11/17/2020 1 Joshua Lichtblau Jennifer Krusa, RPh, CHC Daniel Meier, JD, CHC Director, Medicaid Fraud Division Chief Compliance Officer Partner New Jersey Office of State Comptroller PharmScript Benesch Law Enforcement and Compliance for Pharmacies Health Care Compliance Association 2020 Healthcare Enforcement Compliance Conference Enforcement and Compliance for Pharmacies Presented by Joshua Lichtblau Director, Medicaid Fraud Division New Jersey Office of the State Comptroller 2 1 2
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11/17/2020
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Joshua Lichtblau Jennifer Krusa, RPh, CHC Daniel Meier, JD, CHC
New Jersey Office of State Comptroller PharmScript Benesch Law
Enforcement and Compliancefor Pharmacies
Health Care Compliance Association2020 Healthcare Enforcement Compliance Conference
Enforcement and Compliance for
PharmaciesPresented by Joshua Lichtblau
Director, Medicaid Fraud DivisionNew Jersey Office of the State Comptroller
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Goals for today
To help you better understand:
• NJ Medicaid Overview/Regulatory Framework• Medicaid Documentation Requirements• MFD’s Program Integrity Role • Pharmacy Investigations – MFD Process • Medicaid Pharmacy – FWA Obligations • Consequences for Non-Compliance
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What is Medicaid?
Medicaid is a joint Federal and State program that helps pay medical costs if individuals have limited income and resources or meet other requirements.
Medicaid is a voluntary program for providers. Providers who participate must know, accept and abide by Medicaid rules and policies.
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Compliance
Guidelines
Regulations
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New Jersey Medicaid Program – High Level
1.8 million beneficiaries $15+ billion annual spend 5 Managed Care Organizations (MCOs) cover 96% of
the beneficiaries Program administered by DMAHS, Division within
DHS OSC/MFD oversees program integrity, MCOs oversee
own spend through audits/investigations5
Administration and Oversight
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Department of Law & Public Safety
Division of Criminal Justice
Office of the Insurance Fraud Prosecutor
Medicaid Fraud Control Unit (MFCU)
Department of Human Services
Division of Medical Assistance and Health
Services (DMAHS)
Managed Care Organizations
Special Investigations Unit
Office of the State Comptroller
Medicaid Fraud Division
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Medicaid Program Oversight• The state contracts with the following MCOs:
• Aetna Better Health of New Jersey• Amerigroup New Jersey, Inc.• Horizon NJ Health• UnitedHealthcare Community Plan• WellCare Health Plans of NJ, Inc.
• DMAHS oversees the day-to-day operations of Medicaid • MFD oversees program integrity, including MCO efforts to
combat fraud, waste and abuse (FWA)7
Medicaid Program – Pharmacy Expenditures Approximately 2250+ in-state pharmacies and 1025 out of
state pharmacies with active licenses in NJ (as of 9/2020) Pharmacy expenditures – approx. $1.7 billion (2019) Billing process – (a) Encounter claims: pharmacy submits
claim = PBM pays = MCO submits payment info to DXC; (b) Fee For Service (FFS): pharmacy submits claim = DXC pays on behalf of DMAHS
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Claim Submission/Documentation
• It is the provider’s responsibility to ensure that claims submitted for payment reflect the actual service/product that was provided.
• It is incumbent upon providers to maintain accurate records that support all Medicaid claims.
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Provider Responsibilities
Are employees properly licensed?
Are any employees excluded by any state or the federal government?
Is there a registered pharmacist on duty during all working hours?
