Compliance Today - Health Care Compliance Association

Volume TenNumber TwoFebruary 2008Published MonthlyMeetJames G. SheehanNew York State Medicaid Inspector Generalpage 14Also:Auditing andMonitoring, PartSix: Bringing it alltogether with goodmanagementpage 22Earn CEU creditsee i n s e rtPitfalls withDischarge StatusCode correctionspage 4Feature Focus:Prospective PaymentSystems Rulespage 26

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Pitfalls with dischargestatus code correctionsBy Frank X. SmithEditor’s note: Frank X. Smith, Principal, McBee of these 10 DRGs to another service settingAssociates, Inc. may be reached by e-mail at could receive a reduced payment.FrankSmith@McBeeAssociates.comThe initial policy applied to all dischargesAcute-care providers are experiencing dated October 1, 1998 or later. In subsequentyears, the number of DRGs subjectthe financial effects of Medicare’sPost-Acute Care Transfer (PACT) to the PACT policy has grown steadily andpolicy. Seemingly simple Discharge Status now includes 273 different DRGs. TheseCode (DSC) errors have led to extensive DRGs account for approximately 60% of allproblems with over- and under-reimbursementof claims.of the 273 DRGs receive post-acute care byMedicare discharges. Hospitals identify whichusing specific DSCs, which indicates in whatOverpayments are caught due to edits implementedby the Fiscal Intermediaries (FI), delivered (SNF, HHA etc). Patient dischargestype of post-acute care setting the service isbut no such edits identify underpayments. It that meet length-of-stay requirements andis left to the provider to identify the wrong post-discharge care requirements are subjectDSC and adjust the claim to receive the correctincreased revenue.to a formulaic reduction in reimbursement.The accurate DSC problemWhen it comes to actually making the corrections,however, a number of common pitfalls are supposed to indicate what the hospitalDSCs are established at time of discharge andmust be avoided to ensure both compliance believes will happen to a patient once theyand appropriate reimbursement. This article are discharged. However, what happens toprovides an explanation of what those pitfalls the patient after discharge is not determinedare and how you can navigate around them. by the hospital, but instead by the patient,nursing facility, or home care service provider.BackgroundThis lack of control over post-acute careWith the introduction of the PACT policy, leads to overpayments and underpayments toMedicare began treating and reimbursing hospital providers. Patients may not presentdischarged patients in 10 specific Diagnostic themselves for care, they may cancel services,Related Groups (DRGs) as transfers. These the SNF may not believe skilled care is required,or the care provider may not provide10 DRGs were initially identified because ofthe propensity of these discharges to receive the services within the prescribed time period.additional care in a post-acute setting. It is These factors occur after discharge, renderingCMS’ contention that the service the patient the initial DSC assignment by the hospital incorrectand wrong payments made by the FI.received after discharge was a shift in thedelivery of care from an acute-care settingto a less-than-acute-care setting. Because the To make sure that the Medicare program doesoriginal DRGs included the cost of this care, not overpay hospitals for incorrect coding, thethe shift in provider site resulted in an overpaymentto the hospital provider. Therefore, Working File (CWF) with claims submit-FI matches information from the Commonthe facility that discharged patients with one ted by post-acute care providers within theprescribed timeframe of a hospital’s discharge.The FI requests that the hospital revise theDSC to reflect the appropriate dischargestatus, which results in reduced payments tothe hospital.Underpayments occur when a hospitalsubmits claims to the FI with a DSC thatindicates that post-acute care will be providedto a patient and that care is not providedaccording to regulations. Unfortunately,CMS did not put corresponding edits in theCWF, so that when no subsequent claimsare submitted by post-acute providers, thehospital would receive a request to submitthe correct DSC. If the FI sent a request torevise the DSC when post-acute services arenot provided, hospitals would recoup millionsof dollars in revenue due to seemingly simplecoding errors.These reductions in reimbursement, subsequentto initial payments, have highlighted anongoing problem. Realizing that DSC errorsgo in both directions, providers are startingto address the issue that post-acute dischargeservice is not always provided as anticipated.Situations occurring after a patient leaves theprovider’s facility are not easily tracked. Providershave not established internal processesto correct DSC errors. Yet, identifying andcorrecting these DSC mistakes can mean asignificant increase in appropriate reimbursementto the hospital.Recently, hospitals, either internally or withthe assistance of external resources, have beenreviewing claims subject to the PACT policyto determine if services were truly rendered.A common approach has been to review theCWF. This approach can determine if anotherprovider has billed at some point after thehospital discharge. However, this does notprovide sufficient information to prove therehas been a true discharge and not a transfer asFebruary 20084Health Care Compliance Association • 888-580-8373 • www.hcca-info.org

defined by the PACT policy. Problems occur “No-Pay Bills”—Insufficient information in Correcting the practice of not submittingwith CMS keeping the files updated and the CWFno-pay bills will provide the CWF with moreproviders submitting timely claims.These two pitfalls exemplify the problem of complete information and will provide the FIrelying solely on the CWF as the only source with better information to identify transfersIn particular, patients admitted to a skilled in identifying and distinguishing between vs. discharges.nursing facility (SNF), present their own discharges and transfers. The issue of patientparticular problems that relate to Medicare information not getting to the CWF is being Pitfall 3—Non-covered services delivered inregulations. Several pitfalls with viewing just addressed by the 2007 OIG work plan. a skilled unitthe CWF can cause you problems down the SNFs are supposed to bill Medicare when a A patient who is discharged from a hospitalroad. The following examples highlight the Medicare beneficiary is admitted to the facilityto a SNF with the anticipation of onlyissues facing providers.whether or not there are available benefit non-skilled services being delivered can stilldays, or a three-day qualifying hospital stay. be classified as a transfer if the patient isPitfall 1—Exhausted benefitsThe applicable part of the OIG work plan admitted to a skilled bed. Medicare’s positionA patient treated for an illness that is included states:is quite clear. In the July 31, 1998 Federalin one of the 273 DRGs is discharged after Submission of Skilled Nursing Facility Register they stated:a qualifying three-day stay to a SNF. The No-Pay Billspatient receives skilled nursing care during This review will determine whether SNFs The statute does not limit application ofthe admission. However, the patient has submit “no-pay bills” as required. No-pay the transfer definition to “covered” skilledexhausted her 100 SNF days benefit and bills are submitted to Medicare without a nursing facility services. Moreover, therethere is no coverage by Medicare. The SNF request for reimbursement to track beneficiaries’are several policy reasons why we woulddoes not bill Medicare but some other insurerbenefit periods. We will also deter-not adopt such a policy. First, it would(Medicaid, commercial, private pay).mine the extent to which failure to submit place an added administrative burdenno-pay bills contributes to inappropriate upon the hospital to evaluate the patient’sBecause the SNF did not bill Medicare, no calculations of Medicare SNF eligible eligibility for covered skilled nursingsubsequent care information is included benefit periods, as well as the amount of services. Second, it would create incentivesin the CWF. A review of the CWF would inappropriate Medicare payments due to for providing non-covered post-acute careindicate that the patient was discharged and this practice. Additionally, we will identify that could potentially place beneficiaries atnot transferred, because no subsequent billing whether measures are in place to ensure medical and financial risk. Third, it wouldinformation is on file. The hospital incorrectly that no-pay bills are submitted.be inconsistent with existing transferchanges the DSC and inappropriately receivespolicy (from one acute care hospital to anotherincreased reimbursement from the FI. The submission of a no-pay bill is importantacute care hospital), which does notto CMS because it provides information limit the definition of a transfer to thosePitfall 2—No qualifying three-day stay necessary to help determine the end of a spell cases in which a patient receives MedicarecoveredThis example uses the same scenario as above of illness, and consequently, when a new spellservices at the receiving hospital.with one exception—the hospital stay was of illness can begin. The new spell of illness Finally, the basic rationale for the transferonly two days. Because the patient does not provides new benefits to patients. The OIG policy (that is, adjusting hospital paymentshave a three-day qualifying stay, the stay is believes that no-pay bills are not submitted to reflect reduced hospital costs due to dischargenot covered by Medicare and the SNF does and that a new spell of illness is establishedto a post-acute care facility) appliesnot bill. Again there is no subsequent billing prematurely, thus costing the Medicare programregardless of whether the post-acute care isinformation in the CWF and the patient’ssignificant revenue.covered by Medicare.release from the hospital is mistakenlyidentified as a discharge and not a transfer. A A side benefit of focusing on no-pay bills to Therefore, our final regulations providechange to the DSC will result in an overpaymentthe Medicare program is the identification that all discharges from the 10 specifiedto the hospital.that post-acute service was provided even DRGs admitted to a skilled nursing facil-when the stay was not covered by Medicare.Continued on page 7Health Care Compliance Association • 888-580-8373 • www.hcca-info.org5February 2008

Every day, clinical and researchprograms face pressure toenhance operations and strengthencontrols and compliance.Intense government focus on fraudand abuse as well as the enhancementof compliance programs are criticalareas for all healthcare organizationsand research sites.Huron can help alleviate these pressures. Withmore than 40 experienced professionals devotedto healthcare compliance and clinical researchsolutions, our team is well prepared to help youbenefi t from our expertise. Our services include:• Investigations• Operations improvement• Responsible conduct of research• Budgeting, contracting, and Medicarecoverage analysis• Accreditation Process• IRB and Human Research ProtectionsCompliance• Medicare Coverage Analysis (MCA)• Documentation, coding, and billing services• Compliance effectivenessHuron Consulting Group helps clients effectively address complex challenges that arise in litigation, disputes, investigations, regulatory compliance, procurement,financial distress, and other sources of significant conflict or change. The Company also helps clients deliver superior customer and capital market performance throughintegrated strategic, operational, and organizational change. Huron provides services to a wide variety of both financially sound and distressed organizations, includingFortune 500 companies, medium-sized businesses, leading academic institutions, healthcare organizations, and the law firms that represent these various organizations.www.huronconsultinggroup.com1-866-229-8700© 2008 Huron Consulting Group Inc. All Rights Reserved01/08

Pitfalls with discharge status code corrections ...continued from page 5ity will be defined as transfers, regardless ofthe coverage status of that admission.Here the CMS has clearly stated that it isnot the level of care received, but where theservices are delivered that dictates a dischargeor transfer. However, complicating the issuein making a discharge/transfer determination,some facilities are 100% Medicare certified,but use the beds for both skilled and nonskilledpurposes, as needed.Once again the OIG focus on no-pay billswill close this information gap. Because theno-pay bill is not submitted, the total informationneeded is not contained in the CWFor hospital records.How to truly avoid pitfalls and safeguardyour facilityFor a retrospective review of PACT discharges,whether you use internal or externalresources for identifying and recouping reimbursementfrom incorrect coding of DSCs,appropriate steps must be taken to obtain theinformation available.A look at the new 2008 OIG Work Planshows the impetus to review this practice andensure that the hospitals are compliant withMedicare’s transfer policy:determine whether claims were appropriatelycoded.Remember the CWF is flawed to the pointthat the OIG is making it a focus of review.In 2008 the OIG is looking at the hospitalpractice of coding (and changed coding) ofdischarges. Therefore, it is important to gobeyond the CWF when reviewing PACTclaims. Contacting those providers in caseswhere there is not a clear-cut answer as towhether or not the patient was dischargedor transferred is a critical component in maintainingcompliance integrity and ensuringappropriate reimbursement.To protect your hospital, before changing aDSC, ask the SNF post-acute provider forthe following information to make sure youhave a true discharge:n Was the patient admitted to the facility?n When was the patient admitted? (Mustbe the same day as discharge, with specialexceptions relating to time of dischargeand travel time)n Was the patient admitted to a skilled ornon-skilled unit?n Is the facility also the patient’s home?n Is the facility billing Part A or Part B forservices?n Is your facility 100% Medicare certified?support for change is not consistent withgood compliance practice. Making dischargestatus follow-up with the admitting providerpart of your compliance process results inidentifying appropriate lost payments andavoids potential compliance pitfalls. nBe Sure to GetYour CHC CEUsInserted in this issue of ComplianceToday is a quiz related to this article:“Pitfalls with Discharge Status Code corrections”by Frank X. Smith, beginningon page 4.To obtain your CEUs, take the quiz andprint your name at the top of the form.Fax it to Liz Hergert at 952/988-0146,or mail it to Liz’s attention at HCCA,6500 Barrie Road, Suite 250,Minneapolis, MN 55435. Questions?Please call Liz Hergert at 888/580-8373.Compliance Today readers taking theCEU quiz have one year from thepublished date of the CEU article to submittheir completed quiz.We will review coding of claims submittedby hospitals for erroneously codeddischarges that should have been coded astransfers. Pursuant to Federal regulationsat 42 CFR § 412.4 (e), a hospital discharginga beneficiary is paid the full DRGpayment. In contrast, under 42 CFR§ 412.4(f), a hospital that transfers abeneficiary to another facility is paid agraduated per diem rate, not to exceed thefull DRG payment that would have beenmade if the beneficiary had been dischargedwithout being transferred. We willResponses to these questions can give youan indication as to whether you are dealingwith a transfer or a discharge. Sometimes youreceive seemingly contradictory responses(patient is admitted to skilled unit and notbilling Part A) and may require furtherinvestigation.Beware of changing the DSC without takingthese steps. Don’t forget that your medicalrecords probably indicate that an admissionto a SNF or home care was the appropriatedischarge status. Using the CWF as your onlyHealth Care Compliance Association • 888-580-8373 • www.hcca-info.org7February 2008

SAVE THESE DATES!Same Week,Same City,Same HotelQuality of CareComplianceConferencePhiladelphia, PASeptember 28-30The Quality of Care ComplianceConference focuses on organizationalchange: improving quality andcompliance for your organizationwithout forgoing the business model.PhysicianPracticeComplianceConferencePhiladelphia, PAOctober 1-3Physicians, compliance officers, codersand managers will learn to manage aneffective compliance program. Learnabout compliance program developmentand management as it relates tophysician practices; current governmentinitiatives in health care compliancespecific to physicians and their grouppractices; correct documentation, billingand coding practices for physicians;and best practices utilized in physicianpractices.Visit www.hcca-info.org for more informationcertified inCHChealthcarecomplianceThe Compliance Certification Board (HCB) compliance certificationexamination is available in all 50 states. Join your peers and becomeCertified in Healthcare Compliance (CHC).CHC certification benefits:n Enhances the credibility of thecompliance practitionern Enhances the credibility of thecompliance programs staffed bythese certified professionalsn Assures that each certifiedcompliance practitioner has thebroad knowledge base necessaryto perform the compliancefunctionn Establishes professionalstandards and status forcompliance professionalsn Facilitates compliance workfor compliance practitioners indealing with other professionalsin the industry, such asphysicians and attorneysn Demonstrates the hard workand dedication necessary toperform the compliance taskSince June 26, 2000, when CHCcertification became available,hundreds of your colleagues havebecome Certified in HealthcareCompliance. Linda Wolverton,CHC, says she sought CHCcertification because “manyknowledgeable people work incompliance and I wanted my peers torecognize me as one of their own.”For more information aboutCHC certification, please call888/580-8373, e-mail ccb@hcca-info.org or click on the CCBCertification button on the HCCAWeb site at www.hcca-info.org. nThe ComplianceProfessional’s CertificationCongratulations on achieving CHC status! TheCompliance Certification Board announces thatthe following individuals have recently successfullycompleted the Certified in Healthcare Complianceexamination, earning CHC designation:David Carey Alexander Sally L. MaherDon Bryce Billingsley Christine McMahonBarbara Markus Briggs Mary Elizabeth McCabeScott Matthew Clark Dan L. McCulloughKeoki Leon Clemente Angela FornataroMary Alice DentonMcMahillShelby A. DiedeCheryl Jean MurphyCecile M. EderKathleen M. NaughtonCharlotte EdwardsNancy Kay PattonEvelyn Kari EggerAlex PerezPenny EwingLorraine S. PhillipsJana K. FeinTimothy M. PowersBrian FershtmanSusan M. PrestonMyra Pate FieldsDara S. QuinnGlenda FlancerTeresa R. Ramos-AlvarezMert GambitoRoya RezaiChristopher R. GingrasRick L. RhewKathy HarlanMichele LucilleAdam I. Hayden RobinsonPatty L. Hefner Mary M. SacilottoMarian Hughlett Michael Robert ScottTonya R. Hunt Maureen ShawJill Jacobs James Michael ShookKimberly K. Johnson Martha SikkensLinda E. Johnson Steve S. SmithJuakena Johnson Joan SpieglerGregory V. Kerr George K. StaceyNeeru K. Khanuja Chel SvendsgaardL. Todd Landreneau Cynthia Adams TrappDonna Maria Lawlor Irene TsaiRobert Scott Libberton Larry VarelaDiane B. Liepins Debrah Diane WonderDonna V. Lupinacci Diana E. WyattFebruary 20088Health Care Compliance Association • 888-580-8373 • www.hcca-info.org

