Kusserow on Compliance: DOJ ‘Brand’ memorandum

One of the topics discussed at the recent HCCA Compliance Institute related to current DOJ positions regarding compliance guidance. Many questions have been raised since Atty. Gen. Sessions issued a memorandum at the end of last year that intended to implement the new administration’s goal of reducing overregulation. The AG stated, in the past, the DOJ had published guidance documents binding parties outside of the rulemaking process. Additionally, the AG stated that the DOJ was no longer engaged in this practice. Going forward, the DOJ is not to issue guidance documents that purport to create a right or obligation binding a person or entity outside the executive branch of the federal government. As such, guidance documents provided by the DOJ setting up voluntary standards need to clearly state that compliance with such standards would be voluntary—that failure to comply would not, in itself, result in enforcement action.

Earlier this year, Associate AG Rachel Brand issued a memo on behalf of the DOJ prohibiting certain DOJ uses of federal agency guidance documents in affirmative civil enforcement (ACE) cases (the “Brand Memo”). ACE cases include lawsuits brought by the DOJ on behalf of the United States to recover money lost to fraud or other misconduct, or to impose penalties for violations of Federal health, safety, civil rights or environmental laws, for example, False Claims Act (FCA) enforcement by the DOJ.  The Brand Memo stated that the DOJ is now prohibited from using its enforcement authority to effectively convert agency guidance documents into binding rules; and DOJ litigators may not use noncompliance with agency guidance documents as a basis for proving violations of applicable law in these cases. It also prohibits the DOJ from “using its guidance documents to coerce regulated parties into taking any action or refraining from taking any action beyond what is required by the terms of the applicable statute or lawful regulation.” The primary focus of the memorandum was on government contractor cases.

The long and short of this memorandum is that the DOJ can continue to use agency guidance documents  for “proper purposes,” but should not treat a party’s noncompliance with an agency guidance document as presumptively or conclusively establishing that the party violated the applicable statute or regulation.

 

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.

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Copyright © 2018 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: OIG cases involving sanctioned parties and tips to avoid violations

Compliance Officers must screen employees against the List of Excluded Individuals and Entities (LEIE). This is stressed in all of the OIG’s compliance guidance documents. CMS makes it a condition of participation and enrollment. The LEIE continues to change and grow with more than 3,000 exclusions added annually. Failure to screen employees, medical staff, contractors, and vendors results in a great risk. The OIG may consider claims that include work or products from a sanctioned party to be false and fraudulent. Violations can result in monetary penalties. Most cases that deal with this issue are brought to the OIG’s attention through the “Self-Disclosure Protocol.”  In all the recent cases posted, the OIG imposed penalties, but the penalties were mitigated by the fact the matters were self-disclosed—as a result, none of these cases resulted in a Corporate Integrity Agreement (CIA). The OIG posts a number of these cases on its website. The following are examples of recent actions against organizations that engaged individuals they knew or should have known were excluded from participation in the federal health care programs:

  • Southwest Trinity Management, LLC (STM), in Oklahoma paid $141,986.36 in settlement for employing an excluded licensed practical nurse that provided items or services that were billed to Federal health care programs.
  • Diamonds & Pearls Health Services, LLC (DPHS), Cleveland, Ohio paid $75,471.92 for employing an excluded individual who was a scheduling/staffing coordinator, provided items or services to DPHS patients that were billed to Federal health care programs.
  • Center for Ear, Nose Throat & Allergy, P.C. (CENTA) in Indiana, paid $51,564.14 for employing an excluded medical records file clerk, provided items or services to CENTA’s patients that were billed to Federal health care programs.
  • MHMR, Fort Worth, Texas, paid $97,869.78 for employing a program director who had been excluded to provide items or services to clients who were receiving services funded by a Medicaid waiver program.
  • Shawnee Health Services (Shawnee), Carterville, Illinois, paid $107,761.08 as result of employing an excluded individual as a case manager, provided items or services to clients that were receiving services under a Medicaid waiver program.
  • Arkansas Department of Health (ADH) paid $39,343.61 as result of employing an excluded hospice social worker that provided items or services to patients of a community based hospice operated by ADH.
  • Century Pharmacy (Century), Brooklyn, New York, paid $10,000 for an employed excluded individual, who assisted in filling prescriptions in addition to performing other clerical tasks, provided items or services to Century patients that were billed to Federal health care programs.
  • Sundance Behavioral Healthcare System (Sundance), Texas, paid $49,183.48 for an employed sanctioned licensed vocational nurse that provided items or services to patients that were billed to Federal health care programs.
  • ASAP Professional Home Health (ASAP), Houston, Texas, paid $21,797.76 for an employed excluded attendant, provided items or services to ASAP patients that were billed to Federal health care programs.

Practical Screening Tips

  1. Ensure periodic sanction screening of employees, medical staff, contractors, and vendors against the LEIE—best practice is monthly screening.
  2. Inasmuch as most states have developed their own exclusion database, with many states mandating monthly screenings, care should be taken to understand and meet state screening requirements.
  3. Inasmuch as most LEIE exclusions arise from another underlying court, state agency, or licensure board action, it is advisable to also conduct background checks and seek written assurances in applications that prospective employees, contractors, and vendors have not been subject to any prior court or licensure board actions.
  4. It is common for individuals that may be the subject of an investigation, but not yet sanctioned with final actions, to be under investigation for considerable time, therefore it is a best practice to require as a condition of employment, gaining staff privileges, or engagement for the applicant to attest that they have not been, nor are they now, the subject of an investigation by any duly authorized regulatory or enforcement agency. It is also advisable to add a condition that they must promptly report any notice of investigation that involves them.
  5. Educate and inform management and employees on their obligation to promptly report any notification of an adverse action by any duly authorized regulatory or enforcement agency.

