Compliance and Federally Qualified Health Centers. Jacqueline C. Leifer, Esq. Senior Partner AGENDA. PIN : Sliding Fee Discount Program
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1 Compliace ad Federally Qualified Health Ceters Jacquelie C. Leifer, Esq. Seior Parter AGENDA I. Key Policy Updates OMB Supercircular PIN : Slidig Fee Discout Program FTCA Proposed Rule o De-Deemig OIG Proposed Rule II.Agecy Eforcemet Updates 2 1
2 I. Key Policy Updates 3 OMB SUPERCIRCULAR: PROCESS AND EFFECTIVE DATES O Dec. 19, 2014, HHS issued the agecyimplemetig rules set forth i 45 CFR Part 75, supersedig 45 CFR Part 74 ad 92 for awards made after the effective date Dec. 26, 2014 The Supercircular became effective as to grat awards made after this date Curret awards uchaged Grace period for implemetatio of ew procuremet rules for oe full fiscal year to take advatage of the grace period, health ceter must: Documet i iteral procuremet policies that the health ceter is followig the old procuremet rules AND Meet the documetatio stadard 4 2
3 OMB SUPERCIRCULAR: TIME & EFFORT REPORTING Documetatio of staff time spet o programmatic activities that demostrates health ceter s right to charge costs to Federal grat New rules emphasize the use of iteral cotrols, rather tha specific required procedures (e.g., budget estimates are ot usable aloe, but are usable o a iterim basis as log as there is a review process) Documetatio Stadards (45 C.F.R (i)(1)) No rigid rules regardig the type of records or reportig time frame If a time ad effort reportig system met the old requiremets, it will likely meet the ew oes Persoal Activity Reports are o loger the default rule (but govermet could choose to require them if a gratee does ot meet ew stadards) Documetatio must accurately reflect the work performed : Iteral cotrols must provide reasoable assurace that the charges are accurate, allowable, ad properly allocated Documetatio must be icorporated ito the health ceter s official records Records must reasoably reflect the total activity for which a employee is compesated by the health ceter Records should iclude both federally assisted ad all other activities, distributig a employee s salary amog multiple activities, if applicable Each health ceter must comply with its ow established accoutig policies 5 Charges for salaries ad wages of oexempt employees must be supported by records idicatig hours worked (o chage) OMB SUPERCIRCULAR: CHANGES TO PROCUREMENT Orgaizatioal coflicts of iterest Maitai writte stadards of coduct outliig orgaizatioal coflicts of iterest if the health ceter has a paret compay, affiliate, or subsidiary that is ot a state, local govermet, or Idia Tribe Uder the Supercircular, orgaizatioal coflicts of iterest meas that because of relatioships with a paret compay, affiliate, or subsidiary orgaizatio, a health ceter is uable or appears uable to be impartial i coductig a procuremet actio ivolvig a related orgaizatio Sole Sourcig rules Outlies four circumstaces where sole source procuremets over $3,000 are allowed: (1) Item is available from oly oe source; (2) Public exigecy or emergecy; (3) Authorized by awardig agecy; or (4) After solicitatio from a umber of sources, competitio deemed iadequate Simplified Acquisitio Threshold updated ($150,000) May use simplified procuremet procedures for purchases uder this threshold Micro-Purchase Threshold Do ot eed to solicit competitive bids for a purchase of supplies or services uder $3,000, so log as the cost is reasoable Not ew (but still importat) 6 3
