impressing the judges performance and compliance in an environment of “presumed” non-compliance...

Impressing the JudgesPerformance and Compliance in an Environment of

“Presumed” Non-Compliance

Roger L. BatesManaging Member

9/27/12

Impressing the Judges

Session Overview

Review HRSA Site Visit Guidance for conducting operational and compliance related to the 19 core program requirements.

Review FTCA program and compliance

Heightened Compliance Reviews

• Funding for the Health Center Program has increased; doubled from approximately $1.3 billion to about $2.8 billion, FY 2002-FY2012.

• Additional $2 billion through the American Recovery and Reinvestment Act of 2009

• $2.2 billion HRSA received through the Patient Protection and Affordable Act.

Strings Attached

To continue receiving program funds, health center grantees must demonstrate compliance with core program requirements.

HRSA groups these 19 program requirements into four broad categories: patient need, the provision of services, management and finance, and governance.

Oversight

HRSA Oversight

HRSA relies on three main methods to oversee Grantee compliance with the 19 key program requirements:

1.Compliance reviews

2.Site visits

3. Routine communications

Beware: Stricter Scrutiny

On June 21, 2012, members of the U.S. Congress released a Government Accountability Office (GAO) report concluding that the Health Resources and Services Administration (HRSA) does not adequately oversee grantee compliance with the federal Health Center Program requirements.

The congressional representatives also sent HRSA a letter calling for immediate action to ensure more effective management of the Health Center Program.

In light of this increased scrutiny, HRSA is likely to reform its oversight process and impose stricter monitoring measures on Health Center Program grantees.

In enacting such reforms, it is possible that HRSA also may examine and increase monitoring of federally qualified health center (FQHC) look-alike entities under its purview, which do not receive grant funds but are required to meet Health Center Program requirements.

19 Key Program Requirements:

Making the Grade

HRSA provides project officers with a list of key factors and questions related to the 19 program requirements to consider

when making their assessment of compliance.

# 1 Needs Assessment

FQHC demonstrates and documents the needs of its target population, updating its service area, when appropriate

Does the grantee have written needs assessment?

Does the grantee have a clearly defined service area?

#1 Needs Assessment

Is the needs assessment comprehensive in terms of encompassing the entire service area? Should it be modified/expanded?When was last needs assessment completed/updated?Has grantee updated service area based on recent data (annual patient origin data)? If not, is it recommended?Have updates been reviewed and approved by Board?What priority needs were identified?What steps were taken to address priority needs?Does defined service area take into account geographic, demographic, or other relevant factors?Are there any concerns or issues around service area overlap?

19: #2 Required and Additional Services

FQHC provides all required primary, preventive enabling health services and additional health services, either directly or through established written arrangements and referrals

NOTE: FQHC requesting funding to serve homeless must provide substance abuse among their required services

# #2 Required and Additional Services

Does the center provide all required health center services?Is translation type appropriate for size/needs of grantee and are all documents in appropriate languages?Are the outside providers agreements documented with how service will be documented, how grantee will pay and bill for service, and how grantee’s policies and procedures include applicability of a sliding fee discount schedule?

#3 Staffing

FQHC maintains a core staff to carry out all required services.

Staff is licensed, credentialed, and privileged as appropriate.

#3 Staffing

Is the core staff appropriate for serving the patient population in terms of size and composition?

Are all providers appropriately credentialed to perform activities/procedures detailed in approved scope of project?

Are credentialing and privileging policies adequate so as to assure meet requirements?

#3 Staffing

Budget v. Actual staffing levelsPersonnel PoliciesPersonnel FilesJob and Position DescriptionsPerformance EvaluationsClinical StaffProvider Credentialing and PrivilegingEmployment ContractsStandard orientationStandard format for agendas and minutes of staff meetingsEmployee Satisfaction Surveys

#4 Hours of Operation

FQHC provides services at times and locations that assure accessibility and meet the needs of population to be served

•Are the times services provided appropriate to ensure access for population to be served?

