independence care system, inc. corporate ... care system, inc. corporate compliance program 2016...

Independence Care System, Inc.

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INDEPENDENCE CARE SYSTEM, INC.

CORPORATE COMPLIANCE PROGRAM 2016


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Table of Contents

I. The Purpose of This Compliance Program ........................................................................ 4

II. The Elements of the Program ............................................................................................. 4

III. Code of Conduct and Ethics................................................................................................ 5

A. Providing Access to Medically Necessary Services .......................................................... 5

B. Submitting Complete and Accurate Reports ...................................................................... 5

C. Avoiding Kickbacks and Referral Fees .............................................................................. 6

D. Avoiding Conflicts of Interest ............................................................................................ 6

E. Using Resources Exclusively for ICS Business ................................................................. 7

F. Using Resources Exclusively for Tax-Exempt Purposes ................................................... 7

G. Ensuring Equal Opportunity for all Members, Employees and Contractors ...................... 7

H. Maintaining the Confidentiality of Member Records ........................................................ 7

I. Complying with Government Contracts ............................................................................ 8

J. Complying with Applicable Law ....................................................................................... 8

1. False Claims Act .......................................................................................................... 8

2. Political Contributions and Activities .......................................................................... 9

K. Conducting all Business With Honesty and Integrity ........................................................ 9

IV. Compliance Oversight Personnel ....................................................................................... 9

A. Compliance Officer ............................................................................................................ 9

B. Compliance Committee .................................................................................................... 10

C. Board of Directors ............................................................................................................ 11

V. Compliance Training ........................................................................................................ 12

A. General Compliance Training .......................................................................................... 12

B. Fraud, Waste and Abuse Training (“FWA”) .................................................................... 13

VI. Effective Lines of Communication; Reporting Compliance Problems ............................ 13

A. Reporting Options ............................................................................................................ 13

B. Compliance Hotline ......................................................................................................... 14

C. Non-Retaliation ................................................................................................................ 14

D. Routine Communications ................................................................................................. 14

VII. Employee Discipline; Enforcing Standards through Well-Publicized Disciplinary

Guidelines .................................................................................................................................... 15

VIII. Routine Monitoring, Auditing and Identification of Compliance Risks .......................... 15

A. Routine Risk Assessment ................................................................................................. 15

B. Routine Monitoring and Auditing .................................................................................... 16

C. Employment of and Contracting with Ineligible Persons; OIG/GSA Exclusion ............. 18

D. Government Audits and Investigations ............................................................................ 18

E. Fraud, Waste and Abuse .................................................................................................. 19


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IX. Responding to Detected Offenses, Developing Corrective Action Initiatives and

Reporting to Government Authorities .......................................................................................... 19

A. Internal Investigations of Potential Non-Compliance ...................................................... 19

B. Corrective Action Initiatives ............................................................................................ 20

C. Self-Reporting to Government Authorities ...................................................................... 21

D. Referrals to MEDICs ........................................................................................................ 21

E. Identifying Providers with a History of Complaints ........................................................ 21

X. Addendum: Code of Conduct — First Tier, Delegated and Related Entities (FDRs) ..... 22

List of Exhibits

1. Anti-Kickback Policy ................................................................................................................24

2. Employee Conflicts of Interest Policy ......................................................................................26

3. Directors and Officers Conflict of Interest Policy ....................................................................29

4. Employee Training Policy ........................................................................................................33

5. Whistleblower Policy ................................................................................................................36

6. Employee Discipline Policy ......................................................................................................39

7. Internal Auditing Policy ............................................................................................................41

8. Government Investigations Policy ............................................................................................44

9. Overpayment Policy ..................................................................................................................48


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I. The Purpose of This Compliance Program

The Independence Care System (“ICS”) Corporate Compliance Program (the “Program”)

is designed to promote ICS’s compliance with all applicable federal, state and local laws and

regulations as well as government contracts and conditions of participation in public programs.

The Program applies to all ICS lines of business, including ICS’s Medicare-Medicaid capitated

financial alignment product. The primary goals of the Program are to:

Prevent fraud, abuse and other improper activity by creating a culture of compliance

within ICS;

Detect any misconduct that may occur at an early stage before it creates a substantial

risk of civil or criminal liability for ICS; and

Respond swiftly to compliance problems through appropriate disciplinary and

corrective action.

The Program reflects ICS’s commitment to operating in accordance not only with the

strict requirements of the law, but also in a manner that is consistent with high ethical and

professional standards. The Program applies to the full range of ICS’s activities.

All employees and contractors have a personal obligation to assist in making the Program

successful. Employees are expected to: (1) familiarize themselves with the Program’s Code of

Conduct and compliance procedures; (2) review and understand the key policies governing their

particular job functions; (3) report any fraud, abuse or other improper activity through the

mechanisms established under the Program; (4) cooperate in internal and government audits and

investigations; and (5) carry out their jobs in a manner that demonstrates a commitment to

honesty, integrity and compliance with the law.

The Program is regularly reassessed and is constantly evolving to address new

compliance challenges and maximize the use of ICS’s resources. Employees are encouraged to

provide input on how the Program might be expanded or improved.

II. The Elements of the Program

The Program’s design is based on compliance guidance provided by the U.S. Department

of Health and Human Services Office of Inspector General and the Centers for Medicare and

Medicaid Services. The key elements of the Program, which are discussed in greater detail in the

Program sections referenced below, are as follows:

A Code of Conduct that includes basic standards and references more detailed

policies that guide the ICS’s activities (Section III);

The assignment of personnel to oversee the Program, including the Compliance

Officer and Compliance Committee (Section IV);


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Compliance training for all employees (Section V);

Mechanisms for reporting compliance problems, including an anonymous reporting

option, and a prohibition on retaliation against employees (Section VI);

The imposition of disciplinary measures against employees who engage in

misconduct or fail to adhere to the terms of the Program (Section VII);

A system of internal compliance audits and reviews to detect potential fraud, abuse or

other improper activity, and procedures for cooperating in government investigations

(Section VIII); and

Procedures for investigating reports of suspected compliance problems and for taking

corrective action in response to identified compliance problems (Section IX).

III. Code of Conduct and Ethics

The Code of Conduct and Ethics sets forth the basic principles that guide ICS’s decisions

and actions. All employees and contractors are expected to familiarize themselves with the Code

of Conduct and Ethics, and should rely on the standards contained in the Code in carrying out

their duties.

The Code is not intended to address every potential compliance issue that may arise in

the course of ICS’s business. ICS has adopted more detailed written policies governing key

aspects of its operations. Some of these policies are referenced in the Program; others may be

provided to employees by their supervisors. Employees are required to review and carry out

their duties in accordance with the policies applicable to their job functions.

Providers and first tier, downstream and related entities (“FDRs”) are required to adopt

and follow a code of conduct and ethics particular to their own organization and that reflects

their own comparable commitment to ethical behavior, compliance and detecting, preventing

and correcting fraud, waste and abuse. ICS ensures this requirement is met through audits and

other monitoring of FDRs.

All non-FDR entities at ICS who have access to member PHI or who provide direct services to

our members have to go through an onboarding process where they are required to attest to

completing HIPAA, FWA and Code of Conduct trainings. They are also required to sign a non-

disclosure and a Business Associate Agreement protecting member specific information.

The Code of Conduct and Ethics’ standards are set forth below.

A. Providing Access to Medically Necessary Services

ICS is committed to ensuring that all members receive prompt access to the full range of

medically necessary health care services to which the member is entitled under the applicable

government program. All decisions regarding the medical necessity of proposed services must

be made in accordance with the standards set forth in applicable law.

B. Submitting Complete and Accurate Reports


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ICS is required to submit regular cost reports and other financial reports to government

agencies. The information in these reports may be used by the government for rate-setting and

other important purposes. All employees involved in the process of preparing and submitting

cost and other financial reports must strive to ensure that these reports are accurate and complete.

Expenses reflected on cost reports must have been actually incurred and properly allocated in

accordance with program guidelines. The same standards of accuracy and completeness apply to

any other reports or data regarding ICS’s operations submitted to government agencies or private

parties. Knowingly falsifying records is a serious breach of the ICS Code of Conduct and may

result in immediate termination from ICS.

C. Avoiding Kickbacks and Referral Fees

Under the federal Anti-Kickback Statute, it is illegal for any employee or contractor to

knowingly and willfully solicit, receive, offer or pay anything of value to another person in

return for the referral of a member, or in return for the purchasing, leasing, ordering or arranging

for any item or service reimbursed by a federal health care program such as Medicaid or

Medicare. Penalties for violating the Anti-Kickback Statute include imprisonment, criminal

fines, civil monetary penalties and exclusion from government health care programs. A similar

New York law prohibits the exchange of remuneration for referrals for items or services covered

by the state’s Medicaid program.

ICS has adopted an Anti-Kickback Policy (Exhibit 1) that describes the restrictions

imposed under the Anti-Kickback Statute in greater detail. All employees involved in

purchasing items or services from vendors, or managing relationships or conducting business

transactions with sources or recipients of member referrals, should familiarize themselves with

this policy.

D. Avoiding Conflicts of Interest

Employees are required to act solely in the best interests of ICS when carrying out their

job responsibilities and must avoid all activities that constitute or create the appearance of a

conflict of interest. Employees are prohibited from using their position with ICS for personal

benefit. For example, employees are prohibited from accepting gifts of more than nominal value

from vendors of ICS or facilitating contracts between ICS and companies in which they have a

financial interest.

ICS has adopted an Employee Conflicts of Interest Policy (Exhibit 2) that contains

standards and procedures for avoiding conflicts of interest. All employees are expected to

familiarize themselves with this policy. Employees involved in procurement or other sensitive

job duties may be required to submit annual conflict of interest disclosure forms.

ICS’s directors and officers are also required to avoid conflicts of interest. Among other

things, they are prohibited from voting on or otherwise influencing the implementation of

business arrangements between ICS and the director/officer or a company in which the

director/officer has a financial interest. ICS has adopted a Directors and Officers Conflicts of

Interest Policy (Exhibit 3). All directors and officers are expected to familiarize themselves with


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this policy. Directors and officers are required to submit conflict of interest disclosure forms.

E. Using Resources Exclusively for ICS Business

Employees may use ICS resources solely for the purpose of carrying out their job

responsibilities. ICS’s facilities, equipment, staff and other assets may not be used by an

employee for personal benefit or to engage in any outside business or volunteer activity without

the prior approval of the Compliance Officer. Employees may not use their affiliation with ICS

to promote any business, charity or political cause. Employees shall seek reimbursement for

expenses only to the extent such expenses have been incurred in the course of carrying out their

job duties and in accordance with ICS’s expense reimbursement policies.

