NEWS AND VIEWS FOR PTs
A complimentary newsletter from
MAILLY INGLETT & BARMAK, LLC
Educators and Consultants to Physical Therapists
NOVEMBER, 2010 - Volume 1, Issue 11 |
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Providers/Suppliers Beware: Expansion of the False Claims Act |
On May 20, 2009, the president signed into law the Fraud Enforcement and Recovery Act of 2009 (FERA). Significant changes were made, as a result, to the civil False Claims Act (FCA) which is the primary civil enforcement tool used by both federal and state governments to fight fraud in the healthcare industry.
Prior to FERA, courts interpreted FERA as requiring that "a defendant must intend that the government itself pay the claim" in order for there to be a violation of the FCA. This previously meant that a subcontractor who knowingly submitted a false claim to a general contractor was not held liable under the FCA unless the subcontractor intended to defraud the federal government, not its general contractor. FERA revises the FCA to remove this requirement of intent on the part of the subcontractor. For example: a skilled nursing facility subcontracts to a private practice to provide physical therapy for its residents. The practice intentionally falsifies its records in order to maximize the facility reimbursement through the Medicare reimbursement process, and likewise increase their payment from the facility. Prior to FERA, the therapy provider was immune from a possible qui tam or false claims lawsuit under the FCA because the therapy provider was not being reimbursed directly by the government. Under FERA, the therapy provider can be targeted by a qui tam whistleblower as well as by the government. No question about it - the skilled nursing facility will also be included in the prosecution even if the skilled nursing facility was unaware of what the therapy provider was doing. This only further reinforces the importance of the skilled nursing facility developing and implementing an effective compliance program, and of contractors doing the same.
FERA reinforces the application of the FCA to individuals who knowingly conspire to defraud the government. If individuals act in concert with each other, the government can charge them with conspiracy under the FCA.
As affirmed in the recent Patient Protection and Affordable Care Act, FERA makes the retention of any overpayment a violation of the FCA once the overpayment is knowingly and improperly retained or concealed.
FERA also provides more investigative tools to the U. S. Department of Justice (DOJ) to investigate alleged violations of the FCA. FERA now enables the DOJ can now subpoena documents and depose witnesses before filing a FCA lawsuit. The government can also now recover its costs from a FCA defendant for bringing a FCA action.
Prior to FERA, when the government intervened in a qui tam case, the government's complaint, for statute of limitations purposes, did NOT relate back to the original complaint filed by the qui tam relater. FERA changes this. The government's complaint does relate back to the qui tam relator's complaint date as long as the claims arise out of the conduct, transactions or occurrences in the original complaint. This is incredibly significant because it expands the period of time over which the government can target claims as false under the FCA.
FERA expanded the non-retaliation provisions of the FCA from employees to include independent contractors. This, too, is very significant because it increases the potential qui tam whistleblowers under the FCA from employees to independent contractors, not only on the basis of alleging false claims but also alleging retaliation for having attempted to bring to the attention of the provider or supplier a false claim situation.
Healthcare providers and suppliers should expect to see a substantial increase in FCA claims filed against them. There is now a substantial risk of increased investigations by the government and therefore an extra risk of liability. The FCA has been expanded and a number of defenses previously available to healthcare provider defendants have been eliminated. In addition, the expense of fighting a FCA has increased because the defendant is now obligated to pay the government's costs. In addition, overpayments are now considered violations of the FCA. It is critical that healthcare providers establish a system to detect and return overpayments in a timely manner as well as to show the government, if necessary, as part of a compliance program, that there is a good faith effort to detect and return overpayments in a timely manner. Under the recent Patient Protection and Affordable Care Act, overpayments are deemed false claims if a healthcare provider or supplier has not returned the overpayments within 60 days of knowing within 60 days of the date that it should have known of the overpayment. Now that employees AND independent contractors have a right to bring qui tam actions, they can also bring actions based upon alleged retaliation for their efforts to prevent or remedy alleged violations of the FCA. The most effective defense to these increased risks under the FCA is still the development and implementation of an effective compliance program. A primary goal of an effective compliance program is to reduce the risk of becoming a target of federal and / or state government enforcement of healthcare compliance. In other words: Prevention is key.
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| For Your Information - Q & A |
I am a supervisor in a physical therapy practice. I do a lot of hiring and, unfortunately, a lot of firing. I'm very worried that every employee whom I have fired might someday accuse me of discrimination - and they're right! I do discriminate. I discriminate in favor of one employee (who keeps her job) and another employee (who loses her job). Am I ok when I fire an employee who isn't cutting it on the job? Thank you, "Anxious"
Response: Hi Anxious. As long as the reasons you have for firing the employees are LAWFUL reasons then you have nothing to be anxious about. Let's talk about what are lawful and unlawful reasons.
