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Compliance Implications Of Health Care Reform
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Compliance Implications Of Health Care Reform


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The presentation that Shawn DeGroot, Jeff Kapp, and I gave at the Health Care Compliance Association\'s Annual Compliance Institute in Dallas.

The presentation that Shawn DeGroot, Jeff Kapp, and I gave at the Health Care Compliance Association\'s Annual Compliance Institute in Dallas.

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  • 1. What you need to know about Health Care Reform Shawn DeGroot Vice President of Corporate Responsibility Regional Health, South Dakota Jeffrey L. Kapp Partner, Jones Day, Cleveland, Ohio Frank E. Sheeder Partner, Jones Day, Dallas, Texas
  • 2. Background
  • 3. Agenda
    • Identify the (many) provisions that are most pertinent from a compliance standpoint
      • We may not hit your unique issue in depth. . . .
      • The regs aren’t out yet. . . .
    • Highlight the compliance concerns
    • Provide some practical advice
  • 4. The Process Wasn’t Pretty Source:
  • 5. Bill weighs 20.3 lbs. Values based on that amount of sausage Amount Per Serving Calories 31,180 Calories from Fat 25,009 % Daily Value* Total Fat 2933g 4222% Saturated Fat 974g 4872% Cholesterol 7145mg 2273% Sodium 76,003mg 3248% Total Carbohydrate 300g 220% Dietary Fiber 300g 350% Sugars 0g Protein 1624g New Commitments Compliance Issues 110% New Meetings 70% Initiative Changes 90% Chaos 974% Compliance Calories Serving Size 20.3 lbs (324.8 oz) *Percent Daily Values are based on a 60-hour work week. Your daily values may be higher or lower depending on your organization’s resources.
  • 6. Introduction
  • 7. Patient Protection and Affordable Care Act
    • Passed March 21 and following, 2010.
      • HR 3590
      • Sidecar Bill (HR 4872)
      • Executive Order re Abortion
      • Manager’s Amendment (student loans, rural subsidies, lower tax on medical devices)
      • Senate corrections (procedural issues)
      • House vote (because of Senate corrections)
  • 8. Congressional Findings
    • National health spending:
      • $2,500,000,000,000 or 17.6% of economy in 2009
      • $4,700,000,000 in 2019
    • Private healthcare spending:
      • $854,000,000,000 in 2009
  • 9. Commercial Insurance
  • 10. Improving Coverage
    • Limitation on deductibles for employer-sponsored plans
    • No lifetime or annual limits
    • No pre-existing condition exclusions
    • Coverage of Preventive Health Services
    • Extension of dependent coverage up to age 26
    • Guaranteed availability of coverage
    • Guaranteed renewability of coverage
    • Can keep current coverage
    • No Discrimination
      • Health status, medical condition, claims experience, receipt of health care, medical history, genetic info, evidence of insurability, disability , any other health status factor
  • 11. Improving Coverage Compliance
    • New service lines that hospitals have not done before
    • Sicker insured patients with same reimbursement
      • Economic pressure can lead to bad choices
  • 12. Four Levels of Coverage
    • Bronze (60%)
    • Silver (70%)
    • Gold (80%)
    • Platinum (90%)
  • 13. Essential Health Services (Note: Apply to Medicaid too)
    • Ambulatory
    • Emergency
    • Hospitalization
    • Maternity and newborn care
    • Mental health and substance abuse
    • Prescription drugs
    • Rehabilitation and habilitative services and devices
    • Laboratory
    • Preventive and wellness services
    • Chronic disease management
    • Pediatric, including oral and vision
  • 14. Essential Health Services Compliance
    • More things reimbursed
    • New services by providers?