F. Using Resources Exclusively for Tax-Exempt Purposes

ICS is a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code.

This status generally requires ICS to engage in only those activities that are within its approved

tax-exempt purpose. ICS’s primary tax-exempt purpose is operating a managed long term care

plan. Employees may not use ICS’s resources to engage in any business activity, even if for

ICS’s benefit, that is outside the scope of ICS’s tax-exempt purpose without the approval of the

legal counsel.

G. Ensuring Equal Opportunity for all Members, Employees and Contractors

ICS is committed to serving all members on an equal basis without regard to race,

nationality or ethnic origin, religion, gender, disability or any other personal characteristic with

respect to which discrimination is barred by law. Discrimination on these grounds is also

prohibited in connection with the hiring and treatment of employees and contractors. In addition,

sexual harassment of employees or clients will not be tolerated. ICS seeks to create an

environment in which the dignity of each individual is fully respected.

H. Maintaining the Confidentiality of Member Records

All member records must be kept confidential in accordance with applicable privacy laws

and regulations. As a “covered entity” under the Health Insurance Portability and Accountability

Act of 1996 (“HIPAA”), ICS must limit the use and disclosure of protected health information.

As part of limiting disclosures, it is expected that ICS employees access member records for ICS

business only. Employees must not access member records for personal or non-work related

reasons. ICS must also comply with special state confidentiality laws governing HIV-related,

mental health and genetic testing information. ICS has adopted a comprehensive privacy

compliance program governing the use and disclosure of member records. All employees who

have access to such records must familiarize themselves with this program’s policies and

procedures, and adhere to their terms.


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I. Complying with Government Contracts

ICS operates under state and federal government contracts. In this capacity, ICS may be

required by contract to comply with rules and standards governing Medicaid, Medicare and other

state and federal health care programs. Employees are expected to familiarize themselves with

the contract requirements applicable to their duties and carry out their responsibilities in a

manner consistent with these obligations.

J. Complying with Applicable Law

ICS is committed to carrying out its business in full compliance with both the letter and

spirit of all applicable local, state and federal laws and regulations. Illegal conduct by employees

will not be tolerated. Employees are expected to seek clarification from their supervisor, the

Compliance Officer or other ICS personnel whenever they are unsure about the interpretation of

applicable laws or regulations. Applicable federal law and regulations include, but are not

limited to: Title XVIII of the Social Security Act (Medicare); Medicare regulations governing

Part C found at 42 CFR §§ 422 et seq); Patient Protection and Affordable Care Act; Health

Insurance Portability and Accountability Act (HIPAA); False Claims Act (31 U.S.C.§§ 3729-

3733); Federal Criminal False Claims Statutes (18 U.S.C. §§ 287.1001); Beneficiary Inducement

Statute (42 U.S.C. §§1320a-7a(a)(5)); Civil Monetary Penalties of the Social Security Act (42

U.S.C. §1395w-27(g)); Physician Self-Referral (“Stark Statute”) (42 USC §1395nn); Fraud and

Abuse, Privacy and Security Provisions of the Health Insurance Portability and Accountability

Act, as modified by HITECH Act; prohibitions against employing or contracting with persons or

entities that have been excluded from doing business with the Federal Government (42 USC

§1395w-27(g) (1) (G); Fraud Enforcement and Recovery Act of 2009. In addition, sub-

regulatory guidance produced by CMS and HHS such as manuals, training materials, HPMS

memos and guides may apply.

1. False Claims Act

The Federal False Claims Act ("FCA") and similar state laws prohibit

knowing submission of false or fraudulent claims or the making of a false record

or statement in order to secure payment from a government sponsored program.

Violations of the FCA can produce fines of $5,500 to $11,000 per claim in

addition to penalties up to three times the value of the claim.

ICS is committed to detecting and preventing fraud, waste and abuse and

has processes and programs in place to review and ensure that billing processes

satisfy applicable government program requirements. Employees of ICS shall

adhere to all applicable federal and state laws regulations and requirements when

billing identifiable federal and state government sponsored programs. Employees

of the ICS are obligated to report any ethical misconduct, including concerns

about potential false claims, to the Compliance Officer or other appropriate

internal authority. As set forth elsewhere in this Program, any retaliation against

any individual making a report of a violation of the FCA is prohibited.


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2. Political Contributions and Activities

In the United States, federal and many state laws prohibit corporations

from making political contributions. No direct or indirect political contribution

(including the use of ICS property, equipment, funds or other assets) of any kind

may be made in the name of ICS, or by using ICS funds, unless the Compliance

Officer has certified in writing that such political contribution complies with

applicable law. When such permission is given, such contributions shall be by

check to the order of the political candidate or party involved, or by such other

means as will readily enable the Company to verify, at any given time, the amount

and origin of the contribution.

K. Conducting all Business with Honesty and Integrity

ICS is committed to conducting all of its activities with honesty and integrity.

Employees are expected to act in a manner that promotes ICS’s reputation as an organization that

exceeds the strict requirements of the law and operates in accordance with the highest ethical

standards.

IV. Compliance Oversight Personnel

A. Compliance Officer

The Compliance Officer is responsible for overseeing the implementation and

modification of the Program. The Compliance Officer’s chief duties include, but are not limited

to, completing or ensuring that Compliance Department staff complete the following:

Developing policies and procedures governing the operation of the Program;

Managing day-to-day operation of the Program;

Periodically reviewing and updating the Code of Conduct and Ethics, and related

policies;

Overseeing operation of the Compliance Hotline described in Section VI below;

Receiving, evaluating and investigating compliance-related complaints, concerns and

problems;

Ensuring proper reporting of violations to duly authorized enforcement agencies as

appropriate or required;

Working with the Human Resources Department and others as appropriate to develop

the compliance training program described in Section V below;

Regularly evaluating the effectiveness of and strengthening the Program;


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Ensuring a compliance overview is provided to the CEO, compliance committee,

and the Board of Directors at least quarterly, including status updates on Medicare

compliance program implementation, identification and resolution of suspected,

detected or reported noncompliance, and ICS compliance oversight and audit

activities;

Responding to reports of potential fraud, waste and abuse, including coordination of

internal investigations and development of appropriate corrective or disciplinary

actions, if necessary; coordinating potential fraud investigations/referrals with the

National Benefit Integrity Medicare Drug Integrity Contractor (“NBI MEDIC”),

State Medicaid programs, Medicaid Fraud Control Units, commercial payers, and

other organizations;

Developing procedures to promote FDR compliance with all applicable laws, rules

and regulations with respect to Medicare and Medicaid delegated responsibilities;

Ensuring DHHS OIG and Government Services Administration exclusion lists have

been checked with respect to all employees, governing body members and FDRs at

least monthly, and coordinating any resulting personnel issue with Human Resources,

Security, Legal or other departments as appropriate;

Maintaining documentation for each report of noncompliance or potential fraud,

waste and abuse received through any source; and

Reporting to the CEO on high-risk areas, strategies for addressing risks,

implementation results, and all governmental compliance enforcement activity.

The Compliance Officer is an employee of ICS, a member of senior management, and

reports directly to the Chief Operating Officer (the “COO”). The Compliance Officer also makes

regular oral and written reports to the Compliance Committee and the Board of Directors on the

operation of the Program. ICS will require Board approval before terminating the Compliance

Officer.

Employees and contractors should view the Compliance Officer as a resource to answer

questions and address concerns related to the Program or compliance issues. As discussed in

Section VI below, the Compliance Officer maintains an “open door” policy and may be

contacted directly by any employee or contractor regarding a compliance-related matter.

Depending on the level of resources available to ICS, the Compliance Officer may be

assisted by a Compliance Manager, Assistant Compliance Officer and/or other personnel. The

Compliance Officer may delegate certain day-to-day Program responsibilities to these

individuals. No Compliance Officer or Compliance Program functions may be delegated to

FDRs.

B. Compliance Committee

The Compliance Committee is comprised of the Compliance Officer, Chief Operating

Officer, and any other employees, with decision


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making authority in their respective areas of expertise.. ICS seeks to appoint members to the

Compliance Committee with varying backgrounds and experience to ensure that the Compliance

Committee has the expertise to handle the full range of clinical, administrative, operational and

legal issues relevant to the Program.

The Compliance Committee’s functions include, but are not limited to, the following:

Receiving regular reports from the Compliance Officer and providing him or her with

guidance regarding the operation of the Program;

Approving the internal auditing and monitoring plan carried out under the Program

(see Section VIII below);

Approving the compliance and fraud, waste and abuse training program provided to

all employees, and ensuring training is effective and appropriately completed;

Reviewing and all investigations of suspected fraud or abuse and any corrective

action taken as a result of such investigations;

Assisting in the monitoring of effective corrective actions;

Ensuring there is a system for employees, enrollees, and FDRs to ask

compliance questions and report noncompliance;

Recommending and approving any changes to the Program;

Supporting the Compliance Officer’s staffing and resource needs for carrying out

his/her duties, and

Providing ad hoc reports to the Board of Directors.

The Compliance Committee is chaired by the Compliance Officer. The Compliance

Committee meets no less than quarterly.

C. Board of Directors

The Board of Directors has ultimate authority for the governance of ICS, including

oversight of ICS’s compliance with applicable law. The Board of Directors has authority for

overseeing the activities of the Compliance Officer and Compliance Committee as well as the

general operation of the Program.

The Board of Directors receives reports on the operation of the Program directly from

the Compliance Officer at least once every six months. The Board reviews measureable

evidence that the compliance program is detecting and correcting noncompliance on a timely

basis. The Compliance Officer has the right to bring matters directly to the Board of Directors

attention at any time.

V. Compliance Training

ICS believes that in order to achieve and ensure compliance with applicable laws and


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Medicare and Medicaid guidance, it is important that directors, officers, employees, temporary

employees, providers and FDRs receive training and education. Training focuses on both

general compliance and fraud, waste and abuse. All training activities are conducted in

accordance with ICS’s Employee Training Policy (Exhibit 4). FDRs agree to conduct their own

compliance training as described below.

A. General Compliance Training

Every employee, officer and director must attend the basic compliance training session

offered by ICS within 30 days of the commencement of employment and annually thereafter.

This session covers the contents of the Code of Conduct and Ethics, and the key elements of the

Program and will identify Medicare and Medicaid requirements that apply to employee job

functions.

