After years of presenting my views in speeches and numerous outlines regarding Health Care Fraud and Abuse to various health care providers, many of my predictions were realized when Congress passed pertinent legislation in 1996 and 1997. Although it has not been widely publicized, the Health Insurance Portability and Accountability Act of 1996 contains significant statutory changes and has created new programs affecting the healthcare-provider industry.

This outline addresses the new laws, programs and policies. It recognizes the 1996 and 1997 statutory amendments, 1998 items of interest, and identifies many issues now confronting providers, such as search warrants, grand jury subpoenas, compliance programs and the harsh realities of the federal sentencing guidelines. Most health care providers do not view themselves as potential targets of criminal investigations or prosecutions. This false sense of security will be shattered when and if the government initiates an investigation utilizing the tools and techniques developed to attack "the mob" and "drug dealers."

Industry wide practices, previously overlooked by the authorities, are now becoming the subject matter of criminal prosecutions. Fines, forfeitures and seizures now fund the enforcement programs and provide incentive to initiate criminal action in circumstances where administrative action once prevailed. The following broad outline should be food for thought.

Health Care Fraud and Abuse Control Program - 1998

1. The OIG has continued to steer its efforts toward rapid and effective implementation of the antifraud provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Title II of that Act directs the Attorney General and the Secretary of HHS (acting through the Inspector General) to establish a national Health Care Fraud and Abuse Control Program to accomplish a number of purposes, chief among them to coordinate Federal, State and local law enforcement activities with respect to health care fraud and abuse. Other important statutory goals are to facilitate enforcement of all applicable remedies for health care fraud; to provide industry guidance relating to fraudulent practices; to establish a national adverse actions data bank; and to conduct investigations, audits and other reviews relating to the provision of and payment for health care in the Nation.

 
2. During the period ending September 30, 1997, OIG, in close coordination with the Department of Justice (DOJ) and other components of HHS, took significant strides in implementing the ambitious Fraud and Abuse Control Program. Through expansion of its own investigative, audit and evaluation staffs, OIG has extended its coverage to geographical areas that were underserved in recent years and bolstered its ability to fulfill its responsibilities under the broadened antifraud and abuse program. Moreover, OIG has sought to maximize its effectiveness by joining forces with DOJ and other law enforcement and health care agencies to coordinate antifraud and abuse efforts nationwide.

 
3. Other accomplishments under HIPAA include providing funding (through grants and interagency agreements) for other Federal, State and local partners in health care enforcement and oversight; issuing the first formal advisory opinions in response to industry inquiries concerning the propriety of specific transactions or practices; and assisting in the development and design of the adverse actions data bank mandated by HIPAA.

 
4. To fund the coordinated antifraud effort, HIPAA directs that an amount equaling recoveries derived from health care cases -- including civil monetary penalties (CMPs), fines, forfeitures and damages assessed in criminal, civil or administrative health care cases -- be transferred to the Federal Hospital Insurance Trust Fund. Monies are appropriated from the trust fund to a newly created expenditure account, called the Health Care Fraud and Abuse Control Account, in amounts that the Secretary and Attorney General annually certify are necessary to finance antifraud activities. Of the amount so certified and appropriated, a stipulated sum is available only for "activities of the Office of Inspector General of the Department of Health and Human Services, with respect to Medicare and Medicaid programs."

 
5. During the reporting period, HHS and DOJ issued the first grants and interagency funding agreements for projects to foster antifraud and abuse efforts. A total of 28 proposals were received and rated by a panel from HHS and DOJ. The panel recommended funding for 11 proposals (eight State governmental units, the District of Columbia, and two Federal agencies) totaling $1.55 million. The Secretary and the Attorney General adopted the recommendations of the panel, and funds were issued in July. During future months, OIG will be monitoring these grants for effectiveness in furthering the goals of the Fraud and Abuse Control Program.

 
6. As part of the Fraud and Abuse Control Program, OIG has expanded its hotline operation (1-800-HHS-TIPS). During this period, the automated menu system was modified to allow all callers the opportunity to talk with an investigative technician. In addition, OIG is automating its complaint resolution process and increasing its analytical capabilities by linking an analysis of the complaint activity with other available data in the Department.

 
7. Other activities implementing HIPAA are also underway. The processes for providing industry guidance, including formal advisory opinions, safe harbors and special fraud alerts relating to fraudulent health care practices are in place, and OIG issued its first advisory opinions during the reporting period. These four opinions and future advisory opinions are available to the public. The OIG has also initiated a negotiated rulemaking process to establish standards relating to the new statutory exception to the anti-kickback statute for certain risk-sharing arrangements. More than 20 government, industry and consumer representatives are participating in this rulemaking process. The OIG continues to add staff to accomplish the office’s responsibilities under the expanded antifraud and abuse program.

INVESTIGATIONS - OIG/HHS
 

8. The OIG’s Office of Investigations conducts investigations of fraud and misconduct to safeguard the Department’s programs. These investigative activities are designed to prevent fraud and abuse in departmental programs by identifying systemic weaknesses in areas of program vulnerability that can be eliminated through corrective management actions, regulation or legislation; by pursuing criminal convictions and civil remedies.

 
9. While each year literally thousands of complaints from various sources will be brought to the OIG’s attention for development, investigation and appropriate conclusion, the Office of Investigations has targeted certain high-risk areas for continued investigative concentration for as long as there appears to be a high probability that wrongdoing will be uncovered, prosecuted, and deterred in these areas. Although OIG managers will continue to make their investigative decisions on a case by case basis, the work plan identifies several investigative focus areas in which the OIG will be concentrating its resources.

Incontinence Care Fraud - Project "04"
 

10. As part of OIG efforts to reduce questionable allowances for incontinence care product billings and prosecute suppliers involved in such billings, the Office of Investigations launched a national investigation known as the Incontinent Care Case Project. Under this initiative, OIG, along with other law enforcement agencies, has developed over 30 cases against incontinence suppliers. These cases involved over $100 million in fraudulent Medicare claims. These investigations have resulted in recoveries of over $50 million through seizures and restitution. Thus far, 8 cases have resulted in 13 prosecutions. In most of the cases, suppliers were billing for female external urinary collection devices but providing beneficiaries residing in nursing homes with diapers, which are not covered under Medicare. This work continues.

Pneumonia DRG Upcoding Project
 

11. The Pneumonia DRG Upcoding Project was initiated to identify hospitals that falsify the diagnosis and diagnosis related group on claims from viral to bacterial pneumonia. The Office of Investigations is currently working with the Department of Justice to initiate a nationwide project in this area.