•Are locations services provided accessible to population to be served?

#4 Accessible Hours of Operation

Additional times could be open to increase access?

Are hours posted in appropriate languages?

Is signage clear and appropriately placed?

Is size of facility adequate for size of population?

#5 After Hours Coverage

FQHC provides professional coverage during hours when center is closed

Requirements:

Is professional coverage for medical emergencies available to patients after center’s closed through clearly-defined arrangements?

#5 After Hours Coverage

What arrangements available

for after hours coverage?

Do all patients receive explanation for emergency care after hours?

Does phone system provide emergency information? In appropriate language?

After Hours Coverage

• At a minimum, the grantee should ensure telephone access to a clinician who can exercise professional judgment in assessing a patient’s need for emergency medical care and who can refer patients to an appropriate location for such care, including emergency rooms, when warranted.

• Grantee should have an established mechanism for patients needing care to be seen after hours in an appropriate location and ensure that health center clinicians conduct timely follow up with patients seen after hours.

#6 Hospital Admitting Privileges and Continuum of Care

FQHC physicians have admitting privileges at referral hospitals; if not possible, FQHC must firmly establish arrangements for hospitalization, discharge planning, and patient tracking.

•Do health center physicians admit and follow hospitalized patients?

•If not, is there a formal, written arrangements outlining arrangements for

hospitalization, discharge planning and patient tracking?

How is continuum of care ensured?

#7 Sliding Fee Discounts

FQHC has a system in place to determine eligibility for patient discounts adjusted on the basis of the patient’s ability to pay.

NOTE: No discount to patients with incomes over 200% of poverty guidelines. Full discount to those at or below 100%, and sliding scale to those between 100-200%.

#7 Sliding Fee Discounts

Are all patients provides service regardless of ability to pay?

Does center have established sliding fee discount schedule? Approved board policies? Based on most recent federal poverty guideline?

Are there signs for communicating availability of sliding fee discount for low income patients?

Does schedule of fees cover cost of all services?

Sliding Fee Discounts

• Grantee should have a fee schedule that provides varying levels of discounts on charges to patients with incomes between 101 and 200 percent of the federal poverty level.

• No fee or only a nominal fee that would not be a major barrier to care should be charged to patients with incomes at or below the federal poverty level.

• No discount should be provided to patients with incomes above 200 percent of the federal poverty level.

• Fee schedule must be based on the most recent federal poverty level guidelines.

#8 Quality Improvement Plan

FQHC has an ongoing quality improvement or quality assurance program that includes clinical services and management and that maintains the confidentiality of patient records.


QI/QA Program must :

•Include clinical services and management•Maintain confidentiality of patient records•Include clinical director focusing on QI/QA and high quality patient care•Include Periodic assessment of service utilization and quality of services by licensed health professionals under supervision of physician


Was QI program reviewed and approved by Board? When?Is health center accredited by national organization?Is center participating in HRSA Patient-Centered Medical/Health Home Initiative?Are roles/responsibilities of the board, Management staff and clinical director clearly defined in QI plan?Does QI plan address all operations areas of center for clinical, environmental, management, financial issues and patient experience?Does center have appropriate insurance coverage in place (like FTCA)? For general liability, D/O, malpractice, property, etc?How is risk management tracked?How are medical records supervised and maintained?Are QI audit reports provided to Board and others When deficiencies are identified, are there follow-up reports to Board and action plans implemented?

#9 Key Management Staff

FQHC maintained fully staffed health center management team for the size and needs of center

HRSA requires review on all final candidates for CEO/Exec Dir/Project Director positions.

#9 Key Management Staff

What is composition of management team?Are key management staff directly employed by center? If not,

what arrangements are in place?Are key strategic planning goals tied to performance

evaluations for senior mgmt staff?What is CEO’s professional background?Does clinical Director advise CEO and Board on clinical issues

and have lead responsibility for hiring/firing clinical staff?Are methods in place to ensure competency in key positions?What systems in place to manage multiple sites?

