The “Pith” of Fraud and Abuse Compliance

The “Pith” of Fraud and Abuse Compliance
There has been a great deal of talk about fraud and abuse compliance for many years. Anecdotally, despite all of the discourse, dissertation, exhortation, harangue, and horrifying enforcement actions, there are still a number of providers who just don’t seem to get it! In a speech at the Health Care Compliance Association 2019 Compliance Institute; on April 8, 2019; Joann Chiedi, Principal Deputy Inspector General, provided some pithy statements that may help bring the issues into focus as follows:
• My main message is this: Be bold. Take action. Compliance must have a seat – and a voice – at the innovation.
• We cannot oversee what we do not understand. Effective oversight requires understanding how healthcare is delivered today and how it will be delivered in the future.
• Give Compliance the data. If anyone in your organization has data, Compliance should have access to it, too.
• Compliance and innovation must advance together. Compliance can and will play a big part in getting innovation right in healthcare.
• If you want to predict and manage risks, if you want to delve beyond what happened, to explore why, give Compliance data, give them C-suite support, and freedom to do their jobs.
• Oversight and compliance professionals are working to ensure that the rules of the road are followed, that dollars are well spent, and that patients are protected. Like innovation, compliance never stops, should never become stagnant, and will be essential to the success of the new healthcare ecosystem.
• Businesses that plan to be around for more than fifteen to twenty years will embrace change. They will have their compliance professionals working shoulder to shoulder with their disruptive innovators.
• Create multidisciplinary teams with the flexibility and skills to work in new ways across your organization to identify and gain new insights into program vulnerabilities and how to address them.
• Use your organization’s data to identify compliance soft spots and liabilities before they come to government’s attention and potentially become bigger, more expensive problems.
• Set up a regular process for environmental scanning and prioritization of your compliance activities.
• Compliance leadership is about a clear vision, empowerment, being passionate so others can see that you care, so that they you are sitting at the table, your voice will be heard.
• Compliance and oversight must be forethoughts, not afterthoughts.
• Getting in early and often can avoid costly mistakes and retrofitting down the road.
• Working with mission partners who share your passion for effective oversight makes a huge difference. It is not healthy or sustainable to go it alone.
There it is in a nutshell! Read and follow!

©2019 Elizabeth E. Hogue, Esq. All rights reserved.

No portion of this material may be reproduced in any form without the advance written permission of the author.

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Assisted Living Facilities and Independent Living Facilities: Valuable Sources of Referrals

Managers at assisted living facilities (ALFs) and independent retirement communities (ILFs) are often committed to keeping residents in their facilities for as long as possible. There are, of course, costs associated with filling vacancies. In addition, if residences remain empty for any length of time, the profitability of these types of entities can be severely adversely affected.

Consequently, to the extent that agencies can assist residents to remain in their homes, ALFs and ILFs may be extremely interested in establishing on-going relationships with private duty agencies, home health agencies, hospices and home medical equipment companies. ALF’s and retirement communities can be valuable referral sources for companies, both in terms of the volume of patients and the types of patients referred. Referrals from ALFs and ILFs can also be relatively cost-effective. With enough volume, providers can realize significant savings in staff members’ travel time and costs.

Management at ALFs and retirement communities often want to make referrals to a single or a few providers. The perception among managers of these types of facilities, whether true or not, seems to be that providers are more likely to assist them in meeting the goal of limiting resident turnover if they have preferred provider relationships with them. Providers may wish, therefore, to approach ALFs and ILFs to see if they are interested in these types of arrangements.

