fraud and medicare compliance - psow 2015

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Fraud & Medicare ComplianceThomas N. Shorter, Esq., FACHE

1PSOW 28th Annual WorkshopSeptember 23, 2015Tundra Lodge Hotel & Convention CenterGreen Bay, WI

OverviewLegal FrameworkGovernmental OversightOther groups to knowLaws to Know

Recent Fraud Activity

Compliance Program Guidance 2

Legal Framework - Governmental OversightFederalOIG Office of Inspector GeneralDHS - U.S. Department of Health & Human ServicesDOJ Department of JusticeCMS Center of Medicare/Medicaid ServicesStateAG - Wisconsin Attorney Generals OfficeDHS - Wisconsin Department of Health ServicesOIG - Office of Inspector General


Additional Groups to KnowZPICs Zone Program Integrity ContractorsPrimary goal to identify cases of suspected fraud, develop them thoroughly and in a timely manner, and take immediate action to ensure that Medicare Trust Fund monies are not appropriately paid out and that any mistaken payments are recouped.

ZONE 3 Cahaba Safeguard AdministratorsOperational April 24, 2012IL, IN, KY, MI, MN, OH and WI


Additional Groups to Know cont.RACs Recovery Audit Contractors

To identify and correct Medicare improper payments through the efficient detection and collection of overpayments made on claims of health care services provided to Medicare beneficiaries, and the identification of underpayments to providers so that the CMS can implement actions that will prevent future improper payments in all 50 states.5

Laws to Know6Anti-kickback Statute

False Claims Act

Laws to Know - Anti-kickback Statute42 U.S.C. 1320a-7b.

Unlawful to: knowingly and willfully, solicit or receive any remuneration (directly or indirectly, overtly or covertly, in cash or in kind).

In return for referring any item or service reimbursable by federal health care programs, or purchasing, leasing, ordering or arranging for (or recommending any of the same) any good, facility or service reimbursable by federal health care programs.


Laws to Know - Anti-kickback StatuteUnlawful to: Knowingly and willfully, offer to pay any remuneration (directly or indirectly, overtly or covertly, in cash or kind).

To induce: Referring for any item or service reimbursable by federal health care programs, or purchasing, leasing, ordering or arranging for (or recommending any of the same) any good, facility or service reimbursable by federal health care programs.8

Law to Know Anti-kickback Statute

3 necessary elements:Intentional ActDirect and Indirect Payment of RemunerationTo Induce the Referral of Patients or Business9

Laws to Know - Anti-kickback StatuteStatutory Exceptions and Safe HarborsDiscounts;Employees;Group Purchasing Organizations;Sale of a practice;Referral Services;Warranties;Investment Interests;Space Rental;Equipment Rental;Personal Services and Management Contracts; andWaiver of Deductibles and Coinsurance.10

What is Remuneration?An extremely broad scope, whether in case or in kind, and whether made directly or indirectly, including:Kickbacks;Bribes;Rebates;Gifts;Above or below market rent or lease payments;Discounts;Furnishing of supplies, services or equipment either free, above or below market;Above or below market credit arrangements; andWaiver of payment due.11

Laws to Know - False Claims Act31 U.S.C. 3729-3733 Lincoln Law

Prohibits a person from knowingly submitting claims or making a false record or statement in order to secure payment of a false or fraudulent claim by the federal government.

A person:has actual knowledge of the information,

acts in deliberate ignorance of the truth or falsity of the information, and

acts in reckless disregard of the truth or falsity of the information.


Laws to Know False Claims Act cont.Key elements

False ClaimsIntentMaterialityCausation13

Laws to Know False Claims Act cont.Key Healthcare TheoriesUpcoding/billing for Services not RenderedFalse Certification of Compliance with RegulationsQuality of Care/Worthless ServicesImproper Retention of OverpaymentsCausing submission of False Claims

Does not cover false tax returns.14

Recent Fraud ActivityFlorida - 9 hospitals agreed to a $6.2M settlement for allegations of billing Medicare for unnecessary ambulance transports.

California 5 ambulance companies agreed to settle kickback allegations for $11.5 M.

Pennsylvania ambulance company developed a Medicare fraud scheme of $2 million in inappropriate bills.


Recent Fraud Activity cont.Connecticut 2 ambulance services will pay $595,000 to resolve inappropriately billing Medicare and Medicaid.

Wisconsin MTM recently audited by DHS after receiving complaints by Medicaid and BadgerCare Plus members throughout the State.16

Compliance Program Guidance for Ambulance SuppliersFederal Register, Vol. 28, No. 56,March 24, 2003, 14245-14255.

Basic Elements:Development of Compliance Program.Designate a Compliance Officer and Committee.Conduct effective training and education.Develop Internal Monitoring and Reviews.17

Compliance ProgramBasic Elements (continued)Respond Appropriately to Detected Misconduct.Develop effective lines of communication.Conduct internal auditing and monitoring.Enforce standards through well-publicized disciplinary guidelines.Respond promptly to detecting offenses and take appropriate corrective action.18

Thomas N. Shorter, Esq., FACHEOne East Main Street, Suite 500Madison, WI 53703608.284.2239, tshorter@gklaw.com19

The presentation and materials are intended to provide information on legal issues and should not be construed as legal advice. In addition, attendance at a Godfrey & Kahn, S.C. presentation does not create an attorney-client relationship. Please consult the speaker if you have any questions concerning the information discussed during this seminar.


Thank You


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