#10 Contractual Agreements

FQHC exercises appropriate oversight and authority over all contracted services, including assuring that any sub-recipient meets health care program requirements

Question: Do any of the center contracts have the potential to threaten the center’s integrity or limit its autonomy, or compromise its compliance with federal program requirements?

#10 Contractual Agreements

Do the center’s contractual arrangements:•Contain provisions about activity to be performed, time schedules, policies, and maximum amount of money center may become liable?•Require contractor to maintain appropriate systems and records and access?•Comply with federal procurement standards?•Include contract is subject to termination in event of breach?Does Board review/approve all new affiliations to maintain oversight?Is center able to address any specific legal or fiscal concerns related to contracts with their own legal counsel/auditor?

#11 Collaborative Relationships

FQHC makes effort to establish and maintain collaborative relationships with other health care providers in the service area

Secure letter of support from existing FQHC in the service area or explain why letter cannot be obtained

#11 Improving Collaborative Relationships

How could center strengthen working relationships with other nearby health centers, public health depts, private providers, rural health clinics, hospitals, other stakeholders?If center unable to secure letter of support from existing FQHC, what steps could take to improve relationship?Does center have any collaborative relationships that support ER preparedness and management plan/activities?

#12 Financial and Control Policies

FQHC maintains accounting and internal control systems for the size and complexity of the organization reflecting GAAP and separated functions to size to safeguard assets and maintain financial stability

Conduct annual independent audit including submission of corrective action plan with findings, questioned costs, reportable conditions, and material weaknesses cited in the Audit Report

#12 Improving Financial and Control Policies

Is there a monthly cash budget for center with monthly projections for at least 12 months?Are monthly financial statements prepared for review by finance committee and Board?Do last 3 monthly financial statements have adequate cash on hand, reasonable levels of AR and APAre expenses appropriately allocated?Does center have written purchasing and cash disbursement policies?Are accounting procedures adequate to result in financial results from operations?Does center know expected breakeven point for operations in terms of patient volume and mix to ensure viable fiscal operations?More…..

#13 Billing and Collections

FQHC has systems in place to maximize collections and reimbursement for its costs in providing health services, including written billing, credit and collection polices and procedures

#13 Billing and Collection

• Center should maintain documented billing and collections policies and procedures.

• Center must have the ability to bill Medicaid and Medicare.

• Center must make reasonable efforts to collect reimbursements from patients.

#13 Billing and Collection Improvement

Encounter Forms

Medicare/Medicaid

Other Third-Party Billing

Self-Pay

Accounts Receivable

#14 Budget

FQHC has developed a budget that reflects the costs of operations, expenses, and revenues (including federal grant) necessary to accomplish the service delivery plan, including number of patients to be served

#14 Improving Budget

Does center have capital plan?

Approved by Board?

If so, when?

Is annual budget reasonable in terms of accomplishing service delivery plan, in particular the project number of patients to be served?

#15 Program Data Reporting Systems

FQHC has systems which accurately collect and organize data for program reporting and which support management decision making

Does center have systems and capacity for collecting and organizing data required for UDS and FFR reporting and Clinical and Financial Performance Measure Forms?Is information used to inform and support management decisions?Does center have long term strategic plan?

#15 Program Data Reporting Systems

Officers are trained to pick 1-2 Required Clinical Measures to focus on and 1-2 Financial Measures.

Is there significant room for improvement?Is there a negative historical trend for performance measure suggesting intervention necessary?Is grantee committed to developing an action plan to improve performance on the selected measure?Current needs of staff, familiarity and accuracy of UDS reporting and FFR reportingFuture Needs – assessing HIT needs, EHR standards and meaningful use standards

#16 Scope of Project

FQHC maintains its funded scope of project including any increases based on recent grant awards

Any significant decreases in # of overall patients served, special populations served, providers or services available, sites?Has center received any other grant awards in last 5 years and were they successful?

