New Partnerships Create IncreasedNew Partnerships Create Increased 
Compliance and Patient Financial 
Services RiskService...
From Transactional to Operational 
C liCompliance
• Significant attention and resources have been focused 
on ensuring cre...
False Claims Act
• Federal False Claims Act (31 USC § 3279‐3733)
The False Claims Act establishes liability for any person...
Federal False Claims Act
• The Act prohibits:
l b d f l l– Knowingly presenting, or causing to be presented a false claim ...
Strengthening Federal False Claims Act
• Section 6402.  Patient Protection and Affordable Care 
Act
E h d M di d M di id i...
Reverse False Claim:  Retention  of 
OverpaymentsOverpayments
• Affordable Care Act added a new provision 
i i bli i id di...
Reverse False Claims
• If a provider fails to return the overpayment within 
h 60 d i d i b bli i ithe 60 day period it be...
Reverse False Claims
• Huge potential liability
– Discovery of a systemic billing error
– Discovery of a longstanding cont...
C      False Claims Amendment
• 2012 California’s False Claims Act  Amended0 California s False Claims Act Amended
– Calif...
False Claims Amendment
• States have a financial incentive to enact state false 
claims laws that are at least as effectiv...
Key Amendments to CFCAy
• Increases penalties.
– Penalties increased to $5,500 to $11,000 for each false 
claim.
• Broaden...
Key Amendments to CFCA (cont)y ( )
• Defines "obligation." 
– The CFCA incorporates the federal FCA's definition of anThe ...
Key Amendments to CFCA (cont)y ( )
– Clarify that the CFCA's anti‐retaliation provisions apply 
when relators are discrimi...
What is a False Claim?
• Liability under the federal False Claims Act occurs where 
a defendanta defendant 
1. Knowingly p...
What is “Knowingly”?g y
• Any person with respect to the information does 
any of the following:
– Has actual knowledge of...
False Claims Act: Potential Areas 
• Include 
– Coding false claims
– DRG false claims fraud
– PPS false claims fraud
– So...
False Billingg
1. Billing for services not rendered or products not delivered
2. Misrepresenting services rendered or prod...
False Billing (cont)g ( )
6. Falsifying records to meet or continue to meet the 
conditions of participationconditions of ...
FCA and Quality of Care? Q y
• DOJ attorney
– “We are starting to look at quality of care cases as 
potential FCA cases.” ...
False Claims Act:  Key Issuesy
• Who is coding, billing and collecting for integrated 
delivery system?
– Hospital?Hospita...
Physician Owned Distributorshipsy p
• PODs are physician owned entities that sell or• PODs are physician owned entities th...
POD:  Controversyy
• PODs have always been controversial 
• Several years ago the OIG  expressed concerns 
about the busin...
Special Fraud Alertp
• March 2013 OIG issued a Special Fraud Alert
– PODs characterized as “inherently suspect” under the ...
PODs: Red Flagsg
• Some red flags
– Investor selection based on potential to refer
– Requiring divestment if referrals not...
Sunshine Act
• Affordable Care Act included new reporting obligations
• Starting August 1, 2013 manufacturers and Group 
P...
Sunshine Act
• Manufacturer (which include distributors who take 
title to goods) is an entity that produces, prepares, 
p...
Sunshine Act
• Covered drug, device, biological or medical supply 
means any such item that is payable under 
Medicare/Med...
Sunshine Act
• Physicians: as defined under Medicare, except a 
bona fide employee of the manufacturer
• Teaching Hospital...
Guidelines for Tracking g
• Employed Physicians: A payment provided directly to a physician 
who is employed by a teaching...
Sunshine Act: Exclusions
• Payments or Other Transfers of Value of Less than 
$10 l i h d$10, unless in aggregate these pa...
Sunshine Act:  Exclusions
•Trial Loans of Covered Devices: This exclusion covers loans of 
devices and devices under devel...
Sunshine Act:  Reportingp g
– Name: Provide the physician’s full name as reported in the National Plan 
and Provider Enume...
Reporting (cont)p g ( )
Context: You may explain each payment by providing brief 
contextual information. 
Related Cover...
Reporting (cont)
Nature: The categories are: 
 Consulting fee  Grant
 Honoraria  Travel and lodging (including the sp...
Reporting:  Ownershipp g p
All ownership and investment interests held by a physician or an immediate 
family member of a ...
