Track Two

Fraud and Abuse Rules for IONM

Neal D. Shah, JD, MPH

www.ASNM.org

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FRAUD AND ABUSE RULES FOR INTRAOPERATIVE NEUROPHYSIOLOGICAL MONITORING Neal Shah, J.D., M.P.H.

Katten Muchin Rosenman, LLP

American Society for Neurophysiological Monitoring Conference, May 17th, Chicago, IL

Fraud and Abuse Laws

¨  Why worry about healthcare fraud & abuse laws? ¤ Civil and criminal penalties; ¤ Loss of billing privileges / future opportunities; ¤ Loss of license; ¤ Reputational costs.

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Recent Actions

¨  Justice Department recovered over $3.5 billion from False Claims Act cases in 2015; $1.9 billion due to healthcare fraud.

¨  November 17, 2010 - settlement of Maryland-based IONM provider with U.S. Attorney for District of Connecticut for $2.7 million due to improper billing; company excluded from Medicare for three years.

¨  November 2011 – Owner, president, and CEO of IONM testing service excluded from Medicare for three years.

¨  June 2012 – Colorado neurologist who performed IONM paid $747,013 to settle allegations of improper billing based on simultaneous monitoring of multiple patients.

“Fraud and Abuse” vs. Other Liability

¨  What does “fraud and abuse” cover: ¤  Improper billing / False Claims; ¤ Compliance with Medicare & other payor rules; ¤  Illegal financial arrangements.

¨  What doesn’t “fraud and abuse” cover? ¤ Medical malpractice / professional liability; ¤ Healthcare privacy and HIPAA.

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Sources of Fraud & Abuse Requirements ¨  Federal

¤  In most cases, largest potential fines and penalties; ¤ Generally restricted to providers who bill Medicare,

Medicaid, and other government programs. ¨  State

¤ Usually less complex and stringent; ¤ Often apply regardless of which payor(s) involved; ¤ May impact overall right to practice in the state.

¨  Private contracts ¤ Contracts with payors, hospitals, or other partners.

Federal Fraud & Abuse Laws

¨  False Claims Act (31 U.S.C. §§ 3729-3733) ¨  Anti-Kickback Statute (42 U.S.C. § 1320a-7b) ¨  Physician Self-Referral Law (42 U.S.C. § 1395nn)

¤ AKA the “Stark Law”.

¨  Civil Monetary Penalty Law (42 U.S.C. § 1320a-7a)

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False Claims Act

¨  Any person who: ¤  Knowingly presents, or causes to be presented; ¤ A “false or fraudulent claim”; ¤  For “payment or approval”

¨  Repayment of all false claims; civil penalties of $5,000-$10,000 per claim, plus treble damages.

¨  Can be enforced through whistleblower action. ¨  May be shown in several ways:

¤ Actual submission of false claim; ¤  False certification of a condition of payment.

Common Types of False Claims

¨  Knowingly billing for services that are not medically necessary ¤ G0453 code; ¤ Exclusive monitoring of a single patient in fifteen minute

segments; ¤ Technician monitoring in OR in communication with

neurologist.

¨  Submitting a claim that violates another health care law.

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“Reverse False Claim”

¨  Affordable Care Act Section 6309 ¨  Knowingly retaining an overpayment is itself a

violation of the False Claims Act. ¨  Obligation to investigate, report, and refund

identified overpayment in sixty days. ¨  Obligation to report prior six years worth of

overpayments.

Anti-Kickback Statute

¨  Criminal law. ¨  Prohibits the exchange of (or offer to exchange),

remuneration (anything of value) by any person to induce referrals of federal health care program business.

¨  Arrangement where even one purpose is to induce (or reward) the referral.

¨  Penalties include fine of up to $25,000 and imprisonment for up to 5 years per violation.

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AKS Safe Harbors

¨  AKS is an intent-based statute; enforcement depends on demonstration of intent to induce referrals.

¨  HHS Office of Inspector General has created several “safe harbors” that represent low risk of fraud: ¤ Employment; ¤ Personal service & management agreements; ¤ Certain kinds of ownership relationships.

¨  Not required to fit these safe harbors.

Physician Self-Referral (“Stark”) Law

¨  Civil law. ¨  Prohibits a physician from referring patients to an

entity for a designated health service (DHS), if the physician or a member of his or her immediate family has a financial relationship with the entity, unless an exception applies.

¨  Entity receiving referral cannot submit the associated claim. ¤ All Medicare reimbursement treated as a false claim.

¨  Most significant risk for Medicare payments.

