Why Quality of Care Should Matter to You: FCA Enforcement in 2013 and Beyond

AHLA Physicians and Physician Organizations Law Institute

February 11-12, 2013

Speakers: Kevin Cornish, Navigant

George B. Breen, Epstein Becker & Green PCJeffrey Dickstein, US Department of Justice

The False Claims Act Was Inspired By Poor Quality

“For sugar, it often got sand; for coffee, rye; for leather, something no better than brown paper; for sound horses and mules, spavined beasts and dying donkeys; and for serviceable muskets and pistols, the experimental failures of sanguine inventors or the ruse of shops and foreign armories.”

United States ex rel. Newsham v. Lockheed Missiles and Space Co., Inc., 722 F. Supp. 607, 609 (N.D. Cal. 1989) (quoting 1 F. Shannon, The Organization and Administration of the Union Army, 1861-1865, at 5456 (1965) (quoting Tomes, Fortunes of War, 29 Harpers Monthly Mag. 228 (1864))).

Quality of Care Matters

• Patients Deserve It• Payor’s Expect It • Professional Standards Require It

Government Increasingly Focuses On It

• QA Requirements• Hospital Acquired Condition Penalties• Registry/Outcome Reporting Requirements• Quality Based Incentive Payments• Quality of Care Demonstration Projects

And It’s Here…

New York City Ties Doctors’ Income to Quality of Care

In a bold experiment in performance pay, complaints from patients at New York City’s public hospitals and other measures of their care — like how long before they are discharged and how they fare afterward — will be reflected in doctors’ paychecks under a plan being negotiated by the physicians and their hospitals.

The proposal represents a broad national push away from the traditional model of rewarding doctors for the volume of services they order, a system that has been criticized for promoting unnecessary treatment. In the wake of changes laid out in the Affordable Care Act, public and private hospitals are already preparing to have their income tied partly to patient outcomes and cost containment, but the city’s plan extends that financial incentive to the front line, the doctors directly responsible for treatment. It also shows how the new law could change longstanding relationships, giving more power to some of the poorest and most vulnerable patients over doctors who run their care.

“I would expect that we’re going to see this become more and more prevalent in compensation arrangements,” said Alan Aviles, president of the city’s Health and Hospitals Corporation, which runs the city’s 11 public hospitals and is the country’s largest public health system, handling more than 1 million emergency room visits a year.

Laws and Regulations Require It

• Medicaid requires services that “are within accepted professional standards of practice.”

Georgia Medicaid Program Part I; section 106(k).*Varies by State

Laws and Regulations Require It

• TRICARE regulations require that “professional services be provided in accordance with good medical practice and established standards of quality.”

32 C.F.R. §§ 199.4(c)(1)

Laws and Regulations Require It

• Medicare regulations state “no payment may be made … for any … items or services … which … are not reasonable ….”

42 U.S.C. § 1395y(a)(1)(A)

*Query: reasonable to do it or do it reasonably?(Reasonable question, right?)

Laws and Regulations Require It

• Providers may only submit claims that are “of a quality which meet professionally recognized standards of health care.” In addition each claim must be supported by evidence that it is medically necessary and of the appropriate quality.

42 U.S.C. 1320c-5(a)(2)

DOJ Enforces It

• Reasonable and Necessary cases• Worthless Services cases• Quality of Care cases

You’re Judged By the Company You Keep

• Physicians Are Making Medical Determinations, Not DOJ

• DOJ Is Retaining Top Medical Experts• Juries Ultimately Decide

What’s Happening Now

• Long Term Care Facilities • Angioplasties/Stents• Implantable Cardioverter Defibrillators• Radiology • Vascular Surgery

Occasional Poor Quality Does Not A Good Fraud Case Make

• 1X= Instance• 2X= Occurrences• 3X = Trend• 4X = Pattern• 5X = Agenda

Not exactly….

Enforcement Trends Reflect It

• More Cases Filed • More Inquiries• More Referrals • More Investigations• More Prosecutors and Agents• Bigger Budgets

Poor Quality Isn’t Hard to Find

• Adverse Incidents• Claims Data/Spikes • Registry Data*• Whistleblowers

Many Providers In The Crosshairs

• Individual Physicians• Physician Groups• Long Term Care Facilities• Hospitals• Systems

Poor Quality Defense

Trying to defend a Quality of Care case by claiming it’s only malpractice…

What providers and hospitals can do proactively, to try to stave off this enforcement effort and how compliance programs should be adapted to address this risk area.