4 PIN : SLIDING FEE DISCOUNT PROGRAM Policy Iformatio Notice (PIN) # : 02: Slidig Fee Discout ad Related Billig ad Collectios Program Requiremets (effective upo publicatio, September 22, 2014) Serves as the primary resource for HRSA s SFDP policy, alog with HRSA-issued Clarificatio documet Applies to Sectio 330 gratees ad look-alikes Mai goal is to miimize fiacial barriers to care (i.e., either the fees or the operatioal procedures should preset obstacles), for example, a health ceter must: Establish policies ad procedures that idetify circumstaces uder which fees will be reduced or waived Offer prompt paymet or cash discouts as icetives (available to all patiets ad applied uiformly) Full board must approve ad periodically review all SFDP policies, ot just slidig fee discout schedule Applies to all services furished withi the health 7 ceter s scope of project for which a charge has bee established (required or additioal, regardless PIN CONT D: SLIDING FEE DISCOUNT SCHEDULE Icome ad family size are the sole factors i determiig eligibility (Board has discretio to defie family ad icome ) Additioal factors caot be cosidered (e.g., populatio type ad isurace status). Health ceters caot require patiets to apply ad be tured dow for isurace prior to accessig the SFDS, or provide a blaket waiver of fees for all idividuals i a special populatio. SFDS must be applied uiformly to all patiets who qualify. Must iclude at least three graduated pay classes betwee 101% 200% of the Federal Poverty Guidelies (FPG) (may be a percetage or a flat fee) May charge a omial fee (rather tha offer a full discout) to idividuals ad families whose aual icomes are at or below 100% of FPG (i.e., a fixed flat rate fee; it is ot a threshold for receivig care) If a patiet chooses ot to provide the required eligibility verificatio iformatio, health ceters may deem the patiet ieligible ad charge them full fee (provided this policy is applied uiformly) Health ceters receivig o-330 fudig sources that provide for discouts above 200% (such as Rya White fuds) may reduce such patiets paymets accordigly by allocatig all or some of the charge to such other source. 8 4
5 FTCA PROPOSED RULE: DE-DEEMING Departmet of Justice (DOJ) Proposed Rule Determiatio That a Idividual Shall Not Be Deemed a Employee of the Public Health Service regardig de-deemig released March 6, 2015 Proposed rule outlies criteria ad a process by which the DOJ ca determie that a idividual shall be barred from participatig i the FTCA program as it may expose the Govermet to a ureasoably high degree of risk of loss Proposed criteria, which mirror the statute, iclude oe or more fidigs that the idividual: Did ot comply with procedures set by the health ceter to reduce the risk of malpractice Has a history of malpractice claims filed agaist him or her (outside the orm for similarly licesed or certified providers i that specialty) Refused to reasoably cooperate with the AG i defedig the claim Provided false iformatio relevat to his or her duties i relatio to the claim Was the subject of discipliary actio take by a state medical 9 licesig authority or a state or atioal professioal society OIG SAFE HARBOR NOTICE OF PROPOSED RULEMAKING OIG issued a Notice of Proposed Rulemakig o October 3, 2014 to: Revise the Medicare ad Medicaid safe harbors uder the Ati-Kickback Statute (AKS) to formally protect: Certai cost-sharig waivers related to pharmacy services for fiacially eedy Medicare Part D beeficiaries Remueratio (trasfers of items or services for free or for other tha fair market value) betwee Medicare Advatage orgaizatios ad health ceters Certai free ad/or discouted local trasportatio services Amed certai Civil Moetary Pealty (CMP) rules to: Exted protectio to remueratio that promotes access to care ad is provided to fiacially eedy idividuals Provide examples of remueratio that would promote access to care ad pose a low risk of harm to Medicare/Medicaid beeficiaries ad programs 10 5
6 II. Agecy Updates The Latest o Eforcemet Activities 11 OIG ENFORCEMENT: RETURN ON INVESTMENT FY 2011 FY 2012 FY 2013 FY 2014 Idividuals ad etities excluded from Federal health care programs 2,662 3,131 3,214 4,017 Total health care fraud judgmets ad settlemets Total OIG expected recoveries (icludig ivestigatios ad audits) $2.4 $5.2 $3.0 $6.9 $2.6 $5.8 $2.3 $4.9 Retur o ivestmet from various HCFAC activities $1.5 to $1 $7.9 to $1 $8 to $1 $7.7 to $1 Sources: OIG Budget Requests to Cogress; Health Care Fraud ad Abuse Cotrol Program Aual Report (FY 2013, FY 2014, FY 2015, FY 2016) 12 6