    • Reimbursement rules
    • Policies and procedures
  • 15. Individual Responsibility
    • Must maintain Minimum Essential Coverage by 1/1/2014
    • * This is the Constitutional fight
    • Maximum monthly penalties for not doing so
      • 2014: $23.75
      • 2015: $87.50
      • 2016 and following: $187.50
    • There are limits based on ability to pay
  • 16. Provisions Affecting Providers
  • 17. Quality Reporting
    • To improve
      • Case management
      • Care coordination
      • Chronic disease management
      • Education and care compliance
      • Use of Medical Homes
    • To prevent readmissions
      • Discharge planning
      • Education
      • Post-discharge reinforcement
      • Increased safety, fewer errors
  • 18. Quality Reporting Compliance
    • Interaction between compliance and quality
    • New compliance policies
    • Changes in data systems
    • Data accuracy
    • Quality drives reimbursement
  • 19. Prevention Services
    • Smoking cessation
    • Weight management
    • Stress management
    • Physical fitness
    • Nutrition
    • Heart disease prevention
    • Healthy lifestyle support
    • Diabetes prevention
  • 20. Prevention Services Compliance
    • New service lines that hospitals have not done before
    • New specific risk areas
    • New policies and procedures
    • Auditing and monitoring
  • 21. Publication of Standard Hospital Charges
    • Annually make public a list of the hospital’s standard charges for items and services
    • Accuracy of information
    • Antitrust concerns?
  • 22. Better Claim Appeal Procedures re: Insurance Companies
    • Internal claims appeal process
    • Provide notices of internal and external processes
    • Allow enrollee to review file, present evidence and testimony as part of appeal, and receive coverage during the appeal
    • Help enrollees with appeals?
    • New process
    • New policies and procedures
    • Accuracy of information submitted
  • 23. Demonstration Programs
    • Postpartum depression
    • Personal responsibility education
    • Value based hospital purchasing tied to quality
    • Encouraging development of new patient care models
      • “ Center for Medicare and Medicaid Innovation”
    • Hospital readmissions reduction program
    • Wellness programs
    • Integrated care around a hospitalization
    • Medicaid global payments
    • Pediatric accountable care organizations
    • Medicaid emergency psychiatric
    • Maternal, infant, early childhood home visits
  • 24. Demonstration Programs Compliance
    • Show where health care is going
    • Watch or participate in them
    • Think ahead
      • Are we already in these service lines?
      • Will we be in them?
  • 25. Enrollment – HIT
    • Within 6 months
      • Interoperable and secure standards to facilitate enrollment
        • Notification of eligibility
        • Verification of eligibility
        • Electronic matching of federal and state data
        • Simplification
        • Reuse of stored eligibility information
        • Capability to apply, recertify and manage eligibility online, including at home, at points of service, or community-based locations
        • Expandability of platform
        • Notification of eligibility, recertification, and other needed communication re: eligibility by email and cell phone
  • 26. Improved Access to Medicaid
    • Funding
    • Medicaid coverage must be at least Minimum Essential Coverage
  • 27. Improved Access to Medicaid Compliance
    • Are you already completely on top of your Medicaid compliance? [LOL]
    • Over 17 million new Medicaid recipients
    • 58 Medicaid State Plans
      • Watch for amendments
    • Medicaid OIG, MFCU, AG, etc.
    • New or expanded service lines
  • 28. Home and Community Based Services
    • Response to changing needs of aging population
    • Funding to expand state aging and disability resources
    • “ Sense of the Senate” re LTC:
      • It is costly and not meeting needs
  • 29. Reduction of DSH
    • Once reduction in uninsured threshold is reached
    • Question legislators have asked:
      • If most are insured, why do we need DSH or charitable non-profit status at all?
    • Financial pressure
    • Attacks on non-profit status
    • Seeing more and sicker patients at a loss
  • 30. State Option to Provide Health Homes
    • Chronic conditions
      • Mental health, substance, asthma, diabetes, heart disease, overweight (BMI > 25)
    • New service lines
    • Emerging model
    • Reimbursement opportunities, or challenges?
  • 31. Quality
    • Quality measure development
    • Improvements to physician quality reporting
    • Value-based payment modifier under the Physician Fee Schedule
    • Quality reporting for LTC hospitals, inpatient rehab, hospice
    • Payment adjustments for hospital-acquired conditions
      • Study of expansion to other providers
    • Same kinds of issues, just broader and more of them
  • 32. Accountable Care Organizations
    • Coordinate items and services under Parts A and B
    • Encourage investment in infrastructure and redesigned care processes for high quality efficient service delivery.
