Kusserow on Compliance: Employee screening against the Specially Designated Nationals and Blocked Persons list

A frequently asked question by compliance officers for health care organizations is whether they should be screening employees and others with whom they do business against the Office of Foreign Assets Control (OFAC) Specially Designated Nationals and Blocked Persons list (SDN). OFAC is part of the U.S. Department of Treasury that determines whether or not an entity or individual is permitted to do business with the United States. The SDN is “….a list of individuals and companies owned or controlled by, or acting for or on behalf of, targeted countries. It also lists individuals, groups, and entities, such as terrorists and narcotics traffickers designated under programs that are not country-specific.”

Tom Herrmann, JD—who served over 20 years in the HHS Office of Inspector General (OIG) Office of Counsel to the IG and subsequently 6 years as an Appellate Judge for the Medicare Appeals Board—was asked to comment on this issue. He noted that the SDN list was primarily designed for use by financial institutions; they are not permitted to deal with anyone on the list. As a result, OFAC alerts can sometimes show up on credit reports. It is safe to assume that employers, also, would prefer not to hire someone on the SDN list. Those industries most involved in OFAC screening are international businesses, particularly in banking, finance, and insurance. He made special note of the fact that screening against the OFAC SDN List is not required for healthcare providers or managed care and may create more problems than benefits from doing it.

Ashley Felder is a Human Resources Consultant who warns that from an employer’s perspective, a significant problem is that the list consists of a very large number of common Arabic names that can be transliterated into English many different ways that create many false hits. This opens up the possibility of discriminatory practices unless a great deal of care is used in applying the information. In view of the fact that there is not specifically identifiable data that can confirm a match, means that a potential hit cannot be fully resolved without confronting the individual for a detailed briefing of their background. This can be very troublesome and may lead to charges of discrimination, profiling, defamation of character, etc. The result is that OFAC may or may not be a useful supplement to a standard criminal check or screening against state credentialing agencies, the OIG List of Excluded Individuals, and Medicaid sanction lists.

Jillian Bower, Vice President of the Compliance Resource Center that provides sanction-screening tools and services, noted that the overwhelming majority of healthcare related entities “do not” screen against the OFAC SDN. She explained that there are some issues and potential complications in using it for employment screening, as result of the fact that for the most part, the list is name-only with multiple aliases per person, and is a mix of individuals and organizations. Dates of birth are usually missing, or multiple possibilities are listed. Address history, if present, only includes city and country. So OFAC checks are name-only, and making a positive identification can be difficult, if not impossible. As such, the Compliance Resource Center (CRC) does not recommend screening OFAC, unless there are special concerns or reasons for doing so, such as operating outside the United States in areas designated by the Department of Treasury for special concern.

 

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 Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2017 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: Court will not reconsider order to clear Medicare claims appeals backlog

On December 15, 2016, HHS asked the U.S. District Court for the District of Columbia to reconsider its December 5 order requiring the agency to clear the Medicare appeals within four years, stating it would not be able to meet the requirements under the schedule recently ordered without “substantial new resources and authorities.”  The court rejected this argument, as it had already been presented by HHS and considered by the court in reaching its order.  Unless HHS appeals the Court’s decision in American Hospital Association v. Burwell (U.S. District Court for the District of Columbia, January 4, 2017), this will conclude the 2.5 year litigation initiated by the American Hospital Association (AHA) and several hospitals.   Plaintiffs challenged the failure of HHS to meet statutory timeframes related to adjudication of Medicare claims appeals. The Court adopted the plaintiffs’ proposed timetable for clearing the backlog, requiring a 30% reduction of the current backlog of cases pending at the administrative law judge (ALJ) level by December 31, 2017, a 60% reduction by December 31, 2018, a 90% reduction by December 31, 2019, and a 100% reduction by December 31, 2020.

A failure to meet the deadlines would mean that claimants may move for default judgment in their favor. HHS is further obligated to submit a report every 90 days on its “progress in reducing the backlog and includ[ing] updated figures for the current and projected backlog, as well as a description of any significant administrative and legislative actions that will affect the backlog.” The HHS Secretary argued that the timetable would require her to “make payment on Medicare claims regardless of the merit of those claims.”  The Court responded by noting that HHS has already violated Medicare statute by not complying with statutory deadlines for Medicare appeals and the timetable provides a reasonable period for “proper claim substantiation.”  “If the Secretary fails to meet the [court ordered] deadlines, plaintiffs may move for default judgment or otherwise enforce the writ of mandamus.”

Tom Herrmann, JD, who served over twenty years as a former ALJ and executive in the Office of Counsel to the Inspector General, observed that health care providers and suppliers with pending appeals will welcome the court action requiring HHS to take steps to comply with the statutory deadlines for resolution of appeals.  He explained that governing law and regulations require an ALJ to hold a hearing and render a decision within 90 days of a party’s filing of an appeal with Office of Medicare Hearings and Appeals (OMHA).  However, they have been unable to meet this deadline, resulting in a backlog of 1 million pending appeals.  A Government Accountability Office (GAO) report last June was highly critical of the HHS appeals process and the failure to meet deadlines, and the OMHA moratorium on accepting new appeals requests in order to catch up has not worked.

