With compliance as the focus at the 2013 American Health Lawyers Association/Health Care Compliance Association Fraud & Compliance Forum in Baltimore, PYA Consulting Manager Lori Baker and Clay Countryman of Breazeale, Sachse & Wilson, LLP, offered attendees guidance on “Resolving Legal and Audit Issues in an Internal Compliance Investigation.”
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Resolving Legal and Audit Issues in anInternal Compliance Investigation
1. Page 0September 29, 2013
Prepared for AHLA /HCCA Fraud & Compliance Forum 2013
AHLA/HCCA
Fraud & Compliance Forum
September 29, 2013
Resolving Legal and Audit Issues in an
Internal Compliance Investigation
Clay J. Countryman, Esq.
Breazeale, Sachse & Wilson, LLP
Clay.Countryman@bswllp.com
Lori Baker
PYA GatesMoore
lbaker@pyapc.com
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• Working through legal and related issues that may arise
during the course of an audit by an external auditor in
response to internally reported compliance issues
• Analyzing audit results and working with legal counsel to
address potential refund and overpayment obligations, and
other legal requirements
• Discussion of best practices in conducting a compliance
audit/investigation
Focus of Presentation
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Questions employees and contractors Employee turnover/ Exit interviews
Routine/ Annual Compliance Audits Federal Agency Reports and Alerts
Hotline/ Ethics Line Competitors
Reports to Compliance Committee Consultants
Discovery of Compliance Issues and
Potential Concerns
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Immediate Steps to Address
Reported Compliance Issues
• Contact (internal or external) legal counsel to discuss and
prioritize initial steps, and focus on maintaining attorney-
client privilege on investigation
• Immediately require a pre-claims audit of the providers and
issues that were reported
• Take actions to stop conduct subject to investigation
• Determine who to interview and when, considering a
provider and/or employees may be terminated or have
different interests from the organization
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• Focus on reported/discovered compliance issues to
determine possible scope and time period of issues
• Determine compliance with applicable payer billing and
reimbursement requirements
• Conduct a “Reasonable Inquiry” to determine whether an
overpayment exists (2012 CMS Proposed Rule to implement
Sec. 6402(a) of ACA regarding reporting and refunding
overpayments)
• Consider the OIG’s Provider Self-Disclosure Protocol in
determining goals and objectives
Goals and Purposes of a
Compliance Audit
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Legal Considerations Throughout
Compliance Audit Process
• Sec. 6402 of the ACA: Obligation to report and
return overpayments within 60 days of identifying
the overpayments
• False Claims Act liability
• Social Security Act – Sec. 1128B(a)(3) –
requirement to return a known overpayment
• OIG Self-Disclosure Protocol and other potential
resolution routes
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• Engagement of external auditors by legal counsel
• Assess the nature of the reported / discovered issues
• Determine level of risk and priorities
• Decide path to perform audit (internal / external)
• Fact finding through interviews, document review, etc…
Compliance Audit: Initial Steps
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• Sec. 6402(a) of the ACA requires a person who has received
an overpayment to report and refund the overpayment to the
Secretary, the State Medicaid Agency or the appropriate
Medicare contractor and notify the appropriate agency of the
reason for the overpayment.
• The overpayment must be reported and returned within 60
days of the date of which the overpayment was identified, or
the date any corresponding cost report is due, whichever is
later.
Obligation to Report and Refund
Overpayments
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• CMS proposed that a person has identified an
overpayment if the person has actual knowledge of the
existence of the overpayment or acts in reckless disregard or
deliberate ignorance of the overpayment.
• CMS commented that the receipt of information by a provider
concerning a potential overpayment creates an obligation
to make a reasonable inquiry to determine whether an
overpayment exists. (77 Fed. Reg. 9179, 9182 (February 16,
2012).
Obligation to Report and Refund
Overpayments (cont’d)
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• Define the scope of the compliance audit
• Determine an initial audit time period
• Selection of services/items to audit
• Selection of data
• Audit sample of other individual providers to determine whether
identified compliance issues are systemic
• Determine payers to be audited
Determination of the Scope of an
Internal Compliance Audit
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• Process used by physicians, mid-level providers and others
to create medical record and billing documentation
• Auditor’s observations on information in medical record and
billing documentation (i.e., who created it)
• Compare internal notes to supporting processes and
documents
Important Aspects Discovered
During Compliance Audit
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Reimbursement Compliance Issues
Discovered During an Audit
Signature Issues – Medicare Learning Network ICN 905364; August 2012
Supervision Requirements and Incident to billing – Medicare Benefit Policy Manual; Chapter
15; 50.3
Use of staff as scribes
Physician orders
Medical necessity issues
Duplicated documentation
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• Pre-billing claims audit and review
• Retrospective audits
• Previous and future contractor audits on same or similar
issues (i.e., RAC audits)
• Any/all federal, state or Medicare contractor communications
that affected the issue or course of action
Other Considerations in Reviewing
Audit Results
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• Analysis and sharing the audit results
• Determination of next audit steps based on initial results
• Identifying overpayments (i.e. claim by claim, extrapolation)
• Payment error rate
• Other error rates
Analysis and Review of Audit
Results
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• Report and refund overpayments to Medicare contractor
• DOJ
• OIG Voluntary Self-Disclosure Protocol
• U.S. Attorney’s Office
Different Courses of Action in
Resolving Audit Results
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• CMS: “The Self-Disclosure Protocol (SDP) is available for the
resolution of matters that, in the disclosing party’s reasonable
assessment, potentially violate Federal criminal, civil, or
administrative laws for which a CMP is authorized.”
• “The SDP is not available for matters …exclusively involving
overpayments or errors.”
• The SDP contains specific requirements for conduct involving
false billing, including an estimation of the improper amount of
claims paid by Federal health care programs and a report with
specific information listed in the SDP.
OIG’s Provider Self-Disclosure
Protocol: Audit Considerations
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OIG Provider Self-Disclosure
Protocol (cont’d)
• Self-disclosing parties are required to perform
a detailed assessment of the estimation of
improper claims, including:
– A report containing the objective of the provider’s
review, the population of claims reviewed, the
sources of data, and personnel who conducted
the review, and the characteristics used to
identify each item.
– The Sampling Plan that was used.
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Recommended Corrective Action
Plan Components
• Conduct a sample audit of all providers to determine whether
identified audit issues are systematic or isolated.
• Access, revise and make changes to compliance program
and internal audit process (e.g., ensure that all services are
being audited).
• Review and make changes to the provider’s billing and
coding systems, and internal processes to submit claims to
third-party payers.
• Provide training and follow up education to affected
providers and support staff.
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• Who has the overpayment obligation and/or potential civil or
criminal liability?
• Whether a provider may recover from another provider (i.e.,
Clinic from an individual physician) for an overpayment
and/or settlement?
• Providers who are responsible for an overpayment are
involved in commercial litigation regarding similar issues.
Specific Considerations that May
Arise in Resolving Audit Results
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Steps to Consider to Limit
Overpayment and Other Liability
• Ensure that periodic internal audits are regularly
performed
• Address refunds and overpayment liability in a
physician’s employment agreement, partner’s
service agreement and/or partnership agreement
• Address refunds and related issues (i.e., expenses)
that arise after termination of a physician’s
employment or partnership interest.