Kusserow on Compliance: The OIG announces plan to begin auditing the Two-Midnight Rule

The HHS Office of Inspector General (OIG) announced that it will begin auditing short stay claims again, and when appropriate, recommend overpayment collections. The agency’s previous audits identified millions of dollars in overpayments for inpatient claims with short lengths of stay. The OIG found that many have billed stays as inpatient claims when they should have been billed as outpatient claims, which usually results in a lower payment.

To reduce inpatient admission errors, CMS implemented the Two-Midnight Rule in 2014. CMS generally considered it inappropriate to receive payment under the inpatient prospective payment system (IPPS) for stays not expected to span at least two midnights. The only procedures excluded from the rule were newly initiated mechanical ventilation and any procedures appearing on the Inpatient Only List. Revisions were made to the Two-Midnight Rule after its implementation.

The OIG plans to once again audit hospital inpatient claims after the implementation of and revisions to the Two-Midnight Rule. The objective is to determine whether inpatient claims with short lengths of stay were incorrectly billed as inpatient and should have been billed as outpatient or outpatient with observation. The OIG also plans to review policies and procedures for enforcing the Two-Midnight Rule at the administrative level and contractor level. With this new initiative, hospital Compliance Officers should consider focusing on this issue as part of their 2021 work plan.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2020 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: OIG cautions pharmaceutical and medical device companies over speaker programs

The HHS OIG published a Special Fraud Alert cautioning pharmaceutical and medical device companies against conducting speaker programs given the “inherent risks” of implicating the Anti-Kickback Statute and False Claims Act. The OIG cited numerous enforcement actions related to speaker program arrangements, as well as Sunshine Act payment records reflecting significant payments for such programs in recent years. The OIG called for companies to assess the need for re-starting in-person speaker programs that have been paused during the COVID-19 pandemic. The Fraud Alert outlines “suspect” characteristics of a speaker program that may provoke an enforcement action, including the following:

  • Selected high-prescribing persons to be speakers and rewarded them with lucrative fees.
  • There is little or no substantive information presented at the program.
  • Alcohol is available or a meal exceeding “modest value” is provided to program attendees.
  • Held speaker programs at entertainment venues not conducive to educational presentation.
  • Company sponsors many programs on the same or substantially the same topic or product, especially if there has been no recent substantive change in relevant information.
  • Programs conducted where there has been a “significant period of time” with no new medical or scientific information nor new-FDA approval of a product or indication.
  • Programs where the attendees have attended other programs on the same or substantially the same topics more than once.
  • Attendees include individuals who do not have a legitimate business reason to attend the program, such as friends, significant others, family members, practice employees, and others with no use for the information.
  • Sales representatives or marketing personnel involved in the selection of speakers or the company selects HCP speakers or attendees based on past or potential revenue generated by prescriptions (e.g., a return on investment analysis).
  • Payment to HCP speakers exceeds fair market value for the speaking service or compensation takes into account the volume of business generated by the HCPs.
  • Conditioned speaker remuneration on sales targets (e.g., required speaker HCPs to write a minimum number of prescriptions in order to receive the speaker honoraria).

 

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2020 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: 2020 DOJ compliance program guidelines on continuous improvement and use of data

The DOJ released an update to its Compliance Guidance, intended to assist prosecutors in making informed decisions about whether a company’s compliance program was effective at the time of an offense. It emphasizes the importance of using data and technology to support compliance efforts, including assisting with continuous updates of a compliance program and assessing the adequacy and effectiveness of it at the time of the offense, charging decision, and case resolution. Many of the changes involve adding questions about a company’s ability to learn from its own experience through, among other things, the use of data and technology. The guidance asks whether companies:

  1. Engage in periodic reviews limited to a “snapshot” in time, or one based on continuous access to operational data across functions?
  2. Incorporated “lessons learned” through a “process for tracking and incorporating into its periodic risk assessment” information acquired both internally and from other similarly situated companies?
  3. Update policies/procedures and if they provide enough data to allow for effective monitoring and testing their effectiveness?
  4. Publish policy documents in a searchable format for easy reference and access?
  5. Can track access to specific policies/procedures to understand which are attracting the most attention from employees?
  6. Have means for employees to ask questions arising out of training?
  7. Have evaluated extent to which training has had an impact on employee behavior or operations?
  8. Engage in continuous ongoing monitoring and improving reporting mechanisms?
  9. Periodically test[s] hotline effectiveness, and track reports from inception to conclusion?
  10. Effectively communicate compliance requirements to employees during compliance education and training?

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2020 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: DOJ reports 2019 False Claims Act Recoveries of over $3B

The DOJ obtained more than $3 billion in settlements and judgments from civil cases involving fraud and false claims against the government in fiscal year 2019. Recoveries since 1986, when Congress substantially strengthened the civil False Claims Act, now total more than $62 billion. Of the more than $3 billion in settlements and judgments recovered, $2.6 billion related to the health care industry.

This was the tenth consecutive year that health care fraud settlements and judgments have exceeded $2 billion. Whistleblower, or qui tam, actions comprise a significant percentage of the False Claims Act cases that are filed. Of the $3 billion in settlements and judgments reported by the government in fiscal year 2019, over $2.1 billion arose from lawsuits filed under the qui tam provisions of the False Claims Act.

During the same period, the government paid out $265 million to the individuals who exposed fraud and false claims by filing these actions. The number of lawsuits filed under the qui tam provisions of the Act has grown significantly since 1986, with 633 qui tam suits filed this past year—an average of more than 12 new cases every week. In its news release, the DOJ noted that it had increased holding individuals accountable and cited examples of actions taken against responsible executives.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2020 Strategic Management Services, LLC. Published with permission.