7 THE OIG S FY 2015 WORKPLAN Aually, the HHS OIG issues a work pla summarizig ew ad ogoig reviews ad activities that the OIG plas to pursue with respect to HHS programs For 2015, the OIG aouced two ew reviews related to health ceters: Health ceter compliace with grat requiremets, focusig o allowability of expeditures ad the adequacy of accoutig systems that assess ad accout for program icome HRSA oversight of vulerable health ceter gratees (i.e., health ceters with documeted compliace issues), focusig o HRSA s award of fuds to gratees with serious, ogoig compliace or performace issues I additio to reviews related to health ceters, the OIG will review: Screeig process for ew Medicare providers Program itegrity at the state level Federal Debarmet ad whether HHS is takig adequate precautios to esure that idividuals ad etities suspeded or debarred are ot awarded federal grats or cotracts 340B duplicate discouts, focusig o those drugs purchased through Medicaid maaged care orgaizatios ad States efforts to prevet duplicate discouts B COMPLIANCE All OSVs after October 1, 2014 for health ceters that participate i the 340B program ow iclude a assessmet of compliace with 340B requiremets Reviewers will ask five stadard Yes/No questios: Does the health ceter participate i the 340B drug pricig program? If yes, does the health ceter have writte 340B policies ad procedures? If yes, do the policies ad procedures accout for how the health ceter will prevet duplicate discouts ad diversio? If the health ceter uses cotract pharmacies, do they have appropriate cotracts i place with clauses to prohibit duplicate discouts ad diversio? Does the health ceter attest that it provides oversight (e.g. aual audit or other mechaism) of the 340B drugs dispesed by the cotract pharmacy? 14 7
8 340B COMPLIANCE Reviewers will ot actually test compliace, but will flag health ceters that may be out of compliace with 340B by sharig ay o resposes to 340B questios with the Office of Pharmacy Affairs (OPA), which may trigger a follow-up review by OPA 340B questios are ot icluded i the updated site visit guide, OSV reviewers will be give separate assessmet iformatio for guidace I additio, OPA aticipates Audits of covered etities (CEs) i FY 2015 targeted ad radom Areas of focus iclude eligibility, duplicate discouts, diversio, ad group purchasig orgaizatios Note: Sigificat uptick i 340B purchases 15 OVERVIEW OF SITE VISIT HIGH RISK AREAS Services #16: Scope of Project #2: Required & Additioal Services Maagemet ad Fiace #7: Slidig Fee Discouts #10 & #11: Collaboratios & Affiliatios Goverace # 17: Board Authority #18: Board Compositio #19: Coflict of Iterest Policy 16 8
9 HIGH RISKS: SCOPE OF PROJECT Maitai accurate ad up to date Scope of Project Board should routiely review ad approve chages Esure scope chages are made o a timely basis Segregate out-of-scope activities Review Scope of Project guidace (PIN ) 17 HIGH RISKS: REQUIRED & ADDITIONAL SERVICES Esure mix ad level of services is cosistet with eeds assessmet / strategic pla Determie most effective mode of delivery for each i-scope service Esure hospitalizatio ad other referral arragemets are formalized ad compliat Esure that formal writte cotracts / referrals iclude all required provisios Esure that after-hours coverage ad hospitalizatio arragemets comply with Site Visit Guide 18 9
10 HIGH RISKS: SLIDING FEE DISCOUNTS Schedule of Charges Cosistet with locally prevailig charges Desiged to cover the health ceter s costs Schedule of Discouts No discouts for patiets with aual icome above 200% FPL No more tha a omial fee for patiets at or below 100% FPL Esure discouts offered by i-scope referral providers or pay the differece Fully charge all third-party payors Evaluate aually whether discouts or omial fee amout(s) create a barrier to care Policy regardig eligibility / icome verificatio documetatio should balace the eed to esure o barrier to care with requiremet to offer discouts/omial fees to patiets with certai levels of aual icome Establish ad/or review ad update policy regardig whether ad i what circumstaces waiver or reductio of fees for idividuals who do ot otherwise qualify for discouts 19 HIGH RISKS: COLLABORATIONS & AFFILIATIONS Structure affiliatios / collaboratios i compliace with all Sectio 330- related requiremets (icludig service requiremets ad affiliatio policies) ad, as appropriate, procuremet rules PINs # ad # address Affiliatio Agreemets Address cocers regardig potetial service area overlap with other health ceters Address exteral pressures ad politics 20 10