Project Bad Bundle
 

12. The Office of Investigations launched Project Bad Bundle to identify hospitals that unbundle blood chemistry tests when using automated equipment and then bill for each analysis separately, or bill for an automated test in addition to several of the analyses separately. "Unbundling" refers to the illegal practice of submitting individual bills for separate tests that should be bundled together into a single bill for a group of related tests. The amount allowed under Medicare for this "bundled" amount is considerable lower than the sum of the amount for tests billed separately. Under this initiative, the total civil settlement to date is $8.8 million and involved 24 hospitals.

Employee Misconduct
 

13. The OIG will investigate employee fraud and misconduct related to the administration of the Department’s programs. Previous areas have included conflict-of-interest, embezzlement, and accepting bribes or gratuities.

State Fraud and Abuse Prevention Activities
 

14. The OIG will conduct a study designed to identify State fraud and abuse prevention and detection activities under the Temporary Assistance for Needy Families (TANF) Program. The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 requires State Plans for TANF to contain a fraud and abuse "certification." This is a certification by the chief executive officer of the State stating that the State has established and is enforcing standards and procedures to ensure against program fraud and abuse, including nepotism, conflicts of interest, kickbacks, and the use of political patronage. An OIG report will provide a comprehensive description of State fraud and abuse prevention and monitoring systems that will encompass both client and vendor fraud and abuse.

LEGAL COUNSEL - OIG/HHS
 

15. The Office of Counsel to the Inspector General (OCIG) coordinates the OIG’s role in the resolution of major health care fraud cases, including the imposition of exclusions and civil monetary penalties and assessments. The OCIG also provides all administrative litigation services required by OIG, such as patient dumping cases and all exclusion administrative cases. In addition, OCIG issues special fraud alerts and advisory opinions regarding the application of OIG’s sanction statutes, and is responsible for the development of new, and the modification of existing safe harbor regulations under the anti-kickback statute. Work planned in FY 1998 includes:

Fraud Alerts
 

16. The OIG/HHS will issue several special fraud alerts to inform the health care industry of particular industry practices, which OIG determines are highly suspect.

Anti-Kickback Safe Harbors
 

17. OIG/HHS will evaluate comments from the public in response to OIG’s solicitation of comments on the existing and additional proposals for safe harbor exemptions from the anti-kickback statute and, where appropriate, develop proposed regulations for additional safe harbors. An interim final regulation implementing the new shared-risk exception to the anti-kickback statute will be issued.

Implementing the Health Insurance Portability and Accountability Act of 1996 and Balanced Budget Act of 1997
 

18. OCIG will prepare regulations to implement new exclusion and civil monetary penalty authorities contained in HIPAA and the Balanced Budget Act of 1997 that have been delegated to the Inspector General for implementation.

Implementation of Corporate Integrity Plans
 

19. OCIG will continue to work with the OIG’s Office of Evaluations and Inspections in reviewing the practices of providers who have had corporate integrity plans imposed in the settlement process. The OIG plans to use the results of this work to improve both the requirements of future corporate integrity plans and the monitoring process.
OTHER OIG/HHS INITIATIVES

Fiscal Intermediary Fraud Units - OIG/HHS
 

20. OIG will conduct a national study evaluating the fraud control activities of Medicare’s fiscal intermediaries, the contractors that process Part A claims and perform payment safeguard functions. The contractors fraud units are responsible for developing and referring cases to the OIG for recovery of maximum dollars possible through judicial and administrative processes. The study will examine fiscal intermediaries’ fraud control procedures and outcomes, including the amount of overpayments identified, number of referrals to the OIG for fraud investigations, and usefulness of referrals to the OIG. The study will also review HCFA’s oversight of fiscal intermediary fraud units.

Medical Review
 

21. This study will assess how contractors are using medical review to deal with potential problem areas. Medicare carriers are using this approach to conduct much of their post payment reviews. Since physicians account for the majority of payments under Medicare Part B, much of the carriers’ activity is expected to focus on this group. This study, following up on prior studies on Medicaid fraud control units and carrier fraud units, will assess how focused medical reviews are being performed by the carriers, what corrective actions are being pursued, and what educational interventions and/or referrals for fraud investigation are resulting from these activities.

Duplicate Billings for Outpatient Services
 

22. OIG will conduct a study to determine the extent of duplicate billings resulting from outpatient claims being submitted to both intermediaries and carriers. Hospitals, nursing homes and other institutions (Part A providers) certified by the Medicare program submit their claims for reimbursement to intermediaries. Physicians, independent clinical laboratories and other (Part B) suppliers of services submit their claims for reimbursement to carriers. The study will assess vulnerabilities in the current systems that may lead to bills for some services being submitted to and paid by both.

Quality-of-Care Safeguards - HMO
 

23. This study will assess the fraud and abuse and quality-of-care safeguards that health maintenance organizations with Medicare contracts use in managing their provider networks. As of March 1, 1997, 5.1 million Medicare beneficiaries were enrolled in 368 managed care plans. About 70 percent of these plans are independent practice network arrangements in which a health maintenance organization contracts with physician groups, individual physicians, physician-hospital organizations, or other emerging entities for the provision of health care services. Many providers contract with multiple health maintenance organizations. To further complicate matters, mergers and buy outs of health maintenance organizations are occurring with increasing frequency, leading to further changes in network arrangements. As Medicare changes from a simple reimbursement program to one based on prudent purchasing of care in a health care marketplace, it must understand the contractual relationships between managed care organizations and their providers.
OPERATION RESTORE TRUST  
24. Announced and launched May 1, 1995. Targets home health agencies, DME suppliers and nursing homes in five states, New York, Florida, Illinois, Texas and California.

 
25. OIG has targeted kickbacks, forgery of physician signatures, billing for services not rendered and/or excessive services, falsified plans of care and the use of unlicensed staff. 14 different agencies are coordinated in this endeavor. HCFA, DOJ, Medicaid Fraud Control Units, State Attorneys General and Administration on Aging are involved.

 
26. Voluntary Disclosure was a key program that allowed companies to come forward with evidence of fraud or errors by offering consideration of reduced penalties. However, this is not an amnesty program. The program was a failure because no one volunteered. OIG anticipated that providers who had acquired companies and found evidence of fraud/wrongdoing in the acquired entity’s books would make disclosures. IG/HHS is re-thinking the program.

