Billing Compliance for Clinical Trials

ExL Pharma:Billing compliance

DARSHAN KULKARNI, PHARM.D, MS, ESQ.

KULKARNI LAW FIRM

Disclaimer

• Not legal advice• May not be specific to your situation• Does not create an attorney/ client relationship

Kulkarni Law Firm, PC

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Legal & Regulatory Sections


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False Claims Act

Anti-Kickback Law

Stark Law

Park Doctrine

Outline

FMV:

FCA

Anti-Kickback

Stark

Sunshine Act


False Claims ACT• FCA• AKL• Stark• Park Doctrine• Planning• Future

What Matters - FCA

• What is it?1. Actions brought by the Department of Justice

2. Whistleblower or qui tam provisions allow individuals to bring actions in the name of the government, and can share in any recovery


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No specific intent to defraud must be proved

What Matters -FCA

• “any person who—(A) knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval;

• (B) knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim; … “


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31 USC § 3729

“presents, or causes to be

presented a false.. claim”

“makes, uses, or causes to be made

or used, a false record…”

Penalty & Damages - FCA … is liable to the United States Government for a civil penalty of not less than $5,500 and not more than $11,000, …, plus 3 times the amount of damages which the Government sustains because of the act of that person.”


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5500/ 11000

3x Govt. damages

Civil Penalty

What Matters - FCA

• How can it be implicated?


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Double Billing

Misused Grants or

Deviations from

BudgetClaims for

services not rendered,

or not rendered as represented

Claims related to

the payment or receipt of a

kickbackRetaining

government funds when there is an obligation to repay

Informed consent

says patient won’t be charged

Anti-kickback law• FCA• AKL• Stark• Park Doctrine• Planning• Future

What Matters – Anti-Kickback Law

• How is it different from the FCA?


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No Private Right of Action

Anti Kickback Law• Whoever knowingly and willfully solicits or receives any

remuneration (including any kickback, bribe, or rebate) directly or indirectly, overtly or covertly, in cash or in kind—(A) in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service for which payment may be made in whole or in part under a Federal health care program, or

• (B) in return for purchasing, leasing, ordering, or arranging for or recommending purchasing, leasing, or ordering any good, facility, service, or item for which payment may be made in whole or in part under a Federal health care


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42 USC § 1320A–7B

…solicits or receives any remuneration..

…for furnishing or arranging.. Any item or service for which payment was made..

Intent - AKL

“a person need not have actual knowledge of this section or specific intent to commit a violation of this section.”


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Anti-Kickback Law - Penalties

“… shall be guilty of a felony and upon conviction thereof, shall be fined not more than $25,000 or imprisoned for not more than five years, or both.”


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$25000 Imprisonment = 5 years Penalties



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Seeding Trials

Payments above FMV

Investigator Initiated Trials



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FCA

Anti- Kickback

Stark Law

• How many sites here are owned by Physicians who have separate practices?

• How many sites here are owned by Physicians whose own separate laboratories?

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Stark Law

• Applies primarily to CROs, sites and physicians

• Technically a series of laws

• Governs self referral


What is Prohibited: Self Referral

• The physician may not make a referral to the entity for the furnishing of designated health services for which payment otherwise may be made under this title,

• Prohibits an entity from presenting a claim to Medicare or to any person or other entity for DHS provided under a prohibited referral.

42 U.S.C. 1395 Kulkarni Law Firm, PC

Potential exposure

Penalties

• No Medicare payment may be made for DHS rendered as a result of a prohibited referral;

• Entity must timely refund any amounts collected for DHS performed under a prohibited referral.

• Civil money penalties may also apply under some circumstances.


Some Potential Improper Arrangements

Referrals

Co-ownership of

PI and MD Office

Co-ownership of

offices and Central labs

Insufficient assessment

of FMV


Park Doctrine

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• FCA• AKL• Stark• Park Doctrine• Planning• Future

Park Doctrine - Factors

• Individual’s position in the company • Relationship to the violation• Did the official have authority to correct or prevent

violation?• Knowledge of/actual participation in violation?


Please let me know if you

want full list.

Park Doctrine - Impact

Administrative Fines & Penalties

Criminal Fines

Civil Fines


Park Doctrine - What is it?

• Also called “Responsible Corporate Officer (RCO) Doctrine”

• RCO can be held liable for a first time misdemeanor (and subsequent felony) under the FD&C Act without proof of intent or negligence, even if no actual knowledge of or participation in specific offense


Synthes - Impact

Monetary penalties: $22,500,000 (Norian) + $669,800 (Synthes)

Forfeiture of defendant Synthes

4 executives charged via Park Doctrine got 5-9 months in jail


http://www.scribd.com/doc/38716686/DOJ-Synthes-Press-Release-of-Criminal-Charges

http://www.philly.com/philly/business/135555613.html

Scott Harkonen - Impact

Convicted of wire fraud in September 2009

Fined $20,000

Sentenced to 6 months of home confinement


Penalties• FCA• AKL• Penalties• Planning• Future

Administrative Penalties


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Public Relations Impact

Temporary Exclusions

Permanent Exclusions

Consent Decrees Fines

Compliance planning• FCA• AKL• Stark• Park Doctrine• Planning• Future

Compliance


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Compliance Officer/

CommitteeWritten Standards

Training Program

Report Overpayments

Provide OIG with annual compliance

reports

Restrict employment of ineligible

persons

Please contact me for a printable list

of factors

Future• FCA• AKL• Stark• Park Doctrine• Planning• Future

Future

• Impact of Physician Payment Sunshine Act

• Results reporting

• Franck's Pharmacy


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Financial ReportingClinical

trials.govRegulations v. Guidances

Questions?

Darshan Kulkarni


Ph: 215-703-7842

SLIDES MADE AVAILABLE.

@FDALawyers

www.kulkarnilawfirm.comKulkarni Law Firm, PC

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References

• http://www.taf.org/whyfca.htm• False Claims Act: 31 U.S.C. § 3729-3733 • Anti-Kickback Law: 42 U.S.C. § 1320a-7b(b) • False, Fictitious or Fraudulent Claims: 18 USC 287• http

://www.mintz.com/newsletter/2012/Advisories/1618-0112-NAT-HCED/1618-0112-NAT-HCED_index.pdf


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http://www.taf.org/whyfca.htm

http://www.taf.org/federalfca.htm

http://www.mintz.com/newsletter/2012/Advisories/1618-0112-NAT-HCED/1618-0112-NAT-HCED_index.pdf



Billing Compliance for Clinical Trials

Health & Medicine