The government’s intervention in a whistleblower’s federal False Claims Act case in Alabama(United States ex. Rel Dawn Richardson et al v. Golden Gate Ancillary LLC et al., 09 cv 627, ND Ala.) – which was recently made public  – signals that the government has jumped into the deep end feet first in its self-proclaimed effort to combat fraud in the hospice context.  What remains to be seen is how successful these efforts will ultimately be. 

In this case, the government alleges that Golden Gate Ancillary LLC (doing business as Aseracare Hospice) misspent millions of Medicare dollars by admitting and billing for Medicare beneficiaries whom the company well-knew were not terminally ill and did not otherwise qualify for this expensive end-of life care, and consequently caused the submission of numerous false claims to the federal government for unnecessary health care services..  One of the complaint’s allegations is that although hospice care is limited to patients with a prognosis of six months or less to live, several of the defendant’s hospice patients in fact lived longer than six months and some were well enough to be released back to skilled nursing facilities.

On first glance, these allegations are not particularly different distinctive from those levied in other Flase Claims Act cases.  However, when you stop and consider the government’s assertions more carefully – with an eye to what they will ultimately be proving –  a key distinction emerges. 

End-of-life care is materially different.  Why?  One reason is that everyone deals with end-of-life on some level – either in terms of contemplating their own death (and thinking about how they want to be treated) or in terms of dealing with dying loved ones.  As the recent furor over alleged federal death panels in the context of the health care reform debates made clear, absolutely no one, regardless of their political views, thinks it is a good idea for the government to determine who can live and die in terms of the provision of health care services.

This emotional, almost visceral, reaction to the suggestion of government involvement in such a personal issue illustrates what the government is likely to encounter in these cases.  To prevail, the government will have to prove that some individuals got end-of-life care to which they were not entitled, or put another way, care that was just too expensive. 

The problem for the government, however, is that expensive end-of-life care is something that most people want for themselves and undoubtedly hope to provide for their loved ones.  No one really wants the government telling them that they cannot have it or that their relatives do not qualify.

Second guessing end-of-life decisions of doctors and well-meaning relatives is not something that a jury or judge will do lightly.  Nor are these decisions akin to the kinds of decisions involved in more routine False Claims Act cases – such as whether a doctor cut toe nails but billed for surgery.  Those kinds of cases are unemotional and, relatively speaking, can be fairly black and white.

Any hospice defendant worth its salt can produce grieving relatives of former (now deceased) hospice residents who will be prepared to testify about how wonderful the doctors and nurses were at XYZ company to their relative during the last days of their lives. 

Evidence that patients who were in care lived beyond the expected 6 months and even were released back to Skilled Nursing Facilities is also a double-edged sword.  While one conclusion from this sort of evidence could be that the patient did not qualify for hospice in the first place, another equally plausible explanation is that the patient received such good care in the hospice setting that they became stable or improved.  Thus, a logical defense (which does not even need to be explicitly mentioned) is that the government believes a false claim was filed because a hospice provided such good care that its nurses and doctors extended a dying patient’s life.  What relative wouldn’t be thrilled that their dying relative recovered or lived longer than expected? 

In the Golden Gate case, the government appears to try to blunt this emotional reaction by teeing up an emotional argument of its own:  Medicare is paid for by US taxpayers so you, members of the jury, are subsidizing unnecessary care.  Indeed, a reference to citizens (a/k/a jurors) paying for Medicare appears repeatedly in the government’s complaint in intervention. 

 There is nothing subtle about this strategy.  What remains to be seen is whether it works.  Second guessing end-of-life care — including its necessity — is hard business fraught with shades of grey.  That being said, neither party can be confident of the outcome:  as the old adage goes, there is nothing certain except death and taxes.  This case, of course, has both.