#16 Scope of Project

Based on purpose of grant award received, are there market conditions not reflected in application that may impede goals, such as:•Growth in # of patients•Growth in # of patient visits•Addition of new services•Addition of new providers•Addition of new sites•Other expansions/ improvementsCurrent CapacityPlanned Expansions of service area/sitesOther Lines of Service / outside of scope

#17 Board Authority

FQHC Board maintains authority by:•holding monthly meetings and maintain minutes; •approving grant application and budget;•Selecting and evaluating performance of CEO;• Selecting services and hours of operation•Measuring and evaluating annual and long term goals; developing long-range plans; ongoing review of bylaws, and such•Establishing general policies of FQHC

#17 Board Authority Improvement

Monthly board packetsIs there standard format for agendas and minutes for Board meetings?Do bylaws specify expectations regarding meeting attendance and policies for removal of inactive members?When were bylaws last reviewed and approved?Corporate Compliance: approved plan? Committee? Compliance officer?Which senior management staff attends meetings?Does Board have a self-evaluation process?

#18 Board Composition

FQHC Board must meet statutory requirements:•Patient-centered majority (51% of board members are patients, receiving services at health center) who are reasonably representative of patient community in race, ethnicity and sex•Composed of 9-25 members, which comply with bylaws and size appropriate for organization and diversity of community served•Remaining board members must be representative of community and service area with at least one member with expertise in community affairs, local govt, finance, legal affairs, trade unions, business, social services or health•No more than 50% of members may derive more than 10% of annual income from healthcare industry

#18 Improving Board Composition

Does center have a board recruitment and retention plan, orientation program for new board members and plans for ongoing training?

Does overall expertise among members reflect scope in terms of services, needs, target population, and service area?

Has Board composition taken into account key demographic factors such as socioeconomic status and age?

#19 Conflict of Interest Policy

FQHC bylaws or written corporate board approved policy include provisions that prohibit conflict of interest by board members, employees, consultants, vendors

State: No board member shall be employee of FQHC or immediate family member of employee

State: CEO may only serve as non-voting ex-officio member of board

#19 Conflict of Interest Policy

• Do the grantee’s bylaws or other policy documents include a conflict-of-interest provision?

– Address Disclosure of relationships that create actual or potential conflict of interests, including nepotism;

– Address Extent to which board members can participate in decisions where the member has a personal or financial interest;

– Address Using board members to provide services to the health center; – Address Board member expense reimbursement policies; – Address Acceptance of gifts and gratuity; – Address Personal political activities of members; and – Address consequences for violating the conflict-of-interest policy

•

#19 Improving Conflict of Interest Policy

Are annual conflict of interest statements required from Board and key management staff?

Are the required statements on file?

Does Board allow related party transactions to take place? Describe.

Noncompliance

In April 2010, HRSA implemented a uniform process intended to standardize how the agency works with grantees to address noncompliance with Health Center Program requirements.

This “progressive action process” begins when HRSA documents an area of noncompliance by placing what it refers to as a “condition” on the health center’s grant. Through this process a grantee is provided with a “progressive” series of time frames within which it must address the noncompliance.

When HRSA places a condition(s) of noncompliance on a grant, it alerts the health center grantee by sending a notice specifying for which of the 19 program requirement(s) the grantee is noncompliant, the nature of corrective action required, time frames for achieving compliance, and the consequences if the grantee fails to achieve and document compliance.

Phases

• Phase 1 provides the grantee with 90 days to submit documentation demonstrating that it has complied with, or developed an action plan to comply with, the specified program requirements.

• Phase 2 provides an additional 60 days, and phase 3 another 30 days, for grantees to submit the appropriate documentation. If the nature of the condition of noncompliance requires the grantee to develop and implement a plan for achieving compliance, then the grantee is provided additional implementation phases—the first of which is 120 days in length—to implement its plan and document compliance with the specified program requirements.

• In between each phase, HRSA provides itself with 30 days to review the grantee’s response and determine whether or not the response is acceptable.

Termination

If a grantee is unable to correct the compliance issue by the end of the progressive action process, HRSA’s policies require it terminate the health center’s grant.