 
27. A corporate compliance plan sets up procedures to prevent and detect violations of applicable laws. The existence of a corporate compliance plan or internal auditing program within the disclosing company can be an important factor to the OIG in negotiating terms of settlement. Corporate compliance plans may not be desirable for everyone. (See paragraphs 42; 48-53 below.)
Statutes/Programs  
The Health Insurance Portability and Accountability Act of 1996
 
28. The Health Insurance Portability and Accountability Act of 1996 became law on August 21, 1996. In addition to the portability and tax changes, the new acts strengthen federal fraud and abuse prosecutions. The 1997 amendments further strengthened the government's hand in both regulations and statutes.

Expansion of the Secretary’s exclusionary authority.
 

29. The Secretary is "REQUIRED TO EXCLUDE" from Medicare and state health plans (Medicaid, etc.) for a minimum of five years, individuals and entities convicted of felony offenses related to health care fraud.

 

30. In addition, these statutes mandate exclusion periods to replace permissive exclusions, including convictions for fraud, obstruction of investigation and controlled substance convictions.

Expanding anti-fraud and abuse programs:
 

31. "FRAUD AND ABUSE CONTROL PROGRAM" to coordinate federal, state, and local enforcement agencies. The program will conduct investigations, audits, etc., and facilitate enforcement. It is also responsible for safe harbors and issuing advisory opinions and "Fraud Alerts."

 
32. "MEDICARE INTEGRITY PROGRAM" - allows the Secretary to contract with entities who promote the integrity of Medicare. Activities include:

a. Review of providers, including utilization review and fraud review;

b. Audits of cost reports;

c. Determinations as to whether payments should have been made;

d. Education of providers, beneficiaries, and others;

e. The Integrity Program will replace the intermediaries in the above-listed functions.
 

33. A new "BENEFICIARY INCENTIVE PROGRAM" - requires the Secretary to encourage individuals to inform HHS of any fraud or abuse against the Medicare program.

a. Provides for cash payments to individuals.
 

34. Requires HHS TO ISSUE BINDING ADVISORY OPINIONS for four years on activities subject to sanctions. This new requirement is being reviewed by the Clinton administration and may be repealed.

a. Requires the Secretary to solicit proposals for safe harbors.
 

35. Creates a COLLECTION OF PROGRAMS for health care fraud and abuse data that will provide federal and state agencies with a list of actions against health care providers, suppliers, and practitioners.

 
36. Creates a "HEALTH CARE FRAUD AND ABUSE CONTROL ACCOUNT" providing funds to finance new efforts to control fraud and abuse.

a. Funding comes from: criminal fines recovered in federal health care offenses; civil monetary penalties and assessments; forfeiture of property resulting from federal health care offenses; recoveries under the False Claims Act (Qui Tam); etc. This fund is already projected to pay for hundreds of OIG agents and FBI agents assigned to Health Fraud matters only.

Creates Or Enhances Federal Criminal Sanctions For Offenses Related To Health Care Fraud.
 

37. Health care fraud.

"Whoever knowingly and willfully executes, or attempts to execute, a scheme or artifice--

"(1) to defraud any health care benefit program; or

"(2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program, in connection with the delivery of or payment for health care benefits, items, or services, shall be fined under this title or imprisoned not more than 10 years, or both. If the violation results in serious bodily injury . . . such person shall be fined under this title or imprisoned not more than 20 years, or both; and if the violation results in death, such person shall be fined under this title, or imprisoned for any term of years or for life, or both . . . ^"
 

38. Theft or embezzlement in connection with health care.

"Whoever knowingly and willfully embezzles, steals, or otherwise without authority converts to the use of any person other than the rightful owner, or intentionally misapplies any of the moneys, funds, securities, premiums, credits, property, or other assets of a health care benefit program, shall be fined under this title or imprisoned not more than 10 years, or both; but if the value of such property does not exceed the sum of $100 the defendant shall be fined under this title or imprisoned not more than one year, or both . . ."
 

39. False statements relating to health care matters.

"Whoever, in any matter involving a health care benefit program, knowingly and willfully--

"(1) falsifies, conceals, or covers up by any trick, scheme, or device a material fact; or

"(2) makes any materially false, fictitious, or fraudulent statements or representations, or makes or uses any materially false writing or document knowing the same to contain any materially false, fictitious, or fraudulent statement or entry, in connection with the delivery of or payment for health care benefits, items, or services, shall be fined under this title or imprisoned not more than 5 years, or both . . .
 

40. Obstruction of criminal investigations of health care offenses.

"a) Whoever willfully prevents, obstructs, misleads, delays or attempts to prevent, obstruct, mislead, or delay the communication of information or records relating to a violation of a Federal health care offense to a criminal investigator shall be fined under this title or imprisoned not more than 5 years, or both.

"b) As used in this section the term ‘criminal investigator’ means any individual duly authorized by a department, agency, or armed force of the United States to conduct or engage in investigations for prosecutions for violations of health care offenses."
 

41. Laundering of monetary instruments.

Section 1956(c)(7) of title 18, United States Code (money laundering), is amended by adding:

"(F) Any act or activity constituting an offense involving a Federal health care offense."
 

42. Injunctive relief relating to health care offenses.

a. "Section 1345(a)(1) of title 18, United States Code, is amended--

"(1) by striking "or" at the end of subparagraph (A);

"(2) by inserting "or" at the end of subparagraph (B); and

"(3) by adding at the end the following:

"(C) committing or about to commit a Federal health care offense."

b. "Freezing of Assets. --Section 1345(a)(2) of title 18, United States Code, is amended by inserting "or a Federal health care offense" after "title".
 

43. Authorized Investigative Demand Procedures. (AID)

This procedure is already being utilized, sometime in conjunction with Search Warrants. Such is the case at the recent well-publicized Columbia Search Warrants.

"(a) Authorization.

(1) In any investigation relating to any act or activity involving a Federal health care offense, the Attorney General or the Attorney General's designee may issue and cause to be served a subpoena--

"(A) requiring the production of any records . . . which may be relevant to an authorized law enforcement inquiry . . . or

"(B) requiring a custodian of records to give testimony concerning the production and authentication of such records.

"(2) A subpoena under this subsection shall describe the objects required . . . .

"(3) The production of records shall not be required under this section at any place more than 500 miles distant from the place where the subpoena for the production of such records is served.

"(4) Witnesses . . . shall be paid the same fees and mileage that are paid witnesses in the courts of the United States.

"(b) Service . . . may be served by any person who is at least 18 years of age . . . by personal delivery of the subpoena to him. Service may be made upon a . . . corporation . . . a partnership . . . by delivering the subpoena to an officer, to a managing or general agent . . . .

