Complying With the New CMS Emergency Preparedness Rule for Medicare and Medicaid Providers and Suppliers

Transcription

1 Presenting a live 90-minute webinar with interactive Q&A Complying With the New CMS Emergency Preparedness Rule for Medicare and Medicaid Providers and Suppliers Navigating Requirements for Risk Assessment, Communication, Training and More for Participation in Medicare and Medicaid WEDNESDAY, JANUARY 25, pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Jackie Gatz, Vice President, Grant Management and Safety, Missouri Hospital Association, Jefferson City, Mo. Steven D. (Steve) Gravely, Partner, Troutman Sanders, Washington, D.C. Ted Lotchin, Partner, K&L Gates, Research Triangle Park, N.C. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

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5 Complying With the New CMS Emergency Preparedness Rule for Medicare and Medicaid Providers and Suppliers Jackie Gatz 5

6 Background and Purpose Challenges faced from natural and man-made disasters since 9/11 terrorist attacks. Definition of emergency or disaster : Event affecting the overall target population or the community at large that precipitates the declaration of a state of emergency at a local, state, regional, or national level by an authorized public official CMS reviewed a variety of emergency preparedness guidance from federal agencies, states, accrediting bodies and standard setting bodies. 6

7 Justification CMS also reviewed its existing EP regulations Conclusion: not comprehensive enough Doesn t address communication, coordination, contingency planning or training CMS concluded: Existing law, guidelines, accrediting organization EP standards, fall short of what is needed for healthcare to be adequately prepared for a disaster Thus, EP regulations intended to establish: a comprehensive, consistent, flexible, and dynamic regulatory approach to EP and response that incorporates the lessons learned from the past, combined with the proven best practices of the present. Regulations would encourage providers and suppliers to coordinate efforts in communities and across state lines. 7

8 Categories: Providers and Suppliers 1. Hospitals 2. Critical Access Hospitals (CAHs) 3. Rural Health Clinics (RHCs) & FQHCs 4. Long-Term Care Facilities (Skilled Nursing Facilities (SNF) 5. Home Health Agencies (HHAs) 6. Ambulatory Surgical Centers (ASCs) 7. Hospice 8. Inpatient Psychiatric Residential Treatment Facilities (PRTFs) 9. Programs of All-Inclusive Care for the Elderly (PACE) 10. Transplant Centers 11.Religious Nonmedical Health Care Institutions (RNHCIs) 12.Intermed. Care Facilities for Indiv. with Intellectual Disabilities (ICF/IID) 13.Clinics, Rehab. Agencies, & Public Health Agencies as Providers of Outpatient Physical Therapy & Speech Language Pathology Services 14.Comprehensive Outpatient Rehabilitation Facilities (CORFs) 15.Community Mental Health Centers (CMHCs) 16.Organ Procurement Organizations (OPOs) 17.End-Stage Renal Disease (ESRD) Facilities 8

9 The Role of Hospitals Hospitals are often the focal points for healthcare in their respective communities; thus it is essential that hospitals have the capacity to respond Medicare participating hospitals are required to evaluate and stabilize every patient see in the ED and evaluate every inpatient at discharge hospitals are in the best position to coordinate emergency preparedness planning with other providers and suppliers 9

10 CMS Emergency Preparedness Final Rule Timeline Proposed December 2013 Finalized September 8, 2016 Published in Federal Register on September 16, 2016 Effective November 16, 2016 Implement November 16,

11 Noteworthy CMS received 400 public comments to the proposed rule. The proposed rule provided: detailed discussion of each requirement a methodology to establish and maintain preparedness resources and guidance available to organizations CMS encourages providers to reference the proposed rule, as needed. 11

12 Summary of Major Provisions 4 core elements to an effective and comprehensive framework. These provide framework for the rule for all provider/supplier categories. Risk assessment and planning Policies and procedures Communication plan Training and testing Emergency and standby power systems regulations only for inpatient providers (Hospitals, CAHs, LTC/SNFs) 12

13 Emergency Preparedness Plan and Program Risk Assessment Hospital risk assessment is based on and includes a documented, facility-based and community-based risk assessment, utilizing an all hazards approach. Emergency plan Emergency plan includes strategies for addressing emergency events identified by the risk assessment Patient population and available services The hospital emergency plan must address its patient population, including, but not limited to, persons at-risk. The hospital emergency plan must address the types of services that the hospital would be able to provide in an emergency. All hospitals include delegations add succession planning in their emergency plan to ensure that the lines of authority during emergency are clear and the plan is implemented promptly and appropriately. 13

