CO helps NJ hospital navigate self-disclosure
November 2, 1998 3 minutes read
CO helps NJ hospital navigate self-disclosure
If you opt for self-disclosure, don’t be surprised if the numbers that you come up with are different from what the feds accept. That’s one lesson learned by Deborah Heart and Lung Center in Browns Mill, NJ, which just signed a $840,000 settlement with the government after submitting to OIG’s Voluntary Disclosure Program (VDP).
Deborah entered VDP in 1996, after physicians complained to hospital management in 1995 that there was something wrong with claims being submitted in their names, says compliance officer Brian Sherin. The hospital could have just sent a check to a carrier and hoped the matter would go away, but management also wanted to reassure the doctors that the issue wouldn’t come back to haunt them, "and this seemed the cleanest way to get it done," Sherin says. The Justice Department says the hospital submitted inflated claims for its cardiac catherization, electrophysiology studies and medicine/cardiology departments. The hospital doesn’t admit any wrongdoing, but says the problem stemmed from software glitches and inadvertent coding errors.
Before applying to enter VDP, the hospital conducted an internal investigation that concluded the government was owed $283,000, says Sherin. The government crunched Deborah’s raw data and came up with a figure far in excess of the final $840,000 settlement. The difference: Deborah had subtracted undercoded and unbilled services from what it owed Medicare. OIG would not count most of those claims, though they were willing to give the hospital a break if, for instance, an E&M code was billed as a Level Four instead of a Level Two. However, the hospital was able to reduce the settlement by convincing OIG auditors that some of their calculations were wrong.
If you want to avoid more grief during self-disclosure, be sure that your self-audit is one that OIG will accept, warns Sherin. Deborah hired a Big Five accounting firm for the audit, only to find that OIG wasn’t comfortable with the accounting firm’s methodology.
On the whole, Deborah didn’t come out too badly, Sherin says. The hospital paid only an overpayment plus interest and settlement costs, rather than the triple damages that could have been levied under the False Claims Act. Plus, Deborah is bound by a corporate integrity agreement that lasts three years instead of the customary five. The 161-bed hospital, which has a relatively large compliance staff of four, can use its own people for audits, though it will still have to submit an annual compliance audit to OIG.
While Sherin says self-disclosure works, even the price of leniency isn’t cheap. Of the $840,000 settlement, only $600,000 reflects overpayments, says Sherin. The remaining $240,000 is interest penalties and OIG’s charges for the cost of its investigation. And that doesn’t count legal and consulting costs, which Sherin says exceeded $100,000.
To avoid these kinds of complications, OIG has created an audit protocol that lays out what it wants from those wishing to self-disclose. The agency says you don’t have to use its methodology for the audit, but the process will be much smoother if you do. But before you sign on the dotted line, remember these points:
OIG reserves the right to turn over the information in your case to the Justice Department.
s If you spot a fraud scheme in your organization, contact OIG but don’t investigate the violation yourself without OIG approval, or else the government fears you will compromise its own investigation. Still, OIG does expect that providers will have to make some kind of compliance assessment before deciding to opt for self-disclosure.
s OIG will delay its investigation until you complete yours, but your probe will have to be a penetrating one. Among other things, you’re expected to disclose the names of those who knew, or should have known, about the wrongdoing.
s You’ll have to turn over your audit work papers regardless of attorney-client privilege. OIG promises not to routinely ask for written papers covered by the privilege, but rather will try to negotiate a way to get the information.
You’d better be prepared to cooperate if you self-disclose. Lack of cooperation will be an aggravating factor when OIG determines penalties. Note that you can be prosecuted not only for giving false information, but also for not turning over all relevant information.
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content