Health Care Matters

A Complimentary Newsletter From:

Law Offices Of David S. Barmak, LLC

Managing Risk for Long Term Care and Health Care Providers

Volume 11, Issue 6                               ADVERTISEMENT                                         JUNE 2010

In This Issue
Red Flag Rules Implementation Delayed for the 4th Time
Patient Protection and Affordable Care Act (Healthcare Reform Act of 2010) Includes Significant Change to the Federal Anti-Kickback Statute
Administrators in Training Seminar - Tuesday October 5, 2010. To Address: Fraud and Abuse Aspects of New Healthcare Reform Act
Safe Harbors Can Sheild Health Care Providers From Federal Anti-Kickback Law
David S. Barmak, Esq. 
David Photo
Licensed to practice law in the States of New Jersey, New York, Connecticut and Pennsylvania 
 
Red Flag Rules Implementation Delayed
for the 4th Time
Enforcement of the Federal Trade Commission's (FTC) red flags rule has been pushed back to December 31, 2010 giving health care providers another six months to establish a program for finding and preventing identity theft - unless Congress exempts them from coverage.
 
Many groups representing various constituencies have fought implementation through their national associations stating that Congress intended the rule to apply to banks, credit card companies  and mortgage lenders and that the FTC does not have the statutory authority to apply the rule to health care providers.
 
The rule, which implements the Fair and Accurate Credit Transactions Act of 2003, defines a creditor as any "entity that regularly extends, renews or continues credit".
 
Legislation in both the Senate and the House has been introduced that would limit how the red flag rule applies to heatlh care providers.
 
The FTC has urged Congress to act quickly to pass legislation that will resolve any questions as to which entities are covered by the rule. 
 
Jon Leibowitz, FTC Chairman has stated that if Congress passes legislation limiting the scope of the red flags rule with an effective date earlier than December 31, 2010 the commission will begin enforcement as of that effective date.
Patient Protection and Affordable Care Act (Healthcare Reform Act of 2010) Includes Significant Change to the
Federal Anti-Kickback Statute
A violation of the Federal Anti-Kickback Statute no longer requires intent: that is, actual knowledge of violating the statute and specific intent to violate the statute under a change dictated by the Patient Protection and Affordable Care Act of 2010.

This is a very significant change to the statute where previously "intent" was a critical component. In addition, a violation of the federal anti-kickback statute is now expressly recognized as resulting in the submission of false claims and a violation of the federal false claims act.  The federal false claims act is the basis for qui tam or whistleblower lawsuits brought on behalf of the federal government.
 
This change in the federal anti-kickback statute is a serious reduction of the level of proof needed to successfully prove a violation of the statute.
Health care providers and suppliers must reevaluate all business relationships with actual or perceived referral sources to ensure that there is full substantiation of compliance with this statute.
Administrators In Training Seminar - Tuesday October 5, 2010. To Address: Fraud and Abuse Aspects of New Health Care Reform Act
All Administrators In Training (AIT) are invited to attend a free seminar on the Fraud and Abuse aspects of the Patient Protection and Affordable Care Act of 2010 presented by David S. Barmak, Esquire on Tuesday evening, 6:00 PM October 5, 2010 at Leisure Chateau Care Center, 926 River Avenue in Lakewood.
 
A buffet dinner will be served compliments of the facility and its administrator, Norman Rokeach. To make a reservation please call The Law Offices Of David S. Barmak, LLC at (609)688-0055 and ask for Merle or Saul.  Space is limited so call today.
Safe Harbors Can Shield Health Care Providers From Federal Anti-Kickback Law
The principle purpose of the Federal Anti-Kickback Law is to protect patients and the federal health care programs from fraud and abuse by eliminating the corrupting influence of money on health care decisions.  The law as written is very broad and over the years health care providers have argued that some relatively minor and some cases even beneficial commercial arrangements are prohibited by this federal regulation.
 