14 Emergency Preparedness Plan and Program The hospital must have a process for cooperation and collaboration with local, tribal, regional, state, or federal emergency preparedness officials efforts to maintain an integrated response during a disaster or emergency situation, including documentation of the hospital s efforts to contact such officials and, when applicable, its participation in collaborative and cooperative planning efforts. allow a separately certified healthcare facility within a healthcare system to elect to be a part of the healthcare systems unified emergency preparedness program 14

15 Policies and Procedures Hospitals are required to develop and implement emergency preparedness policies and procedures based on the emergency plan, the risk assessment and the communication plan, reviewed and updated annually. Policies and procedures must address: Subsistence needs (staff and patients) System to track the location of staff and patients during an emergency if evacuated, document details of their relocation Ensure safe evacuation, transportation and placement A means to shelter in place for patients, staff and volunteers Systems of medical documentation to preserve, secure, and maintain availability of records Use of volunteers during an emergency, other emergency staffing strategies and the process to utilize state and federal resources Continuity of services arrangements with other hospitals and providers to receive patients, due to limitations or temporary closure the role of the hospital under an 1135 waiver, for the provision of care and treatment at an alternate care site 15

16 Communications Plan Hospital must develop, maintain and review annually an emergency preparedness communication plan that complies with federal, state and local law. Contact information for staff, entities providing services under arrangement, physicians, other hospitals and volunteers Government agency contact information for federal, state, tribal and/or local Establish primary and alternate communication Method for sharing information and medical documentation for patients with providers to maintain continuity of care Means, in the event of evacuation to release patient information, as permitted under 45 CFR (b)(1)(ii) Means to provide information about the general condition and location of patients under the facility s care. Means to provide information about occupancy, needs and ability to provide assistance 16

17 Training and Testing Hospital develop and maintain an emergency preparedness training and testing program that includes initial training based on hospital emergency plan, risk assessment, policies and procedures, and communication plan. hospitals provide such training to all new and existing staff, volunteers, consistent with their expected roles and maintain documentation of such training. Training on emergency procedures occur at least annually and demonstrate staff knowledge drills and exercises to test emergency plans participate in a full-scale exercise annually exemption if hospital experiences an actual incident conduct an annual exercise of hospitals choice for second requirement hospitals analyze their response to, and maintain documentation on all drills, tabletop exercises, and emergency events, and revise the hospital s emergency plan as needed. 17

18 Emergency Fuel and Generator Testing Hospitals must meet the requirements of NFPA edition, NFPA edition, and NFPA 110, 2010 edition 18

19 Contact Information Jaclyn E. Gatz, MPA Vice President of Grant Management and Safety Missouri Hospital Association 573/ ext

20 Healthcare Providers and Disasters TROUTMAN SANDERS LLP Steve Gravely Partner Complying With the New CMS Emergency Preparedness Rule for Medicare and Medicaid Providers and Suppliers

21 Healthcare Providers and Disasters Healthcare is part of the nation s critical infrastructure per Homeland Security Presidential Directive 7 (2003) and Presidential Policy Directive 21 (2013) A resilient healthcare system is essential to effective disaster response Being prepared to respond to a variety of hazards is foundational to resiliency 21

22 The Current Healthcare Environment Disasters are inevitable The healthcare system is extremely vulnerable to disruption as we have seen from large scale events over the past 15 years Healthcare is high tech and high touch Today access to electronic medical records, cloud based services and wireless devices is essential to healthcare operations and these systems are fragile Requires highly qualified staff who cannot be replaced easily or rapidly 22

23 Recent Disasters Impacting Healthcare SARS Toronto 2003 Hurricane Katrina 2005 Superstorm Sandy 2012 Ebola

24 Recent Disasters Impacting Healthcare SARS Virtually crippled the Toronto healthcare system Nurses were most affected, rampant staff shortages Work quarantine was invented and deployed Multiple government investigations, reorganizations, careers ended US was, miraculously, not affected Katrina Flooding of hospitals resulted in massive power failures and staff shortages Evacuation was chaotic and not coordinated Patients were separated from families Memorial Hospital is infamous for patient deaths One doctor was indicted but acquitted of murder 24