General compliance training includes topics such as:

Overview of the process and lines of communication for asking compliance

questions or reporting potential noncompliance;

Review of disciplinary guidelines;

Attendance and participation in formal training programs as a condition of

continued employment and a criterion to be included in employee evaluations;

Overview of HIPAA/HITECH and CMS Data Use Agreement and the

importance of maintaining confidentiality of Personal Health Information;

Review of the laws governing employee conduct in the Medicare and Medicaid

Program.

Attendees must acknowledge in writing that they have received this training and

understand the Code of Conduct and Ethics. Employees, officers and directors must also attend

annual refresher training sessions. Employees are required to participate in any advanced

compliance training sessions organized by their department, which are designed to focus on the

specific compliance issues associated with the department’s functions. Additionally, training

sessions may be required when there are material changes in regulations, policy or guidance.

ICS requires FDRs to provide their employees with compliance training at the time of

contracting, and annually thereafter, and has the right to obtain written acknowledgment that the

FDR’s employees have received training and understand the Code of Conduct at any time. ICS

provides FDRs with copies of ICS’s Corporate Compliance Program and compliance policies and

procedures, and requires FDRs to distribute comparable documents to their employees.


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B. Fraud, Waste and Abuse Training (“FWA”)

All employees, officers, directors, and FDR employees involved in the administration or

delivery of Medicare or Medicaid benefits receive FWA training within 90 days of

commencement of employment, Board service, or contracting, as applicable, and annually

thereafter.

FWA training includes topics such as:

Laws and regulations related to MA and Part D FWA (i.e. False Claims Act, Anti-

Kickback statute, HIPAA/HITECH, etc.);

Obligations of FDRs to have appropriate policies and procedures to address FWA;

Processes for reporting suspected FWA;

Protections for ICS and FDR employees who report suspected FWA; and

Types of FWA that can occur in employee work settings.

Additional or refresher training may be provided more frequently based on an

individual’s job function, when requirements change, when employees are found to be

noncompliant, as corrective action to address a noncompliance issue, or when an employee

works in an area implicated in past fraud, waste and abuse. All employees, officer, directors and

FDR employees must acknowledge in writing that they have received FWA training. ICS and

FDRs maintain records of attendance, topic, and certificates of completion, as applicable, for 10

years.

ICS accepts FDRs’ use of CMS’ standardized FWA training and education module,

available through the CMS Medicare Learning Network (MLN)

at http://www.cms.gov/MLNProduct, for purposes of satisfying the requirement that FDRs fulfill

these training requirements. FDRs that have met the fraud, waste, and abuse certification

requirements through enrollment into the Medicare program or accreditation as a supplier of

Durable Medical Equipment Prosthetics, Orthotics or Supplies (DMEPOS) are deemed to have

met the training and education requirements for FWA.

VI. Effective Lines of Communication; Reporting Compliance Problems

A. Reporting Options

In accordance with its Fraud and Abuse Reporting Policy described in the Whistleblower

Policy (Exhibit 5), ICS maintains open lines of communication for the reporting of suspected

improper activity. Employees, including employees of FDRs, are expected to promptly report

any such activity of which they become aware in one of the following ways:

Notifying their supervisor;

Notifying the Compliance Officer;

http://www.cms.gov/MLNProduct


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Notifying any other member of the Compliance Committee with whom they feel

comfortable; or

Filing a report through the Compliance Hotline or [email protected] e-

mail.

Employees are made aware of these methods for reporting suspected noncompliance, and

the non-retaliation policies discussed below, through compliance training, and through the use of

posters, other prominent displays, etc.

B. Compliance Hotline

The Compliance Hotline may be accessed by dialing 1-855-427-8477 (1-855-ICS-TIPS)

and is available 24 hours a day. To encourage full and frank reporting of suspected

noncompliance, fraud, waste or abuse, ICS gives employees the option of filing complaints

through the Compliance Hotline anonymously. The Compliance Department is responsible for

reviewing all Compliance Hotline reports, assessing whether they warrant further investigation

and ensuring that any compliance problems are identified and corrected. The Compliance

Department follows-up with employees who file complaints to let them know the timing for

developing a response and that confidentiality and non-retaliation policies apply.

Employees should understand that the Compliance Hotline is designed solely for the

reporting of fraud, abuse and other compliance problems; it is not intended for complaints

relating to the terms and conditions of an employee’s employment. Any such complaints should

be directed to the Director of Human Resources. ICS requires FDRs to notify their employees

that they can report compliance or FWA issues through the Compliance Hotline.

C. Non-Retaliation and Non-Intimidation

In compliance with federal and state law, ICS will not permit any intimidation or retaliation against any

individual who raises questions or concerns about misconduct or reports violations of federal or state laws

and regulations, internal policies and procedures, or otherwise in good faith participates in ICS’s

Compliance Program. Under ICS’s Whistleblower Policy (Exhibit 5), no employee who files or wishes to

file a report of suspected fraud, waste, abuse or other improper activity in good faith will be subject to

retaliation or intimidation by ICS in any form. Prohibited retaliation or intimidation includes, but is not

limited to, the threat or the act of: terminating, suspending, demoting, failing to consider for promotion,

harassing or reducing the compensation of any employee due to the employee’s intended or actual filing

of a report. Employees and FDRs are notified that they are protected from retaliation and intimidation for

False Claims Act complaints in addition to any other applicable anti-retaliation and anti-intimidation

protections. Employees should immediately report any such retaliation or intimidation to the Compliance

Officer. The Compliance Department, in cooperation with the Human Resources Department shall take

appropriate disciplinary action against any individual found to have intimidated or retaliated against any

person who reports a concern or question as outlined in this Program.

D. Routine Communications

The Compliance Officer periodically disseminates compliance communications to all

employees, temporary employees, FDRs, providers and the Board of Directors. Examples of

mailto:[email protected]


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communication mechanisms used are, but are not limited to, compliance posters, periodic e- mails,

staff meetings, and compliance training.

ICS also uses communication methods such as posting information on its website and

member communications to educate members on how to identify, detect, and report suspected

fraud, waste and abuse.

ICS also utilizes exit interviews with employees, conducted by Human Resources, to

identify potential non-compliance, misconduct and/or FWA.

VII. Employee Discipline; Enforcing Standards through Well-Publicized Disciplinary Guidelines

Employees who engage in fraud, waste, abuse or other misconduct are subject to

disciplinary action in accordance with ICS’s Employee Discipline Policy (Exhibit 6). ICS

employees and FDRs are made aware of the disciplinary policy through new employee training,

ongoing training, and our Compliance Program Manual, and our Employee Handbook. Any such

sanctions will be carried out by the Director of Human Resources in consultation with the

Compliance Officer. Depending on the nature of the offense, discipline may include counseling,

oral or written warnings, modification of duties, suspension or termination. ICS maintains

records of all compliance violation disciplinary actions for ten (10) years, and periodically

reviews these records to ensure that disciplinary actions are appropriate to the seriousness of the

violation, fairly and consistently administered, and imposed within a reasonable timeframe.

VIII. Routine Monitoring, Auditing and Identification of Compliance Risks

A. Routine Risk Assessment

ICS seeks to identify compliance issues and FWA at early stages before they develop into

significant legal problems. ICS believes that monitoring (regular reviews of operations) and

auditing (formal compliance reviews) are critical components to a successful Compliance

Program and programs to detect FWA.

The Compliance Officer, with input from our e Compliance Committee as applicable,

conducts a risk assessment, at least annually, of all applicable operational areas. The risk

assessment considers the size, budget and complexity of work of each area, in addition to the

compliance training provided and past compliance issues.

In collaboration with Department Heads, the Compliance Officer then ranks the risks in

each department taking into account:


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Program areas identified by the OIG in its annual work plan and other published

reports on the Medicare program, and program areas identified in the CMS

Medicare Managed Care Manual;

Results of prior monitoring reviews by ICS or first tier, downstream and related

entities;

Results from internal audits;

Results of regulatory reviews by CMS and State Departments of Insurance;

Resources developed by the industry that identify high risk areas for

Medicare Health Plans and Prescription Drug Plans;

Aberrant behavior identified through various techniques including techniques to

identify aberrant claim trends; and

Operational areas posing heightened risk of noncompliance, including but not

limited to provider credentialing, and ensuring access to medically necessary

care.

It may be determined that all operational areas are risk areas and therefore the risk

assessment would not be necessary. As explained below, this risk assessment impacts the types

of monitoring reviews and internal audits to be performed by ICS during the year as documented

in its internal audit work plan.

B. Routine Monitoring and Auditing

Based on the annual risk assessment, and in accordance with ICS’s Internal Auditing

Policy (Exhibit 7), at the beginning of each year the Compliance Officer develops an auditing

schedule that, at a minimum, addresses risk areas that will most likely affect ICS members

and ICS compliance (including payment and financial integrity). The audit schedule includes all

auditing activities for the upcoming calendar year, and identifies the methodology, needed

resources, processes for responding to audit results, and planned follow-up reviews of

noncompliant areas. The follow-up reviews are used to assess whether corrective actions have

addressed identified underlying compliance risks.

ICS uses a combination of techniques for its reviews including desk and on-site audits,

unannounced reviews, direct observation, inquiry, data analysis and statistical sampling methods.

In certain instances the


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Compliance Officer may consider external audits to be optimal and the audit schedule will

identify planned external audits. These reviews and audits help ensure all departments are

compliant with the requirements of the Medicare and Medicaid programs and ICS's policies and

procedures. The Compliance Program is also audited; components of the audit may include

review of training, post-training testing and results, the reporting mechanisms (e.g., hotline),

investigations, sanction screenings, certifications for receipt of standards of conduct, record

retention or delegation oversight activities. Audits of the Compliance Program are not conducted

by Compliance Program staff. Results of the Compliance Program audits are shared with the

Board of Directors and the Compliance Committee.

All employees are required to participate in and cooperate with audits as requested by the

Compliance Officer. This includes assisting in the production of documents, explaining program

operations or rules to auditors and implementing any corrective action plans. No employee who

participates in audits in good faith will be subject to retaliation or intimidation by ICS.

ICS also monitors FDRs and contracted providers for compliance with regulatory

requirements and contractual obligations, and follows the guidance and recommendations in

Section 50.6.6 of Chapter 21 of the Medicare Managed Care Manual.

ICS’s Compliance work plan includes ICS audits of first tier entities. Routine monitoring

and audit reviews are included as part of ICS's contractual agreement with its FDRs and

providers. Results implicate contractual corrective actions or if corrective action is not feasible,

termination of contract.