Historic Fraud and Abuse Detection and Enforcement Methods are changing

The historic trend of state and federal focus of fraud, waste and abuse efforts on technical, coding, billing, bundling, etc. is fading as the future of such efforts.

Future of Fraud Detection and Enforcement is Intersection of Data Mining and Quality

• Quality = Medical Necessity= FCA• Intersection of use of multi agency data sets to

identify outliers• Suspicion of outlier patterns as a foundation for

improper medical necessity.• Onus is on provider to substantiate outlier

pattern• Data mining as support of qui tam relator claims

Medical Necessity is the New Front Line of Fraud, Waste and Abuse Investigations

What is definition of medical necessity?Who is accountable for the medical decisions of physicians?What is basis for companies to evaluate and/or challenge medical decisions of medical staff?How can/should companies self assess medical necessity activity?Can there co-exist medically necessary services that are not covered by Medicare?Other examples of Medical Necessity and Quality Fraud risks

Conditions of ParticipationContractor/vendorsLicensing and credentialingDiagnostics

What is definition of medical necessity?

Wikipedia- Medical necessity is a United States legal doctrine, related to activities which may be justified as reasonable, necessary, and/or appropriate, based on evidence-based clinical standards of care.SSA Sec. 1801- Nothing in this title shall be construed to authorize any Federal officer or employee to exercise any supervision or control over the practice of medicine or the manner in which medical services are provided,… or to exercise any supervision or control over the administration or operation of any such institution, agency, or person.42 U.S.C. § 1395 “items and services reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member”

Primarily defines what Medicare will and will not pay for (coverage)Most “rules” for medical necessity are really coverage guidelines and are not found in in Medicare statue and regulations but contractor manuals

NCDs, LMRPs, LCDs etc.

Who is accountable for the medical decisions of physicians?

The PhysicianThe Provider CompanyThe Provider ExecutivesChief’s of MedicineQuality CommitteesPlan of Care or Standards Committees

What is basis for companies to evaluate and/or challenge medical decisions of medical staff?

• Peer Review Committees• Standards of Care Committees• Difficulty starts and stops with an unclear

understanding and translation into every day medical, clinical, documentation and revenue cycle work flows of payer based coverage rules and their intersection with accepted standards of care

• Change the “not my problem” paradigm• Is it just about the $$$?

Examples of Medical Necessity Investigations

• Cardiac Stents• Implantable Cardiac Defibrillators• Inpatient v. outpatient• Kypho and Vertebroplasty• Pacemakers• Angioplasty

How can/should companies self assess medical necessity activity?

• Proactive tracking and trending – Local, regional and national– If an outlier, medical case documentation and hospital documents

should proactively support outlier status

• Company determination of appropriate standards of care• Commonly accepted, defined and used markers for

demonstration of medical necessity• Development of process to proactively know circumstances

when medically necessary care diverges from payer coverage guidelines

Can there co-exist medically necessary services that are not covered by Medicare?

Medical Necessity = or ≠ CoverageCoverage = or ≠ Medical Necessity

Other examples of Medical Necessity and Quality Fraud risks

Conditions of Participation- NF• Protect and promote the rights of each resident• The facility must care for its residents in a manner and in an environment that promotes

maintenance or enhancement of each resident’s quality of life• Facility must conduct initially and periodically a comprehensive, accurate, standardized,

reproducible assessment of each resident’s functional capacity• Each resident must receive and the facility must provide the necessary care and services to

attain or maintain the highest practical physical, mental and psychological well-being• Must have sufficient nursing staff to provide nursing and related services to attain or maintain

the highest practicable physical, mental and psychological well being..• Must provide each resident with a nourishing, palatable, well-balanced diet that meets the

daily nutritional and special dietary needs of each resident• A physician must personally approve, in writing a recommendation that an individual be

admitted to a facility.– The facility must ensure that the medical care of each resident is supervised by a physician

Other examples of Medical Necessity and Quality Fraud risks for Providers

Contractor/vendorsLicensing and credentialingDiagnostics