Corporate Integrity Agreements and Exclusions from Medicare and Medicaid

According to the US Department of Health and Human Services, the Office of Inspector General (OIG) negotiates corporate integrity agreements (CIAs) with healthcare providers and other entities – as part of settlements when claims are filed under the civil False Claims Act law or similar fraud statutes.

What is the False Claims Act?

The False Claims Act (FCA) dates back to the administration of Abraham Lincoln. The FCA protects the US government from overcharges, false claims and other requests for payment that are improper or illegal. The law makes it illegal for healthcare practices, pharmaceutical companies, and other healthcare businesses to submit claims for payment to Medicare or Medicaid that the entity knows are false or fraudulent. The penalties for violations of the FCA include payment of up to three times the payment the federal program paid – and $11,000 for each claim filed.

The civil FCA provides that “each instance of an item or a service billed to Medicare or Medicaid counts as a claim, so fines can add up quickly.” FCA violations also generally include violations of the Anti-Kickback Statute (AKS) and Stark Law. Under the civil FCA, knowledge includes actual knowledge – and “deliberate ignorance or reckless disregard of the truth or falsity of the information.”

The FCA also has a whistleblower provision that encourages employees, patients, ex-business partners, and others to file FCA claims – in return for receiving a percentage of any recovery.

In addition to the civil FCA, there is a criminal FCA which can result in imprisonment and criminal fines for submitting false claims. Doctors can go to prison for violating the criminal FCA.

The OIG can impose “administrative civil monetary penalties for false or fraudulent claims, as discussed below,” for violations of the FCA, the AKS, and Stark Law.

What types of fraudulent acts can result in the filing of False Claims Act violations?

Some of the misconduct that can result in FCA claims that involve medical practices and pharmaceutical companies include the following types of false bills:

• Overcharging
• Submitting bills for services that were never provided
• Submitting bills for unnecessary services
• Falsifying test results or other billing information
• Bundling or unbundling services to obtain higher reimbursement rates
• Double billing
• Misrepresenting or making false claims about the benefits of products or services
• Failing to advise the side effects of any healthcare product

The federal health care program exclusion law

Exclusion Statute [42 U.S.C. § 1320a-7]

The OIG is legally required to exclude from participation in all Federal health care programs individuals and entities convicted of the following types of criminal offenses:

• Medicare or Medicaid fraud, and related offenses
• Abuse or neglect of a patient
• Felony convictions for “other health-care-related fraud, theft, or other financial misconduct.”
• Felony convictions for certain controlled substance offenses

If the OIG excludes you from participating in Federal healthcare programs (Medicare, Medicaid, TRICARE, Veterans Administration programs, or any other programs), then any bills you submit to these programs for items or services that you provide, order, or prescribe will not be paid.

“Excluded physicians may not bill directly for treating Medicare and Medicaid patients, nor may their services be billed indirectly through an employer or a group practice.” Additionally, “if you furnish services to a patient on a private-pay basis, no order or prescription that you give to that patient will be reimbursable by any Federal health care program.”

Medical practitioners also must ensure that the practitioners don’t employ or enter into contracts with

“excluded individuals or entities, whether in a physician practice, a clinic, or in any capacity or setting in which Federal health care programs may reimburse for the items or services furnished by those employees or contractors.”

Healthcare providers must screen “all current and prospective employees and contractors against OIG’s List of Excluded Individuals and Entities.” For more information, see OIG’s exclusion Web site.

Medical practices and entities who “employ or contract with an excluded individual or entity and Federal health care program payment is made for items or services that person or entity furnishes, whether directly or indirectly, may be subject to a civil monetary penalty and/or an obligation to repay any amounts attributable to the services of the excluded individual or entity.”

The Civil Monetary Penalties Law

The Civil Monetary Penalties Law (CMPL). [42 U.S.C. § 1320a-7a]

The OIG also has the authority to seek civil monetary penalties – based on the type of violation. The penalties range from $10,000 to $50,000 per violation.

Some examples of CMPL violations include:

• Presenting a false or fraudulent claim that the healthcare provider or entity knows or should know was improper.
• Presenting claims that the healthcare provider or entity knows or should know are for services that the provider or entity is not allowed to claim.
• Violating the Anti-Kickback Statute.
• Violating the False Claims Act.
• Violating Stark Law.
• Violating Medicare’s “assignment provisions.”
• Violating the physician’s agreement with Medicare.
• Providing information that is false or misleading
• Failing to “provide an adequate medical screening examination for patients who present to a hospital emergency department with an emergency medical condition or in labor.”

When are CIAs used?

Healthcare practices and other healthcare businesses generally agree to sign a corporate integrity agreement because, if the practices/businesses don’t, the OIG can seek to have the medical practice/business excluded from participation in Medicare, Medicaid, or other Federal healthcare programs. Since many patients use these federal programs to cover their bills, exclusion from these programs can be a huge financial setback for the participating medical practices and businesses. The CMPL laws can be quite substantial.

Generally, the CIA requires that the healthcare practice pay CMPL penalties up to a specified amount and agree to the compliance terms – in return for being able to continue billing the various federal healthcare programs.

What are the elements of a corporate integrity agreement?

Each CIA depends on the specific reason a claim was filed against the medical practice/entity. Generally, a corporate integrity agreement last for five years. Some of the common provisions include the following requirements that the healthcare practice or entity must meet:

• Hire or appoint a compliance committee to supervise the practice’s/entity’s business.
• Develop and implement standards and procedures.
• Create and implement a thorough comprehensive employee training program.
• “Retain an independent review organization to conduct annual reviews”
• Establish a confidential disclosure program so complaints and concerns can be filed without fear of retribution.
• Restrict the people who can work for the medical practice/entity to eligible workers.
• “Report overpayments, reportable events, and ongoing investigations/legal proceedings; and
• provide an implementation report and annual reports to OIG on the status of the entity’s compliance activities.”

If a medical practice or medical business breaches the terms of the corporate integrity agreement, the Office of Inspector General can impose additional monetary penalties for failing to comply with the terms of the CIA. If there is a “material breach,” of the corporate integrity agreement, the OIG can exclude the healthcare practice/entity from participating in Medicare, Medicaid, or other federal programs.

Information regarding OIG’s enforcement actions under CIAs is available here. The actions listed generally include agreements to pay money for violation of the Civil Monetary Penalties Law.

The Office of Inspector General (OIG) of the Department of Health and Human Services has the authority to exclude physicians medical practices, pharmaceutical companies, medical device companies, and other healthcare entities from submitting bills to Medicare, Medicaid, TRICARE, and other federal healthcare programs. The OIG can also authorize civil monetary penalties for violations of the Federal False Claims Act and related laws. A corporate integrity agreement can help address these enforcement issues. In return for continued healthcare program participation and possibly lower penalties, a healthcare practice or business will need to agree to a range of compliance issues that must be met for, generally, a five-year period.

Doctors, medical practices, drug companies, and other medical companies who prescribe medicines online should contact Cohen Healthcare Law Group, PC to review their legal and healthcare compliance requirements. Our experienced healthcare lawyers advise medical companies, pharmacists, and physicians about corporate integrity agreements and other compliance laws and regulations issues.