"(c) Enforcement . . . the Attorney General may invoke the aid of any court of the United States . . . to compel compliance with the subpoena. . . . Any failure to obey the order of the court may be punished by the court as a contempt thereof. All process in any such case may be served in any judicial district in which such person may be found.

"(d) Immunity From Civil Liability.- . . . any person . . . who complies in good faith with the summons and thus produces the materials sought, shall not be liable in any court of any State or the United States to any customer or other person . . .
"(e) Limitation on Use.

"(1) Health information about an individual that is disclosed under this section may not be used in . . . any administrative, civil, or criminal action or investigation directed against the individual who is the subject of the information unless the action or investigation arises out of and is directly related to receipt of health care or payment for health care or action involving a fraudulent claim related to health . . . .

"(2) In assessing good cause, the court shall weigh the public interest and the need for disclosure against the injury to the patient . . . .

"(3) Upon the granting of such order, the court . . . shall impose appropriate safeguards against unauthorized disclosure."
 

44. Forfeitures for federal health care offenses.

The court, in imposing sentence on a person convicted of a Federal health care offense, shall order the person to forfeit property, real or personal, that constitutes or is derived, directly or indirectly, from gross proceeds traceable to the commission of the offense.
 

45. Provides for stronger Civil Monetary Penalties (CMPs).

Any physician who signs a document falsely certifying a need for home health services shall be subject to a CMP of not more than $5,000.00 or 3 times the amount of payments for home health services made pursuant to the false certification.
 

46. Civil Monetary Penalties and assessments will be greatly increased.

The 1997 Statutes
 

47. Enhanced exclusion authority.

The 1997 amendments allow for a mandatory exclusion of not less than ten years for an individual who has been convicted one previous occasion of one or more offences related to healthcare. If the individual has been convicted on two or more previous occasions of one or more offences, the exclusion period is permanent.
 

48. HHS May Refuse To Enter Into Medicare Agreements With Individuals Or Entities Convicted Of Felonies.

The 1997 amendments provide that if an individual has been convicted of a felony under federal or state law for an offense which the Secretary determines is "detrimental to the best interest to the program or program beneficiaries" the Secretary may refuse to enter into a Medicare agreement with the individual under Medicare Part A. Furthermore, under Medicare Part B, the Secretary may refuse to enter into an agreement with a physician or supplier, or may terminate or refuse to renew such agreement if the physician or supplier has been convicted under federal or state law for an offense which the "Secretary determines is detrimental to the best interest of the program or program beneficiaries even if it is a conviction unrelated to healthcare."
 

49. Exclusion of Entity Controlled By A Family Member Of A Sanctioned Individual.

The 1997 amendment allows the Secretary to exclude from participation an entity which is controlled by an immediate family member or member of the household of a person who transferred ownership or control interest in an entity in anticipation of (or following) a conviction, assessment, or exclusion against that individual. Immediate family member and member of household includes husband or wife, natural or adoptive parent, child or sibling, step parent, step child, step brother, step sister, father-in-law, mother-in-law, daughter-in-law, son-in-law, sister-in-law, brother-in-law, grandparent, grandchild, spouse of grandparent or grandchild. Member of household means any individual sharing a common abode as part of a single-family unit with that person including domestic employees or others who lived together as a family unit. (Does not include a roomer or boarder.)
 

50. Enhanced Imposition of Civil Money Penalties.

Now, HHS may impose civil money penalties for persons who contract with excluded individuals. An individual is subject to CMP's if he arranges or contracts (by employment or otherwise) with an individual or entity that the person knows or should know is excluded from participation in a federal healthcare program for provision of items or services for which payment may be made by a federal healthcare program. The CMP's may be as high as $50,000 for each such act. Additionally, CMP's for improperly filed claims may also now be as high as $50,000 for each act and damages may be sought for not more than three times the total amount of remuneration offered, paid, solicited, or received, without regard to whether a portion of such remuneration was offered, paid, solicited or received for a lawful purpose.
 

51. Disclosure of Information and Surety Bonds.

Durable medical equipment suppliers must provide HHS with full and complete information as to the identity of each person with an ownership or control interest and the supplier or any subcontractor in which the supplier directly or indirectly has a 5% or more ownership interest. Additionally, DME suppliers must provide a surety bond in an amount not less than $50,000.

Home Health Agencies must also provide HHS with a surety bond in an amount not less than $50,000.

HHS may, at the Secretary's discretion, impose a surety bond requirement on some or all providers of items or services under Part A, or some or all suppliers or other persons (other than physicians or other practitioners) who furnish items or services.
 

52. Provision of Certain Identification Numbers.

Providers of services, independent clinical laboratories, renal disease facilities, or Medicare HMO's must now supply the Secretary with both the employer identification number and social security number of the disclosing entity, each person with an ownership or control interest, and each subcontractor in which the entity directly or indirectly has a 5% or more ownership interest. The new disclosure requirements shall apply to the application of conditions of participation, and entering into and renewal of contracts and agreements with HHS.
 

53. Advisory Opinions Regarding Certain Physicians' Self-Referral Provisions.

New amendments require the Secretary to issue written advisory opinions concerning physicians' referrals relating to designated health services and whether they are to be prohibited. The advisory opinions shall be binding as to the Secretary and the party or parties requesting the opinion.
 

54. Revision of Penalties for Fraudulent Eligibility for Medicaid.

The Health Insurance Portability and Accountability Act of 1996 provided for criminal penalties for anyone knowingly and willfully disposing of assets in order to become eligible for medical assistance under a state Medicaid plan. The 1997 amendments now read that a criminal penalty may be imposed when a person "for a fee knowingly and willfully counsels or assists an individual to dispose of assets. . . in order for the individual to become eligible for medical assistance under a state plan . . . ." This provision is purportedly directed at other professionals who structure and advise on the prohibited disposal of assets.

 

1998 - ITEMS OF INTEREST   No "Right to Choose" for Medicare - Section 4507
 
55. On December 30, 1997, The United Seniors Association ("USA") filed suit against the Clinton administration to enjoin the enforcement of Section 4507 of the Balanced Budget Act. As interpreted by the Health Care Financing Administration (HCFA), Section 4507 would prevent seniors from privately contracting with their doctors for otherwise covered medical services deemed "not reasonable and necessary" by HCFA.

