Confession can be good for your job
July 1, 2001 7 minutes read
Confession can be good for your job
If you’ve been bad, go ahead and admit it. It probably will make your punishment a little easier. That’s the message in a little-publicized document obtained by Healthcare Risk Management from the federal government. The feds recently assessed the way the government has been dealing with health care organizations that have strayed from the straight and narrow. As part of an ongoing self-assessment of health care compliance initiatives, the Office of Inspector General (OIG) conducted an informal survey of the results of corporate integrity agreement (CIA) negotiations since the issuance of the "Open Letter to Health Care Providers" in March 2000. The purpose of the review was to determine the extent to which health care providers’ existing compliance efforts and self-disclosure of misconduct influenced the decision to require a corporate integrity agreement or modify specific terms.
"An informal review of the results of recent CIA negotiations confirms that significant and appropriate modifications are being made to CIAs with health care providers that have established compliance programs and make disclosures of misconduct to the government," the OIG says. "When negotiating a resolution to its administrative liability, a provider is often able to limit the scope and reduce the cost of a CIA or, in some instances, as a result of its self-disclosure and pre-existing compliance efforts, avoid the imposition of a CIA."
The OIG and the Department of Justice use the False Claims Act and other tools to sanction health care providers that have knowingly submitted false claims to Medicare. In addition to monetary penalties, the OIG can exclude providers from participation in Medicare and other federal health care programs. A criminal conviction triggers mandatory exclusion, but in other cases, the OIG usually requires that the provider adopt specific measures to better ensure its integrity. Those measures are set forth in what is known as a CIA.
Consistent with the United States Sentencing Commission’s Federal Sentencing Guidelines Manual, the CIA contains the seven core elements of an effective compliance program. In addition, the OIG generally requires the submission of periodic reports concerning the provider’s compliance efforts and reserves the right to impose sanctions for a material breach of the CIA. While CIAs almost always include these basic elements, the specific terms of a provider’s CIA are subject to extensive negotiations. Among the relevant factors considered in crafting a specific CIA are the severity and extent of the underlying misconduct, the provider’s existing compliance infrastructure and the resources available for such efforts.
Potential for misconduct
Perhaps the best measure of a provider’s existing compliance efforts is the ability to identify and respond to potential misconduct. Inspector General June Gibbs Brown observed in her March 9, 2000, "Open Letter to Health Care Providers" that "the best evidence that a provider’s compliance program is operating effectively occurs when the provider, through its compliance program, identifies problematic conduct, takes appropriate steps to remedy the conduct and prevent it from recurring, and makes a full and timely disclosure of the misconduct to appropriate authorities." The Open Letter went on to explain that the OIG would give more deference to the self-disclosing provider when negotiating a CIA and, under certain circumstances, might not even require a CIA as part of the resolution of the matter. The recent analysis by the OIG shows that the feds are coming through on that promise.
The OIG analysis found that when the provider admitted its wrongdoing and produced evidence of a comprehensive compliance program, the OIG usually made two changes to the CIA. The OIG reduced the term of the CIA from the usual five-year time period to three years, and reduced the role of the independent review organization (IRO) in those cases where the provider was able to demonstrate that it had an established system of internal audits. "These two modifications alone represent a significant benefit to the provider," the OIG analysis says. "Other modifications generally focused on conforming the requirements of the CIA to the provider’s existing compliance infrastructure. These modifications to the CIA were intended to promote continuity in the provider’s ongoing compliance program, as well as reduce the overall costs of such efforts."
Negotiating a CIA
The OIG provides these examples of how a hospital’s self-disclosure could be considered in negotiating the terms of a CIA:
• A rural hospital in the Southeast self-reported that, while under former ownership and management, it had submitted claims with information that was falsified to support reimbursement. The hospital uncovered the false claims during the course of an internal audit performed as part of its voluntary compliance program. In the fall of 2000, the hospital agreed to resolve its financial and exclusion liability. The OIG did not impose a CIA because the misconduct was committed by the former management and the new management disclosed its findings to the government as part of a comprehensive pre-existing compliance program.