GAO Report

United States Government Accountability Office (GAO) was asked to examine HRSA’s oversight over health centers and issued a report in May 2012.

GAO reviewed and analyzed HRSA’s policies and procedures and available program-wide data related to HRSA's oversight of health centers, interviewed HRSA officials, and reviewed documentation of HRSA’s oversight from 8 selected grantees that varied in their compliance experience, as well as other factors.

GAO Findings 1

The GAO report found that HRSA’s annual compliance reviews did not identify all instances of Health Center Program grantee noncompliance. The GAO report noted that HRSA annual reviews not only failed to identify instances of noncompliance, but sometimes concluded that a grantee was in compliance with program requirements even though the reviewer did not have enough information to evaluate. EXAMPLE 1: project officers incorrectly marked a health center grantee as in compliance with after-hours coverage requirements based only on the grantee’s description of its health center’s 24-hour answering service. EXAMPLE 2: HRSA improperly found a grantee in compliance with sliding-fee discount requirements without verifying the grantee’s assertion that it used an up-to-date sliding-fee discount schedule.

The GAO report concluded that HRSA’s use of site visits to assess compliance was limited. In an approximately 10-month period, the GAO estimated that only five percent of health center grantees had site visits to review compliance with all 19 requirements, and another six percent had site visits that may have included a limited compliance assessment. However, the frequency of site visits is likely already on the rise. HRSA officials have indicated that in 2012 the agency increased its planned number of compliance-related site visits to meet a goal of reviewing each grantee’s compliance with all 19 requirements at least once every five years.

GAO Findings 2

Another key issue in the GAO report was inconsistent identification and documentation of grantee noncompliance by HRSA project officers. In part, the inconsistency was due to varying interpretations among the project officers of what constituted compliance with the Health Center Program requirements. However, the report also noted that HRSA sometimes failed to place conditions on grants even when the project officer identified grantee noncompliance.

The GAO report also stressed that HRSA’s annual compliance reviews placed too little emphasis on documenting the basis for the project officers’ decisions, especially with respect to findings of compliance. HRSA’s policies directed project officers who were unsure about a grantee’s compliance to indicate on the review that the grantee was in compliance and then make a note to follow-up later. However, project officers did not always follow-up, and subsequent auditors could not consistently determine from review records whether a grantee marked as compliant was known to be compliant or merely assumed to be compliant because of a lack of sufficient information.

GAO RecommendationsThe GAO report recommended that HRSA address the inadequacies in its oversight of Health Center Program grantees by implementing the following six reforms: 1.Create a system for recording, tracking, and following-up on instances when project officers cannot determine compliance during an annual review2.Require project officers to document their basis for determining that grantees are in compliance (in addition to documenting any noncompliance) 3.Provide guidance to ensure that project officers accurately and consistently assess grantee compliance with Health Center Program requirements 4.Ensure that electronic site visit data are complete, reliable, and accurate 5.Establish procedures so that noncompliance with program requirements consistently results in the placement of a condition on a health center grantee 6.Periodically assess whether the process for addressing grantee noncompliance works as intended. The Department of Health and Human Services has indicated that it concurs with all six of the GAO report recommendations and that HRSA has already begun planning and implementing many of them. Additionally, because FQHC look-alike entities are required to meet Health Center Program requirements, HRSA likely will extend its oversight reforms to these entities as well.

HRSA Response

On August 2, 2012, HRSA provided the U.S. Senate its Management Plan in response to GAO reports. In answering these reports, HRSA highlights steps it is taking to increase its scrutiny of the health center program, including:

1.new trainings for project officers and HRSA staff, with a focus on board composition, after-hours coverage, and key management staff program requirements;2.new procedures for placing conditions on notices of grant awards at any time during the year; 3.improvements to ensure grantees address non-compliance in a timely matter; and4.operational site visits for each health center at least once in every five-year period.