 
56. Senator Kyl had sponsored legislation explicitly allowing Medicare patients to contract with doctors at rates above the program’s mandated fees and won overwhelming Senate approval. The Clinton Administration threatened to veto the entire balanced budget deal if the Kyl language was included. The Administration professed to fear a "two-tiered" health care system; in fact, it saw that giving patients a right to choose threatened the piece-by-piece effort to revive the "Clinton-care" plan so resoundingly defeated during the President’s first term. But to preserve their budget deal, Republicans caved in and agreed to compromise language in Section 4507. The section requires that any doctors who treat a Medicare patient privately ("right to choose") must file an affidavit swearing they will see no Medicare patients for two years. On March 6, 1998, the court heard oral arguments on the Plaintiff’s Motion for Preliminary Injunction and took the matter under advisement.

Medicare Anti-Fraud Office to Open in Louisiana
 

57. In February 1998, the Department of Health and Human Services announced the opening of a new Medicare anti-fraud office in New Orleans, as well as $150,000 in grants to three states to help fight health care fraud and abuse and protect Medicare for the future. "Fighting health care fraud and abuse is one of our highest priorities," said HHS Secretary Donna E. Shalala. "Protecting Medicare’s integrity is more important than ever as we gear up to meet the needs of the coming Baby Boom generation."

 
58. The New Orleans anti-fraud field office will operate in the same way as the highly successful anti-fraud field office in Miami, Florida, working with federal and state program, law enforcement, private insurer and consumer advocacy groups to find, prosecute, and prevent fraud and abuse. The Louisiana office will also help coordinate anti-fraud efforts in other states, including Texas.

 
59. Last year, nearly $1 billion was returned to the Medicare Trust Fund, thanks to partnerships between HCFA, the HHS inspector General, Department of Justice and state and local authorities. Medicare alone saved an estimated $7.5 billion in FY 1997 - mostly by preventing inappropriate payments -- through audits, medical reviews, and making sure other insurers who cover beneficiaries pay claims that are not Medicare’s responsibility.

First DOJ Report
 

60. The first annual progress report by the DOJ and HHS reflects on the nation’s successful efforts in cracking down on Medicare fraud and abuse.

1. Nearly $1 Billion has been returned to the Medicare Trust Fund from collections of criminal fines, civil judgements and settlements, and administrative actions. This was the largest recovery amount ever collected in one year.

 
2. More than 2,700 individuals and entities have been excluded from doing business with Medicare, Medicaid, and other federal and state health care programs for engaging in fraud or other professional misconduct - a near doubling over 1996. These have been increased convictions for health care fraud-related crimes by nearly 20 percent. 4,010 civil health care fraud cases have been pursued- an increase of 61% over 1996.

 
3. A 10-step anti-fraud and abuse legislative package that saves Medicare at least $2 Billion includes: eliminating overpayments for certain drugs; ensuring Medicare does not pay for claims that ought to be paid by private insurers and asking providers to pay for their audits, which will allow Medicare to double the number of audits; ensuring that providers do not leave Medicare strapped by declaring bankruptcy; and taking unprecedented steps to involve Medicare beneficiaries in identifying and combating fraud and abuse by: providing beneficiaries with new information on how to report fraud. Starting February 1998, Medicare beneficiaries across the nation will receive a toll-free number to call to report fraud and abuse in Medicare on every statement, bill, and claim, making it easier to crack down on fraud and abuse; and

 
4. Beneficiaries will be rewarded for fighting fraud. Provisions in the HIPA legislation will be implemented this spring that give beneficiaries rewards for reporting fraud.

 
5. Nationwide On-Site Inspections to Target Medical Supplier Rip-Off Artists. To ensure that medical equipment suppliers are providing the medical devices they claim, the Department of Health and Human Services is conducting nationwide on-site inspections of medical suppliers.

 
6. A Nationwide Conference, With Law Enforcement Officials and Others, Designed to Identify the Next Steps to Fight Fraud and Waste. This spring, the HCFA will hold a conference including consumers and their representatives, law enforcement officials, private insurers, health care providers, and beneficiaries, to build on the success achieved in fighting fraud and abuse in the nation’s health care system.

1. HHS and the Los Alamos National Laboratory have signed an agreement that allows the laboratory’s supercomputers to be turned against perpetrators of Medical fraud. The two-year, $6 million contract with HHS HCFA Los Alamos is using modern computer techniques to analyze Medicare transactions is nearing completion. Much of the project builds on Los Alamos’ experience in examining vast amounts of data stored in many different formats, and recognizing patterns or spotting anomalies in such data. The Medicare project will require Los Alamos to develop new analytical methods making it easier to discover mistakes or fraudulent transactions.

 
2. When HCFA processes a claim from a contractor, it uses a system of specific computer codes called "edits" that look for obvious inconsistencies within the claims. For instance, if the claim originated with a gynecologist, the edit checks to make sure the patient is a woman. The system and the computerized edits have grown up over the past 30 years. Los Alamos scientists will try to streamline this mixture of edits so systems operate more efficiently, and will develop new edits that look for fraud, mistakes and abuse. HCFA and the laboratory hope the new system can be designed to detect a wide variety of potential anomalies, including simple mistakes, such as double billing, "unbundling" of medical services, and coding errors. Los Alamos computer scientists have extensive experience in fraud detection. They also have helped IRS investigators develop new ways to detect fraud in electronically filed tax returns.

 
3. Pre-1996 Criminal Statutes for Health Care Prosecutions

1. 18 U.S.C.  286 - Conspiracy to Defraud Government with Respect to Claims. Special conspiracy statute dealing with false claims presented to the government. Penalties include imprisonment for up to ten years and monetary penalties as provided for in Title 18.

 
2. 18 U.S.C.  287 - False Claims. Proscribes the presentation of any false claim, knowing it to be false, to the federal government. This statute would cover any Medicare/Medicaid funded reimbursement program. Penalties include imprisonment for up to five years and monetary penalties as provided for in Title 18.

 
3. 18 U.S.C. 371 - Conspiracy to Defraud United States. General conspiracy statute for government fraud; may be used in addition to a statute prohibiting the substantive offense where that offense involves an agreement between two or more actors. Penalties include imprisonment for up to five years and monetary penalties as provided for in Title 18.

 
4. 18 U.S.C.  1001 - False Statement. Prohibits making false statement to the government including the presentation of any document with a false entry. Penalties include imprisonment for up to five years and monetary penalties as provided for in Title 18.

 
5. 18 U.S.C.  1341 - Mail Fraud. If the Postal Service (or other private or commercial interstate carrier) is used in a fraudulent scheme, that fraud can be prosecuted under this section. Penalties include imprisonment for up to five years and monetary penalties as provided for in Title 18.