11 GOVERNANCE HIGH RISKS: BOARD AUTHORITIES Esure the bylaws are up to date ad iclude provisios required by the Site Visit Guide ad PIN : Health Ceter Goverace comply with the bylaws at all times! Hold mothly meetigs (o more waivers except for special populatio-oly health ceters) Determie which policies must be Board-approved, determiig method ad frequecy for review ad update, ad documet approval Esure meaigful participatio i mothly meetigs set attedace expectatios, sed Board packets i advace Provide Board traiig o appropriate exercise of authorities (icludig ot oversteppig roles) Documetatio is critical 21 HIGH RISKS: BOARD COMPOSITION Adopt recruitmet ad selectio procedures i order to maitai a Board with at least 9, but o more tha 25 members Esure compliace with Sectio 330 compositio requiremets: Determie who couts as a patiet (as defied by PIN ) for cosumer Board member represetatio purposes i order to meet the 51% threshold Aalyze chagig demographics (e.g., race, ethicity, geder, age, socioecoomic status, special populatios, etc.) to esure reasoable represetatio Defie health care idustry to esure that o more tha 50% of o-cosumer members derive more tha 10% of aual icome from the health care idustry Cosider expertise of curret Board members ad idetify skillsets or areas of expertise that are missig or would be helpful for ew members to have Comply with affiliatio policies ad related restrictios o Board compositio uder PIN Establish procedures to promote Board developmet ad stability, allow for a self-perpetuatig Board 22 11
12 HIGH RISKS: CONFLICT OF INTEREST POLICY Approve ad aually update a comprehesive Coflict of Iterest Policy (or Stadards of Coduct ) applicable to Board members, employees, cotractors ad other agets of the health ceter that: Defies coflict of iterest ad establishes other prohibitios regardig: gifts ad gratuities, epotism, ad bribery Establishes procedures to disclose ad maage potetial or actual coflicts of iterest Addresses cosequeces for violatig the policies Specifically cosiders the followig risks: Board members or immediate family members providig services to the health ceter Board member expese reimbursemet policies Cofidetiality 23 HIGH RISKS: ESTABLISHING REASONABLE COMPENSATION Establishig reasoable CEO compesatio packages & other wage ad beefit scales: Health ceters may pay reasoable compesatio Comply with Iteral Reveue Service requiremets (to avoid itermediate sactios ) ad the applicable cost priciples whe establishig CEO compesatio ad, more geerally, whe approvig salary ad beefit scales cosistet with Sectio 330-related regulatios» Documetatio of comparability» Iclude all compesatio, icludig frige beefits, icetives, etc.» No coflicts of iterest Remember, ALL compesatio must be cosidered, icludig: frige beefits, isurace, car allowaces, icetives, etc
13 HIGH RISKS: DISTINGUISHING BETWEEN LOBBYING AND POLITICAL ACTIVITY Lobbyig: Writte or oral commuicatio that is a attempt to ifluece (for or agaist) specific legislatio, icludig refereda, iitiatives, or similar ballot measures Tax law: Health ceters ca lobby, withi certai limits Federal cost priciples: Federal grat fuds may ot be used to support the cost of lobbyig activities Educatio is ot lobbyig! Political activity: Health ceters may ot itervee i ay electio for public office or attempt to ifluece the outcome of ay federal, state or local electio Board members ca support or oppose cadidates ad egage i political process as idividuals, PROVIDED THAT they do ot act o behalf of the health ceter 25 QUESTIONS? Jacquelie C. Leifer, Esq. JLeifer@FTLF.com Feldesma Tucker Leifer Fidell LLP th Street N.W. Suite 400 Washigto, D.C (202)
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