Medicare Advantage/Part D Fraud, Waste, and Abuse Training

1. Medicare Advantage/Part DFraud, Waste, and Abuse Training

2. The CMS Mandate • The Centers for Medicare & Medicaid Services (CMS) requires all Medicare Advantage-Prescription Drug health plans to ensure that their participating providers complete Fraud, Waste, and Abuse training no later than December 31, 2009.

3. Learning Objectives By the end of this course, you will be able to: • Describe the Medicare Advantage-Prescription Drug Fraud, Waste, and Abuse (FWA) training requirements • Recognize examples of health care FWA • Describe steps taken to prevent and combat FWA • Describe how you can prevent health care FWA • Report suspected health care FWA

4. Key Terms and Acronyms Part C Medicare Advantage Plans (MA) • Provide all of a person’s Part A and Part B coverage • Most MA plans are offered by private companies and many include Part D coverage Medicare Part D Plans • Optional drug coverage available to all Medicare recipients • Most Part D plans are either stand-alone prescription drug plans (PDPs) or MA plans offering drug coverage (MA-PD)

5. Key Terms and Acronyms, Cont’d. Medicare Advantage Organizations • A public or private entity organized and licensed by a state as a risk-bearing entity (with the exception of provider sponsored organization receiving waivers) that is certified by CMS as meeting the MA contract requirements. Part D Sponsors • Refers to a PDP Sponsor, MA organization offering a MA-PD plan, a PACE* organization offering a PACE plan including qualified prescription drug coverage, and a Cost Plan offering qualified prescription drug coverage. This includes employer- and union-sponsored plans. *Program of All-Inclusive Care for the Elderly

6. How Does CMS Combat Fraud? • Close coordination with contractors, providers, and law enforcement agencies • Developing Medicare Program compliance requirements that protect stakeholders • Applying fair and firm enforcement policies • Early detection through Medical Review and data analysis • Effective education of physicians, providers, suppliers and beneficiaries Among other things, the fifth strategy led to the development of this FWA training requirement.

7. FWA Training Requirement • Required annually for all Part C and D first tier, downstream, related and delegated entities, including MA providers who administer Part D benefit or provide health care services to MA enrollees .* • Such entities must advise MA organizations and Part D sponsors with whom they contract that the training has been completed. *The following pages define first tier, downstream, and related entities.

8. First Tier Entities • Any party that enters into a written arrangement with an MA organization to provide administrative services or health care services for a Medicare eligible individual.1 • First tier entities include Pharmacy Benefit Managers (PBMs) • SummaCare’s PBM: Catalyst CMS Pub. 100-16 (http://www.cms.hhs.gov/transmittals/downloads/R79MCM.pdf) 1

9. Downstream Entities • Any party that enters into an acceptable written arrangement below the level of the arrangement between the MA organization (and contract applicant) and a first tier entity.1 • Downstream entities include: • Pharmacies and pharmacists • Subcontractors such as claims processing firms • Hospitals • Primary care providers • Specialists • Ancillary providers • Dentists CMS Pub. 100-16 (http://www.cms.hhs.gov/transmittals/downloads/R79MCM.pdf) 1

10. Related Entities • Any entity that is related to the MA organization by common ownership or control and: • Performs some of the MA organization’s management functions under contract or delegation; • Furnishes services to Medicare enrollees under an oral or written agreement; or • Leases real property or sells materials to the MA organization at a cost of more than $2,500 during a contract period.1 • An example of a related entity would be one where a sponsor is the parent company of its own in-house PBM. 1 CMS Pub. 100-16 (http://www.cms.hhs.gov/transmittals/downloads/R79MCM.pdf)

11. Plan Responsibilities CMS stipulates that MA Organizations and Part D Plan Sponsors are ultimately responsible for training entities and providers who render service to Medicare health plan members to meet CMS’ contractual requirements.

12. Provider Responsibilities • By 12/31/09, and annually thereafter, affected providers and entities must: • Complete training as defined in 42 CFR 422.503 (“Medicare Advantage Programs”) and 42 CFR 423.504 (“Voluntary Medicare Prescription Drug Benefit”). • Submit an attestation to each of the health plans which you are contracted to provide services for MA and/or Part D beneficiaries.

13. Health Care Fraud • Intentionally, or knowingly and willfully attempting to execute a scheme to falsely obtain money from any health care benefit program. • Considered a crime by the federal government and all 50 states. FRAUD

14. Medicare Fraud • Purposely billing Medicare for services that were never provided or received http://www.medicare.gov/FraudAbuse/Tips.asp

15. Health Care Abuse • Improper behaviors or billing practices that create unnecessary costs Fraud is distinguished from abuse in that, in the case of fraudulent acts, there is clear evidence that the acts were committed knowingly, willfully, and intentionally or with reckless disregard.

16. Health Care Waste • Health care spending that can be eliminated without reducing the quality of care Quality waste Overuse, underuse, and ineffective use of drugs, medical care, and surgical services.* Inefficiency waste Redundancy, delays, and unnecessary process complexity *Examples include the underuse of generic drugs and the overuse of antibiotics and non-urgent use of emergency department care.