Concerns raised by many though the years has led Congress to authorize the Department of Health & Human Services to issue regulations designating "safe harbors" for various payment and business practices such as but not limited to space rental, equipment rental, personal services and management contracts. These types of safe harbor arrangements while potentially prohibited by the law will not face criminal and civil prosecution.
 
Without safe harbor status violation of the Federal Anti-Kickback law could be punishable by up to five years in prison, criminal fines up to $25,000, administrative civil penalties up to $50,000 and exclusion from participation in federal health care programs.
 
Failure to comply with a safe harbor provision does not mean that a business arrangement is per se illegal. Compliance with safe harbors is voluntary and arrangements that do not comply with a safe harbor must be examined on a case by case basis for compliance with anti-kickback statute.
Medicaid Fraud Control Units (MFCU)
The mission of each Medicaid Fraud Control Unit (MFCU or Unit), as established by Federal law, is to investigate and prosecute fraud by Medicaid providers as well as patient abuse and neglect. The Units are required to be "single, identifiable" entities whose professional staff are required to work full-time on MFCU duties. The Units are administered by the States themselves but are funded on a matching basis by the Federal Government. All MFCUs currently receive 75 percent of their funding from the Federal Government and 25 percent from their State government. The MFCUs' authority to investigate patient abuse and neglect extends to Medicaid-funded facilities as well as to "board and care" facilities that do not receive Medicaid funding. MFCUs may, in certain circumstances, also investigate program fraud involving Medicare or other Federal programs, upon the approval of the Department of Health & Human Services Office of Inspector General (HHS/OIG) or another relevant agency Inspector General.
 
States are required as part of their Medicaid State plans to maintain a MFCU, unless the Secretary of HHS determines that certain safeguards are met regarding fraud and abuse. Forty-nine States and the District of Columbia currently maintain Units. The MFCUs operate on an interdisciplinary model and are required by statute to employ investigators, auditors, and attorneys. The MFCUs are required to have statewide authority to prosecute cases or to have formal procedures to refer suspected criminal violations to an office with such authority. Consistent with this requirement, the Units' authority to investigate and prosecute cases varies from State to State. Forty-three of the MFCUs are located within Offices of State Attorneys General. The remaining seven Units are located in other State agencies.
 
OIG is delegated the authority under statute to certify and annually recertify each MFCU. As part of regularly scheduled onsite reviews, OIG also assesses whether Units operate in accordance with 12 published performance standards and makes recommendations and, where appropriate, suggests opportunities for improvement.
OIG maintains a collaborative relationship with the National Association of Medicaid Fraud Control Units, which represents all 50 MFCUs.
Law Offices Of David S. Barmak, LLC
David Barmak established his health care law firm in 1984 to deliver legal services, both in transactions and litigation, to organizations and professional practitioners in the health care field.  We call this approach "Enterprise-Wide Risk Management" because it includes three important facets:
  1. Counsel and advisement on all aspects of legal risk, from setting up the entity to corporate governance and compliance;
  2. Protection of your practice or business through litigation prosecution or defense in the Courts; as well as regulatory compliance and licensure issues before government agencies; and
  3. Operations improvement through the implementation of enterprise-wise onsite audits, programs and training seminars in the areas of, but not limited to, Fraud and Abuse, HIPAA Privacy and Data Security, Employment, A/R Management, Emergency Preparedness, and Workplace Violence.

David S. Barmak, Esq. received his JD from Cornell University and BA from Duke University.  He is licensed to practice and serves clients in the States of New Jersey, New York, Connecticut and Pennsylvania.  Also he now serves as Chair of the Health and Hospital Law Section of the New Jersey State Bar Association.  Before making your choice of attorney, you should give this matter careful thought.  The selection of an attorney is an important decision.  The recipient may, if the newsletter is inaccurate or misleading, report the same to the Committee on Attorney Advertising. 

For more information, please contact us:
Telephone (609) 688-0055
Fax (609) 688-1199
 
Copyright, 2010.  Law Offices Of David S. Barmak, LLC.  All rights reserved.
No portion of these materials may be reproduced by any means without the advance written permission of the author.