A recent blog post from Health Care Enforcement & Compliance Matters discussed 12 Enforcement and Compliance predictions for 2012. The blog is written and edited by Frank Sheeder and Rebecca Jones McKnight, who are attorneys and members of the Health Care Enforcement and Compliance Practice at DLA Piper.
1. Regardless of what happens with the health care reform law, the current market forces toward collaboration, integration, efficiency and quality will continue.
We will continue to see collaboration and integration, especially through programs such as the Medical Home and bundled payments. Efficiency and quality will be a focus for hospitals and Medicare and Medicaid providers as CMS will implement new hospital rules about readmissions and other patient quality factors, such as hospital acquired infections. For example, CMS will impose payment restrictions on preventable conditions. CMS has also updated rules about outpatient services.
Efficiency and quality will also be a large focus for two large programs that CMS is planning and implementing over the next couple of years: 1) the CMS Innovation Challenge and 2) the Partnership for Patients. We will also see a continued focus on various gaps and goals identified by the Healthy People 2020 initiative. Additionally, there will be a significant focus on implementing comparative effectiveness research, which will be regulated and overseen by the Patient Centered Outcomes Research Institute (PCORI).
2. At the same time, there will be much more Stark and Anti-kickback enforcement as the government steps up its scrutiny of hospital-physician relationships.
This is especially true considering the recent proposed regulations under the Physician Payment Sunshine Act. See our summary of a great article about the impact the Sunshine Act will have on increased enforcement. Specifically, information disclosed and reported to the public under the Sunshine Act may be pertinent:
- To a violation of fraud and abuse laws;
- To non-compliance with federal regulations on conflicts in clinical research, or
- May present a reputational risk due to the appearance of impropriety, even if the payment or other financial relationship with a Covered Manufacturer has not influenced medical practice by the physician or his or her affiliated institution
For example, payments to physicians for speaking, travel, consulting, and other services may violate the Anti-Kickback Law if any one purpose of the Payment is to induce physicians to prescribe medication or refer the patients for goods or services paid for by Medicare or Medicaid. In addition, public disclosure of physician investment or ownership interests in a pharmaceutical, medical device, and medical supply company will create a road map for Stark Law enforcement.
As noted by the author of the article, “Data mining also is likely to extend the scope of scrutiny by prosecutors and the press following disclosure of Payments to physicians and teaching hospitals. “Prosecutors can be expected to use information about Payments to physicians as a starting point for data mining and analysis of claims tied to physicians for procedures and prescriptions, including the number of surgeries conducted, and prescriptions for off-label use of medications or high cost drugs.”
3. Medicaid enforcement will increase dramatically as the federal government pressures the states and the states endeavor to deal with funding pressures.
Specifically, HHS-OIG recently published Proposed Revisions of Performance Standards for State Medicaid Fraud Control Units. As noted by Frank Sheeder, “The proposed rules apply to state Medicaid Fraud Control Units (MFCUs), which must investigate and prosecute Medicaid fraud cases under state law, on a statewide basis. If a state has a “certified” MFCU, the federal government pays 75% of the cost to run it. Accordingly, it is beyond question that when these standards become final, states will step up their MFCUs’ efforts to meet them.” Specifically, Sheeder noted 13 numbered Performance Standards that MFCUs must do.
4. HIPAA enforcement will increase, and there will be more unfortunate and costly breaches as we implement more electronic records.
As emphasis shifts to “meaningful use” of electronic health records (EHRs), hospitals and other health care providers and systems will face significant pressure to comply with HIPAA. For example, there have recently been several large privacy breaches of electronic health records from various hospitals and health care systems, which have led to large lawsuits that will likely settle for millions of dollars. Consequently, CMS has recognized the significant difficulties that providers and hospitals are facing to implement health information technology (HIT) and EHRs, which has led to CMS delaying implementation for providers, and offering more guidance to providers.
Nevertheless, healthcare organizations will be subject to audits by the Office of Civil Rights (OCR), evaluating their compliance with the HIPAA privacy and security rules and breach notification standards. Specifically, OCR is piloting a program to perform up to 150 audits of covered entities to assess privacy and security compliance. Audits conducted during the pilot phase will begin November 2011 and conclude by December 2012. Auditors will conduct a site visit, interview key personnel, and record results in reports that will be shared with the organization and the OCR.
5. The DOJ/HHS HEAT initiative will ensnare some mainstream, institutional providers.
Just a few weeks ago, the Justice Department announced securing more than $3 billion in settlements and judgments in civil cases involving fraud against the government in the fiscal year ending Sept. 30, 2011. According to the press release, this is the second year in a row that the department has surpassed $3 billion in recoveries under the False Claims Act, bringing the total since January 2009 to $8.7 billion – the largest three-year total in the Justice Department’s history. The $3 billion total for fiscal year 2011 includes a record $2.8 billion in recoveries under the whistleblower provisions of the False Claims Act, which is the government’s primary civil remedy to redress false claims for federal money or property, such as Medicare benefits, payments on military contracts, and federal subsidies and loans.