Sunshine Act: Research
• Payments made pursuant to a research protocol or 
research agreement may be postponed until the 
...
Following Submission . . .g
• CMS notifies covered recipients
• 45 day period following submission for discussion
• Covere...
3 Day Payment Ruley y
• Medicare’s 3‐day (or 1‐day) payment window 
applies to outpatient services furnished by hospitals ...
Three‐day payment windowy p y
• The three‐day rule defines certain preadmission services as 
inpatient operating costsinpa...
3 Day Payment Rule
O t ti t S i T t d I ti t S iOutpatient Services Treated as Inpatient Services
• Within 3 days of inpat...
3 Day Payment Rule
Outpatient Services Treated as Inpatient Services (cont)
• Facilities Excluded from Payment Window 
Pro...
Three‐day payment windowy p y
• Clinically unrelated non‐diagnostic preadmission 
services may be separately billedservice...
Three‐day payment window (cont)y p y ( )
• Documenting unrelated services
– Providers must clearly document why they provi...
jmahealthcare.comjmahealthcare.com
44
Three‐Day Payment Window
Key IssuesKey Issues
• Who is coding, billing and collecting for integrated 
delivery system?deli...
Key Issuesy
• What was agreed to during the transactional portion of the 
“deal?”
• What was promised to further “business...
Critical Success Factors
C T E SCreate Teams to Ensure Success
• Operational Implementation Teamp p
– Hospital executives ...
Critical Success Factors
C t T t E S ( t)Create Teams to Ensure Success (cont)
– Partner executives involved in creating t...
Critical Success Factors
• Leverage existing hospital policies and procedures 
where possiblep
– Fraud & Abuse
– Corporate...
Critical Success Factors
• Operational Implementation Team Functions
– Integrate business plan into operations
• Connect s...
Key Components of 
O ti l I l t ti PlOperational Implementation Plan
• Determine Objectives and Controls and How TheyDeter...
Key Components of 
O ti l I l t ti Pl ( t)Operational Implementation Plan (cont)
• Document results of risk assessment• Do...
Joseph Mack, MPA
P.O. Box 23
Dana Point, CA  92629
(949) 481 0602
Robert Homchick, Esquire
Davis Wright Tremaine LLP
Suite...
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New Partnerships Create Increased Compliance and Patient Financial Services Risk September 2013

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Compliance, Transactions, Risk Management, Patient Financial Services, Transactional Compliance, Operational Compliance, False Claims Act, Federal False Claims Act, California False Claims Act, Patient Protection and Affordable Care Act, Medicare Integrity, Medicaid Integrity, Reporting Overpayments, Returning Overpayments, Reverse False Claims, Coding False Claims, Medical Billing, DRG false claims, Medicare Kickbacks, Stark law, Stark law violations, DRG fraud, False billing, Physician Owned Distributorships, PODs, Sunshine Act, manufacturers, group purchasing organizations, Medicare 3 day payment rule, 3 day payment rule, Bundling of outpatient and inpatient claims, Outpatient services treated as inpatient services, compliance key issues, compliance team building, compliance auditing, ACOs, Hospital Physician joint ventures, Integrated delivery systems

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New Partnerships Create Increased Compliance and Patient Financial Services Risk September 2013

  1. 1. New Partnerships Create IncreasedNew Partnerships Create Increased  Compliance and Patient Financial  Services RiskServices Risk 23rd Annual HFMA  Southern California and San  Diego/Imperial Chapter Fall  Conference September 8 – 10, 2013 jmahealthcare.comjmahealthcare.com 1
  2. 2. From Transactional to Operational  C liCompliance • Significant attention and resources have been focused  on ensuring creation of hospital/physician collaboration  models comply with various regulations.    • Less attention has focused on ensuring operational or g p implementation compliance.  • Does your new “integrated delivery system” have the  infrastructure to implement and comply with theinfrastructure to implement and comply with the  myriad of new requirements?  • This session focuses on increased risks organizations  assume in implementing various health care reformassume in implementing various health care reform  managed care approaches, discusses key issues and  critical success factors for implementation. jmahealthcare.comjmahealthcare.com 2
