Newsletters

The Health Law Advisor - Spring 2006

COMPLIANCE CORNER: THE BUSINESS OF HEALTHCARE

As the healthcare legal landscape is complicated and ever changing, it is vital for all providers to have processes in place for keeping apprised of new laws and regulations, changes in third party payor policies, and other changes. It is also important to understand the current healthcare laws and rules that apply to the business of medicine. Within this ever-changing environment, all providers are well advised to ensure that a trustworthy person is accountable for monitoring changes in the laws and regulations as well as third party payor policies. Two recent developments in Michigan law are set forth below:

Michigan Medicaid False Claims Act

On January 3, 2006, the Michigan Medicaid False Claims Act was amended to include provisions similar to the “Qui Tam” (i.e., whistleblower) provisions of the Federal False Claims Act. The Act provides whistleblowers with legal protection and a financial incentive to bring a civil suit against, and to assist in, the investigation and prosecution of a violator of the Medicaid False Claims Act. Thus, not only the State Attorney General can bring an action against a practice for submitting false claims to the Medicaid program, in addition, private individuals can bring a civil suit in the name of the State and share in the financial recovery. For example, a competitor, an employee or any other person may bring a civil action in the name of the State against a practice to recover losses that the State suffers from a violation of the Medicaid False Claims Act. Similar to the whistleblower risks under the Federal Civil False Claims Act, this Michigan law further reinforces that physician practices must be diligent about compliance and must dedicate financial and other resources, such as staff time, to compliance.

Michigan Social Security Number Privacy Act

The Michigan Social Security Number Privacy Act was effective March 1, 2005 and impacts numerous organizations and entities within Michigan, including every physician practice and healthcare organization in Michigan. Most practices and entities are not even aware that the law exists. The law specifically sets forth prohibited uses of social security numbers and requires practices to implement a Privacy Policy to ensure the confidentiality of social security numbers obtained in the course of business. For example, since social security numbers are obtained from patients for the patient registration and billing process, this policy must be implemented and appropriately distributed to employees.

The law actually required impacted entities to implement a policy by January 1, 2006. However, for those that have not drafted, implemented and distributed the policy, this should be done as soon as possible to avoid continuing non-compliance with the law. Violations of the law can lead to a misdemeanor punishable by imprisonment for not more than 93 days or a fine of not more than $1,000, or both. Moreover, an individual can bring a civil action against a person (which includes a professional corporation or limited liability company) for violations of law and may recover damages and attorneys’ fees, in certain cases. However, your entity will have protection under the law if an agent or employee acts in a manner inconsistent with the Privacy Policy if your entity has taken measures to enforce the Privacy Policy and to correct and prevent the reoccurrence of any known violations.

OIG ISSUES RESEARCH COMPLIANCE GUIDANCE

On November 28, 2005, the Office of Inspector General (OIG) issued draft compliance program guidance for recipients of U.S. Public Health Service (PHS) research awards. The purpose of the draft compliance program guidance was to set forth the OIG's general views on compliance programs for colleges and universities as well as other recipients of PHS awards for biomedical and behavioral research. Notably the guidance document does not establish mandatory criteria for compliance programs adopted by colleges, universities and other recipients of PHS awards, but instead sets forth OIG's suggestions regarding guidelines that recipients of extramural research awards may consider when developing and implementing a compliance program or when evaluating an existing compliance program.

While the decision to implement a compliance program is voluntary, the OIG believes that an effective compliance program will provide numerous advantages to institutions, particularly by demonstrating to employees and the community at large the institution's commitment to honest conduct.

When developing an effective compliance program, in order to avoid a potential civil or criminal fraud investigation, institutions are well advised to consider the particular risk areas with which they are faced. Institutions must identify their potential risks based upon an evaluation of the particular operations and experiences of the institution. According to the OIG, compliance risks facing recipients of extramural research awards often include, but are not limited to the following:

• Ensuring the accurate reporting of research time and effort;
• Properly separating and allocating the amount of funding received from each funding source to award projects; and
• Completely and accurately reporting financial support from other sources.

