The Current State of Compliance – Issues and Challenges: Part 5 – Healthcare Compliance Concerns

The Current State of Compliance - Issues and Challenges: Part 5 - Healthcare Compliance Concerns



hello everyone this is Tom Fox I'm the compliance evangelist and the voice of compliance and I'd like to welcome you to a special five-part podcast series on the current state of compliance issues and challenges where I visit with Terry or the managing director at Kroll a division of Duff and Phelps Kroll is the sponsor of this podcast series in this podcast series we visit with Terry about his professional background the current state of compliance through the lens of recent fcpa enforcement actions the evaluation of corporate compliance programs 2019 guidance we consider some of the specific issues for compliance in the private equity arena and the increased importance of the clients in the ever-changing healthcare space first word about our sponsor Kroll and Duffin fellows Kroll is a leading provider of risk solutions for more than 45 years Kroll has help clients make confident risk management decisions about people assets operations and security through a wide range of investigations cyber security due diligence and compliance physical and operational security and data and information management services for more information on Kroll visit Kroll's website wwm Duffin phelps the parent of Kroll is the global advisor that protects restores and maximizes value for clients in the areas of valuation corporate finance investigations disputes cyber security compliance regulatory matters and other government related issues Duffin phelps works with clients across diverse sectors mitigating risk to assets operations and people with Kroll a division of Duff and Phelps since 2004 the firm has nearly 3500 professionals in 28 countries around the world more information on Duff and Phelps visit their website wwlp.com in today's fifth and final episode we take up some new challenges in the healthcare industry and talk about a new case around bribery and corruption in health care that may be a game changer hello everyone this is Tom Fox back again for our fifth and concluding episode in our five-part series with Terry or a managing director at Kroll a division Duffin felts today we are going to take up new compliance concerns in health care and certainly with the amount of money that is spent in health care in the United States estimated to be as high as 20 percent of our gross national product and the federal government's involvement in health care in terms of Medicare Medicaid – the Affordable Care Act and other programs the amount of spending is humongous if I can use that word my daughter uses and unfortunately when you have that much money the propensity to attract fraudsters increases so with that somewhat long-winded introduction first of all Terry welcome back and thank you for taking the time to visit with me today it's good to be back Tom thanks so Terry what are some of the recent changes and challenges in the healthcare industry that you have seen well there's one that I'd like to talk about it's kind of a series of topics but the first one deals with the recent changes and anti-kickback regulations in the healthcare industry on October 24 2018 president Trump signed the support for patients and communities act of 2018 besides authorizing 8 billion to combat the opioid epidemic over five years there were additional provisions that specifically dealt with patient brokering that has plagued the substance abuse industry some states have addressed the concern of patient brokering such as Florida California Massachusetts and here in Texas but many states don't have specific not specifically addressed the issue there are other federal laws that prohibit patient referral brokerage fees such as the federal anti-kickback statute the federal anti-kickback set to federal health care programs such as those connected to Medicare Medicaid TRICARE etc the federal anti-kickback statute does not apply to private insured patients Jiri how does the support for patients and communities act or the Recovery kickback prohibition act change the healthcare landscape that's a great question time the Recovery kickback prohibition law prohibits or attempts to excuse me attempts to close some of the gaps in the federal anti-kickback statute the Recovery kickback prohibition law is focused specifically on patient brokering connected to private insurance based treatment centers and makes it a federal crime to receive or offer illegal remunerations for referrals to recovery homes clinical treatment facilities and laboratories whereas the federal anti-kickback statute applies only to the referral of patients who are covered by federal health care programs the Recovery kickback prohibition law extends its prohibitions to any and all healthcare benefit programs in fact the federal government can now police strictly private market arrangements for conflicts of interest in addition to all the prior aspects or all the payor aspects of the Recovery kickback prohibition is also worth noting that the Recovery kickback prohibition applies with respect to the solicitation or receipt of remuneration for any referral to recovery homes clinical treatment facilities or clinical laboratories whether or not related to treating substance use disorders the broad application of the Recovery kickback prohibition to the treatment of all categories of healthcare treatment not just substance abuse treatment makes it even more important for it impacted providers including physicians own laboratories to understand and consider