  3. 3. False Claims Act • Federal False Claims Act (31 USC § 3279‐3733) The False Claims Act establishes liability for any person who– The False Claims Act establishes liability for any person who  KNOWINGLY presents false or fraudulent claims to the US  government for payment. – The Act includes “Qui Tam” provisions that allow privateThe Act includes  Qui Tam  provisions that allow private  citizens (relators) to sue violators on behalf of the government. • California False Claims Act (CFCA) – Enacted in 1987 (Gov’t Code 12650 et. Seq)Enacted in 1987 (Gov t Code 12650 et. Seq) – Modeled after the Federal False Claims Act. – Allows the government or individual (relator) to bring civil  actions to recover damages, penalties, and costs when g , p , government contractors, vendors or others defraud the  government. jmahealthcare.comjmahealthcare.com 3
  4. 4. Federal False Claims Act • The Act prohibits: l b d f l l– Knowingly presenting, or causing to be presented a false claim  for payment or approval. – Knowingly making, using, or causing to be made or used, a  f l d i l f l f d lfalse record or statement material to a false or fraudulent  claim. – Conspiring to commit any violation of the False Claims Act – Falsely certifying the type or amount of property to be used by  the Government. – Knowingly making, using, or causing to be made or used a false  record to avoid, or decrease an obligation to pay or transmit  property to the Government. jmahealthcare.comjmahealthcare.com 4
  5. 5. Strengthening Federal False Claims Act • Section 6402.  Patient Protection and Affordable Care  Act E h d M di d M di id i t it i i– Enhanced Medicare and Medicaid program integrity provisions – Allows OIG and Attorney General access to claims and  payment data of the DHHS and its contractors – Anti‐Kickback Statute • AKS violation that results in submission of a claim = False  Claim – Reporting and Returning Overpayments • Overpayments from the Medicare or Medicaid programs  must be reported and returned with in 60 daysp y • Retention of any overpayment after the  60 day period may  lead to liability under the False Claims Act jmahealthcare.comjmahealthcare.com 5
  6. 6. Reverse False Claim:  Retention  of  OverpaymentsOverpayments • Affordable Care Act added a new provision  i i bli i id dimposing an obligation on providers to report and  return identified overpayments within 60 days – Overpayments broadly defined ‐‐ funds received thatOverpayments broadly defined  funds received that  provider is not entitled to – 60 day clock starts running when the provider has  “identified” the overpaymentidentified  the overpayment • No clear definition of “identified” • Failure to investigate might trigger the 60 day clock if  the circumstances suggest deliberate disregard or  dilatory tactics jmahealthcare.comjmahealthcare.com 6
  7. 7. Reverse False Claims • If a provider fails to return the overpayment within  h 60 d i d i b bli i ithe 60 day period it becomes an obligation creating  exposure under the False Claims Act • This means a claim might be fine when submitted• This means a claim might be fine when submitted  but become a false claim when facts are later  discovered, for example:  – Bills submitted in good faith that did not meet coverage  requirements – Bills submitted in good faith for services providedBills submitted in good faith for services provided  pursuant to a referral prohibited by the Stark law  jmahealthcare.comjmahealthcare.com 7
  8. 8. Reverse False Claims • Huge potential liability – Discovery of a systemic billing error – Discovery of a longstanding contract with a physician  gro p that does not compl ith Starkgroup that does not comply with Stark • Government proposed regulations for 60 day rule 10 year look back period proposed???– 10 year look back period proposed??? – Current reopening rules provide for a 4 year look back  period  jmahealthcare.comjmahealthcare.com 8
  9. 9. C      False Claims Amendment • 2012 California’s False Claims Act  Amended0 California s False Claims Act Amended – California Government Code sections 12650 through  12656  – The Amendment took effect January 1, 2013 • The Amendment largely conforms the CFCA to the  f d l F l Cl i A ("FCA") b difederal False Claims Act ("FCA") by expanding  liability under the CFCA and the rights of qui tam plaintiffs (called relators)plaintiffs (called relators).  jmahealthcare.comjmahealthcare.com 9
  10. 10. False Claims Amendment • States have a financial incentive to enact state false  claims laws that are at least as effective as the FCA  • By doing so, states qualify under the federal Deficit  Reduction Act of 2005 ("DRA") for an additional 10  h f h d i hpercent share of the amount recovered using the  state law. jmahealthcare.comjmahealthcare.com 10
  11. 11. Key Amendments to CFCAy • Increases penalties. – Penalties increased to $5,500 to $11,000 for each false  claim. • Broadens the definition of "claim." – The definition includes claims submitted to a "contractor,  grantee, or other recipient, if the money, property, or  service is to be spent or used on a state or any politicalservice is to be spent or used on a state or any political  subdivision's behalf or to advance a state or political  subdivision's program or interest . . . ." jmahealthcare.comjmahealthcare.com 11