17. Stakeholders and Risks for FWA • Stakeholders include: • MA Organizations and Part D Sponsors • Providers • Pharmacies • Pharmacy Benefit Managers • Beneficiaries • Schemes: • Vary in degree of severity • Are not necessarily unique to a single stakeholder • May involve multiple types of fraud, waste, or abuse

18. Potential Risks – MA Organizations and Part D Sponsors • Failure to provide medically necessary services • Marketing schemes such as offering beneficiaries a cash payment as an inducement to enroll in Part D • Selecting or denying beneficiaries based on their illness profile or other discriminating factors • Inappropriate formulary decisions in which costs take priority over criteria such as clinical efficacy and appropriateness

19. Potential Risks – Providers:Prescription Drug FWA • Illegal remuneration schemes, such as selling prescriptions • Prescription drug switching • Script mills • Theft of a prescriber’s Drug Enforcement Agency (DEA) number, prescription pad, or e-prescribing log-in information • Falsifying information in order to justify coverage

20. False Claims Act (FCA) The False Claims Act prohibits any false or fraudulent claims for government money or property, whether or not the claim is presented to a government official, and whether or not the defendant specifically intended to defraud the government. Liability attaches to government funds dispersed through intermediaries including state agencies, and may apply to subcontractors as well as funds received from MA Plans and Medicaid HMOs. American Recovery and Reinvestment Act of 2009 (ARA)

21. Anti-Kickback Statute • The Anti-Kickback Statute makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program. • Remuneration includes anything of value, directly or indirectly, overtly or covertly, in cash or in kind. Examples: Free drugs or supplies, inflated consulting contracts, and gifts of travel and entertainment.

22. Combating Fraud:A Collaborative Effort The following entities collaborate to combat Medicare fraud and abuse. • Department of Justice (DOJ), including the Federal Bureau of Investigation (FBI) • criminal enforcement authority • Office of Inspector General (OIG) and the Department of Health and Human Services (HHS) • civil enforcement authority • Quality Improvement Organizations • contribute to the effort to prevent and detect fraud

23. Possible Remediation Processes • Education • Administrative sanctions • Civil litigation and settlements • Criminal prosecution • Automatic debarment • Prison time

24. Best Practices for Preventing FWA • Develop a compliance program • Monitor claims for accuracy • ensure coding reflects services provided • Monitor medical records • ensure documentation supports services rendered • Perform regular internal audits

25. Best Practices for Preventing FWA, Cont’d. • Maintain open lines of communication with colleagues and staff members • Ask about potential compliance issues in exit interviews • Take action if you identify a problem Remember that you are ultimately responsible for claims bearing your name, regardless of whether you submitted the claim.

26. Exclusion Lists • Check the OIG and General Services Administration (GSA) List of Excluded Individuals/Entities (LEIE*) for all new employees and at least once a year thereafter to ensure that employees and other entities that assist in the administration or delivery of services to Medicare beneficiaries are not included in such lists. • LEIE: http://exclusions.oig.hhs.gov/search.aspx • GSA: https://www.epls.gov/ *Individuals who have been reinstated are removed from the LEIE.

27. Whistleblower Protections • Whistleblower: An employee, former employee, or member of an organization who reports misconduct to people or entities that have the power to take corrective action. • Generally, the misconduct is a violation of law, rule, regulation, or direct threat to public interest. • Examples include fraud, health/safety violations, and corruption.

28. Whistleblower Protections, Cont’d. • The Whistleblower Provision of the False Claims Act allows individuals to: • Report fraud anonymously • Bring suit against an organization on behalf of the government and collect a portion of any settlement that results* * The US Department of Justice reviews each case initiated by the individual , who is called a qui tam relator, and decides whether or not to take action against the organization. The qui tam relator can share the recovery, even if he or she participated in the false claim. If the court finds that an employee was terminated for helping the government investigate false health claims, that person is entitled to reinstatement, double the amount of back pay, plus interest, and compensation for expenses, such as legal fees.

29. OIG CMS Confidential Methods for Reporting FWA • Phone: 1-800-HHS-TIPS • (1-800-8477- 8477) • TTY: 1-800-377-4950 • Email: HHSTips@oig.hhs.gov • Phone: 1-800-MEDICARE • (1-800-633-4227) • TTY: 1-877-486-2048 Callers are encouraged to provide information on how they can be contacted for additional information, but they may remain anonymous if they choose.

30. SummaCare Compliance Hotline • SummaCare investigates all reported cases of fraud and abuse. • Compliance hotline: 330-996-8821 or 1-800-361-3908 • Available 24 hours a day, 7 days a week • May leave your name, number, and other info, or may remain anonymous. Either way, please include the following: • The reason you believe that a fraudulent or abusive situation has occurred. • Information regarding the situation in question. • The name of the individual, provider or group that may have committed fraud or abuse. • The date(s) that the situation has occurred.