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Sources of Cases
Law enforcement and MCOs
Hotline
Data analytics – JSURS, MFD investigators, DMU referrals
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MFD Expectations:
Provider/counsel will act in good faith
Good faith includes o Responding to information requests in a timely mannero Providing accurate information in response to requesto Providing comprehensive responses
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Our Visit
MFD may:• Come unannounced • Interview the RPIC/Owner and any other
personnel • Provide document preservation letter• Request wholesaler list, prescription records
and signature logs if warranted• Review timely reversal of claims for
prescriptions not picked up13
MFD Inventory Protocol
• MFD Investigator analyzes claims reimbursed for select medications
• MFD requests wholesale invoices directly from the wholesalers for all purchases and returns made during investigation period
• The wholesale invoices are used to establish a beginning inventory
• MFD reconciles the claims data to the wholesale invoices to determine if an inventory shortage occurred during the investigation period
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Hard Copy Wholesale Invoice
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Inventory Reconciliation Detail Report –Completed Example
– Develop and implement the elements of an effective compliance program– Generate policies and programs related to compliance issues– Develop and implement education and training programs– Conduct internal audits and compliance reviews– Report on the progress of the compliance program– Investigate and develop CAPs– Coordinate with HR– Assess the effectiveness of the compliance program and revise as necessary
• Sources for Compliance Officer Responsibilities– OIG Compliance Program Guidance – Federal Sentencing Guidelines, §8B2.1(b)(2)(C)– Practical Guidance for Health Care Governing Boards on Compliance
Oversight, 2015
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Roles – Legal Counsel• Legal Responsibilities
– Interpret rules and law– Respond to regulatory inquiries– Advise organization
• Compliance Functions– Privileged communications
• Sources– “The legal function advises the organization on the legal and regulatory risks
of its business strategies, providing advice and counsel to management and the Board about relevant laws and regulations that govern, relate to, or impact the organization. The function also defends the organization in legal proceedings and initiates legal proceedings against other parties if such action is warranted.”
• Practical Guidance for Health Care Governing Boards on Compliance Oversight, 2015
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• Factors to consider to determine relationship• Compliance Officer as General Counsel?• Collaboration, not Cohabitation
– Examples• Policies• Facts• Analysis
• Cost considerations– Acceptable risk levels – not all risks are equal– Legally sufficient versus best practices
• Upjohn Co. v. United States, 449 U.S. 383 (1981)• In re Kellogg Brown & Root, Inc., 756 F.3d 754 (D.C. Cir. 2014)
– Confidential information between company and counsel– Legal advice versus business advice
• Anaya v. CBS Broad., Inc., 251 F.R.D. 645 (D.N.M. 2007)• United States ex rel. Baklid-Kunz v. Halifax Hospital Medical Center, 2012 WL 5415108 (M.D.
Fla. Nov. 6, 2012)• TVT Records v. Island Def Jam Music Group, 214 F.R.D 143 (S.D.N.Y. 2003) • Bank Brussels Lambert v. Credit Lyonnais (Suisse) S.A., 220 F. Supp. 2d 283 (S.D.N.Y. 2002)
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When to Bring in an Attorney?
– In-house legal versus external legal– Compliance matters to be covered by A-C privilege– Proper protections to ensure A-C privilege– U.S. ex rel. Gale v. Omnicare, Inc., No. 1:10–CV–00127 (N.D. Ohio Oct. 4,
2013) • Finding that business communications made in business meetings when an
attorney is present are not protected from disclosure• Holding that the A-C privilege did not apply to documents drafted by a compliance
officer just because general counsel and other attorneys may have also received these documents
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When to Bring in an Attorney?
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– Prepared in Anticipation of Litigation• U.S. v. Adlman, 134 F.3d 1194 (2d Cir. 1998)
– Test: “in light of the nature of the document and the factual situation in the particular case, the document can fairly be said to have been prepared or obtained because of the prospect of litigation.”
– Conclusion: attorney would not have prepared this analysis without the looming threat of possible litigation in the event that the proposed transaction was consummated.
– If documents “would have been created in essentially similar form irrespective of litigation,” it cannot be said that they meet the “because of” standard.
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When to Bring in an Attorney?
Hypotheticals: (1) Customer Complaint(2) Regulatory Inquiry• Who gets involved?• Roles
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When to Bring in an Attorney?
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Hypothetical: Customer Complaint• Who gets involved?
– Compliance response team – In-house counsel– General counsel– Consultant
– Was inquiry routine as part of business process or from enforcement agency?– Is the issue serious?– Involve novel interpretations of the law, rules or policies?
• Who gets involved?– Compliance
• Routine business inquiry– Legal
• Provide buffer for compliance• Maintain privilege• Evaluate risk• Report to firm management
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When to Bring in an Attorney?
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Don’t pretend you don’t have a problem if you do…
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If you become the target of an investigation…
• The Government will often initiate an investigation by issuing a document request.