If they are, management of ALFs and ILFs may be interested in signing a Preferred Provider Agreement in order to cement relationships with providers. Providers that enter into Preferred Provider Agreements with ALFs and ILFs must be sure to take into account requirements for licensure of ALFs regarding patients’ right to choose providers that may vary from state to state. In addition, home care providers should also consider the following, in combination with Preferred Provider Agreements, in order to strengthen relationships with ALFs and ILFs:

  • Assign a coordinator/liaison to each ALF or ILF. There is no substitute for a regular “presence” at ALFs and ILFs on at least a part-time basis so that management and residents can rely more readily on the assistance of home care providers through access and developing relationships.
  • Lease space for the coordinator/liaison to occupy on a regular basis. A standardized Lease can be used for multiple relationships. In addition, Medicare certified providers must take into account requirements of the Medicare Program regarding branches, satellites/drop sites and multiple locations.
  • Providers should offer a full range of screenings and educational events for and about common chronic illnesses or community awareness activities. ALF’s and ILFs often ask providers to conduct educational events and basic screenings for common chronic conditions. Managers of ALFs and ILFs like to include the availability of these programs in their marketing efforts. Generally, providers may offer these activities if they walk a relatively fine line between engaging in community awareness activities and providing free skilled services to residents that exceed $15.00 in value at a time or $75.00 in the aggregate per year. At a minimum, such activities must be conducted consistent with a detailed policy and procedure that governs the provision of such services, so that providers do not violate the anti-kickback statute.

Establishing relationships with ALF’s and ILFs may result in numerous referrals to post-acute providers. Such relationships should be based on standard documents and comprehensive policies, as described above, in order to ensure compliance. Legal representation is essential for the development and implementation of these documents due to the complexity of the issues involved.

©2019 Elizabeth E. Hogue, Esq. All rights reserved.

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Providers v. UPICs and ZPICs: Another Chapter

Simply Home Health Care, a home health agency in Illinois, is suing the U.S. Department of Health and Human Services (HHS) and AdvanceMed, a UPIC, for continued suspension of payments from the Medicare Program in Simply Home Healthcare, LLC . Azar et al, Case No. 1:19cv-02313 in the U.S. District Court for the Northern District of Illinois. Simply Home Health Care filed a class action lawsuit in the U.S. District Court for the Northern District of Illinois on April 5, 2019. Payments to the Agency were originally suspended because of an overpayment. The Agency was later told by AdvanceMed that payments were suspended because of suspected fraud. The Agency says that AdvanceMed cannot support its claims of fraudulent conduct.

The suspension of payments from the Medicare Program was ultimately reversed many months later. According to AdvanceMed, however, the Agency owed the Medicare Program $5.4 million. The amount due to the Medicare Program was later reduced to $4.8 million. Based on the alleged overpayment, Simply Home Health Care was forced to go out of business in 2017.

The Agency claims that AdvanceMed did not correctly apply federal statutes and regulations. Simply Home Health Care also claims that AdvanceMed had incentives to do so in order to win additional contracts from the Centers for Medicare and Medicaid Services (CMS). The Agency also claims in its suit that many other agencies have experienced the same fate as it did and deserve to be compensated for their losses, too. The Agency, therefore, filed a class action on behalf of both itself and these other agencies.

This case is another “chapter” in the continuing saga of providers v. UPICs and ZPICs. So far, the results of these efforts have been mixed. In some instances, providers have been able to obtain temporary restraining orders (TROs) from sympathetic judges that prevented recoupments until after hearings by Administrative Law Judges (ALJs). The courts in Texas, for example, have been especially receptive to providers’ requests for assistance with huge overpayments. In other similar instances, however, Courts have been unwilling to provide any assistance to providers even though providers continue to go out of business because of extrapolated overpayments and their inability to financially withstand massive recoupments.

Faced with the loss of their businesses, providers must, of course, continue to seek assistance from the Courts. The stakes are high! Consequently, providers must continue to “knock at the door” seeking relief from devastating actions by the UPICs and ZPICs.

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U.S. Department of Labor Proposes Rules on Joint Employer Status under FLSA

The U.S. Department of Labor issued proposed rules on April 1, 2019, that are intended to revise and clarify the responsibilities of employers and joint employers in joint employer arrangements. These regulations are likely to be especially relevant to franchisors and franchisees of private duty agencies. The “heart” of the proposed regulations is a four-factor test to determine whether joint employers have joint and severable liability for employees’ wages.

The four-factor test to determine whether potential joint employers actually exercise certain powers and, therefore, are joint employers whether they:

  • Hire or fire employees;
  • Supervise and control employees’ work schedules or conditions of employment;
  • Determine employees’ rate and method of payment; and
  • Maintain employees’ employment records.

