Tag Archives: hospital

Hospital CEO to pay $1.25 million False Claims tab; a chilling reminder for health system and hospital leadership

2019 is well underway and so are Q1 board meetings.  If you haven’t done so already and serve on a hospital board or work with hospital boards, look back at the December 11, 2018 DOJ press release which announced that a Pennsylvania hospital and health system CEO agreed to pay $1.25 million. https://www.justice.gov/usao-edpa/pr/coordinated-health-and-ceo-pay-125-million-resolve-false-claims-act-liability  

The announcement caught the attention of CEOs, board members and other health leaders across the country as a pre-holiday reminder of the potential for individual civil and criminal liability arising out of compliance failures.  Dr. Emil Dilorio, the founder, principal owner and CEO of Coordinated Health Holdings Co., a for-profit hospital and health system, agreed to settled allegations with the DOJ under the False Claims Act.  The DOJ alleged that he and the company (which is on the hook for $11.25 million) submitted false claims to Medicare and other federal health care programs for orthopedic surgeries in a practice known as unbundling.  Coordinated Health also had to enter into a five year Corporate Integrity Agreement – one of the most dreaded enforcement tools that HHS has in its arsenal.  “The alleged corporate culture and leadership that promoted this conduct and allowed it to continue despite crystal clear warning is shameful,” said U.S. Attorney William M. McSwain of the Eastern District of Pennsylvania.   

It is now an opportune time to assess your organization’s true corporate culture and determine whether your leadership appreciates its growing responsibilities and is equipped to fulfill those responsibilities in a meaningful way.  Going through the motions of compliance education is simply not enough.  The federal government has been very clear that it expects leadership, including boards, to understand their corporate governance responsibilities, their responsibilities regarding review and oversight of the organization’s compliance program, as well as applicable federal and state laws such as the False Claims Act. 

While the OIG has stated that there is not a “one size fits all” program design for all compliance programs and that companies should tailor their compliance program designs, individuals who serve on for-profit and not-for-profit boards should make sure that they are fully equipped during the entire life cycle of their tenure.  Board responsibility, particularly in the fast paced and highly regulated health care space, is not a static journey. 

Moreover, each board member has a different baseline understanding of the industry, experience and skill set.  Not every board member is living and breathing MACRA, ACOs, EMRs, CINs and AKS.  But the old assumptions that health care has too many acronyms to bother lay members with or that the Stark law makes no sense and is not worth going over, have never been accurate and are definitely not in today’s enforcement environment.  In fiscal year 2018 alone, the DOJ recouped $2.8 billion for False Claims Act cases.

Any prudent board member should make sure that either the organization’s current program is sufficiently tailored to that board’s individual needs or ask for additional and ongoing education and support. Initial education and ongoing refresh are just the beginning of an effective board compliance program.  The OIG expects that board members understand their responsibilities to provide oversight for corporate compliance programs and to promote an ethical culture in their organizations.  This is no small task.  The regulatory framework is complex and in a state of flux, the OIG’s Work Plan is comprehensive and not the only determinant of focus areas and compliance risks, hospital operations are being reinvented to transition out of the fee for service model, and the reimbursement landscape is uncertain. 

At a minimum, new and existing board members should look to understand the organization’s business models; organizational and governance structures; governing documents; authority matrix including any powers reserved for a parent or subsidiary board; board committee policies and procedures; D&O policies and scope of coverage; COI policies; current compliance plan; past years’ compliance plans and performance against the plans; significant compliance concerns that have led to self-disclosures or other self-reporting obligations; any recent or material government investigation; the terms of any Corporate Integrity Agreements; significant security or privacy breaches; processes and procedures in place relating to financial arrangements with physicians and physician groups; the fraud and abuse laws; medical necessity; billing and reimbursement basics; security obligations; and other key regulatory requirements that impact the organization. 

Board members are also advised to meet the compliance lead, understand how issues are identified and remediated, and have access to the compliance team to answer any questions that may arise.  Internal and, as appropriate, external counsel should be part of the process and partner with the compliance lead and board members, when necessary.  These steps are important but not sufficient and every organization should continuously assess and improve its ongoing compliance strategy.

Service on a hospital board is an opportunity to serve and a privilege.  It is also an obligation full of responsibilities.  With so many issues competing for boards’ attention these days, the Coordinated Health settlement is a timely reminder that hospital leadership and boards cannot take their eyes off of the importance of compliance.  The risk is too high to get lost in the alphabet soup.

Illinois Posts Medicaid Managed Care Performance Report

In January 2018, The Office of the Auditor General for the State of Illinois published its Performance Audit (“Audit Report”) of Medicaid Managed Care Organizations (“Medicaid MCOs”) for Fiscal Year 2016. What was unleashed was a startling review of the Medicaid MCOs’ performance over FY 2016 in administering the Medicaid Program for what was then called the Integrated Care Program (“ICP”) or Medicare/Medicaid Alignment Initiative (“MMAI”) Programs. You may recall these ICP and MMAI Medicaid MCO programs in Illinois involved almost a dozen Medicaid MCOs that covered about 70% of the State of Illinois Medicaid recipients.