Setting up an Office ofResearch ComplianceBy: Amy LaTulipe, CPA, CIA and Mariana Pope, JD, MPHEditors note: Amy L. LaTulipe is SeniorManager of Research Compliance and MarianaPope is Manager of Research Compliance withThe Methodist Hospital Research Institute inHouston, Texas. Ms. LaTulipe may be reachedat 713/441-5840 and Ms. Pope may be reachedat 713/441-1791.Maybe you are new to research,maybe your institution is justbeginning to perform research,maybe your institution is expanding itsresearch program, or maybe your institutionhas just come to the realization that compliancein research is important. No matterthe reason, you now find yourself with theresponsibility of establishing an Office ofResearch Compliance. Where should youstart? What is the best model? What arethe pitfalls? These are all questions that youshould be concerned with, and which we willcover in this article.Set goalsBefore you can begin to establish the office,you must ensure that you have a comprehensiveunderstanding of research and its administration.If you feel that you do not have thisexpertise, it is wise to involve experts to ensurethat you consider and address all the relevantareas. Armed with this background, you mustfirst determine the goals of the office, whichwill drive everything else. No single “rightanswer” covers what the goals should be; indeciding the goals, you must appreciate theenvironment in which the office will function.Some questions to ask are:n Will this office oversee all areas of compliancein research or will other offices withinresearch administration have complianceresponsibilities (e.g., human and/or animalprotections; grants and contracts)?n Is there a general Compliance office? If so,will this new office fall under the generalCompliance office or be separate?n Is the institution part of an academicmedical center, part of a public or privatehospital system, or part of a teachinghospital?n Is the institution a State institution?n Do you receive federal funding for research?n Does your institution treat Medicarerecipients?n What types of research will be done inyour institution?n Will the research involve humans?Animals? Stem cells? Radiation? Selectagents? Recombinant DNA?n Will your institution manufacture drugs ordevices used in the research?n Will you operate in an open or closed system?The answers to these questions and others willimpact the goals, and thus, the setup of theoffice. Your ultimate goals might be as broadranging as oversight for all areas of compliancein research or it might be very specific,such as overseeing compliance with humansubjects protection.Decide on areas of coverageOnce you have decided on the goals of theoffice, you can begin to determine your areasof coverage. Based on the ground work youdid in determining your goals, you knowthe types of research your institution willperform. Some common areas to considerinclude: Will the office:n Be responsible for the provision of StandardOperating Procedures (SOPs) forresearch?Health Care Compliance Association • 888-580-8373 • www.hcca-info.orgn Oversee implantation plans to areas performingresearch?n Be responsible for receiving and managingconcerns and complaints?n Oversee research misconduct investigations?n Provide monitoring of clinical trials?n Audit individual research trials (bothbasic and clinical)? Will these audits berandom, for cause, or both?n Audit research administration functions(e.g., ensuring that all personnel listedon a study have undergone the researchcredentialing process)?n Be responsible for providing educationprograms?n Be responsible for Conflicts of Interestreporting and management? Will aConflicts of Interest Committee need tobe established?n Oversee, assist in, or review research billing?n Handle special issues relating to drugsand devices, such as investigational newdrugs or investigational device exemptions(INDs)?n Be responsible for regulatory oversightand coordination for various committees,such as the Institutional Review Board(IRB), Institutional Animal Care and UseCommittee (IACUC), Institutional BiosafetyCommittee (IBC), and HazardousSubstances Committee (HSC)?n Will the office have responsibility forHIPAA privacy provisions?Certainly, this list is not all inclusive. Considerwhat areas of coverage are relevant to yourinstitution and research compliance office.Determine the reporting structureYou know your goals, and you know yourareas of coverage. Now you must determinethe reporting structure for the area. Some ofthe biggest considerations are how the officewill interface with other offices and howContinued on page 129February 2008

HCCA’s 2008Join your colleagues in New Orleans for HCCA’s 2008 Compliance Institute—the single most comprehensive compliance conference designed specifically tomeet the needs of today’s health care compliance professionals and their staff.The 2008 Compliance Institute will be held at the Hilton New Orleans RiversideHotel from April 13–16, 2008. Please visit our Compliance Institute Web site atwww.compliance-institute.org or www.hcca-info.org for more details.Register Between February 1 & 29 and Receivethe 2008 OIG Workplan Audio ConferenceA 2 PART Audio ConferenceSAVE $370BROAD SPECTRUM OF SPEAKERSRepresenting Policymakers, Enforcement Officials,Practicing Lawyers, Active Compliance and Privacy OfficersSESSIONS AT THE COMPLIANCE INSTITUTEwill offer the latest compliance information on thehottest topics and current events in compliance.February 200810

VolunteerWe Want You!Here’s your chance to help the peopleof New Orleans. Join HCCA and yourcompliance colleagues in giving backto the community with the New OrleansArea Habitat for Humanity.Lewis Morris, Chief Counsel,Office of Counsel to the Inspector GeneralRoy Snell, CEO,Health Care Compliance AssociationVolunteer with HCCAand the New OrleansArea Habitat forHumanityDate: Saturday, April 12, 2008Time: 7:30 am – 3:00 pmWhat’s Included?1. Continental breakfast2. Transportation to andfrom the location3. A water bottle4. Lunch5. A rewarding community serviceand networking experienceLearn More and Sign UpFor more details on this greatopportunity, visit the Institute’s Website at www.compliance-institute.org.Ready to sign up to volunteer, orwant more information? ContactJennifer Jansen at 952-405-7922 orjennifer.jansen@hcca-info.org.Space islimited:Sign uptoday!If you kindly wish to make a contributionto the New Orleans Habitat for Humanity,please call 504-861-2077.New Orleans Area Habitat forHumanity is a well-known organizationthat builds simple, affordable homes that aresold to homeowners with long-term, interest-freemortgages. Families otherwise notable to own a home are able to build a betterfuture for themselves and their children.Since 1983, NOAHH has completed over 185homes with and for families in need, helpingto house hundreds of people. Due to the devastationincurred by Hurricane Katrina, theyhave greatly increased the size of their staff andthe scope of their project, completing 35 newhomes during the summer of 2006 alone.The majority of volunteers, many with noprior experience, work directly on-site buildinghomes. At the worksite, experiencedstaff and volunteers teach and guide the newvolunteers.A Letter from a Volunteer withSCCE’s ProjectI attended the SCCE conference in Chicago in2006, benefited greatly from it and structuredour company’s compliance function largelyfrom the information from that conference.The conference this year, however, far surpassedanything I had ever experienced at anysuch event. This was largely, and maybe solely,due to being able to participate in the volunteerday with Habitat for Humanity. Comingtogether with a group of colleagues and climbingaround in the rafters to piece together theplywood on the roof created an unexpectedbond with a core group of conference participants.As the conference progressed, I foundthat this teamwork and bonding allowed amuch richer and deeper experience at the conferenceitself. I am grateful that I took the extraday to participate in the volunteer effort andlook forward to doing it again.Dev-Suroop K. KhalsaChief Compliance OfficerAkal Security, Inc. | www.akalsecurity.com

Setting up an Office of Research Compliance ...continued from page 9boundaries and communication protocols willbe established. What will need to be reported,to whom, when, how, and how often? Theoffice may not need the level of independencethat an Internal Audit office wouldneed, but a certain degree of autonomy and“arms length” reviews are essential. To ensureeffective compliance, the office needs to beempowered to accomplish its goals withoutthe appearance of restrictions or forced directionby senior administration. Some form ofreporting to the Board or a Board sub-committeeshould also be in place.Obtaining buy-in is just as important to thesuccess of the office. You should be workingwith other areas in developing the goals,coverage, and structure of the office, but itis crucial that, before pressing onward, youreceive the final agreement of administrationand the other offices with whom youwill interact. The next step is to memorializeyour understanding of all things the office ismeant to accomplish in operating policies andprocedures. These will guide you and othersensuring that compliance is overseen as youintended.What next? Get Going! Hire experiencedpersonnel sufficient to accomplish your goals,assess your risks, and implement your policiesand procedures. As time goes by, you willneed to keep abreast of new developments,which can be a challenge in and of itself. Youshould also audit your office and retool yourprocesses as needed. Time means change. Beready for it!Potential obstaclesNetworking and discussions with manyresearch compliance professionals haverevealed several common barriers that youmay encounter. By recognizing them andunderstanding possible solutions, you may beable to avoid these pitfalls:n Political pressures regarding structure,ownership, and boundaries. The creationof a new office can often make individualsin existing offices uncertain about changesin the scope of their responsibilities andmay foster feelings of lost power. It is bestto approach this issue head on. As we indicatedpreviously, involve these individualsearly in the process. If they are involved inthe decision making, they are less likely tofeel threatened. Honesty and openness canhelp keep walls from going up in the firstplace. View these individuals as resources,rather than barriers, and it can be a selffulfillingprophecy.n A lack of qualified personnel andlimited support, both financial andadministrative, for necessary operations.This can be one of the most difficult barriersto overcome. Qualified personnel canbe found, but do not be afraid to thinkoutside of the box. You may look to studycoordinators, research administrators, orassistants, monitors, and internal auditors.Many times you can find someone lookingfor a change. To obtain administrativesupport you will have to sell the importanceof your function to senior officials.If they can see the value to the institution,they will support your decisions. Financiallyspeaking, not a lot of informationis available regarding the optimal numberof full-time employees (FTEs) in creatingthis type of office. Because a variety ofinstitutions and structures are employed, itwould be almost impossible to find meaningin the data, if it did exist. The only realapproach is to justify your needs based onthe stated goals. Let’s say your office willperform routine and for-cause audits as apart of its duties. You plan to audit 5% ofall trials annually. You find from your datathat your average audit takes about 100man-hours. Simply determine the numberof trials, the amount of time each FTE isavailable for auditing, and do the math.This type of justification may take sometime, but having numbers to back up youranalysis is key.n Difficulty in identifying best practices,finding training, and keeping up withemerging trends. Unfortunately, there arefew good answers here. Most institutionsare struggling with the same issues. Onthe plus side, groups such as theHealthCare Compliance Association (HCCA)and Public Responsibility in Medicine &Research (PRIM&R) have recognized theneeds and hold conferences and trainingon topics of interest in research andcompliance. Perhaps the most importantthing you will take away from thesemeetings are the contacts made throughnetworking. Input from new contacts canbe invaluable.Our exampleClearly, establishing a Research Complianceoffice is a complex task. How, then, did wego about doing it? First and foremost, it isimportant to understand the environment inwhich our office was developed. Our officeresides in a research institute (a separate legalentity) that is affiliated with a hospital system.In its capacity, the research institute providesoversight of all research conducted within thehospital system. Within the research instituteare the following administrative functions:Office of Research Compliance; Office ofGrants and Contracts; Office of ResearchProtections; Office of Laboratory Operations;Office of Intellectual Property and TechnologyTransfer; Academic Office of ClinicalTrials; and Office of Research InformationTechnology. In our case, the Research Complianceand Research Protections offices arepurposefully two distinct offices. This allowsus to conduct research compliance functionsat arms length, rather than under the auspicesof a regulatory committee, such as the Institu-February 200812

tional Review Board (IRB) or InstitutionalAnimal Care and Use Committee (IACUC).Practicing within the system, we have ourown physician organization employees, privatephysicians, and physicians affiliated withother institutions. This “open model” formatis a complex one, from a research standpoint,in that we provide oversight for all researchthat occurs within the system. Our officeworks closely with the Business Practices Office,which provides compliance oversight forthe entire system. Because research oversightis not limited to our direct employees, wemust consider how our policies and procedureswill apply to all personnel conductingresearch in our system.Armed with this information, we systematicallywent about building the office from theground up. The first step in developing ouroffice was to establish our goals. Our officewas developed to ensure the responsibleconduct of research. In its capacity, the officeis responsible for the broad oversight of allresearch compliance. Our office also worksin conjunction with other offices that areresponsible for specific compliance areas (e.g.,IRB review and approval, time and effortreporting, etc.). Areas of coverage for ouroffice include:1. Good Clinical Practices (GCP) StandardOperating Procedures (SOPs), and policieswithin our office;2. Formal audit program;3. Formal education program;4. Research Conflicts of Interest Committee;5. Formal process for managing researchconcerns/complaints;6. Formal process for managing allegationsof research misconduct;7. Special projectsA vital part of our office is the disseminationof GCP SOPs across all departments.Implementing GCP at clinical research sitescan be challenging, and education is a keycomponent in establishing GCP. Our officepurchased a standard set of GCP SOPs andthen modified them to fit each department’sneeds. As new departments join the hospital,we personally meet with the departmentadministrator and provide an orientation tothe GCP SOP binder. We also ensure that allresearch personnel within the department arefamiliar with these procedures by having eachperson sign and date a Training Complianceform, which is then filed at the front of thedepartment’s GCP SOP binder.Ultimately, we will have a comprehensiveaudit program in which we plan to audit bothclinical (human subjects) and basic (animaland bench) research. In considering theselection of studies to be audited, our officeadopted a risk-based approach and developeda risk matrix to identify potential studies foraudit. For example, an investigator-initiatedstudy in which the physician holds the INDis weighted more heavily than an industrysponsoredtrial where the company holds theIND. Crucial to a successful audit programare comprehensive audit tools, which allowthe auditor to systematically review the studyusing appropriate criteria. Our office hasdeveloped several audit tools, including onedesigned for auditing clinical research. We arealso working on the development of a tool forauditing basic research. The goal of our auditprogram is non-punitive. We strive to focuson identifying aggregate areas of concern foreducation programs. Throughout the courseof the audit, we proactively work with thestudy team to correct any action items on areal time basis and offer additional on thespot training. Our aim is to deliver an auditreport in which most findings have beenresolved. Our audit findings are, for the mostpart, kept confidential, with certain itemsnoted for compilation in a report that trendsthe information. This trending allows the institutionto identify areas of weakness, and inresponse, offer education and training to thebroader research community. We believe thatour audit program better prepares the studyteam for outside audits.In conjunction with our formal audit program,we established an education programfor the research community. Our ClinicalResearch Education Series is held monthlyand covers an array of topics. Recent topicsincluded: Considerations for ObtainingInformed Consent, Preparing for an FDA Audit,and Conflicts of Interest in Research. It isimportant to choose timely topics that will attracta large audience. Attracting good speakersis key, so if your budget allows, consideroffering an honorarium. Equally important isoffering continuing education credits (CEUs).Our series offers the following continuingeducation credits when possible: ContinuingMedical Education (CME), ContinuingNursing Education (CNE), Association ofClinical Research Professionals (ACRP),and Society of Clinical Research Associates(SoCRA). By offering a variety of CEUs, wehave been able to attract physicians, nurses,research coordinators, regulatory coordinators,and even pharmacists to our monthlysessions.Our office also established a ResearchConflicts of Interest Committee (RCOIC).Our system Business Practices Office hasan established Conflicts of Interest (COI)Committee, but it was decided that researchconflicts would be better handled by thosewith focused expertise. The RCOIC membershipincludes physicians, research administrators,representation from Business Practices,and legal counsel (non-voting). One of themost complicated tasks that the RCOIC hasdealt with to date has been writing the COIContinued on page 43Health Care Compliance Association • 888-580-8373 • www.hcca-info.orgFebruary 200813