  12. 12. Key Amendments to CFCA (cont)y ( ) • Defines "obligation."  – The CFCA incorporates the federal FCA's definition of anThe CFCA incorporates the federal FCA s definition of an  "obligation." – An obligation includes retention of an overpayment,  thereby giving rise to liability under the CFCA forthereby giving rise to liability under the CFCA for  retention of an overpayment • Amendments favorable to relators – Make relators eligible for an award even if they planned  and initiated the violation upon which the CFCA action  was based – Eliminate the requirement that a claim must have been  presented to an officer, employee, or agent of the state jmahealthcare.comjmahealthcare.com 12
  13. 13. Key Amendments to CFCA (cont)y ( ) – Clarify that the CFCA's anti‐retaliation provisions apply  when relators are discriminated against for furthering anwhen relators are discriminated against for furthering an  action under the CFCA or for trying to stop a violation of  the CFCA (currently, these provisions apply only after a  relator disclosed information about the false claim to therelator disclosed information about the false claim to the  government) – Expand the anti‐retaliation provisions to include  d dd lcontractors and agents in addition to employees – Grant relief to relators who are discriminated against,  including reinstatement with the same seniority status, g y twice the amount of back pay plus interest, and  compensation for special damages. jmahealthcare.comjmahealthcare.com 13
  14. 14. What is a False Claim? • Liability under the federal False Claims Act occurs where  a defendanta defendant  1. Knowingly presents (or causes to be presented) a false or  fraudulent claim for payment l k b d d f l2. Knowingly makes, uses, or causes to be made or used, a false  record or statement material to a false or fraudulent claim 3. Conspires with others to commit a violation of the False  Claims Act  4. Knowingly makes, uses, or causes to be made or used, a false  record or statement to conceal, avoid, or decrease anrecord or statement to conceal, avoid, or decrease an  obligation to pay money or transmit property to the Federal  Government. jmahealthcare.comjmahealthcare.com 14
  15. 15. What is “Knowingly”?g y • Any person with respect to the information does  any of the following: – Has actual knowledge of the information d l b f h h f l f h– Acts in deliberate ignorance of the truth or falsity of the  information – Acts in reckless disregard of the truth or falsity of theActs in reckless disregard of the truth or falsity of the  information. • Proof of specific intent to defraud is not required jmahealthcare.comjmahealthcare.com 15
  16. 16. False Claims Act: Potential Areas  • Include  – Coding false claims – DRG false claims fraud – PPS false claims fraud – Some Medicare kickbacks Outpatient PPS false claims fraud– Outpatient PPS false claims fraud – Stark law violations – DME fraudDME fraud – DRG fraud jmahealthcare.comjmahealthcare.com 16
  17. 17. False Billingg 1. Billing for services not rendered or products not delivered 2. Misrepresenting services rendered or product provided  ( )(e.g., upcoding, inappropriate coding) • Misrepresenting the nature of the patient’s condition (e.g., DRG  fraud, DRG creep). 3. Ungrouping or unbundling services or products billed 4. Billing for medically unnecessary services  • Furnishing services in excess of the patient’s needs, based on theirFurnishing services in excess of the patient s needs, based on their  diagnosis • Furnishing a battery of diagnostic tests, where, based on the  diagnosis, only a few were needed • Misrepresenting the diagnosis to justify the services or products. 5. Duplicate billing jmahealthcare.comjmahealthcare.com 17
  18. 18. False Billing (cont)g ( ) 6. Falsifying records to meet or continue to meet the  conditions of participationconditions of participation • Alteration of dates • Forging of physicians’ signatures • Adding of additional information after the fact. g 7. Increasing units of service, which are subject to a payment  rate. 8. Billing procedures over a period of days when all treatment8. Billing procedures over a period of days when all treatment  occurred during one visit (i.e. split billing) 9. Billing Medicare improperly based on a higher fee schedule  or unit schedule than that used for non‐Medicare patients.or unit schedule than that used for non Medicare patients. 10. Submitting bills to Medicare that are the responsibility of  other insurers under the Medicare Secondary Payer rule. jmahealthcare.comjmahealthcare.com 18