The Audit Report played into health care providers’ deepest fears in Illinois: showing that Medicaid Managed Care may not be working as it was intended; namely, to reduce costs and improve quality of care in the Medicaid Program in Illinois. For example, long term care providers in Illinois had to fight tooth and nail with Medicaid MCOs under the ICP and MMAI programs, experiencing cumbersome Medicaid contracts, denied claims, delayed claims, and worse yet, a prior authorization administration problem (administrative MCO delay) which in some instances prevented residents from receiving care timely. Most, but not all, of those issues are still being resolved, but providers had hoped that there was a good reason for this madness involving Medicaid MCOs: better and lower cost care for Medicaid beneficiaries. Continue reading Illinois Posts Medicaid Managed Care Performance Report

Seventh Circuit Finds Hospital Not A “Credit Reporting Agency”

In Tierney v. Advocate Health & Hospitals Corp., the Seventh Circuit recently affirmed the dismissal of a Fair Credit Reporting Act (“FCRA“) complaint and found that a hospital was not a “credit reporting agency” under the FCRA.  Continue reading Seventh Circuit Finds Hospital Not A “Credit Reporting Agency”

Specific Facts Suggest Hospitals and Insurers Agreed to Group Boycott

A per se violation of Section 1 of the Sherman Act, 15 U.S.C. § 1, generally requires an agreement among horizontal competitors that unreasonably restrains trade. To withstand a motion to dismiss, a Section 1 plaintiff must allege facts that suggest direct of evidence of an agreement among the defendants, as opposed to alleging facts that merely are consistent with parallel conduct. These principles have been referred to by some courts as creating a heightened pleading standard for Section 1 claims.

In Arapahoe Surgery Center, LLC, et al. v. Cigna Healthcare, Inc., et al., 2015 U.S. Dist. Lexis 28375 (D. CO.), the Colorado District Court determined that the plaintiffs’ allegations of a group boycott were sufficient to meet the pleading requirements under Section 1, and therefore denied a motion to dismiss filed by three insurance carrier defendants. The specificity of the factual allegations concerning the agreement among the defendants, and the acts in furtherance thereof, underscore the importance of antitrust compliance in the healthcare and health insurance industries. Continue reading Specific Facts Suggest Hospitals and Insurers Agreed to Group Boycott

mHealth App Use: Is Data Truly Protected?

One of the reasons why consumers, healthcare providers, investors, the government and others have been slow to adopt mobile health applications and software (apps), are concerns about the privacy and security of data collected through the apps. For instance, Appthority, a service provider that offers an app risk management solution, recently reported that the iPharmacy Drug Guide and Pill ID app “is playing fast and loose with your personal info.” www.appthority.com/news/mobile-threat-monday-android-app-leaks-your-medical-info-online. iPharmacy is a free app that allows consumers to maintain a personal health record on their prescription drugs, look up information on a drug, provide reminders, and maintain pharmacy discount cards. Continue reading mHealth App Use: Is Data Truly Protected?

The Accretive Matter Is a Wake-Up Call for Hospitals: Examine Your Debt Collection and Revenue Cycle Practices ASAP

The Minnesota Attorney General is on a mission to eliminate over-aggressive debt collection behavior in the hospital industry. Her target is Accretive Health, Inc., a national company that provides support services to hospitals in Minnesota and other states on debt collection and revenue cycle management using sophisticated data analysis tools. Already other states have announced investigations, and federal investigations are likely to follow. The AG has also raised issues regarding the health system that used Accretive, Fairview Health Services, a nine-hospital system in Minnesota. Any hospital that outsources collections, revenue cycle management and related financial activities, or even performs them in-house, should closely review its compliance with best practices, including the AHA’s Statement on Hospital Billing and Collection Practices, agreed to in writing by many hospitals some years ago.

Continue reading The Accretive Matter Is a Wake-Up Call for Hospitals: Examine Your Debt Collection and Revenue Cycle Practices ASAP

Don’t Just Pay the RAC

Medicare Recovery Audit Contractors (RACs) mine data using automated systems to detect and recover improper Medicare payments. RAC audits pick up billing and coding errors and deny claims based on those errors. In many instances, the service was provided and was billable. In some cases, the coding error makes no difference in reimbursement, sometimes reimbursement should be higher, sometimes lower, but still reimbursable, under some code. In some cases, the RAC’s automated systems deny claims that were properly billed, because of software coding flaws. RAC auditors don’t correct billing errors, they just take the money back.

Continue reading Don’t Just Pay the RAC