PRACTICAL SIDE OF INVESTIGATING AND REPORTING OVERPAYMENTS

1. PRACTICAL SIDE OF INVESTIGATING AND REPORTING OVERPAYMENTS ABA Health Law Section Emerging Issues in Healthcare Law February 24, 2012 San Diego, California Bill Mathias Ober | Kaler410-347-7667wtmathias@ober.com

2. Now What Do I Do?

3. Why Are Internal Investigations Important? • Increasing promotion of self-identification and self-disclosure • 60-day repayment of overpayments & potential FCA liability • Enforcement remains aggressive • Federal Level • State Level • Government view Fraud, Waste, and Abuse as a significant source of revenue

4. When Must You Investigate? • Any time there is: • An allegation of a violation of law. • A suggestion of improper conduct. • A potential for an overpayment by the government. • A potential for a significant overpayment by a commercial insurer or other third-party payor. • A potential for whistleblower activity.

5. How Much Must You Investigate? • Depends on the facts. • Initially, need to investigate enough to gauge the credibility of the allegation. • Believable on its face • Documentary evidence exists • Dollar amount of potential exposure impacts practical decisions regarding scope, depth, and personnel involved in investigation.

6. Who Should Investigate? • Depends on the type of issue: • Human resources issues (such as sexual harassment or discrimination) – investigated by HR Department and/or employment counsel. • Other general issues (non-criminal in nature, unlikely to result in substantial civil liability) – initially investigated in-house. • Consider whether attorney-client privilege may be important? If so, involve counsel (in house or outside).

7. Who Should Investigate? • Criminal issues or issues likely to result in significant civil liability (whistleblower situations, high dollar overpayments, systemic problems) – shouldn’t be investigated without legal counsel. • Attorney-client privilege important – may want outside counsel involved to strengthen argument supporting attorney-client privilege.

8. Conduct Your Investigation

9. Results of Your Investigation • No problem  Done!!! • Problem  Fix it???

10. Fix The Problem • Take corrective action • Assess existing compliance process and policies to identify shortfalls • Discipline responsible employees, as appropriate • Add policies, procedures, or reporting layers as necessary to prevent reoccurrence

11. Now What? • Need to discuss with client: • Whether the past conduct needs to be reported • If so, to whom?

12. Disclosure Calculus • Decision to disclose is a business decision – weighing potential risks and benefits. • Where available, disclosure offers protections too significant to pass up • Useful for substantial violations of law • More difficult question for more minor or isolated violations – time + expense • Continuing focus on compliance programs, good faith cooperation, and prompt disclosure

13. What Gets Disclosed Where? • To OIG – only “potential fraud against the Federal health care programs, rather than merely an overpayment.” • “Potential fraud” does not include Stark only violations – must be at least a “colorable” AKS violation • To CMS – Stark only violation • To Contractor – “merely an overpayment” • To U.S. Attorney’s Officer – depends • To State – depends on state laws • NY OIG has been aggressive in seeking disclosures

14. Practical Issues with Proposed 60-Day Rule

15. Good & Bad of Investigations • Good news • CMS recognized importance of investigating before overpayment can be identified and 60-day clock violated • Bad news • Must conduct “reasonable inquiry” to determine if overpayment exists • Not sure what it means to investigate with “all deliberate speed”? • Do you have to investigate all reports of overpayments?

16. Anti-kickback Violations • Claims submitted in violation of AKS • Don’t meet conditions of payment • False or fraudulent claims • Overpayment

17. Anti-kickback Violations (cont.) • Party submitting claim is unaware of improper arrangement • No overpayment “identified” • No reporting requirement

18. Anti-kickback Violations (cont.) • Party submitting claim has “sufficient knowledge” of arrangement • Obligation to report overpayment • BUT repayment obligation suspended • CMS will refer matter to OIG • CMS expectation that OIG would seek repayment from parties to kickback scheme, NOT “innocent” provider reporting overpayment • Doesn’t close the door – “the government may always seek repayment of claims paid that do not satisfy a condition of payment.”

19. OIG Disclosure & 60-Day Rule • Disclosure to OIG tolls 60-day repayment clock • When OIG acknowledges acceptance into program • Time lab between submission and acceptance • Disclosure to OIG satisfies 60-day reporting obligation

20. Self-Referral Disclosure Protocol& 60-Day Rule • Disclosure to CMS under SRDP tolls 60-day repayment clock • When CMS acknowledges acceptance into SRDP • Time lab between submission and acceptance • Disclosure to CMS under SRDP does NOT satisfy 60-day reporting obligation • Still must report under 60-day rule • CMS seeks comment

21. Pending Gov’t Investigation • Rule doesn’t address effect of pending government investigation on 60-day repayment obligation • Is this part of investigation with “all deliberate speed”? • Presumably provider and gov’t disagree on overpayment amount • Is overpayment not quantified and thus not “identified”?

22. Formalized Refund Policy • Use current contractor refund process • CMS to develop uniform reporting form “eventually” • Forms ask for claim numbers • Claim numbers may not be readily available, especially if refund based on statistical sampling • Will letter to contractor describing the problem and including a check be sufficient?

23. Probe Samples & 60-Day Rule • Probe sample shows overpayments • Further investigation conducted • Full sample required • When does 60-day repayment clock start to run on probe sample?

24. Why 10 Year Look-back? • Current 4 year reopening on claims • FCA statute of limitations is 6 years • FCA statute of repose is 10 years • Why should look-back be 10 years? • “further our interest in ensuring that overpayments are timely returned to the Medicare Trust Fund.” • If you reach FCA settlement of billing issue going back 6 years, do you have overpayment liability for remainder of 10 year look-back?

25. Practical Problems of 10 Year Look-back • Difficult to investigate issues back 10 years • Need to consider how laws, regulations, and other guidance changed over 10 years • Need to expand record retention requirements

26. Final Words of Advice “Be careful out there”

27. QUESTIONS? Bill Mathias Ober | Kaler410-347-7667wtmathias@ober.com