  19. 19. FCA and Quality of Care? Q y • DOJ attorney – “We are starting to look at quality of care cases as  potential FCA cases.”  E er claim to a federall f nded health care program– Every claim to a federally funded health care program  impliedly certifies that the services provided meet the  standard of care  – Therefore, services that fail to meet the standard of care  are false. jmahealthcare.comjmahealthcare.com 19
  20. 20. False Claims Act:  Key Issuesy • Who is coding, billing and collecting for integrated  delivery system? – Hospital?Hospital? – Physician? – Upcoding, inappropriate coding, unbundling, double billing,  etc.etc. – Integration and accuracy of hospital and physician information  systems • Providers must establish policies/processes forProviders must establish policies/processes for  preventing fraud • Organizations must have ongoing internal audits and  processes for timely reporting of irregularities to ensureprocesses for timely reporting of irregularities to ensure  compliance jmahealthcare.comjmahealthcare.com 20
  21. 21. Physician Owned Distributorshipsy p • PODs are physician owned entities that sell or• PODs are physician owned entities that sell or  arrange for the sale of devices, including physician  owned entities that purport to design orowned entities that purport to design or  manufacture their own devices – In some cases all of the POD’s sales are the result of  orders from the POD’s physician owners for use in  procedures that the physician owners perform on their  own patients at hospitals or ASCsown patients at hospitals or ASCs jmahealthcare.comjmahealthcare.com 21
  22. 22. POD:  Controversyy • PODs have always been controversial  • Several years ago the OIG  expressed concerns  about the business model • Despite these concerns‐‐‐ no government  enforcement  • Number of PODs multiplied – Organized in a variety of ways – Some PODs included safeguards to address concerns of  OIG  jmahealthcare.comjmahealthcare.com 22
  23. 23. Special Fraud Alertp • March 2013 OIG issued a Special Fraud Alert – PODs characterized as “inherently suspect” under the  Anti‐kickback Statute – Concerns: • Corruption of medical judgment • Overutilization • Increased costs to Federal Programs and Beneficiaries • Unfair competition • Fraud Alert included warning to hospitals/ASCs• Fraud Alert included warning to hospitals/ASCs  using PODs— potential AKS liability jmahealthcare.comjmahealthcare.com 23
  24. 24. PODs: Red Flagsg • Some red flags – Investor selection based on potential to refer – Requiring divestment if referrals not made – Disproportionate distributions – Physicians tying use of hospital to purchase of POD  devicesdevices – POD is sham– no real business activities • Implantable devices particular concern becauseImplantable devices particular concern because  they are “physician preference items” jmahealthcare.comjmahealthcare.com 24
  25. 25. Sunshine Act • Affordable Care Act included new reporting obligations • Starting August 1, 2013 manufacturers and Group  Purchasing Organizations (GPOs) must track all:  – Direct or indirect transfers of value to Physicians or Teaching irect or indirect transfers of value to Physicians or Teaching Hospitals (or to third parties at the request of a physician or  teaching hospital) – Ownership interests held by a physician or an immediate p y p y family member (other than an ownership interest in a publicly  traded security of mutual fund) • First report on transfers of value and ownershipFirst report  on transfers of value and ownership  interests due March 31, 2014;  annually thereafter jmahealthcare.comjmahealthcare.com 25
  26. 26. Sunshine Act • Manufacturer (which include distributors who take  title to goods) is an entity that produces, prepares,  propagates, compounds or converts a covered drug  de ice biological or medical s ppl nless soleldevice, biological, or medical supply, unless solely  for the entity’s own use • Group Purchasing Organization is any entity that• Group Purchasing Organization is any entity that  operates in US that purchases or arranges for the  purchase of a covered drug, device, biological orpurchase of a covered drug, device, biological or  medical supply not solely for the GPO’s own use jmahealthcare.comjmahealthcare.com 26
  27. 27. Sunshine Act • Covered drug, device, biological or medical supply  means any such item that is payable under  Medicare/Medicaid or SCHIP, including as a part of  a b ndled pa ment and is either a prescribed dr ga bundled payment, and is either a prescribed drug  or a device that requires premarket approval jmahealthcare.comjmahealthcare.com 27
  28. 28. Sunshine Act • Physicians: as defined under Medicare, except a  bona fide employee of the manufacturer • Teaching Hospitals:   Any hospital that receives IME  or DGME.   CMS will publish a list annually.  jmahealthcare.comjmahealthcare.com 28