Individuals who perform monitoring reviews and audits:

Possess knowledge of the Medicare Program;

Possess the appropriate skills and expertise to perform the monitoring reviews;

Are independent of the specific functional area examined, whenever feasible; and

Have access to existing compliance resources, internal audit resources, and relevant

personnel in all relevant areas of operation.

The results of the monitoring reviews and audits are summarized in a standard written

report that outlines the review's objective, scope and methodology, findings and

recommendations. The corrective actions required to respond to monitoring findings are

documented.

The Compliance Officer provides updates on the monitoring results to the Compliance

Committee and senior leadership periodically, but no less than quarterly.

C. Employment of and Contracting with Ineligible Persons; OIG/GSA Exclusion

ICS prohibits hiring or entering into contracts with individuals and/or entities that are

listed as debarred, excluded or otherwise ineligible for participation in Federal and State health


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programs. ICS uses government resources, including CHHS OIG list of Excluded Individuals and

Entities, and the GSA Excluded Parties Lists System, and a history of complaints to determine

whether such individuals or entities are debarred or to be excluded. These sources are used for

both potential employees and for monthly checks of current employees, providers and FDRs.

ICS will not pay for services or prescription drugs prescribed or provided by a provider

excluded by either the OIG or GSA. If ICS discovers any claims that were submitted for

services or prescription drugs that were provided by or prescribed by an excluded provider, ICS

will investigate to determine whether other claims have been submitted for services or items

provided or prescribed by the excluded provider and report the claims to the MEDIC (for

prescription drug claims).

ICS also maintains files on its direct contract providers who have been the subject of

complaints, investigations, violations, and prosecutions. This includes enrollee complaints,

MEDIC investigations, OIG and/or DOJ investigations, US Attorney prosecution, and any other

civil, criminal, or administrative action for violations of Federal health care program

requirements. This information assists in monitoring and delegation oversight efforts and risk

assessments.

D. Government Audits and Investigations

In accordance with ICS’s Government Investigations Policy (Exhibit 8), employees and

contractors are expected to fully cooperate in all government audits and investigations, including

those conducted by CMS or its designees (e.g. MEDICs), and the OIG. Any employee who fails

to provide such cooperation will be subject to termination of employment.

All subpoenas and other governmental requests for ICS documents should be forwarded

to legal counsel, who is responsible for reviewing and responding to such requests. Employees

are strictly prohibited from destroying, improperly modifying or otherwise making inaccessible

any documents that the employee knows are the subject of a pending government subpoena or

document request. Employees are also barred from directing or encouraging another person to

take such action. These obligations override any document destruction policies that would

otherwise be applicable.

If an employee receives a request from a government investigator to provide an interview,

the employee should immediately contact his or her supervisor, who will inform ICS’s legal

counsel. Legal counsel will seek to coordinate and schedule all interview requests with the

relevant government agency. Employees are expected to answer all questions posed by

government investigators truthfully and completely. ICS contracts with first tier, downstream and

related entities require such contractors to comply with similar provisions.


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E. Fraud, Waste and Abuse

The Compliance Department has developed policies and procedures to prevent detect,

and correct fraud, waste and abuse. The Compliance Department is responsible for reducing or

eliminating costs due to FWA; reducing or eliminating fraudulent or abusive claims paid for

with federal or state dollars; preventing illegal activities; referring suspected, detected or

reported cases of illegal gun activity to MEDIC and/or law enforcement and conducting case

development and support activities for MEDIC and law enforcement investigations; assisting

law enforcement by providing information needed to develop successful prosecutions.

Anonymous reports of suspicion of FWA can be reported to the Compliance Hotline at 1-855-

427-8477 (1-855-ICS-TIPS), by email to [email protected]., or by mail to

Compliance Officer, Independence Care System, 257 Park Avenue South, 2nd Floor, New York,

NY 10010.

IX. Responding to Detected Offenses, Developing Corrective Action Initiatives and Reporting to Government Authorities

ICS is committed to taking prompt corrective action to address any potential fraud, abuse

or other improper activity identified through internal audits, investigations, reports by

employees, or other means.

A. Internal Investigations of Potential Non-Compliance

All reports of fraudulent, abusive or other improper conduct, whether made through the

Compliance Hotline or otherwise, are promptly reviewed and evaluated by the Compliance

Department. The Compliance Department determines, in consultation with the legal counsel

and other ICS personnel as necessary, whether the report warrants an internal investigation. If

so, the Compliance Department coordinates the investigation, issues a written report of its

findings and proposes any corrective action that may be appropriate. Employees are expected

to cooperate with the Compliance Department in resolving reported noncompliance or FWA,

and will not be subject to retaliation or intimidation by ICS for doing so in good faith.

The Compliance Department also conducts investigations into any FWA-related

misconduct by FDRs and providers for ICS’s Medicare-Medicaid and Managed Long-Term Care

products.

Regardless of how the noncompliance or FWA is identified, ICS initiates a reasonable

inquiry within 2 weeks after the date the incident was identified. A reasonable inquiry includes a

preliminary investigation by the Compliance Officer or a delegated member of his/her staff. If

the issue involves potential fraud or abuse and ICS does not have either the time or the resources

to investigate in a timely matter, the matter will be referred to MEDIC within 30 days.



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B. Corrective Action Initiatives

The Compliance In cases involving clear fraud or illegality, the Compliance Officer also

has the authority to order interim measures, such as a suspension of billing, while a

recommendation of corrective action is pending.

Corrective actions are designed to correct underlying problems leading to program

violations and prevent future noncompliance. Corrective action plans are implemented for both

internal initiatives, as well as when necessary for actions of FDRs. Corrective actions plans are

documented in a format determined by the Compliance Officer and include specific

implementation tasks, the names of individuals accountable for implementation, required time

frames for implementation, and ramifications for failing to implement. ICS conducts

independent audits of FDRs, or reviews FDR audit reports, to ensure FDRs have implemented a

corrective action plan.

Corrective Action may include, but not be limited to, any of the following steps:

Modifying existing policies, procedures or business practices;

Providing additional training or other guidance to employees or contractors;

Seeking interpretive guidance of applicable laws and regulations from government

agencies;

Disciplining employees (see Section VII or terminating contractors;

Notifying law enforcement authorities of criminal activity by employees, contractors

or others;

Returning overpayments or other funds to which ICS is not entitled to the appropriate

government agency or program in accordance with ICS’s Overpayments Policy

(Exhibit 9);

Making reports to government authorities including CMS or its designees (e.g.

MEDIC); and

Self-disclosing fraud or other illegality through established state and federal self-

disclosure protocols.

The Compliance Officer or a delegated member of his/her staff maintains a log to track

the status of corrective actions and routinely reports on the status of corrective actions to the

Compliance Committee and senior leadership on at least a quarterly basis.


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C. Self-Reporting to Government Authorities

The Compliance Officer directs the responsibility for any self-disclosures of non-

compliance, misconduct or FWA to government agencies, including CMS, the OIG, the

Department of Justice, or law enforcement, within 60 days after the determination a violation has

occurred.

D. Referrals to MEDICs

If after conducting a reasonable inquiry, ICS determines that potential fraud or

misconduct related to the Medicare-Medicaid plan has occurred, the conduct will be referred to

the MEDIC promptly, but no later than 60 days after the determination that a violation has

occurred. To the extent that potential fraud is discovered at a first tier, downstream and related

entities, the Compliance Officer will refer the conduct to the MEDIC sooner so that the MEDIC

can help identify and address any scams or schemes.

Once it is determined that a referral should be made to the MEDIC, the Compliance

Officer as needed, will develop a referral package that includes, to the extent available and

applicable, basic identifying information as described in § 50.7.4 of the Medicare Managed Care

Compliance Manual, that will allow an investigator to follow-up on a case.

If the MEDIC requests additional information ICS will furnish the requested information

within 30 days, unless the MEDIC otherwise specifies. ICS will also provide updates to the

MEDIC when new information regarding the matter is identified.

E. Identifying Providers with a History of Complaints

ICS maintains files for 10 years on both in and out-of-network providers who have been

the subject to complaints, investigations, violations and prosecutions, including: enrollee

complaints, MEDIC investigations, OIG and/or DOJ investigations, US Attorney prosecution,

and any other civil, criminal or administration action for violations of federal or state health care

program requirements. ICS also maintains files with documented warnings and educational

contacts, results or previous investigations and copies of complaints resulting in investigations.

ICS complies with requests from CMS, its designees and law enforcement regarding monitoring

of network providers that CMS has identified as potentially fraudulent or abusive.

* * * *

ICS has adopted the Program with the goal of carrying out all of its activities in

accordance with law and the highest ethical standards. The effectiveness of the Program hinges

on the active participation of all employees in preventing, detecting and appropriately responding

to fraud, abuse or other misconduct. Working together, we can make ICS a model of excellence

and integrity in the community.


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X. Addendum: Code of Conduct and Ethics — First Tier, Delegated and Related Entities (FDRs)

The following outlines ICS’ expectations of how our suppliers conduct business.

The Code of conduct is applicable to suppliers, vendors, contractors, consultants, agents

and other providers of goods and services who do, or seek to do, business with ICS.

People

1. Encourage a diverse workforce and provide a workplace free from discrimination,

harassment or any other form of abuse.

2. Treat employees and contractors fairly and honestly, including with respect to compensation,

working hours and benefits.

3. Respect human rights, consistent with local cultural norms, and prohibit all forms of forced

or compulsory labor.

4. Establish an appropriate management process and cooperate with reasonable assessment

processes requested by ICS.

5. Provide safe and humane working conditions for all employees and contractors.

Performance

1. Comply with all applicable state and federal (and foreign, where applicable) laws, rules, and

regulations, including all applicable state and federal privacy laws, including HIPAA and

HECH Act, and CMS guidance, where applicable.

2. Consistent with ICS policy as outlined in the Compliance Program section entitled Avoiding

Conflicts of Interest, pursue the ethical handling of actual or apparent conflicts of interest

when conflicts or appearance of conflicts are unavoidable including through full disclosure to

ICS, any transaction or relationship that reasonably could be expected to give rise to a

conflict.

3. Observe ICS policies regarding gifts and entertainment and conflicts of interest when dealing

with ICS associates and Medicare/Medicaid beneficiaries on ICS’s behalf.

4. Ensure no OIG or GSA excluded individuals or legal entities perform any functions for ICS.

5. Notify ICS of any employee or contractor disciplinary actions taken as a result of a

compliance infraction.

