Billing Compliance for Clinical Trials. Discussions include the False Claims Act, Anti-Kickback Law, and other related laws

1. ExL Pharma:
Billing compliance
DARSHAN KULKARNI,
PHARM.D, MS, ESQ.
KULKARNI LAW FIRM

2. 2
Disclaimer
• Not legal advice
• May not be specific to your situation
• Does not create an attorney/ client relationship
Kulkarni Law Firm, PC

3. Legal & Regulatory Sections
3
False Claims
Act
Anti-Kickback
Law
Stark Law
Park Doctrine
Kulkarni Law Firm, PC

4. Outline
FCA
Sunshine
Act
FMV:
Stark
Kulkarni Law Firm, PC
AntiKickback

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FCA
AKL
Stark
Park Doctrine
Planning
Future
False Claims ACT

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What Matters - FCA
• What is it?
No specificof Justice
1. Actions brought by the Department
intentqui tamdefraud
to provisions allow
2. Whistleblower or
individuals to bring actions in the name of the
mustcan shareproved
be in any recovery
government, and
Kulkarni Law Firm, PC

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“presents,
What Matters -FCA or
causes to be
• “any person who—
presented a false..
(A) knowingly presents, or causes to be presented, a
claim”
false or fraudulent claim for payment or approval;
• (B) knowingly makes, uses, or causes to be made or
“makes, uses, or
used, a false record or statement material to a false or
causes to be made
fraudulent claim; or used, a false
…“
record…”
31 USC § 3729
Kulkarni Law Firm, PC

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Penalty & Damages - FCA
… is liable to the United States GovernmentCivil a civil
for
5500/
3x Govt.
11000
damages
Penalty
penalty of not less than $5,500 and not more than
$11,000, …, plus 3 times the amount of damages which
the Government sustains because of the act of that
person.”
Kulkarni Law Firm, PC

9. What Matters - FCA
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• How can it be implicated?
Claims
Informed
Misused
related to
consent says
Grants or
the payment
patient
Deviations
or receipt of
Claims for
Retaining won’t be
from Budget
a kickback
services not
government charged
rendered, or
funds when
Double
not
there is an
Billing
rendered as
obligation to
represented
repay
Kulkarni Law Firm, PC

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FCA
AKL
Stark
Park Doctrine
Planning
Future
Anti-kickback law

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What Matters – Anti-Kickback Law
• How is it different from the FCA?
Kulkarni Law Firm, PC

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Anti Kickback Law
…solicits or receives
• Whoever knowingly any willfully solicits or receives any
and remuneration..
remuneration (including any kickback, bribe, or rebate) directly
or indirectly, overtly or covertly, in cash or in kind—(A) in return
for referring an individual to a person for the furnishing or arranging
for the furnishing of any item or service for which payment may be
…for furnishing or
made in whole or in part under a Federalitem care program, or
arranging.. Any health
• (B) in return for purchasing, leasing, ordering, or arranging for or
or service for which
recommending purchasing, leasing, ormade.. any
payment was ordering
good, facility, service, or item for which payment may be made in
whole or in part under a Federal health care
42 USC §Kulkarni Law Firm, PC
1320A–7B

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Intent - AKL
“a person need not have actual knowledge of
this section or specific intent to commit a
violation of this section.”
Kulkarni Law Firm, PC

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Anti-Kickback Law - Penalties
“… shall be guilty of a felony and upon conviction
thereof, shall be fined not more than $25,000 or
imprisoned for not more than five years, or both.”
$25000
Kulkarni Law Firm, PC
Imprisonment
= 5 years
Penalties

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What Matters – Anti-Kickback
Seeding Trials
Law
Payments above FMV
Investigator Initiated Trials
Kulkarni Law Firm, PC

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What Matters – Anti-Kickback Law
AntiKickback
FCA
Kulkarni Law Firm, PC

17. Stark Law
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• How many sites here are owned by Physicians who
have separate practices?
• How many sites here are owned by Physicians
whose own separate laboratories?
Kulkarni Law Firm, PC

18. Stark Law
• Applies primarily to CROs, sites and physicians
• Technically a series of laws
• Governs self referral
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19. What is Prohibited: Self Referral
• The physician may not make a referral to the entity
for the furnishing of designated health services for
which payment otherwise may be made under this
title,
• Prohibits an entity from presenting a claim to
Medicare or to any person or other entity for DHS
provided under a prohibited referral.
42 U.S.C. 1395
Kulkarni Law Firm, PC

20. Potential exposure

21. Penalties
• No Medicare payment may be made for DHS
rendered as a result of a prohibited referral;
• Entity must timely refund any amounts collected for
DHS performed under a prohibited referral.
• Civil money penalties may also apply under some
circumstances.
Kulkarni Law Firm, PC

22. Some Potential Improper
Arrangements
Referrals
Coownership of
PI and MD
Office
Coownership of
offices and
Central labs
Insufficient
assessment
of FMV
Kulkarni Law Firm, PC

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FCA
AKL
Stark
Park Doctrine
Planning
Future Law Firm, PC
Kulkarni
Park Doctrine

24. Park Doctrine - Factors
• Individual’s position in the company
• Relationship to the violation
• Did the official have authority to correct or prevent
violation?
• Knowledge of/actual participation in violation?
Please let me
know if you
want full list.
Kulkarni Law Firm, PC

25. Park Doctrine - Impact
Kulkarni Law Firm, PC

26. Park Doctrine - What is it?
• Also called “Responsible Corporate Officer (RCO)
Doctrine”
• RCO can be held liable for a first time misdemeanor
(and subsequent felony) under the FD&C Act without
proof of intent or negligence, even if no actual
knowledge of or participation in specific offense
Kulkarni Law Firm, PC

27. Synthes - Impact
Monetary penalties: $22,500,000 (Norian) +
$669,800 (Synthes)
Forfeiture of defendant Synthes
4 executives charged via Park Doctrine got 59 months in jail
Kulkarni Law Firm, PC

28. Scott Harkonen - Impact
Convicted of wire fraud in September 2009
Fined $20,000
Sentenced to 6 months of home confinement
Kulkarni Law Firm, PC

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FCA
AKL
Penalties
Planning
Future
Penalties

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Administrative Penalties
Kulkarni Law Firm, PC

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FCA
AKL
Stark
Park Doctrine
Planning
Future
Compliance planning

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Compliance
Compliance
Provide OIG
Written Standards Officer/
with annual
Restrict
Committee
compliance Report
Please contact me
for areports
printable list
of factors
Training
Program
Kulkarni Law Firm, PC
employment
Overpayments of ineligible
persons

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FCA
AKL
Stark
Park Doctrine
Planning
Future
Future

34. Future
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• Impact of Physician Payment Sunshine Act
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Financial
ReportingClinical
Results reporting
Regulations
trials.gov
Franck's Pharmacy
v. Guidances
Kulkarni Law Firm, PC

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Questions?
Darshan Kulkarni
Kulkarni Law Firm, PC
Ph: 215-703-7842
SLIDES MADE AVAILABLE.
@FDALawyers
www.kulkarnilawfirm.com
Kulkarni Law Firm, PC

36. References
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http://www.taf.org/whyfca.htm
False Claims Act: 31 U.S.C. 3729-3733
Anti-Kickback Law: 42 U.S.C. 1320a-7b(b)
False, Fictitious or Fraudulent Claims: 18 USC 287
http://www.mintz.com/newsletter/2012/Advisories/16180112-NAT-HCED/1618-0112-NAT-HCED_index.pdf
Kulkarni Law Firm, PC