Daniel Peake of the Compliance Resource Center (CRC) works with many organizations in ensuring proper sanction screening and from that experience offers a number of practical tips to avoid creating an actionable violation.  He can be reached at dpeake@strategicm.com or (703) 236-9850.

 

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: HIPAA enforcement update

At the 2018 HCCA Compliance Institute HIPAA Policy and Enforcement Update, it was reported that since September 2009 through the end of 2017 there were 2178 reports filed with the HHS OCR involving breaches affecting 500 or more individuals. In addition to large breaches, there were over 300,000 reports of breaches of protected health information (PHI) affecting fewer than 500 individuals. Individuals affected by the large breaches were about 177 million. So far, OCR’s website has posted 38 breaches as of April 2018. In all, nearly one million patients may have had their PHI put at risk by these incidents with the number continuing to grow. The breakdown of type of large breaches includes:

  • Loss/Theft continues as the most often reported problem; nearly half of the cases.
  • Laptops and other portable storage devices represented one fourth of large breaches.
  • Hacking/IT Incidents account for about one in five reported incidents.
  • Paper records accounted for another fifth of the large breaches

10 largest 2018 incidents to date by number of patient records affected

  1. 582,174 – California Department of Developmental Services, 4/06/2018, Unauthorized Access/Disclosure Incident
  2. 279,865 – Oklahoma State University Center for Health Sciences, 1/05/2018, Hacking Incident
  3. 134,512 – St. Peter’s Ambulatory Surgery Center LLC- d/b/a St. Peter’s Surgery & Endoscopy Center, 2/28/2018, Hacking Incident
  4. 70,320 – Tufts Associated Health Maintenance Organization, Inc. reported on 2/16/2018 an Unauthorized Access/Disclosure Incident
  5. 63,551 – Middletown Medical P.C.,  3/29/201 an Unauthorized Access/Disclosure
  6. 53,173 – Onco360 and CareMed Specialty Pharmacy, 1/12/2018, Hacking Incident
  7. 36,305 – Triple-S Advantage, Inc., 2/02/2018, Unauthorized Access/Disclosure Incident
  8. 35,136 – ATI Holdings, LLC and its subsidiaries, 3/12/2018, Hacking Incident
  9. 34,637 – City of Houston Medical Plan reported on 3/22/2018 a Theft of Laptop Incident
  10. 30,799 – Mississippi State Department of Health, 3/26/2018, Unauthorized Access/Disclosure

Top 10 Recurring Compliance Issues

  1. Pattern of disclosure with sensitive paper PHI
  2. Business Associate Agreements
  3. Risk analysis issues
  4. Failure to manage identified risk, e.g. Encryption of data
  5. Lack of transmission security
  6. Lack of appropriate auditing
  7. No patching of software
  8. Insider threats from employees and contactors
  9. Improper disposal of data
  10. Insufficient data backup and contingency planning

HHS OCR calls for health care organizations to establish contingency plans to keep patient data secure and mandate that covered entities and business associates have such plans. In their March newsletter, OCR officials urged health care organizations to figure out which IT systems are critical, to understand how to function in a disaster, and to back up PHI so it can be retrieved if the original data are lost or taken offline. Once developed, the plan should be routinely tested to identify gaps and ensure updates for plan effectiveness and increase organizational awareness. The plan should be reviewed and updated on a regular basis when there are changes: technical, operational, or in personnel.

 

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 © 2018 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: Using sanction-screening tools vs. outsourcing the entire process

In order to save time and costs, more and more health care organizations have been moving to outsource functions that are not core business activities. Compliance programs have been part of that trend: (1) 80 percent of compliance offices use vendors to provide hotline services, (2) 50 percent of compliance offices use vendors to provide policy development tools, and (3) two-thirds of compliance offices use vendors to provide E-learning tools. Included in the growing list of outsourced tasks has been the movement to address the rapidly growing cost and time commitment obligations related to sanction-screening. Two-thirds of compliance offices use a vendor search engine tools to assist in sanction-screening that saves an organization from downloading the sanction databases and developing a search engine. This is a trend driven by the rapid development of many new databases against which to screen employees, medical professionals, contractors, vendors, etc., including the following:

  • OIG List of Excluded Individuals and Entities (LEIE)
  • GSA Excluded Parties List System (EPLS)
  • 40 Medicaid states now have sanction data bases requiring monthly screening
  • Drug Enforcement Administration (DEA)
  • FDA

All this has increased the burden of sanction-screening exponentially, not only for the compliance office, but also human resource management for new hires and periodic screening of current employees and procurement with vendors and contractors. Medical credentialing is involved as result of having to screen physicians who are granted staff privileges. Using vendors has been a great help, but the most difficult part of the process is resolving “potential hits.” This can be a considerable effort and many organizations have to dedicate staff for investigation and resolution of these hits. It is complicated by the fact that most sanction data does not provide sufficient information to make positive identification. As a result of this heavy burden, many have moved beyond simply using a vendor tool to outsourcing the entire process to vendors. The following address selecting a sanction-screening vendor and outsourcing the process.

 

Tips for selecting sanction-screening vendor

 

Tips for outsourcing the sanction-screening process

  • Determine the cost of moving from use of a vendor search engine tool to outsourcing the screening, along with investigation and resolution of “potential hits.”
  • Inquire as to the methodology they follow in resolving potential “hits,” a critical part of any screening effort.
  • Ensure the vendor provides a certified report of the results that can be made part of the compliance office records.
  • Review an example of the type of reports they would provide to determine if it meets the documentary needs of the organization.

 

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.