6. Compete fairly for our business, without paying bribes, kickbacks or giving anything of

value to secure an improper advantage.


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7. Keep financial books and records in accordance with all applicable legal, regulatory and

fiscal requirements and accepted accounting practices. 8. Promote, utilize and measure engagement of small and diverse suppliers without limiting the

generality of the foregoing, comply with the following Sections of this Code of Conduct:

A. Insider Trading and Fair Disclosure; and

B. Political Contributions and Activities.


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Exhibit 1 – ANTI-KICKBACK POLICY

Purpose of Policy

The purpose of this policy is to ensure compliance by Independence Care System (“ICS”)

with the federal and state anti-kickback statutes.

Applicable Law

The federal anti-kickback statute prohibits any person from knowingly and willfully

soliciting, receiving, offering or paying anything of value to another person in return for the

referral of a patient, or in return for the purchasing, leasing, ordering, or arranging for any item or

service, reimbursed by a federal health care program such as Medicare or Medicaid (42 U.S.C.

§ 1320a-7b). Penalties for violating the statute include imprisonment, criminal fines, exclusion

from government health care programs and civil monetary penalties. A similar New York law

prohibits the exchange of remuneration for referrals for items or services covered by the state’s

Medicaid program (N.Y. Social Services Law § 366-d).

Statement of Policy

Prohibition on Exchange of Remuneration for Member Referrals

Employees are prohibited from offering or paying anything of value, whether in cash or

in kind, to another party in return for the referral of a member to ICS. Likewise, employees are

prohibited from soliciting or receiving anything of value, whether in cash or in kind, from

another party in return for the referral of a member by ICS to another health care provider.

Acceptance of Gifts from Vendors

The acceptance of gifts from current or prospective vendors of ICS may also constitute an

improper kickback under state and federal law. Accordingly, employees may not solicit or

receive any such gifts.

Examples of Potential Kickbacks

Examples of conduct that violates this policy include, but are not limited to, the

following:

• An employee accepts free meals or tickets to a cultural event from a vendor in

return for entering into a contract with the vendor.

• An employee conditions a participating provider’s contract and reimbursement

rate on the referral of patients by the provider to ICS or the performance of other

marketing activities on ICS’s behalf.


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• An employee accepts something of value from a provider in exchange for being

granted a contract.

• An employee provides free space, free services or other items of value to a

community-based organization in return for the referral of potential members to

ICS.

Structuring Business Arrangements to Comply with Safe Harbors

Certain common business arrangements between parties exchanging referrals may be

structured to fit within “safe harbors” to the anti-kickback statute. Complying with a safe harbor

ensures that no portion of the compensation flowing under the arrangement may be characterized

as an improper inducement for referrals. Although compliance with a safe harbor is not legally

required, ICS seeks to fit business arrangements with vendors and member referral sources into a

safe harbor whenever feasible.

In particular, ICS generally requires that any financial concessions offered by vendors or

providers in return for business be in the form of discounted prices or rebates rather than separate

remuneration paid to ICS outside the negotiating pricing. In addition, any lease with a source or

recipient of member referrals should be reflected in a written agreement that provides for

aggregate rent that is fixed in advance for a period of at least one year and is consistent with fair

market value. Service agreements should be structured in a similar manner.

ICS may enter into a financial arrangement with a vendor or a source or recipient of

member referrals that does not satisfy a safe harbor only with the approval of the Compliance

Officer, who shall consult with counsel as necessary. Oral agreements with vendors or sources

or recipients of member referrals for space or services, including oral supplements to or

amendments of existing written agreements, are strictly prohibited. Whenever feasible, ICS will

seek to verify the fair market value of space or services through a third party expert or data

source. This process may include a review of comparable real estate listings in the community,

the purchase of proprietary databases or the retention of an independent valuation expert.

Handling Questions and Concerns

The anti-kickback statute is complex and ICS expects that, from time to time, employees

may have questions as to whether a particular activity or arrangement is consistent with this

policy. Employees are encouraged to ask their supervisors for guidance in this area. In addition,

employees may directly contact the Compliance Officer for assistance in interpreting this policy.

Enforcement

Employees who do not comply with this policy will be subject to disciplinary action by

ICS. Depending on the facts and circumstances of each case, ICS may reprimand, suspend or

dismiss any employee who fails to comply with this policy.


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Exhibit 2 – EMPLOYEE CONFLICTS OF INTEREST POLICY

Purpose of Policy

The purpose of this policy is to protect the interests of Independence Care System

(“ICS”) when it is contemplating entering into a Transaction (as defined below) that might,

directly or indirectly, benefit the private or outside interests of one of ICS’s employees. This

policy is also designed to ensure that any outside activities of employees do not conflict with

their duty of loyalty to ICS.

ICS makes business decisions impartially, fairly and without favoritism, for the purpose

of advancing ICS’s mission and interests. All employees must conduct themselves in a way that

avoids conflicts of interest and protects ICS’s resources as well as its reputation for fair and

ethical business conduct. No Transaction between ICS and any vendor or other outside party

shall be influenced, or appear to be influenced, by an employee’s personal interest or

relationships. Any personal or outside investments, relationships, transactions or interest,

whether direct or indirect, that would or could have an adverse effect on ICS’s or an employee’s

prudent, objective and independent business judgment constitute an unacceptable conflict of

interest and are prohibited.

Definitions

Family. The “Family” of an individual includes (i) such individual’s parents, spouse,

children, brothers and sisters, (ii) the parents, brothers and sisters of the individual’s spouse and

(iii) the spouses of the individual’s parents, children, brothers and sisters.

Substantial Financial Interest. A person has a “Substantial Financial Interest” in any

corporation, firm, association or other entity if such person receives compensation (i.e., wages,

fees, other direct or indirect remuneration, gifts or favors that are substantial in nature, etc.) from

or has, directly or indirectly, through business, investment or Family, an aggregate beneficial

equity interest of 10 percent or more in such corporation, firm, association or other entity.

Transaction. The term “Transaction” means any contract, investment, loan, lease, joint

venture or other business or financial arrangement, whether direct or indirect.

Statement of Policy

Prohibited Activities Representing a Conflict of Interest

Employees are prohibited from engaging in any of the following activities:

Using their position with ICS to profit, directly or indirectly, in any Transaction to which ICS

is a party. This prohibition includes any involvement by an employee in negotiating,


27

recommending, approving or otherwise influencing the terms of a Transaction between

ICS and an entity in which the employee has a Substantial Financial Interest. Engaging in outside employment, self-employment or volunteer work that interferes with the

performance of their duties for ICS, impairs their prudent and independent business

judgment as an ICS employee or otherwise conflicts with their obligations to ICS. Using or disclosing to a third party any non-public information obtained as a result of

their employment for purposes unrelated to the performance of their duties as an ICS

employee. Using any property, including but not limited to, intellectual property belonging to ICS

for any purpose unrelated to the performance of their duties as an ICS employee. Taking advantage of or otherwise acting upon, for their own personal benefit or the benefit

or another party, any business, financial or other opportunity discovered in the course of

their employment with ICS that is within the scope of ICS’s existing or contemplated

operations unless (i) the opportunity is disclosed fully in writing to ICS’s Board of Directors,

(ii) the Board of Directors declines to pursue such opportunity within a reasonable time

period and

(iii) such opportunity does not otherwise result in a conflict of interest or otherwise violate

ICS’s policies.

Potential Conflicts of Interest Requiring Prior Approval

Employees are prohibited from engaging in any of the following activities without full

disclosure to and the prior written consent of the Chief Executive Officer: Obtaining a Substantial Financial Interest in, or serving as a director or officer of, any

entity with which ICS has conducted, or is contemplating the implementation of, a

Transaction. Obtaining a Substantial Financial Interest in, or serving as a director or officer of, any

competitor of ICS. The Compliance Officer shall provide guidance to employees

regarding the types of entities that are deemed competitors of ICS. Conducting business on behalf of ICS with a former Board member, officer or employee

of ICS, or an entity in which a former Board member, officer or employee has a

Substantial Financial Interest. Working as an employee or contractor of any entity other than ICS, including their

own business, for more than 16 hours per month.

Reporting and Disclosure Requirements

In order for ICS to monitor potential conflicts of interest, all employees shall promptly

report to the Compliance Officer any existing, proposed or potential Transaction of which

they are aware that could represent a conflict of interest under this policy.

Employees required to complete the Disclosure Statement must do so in a truthful, complete and

timely manner.

Referral to Compliance Officer


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Questions regarding interpretation or application of this policy should be referred to

ICS’s Compliance Officer.

Enforcement of Policy





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EXHIBIT 3 – DIRECTORS AND OFFICERS CONFLICTS OF INTEREST

POLICY

Purpose of Policy

The purpose of this policy is to protect the interests of Independence Care System

(“ICS”) when it is contemplating entering into a transaction or other business relationship that

might, directly or indirectly, benefit the private or outside interests of one of ICS’s directors or

officers.

Conflicts of interest potentially place personal or outside interests at odds with the

fundamental duty of loyalty owed by ICS’s officers and directors as fiduciaries of ICS. The

appearance of a conflict of interest can also damage ICS’s institutional credibility and ICS’s

ability to fulfill its mission and programmatic goals. The Board of Directors expects that

directors and officers will respect their obligations to act in the best interests of ICS in fulfilling

its non-profit mission.

Definitions

Conflict of Interest. “Conflict of Interest” means any Transaction involving ICS and an

Interested Person.

Interested Person. “Interested Person" means, with respect to any Transaction to which

ICS is a party, any of ICS’s directors or officers if such person:

• Is a party to the Transaction;

• Is a director or officer of any other corporation, firm, association or other entity that is a

party to the Transaction (or holds a position in such corporation, firm, association or

other entity with responsibilities or powers similar to those of a director or officer); or

• Has a direct or indirect Substantial Financial Interest in such Transaction.

Substantial Financial Interest. A person has a “Substantial Financial Interest” in any

corporation, firm, association or other entity if such person receives compensation (i.e., wages,

fees, other direct or indirect remuneration, gifts or favors that are substantial in nature, etc.) from

or has, directly or indirectly, through business, investment or Family, an aggregate beneficial

equity interest of 10 percent or more in such corporation, firm, association or other entity.

Family. The “Family” of an individual shall include (i) such individual’s parents, spouse,

children, brothers and sisters, (ii) the parents, brothers and sisters of the individual’s spouse and

(iii) the spouses of the individual’s parents, children, brothers and sisters.