feature articleMeet James G. Sheehan, CCEPNew York State Medicaid Inspector GeneralFebruary 200814Editor’s note: Frank E. Sheeder, Partner in theDallas, Texas office of Jones Day, conducted thisinterview with James G. Sheehan, New YorkState Medicaid Inspector General. Mr. Sheehanmay be reached by telephone at 518/473-3782.FS: Can you please give a quick summaryof your background and current position?JS: Sure.n 27 years as an Assistant U.S. Attorney, inpositions of increasing responsibility;n Last five years as Associate U.S. Attorneyfor Civil Programs, responsible for majorcases and program initiatives;n Handled major cases in environmentalenforcement, savings and loan fraud, andconsumer frauds early in my career.n Primary experience since late 1980’s hasbeen in health care, where I handled orsupervised over 500 cases. These casesresulted in recoveries of over $700 millionfor the federal government. In health care,we worked with whistleblowers and theircounsel in virtually every major case. Wealso declined more whistleblower casesthan we prosecuted.In February, 2007, Governor Spitzeroffered to nominate me to the position ofMedicaid Inspector General in New York,and U.S. Attorney Pat Meehan, after discussionswith the governor, agreed to allow meto be detailed as a federal employee to NewYork for the position. In June, the New YorkSenate confirmed me to the position. InSeptember, I decided to leave federal service,and work only for New York.The Office of Medicaid Inspector Generalis brand new. It was created by ExecutiveOrder in February 2006 and made permanentby legislation in July 2006. It went intooperation in the fall of 2006 and assumedthe program integrity function previouslyperformed by the Department of HealthOffice of Medicaid Management. It has 400employees, with authorization to hire over250 additional employees in the next fivemonths.FS: You were doing well at the federallevel. You were considered a “thought leader”on federal enforcement initiatives, and hadbeen there a long time. What factors led youto decide to accept the job as the New YorkInspector General?JS: We had just finished a six-year longinvestigation and case against Medco HealthSolutions, which was resolved on the eve oftrial for $155 million, as well as an extensiveconsent decree governing their businesspractices. It was a hard-fought case againstable opposing counsel. A significant part ofthe case was proving “knowing” submissionof false claims relying on corporate businesspractices and the failure to have an effectivecompliance program to detect false claims,several years before the end of the litigation.My perception at the end of the case wasthat promoting effective compliance efforts,and identifying organizations who failed toHealth Care Compliance Association • 888-580-8373 • www.hcca-info.orgprevent systemic bad practices, could be bothmore effective and more timely at the regulatoryand audit level, rather than in prosecutions.The limits of the regulatory/audit processlay primarily in the lack of attention andpolitical support to these efforts at the statelevel, and the power and sophistication ofbusinesses like Medco and other large healthcare organizations in state regulatory efforts.Medco was a regulated entity, a potential orpresent source of hundreds of high-payingprofessional positions in a clean industry,and a potential employer for state employeesinvolved in regulation. Several state pharmacyboards had a Medco representative as a member.None of these sources of power was illegal,but in the absence of strong political andexecutive support for fraud and regulatoryefforts, the balance of knowledge and powerin state regulation was difficult to maintain.

I first read extensively about AttorneyGeneral Spitzer’s approach to public policyin an extensive profile in The New Yorker.From then on, I followed Governor Spitzer’scareer as the New York Attorney General,and was greatly impressed with his focus andability to effect institutional changes throughcareful factual development and negotiation,and his attention to the structure of the businessesand customers involved in his cases.He was creative and practical, and willing totake on tough political challenges. He attractedand supported talented and independentpeople to work with him, and pushed themhard to get to good results. He achievedsignificant changes against strong and determinedopposition. When Governor Spitzeroffered me this opportunity, I accepted itenthusiastically.Patrick Meehan, the U.S. Attorney forwhom I most recently worked in Philadelphia,has long been interested in institutional changeas well, supporting reforms of the pharmacybenefit management industry, as well as leadinginitiatives on predatory and subprimelending, managed care, pharmaceutical fraud,quality of care, and institutional public corruption.My former colleague Amy Kurland fromhis office has just been named as the InspectorGeneral of the City of Philadelphia, and myformer colleague Joan Markman has just beennamed as the Contracting Integrity Officer ofthe City—appointments which Mr. Meehanassisted and supported. He worked with GovernorSpitzer to obtain Department of Justiceapproval for my assignment to New York, at atime when the Department was preoccupiedwith its own difficult issues. My family isoriginally from New York, and my mother andsister still live there, so the idea of moving backwas appealing.FS: What are the political, economic, andmarket forces that brought your position intobeing?JS: The Office of Medicaid InspectorGeneral exists because of the New YorkTimes, and the New York legislature. RichardPerez-Pena of the New York Times wrote adetailed series of stories in 2005 about NewYork’s Medicaid program, which he pointedout, was the largest in the country by far,but lacked any effective system to preventthe significant program abuses he identified.A hard-hitting legislative report concludedthat Medicaid was a huge program withoutany clear purpose or management. GovernorSpitzer made reform of the Medicaid programa centerpiece of his 2006 campaign.The Office has been the beneficiary ofbipartisan support, and there is recognitionthroughout New York that we need to takeaggressive steps to assure that the expendituresin this program are made for legitimatepurposes and to provide quality care. TheDepartment of Health’s Office of HealthInsurance Programs has been very supportiveof the joint effort to assure that programintegrity issues are addressed in programdesign and management. CMS has offered itsassistance and support.In 2006, New York agreed with CMS (inreturn for certain initial funding) that wewould recover over $1.6 billion from overpaymentsbetween 2007 and 2011, and that wewould pay back any shortfall. This obligationhas focused attention and effort on ourrecovery efforts.FS: How does working at the state leveldiffer from the federal environment?JS: State government is much closer to thepeople we serve, and has fewer moving parts,which means fewer people to say “No” beforesomething can happen. I first worked ingovernment in Albany, NY in the 1970s, andwas very impressed with the professionalismand commitment of the civil service peoplewithin state government. In my new position,I have found the same professionalismFrank E. SheederHealth Care Compliance Association • 888-580-8373 • www.hcca-info.organd commitment.I also enjoy being able to pick up thetelephone and call individuals at any level ofstate government to address problems quicklywhen they arise.FS: Your position and office are new. Canyou please outline your blueprint for youroffice from a staffing standpoint?JS: This office has been fortunate to bringon four very experienced Deputy InspectorsGeneral to direct functional areas:Michael Little was most recently theDeputy Inspector General for Investigationsin the federal Office of Inspector General,HHS. He brings over 20 years of experiencein managing professional investigatorsand complex investigations. He began hislaw enforcement career in New York City,and will be based there with OMIG (Officeof Medicaid Inspector General). He willoversee the Bureau of Investigations andEnforcement, which is responsible for investigations,program suspensions and exclusions,and addressing hotline complaints and outsidereferrals.John Foley was most recently the head ofthe health care consulting practice at ParenteRandolph, Pennsylvania’s largest accountingand consulting firm, where he specialized inMedicare and Medicaid fraud matters. HeContinued on page 17February 200815

HCCA Needs You!The Health Care Compliance Association (HCCA) is seeking authors for Compliance Today.We are especially interested in articles covering compliance concerns related to the followinghealth care segments:n Managed Caren Physician Practicesn Long-term Care/Nursing Homesn Laboratoriesn Home Caren Mental Health Clinics and Hospitalsn Hospicen Alcohol and Substance Abuse Treatment Facilitiesn Ambulatory Surgery Centersn Research/IRBn Assisted Livingn Medical Device Manufacturersn Ambulance/Transportation Servicesn Durable Medical Equipmentn Behavioral Healthn Physical and Occupational Therapyn Rehabilitationn Pharmaceutical Manufacturersn Hospitals and Health SystemsCompliance 101 column: As you know, in each issue of Compliance Today we publish articles geared toward the newer compliance officer andcompliance staff. Please send us your topic ideas with deadlines selected from the list below.Articles generally run between 1,250 and 2,500 words; this is not a limit, just a guide. Compliance Today uses the Chicago Manual of Style. Werequire footnotes to be 10 or less We require footnotes to be 10 or less. All references must appear at the end of the article. Please do not use thefootnote feature in Word. The author’s contact information must be included in the article as well as the article title. Articles should be submittedas a Word document with very limited formatting. Anyone interested in submitting an article for publication in Compliance Today should sendan email to margaret.dragon@hcca-info.org which includes the article topic and deadline selected from the list below.IMPORTANT: For those who are Certified In Healthcare Compliance (CHC), please notethat HCCB awards 2 CEUs to authors of articles published in Compliance Today.Upcoming Compliance Today Deadlines:n March 25, 2008n April 3, 2008n April 20, 2008Please contact Margaret Dragon (e-mail margaret.dragon@hcca-info.org or phone: 781/593-4924) if you are interested in writing articles forpublication in Compliance Today. All suggested topics are welcome.

Meet James G. Sheehan ...continued from page 15brings over 38 years experience in accounting,auditing, and health care consulting.He began his accounting career in New YorkCity with the firm of Deloitte (formerlyHaskins and Sells). He will oversee the auditpractice.Sharon Miller was most recently seniorcounsel with the Office of the MedicaidInspector General. She brings over twentyyears of experience in litigation, management,and representation, both of state agenciesand of individuals like Medicaid beneficiarieswho must rely on those state agencies.She began her legal career representing farmworkers in Pennsylvania and North Carolina.She will oversee the legal practice.John Murray was most recently with theDepartment of Health overseeing the nation’slargest Medicaid claims and data system. Hehas over 30 years experience as a civil servantin positions of increasing management andsystems responsibility. He will oversee personnel,administration, budget, and planningfor the office.The office also has a First DeputyInspector General, Robert Hussar, who hasexperience as a practicing compliance officerwith Northeast Health Systems, as a practicinghealth care attorney, and as an expertin regulation with the Governor’s Office ofRegulatory Reform. He was most recentlyActing Inspector General and Acting Counselof OMIG.We will nearly double the size of this agencybetween 2006 and 2009, assuming that presentfunding continues. The increased staff willbe involved primarily in audit, investigations,data mining, and data systems. We will alsorequire additional attorneys to advise anddefend on our audits and investigations. Wewill need to significantly increase our presencein the New York metropolitan area, wheremost of the Medicaid funds are spent—changinga history of centralization in Albany.We are investing significant time andeffort in developing model compliance programs(which are mandatory in New York forcertain providers) and working with industryadvisory committees to assure that the complianceprograms are useful and reasonable.We are working closely with theDepartment of Health on assuring that rulesand policies are reasonable and clear, and thatthe Medicaid program is patient-centered andrun efficiently and fairly.We are collaborating with specialized agencieswhich oversee mental health, substanceabuse, and developmental disabilities toimprove the oversight and cost effectivenessof their programs.We expect to, at minimum, double thenumber of audits in 2008 from those initiatedin 2007, and to shorten the time toaudit completion by 50%. We expect a majorincrease in the number and quality of fraudreferrals to MFCU (Medicaid Fraud ControlUnits) during 2008. We will have several majordata mining initiatives, which we expectto announce in the first calendar quarter.FS: Because I’m from Texas, I have to askwhether this means New York is followingwhat the New York Times has called the“Texas Model.” If so, I need to let you knowthat’s no surprise to us in the great state ofTexas.JS: Our office is based explicitly on theTexas Model. Texas was the first state to havea Medicaid Inspector General, Brian Flood,who testified before the New York legislaturewhen the legislation was being drafted. I sawBrian in Texas in April before I started here,and invited myself to spend three hours withhim in his car on the way back from Houstonto Austin for an intense seminar on inspectorgeneral life. He has been a generous source ofinformation, advice, and ideas from the firstday, for both me and OMIG staff. Texas didit first, we hope to do it even better.FS: You will obviously have significantmanagement responsibilities as you gear up.Will you still be able to roll up your sleevesand get personally involved in cases?JS: I will be responsible for an agencywith over 600 employees and significantstatutory employees. My expectation is that,although I will be involved in developing casearea initiatives and that Mr. Hussar and I willbe available for initial discussions of sensitivevoluntary disclosures and whistleblower actionswith outside counsel, our highly trainedand motivated staff will be given significantautonomy to handle their own cases andaudits, once the matters are opened.FS: What are your priorities for the kindsof cases you will bring?JS: Given the commitment made by thestate of New York to CMS in 2006 (whichrequires us to recover over $200 million infederal fiscal year 2008), our first prioritymust be to identify matters presently in thesystem or capable of prompt development,which will result in substantial recoveries.For the longer term, we are looking closelyat four areas:1) Projects identified through our dataminingefforts. New York has the largestMedicaid database in the country, withover $200 billion in claims history accessiblein our data warehouse. In addition tosignificant in-house efforts, we have engagedone contractor, Maximus, whose report weexpect shortly. We have a pilot project witha second contractor, and we are talking to arange of experts on data mining concepts andapproaches. Data mining can capture simpleissues, like billing for deceased patients, orprenatal care for males; it can also identifymore subtle issues, like DRG assignmentsinconsistent with prior or subsequent ambulatoryand pharmacy diagnoses.2) Projects focusing on high-dollar providerContinued on page 19Health Care Compliance Association • 888-580-8373 • www.hcca-info.orgFebruary 200817

February 200818Health Care Compliance Association • 888-580-8373 • www.hcca-info.org

Meet James G. Sheehan ...continued from page 17areas and providers not previously reviewed.These areas include hospitals, managed care,and certain clinic and specialty care areas.3) Developing algorithms to focus our auditefforts where they are most likely to be productive,and reducing the hassle factor forproviders who are generally compliant (andwhose audits are unlikely to result in recoveries).This agency’s prior targeting effortsrelied heavily on two factors – total dollarspaid and most recent audit. We want to buildin other predictive factors, and to terminateaudits early-on where they are unlikely to beproductive.4) Projects integrating payment and qualityissues. As part of the Governor’s patient-centeredcare initiative, we want to look closelyat providers who are unable or unwilling tomeet their obligations to provide minimumstandards of quality and comply with theirConditions of Participation in the program.We will work with other survey and paymentagencies, both state and federal, and lookseriously toward permissive exclusions fromthe Medicaid program where appropriate.We also want to look closely at the knowledgeand support of beneficiaries involved inthe Medicaid program, and the knowledgeand experience of providers. Our hope is that,by working with the Department of Health,providers, and beneficiaries, we can designcompliance and program integrity into Medicaidat the front end, rather than concentratesolely on bad actors at the back end.FS: Is New York’s Medicaid situationmaterially different from that of other states?JS: Only in that the pot of money is muchbigger, and the system more generous thanmost other states, because of New York’s commitmentto its poorer citizens. The programissues are similar in other states.FS: Are there indications that other stateswill begin attacking Medicaid fraud, waste,and abuse in the same ways Texas and NewYork have?JS: Yes. Kansas just started with its newInspector General and other states, such asIllinois, have working IG models. CMS hasactively supported enhanced Medicaid fraudand abuse controls with ideas and funding,and has brought states together for informationsharing and concept development. In2007, CMS hired over 30 people just toaddress and support Medicaid fraud control,including David Frank, a former colleague ofmine from the Miami U.S. Attorney’s office.FS: What would you suggest that providers,and specifically, compliance professionals,do in light of the new Medicaid environment?JS: Compliance efforts have historicallyfocused on Medicare billing issues, becausethat is where most of the enforcement hasoccurred. Forward-looking compliance programsshould expand their approach in threeareas:1) Medicaid billing, including awareness ofavailable audit and data mining tools;2) Using external sources of information onquality and performance as signals for theoverall compliance effort, including externalreport cards, audit plans and reports, andinformation about ongoing initiatives at thestate level; and3) Assuring that there is significant Boardawareness and involvement in the complianceeffort, including quality and mandatoryreporting issues. This does not necessarilymean that the compliance officer should runquality; but compliance processes (the sevenelements) should be applied to quality andmandatory reporting.FS: You have generously participated inHCCA’s programs for a number of years, andwe appreciate it. You obviously have otheropportunities and lots of demands on yourtime. Why is it that you choose to be soinvolved with HCCA?JS: I have been involved with HCCA sinceits inception because I believe that complianceshould be both a profession and a businessprocess, and that providers should havethe techniques and the systems to addresscompliance issues themselves. HCCA is theforemost organization, not only in promotingthese ideas, but in providing practical training,standards development, and thoughtfuldiscussion of how they can be accomplished.HCCA has also made an effort to involve thebroad range of people involved in complianceinto these discussions.Thank you for inviting me to participatein this discussion. We look forward toworking with HCCA in the future, and weinvite responses from your members to thisdiscussion. nNotice:As of January 17, 2008, the Disclosureof Financial Relationships Report formsreferenced in the January 2008 issueof Compliance Today, page 50, “CMSDisclosure of Financial RelationshipsReport alert,” have not yet been sent outby the Centers for Medicare and MedicaidServices (CMS). The author notesthat CMS intends to send the DFRRforms to affected hospitals “expeditiously”following the pending OMB review.Health Care Compliance Association • 888-580-8373 • www.hcca-info.orgFebruary 200819