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 Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2017 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: Court rules against HHS and orders end of Medicare claims appeal backlog

The U.S. District Court for the District of Columbia has ordered HHS to eliminate pending Medicare claims appeals and outlined a schedule for reducing the backlog. Failure to meet these deadlines will permit claimants to move for default judgment in their favor. This would apply to Medicare appeals that have been pending at the administrative law judge (ALJ) level without a hearing for more than a year. DHHS is obligated to submit a progress report every 90 days on reducing the backlog. This action is the latest in the 2.5 year pending litigation initiated by the American Hospital Association (AHA) and several hospitals.  The Office of Medicare Hearings and Appeals (OMHA) has been unable to comply with the 90-day statutory deadline for appeals, resulting in a backlog of almost 1 million pending appeals.  Last June, the Government Accountability Office (GAO) reported the failure to meet statutory deadlines for the resolution of appeals, noting they had fallen years behind in the backlog. Following this, the OMHA placed a moratorium on accepting new appeals requests in order to catch up on pending appeals, which did little to reduce the backlog.

Dr. Cornelia Dorfschmid is a leading expert on dealing with Medicare claims appeals and has been assisting clients with these kinds of issues for 25 years. She noted that as a result of the actions by the Federal Court, the appeal process may begin to function again as it was expected to do. If a provider has a concern about demand letters coming from government agencies or their contractors, she offers the following advice on how to deal with them:

  1. Correct interpretation of the projected estimate. The first step in assessing the exposure to a demand letter is to determine whether the estimate was projected from a random sample that was based on the correct interpretation and application of the various medical documentation requirements and payer coverage rules. If the medical review, the application of coverage criteria, and case-by-case review findings can be challenged in an appeal or a quality assurance process, the overpayment estimate derived from the sample would not be tenable.
  2. Statistically valid random sample. A demand for overpayments must be generated from a statistically valid random sample; and if it not then the validity of the projection of the total overpayment estimate is difficult to defend.
  3. Confidence and precision.   If each sampled case was reviewed correctly and the sample was a statistically valid random sample, acceptable confidence (i.e, degree of certainty that the sample correctly depicts the universe) and precision (i.e., range of accuracy) are the third piece needed for a quality estimate of the total overpayment in the universe.

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 Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2016 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: Most civil fraud recoveries in 2015 were from health care costs

The Department of Justice (DOJ) reported obtaining more than $3.5 billion in settlements and judgments from civil fraud cases in fiscal year 2015. Significantly, $1.9 billion in recoveries came from the health care industry sector as result of investigations of situations in which: (1) unnecessary or inadequate care was provided; (2) kickbacks to health care providers to induce the use of certain goods and services were paid; or (3) goods and services paid for by Medicare, Medicaid, and other federal health care programs were overcharged. This was over half of the total amount recovered across all sectors and up from about 40 percent in 2014. The cumulative amount recovered from health care fraud cases since January 2009 was reported to be $16.5 billion.

Some of the highlighted cases from 2015 included the following:

  • Two of the largest recoveries were from dialysis services provider, DaVita Healthcare Partners, Inc., who paid $450 million to resolve a civil fraud case.
  • Hospitals were involved in nearly $330 million in settlements and judgments this past year. By far the biggest enforcement effort involved nearly 500 hospitals for implanting cardiac devices in Medicare patients contrary to criteria established by CMS that resulted in settlements of $250 million, including $216 million recovered in the past fiscal year.
  • Hospitals settling false claims involving Stark violations include Adventist Health System for $115 million; North Broward  Hospital District for $69.5 million; and Georgia hospital system Columbus Regional Healthcare System for $25 million plus contingent payments up to an additional $10 million.
  • Claims involving the pharmaceutical industry accounted for $96 million in settlements and judgments. Daiichi Sankyo Inc., paid $39 million to resolve allegations of false claims and paying kickbacks to physicians to induce them to prescribe Daiichi drugs. AstraZeneca LP and Cephalon Inc. paid $26.7 million and $4.3 million, respectively, in separate settlements for underpaying rebates owed under the Medicaid Drug Rebate Program. In another settlement, PharMerica Corp., agreed to pay $9.25 million to resolve allegations that it solicited and received kickbacks from Abbott Laboratories in exchange for promoting drugs for nursing home patients.
  • In the largest failure of care settlement with a skilled nursing home chain in the department’s history, Extendicare Health Services Inc. agreed to pay $32.3 million to resolve allegations for billing Medicare for deficient nursing services and for medically unreasonable and unnecessary rehabilitation therapy services. The DOJ took action in ongoing litigation against additional nursing home chains and rehabilitation centers based on similar allegations of false claims for medically unreasonable or unnecessary rehabilitation therapy.

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 Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2015 Strategic Management Services, LLC. Published with permission.