• A Northeastern hospital system identified that one of its teaching hospitals had submitted improper claims, i.e., it did not have the proper documentation or were upcoded, to the federal health care programs. The hospital system uncovered the false claims during the course of an internal audit performed as part of its voluntary compliance program. In the summer of 2000, the hospital system agreed to resolve its False Claims Act liability. The OIG did not impose a CIA because the hospital system disclosed the misconduct to the government and the hospital system had a comprehensive pre-existing compliance program.
• An acute care hospital in the Southwest — one of several nonprofit affiliates of a larger health system — identified that it had improperly coded claims to the federal health care programs for mammography services. The hospital uncovered the false claims during the course of an internal audit performed as part of its voluntary compliance program. In the summer of 2000, the hospital agreed to resolve its False Claims Act liability. Because 1) the misconduct was isolated and distinct; 2) the hospital disclosed its findings to the government; 3) the damages to the federal health care programs were relatively small; and 4) the hospital had a comprehensive pre-existing compliance program, the OIG did not impose a CIA.
• A rural hospital in the Northeast self-disclosed that it had been submitting claims that were not in compliance with rules governing coding, documentation, and reimbursement for anesthesia services. The hospital uncovered the false claims during the course of an internal audit performed as part of its voluntary compliance program. In the fall of 2000, the hospital agreed to resolve its False Claims Act liability. Since the hospital disclosed its findings to the Government and had a comprehensive pre-existing compliance program, the OIG imposed limited integrity measures for a term of four years instead of five years, and permitted three years of internal audits instead of external reviews by the IRO.
• A network of physician clinics in the Northeast agreed in the spring of 2000 to resolve its False Claims Act liability arising out of its submission of claims to the federal health care programs that violated Medicare’s billing rules. The OIG imposed a CIA on the network for a term of five years. However, the integrity obligations were tailored to the providers’ pre-existing compliance program. Furthermore, the physician clinics were allowed the opportunity to qualify for internal annual reviews instead of reviews conducted by an IRO.
• A mental health facility in the Midwest agreed in the spring of 2000 to resolve its False Claims Act liability arising out of its submission of claims to Medicaid for nonreimbursable services. The facility uncovered the false claims during the course of an internal audit performed as part of its compliance program. Because the facility had disclosed the false claims to the government, cooperated with the government to perform an internal audit, and had already implemented a comprehensive pre-existing compliance program, the OIG made certain modifications to the CIA. The OIG imposed corporate integrity obligations for a term of three years instead of five years. Furthermore, the integrity measures were tailored to the facility’s pre-existing compliance program and the OIG allowed internal annual reviews instead of IRO reviews.
• A national health system, which operates multiple hospitals in 20 states, entered into a global settlement in the spring of 2000 to resolve its False Claims Act liability arising out of its upcoding of pneumonia claims at several of its hospitals. The health system 1) disclosed its problems with pneumonia claims, as well as additional problems; 2) cooperated with the government to perform an internal audit with mutually agreed-upon parameters; and 3) had implemented a comprehensive compliance program. Based on these and other facts, the OIG made certain modifications to the CIA and imposed a CIA for a term of three years instead of five years. Furthermore, the corporate integrity measures conformed to the hospital system’s comprehensive pre-existing compliance program and the IRO review was limited to the covered conduct.
A nursing home in the Midwest identified that it had been improperly waiving copayment amounts for Part B services rendered to Medi-care beneficiaries for nursing and clinical laboratory services, occupational and physical therapy and physician services. In the summer of 2000, the nursing home agreed to resolve its False Claims Act liability. Because the hospital disclosed its findings to the government and was in the process of implementing a comprehensive compliance program, the OIG imposed a CIA for a term of three years instead of five years and tailored the integrity measures to the provider’s pre-existing compliance program.
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