HRSA already has increased its oversight activity by conducting site visits based on the 19 Program Requirements and Health Center Site Visit Guide published last year. HRSA’s Management Plan is a reminder that grantees should expect increased scrutiny and oversight related to compliance with Section 330 requirements.

FTCA Review

Federal Tort Claims

Sovereign Immunity is a common law doctrine providing a citizen cannot sue the US

government without its consent.

US Congress partially waived this immunity by enacting the Federal Tort Claims Act (“FTCA”)

in 1946

found in 28 USC Section 1291.

What is the FTCA?

• Comprehensive legislative scheme

• Waiving sovereign immunity

• Allowing civil suits for actions

• Arising out of negligence by employees and agents of US

Community Health Centers

• The Federally Supported Health Centers Assistance Acts (FSHCAA) of 1992 and 1995 extend Federal Tort Claims Act protections to community health centers funded under section 330(e).

What protections are afforded under FTCA/FSHCAA?

(1)Covered individuals

(2)of FTCA Covered Entities

(3)Be treated as Public Health Service employees for purposes of medical malpractice liability coverage

Who are covered individuals under FTCA/FSHCAA?

(1) Covered individuals:Governing Board MembersOfficersEmployeesCertain individual contractors

NOTE: FTCA coverage should not serve as a substitute or replacement for directors and officers insurance.

NOTE: VOLUNTEERS ARE NOT COVERED.

Who are covered entities under FTCA/FSHCAA?

(2)of FTCA Covered Entities

Health Centers that receive section 330 funds and have been provided for coverage or “deemed” as employees of the Public Health Service by the Secretary

Covered Acts

–Medical Acts resulting in personal injury or death occurring within the scope of employment

– Activities approved within each individual’s scope of employment (includes activities within an applicable individual contract for service with the health center)

–Within the Scope of approved Federal section 330 grant project of the health center

– Take place during the provisions of services to health center patients

Health Center FTCA Medical Malpractice Program

• Intent: Increase availability of funds to health centers to provide primary health care services by limiting health center’s malpractice insurance premiums

• Coverage: not assured from year to year for entities receiving 330 funds.

FTCA Coverage

• Health centers must apply annually to Health Resources and Services Administration/Bureau of Primary Health Care (HRSA/BPHC) to be deemed employees of PHS with associated FTCA coverage for the organization and by extension for their covered individuals

To be Deemed

Application must show that entity has:•Implemented appropriate policies and procedures to reduce risk of malpractice and malpractice lawsuits•Implemented system to verify professional credentials, references, claims history, fitness, and licensure status•No history of claims been filed against US as a result of application or if so, full cooperation with DOJ made•Agreed to fully cooperate with Attorney General and Federal Government in providing necessary information related to claim

Indemnification

• Indemnification clauses within contracts with other organizations are not covered under FTCA protection.

• Covered entity is responsible for any losses incurred as a result of indemnification clauses.

• Health center should remove indemnification language from contracts or obtain appropriate private insurance coverage for indemnification claims that may arise.

Dual Coverage

• Impermissible to have FTCA and private malpractice insurance covering same activities(exception if purchase malpractice for healthcare practitioners with differing policy expiration dates to stagger required tail insurance expenditures)

• Combining FTCA and Gap Coverage (private insurance for activities not subject to FTCA coverage) is allowable

FTCA Claims

Complex series of rules and procedures

See 28 USC 1346(b), 2401(b), 2671-80

Must comply to prosecute claim

Very different from lawsuit brought under common law

Pursuing FTCA ClaimStep 1

Claim must be presented to federal agency employing person who acts caused injury within 2 years after claim accrues

(use Standard Form 95)

Failure to present claim first to agency nullifies any lawsuit based on FTCA


Federal agency has 6 months to admit or deny claim.

Claimant may be required to submit certain evidence during the administrative claim period.


If federal agency denies claim or fails to make a determination within 6 months, a complaint can be brought in Federal District Court where the claimant resides or act occurred.

Action must be brought within 6 months of denial.

Damages are governed by state law.

No punitive damages are permissible.

There is no right to a jury trial under an FTCA action.