Where will we be in 50 years?The evolution of the compliance profession will not be determinedby a single industry. The compliance profession will be determinedby all industries, just as it was in the audit, legal, and human resourceprofessions. Therefore, the future of the compliance profession for anyindividual industry will be determined by all industries. A standardfor compliance programs and the compliance professional’s job willemerge for us as it has in audit, legal, and human resources. Howmuch authority we have, who we report to, and what resources we getwill become, to some degree,standardized. Where we will bein 50 years depends on what wedo now. With the emergenceof the global economy, theevolution of our profession maybe influenced by internationaltrends. If we are not careful, ourfuture could be determined byother departments that have aninterest or stake in it, or simplywant to control compliance.Anticipating this, the HCCABoard started The Societyof Corporate Compliance and Ethics (SCCE) four years ago. Weactually started having multi-industry meetings six years ago. SCCEcan help other industries, and SCCE can help ensure that the fate ofcompliance professionals and compliance programs is determined byqualified compliance professionals.We continue to work with other industries through SCCE. Essentially,SCCE is just like HCCA, a professional association forcompliance and ethics professionals. There are over 1000 membersin SCCE today; they have a magazine, annual meeting, certificationprogram, and a Web site – just like any other professional association.Many HCCA members are attending SCCE multi-industry meetings.I remember Debbie Troklus’s reaction to her first multi-industrymeeting. She felt it was the best meeting she had attended in years,We are the keepers of ourfuture. Today is the day wedecide if compliance and ethicsprofessionals in all industriesdetermine our future, or if weleave it in the hands of otherswho do not have our bestinterest in mind.ROY sNELLprimarily because of the fresh perspective and ideas generated fromother industries. We are now getting international members. In fact,we have members from about one dozen countries. We have hadspeakers, attendees, and authors from another dozen countries. SCCEhas led to several interesting developments. SCCE has an opportunityto help ensure that the future of our profession is not only determinedby our profession, but is developed by those with the most experienceand knowledge.As Debbie experienced, manynew ideas are being sharedacross industries (and now acrosscountries.) More importantly,job opportunities for healthcarecompliance professionalsare increasing in other industries.Odell Guyton is now atMicrosoft and Sheryl Vacca isnow in charge of compliancefor the largest university systemin the U.S. Probably the mostimportant impact, when allindustries work together, is on the development of the complianceprofessional’s role and compliance programs.We are a young profession. These are the days that will determine ourfuture for years to come. These are the days that 50 years from nowcompliance professionals will look back at in astonishment or in reverence.We are the keepers of our profession. We are the keepers of ourfuture. Today is the day we decide if compliance and ethics professionalsin all industries determine our future, or if we leave it in the handsof others who do not have our best interest in mind. If we all worktogether our fate will be sealed. If we don’t work together, our fate willbe also sealed. nFebruary 200820Health Care Compliance Association • 888-580-8373 • www.hcca-info.org

EXPERIENCE. INTEGRITY. RESULTS. Health Care Compliance Association • 888-580-8373 • www.hcca-info.orgFebruary 200821

Focus onAuditing & MonitoringAuditing and Monitoring, Part Six:Bringing it all together with goodmanagementBy Jeff SinaikoEditor’s note: Jeff Sinaiko is president of SinaikoHealthcare Consulting, one of the nation’sleading independent healthcare managementconsulting firms. He works with health careorganizations nationwide on a diverse range ofcompliance issues. For more information pleasee-mail jeff@sinaikohc.com.In this sixth and final column in myseries on Auditing and Monitoring, Iwant to do a little recap of the majorthemes covered in the series and then providesome thoughts on what ultimately can mattermost in making all the efforts in the compliancearena matter – management.I said that experience indicates that the Auditingand Monitoring function is the mostimportant aspect of achieving complianceprogram effectiveness. However, in the end,after discussing all the details of why we audit,what to audit, and how to use the results, formany organizations it can come down to managementperspective and performance as thecrucial difference between effectiveness and ineffectiveness.That difference lies in establishingan organizational culture and an active practicethat either does or does not seek out, identify,and rectify compliance deficiencies.Compliance as a department, regardless ofauditing and monitoring or other efforts, cannot achieve this on its own, if managementand the Board are not fully supportive. Therefore,while we have spent much of the space inthese articles providing specific advice to thoserunning the compliance programs, establishingauditing priorities, and directing those specificefforts, the ultimate key is to bring togetherthe executives responsible for compliance withthose responsible for the overall business operationsof the organization.A brief reviewA number of suggestions have been providedover the course of the previous five articles. Ifyou’re a member of senior management whois not directly responsible for compliance, ora member of the Board, these may also behelpful as a checklist to evaluate how yourauditing and monitoring program — andhow the compliance program as a whole — isbeing implemented. Just to recap, here weresome of the keys to a successful auditing andmonitoring program that we explored:n Establish priorities. OIG’s ‘08 Work Planis now out and every organization alsohas their own issues previously identifiedand new programs, facilities, systems, andother activities that lend themselves tobeing audited, so creating a list should notbe a big challenge. The challenge may liein the need to . . .n Establish a manageable, achievableauditing schedule. If you don’t have theresources to achieve a reasonable schedule,consider augmenting with outside resourcesor seek additional budget. Rememberthat experience proves again and again thatactive auditing often identifies as manyopportunities to improve revenue and revenuecapture, as well as those areas whereinappropriate revenue is being received.n Review the Emergency Department. TheED is an excellent place to commence auditingactivities for both its own range of issuesand its ability to serve as a “window” intoissues that may exist in the rest of the facility.n Review the full process. Do not ignorethe compliance issues that can be createdthroughout the revenue cycle – front,Jeff Sinaikomiddle and back ends of the process, notjust the billing and coding functions.Issues created within the Charge DescriptionMaster, or in the middle of theprocess, include not just wrong codes, buthow those codes are set up to match thelocations, supplies, and equipment used;site of service regulations; and specific servicesprovided in each individual facility.n Leave a trail. Ensure the results are communicated,addressed, and documented asbeing resolved.n Ensure that appropriate discipline occurs.Whether it be physicians or staff whofail to adhere to policy and procedure and/or who simply fail to improve to acceptablelevels of performance, discipline is important.The role of senior managementWith all that said, what can and should seniormanagement, such as the CEO and membersof the Board, do and expect? This could be afar more broadly and deeply explored topic,but here are a few basic suggestions for thosein such positions.First, establish compliance awareness andeducation as not just an organizational priority,but one of yours. Senior management andmembers of the Board should be well educatedContinued on page 47February 200822Health Care Compliance Association • 888-580-8373 • www.hcca-info.org

SAVE THESE DATES!ResearchComplianceConferenceChicago, IL | October 20-22“Increasingly, more and more physicians, health careinstitutions, and others are looking to clinical research as anadditional form of revenue, prestige, and entry into manyother areas of health care. HCCA’s Research ComplianceConference is a must-attend for anyone who touches clinicalresearch issues. Although the opportunities in this areaare great, the risks can be greater. Attendance at HCCA’sResearch Compliance Conference will help one navigatesuccessfully through these issues in a most difficult regulatorytime.” — Paul R. DeMuro, CHC, CPA, MBA, JD,Latham & Watkins LLPAHLA/HCCAFraud &ComplianceForumBaltimore, MD | October 5-7You won’t want to miss the 2008 Fraud and ComplianceForum, designed specifically for compliance officers and healthattorneys who must advise their clients and institutions on thelatest developments in fraud and abuse and compliance issues.Attendees will hear from leading private practitioners andrepresentatives from the Office of Counsel to the InspectorGeneral, the Department of Justice, and the Centers forMedicare and Medicaid Services.Visit www.hcca-info.org for more informationASKLEADERSHIPJohn asks the leadershipyour questionsEditor’s note: John Falcetano isChief Audit/Compliance Officer forUniversity Health Systems of EasternCarolina and a long-time member ofHCCA. This column has been createdto give members the opportunityto submit their questions by e-mail to jfalcetano@suddenlink.net andhave John contact members of HCCA leadership for their response.John FalcetanoQuestion:What should providers know about Advance Beneficiary Notices?The answer below was provided by John C. Falcetano, MA, CHC, CIA,An Advance Beneficiary Notice (ABN) is a written notice thatproviders present to Medicare beneficiaries to inform them thatparticular items or services might not be paid for by Medicare. TheABN must be given to the beneficiary prior to providing the servicein order to allow the beneficiary to make an informed decisionabout whether or not to receive the items or services for which heor she may have to pay out of pocket. When a patient receivesitems or services that are non-covered by Medicare, the beneficiaryis usually responsible for payment for those items or services. Forthe beneficiary to assume financial responsibility, they must beinformed that Medicare probably would not pay for them.The provider must give the patient an ABN every time the providerbelieves Medicare will not cover the item or service that is usuallycovered, if the provider is planning on billing the beneficiarydirectly for the item or service. The ABN must have specificinformation that informs the patient of the specific reason why theprovider believes Medicare may not cover the item or service whenthe service is usually covered by Medicare. General statementslisted on the ABN form, such as “Medicare may not cover the itemor service,” does not meet the requirement. Providers should notprovide ABNs for services that are always excluded from Medicarecoverage. For additional information, see “What Doctors need toKnow about Advanced Beneficiary Notice (ABN)” at http://www.cms.hhs.gov/MLNProducts/Downloads/ABN_READERS.pdf and“Advanced Beneficiary Notices: Update 2007” in the June 2007issue of Compliance Today. nHealth Care Compliance Association • 888-580-8373 • www.hcca-info.orgFebruary 200823

CMS’ Special FocusFacility Initiativeand Nursing HomeCompareBy Cheryl L. Wagonhurst, Esq, CCEP and Nathaniel M. Lacktman, Esq.Editor’s note: Cheryl L. Wagonhurst is a partner nursing homes are providing the quality of carewith the Los Angeles office of Foley & Lardner required under the Medicare and MedicaidLLP and a member of the firm’s Health Care programs. 3 More than 4,000 federal and stateIndustry Team and the White Collar Defense surveyors conduct onsite reviews of nursingand Corporate Compliance Practice Group. Ms. homes. 4 Survey requirements are crafted toWagonhurst is a member of the board of directorsof the Health Care Compliance Association enforceable expectations that nursing homeshighlight key areas of quality and convey basic,and the advisory board of the Society of CorporateCompliance and Ethics. She may be reached tion, the state survey team examines manymust meet. During the nursing home inspec-by telephone at 310/975-7839 and by e-mail at quality-of-care factors, including resident careCWagonhurst@Foley.com.processes, staff/resident interaction, environmentand life safety, and clinical record review. 5Nathaniel M. Lacktman is an associate inthe Tampa, Florida office of Foley & Lardner Special Focus Facility InitiativeLLP and a member of the firm’s Health Care Nursing homes must comply with over 150Industry Team and its White Collar Crime and applicable regulatory standards covering a wideCorporate Compliance Practice Group. He may range of aspects of resident life and quality ofbe reached at 813/225-4127 or by e-mail at care, from specifying standards for safe foodNLacktman@Foley.com.storage and preparation to protecting residentsfrom abuse or inadequate care. 6 When a surveyOn November 29, 2007, the Centers team finds that a nursing home does not meetfor Medicare and Medicaid Services a specific regulation, it issues a deficiency citation.Most nursing homes average 6-7 identi-(CMS) released, for the first time, alist of the poorest performing nursing homes fied deficiencies per survey. 7in the nation. The list of facilities, identifiedas Special Focus Facilities (SFF), is expected Although most nursing homes correct theirto offer consumers who are seeking long-term deficiencies within a reasonable time period,health care services “powerful new information CMS identified a group of facilities exhibitingwhen choosing nursing homes.” 1 There were a “yo-yo compliance history.” 8 These facilities54 nursing homes named in the list, spanning would periodically institute enough improvementsto be in substantial compliance on one34 states. The list, available on CMS’ WebSite, is a key tool for promoting quality of care survey, only to again fail during the next, oftenfor the same deficiency. In addition, thesethrough transparent public reporting. 2facilities averaged twice as many deficiencies,The nursing home survey processhad more serious deficiencies, and continuedCMS, together with states, visits nursing to have these problems for a long period ofhomes at least annually to determine if the time. In CMS’ estimation, it was evident suchfacilities were not addressing the underlyingsystemic problems that give rise to their poorquality of care. To address this concern, CMScreated the SFF.Once a nursing home is designated as an SFF,it must undergo twice as many surveys asother nursing homes. 9 CMS applies progressiveenforcement, and the longer the problemspersist, the more stringent CMS will bein the enforcement actions taken against thefacility. 10 Within 18-24 months after a facilityis identified as a SFF, CMS expects one ofthree possible outcomes:1. The nursing home graduates from the SFFprogram because it has made significantimprovements in quality of care – and thoseimprovements have continued over time.2. The nursing home is terminated fromparticipation in the Medicare and Medicaidprograms. Depending on state law,such a facility may continue to operate,but will typically close once Medicareand Medicaid funding is discontinued.In such a case, the state Medicaid agencywill depopulate the facility, relocating residentsto another location that can providebetter quality of care.3. The nursing home is provided with additionaltime to continue in the SFF programbecause there has been very promisingprogress (e.g., the facility is sold to a differentowner and operator that has a history ofproviding superior quality of care). 11It is important to recognize that CMS’ policy ofprogressive enforcement means that any nursinghome that demonstrates a pattern of poor qualityof care, not only those identified as SFFs, issubject to increasingly stringent enforcementactions. If problems continue, the severity ofpenalties will increase over time, ranging fromcivil monetary penalties, denial of paymentfor new admissions, and termination from theMedicare and Medicaid programs. 12February 200824Health Care Compliance Association • 888-580-8373 • www.hcca-info.org