 
6. 18 U.S.C. 1343 - Wire Fraud. Similar to the Mail Fraud Statute, but the fraud must involve the use of wire (e.g., telephone or telegraph), radio or television communication. Penalties include imprisonment for up to five years and monetary penalties as provided for in Title 18.

 
7. 18 U.S.C.  1956 and 1957 - Money Laundering.

1. Section1956 prohibits engaging in transactions using funds from known unlawful activities to:

1. Promote or carry on a specified unlawful activity (specifically includes "Any act or activity involving a Federal healthcare offense."); or

 
2. Conceal the nature, location, source, ownership, or control of proceeds from an unlawful activity.

1. Penalties for a violation of section1956 include imprisonment for up to twenty years and the greater of $500,000 or twice the value of the property involved in the transaction.

 
2. Section1957 prohibits engaging in monetary transactions in criminally derived property of $10,000 or more.

 
3. Penalties for a violation of section1957 include imprisonment for up to ten years and monetary penalties of up to twice the value of the criminally derived property or other monetary penalties provided for in Title 18.

1. 42 U.S.C.  1320a-7b(a) - False statements and representation in connection with Medicare or state health care programs. This statute specifically addresses most types of health care fraud involving Medicare funds. Penalties include imprisonment for up to five years and monetary penalties of up to $25,000.

 
2. 18 U.S.C. 1347 - Healthcare Fraud. Prohibits fraud on any healthcare benefit program. Penalties include imprisonment for up to ten years and monetary penalties provided for in Title 18. If the violation results in serious bodily injury, imprisonment may be up to 20 years. If the violation results in death, imprisonment may be for life.

 
3. 42 U.S.C. 1320a-7b(b)-Illegal Remuneration. (AKA Federal Anti-Kickback Statute.

 
4. 42 U.S.C. 1395nn-limitations on certain physician referrals. (AKA The Stark Amendments).

1. Background: Effective January 1, 1992, Stark I prohibited physicians from referring Medicare beneficiaries for clinical laboratory services to entities in which they or members of their immediate family had a financial interest. It also prohibited entities from making a claim for payment under the Medicare program for clinical laboratory services furnished pursuant to a prohibited referral.

 
2. Next, and as a result of the Stark II amendments (effective January 1, 1995) the ban covers physician referrals of Medicare or Medicaid beneficiaries to entities in which physicians or members of their immediate family have a financial interest for designated health services. The ban also encompasses entities which make a claim for payment under the Medicare or Medicaid programs for the provision of a designated health service furnished pursuant to a prohibited referral.

 
3. In August 1995, HCFA published the Stark I final regulations. 60 Fed. Reg. 41923 (1995). While the Stark I final rule applied directly only to referrals for clinical laboratory services, it included those provisions in Stark II that applied retroactively for clinical laboratory services as of January 1, 1992. However, since Stark I did not include referrals of Medicaid beneficiaries, the Stark I final rule does not address issues specific to Medicaid. As a result, the Stark II proposed rule addresses, for the first time, the application of the Stark referral ban to Medicaid. When examining the Stark law and regulations, it is necessary to consider both the Stark I final rule and the Stark II proposed rule in conjunction with each other. It should also be kept in mind that the Stark II rule is only a proposed rule and does not have the force and effect of law, while the Stark I rule is final and does have this force and effect.

Stark II Proposed Rules - Self-Referral Prohibitions
 

4. Effective in January 1995, Stark II prohibits physicians from referring certain Medicare/Medicaid "designated health services" to entities with whom the physicians have direct and indirect financial relationships. This applies to the following services: Physical and occupational therapy services; Radiology or other diagnostic services; Radiation therapy services; Durable medical equipment; Parenteral and enteral nutrients, equipment and supplies; Home health services; Prosthetics, orthotics and prosthetic devices; Outpatient prescription drugs; and Inpatient and outpatient hospital services.

 
5. Service Agreements: Unless an exception applies, if a physician group has a service arrangement with a hospital, that group may not refer Medicare/Medicaid inpatient and outpatient hospital services to the hospital. Stark II contains several exceptions that may apply:

1. Physicians provide services to Hospital:

1. Bona Fide Employment Relationships. Physicians can refer to entities with which they have a bona fide employment relationship if the compensation is fair market value and not determined in a manner that takes into account the volume or value of referrals by the referring physician. This exception expressly states that the physician may receive productivity bonuses based on services performed personally by the employed physician or an immediate family member of the physician.

 
2. Personal Services Arrangements. Physicians can refer to entities to which they are providing personal services if the arrangements meet certain criteria, including that the compensation be set in advance, consistent with fair market value and not determined in a manner that takes into account the volume or value of any referrals or other business generated between the parties. (This exception is intended to apply to payments made by a non-profit medical foundation under a contract with physicians to provide health care services and which conducts medical research. The physicians may be paid on a per service basis and still meet the requirements of this exception. Also, certain physician incentive plans may be based on the volume or value of referrals between the parties.)

 
3. Hospital Remuneration Unrelated to Designated Health Services. Physicians may refer designated health services to a hospital for which they are providing services if the services that the physician provides are not related to the provision of designated health services.

 
4. Space and Equipment Rental. Physicians can refer to entities with which they have space and equipment rental arrangements if the arrangements meet certain criteria, including that the rental charges are set in advance, consistent with fair market value and not determined in a manner that takes into account the volume or value of any referrals to other business generated between the parties.

1. Hospital provides services to Physicians:

1. Payments by a Physician: Physicians can refer designated health services to an entity, including a hospital, to which the physician pays fair market value for the furnishing of items or services.

1. Loans/Letters of Credit: Assuming the loans/letters of credit are given to the physicians by the hospital on commercially available terms, then the Stark II prohibitions should not be triggered. Either Stark II does not apply because there is arguably no remuneration between the parties, or, the arrangement can fall in an exception for "isolated transactions." If the loans/letters of credit, however, include terms more favorable to the physicians than the physicians could obtain elsewhere then the Stark II prohibitions would probably apply.

 
2. Hospital-Controlled Medical Group: If a hospital establishes a medical group as a provider of services and the medical group contracts with physicians to provide services for the group, the hospital must consider whether the arrangement is structured to fall in exceptions to Stark II that will permit the physicians to refer both to the medical group provider and to the hospital.

 
3. Referrals to Medical Group: Stark II contains exceptions for physicians’ services and certain in-office ancillary services that are performed by the ordering physician or a member of the physician’s "group practice." A group practice is narrowly defined to exclude "clinic without walls" arrangements. The in-office ancillary services must be performed in a building in which the referring physician or group practice furnishes physicians’ services unrelated to the furnishing of designated health services, or, alternatively, the services may be performed in a centralized location.