  29. 29. Guidelines for Tracking g • Employed Physicians: A payment provided directly to a physician  who is employed by a teaching hospital should be reported in thewho is employed by a teaching hospital should be reported in the  physician’s name. If the payment was not passed through the  teaching hospital in its entirety, then the report must identify the  portion of the payment retained by the teaching hospital and the  portion passed through to the physicianportion passed through to the physician.  • Group Practices: Payments provided to a group practice should be  attributed to: (a) the individual physician who requested the  payment or on whose behalf the payment was made, or (b) the p y p y , ( ) physician who is intended to benefit from the payment. • Indirect Payments: Payments provided to one recipient, but paid  through another recipient, should be reported in the name of the  i i t th t lti t l i d th trecipient that ultimately received the payment. jmahealthcare.comjmahealthcare.com 29
  30. 30. Sunshine Act: Exclusions • Payments or Other Transfers of Value of Less than  $10 l i h d$10, unless in aggregate these payments exceed  $100 in a calendar year • Existing Personal Relationships: Payments or st g e so a e at o s ps: ay e ts o transfers to a covered recipient made solely in the  context of a personal, non‐business‐related  l ti hi d t d t b t drelationship do not need to be reported.   •Educational Materials that directly benefit patients or  are intended to be used by or with patients. Example: y p p Models provided to explain a procedure to patients.  jmahealthcare.comjmahealthcare.com 30
  31. 31. Sunshine Act:  Exclusions •Trial Loans of Covered Devices: This exclusion covers loans of  devices and devices under development, as well as supplies of  disposable or single use devices intended to last no more thandisposable or single‐use devices intended to last no more than  90 days. For a single product, the total number of days for the  loan should not exceed 90 days for the entire year.   Discounts or rebates  Dividends from publicly traded mutual funds •Other Exclusions: The following payments do not need to be  reported: [ Discounts or rebates  Dividends from publicly traded mutual funds  Warranty services  Product samples not intended to be sold and intended for patient use I ki d it f h it bl [  In‐kind items for charitable purposes jmahealthcare.comjmahealthcare.com 31
  32. 32. Sunshine Act:  Reportingp g – Name: Provide the physician’s full name as reported in the National Plan  and Provider Enumeration System (NPPES).  – Business Address: Provide the full street address of the physician’s  primary practice location. – Specialty and NPI: Provide the physician’s individual NPI. Identify the  provider’s specialty by using a single provider taxonomy code, asprovider s specialty by using a single provider taxonomy code, as  reported in NPPES.  – Date of Payment: You may report either (a) the total payment on the  date of the first payment as a single line item, or (b) each individual  payment as a separate line item. Regardless of the methodology youpayment as a separate line item. Regardless of the methodology you  choose, use it consistently.        – Third Parties: If the payment was not made to the recipient directly,  name the third party that received the payment before passing it  through to the recipient.through to the recipient.  – Ownership Interest: Indicate whether the payment was provided to a  physician holding ownership or investment interests in your company.  jmahealthcare.comjmahealthcare.com 32
  33. 33. Reporting (cont)p g ( ) Context: You may explain each payment by providing brief  contextual information.  Related Covered Drug, Device, Biological or Medical Supply: You g, , g pp y must report the product associated with each payment. You may  report up to five associated products for each payment. For  devices and medical supplies, you may report either the name  under which the device or supply is marketed or the therapeuticunder which the device or supply is marketed or the therapeutic  area or product category.  Form of Payment and Nature of Payment:  You must categorize  the payment according to its form and nature. F Th t iForm: The categories are: • Cash or cash equivalent • Stock, stock option or any other ownership interest • In‐kind items or services • Dividend, profit or other return on investment jmahealthcare.comjmahealthcare.com 33
  34. 34. Reporting (cont) Nature: The categories are:   Consulting fee  Grant  Honoraria  Travel and lodging (including the specific destinations)  Gift  Current or prospective ownership or investment interestGift Current or prospective ownership or investment interest  Entertainment  Space rental or facility fees (teaching hospitals only)  Food and beverage  Compensation for serving as faculty or as a speaker for an accredited or certified continuing education programcontinuing education program  Education  Research  Compensation for services other than consulting, including serving as faculty or  as a speaker at an event other than a continuing education program, or  l kCh it bl t ib ti promotional or marketing activities Charitable contribution  Royalty or license jmahealthcare.comjmahealthcare.com 34
  35. 35. Reporting:  Ownershipp g p All ownership and investment interests held by a physician or an immediate  family member of a physician. For 2013, you only need to report interests held  on or after August 1, 2013. The report must include the following information:     • Name: Provide the physician’s full name as reported in the National Plan  and Provider Enumeration System (NPPES).  • Who Holds the Interest? Indicate whether the interest is held by theWho Holds the Interest? Indicate whether the interest is held by the  physician or an immediate family member of a physician.  • Business Address: Provide the full street address of the physician’s primary  practice location. S i lt d NPI M k t th h i i ’ i di id l NPI U• Specialty and NPI: Make sure to use the physician’s individual NPI. Use a  single provider taxonomy code, as reported in NPPES, to identify the  specialty. • Size of Investment: Indicate the dollar amount invested. • Value and Terms: Explain the value and terms of each ownership or  investment interest.  • Payments: Any payments provided to the physician owner or investor.   jmahealthcare.comjmahealthcare.com 35
  36. 36. Sunshine Act: Research • Payments made pursuant to a research protocol or  research agreement may be postponed until the  earlier of 4 years from the date of transfer of value  or FDA appro al of the prod ctor FDA approval of the product jmahealthcare.comjmahealthcare.com 36
  37. 37. Following Submission . . .g • CMS notifies covered recipients • 45 day period following submission for discussion • Covered recipients can dispute reports  • If dispute is not timely resolved data will be published• If dispute is not timely resolved data will be published  with notation – “disputed” • Data released to general public in searchable formatg p – The Press? – Personal Injury Lawyers? Public Watch Dogs?– Public Watch Dogs? – Relators? jmahealthcare.comjmahealthcare.com 37
  38. 38. 3 Day Payment Ruley y • Medicare’s 3‐day (or 1‐day) payment window  applies to outpatient services furnished by hospitals  and hospitals’ wholly owned or wholly operated  ph sician practicesphysician practices. – Bundling of the technical component of all outpatient  diagnostic services and related non‐diagnostic servicesdiagnostic services and related non diagnostic services  (e.g. therapeutic) with inpatient stay claim.   – Impact on hospital/physician joint venture billing. jmahealthcare.comjmahealthcare.com 38
  39. 39. Three‐day payment windowy p y • The three‐day rule defines certain preadmission services as  inpatient operating costsinpatient operating costs – They are bundled and billed as part of the inpatient claim – Payment is made as part of the applicable diagnosis‐related group  paymentpayment • All preadmission diagnostic and related non‐diagnostic  services occurring three calendar days prior to admission are  l t drelated – Prior to June 25, 2010, outpatient nondiagnostic services were  considered related if there was an exact match between the first‐ listed diagnosis code and the inpatient principal diagnosis codelisted diagnosis code and the inpatient principal diagnosis code – CMS now defines "related" as "clinically associated with the reason  for a patient's inpatient admission." jmahealthcare.comjmahealthcare.com 39
  40. 40. 3 Day Payment Rule O t ti t S i T t d I ti t S iOutpatient Services Treated as Inpatient Services • Within 3 days of inpatient admission for hospitals  paid under Inpatient Prospective Payment System  (IPPS)  • Within 1 day for facilities excluded from IPPS  – Inpatient Psychiatric Facilities and units  – Inpatient Rehabilitation Facilities and units  – Long Term Care Hospital  Children’s hospitals– Children’s hospitals  – Cancer hospitals  jmahealthcare.comjmahealthcare.com 40
  41. 41. 3 Day Payment Rule Outpatient Services Treated as Inpatient Services (cont) • Facilities Excluded from Payment Window  Provisions – Ambulance  l d l– Maintenance renal dialysis services  – Skilled Nursing Facilities  Home Health Agencies– Home Health Agencies  – Hospices  – Critical Access HospitalsCritical Access Hospitals  – Rural Health Clinics/Federally Qualified Health Centers  jmahealthcare.comjmahealthcare.com 41