Immediate improvement in quality of care“CMS’ effort to identify poor performingnursing homes is intended to promote morerapid and substantial improvement in thequality of care in identified nursing homesand end the pattern of repeated cycles of noncompliance,”noted CMS Acting AdministratorKerry Weems. 13 As of October 2007,there were 128 SFFs, out of approximately16,000 active nursing homes in the country. 14Those SFFs had survey results in the bottom5%-10% in each state.After being identified as an SFF, a facilitytypically achieves improved survey results.CMS data indicates approximately 50% offacilities in the SFF Initiative significantlyimprove their quality of care within 24-30months. 15 Conversely, approximately 16% areterminated from the Medicare and Medicaidprograms. 16Nursing Home CompareA cornerstone of CMS’ efforts to drive qualitythrough public reporting is the NursingHome Compare Web Site. 17 Designed to beconsumer-oriented, with simplified analysisand easy to understand data, the Web Siteenables potential residents and their familiesto examine and compare nursing homes ona multitude of quality factors. It also reportsa nursing home’s characteristics, compliancehistory and quality measures, nursing staffinformation, and survey results by identifyingspecific deficiencies and the severity of thedeficiency.The quality measures available on NursingHome Compare were selected by CMS,because they can be readily compared anddo not require facilities to prepare additionalreports. 18 The measures reveal ways in whichnursing homes differ from one another andconstitute areas that nursing homes candevelop to improve their quality of care (and,accordingly, their ranking on Nursing HomeCompare). As CMS’ research continues, itwill revise and improve the quality measureson Nursing Home Compare. 19 Currently,the quality measures on the Nursing HomeCompare database 20 come from two sources:1. CMS’ Online Survey, Certification, andReporting database (OSCAR). The informationon OSCAR contains a summaryof each facility’s latest survey results. Suchinformation is prepared and reportedby the individual facilities themselves atthe beginning of each survey inspection.The state survey agencies are responsiblefor entering survey information into theOSCAR database and providing updatesas needed. 212. The Minimum Data Set repository(MDS). This national database, updatedquarterly, includes information on 19 qualitymeasures (e.g., percentage of residentswith pressure ulcers, percentage giveninfluenza vaccine, percentage who are depressed).22 Each nursing home is requiredto perform a comprehensive assessment ofeach resident’s functional capabilities andmedical needs on a periodic basis and thensubmit the information to CMS.Because the data is being made public to consumers,nursing homes must be careful whenrecording and submitting information usedin the OSCAR and MDS databases. For thatreason, nursing homes should periodicallyreview the information on Nursing HomeCompare for accuracy. If any information onNursing Home Compare is inaccurate, thefacility should immediately contact its statesurvey agency to have the information correctedand updated.Campaign for quality improvementIn addition to the public reporting under theSFF Initiative and Nursing Home Compare,CMS is taking many other steps to improveHealth Care Compliance Association • 888-580-8373 • www.hcca-info.orgthe quality of care in nursing homes. Suchefforts include:n developing new, more stringent systemsfor criminal background checks on facilityworkers and applicants;n an unprecedented focus on preventingsevere pressure ulcers in residents;n reducing the use of restraints;n considering resident feedback and emotionalsatisfaction; andn refining the survey process. 23A noteworthy program is CMS’ NursingHome Value-Based Purchasing (VBP) Demonstration.As the largest purchaser of nursinghome services (approximately $64 billion peryear), CMS and states can exert significant leverageto insist on basic levels of quality. UnderVBP, CMS would assess the performanceof nursing homes based on selected measuresof quality of care. 24 The anticipated improvementsin quality may reduce the number ofhospitalizations, thereby saving money in theMedicare program. 25 Those savings wouldthen be shared with nursing homes that eitherimprove quality or maintain exceptionallyhigh quality of care. The VBP demonstrationis scheduled to begin in Winter 2007/08,with approximately 300 participating facilitiesacross 4 or 5 states. By offering paymentincentives for quality care, VBP is intended toaugment and reinforce other quality efforts byensuring that financial investments made bynursing homes to improve quality will be metby reimbursement methods that can discernthe difference between excellent, good, mediocre,and poor quality. 26Public reporting and enforcementGiven the data available to the government toidentify poorly performing nursing homes, afacility may find itself the subject of a quality-ofcareenforcement action under the False ClaimsAct, based on data mining. 27 The governmentContinued on page 56February 200825

focusfeatureProspective Payment System RulesThe Inpatient ProspectivePayment System (IPPS) RuleBy Nancy Payne, RN, MA and Jenny O’Brien, JDEditor’s note: Nancy Payne is Director of Regulatory Affairs for AllinaHospitals and Clinics in Minneapolis, MN. She can be reached at612/262-4912 or by e-mail at nancy.payne@allina.com.Jenny O’Brien is a shareholder practicing in the health law group of HallelandLewis Nilan & Johnson in Minneapolis. She is also Director of ComplianceServices for the law firm’s subsidiary, Halleland Health Consulting. She can bereached at 612/573-2968 or by e-mail at jobrien@halleland.com.In response to managing the cost of complex cases, the Centersfor Medicare and Medicaid (CMS) recently made some of themost sweeping changes to the Medicare Inpatient ProspectivePayment System (IPPS) since the rule was implemented in late 1983.The changes are intentionally focused on two major areas that impactpayment on complex cases: the new Medicare Severity Diagnosis-Related Groups (MS-DRG) system and the reduction in payments forspecified hospital-acquired conditions.These changes are receiving close scrutiny from a number of stakeholders withinthe hospital setting, including reimbursement, revenue cycle improvement,performance measurement, physician leadership, information systems, healthinformation management, coding, and the compliance officer. In short, thechanges are driven to redefine and redistribute Medicare dollars to the mostcomplex cases. When all is said and done, CMS is still willing to reimburse forcomplex cases, but the changes make it even more challenging and onerous forhospitals to meet criteria and qualify for the appropriate reimbursement rates.Major change #1 - The new MS-DRG systemEffective October 1, 2007, hospitals that are paid under the IPPS began toexperience the impact of the IPPS revised rule. In an effort to better recognizethe level of patient complexity and resource use, CMS eliminated theold CMS-DRG system and replaced it with the new MS-DRG system.The transition from the old CMS-DRG system (comprised of 538DRGs with two levels of severity) to the new MS-DRG system waspremised on the concern that the old system was no longer effectivein differentiating the severity of illness and resource utilization in relationto payment. The new MS-DRG system includes 745 new DRGswith three levels of severity that take into account the complexity ofthe patient’s condition(s) and risk of mortality. The three levels ofseverity under the MS-DRG system are:1) Major complication or co-morbidity (MCC)2) Complication/co-morbidity (CC)3) No complication or co-morbidity (no CC)DRGs at the highest level—with an MCC or a CC—are paid at ahigher rate than the DRGs at the “no CC” level. In the old CMS-DRG system, the two levels of severity were simply “with CC” or“without CC.”The following table delineates the projected differences between thepercent of cases in the old system (CMS-DRG) and the new system(MS DRG) that are expected to qualify for a higher level of payment. 1Table1: Comparison of the old and new DRG systemsCMS-DRG Severity TierCCNo-CCMS-DRG Severity TierMajor CCCCNo-CC% of Cases78%22%% of Cases22%37%41%CMS estimates that the MS-DRG method will shift payments betweenhospitals based upon severity of illness. Hospitals will benefit inthat they will be compensated at a higher rate, if they can demonstratetreatment of more complex cases. This is wholly dependent, however,upon the adequacy of the documentation and the accuracy of thecoding.February 200826

Potential impact on hospitalsLet’s take a look at one diagnosis (congestive heart failure, nototherwise specified[NOS]) to see how hospitals might be impactedunder the MS-DRGsystem. Under the oldOld SystemCMS-DRG system Congestive Heart Failureall of these codes were (No qualifiers required)paid at the higher CC CMS DRG 127$5,117severity level and mostphysicians documentedto the general Congestive Heart Failure NOS ICD-9-CM code 428.Table 2 below represents the major codes utilized to describe congestiveheart failure and the level of specificity of the ICD-9-CM coderequired for a higher severity-level payment under the new MS-DRGsystem. Note the breakdown for the three levels of DRG severity andthe detailed physician documentation that is required to attach thecorrectCMS-DRGICD-9-CMSeveritycodes.Tier% of CasesCC78%No-CC22%These changes, though projected by CMS to be budget neutral, willsignificantly MS-DRG redistribute Severity Medicare Tierdollars across hospitals. % of The Cases anticipatedMajoroutcomeCCis that generally, larger urban and teaching22%hospitals,CC37%whichNo-CCtypically treat more complex cases, will most likely41%gain, butsmaller and rural hospitals may end up losing reimbursement becausetypically, they treat patients who have conditions with lower severity.The payment implications to hospitals are broader than just measuringthe complex case mix versus lower-severity case mix. The realityof the new system of reimbursement is that even those who are ableto demonstrate meeting CC (or middle level) criteria will get less reimbursementthan they did under the old system. The above diagramillustrates the reimbursement differences. Rates noted are based on the2008 Final Rule published August 2, 2007.Table 2New System (MS-DRG 291)Acute Systolic Heart Failure w/MCC$7,200New System (MS-DRG 292)Chronic Systolic Heart Failure w/CC$4,960New System (MS-DRG 293)Congestive Heart FailureNOS No CC$3,544The bottom-line is that most providers that were receiving $5,117under the old system will now be receiving $3,544 unless physiciandocumentation supports coding to a more specific diagnosis. Even ifthe documentation supports patient illness severity to a CC level, thehospital payment would still be less than before ($4,960). Both the“without CC” and “with CC” levels of severity represent reductionsfrom previous reimbursement, yet the providers cost for providing theclinical services is, at best, the same and in most cases has increased.Because of the significant redistribution in payments this change creates,CMS will phase in the payment implications over two years beginningin FY 2008. 2 However, even with this phased in approach tothe financial implications, hospitals need to be prepared for a potentialreduction in actual DRG payments.What hospitals can do to be preparedCompliance officers can lead the way by instigating a few steps to helphospitals ensure that they receive the full reimbursements allowedunder the new system.Continued on page 29Code Diagnosis DRG Severity Tier428.21428.41428.43428.31428.33428.1428.20428.22428.32428.40428.0428.9Acute Systolic Heart FailureAcute Systolic & Diastolic Heart FailureAcute On Chronic Systolic Heart FailureAcute Diastolic Heart FailureAcute On Chronic Diastolic Heart FailureLeft Heart FailureSystolic Heart Failure NOSChronic Systolic Heart FailureChronic Diastolic Heart FailureSystolic & Diastolic Heart FailureCongestive Heart Failure NOSHeart Failure NOSMajor CCMajor CCMajor CCMajor CCMajor CCCCCCCCCCCCNo CCNo CCHealth Care Compliance Association • 888-580-8373 • www.hcca-info.orgFebruary 200827

Feature Focus: The Inpatient Prospective Payment System (IPPS) Rule...continued from page 29Through this mandate, hospitals will begin reporting secondary diagnoses thatare present on admission (POA) beginning with discharges on or after October1, 2007, or January 1, 2008 if claims are submitted to Medicare throughDirect Data Entry (DDE). The POA indicator is a new clinical data elementthat will be important in distinguishing between pre-admission conditionsand acquired complications, improving the accuracy of hospital quality datareporting, and improving the risk adjustments for comparisons that involvemortality, patient safety, and pay for performance between hospitals. Codersare a key element to success in implementing this change since the POA is acode that is appended to every principal, secondary, and external cause-ofinjurydiagnosis code in the patient record and on the inpatient claim.The task of defining and documenting POA. “Present on admission”is defined as present at the time the order for inpatient admission occurs.Included in this are conditions that develop during an outpatient encounter,including emergency department, observation, or outpatient procedures asthey occurred prior to the actual inpatient admission. The POA indicator isbased not only on the conditions known at the time of admission, but alsoincludes conditions that were clearly present but not diagnosed until afteradmission. 3 The POA codes are:n Y = Yes, diagnosis was present at the time of inpatient admissionn N = No, the diagnosis was not present at the time of inpatient admissionn U = Unknown, documentation is insufficient to determine if the conditionwas present on admissionn W = Provider is unable to clinically determine whether or not the conditionwas present on admissionn 1 = Condition is exempt from POA reportingThe DRA regulation requires CMS to identify at least two conditions thatmeet the following criteria:1. Are high cost, high volume or both;2. Result in assignment to a higher paying DRG when present as a secondarydiagnosis; and,3. Are reasonably preventable by the hospital through the application ofevidenced-based guidelines.Although the DRA mandated that two conditions be identifed, CMS wentbeyond the regulation and selected the following eight conditions that wereincluded in the Final Rule, including three “never events” that meet the criteriaspelled out in the DRA:1. Serious preventable event - Object left in during surgery2. Serious preventable event (post surgery) - Air embolism3. Serious preventable event - Blood incompatibility4. Catheter associated urinary tract infection5. Pressure ulcersFebruary 200830Health Care Compliance Association • 888-580-8373 • www.hcca-info.org

6. Surgical site infection: mediastinitis after coronary bypass graft(CABG) surgery7. Hospital acquired injuries (fractures, dislocations, intracranialinjury, crushing injury, and other unspecified effects of externalcauses)8. Vascular catheter associated infectionsHospitals are now obligated to have processes and procedures in placeto ensure that these conditions are recognized and reported in order toobtain appropriate reimbursement.What hospitals can do to be preparedHospitals will feel the financial impact if they fail to address the implicationsof POA conditions, so steps must be taken to ensure accuratedocumentation.Education and training of physicians, coders, and senior management.An effective hospital response should focus on a comprehensiveapproach to physician and coder education as well as ongoing monitoringand reporting of the impact on coder productivity and cash flow. Ajoint effort between the health care provider and the coder will go a longway in helping an organization successfully meet the POA reportingrequirements. Clear and complete documentation of whether or not adiagnosis was present at the time of admission is critical to assure thatcoding can efficiently append the correct POA indicators.Providers will play a key role in helping resolve issues related toinconsistent, missing, conflicting, or unclear documentation. Codingeducators need to support this process and work closely with providers,because delays in submitting claims will result from an increasednumber of provider prompts and queries. If claims are submitted withhigh numbers of “U” codes (i.e., unknown), hospital reimbursementswill be reduced because the conditions will not not be considered forthe higher paying CC or MCC DRGs. A good area in which to focusphysician education at the outset is with emergency room physicians,hospitalists, or the high-volume admitting physicians, because it iscritical to capture the data at these entry points.efficiency in coding. Be prepared to manage through the downtime asthe individual coders progress through the learning curve.Engage executive and clinical leaders so they understand the significancein reinforcing the necessity of documentation improvement andprompt and thorough follow-up with all queries. Executives need tounderstand the impact that POA reporting may have on AR days andpayments for the specified conditions. Also make sure to utilize manyof the key members identified above in the MS-DRG task force (e.g.,health information management, quality, risk management, reimbursementand finance, clinical care, performance measurement andcompliance functions) so they can assist in monitoring the impact ofcoding this additional clinical data.ConclusionThe revised IPPS rule has both critics and supporters. Regardless ofwhich side one comes down on, the bottom line is that the rule will impactthe distribution of payments among hospital providers and requirethem to manage both the operational and financial challenges. Hospitalsare encouraged to focus on building good clinical data that can be usedto reflect the true severity of conditions in the patients they care for. Ifthis can be accomplished, a hospital has moved a long way down thecontinuum in minimizing the potential financial impact. nREFERENCES:1 Department of Health and Human Services, Centers for Medicare & Medicaid Services, 42 CFR Parts411, 412, 413, and 489, Medicare Program; Changes to the Hospital Inpatient Prospective PaymentSystems and Fiscal Year 2008 Rates; Final Rule, August 22, 2007. Available at: http://a257.g.akamaitech.net/7/257/2422/01jan20071800/edocket.access.gpo.gov/2007/pdf/07-3820.pdf (Accessed November 21,2007)2 Department of Health and Human Services, Centers for Medicare & Medicaid Services, CMS Manual System,Pub 100-04 Medicare Claims Processing, Transmittal 1240, Change Request 5499, May 11, 2007. Available at:http://www.cms.hhs.gov/Transmittals/Downloads/R1240CP.pdf (Accessed November 21, 2007)3 Coffey R, Milenkovic M, Andrews RM. The Case for the Present- on-Admission (POA) Indicator. 2006. HCUPMethods Series Report #2006-01 Online. June 26, 2006. U.S. Agency for Healthcare Research and Quality.Available at: http://www.hcup-us.ahrq.gov/reports/2006_1.pdf (Accessed November 21, 2007)Educate the coders and communicate the importance of ensuringaccurate and consistent decisions in appending the POA. The NationalUniform Billing Committee (NUBC) UB-04 Manual notes that codingprofessionals should follow the comprehensive guidelines on POAas published in the ICD-9-CM Official Guidelines for Coding andReporting to further assist in the accurate and consistent reporting ofall POA data. It is important to provide staff with the tools to supportContinued on page 32Health Care Compliance Association • 888-580-8373 • www.hcca-info.orgFebruary 200831