The OIG listed the following eight (8) elements that as a minimum are fundamental to an effective compliance program:

• Implementing written policies and procedures;
• Designating a compliance officer and compliance committee;
• Conducting effective training and education;
• Developing effective lines of communication;
• Conducting internal monitoring and auditing;
• Enforcing standards through well-publicized disciplinary guidelines;
• Responding promptly to detected problems and undertaking corrective action; and
• Defining roles and responsibilities and assigning oversight responsibility for the compliance program. According to the OIG, this element is essential to the overall control structure of the institution.

A copy of the compliance guidance is available from the following website: http://oig.hhs.gov/fraud/docs/complianceguidance/PHS%20Research%20Awards%20Draft%20CPG.pdf.

LATEST DEVELOPMENTS IN HEALTH LAW

OIG Issues Open Letter to Health Care Providers

On April 24, 2006, an Open Letter to Health Care Providers was published by the OIG. The Open Letter sets forth the perspective of the OIG Inspector General regarding various topics including compliance, the resolution of healthcare fraud cases, corporate integrity agreements (CIAs), and the OIG's self-disclosure protocol. According to the open letter, the OIG will consider a provider's cooperation when determining "the appropriate terms of an administrative settlement" and whether a Corporate Integrity Agreement, Certification of Compliance Agreement or no additional compliance measures will be required. The Open Letter is available from the OIG website: http://www.oig.hhs.gov/fraud/docs/openletters/Open%20Letter%20to%20Providers%202006.pdf.

Should your organization require counsel regarding fraud and abuse concerns, please contact Andrew Wachler (awachler@wachler.com) or Adrienne Dresevic (adresevic@wachler.com) at (248) 544-0888.

RECENT AND UPCOMING EVENTS AT WACHLER & ASSOCIATES, P.C.

Wachler & Associates, P.C. celebrated 20 years of serving healthcare providers at Lily’s Seafood in Royal Oak, Michigan on March 22, 2006 (see photo above).

Recent and Upcoming Speaking Engagements:

• On March 10, 2006 Andrew Wachler presented on the new Medicare appeals process to the Michigan Podiatric Society.
• On May 2, 2006, Andrew Wachler presented on the new Medicare appeals process at the Annual Meeting of the Michigan Hospice and Palliative Care Organization.
• Andrew Wachler presented to the Federated Ambulatory Surgery Association in May 2006.
• Andrew Wachler presented a teleconference to the American Bar Association’s Health Law Section on the new Medicare appeals process on June 7, 2006.
• Andrew Wachler presented on the new Medicare appeals process at the Annual Meeting of the Associated Professional Sleep Societies on June 17-22, 2006.
• Abby Pendleton will present on Fraud and Abuse Compliance Issues to the United Communications Group Physicians National Summit on September 14-16, 2006.
• Andrew Wachler will present on the new Medicare appeals process at the Annual Meeting of the Health Care Compliance Association on October 1-3, 2006.
• Abby Pendleton will speak on the new Medicare appeals process at the Annual Meeting of the Medical Group Management Association (MGMA) on October 22-25, 2006.
• Andrew Wachler and Robert Iwrey will present to Michigan physicians as part of a 5/3 Bank series of presentations in October 2006.
• Andrew Wachler will speak on the new Medicare appeals process at the Annual Meeting of the American Society of Abdominal Surgeons on November 3-5, 2006.
• Andrew Wachler will speak on the new Medicare appeals process at the Annual Meeting of the American Academy of Ophthalmology on November 11-24, 2006.

Contact Us

For questions regarding any of the information contained in this newsletter, or if we can assist you with any of your legal needs, please contact the attorneys at Wachler & Associates, P.C. at (248) 544-0888:

For more information, please visit our website at www.wachler.com.