Source: http://www.readbag.com/crowell-documents-overpayments-if-when-and-how-to-self-disclose-paddock
Timestamp: 2020-02-20 19:00:25
Document Index: 662954547

Matched Legal Cases: ['§1320', '§405', '§1001', '§1395', '§3729', '§1395', '§669', '§3729', '§3729', '§669', '§ 12', '§ 2000', '§ 2001', '§ 2001']

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Overpayments: If, When and How to Self-Disclose
Michael W. Paddock, Esq.
Self-Disclosure of &quot;Overpayments&quot;
§ What are overpayments? § Laws and other guidance impacting the decision whether to self-disclose § Risks of non-disclosure § Risks of self-disclosure § Benefits of self-disclosure § The OIG's Provider Self-Disclosure Protocol
Laws Impacting the Decision Whether to Self-Disclose
§ No statute or regulation explicitly requires refund of overpayment to the government
­ Except for Stark Law regulations, 42 CFR 411.353(d)
§ However, some laws can be interpreted as prohibiting the retention of funds to which the provider is not entitled
­ 42 USC §1320a-7b(a)(3) ­ 42 CFR §405.371 ­ 18 USC §1001 ­ 42 USC §1395u(b)(3)(B)(ii) ­ 31 USC §§3729(a)(1), (a)(7) ­ 42 USC §1395nn(g)(2) ­ 18 USC §§669, 1347 3
Other Guidance Influencing the Decision Whether to Self-Disclose
§ CMS Forms 855 § CMS' &quot;Overpayment Refund Form&quot; § CMS' January, 2002 Proposed Rule § State laws
The Stark Law and Overpayments
§ Prohibits a physician from referring a patient for &quot;designated health services&quot; to an entity with which the physician (or an immediate family member) has a financial relationship § Prohibits the entity from billing Medicare for services rendered pursuant to such a patient § Numerous statutory and regulatory exceptions permit certain financial relationships § Unexcepted financial relationship + bills to Medicare = potentially large overpayments § Statutory refund obligation: runs to the beneficiary § Regulatory refund obligation: runs to Medicare § Stark Law carries its own penalties
The False Claims Act, &quot;Implied Certification,&quot; and Overpayments
§ The Reverse False Claim, 31 USC §3729(a)(7) § The &quot;Implied Certification Theory&quot; under 31 USC §3729(a)(1)
­ May apply when a claimant receives reimbursement while in violation of a law and, if the government had known of the violation, it would not have paid the claim ­ Courts: underlying law must expressly condition payment on compliance with the law ­ Stark Law: explicit refund provisions mentioned above ­ Anti-Kickback Statute: no explicit refund provisions
§ But see CMS Forms 855: claims while in violation of Anti-Kickback Statute could constitute overpayments / &quot;false claims&quot;
Potential Risks of Retaining Overpayments
§ Potential violation of law(s) § Knowing retention of an overpayment, even a minor one, can blossom into a big problem § Government perceptions subsequent to decision not to disclose § Maximum penalties and fines can be grave
­ Civil monetary penalties ­ Corporate Integrity Agreement ­ False Claims Act ­ Program exclusion ­ Criminal laws at issue
East Tennessee Heart Consultants Settlement (January 2007)
§ First enforcement action against physicians for failure to refund overpayments § Allegations: ETHC improperly retained credit balances (i.e., amounts due to payors and patients as a result of overpayments) § Alleged violations of 18 USC §§669, 1347 § Charges waived for 18 month probationary period § 12 years of overpayments ($1.2m) to be refunded ­ to Medicare, Medicare, private payors, and to patients § If ETHC can't find the individual/payor, refund goes to government § Also: 5 year CIA, $2.9m in civil penalties and restitution
Potential Risks of Self-Disclosure
§ Repayments will be made § Cost of pre-disclosure investigation § Provider's &quot;buyer's remorse&quot; § Government may not agree that self-disclosure and proffered repayment is sufficient § Compliance plans and efforts subject to scrutiny § Government not bound to anything: may decide to further investigate, impose discipline § Cost of post-disclosure efforts to resolve situation
Potential Benefits of Self-Disclosure
§ Criminal exposure may be eradicated § Reduced penalties
­ US Sentencing Guidelines ­ False Claims Act: double damages, rather than treble
§ CIA may be more lenient, if not avoided § Opportunity to cast story in proper light § Reduce chance / scope of government investigation
Risk ­ Benefit Analysis
§ In absence of legal obligation to refund overpayments, decision whether to refund may be a risk ­ benefit analysis: § Investigate, understand, consider FACTS § Consider applicability of laws to facts § Consider potential resultant damages § Consider amount of potential repayments § Consider results of compliance plan § Consider propriety of other business operations
OIG Provider Self-Disclosure Protocol
§ Released in October, 1998 § Open to all providers and suppliers § Protocol intended to resolve matters that potentially violate Federal criminal, civil or administrative laws
­ Not intended for resolution of simple billing errors ­ Other than the Stark Law, these laws typically require at least some form of intentional or reckless conduct
§ OIG report:
­ In 10 years, 379 disclosures accepted into protocol ­ 165 resolved for $118 million
§ Of first 136, 27 required CIA
­ CY 2007: 53 disclosures submitted
§ Requirements of 1998 Protocol:
­ Although providers under government scrutiny are not necessarily ineligible, self-disclosure must be made &quot;in good faith&quot; (and must reveal any knowledge of such scrutiny) ­ Full cooperation throughout process ­ In writing ­ Description of organizational complexities, if any ­ Full description of matter (type of claims, entities/individuals involved, their roles, time period at issue, provider number(s), programs affected) ­ Reason why provider believes a law may have been violated ­ Certification that submission is truthful
§ OIG expects that provider will have conducted (or is in process of completing) thorough internal investigation and self-assessment prior to selfdisclosure § OIG will forego its own investigation if, upon selfdisclosure, provider agrees to complete its investigation and self-assessment in adherence to OIG's Internal Investigation Guidelines and SelfAssessment Guidelines
OIG's Internal Investigation Guidelines
§ In addition to prescribed detail for original submission (above), Internal Investigation Guidelines require:
­ Identification of potential causes of incident / practice ­ Description of impact on health, safety, quality of care ­ Identification of corporate officials who knew of, but failed to detect, the incident ­ Estimate of monetary impact on Federal programs ­ Description of response to matter:
§ Steps taken to prevent future incidents § Thorough explanation of investigative steps § Disciplinary actions taken
OIG's Self-Assessment Guidelines
§ Designed to calculate potential program losses § Review of either all claims or statistically valid sample of claims § Provider must divulge to OIG:
­ Review objective and procedures ­ Review population ­ Sources of data ­ Qualifications of reviewers ­ If review based on sample, detail pertaining to sampling
§ Refunds will not be accepted at this point, but are encouraged to be placed in escrow § OIG begins its review § Scope of OIG review should be based on completeness of self-disclosure § OIG will likely request access to audit work papers and supporting documentation
­ Attorney-client privilege?
§ OIG and DOJ not bound to any concessions
­ Particularly DOJ with respect to attorney-client privilege
2000 and 2001 OIG Guidance
§ 2000 Open Letter: OIG may &quot;be more flexible in considering the terms of a CIA&quot; or &quot;not even require a CIA&quot; for providers that self-disclose § 2001 Open Letter: self-disclosure would be the &quot;first factor&quot; the OIG would consider when determining whether to waive program authorities without imposing a CIA § 2001 OIG report: describes concessions resulting from selfdisclosure
­ Reduced length of CIA ­ Reduce role of Independent Review Organization ­ CIA requirements tailored to meet providers' compliance programs
April, 2006 Open Letter to Providers
§ Seeks to promote use of Protocol for hospital-physician financial relationships that lead to violations of Stark Law and/or Anti-Kickback Statute § Indicates OIG will waive exclusionary authority for &quot;trustworthy&quot; providers and those who have, or will put in place, an effective compliance program § Indicates OIG will seek monetary restitution at multiplier of &quot;lower end&quot; of damages continuum
­ Stark Law: damages based on claims for tainted referrals ­ Anti-Kickback Statute: damages based on amounts paid under financial relationship(s)
§ Indicates OIG will review compliance program when determining whether to impose CIA or CCA
April, 2008 Open Letter to Providers
§ Reiterates commitment to resolve self-disclosures at &quot;lower end&quot; of damages continuum § Commits to resolving self-disclosures speedily § Elements of Internal Investigation Guidelines now required as part of initial submission:
­ Complete description of conduct being disclosed ­ Description of internal investigation, or commitment to completion date within 3 months ­ Estimate of program damages, and methodology used to calculate it... or commitment to calculation within 3 months ­ Statement of laws potentially violated
April, 2008 Open Letter to Providers, cont.
§ Reiterates that SDP is not intended for mere billing errors (report these directly to contractors) § Concession: OIG will generally NOT require a CIA or CCA in exchange for a monetary payment
­ &quot;Recognizes the provider's commitment to integrity and also advances [the] goal of expediting the resolution of selfdisclosures&quot;
§ Coincidence?: Open Letter released contemporaneously with CMS proposal to audit approximately 10% of Medicare-participating hospitals for Stark Law compliance
Provider Self-Disclosure
§ In absence of legal obligation to refund overpayments, decision whether to refund may continue to be a risk ­ benefit analysis § However, consider whether... § Risks are being reduced § Benefits are being increased
Michael W. Paddock, Esq. Crowell &amp; Moring LLP 1001 Pennsylvania Avenue NW Washington, D.C. 20004 (202) 624-2519 [email protected]
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