Feature Focus: Prospective Payment System Rule...continued from page 31A review of the 2008 OPPS FinalRule: Top 10 key issuesBy Andrea Clark, RHIA, CCS, CPC-HThe new edition of this essential guide tohealth care compliance is now availableAuthor Debbie Troklushas revised and updatedCompliance 101 to reflectrecent developments incompliance.The secondedition includes:• Up-to-datecompliance information• A brand-new chapter dedicated toHIPAA regulations• An expanded glossary with additional newterms and definitions• Expanded appendixes, includinga selection of additional new anduser-friendly sample documentsIf you’re planning to become Certified inHealthcare Compliance, Compliance 101 is aninvaluable study aid for the CHC examination.Editor’s Note: Andrea Clark is President of Health Revenue Assurance Associates,Inc. in Plantation, Florida. She can be contacted by phone at 954/472-2340 or bye-mail at aclark@healthrevenue.com.Medicare’s main objective for the 2008 Final Rule is to addressgrowth in Outpatient Prospective Payment System (OPPS) volumeand spending. To read the 2008 Final Rule and access specifictables mentioned in this article, please go to: http://www.cms.hhs.gov/HospitalOutpatientPPS/HORD/list.asp#TopOfPage.The Centers for Medicare and Medicaid Services (CMS) introduced a newterm “value-based purchasing.” This will provide a range of budget-neutralincentives to achieve identified quality and efficiency goals, as a means of promotingbetter quality of care and more effective resource use in the Medicarepayment systems. It is essential to secure your “SWOT” team (see below) andincorporate the new changes by January 1, along with dedicated verificationof claims submission for first quarter 2008, especially focused on one of theincentives finalized—Expanded Packaging of Outpatient Services.SWOT is an acronym for “strengths, weaknesses, opportunities, and threats.”Developing a SWOT list with the appropriate team members will ensurethat you have designed a formidable execution plan, including implementation,management, and forecasting the average projected costs (APC) revenueimpact set forth by changes in payment policies. Hospitals should plot outstrategies for coping with the positive and negative financial impact andoperational challenges posed by the OPPS changes using the Top10 list below.1. Expanded Packaging Concept. Finalized packaged services include guidanceimage processing; intraoperative services; imaging supervision andinterpretation; and diagnostic radiopharmaceuticals and contrast agents.CMS categorized two types of supervision and interpretation (SI) packagedservices as unconditionally packaged:n always packaged or status indicator (SI) “N”, andn conditionally packaged, which are often packaged or SI “Q”.Debbie TroklusGreg WarnerTo order, visit the HCCA Web siteat www.hcca-info.org.The Outpatient Code Editor (OCE) will determine SI Q with two triggerlevels –Level 1 - STVX packaged means if SI Q is reported on the same date as SIS-T-V-or X, payment for Q will be packaged.Level 2 - T packaged means if SI Q is reported on the same date as SI T,payment for Q will be packaged.February 200832

It is important to note that hospitals should continue to report allappropriate codes and charges for all services furnished, packaged ornot. And CMS emphasizes that there are no new billing requirementsassociated with this change in policy payment. Review Table 10 for thecomplete listing of packaged services both SI N and Q.G0379. If SI T is present on the same date of service or 1 day earlier,separate observation payment will not be generated; payment for anyseparately payable services include the clinic or G0379 will be madethrough the usual associated APCs.2. Composite APC (CAPC) for Observation. CMS created CAPC(Composite Ambulatory Payment Class) for observation services, bothdirect admission and emergency department (ED) with the eliminationof specific diagnosis requirements, but now have updated conditionsthat must be met; if not, observation will be packaged.CAPC 8002 or Level I Extended is synonymous with direct admissionobservation from clinic/physician office and the following conditionsmust be met or payment will not be made for CAPC 8002 or $351.04national unadjusted payment.To trigger CAPC 8003, the following must be reported on the claimregardless of diagnosis: G0378 Hospital observation service, per hour,8 ≥ hours plus one of the following HCPCS codes: 99284, 99285, or99291. If SI T is present on the same date of service or 1 day earlier,separate observation payment will not be generated; payment for anyseparately payable services include the ED evaluation and management(E/M) will be made through the usual associated APCs.It is vital for hospitals to review their current observation operationalprocess and compare this new payment policy.To trigger CAPC 8002, the following must be reported on the claimregardless of diagnosis: G0378 Hospital observation service, per hour,8 ≥ hours plus one of the following HCPCS codes: 99205, 99215, or3. Stick it to me again—injections and infusions. For 2008, CMScontinues to instruct providers to use the CPT codes, definitions andContinued on page 34Health Care Compliance Association • 888-580-8373 • www.hcca-info.orgFebruary 200833

Freature focus: 2008 OPPS Final Rule ...continued from page 33guidelines as listed in the current CPT Manual. Hospitals should payclose attention to 2008 CPT updates that include drug hierarchy rulesfor facilities. For the use of each additional sequential intravenouspush of the same substance/drug provided in a facility, 90776 shouldbe reported. The narrative update for 90760 states “31 minutes to onehour.” CPT codes 90776 and 90768 are packaged payments or SI N.Provide critical feedback to your clinicians. These are “time-based”codes which require, “time-line” documentation in order to supportcharge capture and APC revenue reimbursement.4. E/M levels under OPPS. For 2008, hospitals must continue to usetheir internally developed guidelines for E/M clinic and ED visits plusadhere to the 11 principles developed by CMS. Review the 11 principleswith your facility E/M criteria in hand to maintain the circle ofcompliance for this reporting requirement. Performing detailed auditsin all areas that report E/M levels to ensure consistency, accuracy, andAPC revenue integrity is strongly advised.The Final Rule did reiterate that Type A and B ED visits will continuewith no changes to the definitions. And finally, CPT codes 99241 –99245 outpatient consultations will be changed to SI B which cannotbe reported for bill type 131.5. Device-dependent discounting under OPPS. For 2008, CMS willcontinue the policy, whereas the APC amount to a hospital is reducedif the device is received at no-charge or a full-credit warranty replacementdevice is used with modifier -FB. For 2008, CMS finalized anew policy for partial-credit and device upgrade and created modifier–FC if the device is replaced with partial credit from the manufacturerthat is equal to or greater than 50% of the cost of the replacementdevice. Both modifiers, if reported, are appended to the procedurecode. Review Table 25 and 27 carefully with the operating room staffand develop a method of communication when this occurs.6. Migration of APC payments for 2008. Annually and under law,CMS must review APC groups and recalibrate, especially when the2X rule is violated, where necessary. Looking at the commonality ofprocedures among hospitals, here are some areas of interest to auditfrom a coding and financial impact for 2008:n Cardiac CT and CTA (APCs 0383, 0282)o Decrease in APC revenue plus ever increasing detailedrequirements for LCDs and NCDsn Shoulder Arthroscopy (APCs 0041, 0042)o One of the top 25 procedures performed in an ambulatorysurgery setting that is receiving a bump inAPC revenue equating to $1,000. It’s time to invest indedicated audits of ambulatory surgery procedures toensure correct code and modifier reporting along withreliable claims submission.n Intradiscal Annuloplasty and Kyphoplasty (APCs 0050, 0052)o APC revenue increase, however, remember imagingperformed in conjunction with these procedures willnow be packaged.n Skin Repair Procedures (NEW APCs 0133, 0134, 0135, 0136, 0137)o Minor procedure (i.e., wound repair) is the most commonprocedure performed in the ED. Conduct auditson simple, intermediate, and complex repairs to ensuresufficient documentation plus APC revenue integrity.n Coronary and Non-Coronary Angioplasty (APCs 0082, 0083, 0103)February 200834Health Care Compliance Association • 888-580-8373 • www.hcca-info.org

o Deletion of APC 0081 and movement of codes toAPC 0083 will have a financial impact for all facilities.Perform and communicate a financial analysis comparing 2007 to2008 payments to the appropriate departments and your finance department.The best way to accomplish this task is to perform an auditof the medical record documentation and claims submissions.7. Update your pharmacy Charge Description Master (CDM) fromthe inside out. In 2008, Medicare will reimburse drugs using AverageSales Price (ASP) + 5%, which has integrated payments for bothacquisition and overhead costs aggregate. CMS backed off its proposalto require separate revenue code assignment for reporting pharmacyhandling and overhead costs associated with separately payable drugs;this will continue to be evaluated. The threshold for packaged drugs ismedian cost less than $60. Anti-emetics remain exempt from the packagingrequirement, along with IVIG pre-administration reported withHCPCS code G0332. And one more twist, CMS is going to allowhospitals to report any HCPCS code for a Part B drug that is coveredunder OPPS, regardless of the unit determination in the HCPCSdescriptor. Table 34 lists previously unrecognized codes by moving theSI from B to K. Brachytherapy sources cost-based reimbursement willend, and beginning 2008, they will be paid via separate APC paymentrates based on 2006 claims median cost data.n CAPC 8000 Cardiac EPS and Ablation ($8,542), which is triggeredby one CPT code for the evaluation (93619 or 93620) andone CPT code for the ablation (93650, 93651, or 93652);n CAPC 8001 LDR Prostate Brachytherapy ($3,432) which is triggeredby CPT code 55875 and 77778 respectively on the sameclaim; andn CAPC 0034 Mental Health ($205) which was previously considered“per diem” and now moved to composite.9. Hospital Outpatient Quality Data Reporting Program. CMSintroduced seven outpatient measures which will tie to future OPPSpayments. Hospitals not wishing to participate or that withdraw fromthe program will not receive the full OPPS payment rate update.Hospitals will receive a reduction of 2.0% points in their updates forthe affected payment year 2009. Hospitals exempt from IPPS andcritical access hospitals (CAH) are exempt from this provision. CMSwill continue to entertain this measure for ambulatory surgical centers(ASCs) in the future, thereby delaying this requirement.“We are revising our validation requirements from our proposaland not requiring validation for purposes of the CY 2009 paymentupdate. We intend to use validation for purposes of the CY 2010HOP QDRP, beginning with July-September 2008 services and forsubsequent services.”A slew of status indicator changes, along with HCPCS updates, will keepthe APC reimbursement analyst busy. Medicare will continue to pay fortransitional pass through drugs (SI G), separately payable drugs withoutpass through payments (SI K), vaccines (SI L, F), and orphan drugs (G).Use 2008 Addendum B and sort through the above mentioned statusindicators in order to assist with the CDM update, and use the 2008HCPCS book for the long descriptors and dosage. Remember, pharmacysystems typically have “sub-basements” that must be mapped tothe CDM in order for the HCPCS to transfer to the UB-04 claim form.Recheck the revenue codes and validate a sample of claims quarterly toensure APC revenue integrity for appropriate HCPCS code(s) and units.8. Other Composite APC (CAPC) Payments. Per CMS “compositeAPCs provide a single payment for two or more major proceduresthat are commonly performed together, in order to promote efficiencyby increasing the size of the payment bundle.” This will encourageefficiency and allow hospitals maximum flexibility to manage theirresources. CMS reserves the right to create more CAPCs if spendingcontinues to escalate at the current rates. Three additional CAPCs are:Providers are required to begin reporting data in 2008 to get the 2%2009 payment update, but CMS will not apply any validation criteriato the submitted data. The validation has been postponed and CMSintends to begin applying that in 2010, but if providers don’t beginreporting data in 2008, then their 2009 payments will be reduced.10. APC Financial Barometer. Under OPPS, CMS annually updatesthe financial indicators that include outlier formulas, the conversion factor,and co-beneficiary payments. Because the reimbursement landscapechanges year to year, you must stay on top of these changes. For hospitals,the outlier formula changed this year as follows: Outlier payments aretriggered when the cost of furnishing a service or procedure by a hospitalexceeds 1.75 times the APC payment amount, and exceeds the APCpayment rate plus $1,575 (as opposed to $1,825 in 2007). The outlierpayment remains at 50% of the amount by which the cost is exceeded.The national conversion factor for 2008 is $63.694. The beneficiaryco-payment is 40% of APC payment, and the minimum remains20%. Hospitals in rural areas with no more than 100 beds willContinued on page 57Health Care Compliance Association • 888-580-8373 • www.hcca-info.orgFebruary 200835

Compliance and Ethics:An Introduction for Health Care ProfessionalsHCCA’s new video provides everything you need toconduct compliance and ethics training:• 23-minute video with seven dramatizations (available in DVD or VHS)• Trainer’s Guide with suggested program agendas and discussion outlines• Reproducible participant materials• DVD includes viewer’s menu for easy customization of training sessionsSuitable for new employee orientations and staffrefreshers. Topics include:• Documentation accuracy • Patient privacy • Security of ePHI• Anti-kickback • Conflict of interest • Stark law • EthicsHCCA member price $350.00 Non-member price $395.50February 200836Visit www.hcca-info.org for moreinformation and to order.Health Care Compliance Association • 888-580-8373 • www.hcca-info.org6500 Barrie Rd., Suite 250, Minneapolis, MN 55435 • 888-580-8373 • www.hcca-info.org

Educating theeducatedEditor’s note: Shawn DeGroot is Vice Presidentof Corporate Responsibility for RegionalHealth in Rapid City, SD. She may be reachedby telephone at 605/719-8761 or by e-mail atsdegroot1@rcrh.org.As compliance officers, an incredibleamount of creativity is inherentlyrequired to develop an effectiveeducational program based on adult learningprinciples for highly educated health careprofessionals. Furthermore, as adults, we alllearn differently. The human brain is uniquefor each individual and comprehension andunderstanding increase or decrease based onthe method of education (e.g. oral, readingdocuments, multi-media, or instructor ledtraining). Using a DVD starring Julia Robertsor Brad Pitt may be the most effective, butthe approach would be cost-prohibitive andneed to be modified as new regulations arefinalized.From an efficiency standpoint, many healthcare organizations rely on computer-basedtraining (CBT); however, the informationtypically does not allow for direct questionsand immediate feedback from a complianceprofessional. Nevertheless, CBT demonstratesincredible value in quantity, efficiency, and aconsistent message. CBT is also an excellentuse of resources and usually available to staff24/7. While this article is not to encourageone method or criticize another, I would liketo share with you an approach to live trainingfor physicians, board members, and mid-levelproviders.Truly, the number of required educationalhours may impact the number of topics thatcan be presented; however, what is inherentlymore important is whether the education isBy Shawn Y. DeGroot, CHC, CCEPeffective. As compliance officers, the mostpredominant challenge is finding an effectiveapproach to educating the educated, (e.g.,physicians, board members and mid-levelproviders). Not only are these individualseducated, but quite often they have numerousyears of experience in and out of health care.For the past five years, our organization hasprovided three hours of mandated continuingeducation for board members, physicians,and mid-level providers in accordance withour Corporate Integrity Agreement (CIA).Some of the approaches were better thanothers, but each year we strive to improve oureducation, both from a content and effectivenessperspective. This year was our greatestsuccess, based on the evaluation results andthe interaction.Two of the most well-received programsinvolved lawyers and physicians speakingtogether. Yes, this can be accomplished! Thefirst two years, we utilized one speaker with aPowerPoint presentation and a question-andanswersession. In 2006, we improved theeducational forum to include:1. A lawyer who presented the rules, regulations,and examples.2. Two physicians who independentlyprovided education on the integration ofpatient safety, quality, and compliance.3. An emergency department (ED) physician,a compliance officer (CO) and alawyer. The CO read a scenario and theED physician provided his perspective,followed by the lawyer with the legalperspective.The physicians and board members responsewas incredibly positive to the last segmentof the program; therefore, we expanded theprogram further in 2007 as follows:1. A lawyer presented the rules, regulationsand examples via PowerPoint withquestion-and-answer time.2. A panel of two physicians (one physicianfrom our tertiary care entity and onerepresenting a network of hospitals in arural area) and a lawyer were available forthe second half of the education with theformat described below:3. An audience response system was usedwhich allowed physicians at each tableto also participate in the scenarios andquestion-and-answer.4. The CO read scenarios based on the issuesand/or concerns from the past year. Thescenarios were written to allow a “yes” or“no” response.5 The audience responded (one responsemechanism per table of eight) and theresults were projected on a screen. Theimmediate response to the screen resultswas evident in the reaction.6. The CO then read the scenario againand requested a medical perspective fromeach physician on the panel. After thephysicians provided their response, thelawyer opined on the scenario from a legalperspective.7. Microphones were available for audiencephysicians and/or board members to raisequestions. The dialogue between specialtyphysicians, emergency department physiciansin the rural community, and thelegal advice was priceless.The evaluation results were phenomenallypositive, but the most beneficial aspect ofthe program was the physician-to-physiciandiscussion on referring patients, responsibilityof the patient, documentation, and communication.Other physicians offered to serve onthe panel next year, and we plan to offer theprogram again! nHealth Care Compliance Association • 888-580-8373 • www.hcca-info.orgFebruary 200837