Transaction. The term “Transaction” means any contract, investment, loan, lease, joint

venture, or other business or financial arrangement, whether direct or indirect.


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Statement of Policy

Per Se Conflicts of Interest

ICS shall not make a loan to (i) any of ICS’s current directors or officers; (ii) any

corporation, firm, association or other entity in which any current director or officer is a director,

officer or employee (or holds a position in such corporation, firm, association or other entity with

the responsibilities or powers similar to those of a director or officer); or (iii) any corporation,

firm, association or other entity in which any director or officer has a direct or indirect

Substantial Financial Interest.

The ordinary deposit of funds in a bank or the purchase by ICS of bonds, debentures, or

similar obligations of a type customarily sold in public offerings shall not be considered loans for

purposes of this policy. In addition, notwithstanding the above prohibition, ICS may make a loan

to another not-for-profit corporation that is a “Type B” corporation under applicable New York

State law, subject to the disclosure and approval requirements of this policy if such loan

represents a Conflict of Interest.

Compensation Decisions

No director who receives compensation from ICS for services shall vote on matters

pertaining to such director’s compensation; provided, however, this prohibition shall not include

determinations regarding the fee schedule established by ICS for all participating physicians,

even if the director is paid under such fee schedule. Compensation to officers shall require the

affirmative vote of a majority of the Board of Directors, unless a higher proportion is set in the

Certificate of Incorporation or By-laws.

Procedures in Other Conflict of Interest Cases

If any director or officer is an Interested Person in connection with any Transaction to

which ICS is a party, the director or officer must disclose in good faith to the Board or the Board

Committee that is considering the Transaction any material facts relevant to why such

Transaction may present a Conflict of Interest.

If the Board or Committee that is considering a Transaction has been informed or is

otherwise aware of a potential Conflict of Interest:

• Any Interested Person may make a presentation to the Board or Committee regarding the

Transaction, but after making such presentation he or she shall leave the Board or

Committee meeting while the remaining Board or Committee members discuss the

Transaction and the possible existence of a Conflict of Interest; and

• The remaining Board or Committee members shall decide if the Transaction presents a

Conflict of Interest.

If the Interested Person is a director, such person may not be counted in determining the


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presence of a quorum for any vote concerning the existence of a Conflict of Interest. No

Interested Person shall participate in, or use personal influence with regard to, the deliberations

concerning the existence of a Conflict of Interest.

Following due deliberation pursuant to this policy, the Board or Committee may

determine that a Transaction does not present a Conflict of Interest. In such cases the Board or

Committee need take no further action prior to approving the Transaction, other than its usual

procedures for approving Transactions.

If the Board or Committee determines that a Conflict of Interest exists, the Transaction

may be authorized (a) by the Board of Directors, but only by a vote sufficient to approve the

Transaction without including the vote of any director that is an Interested Person; or (b) by the

members of ICS that are entitled to vote thereon, if any, by a vote sufficient to approve the

Transaction.

Additional Guidelines for Officers, Directors and Committee Members

Officers and directors shall not use their position with ICS to benefit the interests of a

particular organization, constituency, or special interest group by any means, including but not

limited to, providing information not available to potential transaction partners or grantees,

lobbying on behalf of or serving as spokesperson to ICS for an organization or interest group

with which he or she is affiliated, or attempting to effect a positive decision for such organization

or interest group through his or her position within ICS.

Officers and directors will maintain the confidentiality of all non-public information

about ICS of which they become aware. Officers and directors shall not use confidential

information for any purpose other than as required to carry out their duties on behalf of ICS.

Records of Proceedings

The minutes of the Board and all Committee meetings shall contain:

• The names and positions of directors and officers who disclosed that they were Interested

Persons or otherwise were found to be Interested Persons, a description of the nature of

the relationship and/or Substantial Financial Interest which gave rise to such disclosure or

identification, and a description of the Transaction at issue;

• The names of the directors who were present during the taking of the action to determine

whether a Conflict of Interest was present, and the basis for there being a quorum for the

taking of such action;

• The steps taken by the Board or Committee to determine whether a Conflict of Interest

was present;

• The Board's or Committee's decision as to whether a Conflict of Interest was present and

the basis for such decision; and


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• The Board’s or Committee’s decision as to whether to proceed with the Transaction

and the names of the persons who voted to approve the Transaction.

Referral to Compliance Officer

Questions regarding interpretation or application of this policy should be referred to

ICS’s Compliance Officer.


If the Board or a Committee has reasonable cause to believe that a director or officer has

failed to make disclosure when there was a Conflict of Interest and such director or officer knew

or should have known that there was a Conflict of Interest, the Board or Committee shall inform

such director or officer of the basis for such belief and afford such director or officer an

opportunity to explain the alleged failure to disclose. If, after receiving the response of such

director or officer and making such further investigation as may be warranted in the

circumstances, the Board or Committee determines that such director or officer has in fact failed

to disclose a Conflict of Interest, it shall take appropriate disciplinary and corrective action.

Failure to disclose a Conflict of Interest may constitute grounds for the director or officer’s

removal from his or her position for cause.

EXHIBIT 4 – EMPLOYEE TRAINING POLICY

Purpose of Policy

The purpose of this policy is to promote Independence Care System’s (“ICS’s)

compliance with applicable laws and regulations by ensuring that all ICS employees receive

appropriate training regarding ICS’s Compliance Program and the prevention, detection and

reporting of fraud and abuse.

Applicability of Policy

This policy is applicable to all ICS employees, officers and directors. First tier,

downstream and related entities (FDRs) are required to provide their employees with

compliance and fraud, waste and abuse training.

Statement of Policy

Basic Compliance Training


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All newly hired employees, officer and directors must receive basic compliance training

within 30 days of the initial date of employment. Training will be documented by the Director

of Human Resources or a delegated member of his/her staff as part of his or her responsibility to

oversee general orientation for new employees. Basic compliance training will be no less than

one hour.

The curriculum for basic compliance training will be developed and updated as necessary

by the Compliance Officer. The curriculum will be designed to provide employees with an

overview of key compliance issues faced by ICS. The topics covered by basic compliance

training will include guidance on preventing and detecting, among other things, fraudulent or

improper billing by providers, under-utilization of health care services, inaccurate cost reporting,

kickbacks, and misuse of ICS funds. Employees will also be advised of their obligation to report

suspected fraud or abuse, the opportunity for anonymous reporting and the prohibition against

retaliating against employees for making reports in good faith.

As part of basic compliance training, each employee will receive a copy of ICS’s Code of

Conduct and Ethics. The Compliance Officer will determine the format of basic compliance

training (e.g., in-person, on-line, video, etc.), including how best to incorporate testing to assess

compliance training effectiveness, and is authorized to retain outside vendors to provide training

components. The Compliance Officer will keep records for ten (10) years of all basic

compliance training programs, including course descriptions, frequency of training and hours of

each training session.

All employees will be required to sign a written form acknowledging the receipt of basic

compliance training and the Code of Conduct and Ethics. Such forms will be retained in

employee


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personnel files for no less than ten years.

Fraud, Waste and Abuse Training

The curriculum for FWA training will be developed and updated as necessary by the

Compliance Officer. The Compliance Officer will determine the format of training (e.g., in-

person, on-line, video, etc.), including how best to incorporate testing to assess FWA training

effectiveness, and is authorized to retain outside vendors to provide training components.

Advanced Compliance Training

As necessary, Department Directors, in consultation with the Compliance Officer, will

develop a curriculum of advanced compliance training for employees in his or her Department.

Advanced compliance training will consist of in-depth guidance on the fraud prevention and

other compliance issues arising in connection with the operation of the Department. Employees

will also be provided with all policies and procedures relevant to the performance of their duties.

All advanced compliance training curricula must be approved by the Compliance Officer. In

addition, the compliance officer will work with the departments to identify an audit and FWA

deputy who will meet regularly with the compliance team to discuss training needs and/or

potential FWA or non-compliance issues identified by the team.

Compliance Officer Training

ICS will ensure that the Compliance Officer has sufficient opportunities to receive

training on compliance issues through attendance at outside conferences, subscription to trade

periodicals and other means.

Annual Refresher Training

The Compliance Officer will prepare an annual refresher compliance training program,

which will reinforce the key principles covered by basic compliance training and summarize any

changes in ICS’s Code of Conduct and Ethics or fraud and abuse prevention program during the

prior year. All employees will be required to attend an annual refresher training session. The

Director of Human Resources will be responsible for tracking refresher training sessions in

consultation with the Compliance Officer.


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Bulletins and Updates

The Compliance Officer will be responsible, on a regular basis, for preparing and

distributing to relevant employees bulletins and updates addressing new fraud and abuse or other

compliance issues of which the Compliance Officer becomes aware. These bulletins and updates

will cover, among other things, changes in government contracts, new interpretations of existing

laws or rules, revisions to ICS policies or procedures, and industry trends or developments.

Department Heads will notify the Compliance Officer of any significant matters they deem

appropriate for inclusion in such bulletins and updates. In 2015, ICS launched an intra-agency

website where staff can view regular updates from the Compliance department including but not

limited to: policy and programmatic changes, FWA issues that impact the organization, FAQs,

and a calendar to compliance trainings and meetings. In addition, the Compliance Department

also conducts department-specific trainings for staff via an in-person meeting.






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EXHIBIT 5 – WHISTLEBLOWER POLICY

Purpose of Policy

The purpose of this policy is to promote Independence Care System’s (“ICS’s”)

compliance with applicable laws and government standards by requiring all ICS employees to

report suspected compliance or fraud, waste or abuse, and ensuring that all reports are handled

appropriately and employees filing such reports in good faith are not subject to retaliation.


This policy is applicable to all ICS employees.

Statement of Policy

Reporting Responsibilities

It is the responsibility of all employees to report observed or suspected fraud, waste,

abuse or other improper activity relating to the operation of ICS. For purposes of this policy,

fraud means any type of intentional deception or misrepresentation made by a person with the

knowledge that the deception could result in some unauthorized benefit to himself or herself, or

to ICS or another person. Waste means the overutilization of services or other practices that

result in unnecessary cost to the state or federal government or ICS. Abuse means practices that

are inconsistent with sound fiscal, business or medical practices and result in an unnecessary cost

to the state or federal government or ICS, or in reimbursement of services that are not medically

necessary or fail to meet professionally recognized standards for health care. Fraud, waste, and

abuse may be committed by ICS employees, contractors, patients or others.

Examples of the types of activities that must be reported by employees include, but are

not limited to, the following:

Billing the government for individuals who are not members. Duplicate billing.