• Additional resources.
• Clearer regulations :)
• Increased stakeholder support for compliance activities.
• More predictable and quicker voluntary disclosure processes.
• A better way to keep track of regulatory developments and new business arrangements.
• Acknowledgement by regulators and enforcers that mistakes happen and not everything is fraud. 
• More compliance involvement in proposed transactions and arrangements – before they get done.
• The ability to learn about potential compliance concerns before they turn into more significant problems.

 What would you add to the list?

1. Regardless of what happens with the health care reform law, the current market forces toward collaboration, integration, efficiency and quality will continue.
2. At the same time, there will be much more Stark and Anti-kickback enforcement as the government steps up its scrutiny of hospital-physician relationships.
3. Medicaid enforcement will increase dramatically as the federal government pressures the states and the states endeavor to deal with funding pressures.
4. HIPAA enforcement will increase, and there will be more unfortunate and costly breaches as we implement more electronic records.
5. The DOJ/HHS HEAT initiative will ensnare some mainstream, institutional providers.
6. The HHS-OIG will more aggressively target hospitals through its current intensive hospital audits.
7. Many of the Implantable Cardioverter Defibrillator (ICD) investigations of hospitals across the country will be resolved.
8. The government and whistleblowers will increasingly target long term care, home health and community care.
9. While there will be large hospital settlements, device and pharmaceutical companies will write the biggest checks.
10. The HHS-OIG will seek to exclude more individuals who are associated with organizations that had compliance lapses.
11. The Health Care Compliance Association (HCCA) will continue to grow steadily and to serve its members’ needs assiduously.
12. There will be increased demand for strong compliance professionals as smart leaders continue to recognize their value.

What are your predictions?

One of the more challenging and rewarding aspects of being a health care attorney is taking a complex regulated environment and breaking it down in a way that is understandable, regardless of the audience.  In the compliance world, this means communicating the rules and how to follow them, the players and their influences and motivations. 

Over the weekend, while on a long car ride, my abilities to meet this challenge were put to the test by perhaps my toughest grader: my ten-year-old daughter. 

When she asked me what was keeping me so busy at work, I gave her my regular elevator speech:

I help people who provide health care to follow the rules and I defend them when somebody says they didn’t.

Being the precocious observer that she is (and because she has heard that a few times before), she found that answer to be completely unsatisfactory.  Pushing further, she asked: “Why is it so hard to follow the rules?”  After all, she doesn’t have any problem doing so, whether at home or school.  (Fortunately, this happens to be true.) 

I then explained what’s going on right now with Medicare and Medicaid enforcement.  Loving to sketch as she does, she took my words and put them into pictures.  When we arrived at our destination, she handed me this:

Enforcica

We recently took a family trip to Spain, where we saw some wonderful art, including that of Picasso.  In discussing his famous work Guernica, Picasso said:

. . . this bull is a bull and this horse is a horse… If you give a meaning to certain things in my paintings it may be very true, but it is not my idea to give this meaning. What ideas and conclusions you have got I obtained too, but instinctively, unconsciously. I make the painting for the painting. I paint the objects for what they are.

So, what do you see?  I’d be interested in your interpretive comments.  For now, I’m calling the piece Enforcica.

My colleage and blog co-editor, Rebecca Jones McKnight, wrote a clever and interesting Feature Focus in the December 2011 issue of the Health Care Compliance Association’s monthly publication, Compliance Today.  She wonders whether CMS is looking at Medicaid providers the way we looked at ants when we were kids.  (I’ll give you a hint:  it involved various uses of magnifying glasses . . .)  You can read it here.

• The compliance function is a cost center.
• The odds are small that this will become a problem.
• Compliance Officers make a mountain out of a mole hill.
• We are an ethical organization and therefore don’t need to dedicate resources to compliance.
• We are too important  — nobody will ever dare to come after us.
• Our reputation will protect us.

These are risky pushback themes that engender substantial financial, legal and reputational costs in a high percentage of cases.  The better question is, What is the price of a compliance failure?

