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 7                               ADVERTISEMENT                                         JULY 2010

In This Issue
Highlights of the Fraud & Abuse Provisions of the Health Care Reform Act of 2010
Medicare and Medicaid Overpayments Must be Reported and Returned Within 60 Days
Administrators in Training Seminar - Tuesday October 5, 2010. To Address: Fraud and Abuse Aspects of New Healthcare Reform Act
New Jersey Medicaid Fraud Control Unit Investigates and Prosecutes Fraudulent Activities Against the Medicaid Program
The Internal Revenue Service is Scrutinizing the Use of Independent Contractors
David S. Barmak, Esq. 
David Photo
Licensed to practice law in the States of New Jersey, New York, Connecticut and Pennsylvania 
 
Highlights of the Fraud & Abuse Provisions of the Health Care Reform Act of 2010
The Office of Inspector General of the Department of Health and Human Services is responsible for the oversight and implementation of the Patient Protection and Affordable Care Act referred to as the Healthcare Reform Act of 2010 as it relates to the Department
of Health and Human Services (DHHS).
 
Following are some of the highlights of the Act's fraud and abuse provisions:
 
FRAUD PREVENTION:
Skilled nursing facilities (SNF) must implement a compliance and ethics program and all employees and agents must follow the program within 36 months of enactment. The program must help prevent and detect criminal, civil and administrative violations.
 
FRAUD DETECTION:
The DHHS may enter into data sharing agreements to identify fraud, waste and abuse as well as to perform enforcement and oversight activities with appropriate Federal agencies. This creates a mechanism for data sharing among the DHHS, the Attorney General and representatives of health plans. Expansion of the Recovery Audit Contractor (RAC) program to detect and correct improper Medicare payments will be expanded to Medicaid. Providers and suppliers will have to continue to be careful with their coding and billing compliance. 
 
FRAUD INVESTIGATION:
The Secretary of the DHHS has the authority to subpoena documents or testimony for program exclusion investigations.  In addition with regard to criminal penalties involving health care programs a person need not have actual knowledge of the legal provision creating the action or the specific intent to commit a violation. The new law allows the DHHS Secretary to more easily suspend payments to a Medicare provider or supplier. DHHS may also suspend payment to a Medicaid provider or supplier during a pending fraud investigation if a state fails to suspend such payments.
 
FRAUD PROSECUTION:
An additional $100 million in annual funding has been appropriated for fraud and abuse enforcement activities. Fraud sentencing guidelines are enhanced, the intent requirement for fraud under the anti-kick statute is changed and the subpoena authority relating to health care fraud is increased. Persons who fail to grant the Office of Inspector General (OIG) timely access to documents for audits, investigations, evaluations or other statutory function will be subject to a civil monetary penalty (CMP) of $15,000 for each day or failure.  A $50,000 CMP per violation will be established for persons who knowingly make use, or cause to be made or used any false statement to a federal health care program.
 
The above are just some of the Fraud and Abuse Provisions of the recently passed Health Care Reform Act of 2010.  A complete understanding and implementation of this new law will take some time; however, one thing is very clear: all skilled nursing facilities must have a working compliance and ethics program within 36 months of the enactment of this act, namely March of 2013.
Medicare and Medicaid Overpayments Must be Reported and Returned Within 60 Days
Under provisions of the recently enacted Patient Protection and Affordable Healthcare Act of 2010 (PPAHA) healthcare providers and suppliers must report and return Medicare and Medicaid overpayments within 60 days after the overpayment was identified. Report of the overpayment must be made to DHHS/CMS, the State, and intermediary/carrier as appropriate. Failure to report and return overpayments within 60 days is a violation of the civil monetary penalties law.  The penalty is $10,000 per claim or exclusion. In a civil action the burden of proof is lighter than in a criminal action and this makes it easier for the government to win the case.
 
In addition under the false claims act there is an obligation to report the overpayment.  Failure to report and repay knowingly is transformed into a False Claims Act violation creating a potential for a whistleblower's suit with penalties 3 times damages plus over $10,000 per violation. Make certain overpayments are reported and returned within the time restraints of the PPAHA.
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.
New Jersey Medicaid Fraud Control Unit Investigates and Prosecutes Fraudulent Activities Against the Medicaid Program
The New Jersey Medicaid Fraud Control Unit, ("MFCU"), is located within the Office of the Attorney General's Division of Criminal Justice.
 
The MFCU investigates and prosecutes:
  • Fraudulent activities by providers against the Medicaid program.
  • Fraud in the administration of the program.
  • Investigate and prosecute fraud against other federally funded health care programs where there is a Medicaid nexus.
  • Complaints of patient or resident abuse or neglect in health care facilities receiving Medicaid funding such as nursing homes. Also those Medicaid beneficiaries who reside in any other setting outside their home where care is provided to them. Abuse and/or neglect means both physical abuse or neglect and fiscal pertaining to money or property abuse or neglect.
  • Violations of the Civil False Claims Act, where the alleged fraud impacts Medicaid.
 Fraud Examples - Medicaid Fraud:
  • It's illegal to participate in a scheme to offer or receive kickbacks in connection with the furnishing of items or services which are billable to the Medicaid program.
  • It's illegal to over bill Medicaid for services provided.
  • It's illegal to receive more Medicaid benefits than you're entitled to.
  • These are violations of N.J.S.A. 30:4D-17.
  • Punishable by up to 3 years in prison and a $10,000 penalty.
  • They may also be violations of the Health Care Claims Fraud Act and other criminal statutes.
 Fraud Examples - Health Care Claims Fraud:
  • It's illegal to submit a false claim form to an insurance company in order to be paid for health care services which were not received or provided.
  • This is a violation of the New Jersey Health Care Claims Fraud Act, N.J.S.A. 2C:21-4.2 and 2C:21-4.3.
  • In addition, this person can be required to pay a fine of up to $150,000 or up to five times the amount of the claim.
  • A person who is not a doctor, chiropractor, etc., could be sentenced to 3 to 5 years in jail for filing just one false claim.
The Internal Revenue Service is Scrutinizing the Use of Independent Contractors
The United States Internal Revenue Service (IRS) is renewing its efforts to ensure that individuals are properly treated as employees instead of independent contractors.  The critical difference between the two classifications is that employees have social security and Medicare taxes credited to their social security record by the employer instead of doing so on their own.
 
Tip offs for the IRS that workers are improperly classified include, but are not limited to the following: The worker was treated previously by the employer as an employee and is now classified by the employer as an independent contractor even though the services performed are done in a substantially similar capacity by the worker under substantially similar direction and control by the employer; co-workers performing substantially similar services under substantially similar direction and control are treated as employees by the employer; co-workers performing substantially similar services under substantially similar direction and control have received determinations from the IRS that they are to be considered employees.

There are a number of defenses for a company to sustain its treatment of workers as independent contractors and not as employees.  All such defenses revolve around a company's ability to show a reasonable basis for its classification decision.  To establish a reasonable basis it is critical that policies and procedures as well as contracts with independent contractors and the business practices of the company be reviewed and tailored to support the various reasonable basis that the IRS has historically accepted as legitimate defenses.
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-wide 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 served as Chair of the Health and Hospital Law Section of the New Jersey State Bar Association from July 1, 2009 to June 30, 2010.  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.