Failing to provide all medically necessary services for which ICS receives reimbursement.

Inflating or otherwise misrepresenting ICS’s costs on cost reports filed with government

agencies or private funders. Billing the government for a member if the employee is aware that the member or his or her

family has obtained coverage fraudulently. Submitting inaccurate or misleading data or reports to government agencies.

Theft or other misuse of ICS’s funds or property by employees or contractors.


37

Violations of ICS’s compliance policies or other guidance. Violations of laws, regulations or government contracts.

Reporting Mechanisms

Employees have several options for reporting fraudulent, abusive or other improper

conduct. Employees may file reports with their supervisor or department director, the

Compliance Officer or any other member of the Compliance Committee with whom the

employee feels comfortable.

ICS has also established a toll-free telephone hotline that employees may call to file

reports anonymously. The hotline may accessed by calling 1-855-427-8477 (1-855-ICS-TIPS).

The Compliance Officer will be responsible for overseeing the operation of the hotline,

responding to complaints filed through the hotline and ensuring that all employees are aware of

the hotline number and understand that reports may be filed through the hotline on an

anonymous basis. The Compliance Officer will also publicize the availability of the hotline

through regular reminders, posters and organized compliance awareness events. Staff may also

use the [email protected] e-mail to report possible FWA.

Investigations

All reports of fraudulent, abusive or other improper conduct, if not made to the

Compliance Officer or through the hotline or e-mail, will be promptly forwarded to the

Compliance Officer for review. The Compliance Officer, in consultation with other ICS staff

and counsel as appropriate, will determine whether the report warrants an investigation. If the

Compliance Officer determines an investigation is warranted, he or she will promptly

coordinate an investigation in accordance with counsel as may be necessary.

Non-Retaliation and Non-Intimidation

No individual who files a report under this policy in good faith may be subject to

retaliation or intimidation in any form. Retaliation is also prohibited against an employee for

refusing to carry out any activity that is the subject of a report made under this policy in good

faith. No employee may intimidate or threaten to retaliate against another employee for filing a

report.

Prohibited retaliation or intimidation includes, but is not limited to, the threat or act of:

terminating, suspending, demoting, failing to consider for promotion, harassing or reducing the

compensation of an employee due to the employee’s intended or actual filing of a report under

this policy. Retaliation is prohibited even if it is determined that the allegedly improper conduct

was proper or did not occur, provided that the report was made in good faith. ICS reserves the

right to take disciplinary action against any employee who maliciously files a report he or she

knows to be untrue.

Any actual or threatened retaliation should be reported by the affected employee or any

other employee to the Compliance Officer. The Compliance Officer will investigate such

allegations in the same manner as other investigations carried out under this policy.




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EXHIBIT 6 – EMPLOYEE DISCIPLINE POLICY

Purpose of Policy

The purpose of this policy is to promote compliance with applicable legal requirements

by ensuring that Independence Care System (“ICS”) employees are appropriately disciplined if

they engage in fraudulent behavior, fail to comply with applicable law or do not adhere to ICS’s

compliance program or policies governing the prevention, detection and reporting of fraud and

abuse.



Statement of Policy

Conduct Subject to this Policy

Employees will be subject to discipline under this policy in the event of any violation of

(i) applicable law, (ii) government standards relating to ICS’s operations or (iii) ICS’s policies

governing compliance and the prevention, detection or reporting of fraud and abuse. As more

fully described in other ICS policies, including Whistleblower and Employee Training policies,

employees have obligations to report suspected FWA and to participate in compliance and FWA

training. Nothing in this policy will restrict ICS from disciplining employees for offenses not

referenced above under other ICS policies.

Administration of Disciplinary Measures

The Compliance Officer will promptly notify the Director of Human Resources of any

improper conduct by an employee that may warrant discipline under this policy. The Director of

Human Resources will be responsible for determining the appropriate sanction, if any, in

accordance with ICS’s standard employment policies, taking into account the special

considerations set forth in this policy. The Director of Human Resources will consult with the

Compliance Officer and the General Counsel as necessary throughout the disciplinary process.

Types of Discipline

Any conduct punishable under this policy will be subject to the following disciplinary

actions, which are based on the nature of the violation:

Unintentional Violations. Unintentional violations of ICS policies or legal requirements

may occur if an employee is unaware of the relevant standards of conduct or

inadvertently fails to adhere to such standards. Although unintentional violations do

not generally constitute fraud or abuse, depending on the circumstances, they may be

grounds for discipline. The key factors to be considered in determining the

appropriate type of discipline, if any, for such violations include (i) the degree of the


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employee’s carelessness, (ii) the extent to which the conduct involved an isolated

incident or an ongoing pattern of activity, (iii) a history of any prior violations by the

employee, (iv) the effect of the conduct on ICS enrollees, (v) whether the conduct

resulted in improper billing by ICS to government agencies and (vi) the extent to

which the conduct exposed ICS to regulatory sanctions, other liabilities or adverse

publicity. Disciplinary action will typically involve counseling, an oral warning, a

written warning or modification of duties, but in certain circumstances (especially in

the case of repeat offenses) may also include suspension or termination.

Intentional Misconduct that Does Not Constitute a Crime. An employee engages in

intentional misconduct if the employee knows his or her conduct violates ICS policies

or legal requirements, or acts with reckless disregard of applicable standards of

conduct. “Reckless disregard” may occur, for example, if an employee knows there

is a relevant standard of conduct and fails to seek appropriate guidance as to the

nature of that standard. If an employee’s intentional misconduct is a first offense and

does not constitute a crime, depending on the circumstances, disciplinary action may

involve counseling, an oral or written warning, modification of duties, suspension or

termination. Second offenses will be punishable by termination.

Criminal Activity. Any employee who engages in criminal activity in the course of his or

her employment will be subject to immediate termination by ICS. A finding of

criminal activity may be based on a conviction, a plea bargain or a determination by

the General Counsel, in consultation with outside counsel as necessary, that a crime

has been committed. Being charged with a crime is not automatic grounds for

termination absent a conviction or plea bargain. The Human Resources Director will

determine, on a case-by-case basis, whether an employee should be suspended or

terminated while criminal proceedings are pending. The Compliance Officer will

determine, in consultation with legal counsel, whether it is appropriate to refer the

matter to law enforcement authorities for prosecution.

Disciplinary measures will be imposed within 30 days of the receipt of all relevant

information unless the Director of Human Resources determines there are unusual circumstances

warranting a greater review period. Except in cases of termination, employees subject to

discipline will also be required to undergo specialized retraining relevant to the violation.

Employee Evaluations

The Human Resources Director will include in all standard employee evaluation forms

one or more questions relating to ethics and compliance with applicable ICS policies and legal

requirements. ICS supervisors and managerial staff will provide accurate and complete

information in response to such question(s) when preparing employee evaluations.

Record Retention

All records regarding the imposition of disciplinary measures under this policy will be

retained by the Director of Human Resources for a period of ten (10) years.


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EXHIBIT 7 – INTERNAL AUDITING POLICY

Purpose of Policy

The purpose of this policy is to prevent fraud, waste, abuse and other illegal activity by

establishing a framework for regular internal audits of Independence Care System’s operations.



Statement of Policy

Oversight of Internal Auditing Process

The Compliance Officer will be responsible for overseeing ICS’s internal auditing

system. The Compliance Officer is authorized to delegate auditing duties to other ICS personnel

as well as outside attorneys, accountants and vendors as necessary and appropriate.

Subjects for Auditing

• Internal audits may cover the following subjects:

• Provision of accurate and complete information by member services staff to

individuals contacting ICS’s member services call center.

• Compliance by ICS’s member services call center with waiting time and

abandonment rate goals, and staffing of the call center with sufficient

personnel to satisfy ICS’s contractual obligations.

• The processing and reporting of enrollee complaints in accordance with

applicable contractual and legal requirements.

• The proper credentialing and re-credentialing of providers, and the adherence

to credentialing standards by entities to which credentialing has been

delegated by ICS.

• The accuracy and completeness of ICS’s provider directory.

• Compliance with utilization review time frames and notice requirements set

forth in ICS’s contracts and applicable law.

• Appropriate utilization of health care services and the approval of all

medically necessary covered services.


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• Risks identified through ICS’s annual compliance risk assessment.

Audit Procedures

The Compliance Officer will develop audit tools and procedures for carrying out the

audits required by this policy. The Compliance Officer, with the approval of the Chief Operating

Officer, may contract with outside companies to conduct audits as appropriate. The Compliance

Officer will oversee the services provided by any outside vendors.

The Compliance Officer will, whenever feasible, utilize separate audit staff to carry out

internal audits. It is understood, however, that it may be appropriate or necessary for staff to

perform audits of their own department’s activities. If a department audits its own activities, the

Compliance Officer will design audit procedures that minimize auditing by employees of their

own work.

In the event the Compliance Officer determines it is in the best interests of ICS to keep

the contents and/or findings of any audit confidential, the Compliance Officer will arrange for

counsel to conduct the audit. In such event, employees will be advised that the audit is being

conducted under the attorney-client privilege and the audit report will indicate that such privilege

is applicable.

Audit Deputies

Each Department Head shall appoint an Audit Deputy who will act as a point of contract

for that department during internal audits. The Audit Deputy is responsible for completing or

obtaining audit deliverables and ensuring that audit timeframes are met.

Audit Schedule

On an annual basis, the Compliance Officer will develop a schedule for internal audits for

the upcoming year, which will be approved by the Compliance Committee. The schedule will

specify the subject of each audit, the audit methodology, the time period during which the audit

will be carried out and the personnel or contractors to be used to perform the audit. Audit

subjects may be selected from among the topics specified in this policy and will include any

other topics deemed appropriate by the Compliance Officer, based on an annual risk assessment.

The Compliance Officer will select audit subjects based on the level of risk associated with the

subject, any prior history of violations, and the length of time that has passed since the most

recent audit on the same subject. The Compliance Officer will ensure that any internal audits

mandated by law or contract be carried out on a schedule consistent with such requirements.

Nothing in this policy is intended to require internal auditing on all of the matters specified

herein each year or on any other specific schedule. The Compliance Officer will use best efforts

to minimize any disruption of ICS’s business activities caused by internal audits.