25 Recent Disasters Impacting Healthcare Superstorm Sandy Flooding led to large scale generator failures and power outages Patient evacuation was chaotic Remarkable that patient toll was not great Ebola Dallas hospital unprepared for Patient Zero Widespread panic spread rapidly Governors acted without coordination re quarantine of suspected nurses Staff refused to work due to fear of infection 25

26 Duty to Prepare There have been dozens of reports, studies, guidelines and recommendations which document that healthcare is vulnerable to disruption from natural and man-made events It is clear that hospitals have a duty to care for their patients which includes a safe environment and adequate resources Since disasters are easily foreseeable, healthcare providers have a duty to prepare for them Medicare CPs have the force and effect of law, so now all Medicare Participating Providers have a legal requirement to engage in disaster preparedness 26

27 Liability for Failure to Prepare Failure to comply can result in suspension or expulsion from Medicare program which is the death penalty for healthcare providers Medicare CPs as a standard of care? Provider agrees to comply with Conditions of Participation upon becoming certified by Medicare Yes, the CPs are mandatory standards and failure to comply could be evidence that a hospital failed to meet the standard of care If patients are injured, or worse, because of this noncompliance then a hospital could be held liable 27

28 Liability for Failure to Prepare There is no federal immunity for professional liability by nonfederal hospitals Some states have adopted special immunity statutes to protect healthcare providers during declared emergencies Liability for medical malpractice is capped in many states However, claims for negligent failure to prepare might not be med mal claims and not subject to caps There were multiple lawsuits filed post-katrina and post- SARS alleging negligent failure to prepare as a cause of action - these were not med mal cases 28

29 Liability for Failure to Prepare Healthcare is subject to many federal laws and regulations on just about every aspect of its operations including: Data privacy (HIPAA, HITECH, BREACH NOTIFICATION RULE) Treatment of all patients (EMTALA, Civil Rights, ADA, Obamacare) Control of medications (DEA) Environmental controls of biohazards (EPA) Billing for services (False Claims Act, False Statements Act, Civil Money Penalties Act) Financial arrangements with referral sources (Anti-Kickback Statute, Stark Law) Business structure and practices (IRS) Employment (EEOC, ADA, FLSA, FMLA) These federal laws are NOT automatically suspended during a disaster Even if the President declares a federal disaster under the Stafford Act, the HHS Secretary must issue specific 1135 waivers in order to suspend or modify these requirements 29

30 Liability for Failure to Prepare Katrina put this in the forefront Records were destroyed Patients were displaced Information was not shared that would have helped with reunification 11 years later during the Pulse shooting, Orlando hospitals were still not clear about what patient info they could share to help with reunification! Healthcare providers must assume that all federal and state laws and regulations remain in full force and effect during a disaster and find ways to continue operations in a compliant manner 30

31 Liability for Failure to Prepare Failure to comply with any of these federal laws can trigger administrative fines and penalties which can be substantial In the past, regulators have been tolerant of noncompliance during disasters Now that the CPs require that hospitals be prepared, will they be able to claim that their failure to comply is an extraordinary event? There are other risks, such as cyber, that we are only now beginning to wrestle with in the healthcare industry 31

32 Thank You Steve Gravely Troutman Sanders 401 9th Street, N. W. Suite 1000 Washington, D.C

33 January 25, 2017 Living in a Material World - Emergency Preparedness Requirements for Medicare and Medicaid Providers and Suppliers Ted Lotchin K&L Gates LLP Copyright 2017 by K&L Gates LLP. All rights reserved.

34 Federal Civil False Claims Act

35 Federal Civil False Claims Act Prohibits a BROAD range of activities, including: Presenting a false or fraudulent claim for payment or approval Making, using, or causing to be made or used, a false record or statement MATERIAL to a false or fraudulent claim Making, using, or causing to be made or used, a false record or statement MATERIAL to an obligation to pay or transmit money or property to the Government "Knowingly" defined as: Having actual knowledge of the information; Acting in deliberate ignorance of the truth or falsity of the information; or Acting in reckless disregard of the truth or falsity of the information. "Material" means "having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property" klgates.com 35

36 Potentially Catastrophic Liability Penalties: Civil penalty between $10, and $21, (effective 8/1/16) per false claim, plus 3 times the amount of damages sustained by the Government Each item or service billed to Medicare or Medicaid is considered a claim, which means penalties accrue rapidly Qui Tam Provisions: Private individuals (or, relators) can file a lawsuit on behalf of the U.S. Whistleblower entitled to a percentage of any recoveries in the case Commonly include disgruntled employees, former investors, hospital executives, compliance officers, billing and administrative staff, patients, and/or competitors klgates.com 36

