  • r any of their duly authorized representatives
  • Agreement and such books, documents and records of

Subcontractor, its agents and employees, as are necessary to certify the nature and extent of their compensation for such services

  • $10,000 or more over a 12-month period

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Mitigating supply chain risks

Controlling costs

  • RFx
  • GPO
  • Other purchasing

models

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Mitigating supply chain risks

Preventing fraud and abuse issues

  • Identifying physician

financial relationships and referral patterns

  • Identifying workforce

personnel conflicts of interest and conflicts with physician-owned companies

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Mitigating supply chain risks

Preventing privacy and security issues

  • Identify data elements that vendors,

subcontractors and personnel can access

  • Identify security architecture and procedures
  • Identify all business associates
  • Enter into BAA’s with BA’s

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Policies and procedures to have in place

 Physician conflict of interest policies and questionnaires  Technology review.  Security review and risk assessment  Privacy review  Legal review of contracts and purchase

  • rders

 Financial review of payment and pricing terms  Use of template documents

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Vendor selection

  • Use of GPOs and other vendors

to rate products

  • Vendor due diligence: what to

look for

  • Balancing physician preference
  • v. cost and other considerations
  • Balancing stakeholder

preferences

  • Determining life of contract

pricing and cost

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Identifying vendors as business associates

  • Developing a data

inventory and data map

  • Review of business

associate definition

  • Identifying vendor

trouble-shooting access to data

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Negotiating, drafting and managing supply chain contracts

Points of negotiation

  • Acceptance process – detecting issues before extended use; refund

rights for rejection

  • Reps and warranties – addressing fraud and abuse, Medicare and

privacy compliance

  • Disclaimers – scope of disclaimers; harmonization with reps and

warranties and covenants

  • Limitations on damages types: identifying likely indirect or

consequential damages

  • Limitations on aggregate liability: developing protocols for intelligent

compromise

  • Carve outs for data breaches, fraud and breaches of Medicare COPs
  • Indemnities: beyond infringement
  • Insurance: cyber insurance
  • Payment and pricing terms: payment triggers; pricing transparency
  • Subcontractors: identifying and controlling use of subcontractors
  • Data rights: determining permissible uses of data by vendors
  • Data security: determining appropriate security measures
  • Termination rights: developing a meaningful termination strategy
  • Individual user terms of service/use and privacy policies: determining

appropriateness of allowing binding user terms and their content

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Strategies for ensuring regulatory compliance

  • Audits
  • Annual attestations
  • Whistleblower protection
  • Use of contract notice provisions

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Conclusions

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Ira Berkowitz ira.berkowitz@dignityhealth.org William Mathias bmathias@bakerdonelson.com Stephen Phillips sphillips@health-law.com

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