DOJ’s Assistant Attorney General Tony West recently gave a keynote address at the Twelfth Annual Pharmaceutical Regulatory and Compliance Congress in Washington, DC, where he talked about the success the HEAT team has had over the past three years. He noted that this “record-breaking recovery reflects the broad approach” the Civil Division has taken with respect to health care fraud enforcement over the last two-and-a-half years—an approach that includes not only the off-label marketing and False Claims Act cases with which many of you are familiar, but other, equally important enforcement efforts, as well.
6. The HHS-OIG will more aggressively target hospitals through its current intensive hospital audits.
As we noted above, OCR will begin auditing hospitals for HIPAA compliance. In addition, as noted by a recent article from FierceHealthcare, the OIG work plan is calling for continued attention to fighting healthcare fraud. Among the work plan changes for hospitals regarding Medicare Parts A and B are the following:
- Review of inpatient and outpatient payment to acute-care hospitals: Using computer-matching and data-mining techniques, OIG will select hospitals for focused review of their claims and policies and procedures to see if they follow billing requirements. Inspectors will interview those hospitals’ leadership and compliance officers about their compliance programs. That information will be used for the goal of recovering overpayments.
- Review of present-on-admission indicators submitted on Medicare claims: Inspectors will review the claims submitted in October 2008 by hospitals across the country, distinguishing hospital-acquired conditions from patient conditions at admission time.
- Acute-care hospital inpatient transfers to inpatient hospice care: Inspectors also will look at Medicare claims for inpatient stays in which the patients were transferred to hospice care facilities.
- Critical access hospitals: Inspectors will examine how many and what kind of patients critical access hospitals treat to determine the appropriateness of a CAH designation.
7. Many of the Implantable Cardioverter Defibrillator (ICD) investigations of hospitals across the country will be resolved.
8. The government and whistleblowers will increasingly target long term care, home health and community care.
There have been several recent hearings focusing on the use of anti-psychotic drugs in long-term care.
9. While there will be large hospital settlements, device and pharmaceutical companies will write the biggest checks.
We recently saw $3 billion settlement for Avandia, and are continuing to see large settlements almost every week, many of them dealing with off-label promotion, which are pursued through qui tam lawsuits under the False Claims Act.
10. The HHS-OIG will seek to exclude more individuals who are associated with organizations that had compliance lapses.
As we have written recently, HHS-OIG and the Department of Justice will continue using the so called “Park Doctrine” to go after company executives. In fact, recently, a federal judge sentenced executives of the medical device company Synthes North America to prison for unapproved testing of bone cement that left three people dead. The executives were among the first corporate officials sent to prison for misdemeanor pleas as “responsible corporate officers” under the 1975 Park Doctrine. We will continue to see a battle between companies and the government over whether the Park Doctrine should be enforced using strict liability—meaning no intent or knowledge would be necessary to prove the crime.
11. The Health Care Compliance Association (HCCA) will continue to grow steadily and to serve its members’ needs assiduously. (More Compliance)
12. There will be increased demand for strong compliance professionals as smart leaders continue to recognize their value. (what a shock, a compliance attorney prodicting more need for his services)
As noted by several speeches and programs across the health and life sciences industry, companies must begin shifting towards a healthcare regulatory compliance model, which demands more compliance professionals. Training, education, and compliance programs—whether internal or external—must be robust, proactive, and implemented from the top down, with company executives taking full responsibility for their senior and lower level management, especially considering the increased use of the Park Doctrine.
FDA and Congress 2012
As noted by FDA Matters, rather than focusing on FDA, Congress was more interested in deficit reduction in 2011 than any other topic. The author noted that, “This shows no sign of abating.” As a result, the article asserted that, “for FDA, this means constant pressure from Congress on funding, particularly from sequestration and other threats of across-the-board cuts in federal spending.”
The article noted that, “Congress chose not to address FDA’s FY 11 appropriation in the post-election session. Instead, it addressed this in April of 2011 on fairly favorable terms to the agency.” Nevertheless, future funding increases will be even harder to get.
Additionally, “very little legislation passed Congress in 2011 and virtually none without bi-partisan support.” FDA Matters pointed out that achieving “such consensus was possible on FDA issues when Democrats from technology-oriented regions joined with Republicans on positions that could enjoy industry/patient or industry/consumer support. This approach did not produce any legislation in 2011.”
The article predicted however, that technology-oriented Democrats are likely to join Republicans in shaping the user fee reauthorization legislation, which Congress “must-pass” in 2012. The bi-partisan pathways will produce most of the legislation, including new authority for drug import inspections, incentives for development of antibiotics and provisions to address drug shortages. We will also likely see changing FDA’s conflict of interest standards for advisory committees.
The article predicted Congressional oversight and investigations of FDA and regulated industries. These may be delayed however until after Congress adopts the user fee reauthorization legislation.
2011 marked several more cases where one individual’s actions harm an entire organization. One rogue trader at UBS cost the firm $2.3 billion in bad trades, which led to the resignation of the CEO and loss of confidence in the firm’s ability to manage risk and compliance.