Many of the day to day decisions that a supervisor makes are discriminatory. For example: you prefer pink uniforms to blue jeans. This type of discrimination is a matter of professional and personal choice. The manufacturers of blue jeans have no civil rights claims against you. An insurance company charges higher rates for red cars driven by 20 year olds than green cars driven by 50 year olds. This is permissible.
Decisions, particularly in the employment environment, are considered to be unlawful discrimination when race, religion, national origin, ethnicity or gender are criteria used to cause one person to be treated differently than another; in other words, to be "discriminated against" on the basis of that particular criteria. Please note that in some states sexual preference and marital status can also be the basis for unlawful discriminatory decisions. While you appear to have nothing to be anxious about regarding unlawful discrimination, I do suggest that you examine the lawful hiring criteria that you are using to make your hiring decisions - e.g.; are you using your job descriptions? To minimize expensive and time consuming employee turnover. Please see future newsletter articles dealing with this topic.
Question:
If I can take a moment of your time.... Is there any way to better ensure payment on a PIP claim than the standard letter of protection? We rarely take them anymore as we have been burned on more than one occasion where the claim is settled and we are conveniently "lost in the shuffle" of paperwork at the end of the claim.
Have you heard of private practices writing their OWN letter, including time tables for payment? Is there a way to make it a more "official" contract? Since the lawyer is ultimately only responsible to his client, has anyone found a cost effective way to protect the PT practice?
Response:
There is no legal definition of letter of protection and each and every letter would be different. The answer to this question would depend on exactly how the letter of protection is written. Simply put, a letter of protection is an agreement between an attorney and an individual that provided medical services to their client indicating that when, and if, a claim is settled, they will be considered for payment for services rendered. Keep in mind that this does not absolve the patient of being responsible for the bill if, in fact, the case is not settled favorably.
It is not only prudent business practice to provide your patient with a financial agreement but it is also mandated by the State Board of Physical Therapy Examiners:
13:39A-3.4 Financial arrangements with clients and third party payors
(a) Fees for physical therapy services shall be reasonable and commensurate with fees of licensed physical therapists offering like services or intervention in the geographic area and shall be in accordance with the provisions of N.J.A.C.
13:39A-3.6 prohibiting excessive fees.
(b) Prior to the initiation of physical therapy, the licensed physical therapist or the licensed physical therapist's designee shall explain to the patient in an understandable manner the financial arrangements. The information provided to the patient shall include, but not be limited to:
- The fee for services or the basis for determining the fee to be charged;
- Whether the licensee will accept installment payments or assignment of benefits from a third party payor;
- That insurance coverage may not be available in all circumstances; and
- The financial consequences, if any, of missed sessions.
A letter of protection should be specific and it should indicate exactly what amount will be protected. For example, will the entire bill be protected or only some portion. Many times a letter of protection will indicate that the provider of services will be paid after settling the case but may not indicate the exact amount. Attorneys are notorious for trying to negotiate the settlement fee going to the provider because this puts more money into their own pocket.
Many health-care practitioners will not accept a letter of protection because it is risky business and may have a significant adverse affect on their accounts receivable.
Thanks for any advice you can forward our way. |
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Federal Audit Contractors |
Medicare's Recovery Audit Contractor (RAC) program has been a huge success - at least as far as the government is concerned. Unfortunately, this success has been so great that the government has decided to expand the RAC program from Medicare to Medicaid, with this author's fear that it will be to the detriment of honest healthcare providers and suppliers.
RACs are charged with identifying under and overpayments to health care providers and suppliers. In return, they receive a portion of the money they recover - namely a contingency fee of between 9 and 12.5 percent. Under the Patient Protection and Affordable Care Act, RACs have expanded from Medicare to Medicaid healthcare providers.
Based upon results reported during the three year demonstration period which ended in March 2008, the majority of the improper payments identified by RAC auditors were based upon overpayments. Roughly half of the recoveries were Part A claims and half Part B claims. Overpayments were identified on approximately 33 percent of all records reviewed. The average value of an overpayment was between $4,000 and $12,000 per claim.
RACs perform two types of reviews: automated and complex. Automated reviews are conducted through data mining and the use proprietary techniques to detect clear errors. A complex review is conducted if an error is likely and the medical record is reviewed.