37 Significant Financial Recoveries $4.7 billion in FCA recoveries in 2016 $2.5 billion from health care industry 7 th straight year of recoveries over $2.0 billion from health care industry $31.3 billion in FCA recoveries since 2009 $19.3 billion from health care industry 30 qui tams filed in in 2016 $2.9 billion in qui tam recoveries related to qui tams in 2016 Government intervenes in roughly 20% of qui tam complaints Over 90% of cases in which government intervenes result in settlement or judgment against defendant Over 90% of declined qui tams are subsequently dismissed klgates.com 37

38 Implied False Certification

39 False or Fraudulent Claim Factual Falsity Claim is factually false on its face Billing for services that were never provided Upcoding and/or billing under incorrect CPT code Legal Falsity "Express Certification" typically refers to false representation of compliance with a federal statute, rule or regulation "Implied Certification" predicated on theory that the act of submitting a claim for reimbursement implicitly certifies compliance with relevant ancillary requirements klgates.com 39

40 Historical Circuit Split Seventh Circuit Only express or affirmative falsehoods can render a claim false or fraudulent The FCA is simply not the proper mechanism for government to enforce violations of conditions of participation contained in or incorporated by reference into a [program participation agreement]. Second Circuit Only non-compliance with a condition of payment "[I]mplied false certification is appropriately applied only when the underlying statute or regulation upon which the plaintiff relies expressly states the provider must comply in order to be paid." klgates.com 40

41 Historical Circuit Split First Circuit Include conditions of participation, quality standards, and contract provisions that are material to payment decision Rejected argument that claim can only be false or fraudulent if it fails to comply with a precondition of payment expressly identified in statute or regulation. "[C]onditions of payment need not be expressly designated as such to be a basis for [FCA] liability." Precondition of payment need not be found in a statute or regulation. klgates.com 41

42 UHS v. U.S. ex rel. Escobar Recent Supreme Court opinion resolved circuit split and provided guidance on materiality requirement Teenage Medicaid beneficiary received counseling and medication management services at mental health facility Experienced seizures in response to medication prescribed to treat bipolar disorder and ultimately died State investigation determined that very few counselors providing services were actually licensed and/or supervised appropriately Regardless, facility billed for individual and family therapy as if provided by licensed clinical social workers Beneficiary's parents alleged that facility provided inadequate care by using underqualified and unsupervised personnel to deliver services Argued facility "impliedly certified" services were provided by specific types of professionals in accordance with state Medicaid requirements klgates.com 42

43 Validates Implied Certification False or fraudulent claims include more than just claims containing express falsehoods Every claim for payment implicitly certifies compliance; OR Nondisclosure of legal violations absent some special duty Theory upheld where: Claim for payment makes specific representations about goods or services provided; AND Failure to disclose non-compliance with material statutory, regulatory, or contractual requirements makes those representations misleading klgates.com 43

44 Only Material Non-Compliance Misrepresentation about compliance with a statutory, regulatory, or contractual requirement must be MATERIAL to the Government's payment decision Reaffirms that material means "having a natural tendency to influence, or be capable of influencing, the payment or receipt of money or property" Materiality under any standard look[s] to the effect on the likely or actual behavior of the recipient of the alleged misrepresentation. klgates.com 44

45 Demanding Materiality Does not depend on whether requirement is labeled a condition of payment relevant not dispositive Cannot be found where non-compliance is minor or insubstantial Government consistently refuses to pay claims based on non-compliance with statutory, regulatory, or contractual provision Government pays claim in full despite actual knowledge of non-compliance with statutory, regulatory, or contractual provision klgates.com 45

46 A Glimmer of Hope Rigorous materiality standard FCA is not a means of "imposing treble damages and other penalties for insignificant regulatory or contractual violations" "This case centers on allegations of fraud, not medical malpractice." FCA is not an all-purpose antifraud statute klgates.com 46

47 Living in a Material World Post-Escobar, courts are being asked to define which requirements are material to a payment decision At least six federal courts of appeal and 20+ district courts have decided Escobar-related motions End of bright line distinction for conditions of payment and participation means more stringent pleading requirements Materiality requirement is both rigorous and demanding, and must be pled with particularity Conclusory statements will not be sufficient klgates.com 47