 
4. Thus, if a hospital contracts with a group practice which will perform substantially all of their services through the medical group, then Stark II should not apply to the physicians’ referrals to the medical group.

 
5. If the physicians are not part of a group practice, then the medical group’s arrangement with the physicians can be structured to fall in the personal services exception to Stark II, i.e. a fair market value fee not related to the physicians’ referrals to the medical group.

 
6. Referrals to Hospital: Any arrangements for the physicians to provide services to the hospital should be structured to fall in the personal services exception to Stark II, i.e. fair market value compensation not related to the referrals between the parties.

  The Criminal Investigation!

Attorney Representation: Preventive Measures--When Should A Provider CEO, Administrator, Or Staff Contact Counsel?
 

7. It is never too early! Locate an attorney now! Be prepared for emergencies!

a. When state or federal agents or any "auditor" arrive whether HHS/OIG/FBI/DOJ/State-do not discuss "facts" before conferring with your attorney. Later, they may call your explanation a confession. Penitentiaries are full of people who decided to "explain" their position to agents before talking to their attorney!

b. What to do when investigators try to interview your employees.
 

i. It is appropriate to advise your employees of their constitutional right to refuse an interview without the opportunity to consult with legal counsel.
 
ii. It is appropriate to provide employees with independent legal counsel.
 
iii. It is not appropriate to forbid your employees from speaking with investigators.
 
iv. It is appropriate to require your employee to obtain approval of a designated person before the employee is authorized to turn over business records to anyone.
 
v. It is a good idea to provide your employees with this information as part of an employee manual or other written policy before investigators arrive. Investigators often use scare tactics, such as showing up at an employee’s home at night, and will often try to persuade an employee not to speak with you or an attorney. Employees will appreciate knowing what rights and options are available to them before the issue arises.
 
8. Arrest Warrant - When someone is served with arrest warrant - he has very limited options. Someone should call an attorney ASAP!

  Search Warrant  
9. When a search warrant is executed - It’s always a surprise! Again, be ready to call a lawyer - one experienced in Federal criminal matters.

1. Victims/Citizens - Sometimes they make their own complaints.

 
2. Disgruntled former employees - Virtually all investigations can be traced to a complaint by a disgruntled employee, former employee, or competitor.

 
3. Hot Line

 
4. Civil Suits

1. Subject matter of suit - Can tip off investigators to problem areas.

 
2. Fraud allegations – Civil suits can be a road map to an investigation.

1. Depositions - depositions or trial testimony in civil cases can be extremely helpful to investigators.

 
2. State and Federal Agencies with civil powers can make criminal referrals.

 
3. Collateral investigation of the whole industry or of associates can lead to your investigation. The OIG/HHS programs and initiatives are good examples of industry-wide investigation.

 
4. Rumors - Can spread through industry and reach investigators.

 
5. Intergovernmental referral from other government agencies.

When documents are seized or demanded, inventory and copy all documents produced.

1. Arrange access to search warrant affidavit at the scene.

 
2. Arrange access to documents seized.

 
3. Secure/seal privileged documents not subject to seizure.

1. The Grand Jury

1. Personal Documents - Few individual documents can be protected.

 
2. All corporate and partnership documents available to the Grand Jury.

1. Attorney work-product privilege;
2. Attorney-client privilege;
3. Marital privilege;
4. No federal parent-child privilege;
5. No federal accountant-client privilege;
6. Psychotherapist-patient privilege - courts are split;
7. No federal newsman privilege;
8. Social worker privilege - courts are split;
9. No informer privilege.

1. Initial Considerations - Criminal, civil, administrative investigations, or all three?

1. Scope of search warrant seizure;

 
2. Attempt to retain client documents;

 
3. Identify targeted areas;

 
4. Compliance time for grand jury subpoena;

 
5. Retain copies of documents submitted to grand jury;

 
6. Records custodian;

 
7. Witness testimony;

 
8. Immunity;

 
9. Debriefing witnesses.

1. There are times when the organization's interest may be or become adverse to those of one or more of its constituents. In such circumstances the lawyer should advise any person, whose interest the lawyer finds adverse to that of the organization, of the conflict or potential conflict of interest, and that the lawyer cannot represent that person. Such person may wish to obtain independent representation. Care must be taken to assure that the individual understands that, when there is such adversity of interest, the lawyer for the organization cannot provide legal representation for that individual (even though the person may be an employee), and that discussions between the lawyer for the organization and the individual may not be privileged.

 
Joint defense agreement

1. The joint defense doctrine is an extension of the attorney-client privilege that allows communication among joint parties and their counsel on matters of common concern without waiver of the privilege. It may be useful to put this agreement in writing as evidence of the parties' intention to engage in confidential communications, and their commonality of interest. This is frequently done in civil and criminal investigations, where counsel is representing one of several companies in an industry and seeks to cooperate with counsel for other companies; or where corporate counsel wishes to cooperate with individual(s) counsel(s).

 
2. The parties should attempt to safeguard their communications through counsel by use of a joint defense agreement. A joint defense agreement establishes a joint privilege between counsel. Thus, if there is more than one counsel involved in the transaction, communications between counsel are subject to this privilege.

 
3. The rationale for the doctrine is that when co-defendants decide to join in a common effort, "the attorney for each represents both for purposes of that joint effort."

 
4. The bases for invoking the Joint Defense Privilege can be extensive.

1. Application of guidelines. Effective dates: November 1, 1991, for organizations; November 1, 1987, for individuals.

a. Purpose - To equalize sentences imposed on corporate defendants by adopting guidelines like those imposed on individuals since November 1, 1987.
 

2. Determining the punishment is a detailed formula. The results are harsh for individuals and corporations. Individuals receive confinement sentences and fines. Corporations receive huge fines and disgorgement.

 
3. Disgorgement - Court shall add to the fine, any gain to the organization from the offense that has not and will not be paid as restitution or by way of other remedial measures.
Federal False Claims Act  
4. When there is an accusation of fraud in government funded programs, it is inevitable that the Federal False Claims Act ("FCA"), 42 U.S.C. § 1320a-7b, will be considered.

1. The Act was enacted in 1863 in response to rampant fraud in federal defense contracting during the civil war. The Act fell in disuse for a century. In 1986 the Act was amended for clarification of "intent" and to add incentives for private "qui tam" litigants.