The RAC demonstration project has produced valuable data for defending against RAC auditors: approximately 1/3 all appeals by healthcare providers of RAC initiated claims of overpayment were successful during the demonstration project. It is important that healthcare providers carefully review and question RAC initiated overpayments and pursue appeals whenever reasonable to do so.
It is essential that a thorough effort be made in preparing for RAC record requests. An effective compliance program is critical in pulling together the compliance team to review the issues identified by RAC auditors not only those that arose during the RAC demonstration stage but also issues currently identified on the RAC's Web-site. The Compliance Officer, Compliance Attorney, Owners, associates and staff must all work together to review and assess the risks that lie within the medical records prior to submission to the RAC. Documentation should be prepared with the expectation that all conclusions by the RAC auditors will need to be appealed. As always, the compliance program must reflect all efforts made to comply with laws and regulations, efforts made to comply with RAC auditor efforts as well as whatever remedies are implemented in order to minimize the risk of legitimate future problems identified by RAC or the next generation of government auditors.
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Mailly Inglett & Barmak, LLC |
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Ken Mailly, PT, MPA, NJ Lic. # NJ40QAOO335900
Ken is a graduate of the State University of New York at Downstate Medical Center, and completed his Master's in Public Administration at Seton Hall University, with a concentration in Health Care Policy and Management. He is also certified as an Ergonomic Specialist, and as a Rehabilitation Agency Medicare Surveyor.
In addition to his graduate studies, with well over 2,500 hours of continuing physical therapy education, Ken has amassed an extremely diverse and extensive knowledge of the clinical practice of physical therapy, rehabilitation, and practice management. Ken's primary clinical focus is in orthopedics, chronic soft tissue disorders, and management of patients with bleeding disorders.
Along with this clinical knowledge base, Ken has devoted the last 10 years to the study of regulation, legislation, and reimbursement for physical therapy & rehabilitation services. He has served as an expert witness, on behalf of both plaintiffs and defendants, in numerous malpractice cases. He has also been consulted on state, federal, and third party payer inquiries regarding physical therapy and rehabilitation billing, regulatory, and legal issues.
Ken is a partner in Mailly & Inglett Consulting. His focus is on compliance with professional standards, state and federal regulations, as well as practice management strategies.
Barry G. Inglett, PT, CHT, Cert. MDT, NJ Lic # NJ40QA00146200
Barry is a graduate of Columbia University, a Certified Hand Therapist and a Credentialed McKenzie Therapist. He is a physical therapist and co-owner of Wayne Physical Therapy & Spine Center, a private practice established in 1977. Barry is also a partner in Mailly & Inglett Consulting, working with both physical therapists and Payers.
Barry is a guest lecturer for UMDNJ's Physical Therapy Program as well as a clinical instructor for several colleges including Columbia University, New York University, Temple University, Stockton State College, Kean College and the University of Medicine and Dentistry's Physical Therapy Program. He is also an instructor for HMW (Human Mechanical Wellness) Seminars, specializing in mechanically oriented treatment programs for the spine and extremities.
Barry has been retained by numerous insurance companies as well as the New Jersey Attorney General's Office offering expert witness testimony in physical therapy practice. He has been involved in utilization review and reimbursement issues in physical therapy for over 20 years. Barry also instituted, and was retained as the lead expert, in the largest PT fraud case in NJ history (Cobo v. MTF). He also served as a physical therapy consultant from 1997-2005 for Horizon Healthcare running the NJ Plus pre-certification program. Barry has served on the New Jersey Board of Physical Therapy Examiners in the past for eight years and has also served as the Chairman of the Board of Physical Therapy Examiners.
David S. Barmak, Esq.
David S. Barmak, Esq. received a JD from Cornell University and a BA from Duke University. The Law Offices Of David S. Barmak, LLC was established in 1984. David is licensed to practice law and has clients in the states of New York, New Jersey, Pennsylvania and Connecticut.
David's legal focus is in the areas of corporate compliance, risk management, human resources and operational legal affairs.
David has a strong background in operations, having served as both the Associate Administrator and General Counsel for a large New York Certified Home Health Agency, initiating and directing a New York Licensed Home Care Services Agency as well as owning and operating a Durable Medical Equipment company. David also provides defense of enterprises, directors, officers and other professionals accused of misconduct.
For more information, please contact us:
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| © Copyright, 2010. Mailly Inglett & Barmak, LLC. All rights reserved. No portion of these materials may be reproduced by any means without the advance permission of the author. | |
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