Three Key Things in Health Care

Time 7 Minute Read
November 24, 2020
Publication
  • A new Special Fraud Alert continues efforts to root out improper pharmaceutical company-sponsored speaker programs. Health systems should (re)examine the compliance posture of any similar programs they fund.
    • In three prior issues[1] we examined the recent settlements between the Department of Justice (DOJ) and Novartis Pharmaceuticals Corporation, one of which resolved False Claims Act allegations (for $678 million) that the Novartis speaker programs and other promotional events were used as vehicles to bribe doctors.
    • In the wake of this and numerous other cases investigated and resolved by DOJ and the Office of Inspector General (OIG), on November 16 OIG published a Special Fraud Alert focusing on “the inherent fraud and abuse risks associated with . . . remuneration relating to company-sponsored speaker programs.”
    • Collectively, OIG’s and DOJ’s actions plainly demonstrate that speaker programs are viewed with a high degree of skepticism by enforcement officials.
      • OIG expressed doubt “about the educational value of such programs,” describing them as often involving “generous compensation to [physician speakers] to speak at programs offered under circumstances that are not conducive to learning or to speak to audience members who have no legitimate reason to attend.”
      • OIG concluded that such circumstances “strongly suggest that one purpose of the remuneration to the . . . speaker and attendees is to induce or reward referrals.”
      • OIG went on to list a number of suspect characteristics, including the serving of alcohol, speakers making presentations with little or no substantive information, and sponsorship of a large number of programs on the same or substantially similar topics, particularly if no recent substantive change in relevant information has occurred.
    • OIG’s examples all run afoul of what should, by now, be one of the most basic fraud and abuse compliance principles: Generally speaking, those who provide products or services reimbursed by Medicare or other federal health care programs should only pay referral sources to do real work, when that work is actually needed and only if the work is actually provided, and the payment amount should be reasonable under all of the circumstances (i.e., consistent with fair market value). To do otherwise invites challenge under the Anti-kickback Statute or the False Claims Act.
    • Key takeaway: Clearly, there is a difference between the conduct highlighted by the Special Fraud Alert and what OIG termed “meaningful [health care professional] education and training,” the former presenting substantial compliance risks. To the extent health systems or hospitals are sponsoring (potentially) similar educational programs, prudence dictates confirming that the speakers are performing meaningful work that is actually needed and that compensation is commensurate with the work effort involved.
  • As nursing homes continue to be severely impacted by the COVID-19 pandemic, the Centers for Medicare & Medicaid Services (“CMS”) issued an alert to facilities, residents and family members in anticipation of the quickly approaching holiday season.
    • On November 18, 2020, CMS issued a holiday alert in anticipation that nursing home residents and their family members will want to spend more time together over the Thanksgiving and winter holidays.
    • The latest alert is a continuation of the agency’s efforts to balance the emotional and social needs of residents, in recognition that isolation from family members and loved ones can lead to increased risks of depression and anxiety, along with the increased risk of COVID-19 transmission in the nursing home setting. It follows recent September updates to formal guidance issued to State Survey Agency Directors, October updates to frequently asked questions (FAQs) on nursing home visitation, and November updates to an agency toolkit on state actions to mitigate COVID-19 prevalence in nursing homes.
    • Rather than modify the recent guidance, the latest alert specifically reinforces CMS’s September guidance, stating, “During the holidays, facilities, residents, and visitors should continue to follow the guidelines for visitation and adhere to the core principles of infection prevention, such as remaining six feet or more apart, wearing a face covering, and limiting the number of visitors in the nursing home at any one time.” The alert also recommends that nursing home facilities find innovative ways to celebrate (e.g., virtual parties) and, importantly, specifically recommends against residents leaving the nursing home setting during the COVID-19 public health emergency. If, notwithstanding such recommendations, residents choose to leave the nursing home setting, the alert contains specific recommendations for off-site visits and gatherings and actions nursing homes should take upon a resident’s return to the nursing home to mitigate the risk of COVID-19 transmission.
    • Notably, the alert comes on the heels of CMS’s announcement that just 12.5% of the approximately one million nursing home staff in the United States have completed CMS training specifically designed to combat the spread of COVID-19 in nursing homes.
    • Key Takeaway: Until a vaccine is available for widespread administration to nursing home residents in the United States, the latest guidance from CMS seeks to mitigate the risk of COVID-19 transmission while also recognizing the physical and emotional risks of social isolation to the nursing home resident population.
  • The Centers for Medicare & Medicaid Services (“CMS”) recently announced a decrease in estimated improper payment rates in Medicare Part A and Part B (Medicare Fee-For-Service) and Medicare Part C (Medicare Advantage) programs from 2019 to 2020.
    • Under the Payment Integrity Information Act of 2019, CMS must periodically review the programs it administers and estimate the amount of improper payments for each such program. CMS is then required to report its improper payment estimates and describe actions taken to reduce improper payments.
      • CMS notes that “improper payment rates are not necessarily indicative of, or measures of, fraud. Instead, improper payments are payments that did not meet statutory, regulatory, administrative, or other legally applicable requirements and may be overpayments or underpayments. Additionally, improper payments do not necessarily represent expenses that should not have occurred.”
    • In response to the COVID-19 pandemic, CMS suspended improper payment-related communications and data requests between March and August 2020 and used data already collected at the time of the public health emergency and data voluntarily submitted by providers and states to make improper payment rate estimates for the federal fiscal year (“FY”) ending September 30, 2020.
    • Medicare Part A and Part B (Medicare Fee-For-Service)
      • CMS places the FY 2020 Medicare Fee-For-Service estimated improper payment rate at 6.27 percent, representing $25.74 billion in improper payments. The FY 2019 estimated improper payment rate was 7.25 percent, representing $28.91 billion in improper payments.
      • CMS accredits this overall decrease to reductions in the improper payment rates for home health and skilled nursing facility claims.
    • Medicare Part C (Medicare Advantage)
      • For FY 2020, the Medicare Part C estimated improper payment rate is 6.78 percent, representing $16.27 billion in improper payments. The FY 2019 estimated improper payment rate was 7.87 percent, representing $16.73 billion in improper payments.
      • CMS accredits this decrease to Medicare Advantage organizations submitting a greater number of medical records that validated the clinical diagnoses for which they were paid.
    • Key Takeaway: Although reductions in the estimated improper payment rates for Medicare Fee-For-Service and Medicare Advantage programs are promising, CMS recognizes that there is still room for improvement, especially in Medicare Part D (Prescription Drug Benefit), which experienced an increase in its estimated improper payment rate from 2019 to 2020 (from $0.61 billion to $0.93 billion).

[1] The prior issues were published on August 4, August 11 and August 18, 2020.

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