    • A new model creates new compliance activity
    • New incentives, disencentives, behaviors
    • Stakeholders all trying to get a piece of the pie
  • 33. More Quality/Efficiency
    • Quality improvement program for hospitals with high severity adjusted readmissions
    • Community based care transitions program
    • Extension of gainsharing demonstration
    • Permitting physician assistants to order post-hospital extended care services
    • Maximum period for submission of Medicare claims reduced to 12 months
  • 34. Transparency
    • Physician Payments Sunshine- Transparency Reports
      • Requires annual public reporting of any payments made by pharmaceutical, biologic, or medical device companies to physicians, effective March 31, 2013
  • 35. Fraud and Abuse
    • Anti-Kickback Statute
      • Specific intent requirement relaxed
      • A violation of AKS now constitutes a false or fraudulent claim under FCA
      • Definition of remuneration is amended for the beneficiary inducement provisions to exclude any remuneration that promotes access to care and poses a low risk of harm to patients and federal healthcare programs
  • 36. Fraud and Abuse Compliance
      • Watch out for expanded FCA liability
      • Definition of remuneration now has a broad exclusion that many activities may come within
  • 37. Fraud and Abuse
    • False Claims Act Qui Tam Public Disclosure Bar
      • FCA amended to provide that the public disclosure bar is not jurisdictional and does not require dismissal if the government opposes dismissal
      • State proceedings and private litigation are not qualifying public disclosures
      • Original source exception amended to eliminate direct knowledge requirement
  • 38. Fraud and Abuse Compliance
      • Adds significant litigation complexity and cost to declined qui tam actions
      • Ensures that DOJ has a prominent role in determining a relator’s status to proceed with the declined qui tam action
  • 39. Fraud and Abuse
    • Overpayments and FCA liability
      • Identified overpayments must be reported and repaid within 60 days
        • Retention of overpayments after 60 days constitutes an “obligation” under the FCA
      • What is an “identified” overpayment? Gov’t could find any delay in processing a known overpayment to create FCA liability
  • 40. Fraud and Abuse
    • All suppliers and providers enrolled in Medicare, and all providers enrolled in Medicaid, required to implement a compliance plan that contains core elements laid out by the Secretary of HHS
      • Once the core elements are published, update/create compliance policies
  • 41. Fraud and Abuse
    • Limitations on Stark Law Exceptions
      • Limits Whole Hospital and Rural Provider exceptions to hospitals that have Medicare provider agreements and physician ownership or investment as of 12/31/2010
        • Limitation on expansion of facility capacity
      • Retroactively imposes disclosure requirements on In-Office Ancillary Services exception
  • 42. Fraud and Abuse
    • Stark Law Self-Disclosure Protocol
      • Statutory disclosure protocol created for violations of the Stark Law
        • Provides for agency discretion to resolve Stark violations and authorizes HHS to reduce the amount due and owing for all Stark violations, considering such factors as the nature and extent of the improper practice and timeliness of the disclosure
  • 43. Fraud and Abuse Compliance
      • CMS will develop the protocol in the next 6 months
      • Providers must assess their disclosure efforts in context with new overpayment provision, which is effective now
  • 44. Fraud and Abuse
    • Expanded RAC Activities
      • RAC audits of providers will increase and expand to Medicare Part D and Medicare Advantage programs
      • Check your internal audit activities and your responses to RAC requests
  • 45. Fraud and Abuse
    • Healthcare Fraud Criminal Statute
      • Intent requirement amended- now provides that proof of actual knowledge of the healthcare fraud statute or specific intent to violate the statute is not required
      • Definition of healthcare offense amended to include violations of the AKS, among other things
  • 46. Fraud and Abuse
    • US Sentencing Guidelines amended
      • Guidelines amended with respect to individuals convicted of healthcare fraud offenses related to any federal healthcare program
        • Offense level increased anywhere from 20% to 50% where the loss involves more than $1 million
  • 47. Fraud and Abuse
    • Gov’t has new resources
      • Expanded HHS subpoena power
      • Additional funding- over $300 million over the next 10 years
      • Expanded use of RACs
      • Agency data sharing
  • 48. Fraud and Abuse
    • Expansion of Administrative Penalties