Major features of the proposed rule include:

  • Eliminates the “not completely disassociated” standard for situations in which employees work one set of hours for an employer that simultaneously benefits another person and replacing it with the above standard.
  • Clarifies that additional factors may be used to determine joint employer status, but only if they are indicative of whether potential joint employers are exercising significant control over the terms and conditions of employees’ work or acting directly or indirectly in the interest of employers in relation to employees.
  • Also clarifies that employees’ “economic dependence” on potential joint employers does not determine joint employers’ liability under the FLSA and identifies three examples of “economic dependence” factors that are not relevant to analysis of joint employer relationships including, but not limited to, whether employees: (1) are in specialty jobs or jobs that require special skill, initiative, judgement or foresight; (2) have the opportunity for profit or loss based on managerial skill; and (3) invest in equipment or materials required for work or employment of helpers.
  • Confirms that the ability, power, or reserved contractual right to act in relation to employees is not relevant to determine joint employer status.
  • Clarifies that indirect action in relation to employees may establish joint employer status.
  • Explains that the FLSA Section 3(d) only, not section (3)(e)(1) or 3(g) determines joint employer status.
  • Clarifies that an entity’s business model, such as operating as a franchisor, does not make joint employer status more or less likely.
  • Explains that certain business activities, such as sample employee handbooks provided to franchisees, do not make joint employer status more or less likely.
  • Emphasizes that certain business agreements, such as requiring employers to institute workplace safety measures, wage floors or sexual harassment policies, for example, do not make joint employment status more or less likely.

The proposed rules also include a number of examples intended demonstrate how the proposed rules would be applied. For example: Franchisor A is a global hospitality brand with several thousand hotels under franchise agreements. Franchisee B owns one of these hotels and is a licensee of A’s brand. In addition, A provides B with a sample employment application, a sample employee handbook, and other forms and documents for use in operating the franchise. The licensing agreement is an industry-standard document explaining that B is solely responsible for all day-to-day operations, including hiring and firing of employees, setting the rate and method of pay, maintaining records, and supervising and controlling conditions of employment. Is A a joint employer of B’s employees?

Application: Under these facts, A is not a joint employer of B’s employees. A does not exercise direct or indirect control over B’s employees. Providing samples, forms, and documents does not amount to direct or indirect control over B’s employees that would establish joint liability.

If finalized, these regulations are likely to be “good news” for franchisors of private duty agencies and others in the home care industry. Providers should weigh in on these proposed rules to help ensure that they are finalized.

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CMS Proposes to Advance Access to Health Data Through Revisions to CoPs for Hospitals

On February 11, 2019, the Centers for Medicare and Medicaid Services (CMS) issued proposed regulations to support MyHealthEData initiatives to improve patient access, and advance electronic data exchange and care coordination through the healthcare system. The purpose of the proposed regulations is to make patient data more useful and transferable through open, secure, standardized and machine-readable formats while reducing restrictive burdens on providers. In addition to these proposals, CMS released two Requests for Information (RFIs) to obtain feedback on interoperability and health information technology adoption in Post-Acute Care (PAC) settings. Among other changes, CMS proposes to change Conditions of Participation (CoPs) of the Medicare Program on discharge planning. These changes, if finalized, will apply to hospitals and critical access hospitals (CAHs).

Current CoPs for hospitals and CAHs include health and safety standards that are intended to help ensure effective care transitions for patients during the discharge process. CMS says that electronic notifications of the status of patients are a “proven tool” to improve transitions of care between settings and patient safety. While using these notifications is low-cost and easy to achieve using any electronic health record system, according to CMS, many hospitals have not developed capabilities and/or utilized these systems to send notifications to other providers and facilities to which they transition patients.

Consequently, CMS proposes to require hospitals, psychiatric hospitals and CAHs that participate in the Medicare Program to send electronic notifications when patients are admitted, discharged or transferred. If finalized, these notices may be especially helpful to home care providers. Anecdotally, providers have expressed concern that they do not know when patients are discharged so that they can resume care, if appropriate. A mandate for hospitals to provide such notice may assist home care providers of all types to provide better continuity and quality of care for their patients who have been hospitalized.