48 Living in a Material World First Circuit U.S. ex rel. Escobar v. UHS [C]ourts are to conduct a holistic approach to determining materiality in connection with a payment decision, with no one factor being necessarily dispositive. Licensing and supervision requirements go to the "very essence of MassHealth s contractual relationships with various healthcare providers under the Medicaid program Seventh Circuit U.S. v. Sanford Brown, Ltd. Department of Education reviewed for-profit college s compliance with Higher Education Act and did not pursue administrative penalties or program termination Establishing that non-compliance would have entitled the government to decline payment will not meet materiality standard klgates.com 48

49 Living in a Material World Eighth Circuit U.S. ex rel. Miller v. Weston Educational False statement is material if (1) a reasonable person would likely attach importance to it; OR (2) defendant knew or should have known that government would attach importance to it. Materiality depends on whether for-profit college s promise to maintain accurate grade and attendance records influenced the government's decision to enter into its relationship with the college. klgates.com 49

50 Living in a Material World E.D. Va. U.S. ex rel. Beauchamp v. Academi Training Centers, Inc. [S]trains credulity to argue that payment decision would not have been affected if the government knew that private security contractors had not fulfilled weapons training requirements N.D. Cal. Rose v. Stephens Institute Compliance with federal law that prohibits colleges from providing incentive compensation to college recruiters is material to government s payment decision Department of Education s decision not to take action against college despite its awareness of allegations of non-compliance not terribly relevant to materiality klgates.com 50

51 Living in a Material World S.D. Ala. U.S. v. Crumb Falsified diagnoses to ensure reimbursement for botox and other cosmetic procedures material to payment decisions E.D. N.Y. U.S. ex rel. Lee v. Northern Adult Daily Health Care Center Failed to allege that discriminatory treatment of residents in violation of Title VI of the Civil Rights Act and Department of Housing regulations would have influenced payment decision D.D.C. U.S. v. Dynamic Visions Compliance with plan of care requirements for home health services material to D.C. Medicaid s payment decision klgates.com 51

52 Emergency Preparedness

53 Legacy Conditions of Participation Historically, limited potential for liability created by noncompliance with emergency preparedness requirements N.D. N.Y. U.S. ex rel. Blundell v. Dialysis Clinic, Inc. Claims included failure to adequately train employees on emergency preparedness Analyzed under the majority view that required non-compliance with conditions of payment Complaint dismissed because allegations only involved conditions of participation No indication that emergency preparedness requirements would be material to government s payment decision klgates.com 53

54 New Conditions of Participation Four core elements to an effective and comprehensive framework Risk assessment and planning Policies and procedures Communication plan Training and testing Question Will non-compliance with any of these elements be material to government payment decisions? klgates.com 54

55 Potential Arguments for Materiality Holistic approach - Emergency preparedness requirements go to the very essence of the bargain with participating providers Preamble puts providers on notice that government will attach importance to emergency preparedness requirements In light of recent mass casualty events and public health emergencies, strains credulity to believe that government payment decisions would not be affected klgates.com 55

56 Potential Arguments Against Materiality FCA is not an all-purpose antifraud statute Condition of participation, not payment Non-compliance is minor or insubstantial Government pays for provider services despite actual knowledge of non-compliance with emergency preparedness COPs Non-compliance would only have entitled government to decline payment for services klgates.com 56

57 Case Study - Cybersecurity

58 Cyberattacks in the Health Care Industry Hacker collective Anonymous targets Boston Children s Hospital (2014) Fourteen hospitals attacked with ransomware (2016) OIG report on hospital contingency planning for EHR disruption (2016) Cyberattacks responsible for roughly 30% of all major HIPAA breaches (2016) klgates.com 58

59 All-Hazards Emergency Planning Integrated approach to planning that focuses on critical capacities and capabilities for a full spectrum of emergencies or disasters. Specific to the location of the provider or supplier Considers the particular types of hazards most likely to occur Risk assessment and emergency planning can include processes to account for cyberattacks klgates.com 59

60 New Theories of Liability Duty to prepare? Liability for failure to prepare? Implied false certification? Material to government s payment decision? Minor or insignificant non-compliance? Essence of contractual obligations? Increased government enforcement puts providers on notice? klgates.com 60

61 61 Ted Lotchin Partner K&L Gates LLP Research Triangle Park (919)