 
2. Liability for health care fraud requires that: (1) the defendant submitted or caused to be submitted a "claim for payment" to the federal government; (2) the claim is false or fraudulent; and/or (3) the defendant acted "knowingly."

 
3. "Knowingly" means a person has actual knowledge, or acts in deliberate ignorance of the truth of falsity of the information, or acts in reckless disregard of the truth of falsity of the information.

 
4. The act specifies the no proof of specific intent to defraud is required. This is in contrast to the anti-kickback statute.

 
5. Damages include (1) triple the amount of damages to the government (the amount the government actually overpaid); and (2) a civil penalty of not less than $5,000, and not more than $10,000 for each false claim. Each submission to an intermediary can be a separate claim.

 
6. Damages may be limited to double the amount of actual damages if the following conditions are met: (1) the fraud is disclosed to the government within 30 days of its discovery by the defendant; (2) cooperation with the government; (3) the government has not initiated a civil or criminal action; (4) the defendant had no knowledge of an investigation.

1. Definition: Latin shorthand - "one who sues for the king as well as for himself." Private party acts as a sort of "private attorney general" and receives a percentage of the government’s civil recovery.

 
2. Outline of Qui Tam Action.

1. Who may sue? Anyone with evidence of a false claim that has been presented to a government agency (e.g., disgruntled employee or competitors in the health care industry).

 
2. The Damages

1. Three times actual damages, and

 
2. $5,000 to $10,000 per false claim. Each voucher submitted for payment may be considered a "claim." Therefore, an inexpensive procedure, billed frequently, may add up to a staggering fine.

 
3. Criminal penalties: The government has wide latitude with numerous statutes.

1. Civil Intent - No specific intent required, "knowingly" defined as: "actual knowledge", "deliberate disregard of the truth or falsity", or "reckless disregard of the truth or falsity."

 
2. Civil Burden of Proof - Now, only a "preponderance of the evidence" is required. Previously, some courts had held plaintiffs to a higher standard of "clear and convincing proof."

 
3. Financial Incentives - to Qui Tam Plaintiff

1. If government joins, 15% to 25% of government recovery goes to private plaintiff, as the court determines.

 
2. If government doesn’t join, 25 to 30% of recovery goes to plaintiff, but he must pursue the case himself.

 
3. Even if government joins, plaintiff remains a party to the litigation, and the settlement.

 
4. When the government/plaintiff wins, defendant must pay plaintiff’s reasonable legal expenses. This makes it easier for plaintiff to obtain legal representation even when dollar amounts are low.

1. NOTE: Recently, a district judge in the Southern District of Texas dismissed a Qui Tam complaint. The Court found that the Qui Tam plaintiff had suffered no injury-in-fact as required by Article III of the Constitution. The court said that Congress cannot statutorily assign the Executive’s potential future interest in pursuing a particular fraud claim to an unnamed, theoretical plaintiff who has suffered no injury. To do so allows Congress to circumvent Article III’s standing requirements. Interestingly, another district judge in the Southern District of Texas made a contrary finding one month later. That court rejected the St. Luke’s reasoning stating that the 5^th Circuit finds the standing question to be a non-issue - the False Claims Act statute grants informers standing to sue. It seems that courts will examine multiple Constitutional issues concerning Qui Tam prosecutions will ultimately be resolved by the Supreme Court.

1. Internal Disclosure Mechanisms

1. A disgruntled employee is most likely to have incentive and the information to file such a suit, or report to the government. Therefore, efforts should be made to keep employees from becoming disgruntled. Mechanisms should be instituted for internal disclosure of potential fraud situations. Employees should feel that:

1. They will be rewarded rather than punished for speaking up.

 
2. They will have feedback as to what action has been taken on their complaint and why. This may relieve internal pressure.

1. Corporate Compliance Programs

1. A meaningful corporate compliance program will be relevant to the government’s decision to join a Qui Tam suit (if the government declines to join a Qui Tam suit with its vast resources, the Qui Tam plaintiff will have to invest far more of their own time and money to recover).

 
2. Voluntary disclosure - obviously, this is a sensitive decision that should be made only after careful consideration of experienced legal counsel. A Qui Tam plaintiff cannot file suit based on evidence or information already known to the government.

 
3. A routine corporate compliance program also has benefits if there is a conviction of a business entity.

1. Background - Federal sentencing guidelines for organizations create the impetus for a fraud prevention program; its existence is a mitigating factor at sentencing. Additionally, a program may affect a prosecutor’s discretion not to prosecute. The program does not statutorily mitigate for individuals.

 
2. Statement of policy - The courts require that organizations take all appropriate steps to provide restitution to victims and remedy harm.

 
3. Bound by Your Own Standards - Providers that create their own compliance program must follow through and implement their own program. It must be up-dated and become a regular part of the ongoing business activity. If a small provider is not confident that the program will be continually implemented then they must consult with counsel and think twice about creating something they will not follow. Failure to follow your own program creates problems.

 
4. Corporate Integrity Agreements (CIA) - the Department of Justice has started to require these in settlements with organizational defendants. They are instructive as to what the Department would like to see in a corporate compliance program. The following factors were abstracted from the National Medical Enterprises case.

1. Independent review of procedures (e.g. by law/accounting firm/professional peer review).

 
2. Corporate Integrity Program - Employees informed of standard of conduct expected, applicable laws/regulations, individual and company consequences of violation.

 
3. Certification

i. Responsible personnel shall prepare report of steps taken and methods used to comply with CIA and applicable laws/regulations.  

ii. CIA Director shall certify report under - 28 U.S.C. 1746 (unsworn statement under penalty of perjury).
 

4. Government right of inspection of books/records referenced in report.

 
5. Disclosure mechanism to internally investigate and report to government complaints of improper activities.

 
6. Agreement not to employ persons convicted/debarred for healthcare-related offenses. Make reasonable inquiry into backgrounds, review General Service Administration list of parties excluded from federal programs, and review the Health and Human Services/Office of the Inspector General Cumulative Sanction Report. The Corporate Integrity Program board is made up of key personnel.

1. Health care fraud is a target. The 1996 & 1997 legislation, the 1998 proposed final Stark II Rules, and funding through fines, forfeitures and penalties serve continue the investigation and prosecution of health care providers.

 
2. The Government’s weapons of attack:

a. A wide array of new criminal statutes, programs and sanctions;

b. Civil suits by the government - False Claims Act;

c. Stricter administrative procedures; and

d. "Qui Tam" civil prosecution initiated by private parties on behalf of the Government.
 

3. Protect yourself through: