Hit the Ground Running: How to be a Healthcare Lawyer - PowerPoint Presentation

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Hit the Ground Running: How to be a Healthcare LawyerSlide2

Today’s speakers

Sean McKenna

Shareholder, Greenberg Traurig, LLP (Dallas, Texas)Sarah FrazierPartner, Berg & Androphy (Houston, Texas)Jessica Parker-Battle Compliance Officer, Biogen (Weston, Massachusetts)

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OUTLINE

Role of Compliance and Legal Partners in a Company

Analyzing Proposed Transactions for Fraud & Abuse ConcernsData Breaches & HIPAA ConcernsRepayment and DisclosureThe Enforcement Landscape – Civil and CriminalStatutory considerationsConcluding thoughts3Slide4

Hypothetical

You are outside counsel for a jointly-owned medical practice and toxicology lab with no GC

The physician customers for the lab have patients with a mix of Medicare, Medicare Advantage, Medicaid, and commercial insuranceA manager for the lab, responsible for marketing, reports concern regarding:Salespeople violating HIPAA with customersInducements to customersMedically unnecessary testingPhysician investors in the lab profiting from self-referrals

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Role of Compliance and Legal Partners at a Company

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Oversight & Governance

Risk Assessment & Issue Identification

Written Standards

Training & Communication

Monitoring & Auditing

Response & Corrective Actions

Culture of Integrity

7 Elements of an Effective Compliance ProgramSlide7

DOJ Issues New Corporate Compliance Guidelines

Analysis and Remediation of Underlying Conduct

Senior and Middle ManagementCompliance Autonomy and ResourcesPolicies and ProceduresRisk AssessmentTraining and CommunicationConfidential Reporting and Investigations7Slide8

DOJ Issues New Corporate Compliance Guidelines

Incentives and Disciplinary Measures

Continuous Improvement, Periodic Testing, and Review3rd Party ManagementMergers and AcquisitionsReference: “Evaluation of Corporate Compliance Programs,” U.S. Department of Justice, Criminal Division, Fraud Section, available at https://www.justice.gov/criminal-fraud/page/file/937501/download. OIG Compliance Guidance

: https://oig.hhs.gov/compliance/compliance-guidance

/

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Analyzing Proposed Transactions for Fraud and Abuse Concerns

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Data Breaches and HIPAA Considerations

Consent

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Repayment and Disclosures

First, Fix Any Problems to Reduce Exposure

CMS Final Rule 60 Day deadline to repay known Medicare and Medicaid overpaymentsFailure to repay is a FCA and/or potential criminal violation!Disclosure to PayorsDisclosure to DOJHHS-OIG Self-Disclosure ProtocolCMS Voluntary Self-Referral Disclosure Protocol

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The Enforcement Landscape

Big budget for enforcement - $672 million for Health Care Fraud and Abuse Program

DOJ Recovery in 2016Total $4.7 billion (up from $3.8 billion in 2015).$2.5 billion paid from healthcare industry.$2.9 billion from whistleblower cases. Whistleblowers received a record $519 million.12Slide13

Enforcement Outlook in 2017

Federal

and State Budget ShortfallsState and Federal Scrutiny of Arrangements IncreasingRepeal and Replace ACA? Greater Enforcement Actions

B

y U.S

. Attorneys, DOJ,

States, and OIG-HHS

Investment and

U

se of Data

A

nalytics Will

C

ontinue to Drive

E

nforcement

Increased

Focus on Individual Actors by DOJ and HHS-OIG

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Company and Officer Conflicts Under the Yates Memo

On September 9, 2015, Deputy DOJ AG, Sally Yates issued a memo encouraging

prosecutors to focus on individual actors, not just legal entities. The memo also provided guidelines for all investigations of corporate wrongdoing.14Slide15

Internal Investigations at a Company

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Parallel Investigations

Knowing who and what you are facing

Determining if investigation is criminal, civil, administrative, and/or multi-statePractices to address government’s concernsLicensing and private liability16Slide17

Whistleblowers

Prevention

HandlingMisconductPrivilegeTrade SecretsLitigation17Slide18

Federal Enforcement Agencies

United States Department of Justice (DOJ)

Commitment to prosecute healthcare fraudCriminal/Civil/Antitrust DivisionsConsumer Protection Branch

Healthcare fraud coordinators within 94 United States Attorneys' Offices

Federal Bureau of Investigation

Drug Enforcement Agency

Partnerships with private payors

Distinct

funding

sources

Federal actions have collateral consequences

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Government Investigations

Sources

WhistleblowersCompetitorsGovernment reportsPayor auditsMediaPatient and Family ComplaintsCommon Risk Areas Lack of compliance with exceptions and safe harbors

Fair Market Value (FMV)

Commercial reasonableness

Overutilization

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Statutory

ConsiderationsSlide21

Common Healthcare Enforcement Statutes

Title 18 U.S.C.

Healthcare, wire, and mail fraud Commercial BriberyAnti-Kickback Statute (AKS)Stark LawFalse Claims Act (FCA)Whistleblowers under Qui tam provisionsCivil Monetary Penalties LawEach State May

H

ave Own Version

And limit certain physician ownership

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Statutory Considerations: Anti-Kickback Statute (AKS)

Prohibits

knowingly and willfully soliciting or receiving, offering or paying: Any remuneration directly or indirectly, overtly or covertly, in cash or kind;To induce or reward the referral, purchase, order, lease, or recommendation of; orAny item or service that may be paid for under the federal healthcare program.Severe Penalties$25,000 per violation

Up to 5 years imprisonment

Exclusion

Statutory

and Regulatory Safe Harbors

Certain types of payments

OIG identified business and financial practices

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Statutory Considerations: Stark Law

“If a

physician (or an immediate family member of such physician) has a financial relationship with an entity…then 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 Medicare.”ExceptionsOwnership/Investment interests (42 C.F.R. § 411.356)

For compensation arrangements (42 C.F.R.

§

411.357)

For certain “services” (42 C.F.R.

§

411.355)

Penalties

Automatic overpayment or disallowance

Knowing violation can result in CMP liability of up to $15k per violation plus treble damages and/or $100k per circumvention scheme

Exclusion from healthcare programs

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Statutory Considerations: False Claims Act,

Escobar

, and State EquivalentsCivil (31 U.S.C. § 3729)Either USAG or a relator (whistleblower) may bring FCA casesQui tam provisions filed under sealDOJ has 60 days to interveneAwards relator 15-30% recovery + attorneys fees6 year SOL and 3 year tolling provision29 states and D.C. have adopted a statute equivalent to

FCA

Remedies: Mandatory treble damages and civil monetary penalties between $10,781 and $21, 563 per false

claim

Criminal

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Stark Law vs. Anti-Kickback Statute (AKS)

Civil

v. Criminal v. AdministrativeStrict Liability v. Criminal IntentExceptions v. Safe HarborsWhat must be satisfied?Which Applies?Hospital renting x-ray at physician’s officeGroup practice

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Types of False Claims Act Cases – Health Care

Fraudulent Billing

Anti-Kickback Statute Violations & Stark schemes – physician salaries, discounted office space, etc.Pricing fraud - “Best Price” AWP fraud, best value, 340(b) diversion“Off-Label” marketing

Switching schemes

Hospice – ineligibility

Nursing home worthless services

Nursing home inflation of RUG scores/medically unnecessary

Unnecessary lab testing – especially urine testing for opioids

Manufacturing standards

Other medical necessity claims

Ambulance

DME rentals

Home healthSlide27

Changing Political Makeup and the Potential Effect on False Claims and Anti-Kickback

A new administration could ease

Yates policy and other agencies could follow lessening individual liabilityChange in Supreme Court Could weaken interpretation of Escobar and what is “material” to a false claim100 vacancies for federal judges27Slide28

Changing Political Makeup and the Potential Effect on False Claims and Anti-Kickback (Continued)

Congress recently passed repeal of ACA, but outcome on FCA remains uncertain

Public Disclosure BarRemoved express reference to jurisdictional nature of public disclosure barGave government the ability to object to dismissal due to the public disclosure barNarrowed categories of what constitutes as “public” disclosureRepeal could expand the protections of this defenseProvided relator with a lower standard to qualify as an “original source”

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Changing Political Makeup and the Potential Effect on False Claims and Anti-Kickback (Continued)

Congress

recently passed repeal of ACA, but outcome on FCA remains uncertain60-Day Rule: A person who has received an overpayment must report and return such overpayment within 60 days after overpayment was identifiedRepeal could cause confusion over timing and what qualifies as “overpayment”Provided violation of Anti-Kickback constitutes a false claimRepeal could weaken government’s implied certification argument

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HHS Inspector General Policy on Exclusion Rule

Statute of Limitations:

Exclusions will only apply to misconduct from the past 6 years (proposed 10-years)Early Reinstatement ProcessAudit Obstruction

Mitigating Factor for Exclusions

Aggravating Factor Threshold

Now $50,000 in certain circumstances

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Statutory Considerations: Dodd Frank

Dodd-Frank Wall Street Reform and Consumer Protection Act, was signed into law July 21, 2010

Dodd-Frank established a bounty for reports, 15 U.S.C. § 78u-6(b)(1), whereby whistleblowers can receive 10-30% of the monetary sanctions over $1,000,000 collected based on the original information provided by the whistleblower. Section 15 U.S.C. § 78u-6(a)(6) of the Dodd-Frank Act defines "whistleblower" as "any individual who provides, or 2 or more individuals acting jointly who provide, information relating to a violation of the securities laws to the Commission [SEC], in a manner established, by rule or regulation, by the Commission [SEC]."

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Statutory Considerations

: Foreign Corrupt Practices Act

Key elements of an anti-bribery violation:Offer, promise, or payment of anything of value;To a Foreign Official

;

With

corrupt intent

; and

To assist in

obtaining

or

retaining

business or

directing

business to any person or

obtaining

any improper

business advantage

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Concluding Thoughts

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CONTACT INFORMATION

Sean McKenna

mckennas@gtlaw.com214.665.3617Sarah Fraziersfrazier@bafirm.com713.529.5622Jessica Parker-Battlejessica.parkerbattle@biogen.com

781.464.5290

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