While we don’t know all of the facts about the current Penn State situation and we should never assume or judge, the circumstances already validate some transcendent truths about compliance.  Organizations cannot simply “check a box” indicating that they have policies or that they technically fulfill legal requirements.  Action and inaction have consequences, and those consequences are not abstract principles — they are real.  What lessons can we learn?

• Leaders must insist on developing a culture of compliance that permeates an organization.
• Much is expected of powerful leaders.
• Not speaking up when there is a compliance concern can be costly for you and your organization.
• Looking the other way because you fear losing your job is not a good strategy.
• Going through the normal chain of command does not always absolve someone of responsibility.
• You can lose a solid reputation, which was built over generations, in a nanosecond.
• Compliance training is essential.  If individuals are not trained to recognize signs of potential concerns and empowered to raise them, serious problems can flourish.
• One unfortunate decision can lead to cascading consequences that are far more damaging than the initial problem.

Look for more insights as the facts come out.  We will tally up the price of compliance failures later.

For now, here’s a challenging question: 

What are you doing in your organization to avoid running afoul of these realities?

I appreciate your interest in The Health Care Compliance Blog.  Because I recently joined DLA Piper as Chair of the Health Care Enforcement and Compliance practice,  I have moved the blog to my firm’s platform.  This will allow for more robust content from a wider array of DLA Piper authors.

The blog is now called Health Care Enforcement and Compliance Matters blog to better reflect the issues it covers.

If you have subscribed to posts by email, you will continue to receive them.  Also, you can still access the blog directly and through the RSS feed.

I am always glad to hear from colleagues about topics they would like us to address on the blog. Please contact me if you have some ideas.  

Thanks for your continued interest and support.

Regards,
Frank Sheeder

The current standards were promulgated in September 1994, in the aftermath of the last big health care reform effort.  It is telling that, among all of the many things OIG and CMS could be doing right now, OIG has once again focused on this issue.  It also supports my other theme:  “When reform doesn’t work, the enforcers step in.” I don’t say this to make a political statement about reform, but rather simply to make the obvious observation that a variety of stakeholders are disappointed with the state of reform — whether they are pro- or anti-PPACA.  The one thing we can all seem to agree on, however, is that there is too much “fraud.”  So regardless of what happens with reform, the enforcement will continue to increase, just like it did after the reform efforts in 1994.

The proposed rules apply to state Medicaid Fraud Control Units (MFCUs), which must investigate and prosecute Medicaid fraud cases under state law, on a statewide basis.  If a state has a “certified” MFCU, the federal government pays 75% of the cost to run it.  Accordingly, it is beyond question that when these standards become final, states will step up their MFCUs’ efforts to meet them.  That can portend trouble for unwitting providers.

There are the 13 numbered Performance Standards under which a MFCU must do the following:

1. Compliance With Requirements: Comply with all applicable statutes, regulations, and policy directives.
2. Staffing:    Maintain reasonable staff levels and office locations in relation to the State’s Medicaid program expenditures.
3. Policies and Procedures: Establish written policies and procedures for its operations and ensure that staff are familiar with, and adhere to, them.  They must include “a process for referring cases, when appropriate, to Federal and State agencies.
4. Maintaining Adequate Referrals: Take steps to maintain an adequate volume and quality of referrals.
5. Maintaining a Continuous Case Flow: Take “steps to maintain a continuous case flow and to complete cases in an appropriate time frame based on the complexity of the cases.”
6. Case Mix: The case mix, as practicable, should cover all significant provider types and contain a mix of fraud and patient abuse and neglect cases.
7. Maintaining Case Information: Maintain case files in an effective manner and develop an efficient case management system.
8. Performance Outcome and Measurement: A process for monitoring and measuring the outcome of cases.
9. Cooperation with Federal Authorities on Fraud Cases: Cooperate with OIG and other Federal agencies in the investigation and prosecution of Medicaid and other health care fraud.
10. Program Recommendations: Make statutory or programmatic recommendations to the State government.
11. Agreement With Medicaid Agency: Periodically review the Memorandum of Understanding between the MFCU and the State Medicaid Agency.
12. Fiscal Control: Exercise proper fiscal control over MFCU resources.
13. Training: Maintain an annual training plan for all professional disciplines.

