Will You Have to Will You Have to Rat Yourself Rat Yourself Out? - - PDF document

Will You Have to Rat Yourself Out? – New Self-Disclosure Risks for the Unwary

Dan Mulholland Horty, Springer & Mattern

Will You Have to Rat Yourself Out?

• 60-day overpayment refund
• Stark Self-Disclosure Protocol
• “Transparency” reports
• Due diligence

Overpayment Refunds – PPACA Section 6402(a)

• If an overpayment is received, provider must

– report and return the overpayment; and – notify Medicare/Medicaid/contractor in writing of the reason for the overpayment.

• By the later of:

– 60 days after the overpayment was identified; or – the date any corresponding cost report is due.

• “Overpayment” means any funds that

a person receives or retains from Medicare or Medicaid to which the person, after applicable reconciliation, is not entitled

• Enforcement: Reverse False Claim

exposure under FCA

Examples of Overpayments

• Payments for non-covered services.
• Payments in excess of the allowable

amount.

• Errors and non-reimbursable

expenditures in cost reports.

• Duplicate payments.
• Receipt of Medicare payment when

another payor was primary.

Proposed Regulations February 14, 2012

• “Identify” means:

–Actual knowledge –Reckless disregard –Deliberate ignorance

What You Have To Give CMS

• how the error was discovered
• a description of the corrective action plan
• reason for the refund
• whether the provider has CIA or is under OIG

Self-Disclosure Protocol

• timeframe and the total amount of refund
• Medicare claim control number
• Medicare NPI number
• refund in the amount of the overpayment; and
• if statistical sample was used, description of

methodology

Stark Self-Disclosure Protocol – PPACA Section 6402(a)

• Voluntary program – tolls 60-day

refund requirement

• May result in a reduction of liability
• Much more complicated than OIG self-

disclosure protocol under AKS

• Could take years to resolve

Stark Self-Disclosure Components

• Description of actual or potential

violation

• Financial analysis
• Certification

Factors to be considered in reducing amounts owed:

• Nature and extent of the improper or

illegal practice

• Timeliness of self-disclosure
• Cooperation in providing additional

information

• Litigation risk
• Financial position of the disclosing party

Transparency Reports – PPACA Section 6002

• Payments or transfers of value by

manufacturers

• Physician ownership of manufacturers and

group purchasing organizations

Requires disclosure of:

• “Applicable Manufacturers” of

covered drugs, devices, biologicals or medical supplies

• “Covered Recipients”

– Physicians – Teaching hospitals

Who Is Covered?

• “Payment or other transfer of value” -

transfer of anything of value to a covered recipient unless through a third party and manufacturer does not know about it

• Investments by physicians or family

members

Who Is Covered?

• Consulting fees
• Compensation for services other

than consulting

• Honoraria
• Gifts
• Entertainment
• Food
• Travel (including specified destination)

Examples of Reportable Items

• Annual reports to HHS
• Publicly available on searchable

government website

Where Does Information Go?

• Regulations issued November 2011
• Reports begin March 31, 2013

Effective Dates

Failure to report:

• CMP of $1,000 to $10,000 for each

payment/ownership interest not reported

• Up to $150,000 per year

Knowing failure to report:

• CMP of $10,000 to $100,000 for each

payment/ownership interest not reported, up to $1,000,000 per year

• Risk of qui tam actions

Penalties for Non-Compliance

• Other party reviews physician

arrangements

• Uncovers real or imagined regulatory

violations

• Demands self-disclosure as condition of

the deal going through

• Could affect value if penalties are

assessed

Due Diligence Risks

• Review and fix problem arrangements

before due diligence begins

• Joint defense/common interest agreement
• Manage internal/external

communications carefully

• Anticipate likely regulatory reviews

How to Mitigate Due Diligence Risk