      • Authorizes HHS to suspend Medicare and Medicaid payments to a provider “pending an investigation of a credible allegation of fraud”
      • HHS authority to exclude any entity that knowingly makes or causes to be made a false statement or omission in an application, agreement, bid or contract to participate as a provider under a federal health care program
  • 49. Fraud and Abuse
    • More Administrative Penalties
      • New grounds for imposing Civil Monetary Penalties, including the knowing retention of an overpayment, or knowingly making or causing to be made a false statement in an application to participate as a provider
  • 50. Fraud and Abuse
    • More Administrative Penalties
      • Requires that state Medicaid agencies exclude any entity that owns, controls, or manages an entity that has unpaid, delinquent overpayments; is suspended, excluded, or terminated from Medicaid; or is affiliated with an individual or entity that has been suspended, excluded or terminated from Medicaid
  • 51. Fraud and Abuse
    • Health Benefits Exchanges
      • Payments made in connection with the new Health Benefits Exchanges will fall within the scope of the FCA, to the extent that such payments include any federal funds
  • 52. Fraud and Abuse Compliance
      • Risks and consequences of enforcement actions are intensified
      • Increased exposure for a broad array of business and regulatory activities where there is no specific intent to violate the provisions
  • 53. Program Integrity
    • Screening and Disclosure Requirements
      • Employee and vendor screening requirements
      • Financial disclosure requirements
      • Providers must include their national provider identifier on all applications and claims
  • 54. Implementation Timeline
    • Upon enactment- March 23, 2010
      • Fraud and abuse provisions, including:
        • Overpayments
        • AKS amendments
        • Expansion of RAC Program
        • FCA public disclosure bar
        • CMS Civil Monetary Penalties expansion
        • Beneficiary fraud penalties
        • Expanded HHS/OIG subpoena authority
        • Data-sharing
  • 55. Implementation Timeline
    • More fraud and abuse provisions:
      • Amendments to Sentencing Guidelines
      • Suspension of payments pending investigation
      • Additional funding to Fraud and Abuse Control Account
      • Provider screening and other enrollment requirements
  • 56. Implementation Timeline
    • 90 days after enactment
      • Temporary Retiree Reinsurance Program
      • National High-Risk Pool
    • 6 Months After Enactment
      • Coverage for adult children up to age 26
      • Plans prohibited from rescinding coverage
      • Restricts annual limits on coverage
      • No preexisting limitation for coverage of children under age 19
  • 57. Implementation Timeline
    • Year 2010
      • Small employer tax credit
      • Reporting on medical loss ratio
      • Medicare beneficiaries who hit the doughnut-hole receive a $250 rebate
  • 58. Implementation Timeline
    • Year 2011
      • Insurers must provide rebates to consumers based on amount spent
      • Medicare Advantage payment freeze so system can be restructured
      • Fee on Pharma begins
      • Prohibition on physician ownership referral
  • 59. Implementation Timeline
    • Year 2012:
      • Allow providers organized as accountable care organizations (ACOs) that voluntarily meet quality thresholds to share in the cost savings they achieve for the Medicare program
      • Excess readmissions provision goes in effect
      • Drug manufacturers must report information relating to drug samples
  • 60. Implementation Timeline
    • Year 2013
      • Transparency reporting begins
      • Increased tax on investment income for high-income taxpayers begins
      • Contributions to Flex Spending Arrangements capped at $2500
      • Medical device tax begins
  • 61. Implementation Timeline
    • Year 2014
      • No pre-existing condition exclusions or annual limits on coverage
      • Individual and Employer mandate
      • Employers with more than 200 employees must automatically enroll employees in plans offered by employer
  • 62. Implementation Timeline
    • Year 2014 (continued)
      • Essential health benefits package established
      • Expanded Medicaid eligibility
      • Health insurance exchanges
      • Annual fee on health insurance providers
  • 63. Implementation Timeline
    • Year 2015:
      • Establishment of Independent Payment Advisory Board to propose changes in Medicare payments
  • 64. Implementation Timeline
    • Year 2016:
      • Interstate Health Choice Compacts
    • Year 2017:
      • Large employer participation in Exchanges
  • 65. Implementation Timeline
    • Year 2018
      • Tax on Cadillac plans
  • 66.
    • Thank you.
    • Questions?
    • [email_address]
    • [email_address]
    • [email_address]