The most concerning Performance Standards for providers are numbers 4, 5, 6, and 9.

What should providers do in light of yet another indication that regulators and enforcers will be renewing their Medicaid providers?

• Identify or develop internal Medicaid experts who understand the requirements and expectations.
• Do a Medicaid risk assessment, and consider doing it under attorney-client privilege and work product protection.
• Act on the risk assessment and shore up your policies, procedures, education and monitoring.
• Get to know your friendly local Medicaid auditors, investigators and enforcers.
• Build relationships with counsel who understand Medicaid compliance and enforcement, so they will be available as these initiatives are put into action.  It’s always better to have these relationships before you need them.

• There were $92.3 million in identified and corrected improper Medicare payments.
  • $75 million were overpayments.
  • The RACs returned $17 million in underpayments.  That’s 18% of the identified improper payments, which is much better than the 4% identified underpayment rate in the pilot project.
  • Region D was the clear “winner” with $43.4 million in recoveries followed by Regions C ($27.5 million), B ($15.5 million) and A ($5.9 million).  According to CMS, the contractors for Regions D (Connolly) and C (HDI) did better because they had previous experience.
• Over half of the recovered overpayments were from inpatient claims ($41 million).  The rest were represented by DME ($19 million), outpatient ($9 million), physician ($5 million), and SNF, home health and other claims ($900,000).
  • Here are the top issues by Region:
    • Region A:  Ventilator support of 96+ hours
    • Region B:  Extensive Operating Room Procedure Unrelated to Principal Diagnosis
    • Region C:  DMEPOS provided during an inpatient stay (billing for bundled services separately)
    • Region D:  DMEPOS provided during an inpatient stay (billing for bundled services separately)
• The average overpayment recoverd was $408.
• The RACs identified and demanded repayment of $136 million in repayments, so there is still $61 million, or 45% of the indentified overpayments, to be recovered.
• Providers only appealed 8,000 claims, which is only about 5% of the identified overpayments. They prevailed in half of the appeals.

Here are the tables showing the recoveries by State.  (It’s good to be in West Virginia. . . .)

The report is called  Implementation of Recovery Audtiting at the Centers for Medicare & Medicaid Services.  It’s worth a read.

I just returned from the HCCA/AHLA Fraud & Compliance Forum which was, as usual, a strong conference. One of the resounding themes was the government’s growing emphasis on holding health care executives and board members responsible for organizational non-compliance. The effort is no longer aimed solely at people who are associated with drug and device manufacturers — it has spread to provider organizations as well.

In the current enforcement environment, senior leaders and directors can expect:

• To be questioned by regulators and enforcers
• To be investigated for what they knew, should have known, or could have done to stop organizational misconduct
• To face the threat of permissive exclusion (there are 20 statutory bases for permissive and mandatory exclusion)

As mentioned in previous posts, the OIG has testified and published guidance about its permissive exclusion authority in October 2010. See OIG Holding Individuals Accountable for Orgs’ Non-Compliance; OIG Focusing on Exclusion of Individuals –Modern Healthcare. The OIG’s promulgations are required reading.

What should compliance professionals do?

• Explain these trends and risks to senior leaders and directors; get lawyers or other “external prophets” involved if your message is not getting through
• Communicate more extensively with leaders and directors about compliance issues
• Respond promptly to potential non-compliance; the new 60-day “report and repay” provisions make this even more critical

Don’t be shy about asking for more resources if there are gaps in the compliance infrastructure or insufficient resources (I know this last one is tough, but the stakes are high)