31. The following section is the appendix. Appendix

32. Online Resources • CMS’ Prescription Drug Benefit Manual • http://www.cms.hhs.gov/prescriptiondrugcovcontra/12_PartDManuals.asp • Code of the Federal Register (see CFR 422.503 and CFR 423.504) • http://www.cms.hhs.gov/quarterlyproviderupdates/downloads/cms4124fc.pdf • Office of the Inspector General • http://www.oig.hhs.gov/ • Medicare Learning Network (MLN) Fraud & Abuse Job Aid • http://www.cms.hhs.gov/MLNProducts/downloads/081606_Medicare_Fraud_and_Abuse_brochure.pdf

33. The Cost of Healthcare Fraud • U.S. spent $2.2 trillion on health care in 2007 • Estimates suggest that 3%-10% of health care dollars are lost to fraud1 If 5% is the correct figure, that means the U.S. lost about $100 billion to health care fraud in 2007 alone – or about $300 million per day.

34. Prescription Drug Fraud • Prescription drugs constitute approximately 10% of all health care spending1. 1http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=56280

35. Risks to Individuals How does fraud harm individuals? • Unnecessary procedures may cause injury or death • Falsely billed procedures create an erroneous record of the patient’s medical history • Diluted or substituted drugs may render treatment ineffective or expose the patient to harmful side effects or drug interactions • Prescription narcotics on the black market contribute to drug abuse and addiction

36. Examples of Risks for Wholesalers • Counterfeit and adulterated drugs through black and grey market purchases • This includes but is not limited to fake, diluted, expired, and illegally imported drugs. • Diverters • Brokers who illegally gain control of discounted medicines intended for places such as nursing homes, hospices and AIDS clinics. Diverters take the discounted drugs, mark up the prices, and rapidly move them to small wholesalers. In some cases the pharmaceuticals may be marked up six times before being sold to the consumer. • Inappropriate documentation of pricing information • Submitting false or inaccurate pricing or rebate information to or that may be used by any Federal health care program.

37. Examples of Risks for Pharmaceutical Manufacturers • Lack of integrity of data to establish payment and/or determine reimbursement • Inappropriate documentation of pricing information: Manufacturers must maintain accurate and complete documentation of their pricing information. • Kickbacks, inducements, and other illegal remuneration • Inappropriate marketing and/or promotion of products (sales, marketing, discounting, etc.) reimbursable by federal health care programs. • Inducements offered if the purchased products are reimbursable by any of the federal health care programs. Examples of potentially improper inducements include inappropriate discounts, inappropriate product support services, inappropriate educational grants, inappropriate research funding, or other inappropriate remuneration.

38. Examples of Risks for Pharmaceutical Manufacturers, Cont’d. • Formulary and formulary support activities • Examples of potential fraud and abuse include inappropriate relationships with formulary committee members, payments to PBMs, and formulary placement payments in order to have manufacturer’s products included on a Plan’s formulary. • Illegal off-label promotion: Illegal promotion of off-label drug usage through marketing, financial incentives, or other promotion campaigns. • Illegal usage of free samples: Providing free samples to physicians knowing and expecting those physicians to bill the federal health care programs for the samples.

39. Examples of Risks for Pharmaceutical Manufacturers, Cont’d • Inappropriate relationships with physicians • “Switching” arrangements, when manufacturers offer physicians cash payments or other benefits each time a patient’s prescription is changed to the manufacturer’s product from a competing product. • Incentives offered to physicians to prescribe medically unnecessary drugs. • Consulting and advisory payments, payments for detailing, business courtesies and other gratuities, and educational and research funding. • Improper entertainment or incentives offered by sales agents.

40. Administrative Sanctions • Denial or revocation of Medicare provider number • Suspension of provider payments • Addition to the OIG List of Excluded Individuals/Entities (LEIE) • License suspension or revocation • Civil Monetary Penalties

41. Civil Monetary Penalties (CMPs) • The Social Security Act authorizes the imposition of CMPs when Medicare determines that an individual or entity has violated Medicare rules and regulations. • Typically, penalties involve assessments of significant damages such as CMPs up to $25,000 for each Medicare Advantage enrollee directly affected.

42. Civil Litigation and Settlements • The United States’ Attorney’s Office may file a civil suit or decide that the interest of the Medicare Program is best served by settling a case out of court. • The civil suit or settlement may include a Corporate Integrity Agreement (CIA). • A CIA requires the individual or entity to accomplish specific goals (e.g. educational plan, corrective action plan, reorganization) and be subject to periodic audits by the federal government.

43. Possible Civil and Criminal Penalties • False Claims Act • For each false claim: $5,500-$11,000 • If the government proves it suffered a loss, the provider is liable for three times the loss • Up to five years in prison and fines of up to $25,000 for violations of the Anti-kickback Statute • If a patient suffers bodily injury as a result of the scheme, the prison sentence may be 20+ years

44. Acknowledgement SummaCare gratefully acknowledges Health Care Administrative Solutions, Inc. for granting permission to reproduce the content of this course. Original content available at: http://www.hcasma.org/MedicalTraining.aspx