We are pleased to introduceThe Duane Morris, LLPCertified in Healthcare Compliance (CHC) ScholarshipHealth Care Compliance AssociationBeginning in 2008, Duane Morris, LLP will sponsor four Certified in Healthcare Compliance (CHC)Scholarships annually.The Duane Morris, LLP CHC Scholarship is intended to offer health care professionals the opportunity to expand theirknowledge and advance their careers by obtaining the Certified in Healthcare Compliance (CHC) credential. Obtainingthe CHC credential demonstrates an advanced knowledge of compliance and ethics principles and practice.Each recipient of the Duane Morris LLP CHC Scholarship will be awarded $4,000 to cover the HCCA Compliance Academytuition and CHC test fees, as well as a portion of travel expenses to attend the Academy. (Both Academy tuition and test feeshave member and non-member pricing, so the portion of travel expenses covered will vary based on membership status.)All applicants must successfully demonstrate financial need of their employer, as this scholarship is designed to provideeducational assistance to health care professionals in organizations that may not otherwise be able to fund Academy attendanceand CHC testing. Applicants must also meet the following criteria for consideration:v Do not presently hold the CHC credentialv Have worked in the Health Care Compliance field for at least one yearv Meet the criteria to sit for the CHC examv Commit to prepare and sit for the CHC exam through the professional testing serviceor at the conclusion of the HCCA AcademyBackground: The CHC credential is awarded to candidates who passthe Healthcare Compliance Certification Board CHC Examination.The Examination is offered at the conclusion of the HCCA ComplianceAcademy. The Compliance Academy offers four days of intense sessionscovering the seven elements of health care compliance.Duane Morris LLP and HCCA encourage equal opportunity for all CHC Scholarshipapplicants and candidates.Applications are available at www.hcca-info.org, please call 888-580-8373to receive an application.If you have questions about the scholarship or the Compliance Academy program please contactJennifer Power at 952/405-7916 or by email at jennifer.power@hcca-info.orgFebruary 200838Health Care Compliance Association • 888-580-8373 • www.hcca-info.org

HIPAA compliance ininternational researchEditor’s note: Brian Williamson is the AssociateRegulatory Compliance Officer with NemoursFoundation in Wilmington, DE. He may bereached bye-mail at bewilla@NEMOURS.ORG or by phone at 302/651-4917.When the “word” HIPAA (the initialismfor the Health InsurancePortability and AccountabilityAct, also known as the Privacy Rule) is mentionedin the research enterprise, eyes glazeover and ears tune-out. This is especially truewhen an institutional review board (IRB) isdiscussing the matter. Researchers are frustratedwith HIPAA, becauseto them it is a black-hole – aplayground of rules enjoyedonly by administrators andtheir bothersome lawyers –completely antithetical to protectingresearch participants’privacy.Contrary to this perception, HIPAA’s primaryaim is to protect privacy and it is importantthat researchers know when it does and doesnot apply to their work. Although mostresearchers and administrative staff have acceptedHIPAA, they do not understand whyit applies to research, especially internationalresearch involving non-U.S. citizens. 1 Thisarticle will explain how HIPAA applies tocollecting research materials from non-U.S.citizens, and under what circumstances.Imagine that a principal investigator at yourinstitution (a “covered entity”) is collaboratingwith Zimbabwean researchers to collectbiological samples and health informationfrom Zimbabwean subjects. You learn thatthe Zimbabwean researchers will forwardBy Brian Williamson, JDthese materials (collected at their non-coveredentity) to your institution, where they willbe analyzed and studied. The investigatorinforms you that there is no need to obtainHIPAA authorization, because these materialsare coded and she will not be able to identifythe subjects.According to the NationalInstitutes of Health (NIH), thereis no distinction between PHIbelonging to U.S. citizens andthat of non-U.S. citizens.U.S. and non-U.S. health informationDoes this investigator need to obtain HIPAAauthorization from the Zimbabwean subjects?Before you can answer this question, it isnecessary to first assess whether the researchmaterials received from Zimbabwe are protectedhealth information (PHI). The PrivacyRule defines PHI as individually identifiableinformation, a subset of health information,including demographic information, collectedfrom an individual and:1. created or received by a health careprovider, health plan, employer, or healthcare clearinghouse; and2. related to the past, present, or futurephysical or mental health or condition ofan individual, the provision of health careto an individual, or the past, present, orfuture payment for the provision of healthcare to an individual; and3. that identifies the individual; or4. there is a reasonable basis to believe thatthe information can be used to identifythe individual. 2According to the National Institutes of Health(NIH), there is no distinction between PHIbelonging to U.S. citizens and that of non-U.S. citizens. Agency guidance states“[t]he Privacy Rule defines PHI as individuallyidentifiable health information… (includingthe individually identifiable healthinformation of non-U.S. citizens).” 3Applying the NIH’s definition to our example,the Zimbabwean subjects’ information isPHI, if it is individually identifiable accordingto the above requirements. Let’s assume thatthe Zimbabwean collaborators are collectingPHI (satisfying criteria #4 above). Is this thetype of research activity that HIPAA regulates?In other words, must the U.S. investigatorobtain HIPAA authorizationfrom the Zimbabwean subjectsprior to using their data andspecimens?HIPAA authorization, whichmust contain all of the PrivacyRule’s “Core” and “Required”Elements,” (see Sidebar 1) istriggered under a two-pronged test: 1) PHImust be involved in the research activity; and2) the research activity must involve a coveredentity or members of its workforce. If bothconditions are met, then HIPAA authorizationis required. At this point, the first prongis met – the investigator is collecting PHI.Whom the Privacy Rule governsThe Privacy Rule defines covered entity as “ahealth plan, a health care clearinghouse, or ahealth care provider who transmits health informationin electronic form in connection witha transaction for which [Health and HumanServices] has adopted a standard.” 4 Whetheran institution is a covered entity is a decisionthe institutional official should make, notContinued on page 40Health Care Compliance Association • 888-580-8373 • www.hcca-info.orgFebruary 200839

Sharpening your hospital compliance program tools...continued from page 39ResearchComplianceAcademyJune 9-12 | San Francisco, CAandFall, 2008 | Location TBDThe Research Compliance Academywill focus on compliance issuesrelated solely to research. Witha wide range of issues related toresearch being such hot topicswith enforcement agencies, avenue such as this will give youthe opportunity to get informationon many areas that affect researchcompliance officers and theirstaffs on a day-to-day basis. Asmall audience will lend to handsoneducational techniques, smallgroup interaction and networking.For more information or questions pleasecontact jennifer.power@hcca-info.orgresearch staff. If your institution is a covered entity, then both the institution andmembers of its workforce must comply with the Privacy Rule whenever using ordisclosing PHI.Researchers are members of the workforce if they are “employees, volunteers,trainees, and other persons whose conduct, in the performance of work for acovered entity is under the direct control of such entity whether or not theyare paid by the covered entity.” 5Accordingly, all activities (e.g., clinical research, creating and maintainingresearch repositories and databases, conducting health services research) thattake place at a covered entity or by investigators who are members of thecovered entity’s workforce, must follow the Privacy Rule. Conversely, thePrivacy Rule does not protect individually identifiable health informationused or disclosed by researchers who are not members of a covered entity’swork force. 3 It is very important that researchers understand how the PrivacyRule affects their work.Here, an analysis of whether HIPAA is required is appropriate, not becausethe Zimbabwean investigators are collecting PHI, but because the investigator,who is a member of a covered entity’s workforce, is receiving PHI. Accordingto the NIH Guidance, the investigator in our example must obtainthe Zimbabweans’ HIPAA authorization because she is receiving PHI – fromnon-U.S. citizens – as a member of a covered entity’s workforce. Recallhowever, the investigator’s statement that she is receiving coded data and willnot be able to identify the subjects. Before you decide HIPAA authorizationis not required, you must consult the Privacy Rule to determine when codeddata is no longer PHI (i.e. de-identified).Under HIPAA, three methods are used to make individually identifiableinformation de-identified: 1) by removing all 18 elements considered identifiers(see Sidebar 2); 2) by verifying statistically the PHI is not individuallyidentifiable; or (3) by coding the PHI. 6 The third method applies to ourexample, because the investigator is receiving coded PHI.Coded PHI may be used without an individual’s authorization. PHI that iscoded according to the Privacy Rule’s safe harbor is not considered individuallyidentifiable and is therefore, not regulated by HIPAA. 7 The Privacy Rulesets out explicit criteria that must be met before coded PHI is consideredde-identified:[T]he Privacy Rule allows a covered entity to assign a code or othermeans of record identification to allow de-identified information to be reidentifiedby the covered entity, if the code is not derived from, or relatedto, information about the subject of the information. For example, theFebruary 200840Health Care Compliance Association • 888-580-8373 • www.hcca-info.org

code cannot be a derivation of the individual’ssocial security number, nor can itbe otherwise capable of being translated soas to identify the individual. 7In addition to the above criteria, the coveredentity must not share the key to translatethe code with anyone, for any purpose. 6When PHI is de-identified, it may be used ordisclosed without following the Privacy Rulebecause there are no restrictions on the use ordisclosure of de-identified health information. 8Again, let’s assume that the PHI received bythe investigator has been coded in accordancewith the above criteria and that the investigatorattests that the key to translate the codeddata will not be released to her under anycircumstances. It appears the second prong ofour HIPAA authorization test is also satisfied(i.e., the Zimbabwean subjects’ data andspecimens are de-identified). Before you tellthe investigator that she does not need to obtainthe Zimbabwean subjects’ authorization,an additional question must be addressed.Does PHI coded according to HIPAA remainde-identified when the data coders and datausers are research collaborators?Coded PHI shared among researchersUsing the facts from our example, if theZimbabwean researchers code the data, shareit with the investigator, and then collaboratewith the investigator, does the data remainde-identified? HIPAA does not address thissituation. Three guidance documents issuedby the Office for Human Research Protections(OHRP) are useful to resolving thisquestion: Engagement of Institutions inResearch; Research Involving Coded PrivateInformation; and Draft OHRP Guidanceon Engagement of Institutions in HumanSubjects Research.The first and second documents, releasedin 1999 and 2004, conclude that codeddata shared among researcher collaboratorsis individually identifiable, if one of theresearchers was involved in coding the data.For example, if researcher A codes data, sharesit with researcher B, and then collaborateswith researcher B, OHRP considers the dataindividually identifiable. This is because itis possible that the identity of an individualcould become known through researcher A’saccess to identifiable information. 9 Under thisGuidance, it is arguable that the investigatorin our example is receiving individuallyidentifiable information, because she couldfind out the subjects’ identities.Last year, however, OHRP released draftguidance that suggests coded data remainsanonymous even when researcher A codes thedata, shares the data with researcher B, andthen collaborates with researcher B. 10 This istrue as long as one of the following criteria issatisfied:1) the key to decipher the code is destroyedbefore the consultants or collaboratorsobtain the coded private information/specimens;2) the consultants/collaborators and theholder of the key enter into an agreementprohibiting the release of the key tothe consultants/collaborators under anycircumstances;3) the releasing institution has IRB-approvedwritten policies and operating proceduresapplicable to the research projectthat prohibit the release of the key tothe consultants/collaborators under anycircumstances; or4) other legal requirements prohibit therelease of the key to the consultants/collaborators.10OHRP’s recent thinking about when codeddata, shared among researchers, is sufficientlyde-identified is similar to HIPAA’s criteria forde-identifying PHI. Under both rules, PHI isde-identified if the holder of the key and therecipient of coded data agree not to share thekey. This suggests that the investigator doesnot have to obtain the Zimbabwean subjects’authorization to use their PHI, as long as thefollowing HIPAA and OHRP criteria are met:1) the code used to de-identify the data is notrelated to the subjects information; and 2) theholder of the key agrees not to release the keyto the investigator.ConclusionIt should now be very clear that HIPAA appliesto international research involving non-U.S. citizens, because PHI is PHI, regardlessof whether it belongs to a U.S. citizen or anon-U.S. citizen. If researchers are membersof your covered entity’s workforce and theyreceive non-U.S. citizen’s PHI, then theymust obtain these persons’ authorization inorder to use or maintain their PHI. However,no authorization is required if researchers canattest that they are receiving de-identifieddata under the Privacy Rule’s criteria andOHRP Guidance, if they are sharing codeddata with collaborators. nThe author would like to acknowledge thefollowing contributors:Sunny Hong, JD, Regulatory Analyst andLaurie Bolton, JD, Director, Office ofInstitutional Assurances, both atSeattle Children’s Hospital ResearchInstitute1 HIPAA, 45 CFR 160 and 164.2 Privacy Rule – 45 CFR 160.103 see definitions for health information,individually identifiable health information, and protected healthinformation.3 Protecting Personal Health Information in Research: Understanding theHIPAA Privacy Rule, NIH Publication Number 03-5388, page 8.4 NIH Publication Number 03-5388, page 5.5 45 CFR 160.103.6 NIH Publication Number 03-5388, page 10.7 Federal Register Vol. 67, No. 157, page 53232, Aug. 14, 2002.8 Summary of the Privacy Rule, HIPAA Compliance Assistance, Office ForCivil Rights, DHHS, page 4.9 Engagement of Institutions in Research, January 26, 1999 at pageexample B (1)(b); Research Involving Coded Private Information orBiologic Specimens, August 10, 2004, page 3.10 Draft OHRP Guidance on Engagement of Institutions in HumanSubjects Research, October 27, 2006 at example B (2).Health Care Compliance Association • 888-580-8373 • www.hcca-info.orgFebruary 200841

Calling All Compliance Today Authors!2008Compliance TodayAuthors Receptionat the 2008 Compliance InstituteApril 13, 4-5 PM, Hilton New Orleans RiversideFor almost 12 years HCCA has delivered timely compliance-relatedinformation to its members through its monthly magazine, ComplianceToday, thanks to more than 500 individuals who have contributed theirtime, their talents and their expertise.So, on Sunday, April 13, at the Hilton New Orleans Riverside, HCCAwill hold an Authors’ Reception where we will recognize our authorsand their vital contributions. The reception is for past and futureCompliance Today authors. We encourage all Compliance Todayauthors and potential authors to register if they plan to attend! Registerat www.compliance-institute.org and click on the registration menu.February 200842Health Care Compliance Association • 888-580-8373 • www.hcca-info.org

