Reprinted from REPORT ON MEDICARE COMPLIANCE, the nation's leading source of news and strategic information on Medicare compliance, Stark and other big-dollar issues of concern to health care compliance officers.
With momentum building for more administrative and enforcement actions against providers over quality deficiencies, hospitals and physician groups should be monitoring quality metrics and thinking carefully about the marketing and compensation moves they make.
“Quality fraud is an underappreciated liability in the Medicare and Medicaid programs,” says Philadelphia attorney Alice Gosfield.
In addition to false claims cases for medically unnecessary stents implanted in hospitals and substandard care in nursing homes and the August arrest of a physician for medically unnecessary cancer treatment(RMC 8/12/13, p. 1), there is growing risk of fraud allegations for inaccurate reporting for pay for performance and other quality improvement programs — especially with whistleblowers and their lawyers expanding into new areas.
There’s no shortage of weapons in the enforcement arsenal for quality failures. Providers can be excluded from federal health care programs for providing items or services substantially in excess of patient needs (42 USC 1320a-7(b)(6)(B), Gosfield notes. OIG also can impose civil monetary penalties for (1) submitting claims for a pattern of items or services that the provider knows or should have known are not medically necessary; (2) providing false or misleading information that could be expected to lead to premature discharge from the hospital, (3) hospital payments to physicians to reduce services; and (4) physician incentive plans that put physicians at substantial financial risk, she says.
Poor Quality of Care Can Be ‘Criminal’
There’s also the risk of criminal liability for poor quality care. In June 2013, cardiologist Sandesh Rajaram Patil pleaded guilty to charges that he exaggerated the blockage in a patient’s arteries to justify stent placements and falsely recorded the severity of the patient’s illnesses to collect reimbursement for a cardiac stent at Saint Joseph’s Hospital in London, Ky. (RMC 6/17/13, p. 3). He agreed to a 30- to 37-month prison sentence and the hospital repaid the government $256,800 for Patil’s stent procedures. In another case, Peninsula Regional Medical Center in Salisbury, Md., paid $1.8 million to settle false claims allegations in connection with physician John R. McLean’s stent implants. McLean was sentenced to eight years in prison after a jury found him guilty of one count of health care fraud and five counts of making false statements relating to health care matters (RMC 8/15/11, p. 1).
OIG has also sharpened its focus on quality in recent years through its work plans. Gosfield says OIG began mentioning quality and safety in 2003 and has since “manifested increasing sophistication.” It published a document with the American Health Lawyers Association on the board’s responsibility for health care quality that emphasized oversight of quality as part of the board’s core mission. “In health care, we are not making widgets, so the business standards that also apply aren’t enough to fulfill the fiduciary standards the board has,” she says. OIG work plans show a progression of interest in quality of care. In 2009, OIG did a study of hospital never events and present-on-admission coding and the following year continued with POA coding but expanded to adverse events. In 2011, OIG continued its focus on adverse events, and drilled down into the types of facilities that most frequently transferred patients with certain diagnoses that were present on admission. Hospitals don’t want those patients on their tab so they transfer them. “OIG thinks it’s problematic,” she notes. In its 2012 Work Plan, OIG continued to study the types of facilities that transferred patients with certain diagnoses that were POA conditions. In 2013, ambulatory surgery centers attracted more attention, with an OIG review of safety and quality of care and adverse events, she says.
Work plans are not the only arena for OIG’s oversight of quality deficiencies. OIG now has corporate integrity agreements (CIAs) tailored for quality-related fraud settlements, and a dedicated section of the website where they are housed. On top of the usual CIA requirements, organizations must hire a peer review consultant — not just an independent review organization, Gosfield notes.
And now hospitals and physicians face a new frontier of quality-related fraud risks. All the Medicare and commercial pay-for-performance programs that link payment to quality improvement, such as value-based purchasing, the Physician Quality Reporting System and state reporting of adverse events, “are potentially subject to false claim liability,” she says. DOJ has identified the kinds of risks that arise in the data reporting arena. They include reporting false data, submitting false statements in support of a claim and making false statements to avoid repaying the government. “DOJ also talks about the implicit quality issues in claims,” she says. In DOJ’s eyes, when claims are submitted, providers are attesting to the medical necessity of the services and conveying that the services met all quality requirements — “personnel were appropriately licensed and properly supervised; supervisors were appropriately trained and had appropriate clinical privileges,” she says, which may go well beyond what people perceive to be what they attest to when submitting a claim.
Data integrity is no small matter. The myriad of health care delivery arrangements driven by health reform depend on the accuracy of data. But if it isn’t consistent and reliable, the arrangements are at risk and whistleblowers may have a field day.
Whistleblowers Have Lots of Places to Look
Whistleblowers — usually insiders at a health care organization — may base quality-related FCA allegations on an insufficient number of nurses on a unit to provide necessary care; inadequate equipment; lack of sufficient resources to live up to clinical practice guidelines; the use of untrained, unqualified personnel to perform skilled services; and insufficient supervision of services, she says. Backed by their attorneys, more whistleblowers are hammering away at providers even if the DOJ does not intervene.
In light of all these developments, Gosfield recommends hospitals and physicians consider the following eight “action steps”:
(1) Review marketing and advertising for quality promises made to the community. “The mere puffery that exists in health care advertising can come back to bite you in terms of holding yourself out as meeting a standard of care. The quality better be factual and supportable by the data back at the mothership,” she says.
(2) Consider the “page six” version of any quality-related initiatives, Gosfield says, referring to the gossipy section of the New York Post. She recounted a consultation with a Texas hospital, which had a “restive” medical staff after the hospital cut a $2 million deal to recruit out-of-town academic researchers because it lost its local medical school affiliation. The independent staff physicians were unhappy about the deal with the new physicians and asked Gosfield if the hospital could pay them for improving quality. She said “yes,” but wondered what they had in mind, and asked them to page-six it for her. “Enthusiastic physicians helping hospitals to improve mortality, from 97% survival rate to 98%.” She told them that was not how it would look. Instead, the page-six version would be “Greedy local physicians, already making millions, seek more money not to kill patients.”
(3) The boards of hospitals and physician groups should be well-versed in their quality metrics and transparency initiatives and understand what data populates them.
(4) Make sure you know who in your organization reports quality data and what data they report.
(5) Monitor the data for “accuracy, consistency among reports, timeliness, completeness and clues to other problems,” Gosfield says. “You need a plan for this, with signed responsibility.
(6) Your compliance program should have a quality oversight component.
(7) Compliance officers, risk managers and quality assurance managers should team up. “Compliance should not be in splendid isolation from quality.”
(8) Physician practices should clinically integrate and hospitals that employ physicians should help their physicians clinically integrate (e.g., form ACOs). “I cannot overemphasize how much true clinical integration can forestall many of these problems,” she says. “It is about generating data that help you change behavior and standardizing to evidence-based criteria.”