CMS also included several requests for information in the proposed regulations. Specifically, CMS is looking for ways to coordinate care across different healthcare settings while advancing interoperability. CMS is also asking for input on how it can promote widespread adoption of interoperable health IT systems for use across healthcare settings, such as post-acute care, including individuals receiving home and/or community-based services. Commenters who respond to the RFIs should provide clear and concise proposals that include data and specific examples. CMS will actively consider all input when developing future regulatory proposals and guidance.

CMS will undoubtedly continue to work at the issue of helping to ensure more effective care transitions across the continuum of care. Providers must get on board!

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OIG Says Hospitals can Provide Free In-Home Services to Discharged Patients

The Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS) posted Advisory Opinion No. 10-03 on March 6, 2019, which permits hospitals to provide free, in-home follow up care to discharged patients. The hospital that requested the Advisory Opinion developed a program to provide free, in-home follow-up care to patients with congestive heart failure and chronic obstructive pulmonary disease who are at higher risk for admission or readmission to a hospital.

In order to be eligible for the program, patients must meet the following requirements:

  • Patients must be currently admitted as inpatients, or receiving outpatient care and admitted as inpatients within the previous 30 days.
  • Clinical nurse leaders must identify patients at high risk for readmissions using risk assessment tools recognized throughout the industry to predict risks of unplanned readmissions or emergency department visits subsequent to hospital discharges.
  • Patients must arrange to receive follow up care at outpatient centers.
  • Patients must be willing to enroll in the program after consultation with clinical nurse leaders.
  • Patients must be discharged to, or reside at personal residences or assisted living facilities, in the hospital’s service area.

Eligible patients receive two visits in their homes from community paramedics each week for approximately thirty days following enrollment. The paramedics are employed by the hospital. The hospital will not bill any federal health care program for costs associated with the program.

During home visits, paramedics provide the following services:

  • Review patients’ medications
  • Assess patients’ need for follow-up appointments
  • Monitor patients’ compliance with discharge plans of care or patients’ disease management
  • Perform home safety inspections
  • Perform physical assessments; including checking patients’ pulse and blood pressure, listening to patients’ lungs and hearts, checking wounds, performing electrocardiograms, drawing blood and running blood tests using portable blood analyzers, and administering medications

The OIG analyzed this program and concluded that the free services are illegal remuneration or kickbacks under the federal anti-kickback statute. The OIG also concluded that there is no exception or “safe harbor” that permits hospitals to provide these services even though they are impermissible.

Nonetheless, the OIG said that it would not take enforcement action against the hospital for the following reasons:

  • The benefits of the program outweigh any risks of inappropriate patient steering that the anti-kickback statute was designed to prevent.
  • If the program works as intended, it is unlikely to lead to increased costs to federal health care programs or patients through overutilization or inappropriate utilization.
  • Risk that the program will interfere with or skew clinical decision-making is low.
  • The hospital does not advertise or market the program to the public, including on its website.
  • The scope and duration of services provided by the paramedics appear reasonably tailored to accomplish the hospital’s goals of increasing patient compliance with discharge plans, improving patient health, and reducing hospital inpatient admissions and readmissions.

The Advisory Opinion raises a number of significant questions for home care providers. Perhaps most importantly, the Advisory Opinion seems to completely ignore questions about state licensure and scope of practice. Does the use of community paramedics to provide services in patients’ homes amount to the provision of home care services without a license in those states in which licensure is required? This hurdle may, of course, be overcome if hospitals contract with home health agencies to provide these services instead of hiring paramedics. Another key question is whether patients in the program are eligible to receive home health or hospice services, but do not receive them because they enroll in this program. What if patients are already receiving home health, hospice and/or private duty services in their homes? The eligibility requirements don’t exclude patients who already receive these types of services. Will community paramedics provided by hospitals and home care staff be required to coordinate the care they provide to patients? If so, how will it be accomplished?

The Advisory Opinion seems to be another example of new interest in providing services in patients’ homes without understanding the home care industry. It’s great to be more valued, but a lack of knowledge remains!

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