  42. 42. Three‐day payment windowy p y • Clinically unrelated non‐diagnostic preadmission  services may be separately billedservices may be separately billed • Condition code 51 (attestation of unrelated  outpatient nondiagnostic services)outpatient nondiagnostic services)  – Used to identify those services that are unrelated and for  which separate outpatient reimbursement is appropriate.  – Condition code 51 on the outpatient claim for the  unrelated services jmahealthcare.comjmahealthcare.com 42
  43. 43. Three‐day payment window (cont)y p y ( ) • Documenting unrelated services – Providers must clearly document why they provided the  outpatient services – Documentation must also support the fact that these pp services are not clinically associated with the inpatient  stay – Providers must document that they are treating an– Providers must document that they are treating an  unrelated condition – Care of that condition should not be included in the  i ti t d i i if th i ffi i t id th t itinpatient admission if there is sufficient evidence that it  is not related jmahealthcare.comjmahealthcare.com 43
  44. 44. jmahealthcare.comjmahealthcare.com 44
  45. 45. Three‐Day Payment Window Key IssuesKey Issues • Who is coding, billing and collecting for integrated  delivery system?delivery system? – Hospital? – Physician?Physician? • Audit patients with 3 day LOS or less – Sample claims and medical records combined due to 3Sample claims and medical records combined due to 3  day rule – Evaluate appropriateness • Combining services as inpatient • Billing therapeutic services as outpatient jmahealthcare.comjmahealthcare.com 45
  46. 46. Key Issuesy • What was agreed to during the transactional portion of the  “deal?” • What was promised to further “business development?”• What was promised to further “business development?” • Do the enabling documents articulate – Objectives • Operational in addition to strategic and financial? • Timing • Responsibilities – Including key personnel within and outside of hospital? • Is there a business plan incorporating operational  implementation issues?p • Have the strategic and business plan objectives been  communicated to operational personnel? jmahealthcare.comjmahealthcare.com 46
  47. 47. Critical Success Factors C T E SCreate Teams to Ensure Success • Operational Implementation Teamp p – Hospital executives involved in creating transaction • Chief Strategy Officer –Director of Business Development • Chief Financial Officer • Chief Medical Officer • Chief Compliance Officer • Risk Manager jmahealthcare.comjmahealthcare.com 47
  48. 48. Critical Success Factors C t T t E S ( t)Create Teams to Ensure Success (cont) – Partner executives involved in creating transaction • Physician leaders • Physician business manager(s) Ad itti– Admitting • Registration – Finance • Business Office • Billing/Collecting – Health Information ManagementHealth Information Management – Information Technology • CIO jmahealthcare.comjmahealthcare.com 48
  49. 49. Critical Success Factors • Leverage existing hospital policies and procedures  where possiblep – Fraud & Abuse – Corporate Compliance • Create new polices and procedures for Physician  Payment Sunshine Act and Physician‐owned  distributorships (‘PODs”) jmahealthcare.comjmahealthcare.com 49
  50. 50. Critical Success Factors • Operational Implementation Team Functions – Integrate business plan into operations • Connect strategy to operations – Develop written policies and procedures – Communicate to relevant departmentsCommunicate to relevant departments – Educate and train staff and physicians » Have at least quarterly in‐services Develop auditing and monitoring plan– Develop auditing and monitoring plan • Who • What • When – Create corrective action policies and procedures jmahealthcare.comjmahealthcare.com 50
  51. 51. Key Components of  O ti l I l t ti PlOperational Implementation Plan • Determine Objectives and Controls and How TheyDetermine Objectives and Controls and How They  Identify Non‐Compliance • Assess the Risk Level  • Identify patterns, practices or specific activities  increase risk of non‐conformance • Determine appropriate response jmahealthcare.comjmahealthcare.com 51
  52. 52. Key Components of  O ti l I l t ti Pl ( t)Operational Implementation Plan (cont) • Document results of risk assessment• Document results of risk assessment • Prepare communication program to educate  executives physicians and staff on performanceexecutives, physicians and staff on performance • Prepare prevention program and assign  responsibility for oversightresponsibility for oversight – CFO, CCO, etc. along with operational director jmahealthcare.comjmahealthcare.com 52
  53. 53. Joseph Mack, MPA P.O. Box 23 Dana Point, CA  92629 (949) 481 0602 Robert Homchick, Esquire Davis Wright Tremaine LLP Suite 2200 1201 Thi d A(949) 481‐0602 Joseph.Mack@jmahealthcare.com 1201 Third Avenue Seattle, WA  98101 (206) 757‐8063 roberthomchick&dwt.com jmahealthcare.comjmahealthcare.com 53

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