• It could take the form of an audit, a subpoena, or a civil investigative demand.
• Know how you would (should) respond to any such request.
• They also might pay you (or one of your people) a personal visit…
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Launching an Investigation
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So what do I do when they come to interview me?!?!?!!?It could take the form of an audit, a subpoena, or a civil investigative demand.
There really is no polite way to say this…
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Launching an Investigation
• Have appropriate protocols in place…• Coordinate with legal counsel ASAP• Remember, the government will have spent months gathering evidence
about your billing practices before they come knocking• Make sure your key people know how to respond• Whatever ‘first story’ you give is your story – or there are consequences to
changing it
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Launching an Investigation
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Don’t make the mistakes that create their own problems…Don’t lie to government investigators.
Don’t destroy or alter documents.
Don’t try to figure it out by yourself.
They know more than you think… don’t see what you can get away with.
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Launching an Investigation
• Don’t make the Government’s job easy• Have policies, implement them, check for compliance and effectiveness;• Keep detailed, accurate patient records;• If it seems too good to be true...• Stay advised of trends (both good and bad).
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Launching an Investigation
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• The easiest way to avoid accusations of healthcare fraud is to keep careful watch of relevant laws, monitor your billing practices, and take immediate corrective action when errors are discovered during routine audits
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Launching an Investigation
Oh… and don’t commit fraud!
What are the options after issues are identified?• Payback to MAC• OIG Self-Disclosure Protocol• SRDP Self-Disclosure Protocol
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Next Steps
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The path of least resistance
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Payback to MAC
• OIG Provider Self Disclosure Protocol – Procedure for health care providers to voluntarily identify, disclose, and resolve
instances of potential fraud involving Federal health care programs– Avoid cost and disruption associated with a government investigation and litigation
• Self disclosure must:– Specify the laws that were potentially violated– Waive any statute of limitations defense – Ensure that corrective actions are in place and misconduct has ceased – Be made within the later of 60 days after any overpayment is identified or the date
the next applicable cost report is due
• Timeline for investigation completion – Disclosing party must complete investigation within 90 days of the date of its initial
disclosure submission
OIG Self-Disclosure Protocol
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• Self disclosure protocol provides detailed instructions for disclosures related to – Erroneous billing– Excluded individuals– Anti-kickback and Stark violations
• Sets a minimum settlement for non-Anti-Kickback Statute violations
• Coordination between agencies pursuing enforcement action (CMS, DOJ, OIG)
• Online submission tool available at the OIG website
OIG Self-Disclosure Protocol
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• Cooperation among the OIG & DOJ • CMS only accepts violations or potential violations of self-referral law. • If additional violations or potential violations of other criminal, civil, and
administrative laws send to OIG. • Cannot submit disclosure concurrently under SRDP and OIG’s Self-
Disclosure Protocol. • Coordination with Law Enforcement. • Corporate Integrity Agreements. • http://www.cms.gov/Medicare/Fraud-and-
Factors considered in compromising overpayments • Nature and extent of the improper or illegal practice • Timeliness of the self-disclosure • Cooperation in providing additional information • Litigation risk to CMS • Ability to pay
Self-Referral Disclosure Protocol (SRDP)
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Disclosure Protocols OIG Provider Self Disclosure Protocol (SDP). The SDPprovides guidance on how to investigate conduct,quantify damages, and report the conduct to the OIG toresolve the potential liability under the OIG’s civilmonetary penalty authorities. The SDP is not availablefor disclosure of an arrangement that involves onlyliability under the Stark Law, without accompanyingpotential liability under the AKS for the samearrangement.
Use of the SDP will suspend the 60-day time periodpursuant to which reporting and repayment of anoverpayment must be made to avoid FCA liability.
CMS Self-Referral Disclosure Protocol (SRDP). The SRDP isintended to facilitate the resolution of only matters that, in thedisclosing party’s reasonable assessment, are actually orpotential violations of the Stark Law.
Use of the SRDP will suspend the 60-day time periodpursuant to which reporting and repayment of anoverpayment must be made to avoid FCA liability.
OIG Self-Disclosure Protocol vs Self-Referral Disclosure Protocol