Audit Reports

Upon completion of an audit, the Compliance Officer will arrange for the preparation of

an audit report. The report will set forth the subject of the audit, the audit methodology, the audit

findings and any recommended corrective action. The report will be provided to the Compliance

Committee, the Chief Operating Officer and any appropriate Audit Deputies and Department

Heads. The Compliance Committee will work with the relevant Audit Deputy to ensure that all


43

recommended corrective action is taken and will require the Audit Deputy to report to the

Compliance Officer when implementation is completed. All audit reports will be maintained by


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ICS for ten (10) years.






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EXHIBT 8 – GOVERNMENT INVESTIGATIONS POLICY

Purpose of Policy

The purpose of this policy is to establish a mechanism for the orderly response to

government investigations of Independence Care System (“ICS”) or its employees, and to ensure

that all ICS personnel and contractors cooperate appropriately with such investigations.


This policy is applicable to all ICS employees and contractors.

Statement of Policy

Types of Government Agencies that May Investigate ICS

A variety of federal, state and local government agencies may be involved in

investigating ICS. These agencies include, but are not limited to, the U.S. Department of Health

and Human Services Office of Inspector General, the New York Office of Medicaid Inspector

General (“OMIG”), the Centers for Medicare and Medicaid Services, the Federal Bureau of

Investigation, the United States Attorney’s Office, the New York State Attorney General’s

Medicaid Fraud Control Unit (“MFCU”), the New York State Department of Health (“DOH”),

the New York State Insurance Department and District Attorneys’ offices.

General Guidelines for Responding to Government Investigators

ICS employees will be expected to be polite and to request the following information: (1)

the name, agency affiliation, business telephone number and address of all investigators; (2) the

reason for the contact; and (3) if the investigator visits in person, the investigator’s identification

and business card. Except as specified otherwise in this policy, employees will direct

investigators to the Compliance Officer who will collaborate with ICS’s counsel. The

Compliance Officer along with ICS counsel will be exclusively responsible for responding to any

requests for information or documents. If an employee is not contacted by an investigator but

learns of a government investigation through other means, the employee will immediately notify

the Compliance Officer.

Subpoenas and Other Requests for Documents

If an employee receives a subpoena or any other written request for documents from a

government agency, the employee will immediately inform the Compliance Officer and forward

the request to counsel. Counsel will be responsible for reviewing the request, verifying its

authenticity and confirming that the production of documents or witnesses is not restricted by

any applicable laws, including HIPAA or other confidentiality statutes. If there is no such

restriction, counsel will coordinate the production of documents with the investigating agency. It

is ICS’s policy to fully cooperate with all appropriate requests for documents issued by

government agencies. All documents will be provided by ICS without charge.


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Government investigators may seek documents by contacting employees by telephone or

in person at ICS’s offices. It is ICS’s policy to cooperate with these requests in an orderly

manner. Any employee who is contacted by a government investigator to provide documents

will immediately notify the Compliance Officer and ICS counsel, who will coordinate the

provision of any requested information. It is ICS’s general policy to provide documents to

government investigators only in response to a written request. However, counsel, after

verifying the authority of the requesting official, has the authority to waive this requirement on a

case-by-case basis as appropriate and permitted by law.

Requests for Interviews and Other Testimony

ICS will cooperate fully with government investigators, including OMIG and MCFU

staff, in making its employees available in person for private interviews, consultations, grand

jury proceedings, pre-trial conferences, hearings and trials. ICS’s contractors will be required to

cooperate in the same manner by making their own employees available.

All employees are required to make themselves available for interviews requested by

government investigators. Although individuals have a constitutional right not to incriminate

themselves, any failure by an employee to provide an interview, testify or otherwise cooperate in

a government investigation will constitute a violation of the employee’s employment obligations

and be grounds for termination.

All requests by government agencies to interview employees, whether by a subpoena or

in any other written or oral form, will be directed to the Compliance Officer and ICS counsel.

Counsel will be responsible for scheduling all such interviews at appropriate times and

locations.

In some cases, investigators may contact employees at their homes or other locations off

ICS’s premises, in person or by telephone, to request an interview. Employees are encouraged in

such circumstances to advise the investigator of their willingness to cooperate in an interview

scheduled by counsel during normal business hours at ICS’s offices or another appropriate

location. Employees should request the investigator’s business card and promptly report the

contact to their supervisor and the Compliance Officer, who will inform counsel. Counsel will

be responsible for coordinating the scheduling of interviews with investigators.

ICS will generally seek to have counsel attend an employee’s interview to the extent

permitted by the investigating agency. ICS’s counsel will represent the interests of ICS and not

the individual employee. Any privilege attaching to information provided to ICS’s counsel

belongs to ICS and not to the employee. An employee may consult with an attorney of his or her

own choosing to represent his or her individual interests. Employees may request reimbursement

of attorneys’ fees by ICS. Counsel will evaluate such requests for reimbursement on case-by-

case basis in accordance with the indemnification provisions of ICS’s Bylaws.

During the interview, employees will be expected to adhere to the following guidelines:

• Always tell the truth. It is a crime to lie under oath or obstruct a government criminal

investigation.

• In talking with the government investigator, employees should be very careful to


47

answer questions completely, accurately and concisely so that there will be no

misunderstanding as to what is said.

• It is important for employees to make clear to the government representative whether

the information he or she is providing is first-hand knowledge, or information that the

employee has heard or otherwise obtained from another individual.

• Do not speculate. If employees do not recall something or have no knowledge or

insufficient knowledge about the topic, they should say so.

If, during the course of the interview, the investigator requests copies of any ICS

documents, the employee will forward the request to counsel, who will handle all requests for

documentation. It is essential that counsel review all documents prior to submission to

government investigators to ensure that they are fully responsive to the investigator’s request and

that they are not protected by the attorney-client or any other legal privilege.

If ICS counsel is not present during the interview, the employee should contact counsel

promptly after the interview to conduct a debriefing. Employees are encouraged to make

detailed notes during the interview.

Searches of ICS’s Premises

If OMIG, the MFCU or other government agencies appear at ICS’s offices and request to

search the premises, the employee receiving the request will immediately contact counsel and

request that the investigator wait in the reception area for counsel to appear. Counsel or his or

her designee will immediately appear in person or direct other staff on the premises as to how to

handle the request. If the investigator refuses to wait for counsel, the employee will not deny

admission to the premises.

Counsel or his or her designee will accompany the investigator on the search. Counsel or

his or her designee will keep a record of the search, including, but not limited to: (1) the date and

time period of the search; (2) the names and positions of all the investigators; (3) the areas and

files searched; (4) which files were seized; (5) the names of any employees questioned by the

investigators and (6) the subjects covered by any questioning.

If permitted by the investigator, a copy will be made of all documents that are seized. If

this is not permitted, an inventory of the seized documents will be requested from the

investigator. Any requests during the search to speak with employees will be handled in

accordance with the provisions of this policy governing employee interviews.

If any government investigators other than those representing OMIG or the MCFU

request to search ICS’s offices, the same policy as referenced above will be followed, except that

counsel or his or her designee will not be required to permit the search unless a duly authorized

search warrant is presented. Counsel will request to see a copy of the warrant and any

supporting affidavit, and confirm that the search and any documents seized are within the scope

of the warrant. If no search warrant is presented, counsel may determine, in his or her discretion,

whether to permit the search.


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Record Retention

Once counsel becomes aware of a government investigation, he or she will ensure that all

relevant ICS employees are promptly notified, and that, until further notice is issued, they are

prohibited from altering, removing or destroying any paper or electronic documents or records of

ICS relating to the subject matter of the investigation. Counsel will define with sufficient

specificity the range of documents subject to the notice. The provision of notice by counsel will

supersede any record destruction that would otherwise be carried out under ICS’s ordinary

record retention policies. Counsel will ensure notification of all relevant employees upon

completion of the investigation and direct how records relating to the investigation should be

handled.






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EXHIBIT 9 – OVERPAYMENT POLICY

Purpose of Policy

The purpose of this policy is to ensure compliance by Independence Care System (“ICS”)

with federal law requiring the return of identified overpayments received from federal health care

programs such as Medicaid and Medicare.

Applicable Law

Under the False Claims Act, as amended by the Fraud Enforcement and Recovery Act of

2009, it is unlawful for a person to knowingly avoid an obligation to pay or transmit money to

the Government. The Affordable Care Act of 2010 clarifies that a provider is liable under the

False Claims Act if it fails to return an overpayment received from Medicaid or Medicare within

sixty days of discovering the overpayment or by the date any applicable cost report is due,

whichever is later. Violations of the False Claims Act may be punished by civil fines of up to

$10,000 per claim, treble damages, and exclusion from federal health programs.

Statement of Policy

Overpayments may be discovered in many different ways, including through internal

audits, claims reconciliations, and employee complaints. Any employee of ICS who becomes

aware of an actual or suspected overpayment is required to notify his or her supervisor or the

Compliance Officer within two business days of the discovery of the actual or suspected

overpayment. Supervisors should forward all such reports to the Compliance Officer.

Upon receiving a report of a potential overpayment, the Compliance Officer or a

delegated member of his/her staff shall conduct an investigation. The Compliance Officer may

consult other ICS personnel and ICS’s legal counsel to the extent necessary to carry out the

investigation. The Compliance Officer shall attempt to complete the investigation within 30 days

of receipt of the report. The Compliance Officer may suspend billing while the investigation is

pending if necessary to prevent the receipt of additional overpayments.

If the Compliance Officer determines that ICS received an overpayment, the Compliance

Officer shall report the overpayment to ICS’s Chief Operating Officer (“COO”) and Chief

Financial Officer (“CFO”), and request approval to return the overpayment to the appropriate

Government payer. If the COO and CFO fail to approve such a request and the Compliance

Officer continues to believe that ICS received an overpayment, the Compliance Officer shall

present the matter to ICS’s Board of Directors for a final determination. The Compliance Officer

shall use best efforts to complete this process within 30 days.

All overpayments shall be returned to the appropriate Government payer within 60 days

of discovery or, if applicable, 60 days from the date any cost report is due.

The Compliance Officer shall maintain records pertaining to the reporting, investigation

and repayment of overpayments under this policy. The Compliance Officer will submit a report

annually to the New York State Department of Health and the New York State Office of the

Medicaid Inspector General detailing any overpayments made throughout the year and the actions


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taken by ICS to correct them.


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Addressing Questions and Concerns

Because the rules governing government health care program reimbursement are

complex, ICS expects that, from time to time, employees may have questions as to whether a

particular payment received constitutes an overpayment. Employees are encouraged to contact

the Compliance Officer to seek guidance on these matters and to ask any questions they may

have regarding this policy.



ICS. Depending on the facts and circumstance of each case, ICS may reprimand, suspend, or