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Stark Law Analysis Framework

¨  Is a “physician” involved? ¨  Did the physician make a “referral” to an entity? ¨  Is the referral for “DHS”? ¨  Does the physician have a “financial relationship”

with the entity? ¨  Does an exception apply?

IONM under the Stark Law

¨  G0453 is not a DHS in its own right. ¨  Inpatient hospital services are DHS

¤  In limited cases, IONM may be bundled into surgical codes.

¤ But IONM is generally not DHS where separately billable.

¨  Financial interests in an IONM entity can still create financial relationships under Stark. ¤ Ex: Physician-owned IONM business that provides

services to a hospital where physician practices.

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Exceptions

¨  Stark is strict liability – intent is irrelevant. ¨  As such, it is mandatory to meet all elements of an

applicable exception. ¨  Common exceptions:

¤ Ownership exceptions limited & complicated n  In-office ancillary services

¤ Compensation exceptions more numerous, but technical: n Employment n Personal Services n Fair Market Value

Anti-Kickback Statute vs. Stark Law

Source: OIG Provider Compliance Training: http://oig.hhs.gov/compliance/provider-compliance-training/files/StarkandAKSChartHandout508.pdf

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Example of Financial Relationships

¨  A surgeon owns a company providing IONM services to a hospital. The surgeon also performs inpatient surgeries in the hospital’s OR.

Hospital

Surgeon

IONM Entity

Example of Financial Relationships

¨  A surgeon owns a company providing IONM services to a hospital. The surgeon also performs inpatient surgeries in the hospital’s OR.

Hospital

Surgeon

IONM Entity

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Example of Stark Analysis

¨  Surgeon may have an indirect relationship with hospital that would need to meet exception.

Hospital

Surgeon

IONM Entity

Payments for IONM services

Ownership relationship with IONM Entity and possible

indirect compensation relationship with Hospital

Referrals to hospital for

DHS (inpatient hospital services)

“Referrals” to IONM entity (but usually not DHS)

Example of AKS Analysis

¨  More factual analysis

Hospital

Surgeon

IONM Entity

Payments for IONM services – should be FMV and not advantage physician

Ownership relationship with IONM Entity and indirect

remuneration with Hospital

Providing inpatient hospital services

Some federal HC program business will go

to IONM Entity; is this arm’s length?

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Civil Monetary Penalties

¨  Additional civil money penalties for violations of the laws mentioned above and other violations of healthcare laws, including: ¤  Employing or contracting with an excluded individual or

entity; ¤ Violations of Medicare assignment rules; ¤ Certain false statements related to hospital discharge or

statements material to a false claim; ¤  Failure to refund an overpayment.

¨  Amount of penalty varies, up to $50,000 per claim for CMPs related to AKS violations.

Common State Law Concerns

¨  Telemedicine rules ¨  “Baby Stark” laws ¨  Fee-Splitting restrictions ¨  Corporate Practice of Medicine

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Telemedicine

¨  State laws vary widely on coverage, scope, and licensure requirements for telemedicine.

¨  Particularly complex for providers in different state than patient.

¨  Issues that may arise: ¤  In-state licensure / special “telemedicine-only” licenses; ¤ Patient informed consent standards; ¤ Private payor coverage and parity in reimbursement.

State Laws Governing Payments

¨  Fee-Splitting Rules ¤ Payment/sharing of fees in exchange for referral

n Often impact percentage-based payment n May reach other forms of remuneration. n  In some states, “fair market value” exception exists.

¨  “Baby Stark” Laws ¤ Often all-payer ¤ Sometimes limited to certain contexts ¤ Exceptions may vary (ex: Maryland in-office ancillary

services)

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Corporate Practice of Medicine

¨  Many states have laws limiting individuals or entities who may legally “practice medicine.”

¨  Definition of “practicing medicine” can vary between states.

¨  Source of law very complex and state-specific. May be formal statutes/regulation or informal Attorney General opinions or guidance.

¨  Consequences may be break-up of entity, sanctions for practicing medicine without a license, and/or professional sanctions for physician-owners.

Examples of “Control”

¨  Issue is usually level of control or direction exerted on physicians. For example, States look to: ¤ Employment of physician and extenders; ¤ Control over medical equipment & records; ¤ Restrictions on physicians’ ability to refer patients; ¤ Policies or procedures that impede a physician or other

state-licensed professional’s medical judgment.

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Questions?

¨  Contact information: ¤  (312) 902-5215 ¤ neal.shah@kattenlaw.com

¨  Helpful links: ¤ www.oig.hhs.gov ¤ www.cms.gov/Medicare/Fraud-and-Abuse/

PhysicianSelfReferral ¤ www.stopmedicarefraud.gov

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