the eliminating kickbacks in in Recovery Act when evaluating their complaint status turrets seems like the recovery kickback prohibition law could have a significant impact on physician laboratory arrangements would that be a fair assessment you're definitely correct over the past several years there have been a proliferation of physician investor laboratory Arrangements where physicians invest and become owners in laboratories this investment arrangement can provide substantial returns for the physician investors as they control their referrals to the laboratories which in turn distribute the labs profits to the physician investor that are typically related to the volume or value of the referrals that the physician has made to the lab because of because the federal anti-kickback statute enforcement efforts have been limited to active activity involving federal healthcare program beneficiaries physicians would refer only their non federally and non-state covered patients ie their self-pay and privately insured patients to avoid implicate implicate implicating federal fraud and abuse laws the Recovery kickback provision materially changes the landscape by expanding the government's reach to private market payers laboratories that previously did not need to structure their business and operations around the federal anti-kickback statute because they did not receive money from federal health care programs now need to reevaluate and perhaps restructure their arrangements to ensure that they are addressing this new compliance risk jury recently had a federal trial in Dallas on involving a entity called the Forest Park Medical Center and it was a bribery and kickback trial but it was much more much broader than this but I wanted to get your thoughts on how you saw that case the laws that were used in that case and really the results as informing some of the challenges for the compliance pact going forward yes the Forest Park Medical Center bribery kickback trial will probably be recognized as a landmark case on April 9th 2019 the jury returned its verdict convicting seven of nine defendants in a bribery and kickback scheme however a number of the defendants claim they're going to appeal the case so we may not see the the last chapter and this in this matter yet but the federal park the Forest Park Medical Center case was tried – under the Travel Act which was it was very unusual to use that the Travel Act criminalizes a business enterprise that carries out an unlawful activity back makes it a criminal crime to remote manage establish carry on or facilitate any unlawful activity through the use of any means of interstate commerce or by traveling among the states or internationally or by using the u.s. mail the acts specifies three kinds of criminal activity they are one any enterprise involving gambling liquor in which the excise tax has not been paid narcotics controlled substances or prostitution offenses – bribery extortion or arson and three any illegal money monetary transaction excuse me federal prosecutors made the case that physicians were receiving payments based on the number of patients they funneled to Forest Park rather than the standard flat fee for co-marketing Arrangements the prosecutor said the surgeons agreed to refer patients to the Dallas hospital in exchange for money to market their practices and the advertising revenue helps some of the doctors grow their practices considerably it's interesting to note that the hospitals and doctors the hospital and doctors did not receive money from federal health care program beneficiaries is all independence and in Curren company's here that was his find a description of the Travel Act is as I believe I've heard and although this podcast does not deal with the federal crop for Incred Practices Act that is an issue that has come up several times so thanks for that and thanks for really I think in putting a wrap around why that cases could be so significant going forward and really I wanted to conclude with asking you what can we conclude from these recent events well the federal anti-kickback statute in the Recovery kickback prohibition law and the Forest Park Medical Center's conviction under the Travel Act clearly should cause hospitals physicians clinical laboratories clinical treatment facilities and recovery homes to take a close look at any type of patient referral payments whether the money is received from federal or state health care program beneficiaries or not additionally it's important to note that both the federal anti-kickback statute and the Recovery kickback prohibition law make it a federal crime to offer pay solicit or receive remuneration including any kickback bribe or rebate in connection with referrals the federal government has interpreted the terms remuneration broadly to cover anything of value there are some safe harbor exceptions but outside of those exceptions a broad interpretation of the bat of value is used so any of those entities should really look at their compliance programs to make sure they're not running afoul of any of these new standards and rulings related to kickbacks Terry unfortunately we are near the end of our time and this has been a fascinating five-part exploration I greatly look forward to continuing the conversation thanks Tom only one this is top box I hope you've enjoyed this special five-part podcast series on the current state of compliance issues and challenges which has been sponsored by Kroll a Duff envelops company if you'd like more information on kro you can check them out at www.thekingofrandom.com

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