Setting up an Office of Research Compliance ...continued from page 13policy and procedure. Because our system isan open model, we struggled with how bestto handle potential conflicts stemming fromnon-employee physicians. Ultimately, even ifthe physicians are not our direct employees,the committee agreed that it had the responsibilityfor oversight of potential conflicts ofinterest stemming from research conducted ator under the auspices of our system.Proper management of research complaintsis another important area that our officemanages. In establishing our formal complaintprocess, we understood that maintainingconfidentiality is critical. We developedseveral mechanisms in which a person can filea complaint, including a formal ReportingForm for Research Concerns or Complaintswhich can be submitted via e-mail, fax, orUnited States mail, and the Business PracticesEthics Line which is manned by outsidepersonnel. Either of these mechanisms can beanonymous. Our office always maintains an“open door” policy, welcoming all concerns orcomplaints. Because of the need for coordinationof information and efforts betweenareas, such as our office, Risk Reduction, andBusiness Practices, we also developed a communicationprotocol regarding the handlingof specific types of complaints.Our office is also responsible for managingany allegations of research misconduct. Indetermining how best to handle these allegations,our office relied heavily on the Office ofResearch Integrity’s (ORI) sample policy (seehttp://ori.dhhs.gov/policies/ori_policies.shtml).In addition, we formally submitted ourpolicy to the ORI for review and approval.With ORI review and approval secured, wefeel confident that, if an allegation of researchmisconduct arises, we will handle the inquiryin a proper fashion.The last step in establishing our office waswriting our departmental policies and procedures,which were presented to our institution’slegal counsel for review and approval.This was arguably the most important stepin building our research compliance office,because these documents provided a backbonefor the office and established its goalsand boundaries. Examples of policies andprocedures that are housed within our officeinclude:n Quality Monitoring Program. The purposeof the quality monitoring programis to provide a systematic, internal processto review trials with the goal of increasingcompliance with federal, state, and institutionalrequirements and promoting humanand animal subjects protections throughthe ethical conduct of research.n Complaints, Non-Compliance andRegulatory Improprieties. This procedureoutlines the process in which concerns orcomplaints are handled.n Research Misconduct. This procedure addressesexpectations and conduct with respectto integrity in research and describesthe responsibilities of research personnelregarding instances of alleged misconductin research.n Conflicts of Interest in Research. Thisprocedure is designed to promote theidentification, disclosure and, if required,resolution or management of potentialconflicts of interest in research.n Research Registration and Billing. Thisprocedure describes the appropriate hospitalbilling process for clinical trials.It is important for your office to establishwhat needs to be written down and whichoffice(s) will be held accountable.Special projects also arise on a frequent basis.Research billing is one area, for example, inwhich our office has supported the hospitalsin the system. In conjunction with other offices,we established a formal research patientregistration and billing process for use inthe hospital setting. As we all know, clinicalresearch billing is an area of concern for mostresearch institutions. Over the past severalyears, the federal government has placedgreater emphasis on regulations related tofinancial accountability for the conduct andpayment of clinical research. In response,our office has worked diligently to assembleprograms to address the concerns of thegovernment and has implemented safeguardsto ensure that the clinical and research careprovided to subjects in research studies isbilled and paid appropriately.Remember that there is no one “right” way inwhich to build your office. However, we feelthat our systematic approach has resulted inan office which provides broad oversight overall areas of research, coordinates efforts, andprovides an environment of care and responsibleconduct. By no means is our approachflawless. We continually work to improveour processes and educate ourselves and ourcommunity. nContact Us! www.hcca-info.orginfo@hcca-info.orgFax: 952/988-0146HCCA6500 Barrie Road, Suite 250Minneapolis, MN 55435Phone: 888/580-8373To learn how to place an advertismentin Compliance Today, contactMargaret Dragon:e-mail: margaret.dragon@hcca-info.orgphone: 781/593-4924Health Care Compliance Association • 888-580-8373 • www.hcca-info.orgFebruary 200843

Join us at HCCA’s 2008 Local Area ConferencesHCCA’s local area conferences take place throughout the year, all over the United States.You’re sure to find one that works for you!2008 Local ConferencesDallas, TX...........................February 15Atlanta, GA.........................February 29Grand Rapids, MI........................May 2New York, NY.............................May 16Seattle, WA.................................June 6Los Angeles, CA.......................June 27Anchorage, AK...................July 10 - 11Boston, MA...................... September 5Minneapolis, MN........... September 12Kansas City, MO............ September 26Chicago, IL............................October 3Pittsburgh, PA.....................October 10Honolulu, HI...................October 16-17Denver, CO..........................October 24Nashville, TN..................... November 7Louisville, KY.................. November 14Visit www.hcca-info.org for registration informationFebruary 200844Health Care Compliance Association • 888-580-8373 • www.hcca-info.org

Upcoming Local Area ConferencesJune 6Seattle, WASeptember 12Minneapolis, MNOctober 24Denver, CO October 3Chicago, ILMay 2Grand Rapids, MIOctober 10Pittsburgh, PASeptember 5Boston, MAMay 16New York, NYJune 27Los Angeles, CASeptember 26Kansas City, MONovember 14Louisville, KYFebruary 15Dallas, TXNovember 7Nashville, TNFebruary 29Atlanta, GAJuly 10 - 11Anchorage, AKOctober 16-17Honolulu, HIHealth Care Compliance Association • 888-580-8373 • www.hcca-info.orgFebruary 200845

TOP RISK Areasin ResearchComplianceIn a follow-up survey, HCCA Research Compliance Conferenceattendees identified the following as the top Research Risk Areas:1. Research Billing2. Effort Reporting3. Conflicts of Interest4. Cost Transfers and otherresearch accounting issues5. Privacy Related Issues in Research6. Data and Safety Monitoring Issues7. Indirect Costs8. Scientific Misconduct9. Security Issues in Research6500 Barrie Road, Suite 250Minneapolis, MN 55435888-580-8373February 2008www.hcca-info.org46Other suggestions from survey responders for top research risk areas included: **NOTE: items marked with * are from FDA findings in published 483 reports. Health Care Compliance Association • 888-580-8373 • www.hcca-info.org

Michigan Doctor SentencedOn December 27, 2007, the MuskegonChronicle reported that Dr. Robert Stokesmust serve 10.5 years in prison as well asthree years supervised release for health carefraud, a federal judge ruled.U.S. District Judge Gordon Quist also orderedStokes, an East Grand Rapids dermatologist,to pay a $175,000 fine. However, Quist heldoff on a decision about restitution, whichwas a major point of contention between thegovernment and Stokes' attorneys. For more:http://blog.mlive.com/chronicle/2007/12/chronicle_news_servicelori_nie.htmlTwo Women Convicted of Health Care FraudOn December 20, 2007 the San FranciscoChronicle reported that two women wereconvicted for their roles in a $34 millionscam to defraud health care companies bybilling for unnecessary medical procedures.Olga Lilia Toscano, 37, of Irvine, was convictedon Wednesday of conspiracy and fourcounts of mail fraud, while co-defendantMaria Licea Rosales, 39, of Santa Ana, wasconvicted of conspiracy and one count ofmail fraud. Jurors acquitted them on fivecounts and were unable to reach a verdict onanother six counts.Both women are scheduled to be sentencedMarch 28. For more: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2007/12/20/state/n021332S04.DTLLong Island Woman Faces Medicare FraudChargesThe December 19, 2007 New York DailyNews reported that A Long Island womanwill surrender Wednesday to face charges in a$6 million Medicare fraud scheme in whichshe posed as a doctor to steal patient recordsfrom nursing homes.Helene Michel, the co-owner of MedicalSolutions Management, a medical supplycompany, allegedly billed the Medicare accountsof patients at eight nursing homes formedical equipment that was never orderedor supplied between 2003 and 2007. Formore: http://www.nydailynews.com/news/ny_crime/2007/12/19/2007-12-19_fake_doctor_faces_6m_fraud_charge.htmlContinued on page 57Auditing and Monitoring, Part Six:...continued from page 22on the subject and should consistently includecomments about compliance and a culture ofcompliant, ethical conduct in staff meetings,presentations, and written communications,such as in corporate newsletters or on Intranets.Second, ensure that compliance is as consistentan item on Board agendas as finance or strategicpresentations. This alone, and the followup it requires and ensures, can go a long wayto establishing accountability for results. Whenpresentations and discussions occur, one of theeasiest ways to signal interest in these mattersis to ask the right questions. Not only will thisdirectly lead to being better informed, but perhapsmore importantly, this will directly signalthat you expect and intend to monitor resultsand accountability for the performance of thecompliance program and resolution of identifiedissues. As a member of the Board, responsibilityshould not entirely be laid at the feet ofthe Compliance department. This is ultimatelya responsibility of the CEO/Administrator orother members of senior management, andthey should be held accountable as well.Third, executives and directors need to be seenand heard on compliance issues. On a number ofoccasions, we have been involved in situations thatleft us asking, “Where is the CEO or the Board inaddressing this issue?” When issues are identifiedand a process is put in place to resolve the matter,be visible in compliance matters. The more seriousthe issue, the more important it is for senior managementor the Board to be involved.And finally, be supportive and committed tothe required decisions, even the hard onesthat may impact important physicians orprograms or those that may have negativefinancial consequences. Nothing erodes anorganization’s sense of commitment to compliancefaster than the perception that it onlymatters when it’s easy.Health Care Compliance Association • 888-580-8373 • www.hcca-info.orgConclusionCompliance is pervasive, or at least it should be,when performing at its best. It is an organization-widefunction that can positively impactthe culture and the attitudes of the staff infeeling that they work for an organization that“walks the walk” in the operations and finance.I have tried to make a compelling argumentin this series that the auditing and monitoringfunction should be designed, implemented,and managed to serve as a critical tool inachieving the level of performance that allorganizations seek and require to maximize inevitablyscarce resources. From our experience,the most compliant organizations tend alsoto be better performing financially. The samediligence and management that produces onejust naturally tends to produce the other.As we head into 2008, we hope that the widerangingbenefits available from complianceprogram effectiveness can be captured by eachand every organization and that the variousrecommendations made throughout this serieswill contribute to achieving those goals. nFebruary 200847

February 200848Health Care Compliance Association • 888-580-8373 • www.hcca-info.org

Health Care Compliance Association • 888-580-8373 • www.hcca-info.orgFebruary 200849

HCCA Training ResourcesGuidebooks & Videos to Train Your Health care WorkforceGuide to ResidentCompliance TrainingThis guide offers a completetraining program designed tointroduce resident physicians tokey compliance concepts, includingethics, coding and reimbursement,conflicts of interest, HIPAA andconfidentiality, human subjectresearch, fraud and abuse, and more.A Supplement to YourDeficit Reduction ActCompliance TrainingProgramThis 13-page handbook offersan easy way to educate youremployees about the basics ofMedicare and Medicaid, theFederal False Claims Act, and thewhistleblower protections that helphealth care workers fight fraud.Compliance Conscienceand ConductThis 17-minute video plus sessionleader guide offers an easy wayto train employees in compliancebasics. Seven dramatized scenarioscover key topics, includingcoding accuracy, workplace conduct,gifts and gratuities, patientinformation, patient charts, vendorrelationships, and vendor gifts.Bridging theGap BetweenMedicare Complianceand MedicineThis 12-minute video offers a simpleway for compliance officers tohighlight the importance of Medicarecompliance to physicians.Topics include making sense ofMedicare language, understandingMedicare’s covered-servicesapproach, identifying Medicare’sareas of flexibility, and more.HIPAA SecurityComplianceThis 15-minute video plus 10participant handbooks show howto meet the requirements of theHIPAA Security Rule. The programcovers security basics, includingprotection from malicious software,device and media controls, log-inmonitoring, technical safeguards,physical and facility access controlsand more.HIPAA PrivacyComplianceThis 19-minute video plus 10participant handbooks offer anin-depth review of the HIPAAPrivacy Rule. Viewers will learnthe importance of protecting patientprivacy and confidentiality,including the use and disclosureof protected health information;patient consent and authorization;administrative requirements, andmore.Healthcare Compliance:Code of ConductThis 18-minute video plus 10participant handbooks give anoverview of compliance and itsimportance in today’s healthcare environment. Topics includecodes of conduct, compliancebest practices, monitoringand auditing, education and training,enforcement and discipline, and more.EMTALA 911: On Call!This 15-minute video plus 10participant handbooks reviewEMTALA requirements for anyfacility that has walk-in patientswith urgent care needs. It explainsa facility’s legal obligations toprovide health care for patientswith an inability to pay, properprocedures for asking aboutfinancial status or health insurance,and more.February 200850*The Health Care Compliance Professional’s Manual is exempt from this offerVisit the HCCA store at www.hcca-info.org, or call 888-580-8373.

Compliance 101:Physical therapy,the referringphysician and StarkregulationsBy Nancy J. Beckley, MS, MBA, CHCEditor’s Note: Nancy Beckley is a health care administratorand rehab consultant at BloomingdaleConsulting Group, Inc. in Brandon, Florida,specializing in compliance programs for smallproviders. She can be reached at 888/999-0275 orby e-mail at nancy@bloomingdaleconsulting.com.Physicians have long referred their patientsfor physical therapy services to communityand hospital-based physical therapy and rehabdepartments. Many physician practices, particularlythose that have the propensity to referlarge volumes of patients for physical therapyin particular, have developed therapy servicesand clinics within their practice. Following theenactment of Stark I, many physician groupsdivested their therapy practices amid concernsof non-compliance with the self-referral law.The landscape of physician-owned physicaltherapy practices (POPTS) has been repopulatedover the past decade as physician groupshave taken advantage of the in-office ancillaryexception available under the Stark II regulations.Physician groups tout the ability toclosely supervise the therapy of their patientsand concurrently develop another revenuestream from in-office ancillary services as themain advantages of offering therapy services.The purpose of this article is to brieflyhighlight Stark compliance issues in the mostcommon context of physical therapy referrals,COMPLIANCEand alert physician groups to those issues thatmay require further review in the context ofreferrals for therapy services, based on wherethe therapy is to be provided.Defining physical therapyAccording to the American Physical TherapyAssociation (APTA), physical therapists helppeople with orthopedic conditions such as lowback pain or osteoporosis; joint and soft tissueinjuries, such as fractures and dislocations;neurologic conditions, such as stroke, traumaticbrain injury, or Parkinson’s disease; connectivetissue injuries, such as burns or wounds;cardiopulmonary and circulatory conditions,such as congestive heart failure and chronicobstructive pulmonary disease; and workplaceinjuries including repetitive stress disordersand sports injuries. A physical therapist (PT)examines the patient and develops a plan ofcare that promotes the ability to move, reducespain, restores function, and prevents disability.Therapeutic exercise and functional training arethe cornerstones of physical therapy treatment.From a Medicare perspective, physicaltherapy services means those outpatientphysical therapy services (including speechlanguagepathology services) described atsection 1861(p) of the Social Security Actthat are covered under Medicare Part A orPart B, regardless of who provides them, if theservices include:(i) Assessments, function tests and measurementsof strength, balance, endurance,range of motion, and activities of dailyliving; (ii) Therapeutic exercises, massage,and use of physical medicine modalities,assistive devices, and adaptive equipment;and/or (iii) Establishment of a maintenancetherapy program for an individualwhose restoration potential has beenreached, although maintenance therapy itselfis not covered as part of these services.101When a physician is contemplating a physicaltherapy referral for a patient, several therapyvenues may be considered as referrals:n A community private physical therapypractice or hospital-based outpatienttherapy department;n Therapy services provided in the physicianoffice as part of the group practice; orn A private practice therapist who in somecases may be renting office space that islocated within the group practice’s office.Many hybrid ownership arrangementsexist, including physician ownership of acomprehensive outpatient rehabilitationfacility (CORF) or rehab agency. Any sucharrangement must not only comply withStark and anti-kickback statutes, but mustalso comply with Medicare regulations(e.g., survey and certification) as well asany state regulatory requirements (e.g.,building codes, certificate of need [CON],and facility licensure).The Stark LawSection 1877 of the Social Security Act ,commonly known as the Stark Law or simplyStark, prohibits physicians from referringMedicare patients for certain designatedhealth services (DHS) to an entity with whichthe physician or a member of the physician’simmediate family has a financial relationship,unless an exception applies. Stark also prohibitsan entity from presenting or causing to bepresented a bill or claim to anyone for a DHSfurnished as a result of a prohibited referral.When Stark I was enacted in 1989,section 1877 applied only to physicianreferrals for clinical laboratory services.In 1993 and 1994, Congress expandedthe prohibition to ten additional DHSand applied certain aspects of the law tothe Medicaid program. Among the DHSservices added in Stark II were physicalContinued on page 53Health Care Compliance Association • 888-580-8373 • www.hcca-info.orgFebruary 200851

Reduce Your Medicaid Compliance Riskswith the newHCCA-AIS Medicaid Compliance NewsYour source for timely news and practical compliance strategiesfor hospitals, health systems, and other providers and suppliersNewMedicaidComplianceNewsletterThink you’re on top of Medicaid compliance? Think again…Driven by tough new Congressional mandates and explosive pressure from the states, theCenters for Medicare & Medicaid Services (CMS) and the HHS Office of Inspector General(OIG) are now launching unprecedented efforts to curtail Medicaid payment errors and fraudand abuse. For the next five years, Congress is providing $100 million per year to CMS and theOIG to reduce the Medicaid error rate and fight fraud, and they expect a tenfold return—$1billion in checks that will be written to the U.S. Treasurer by hospitals, health systems, andother providers and suppliers.Highly experienced teamThe Health Care Compliance Association (HCCA) and Atlantic Information Services (AIS)have teamed up to publish an information-packed 12-page monthly print and electronicnewsletter that mixes news developments with valuable how-to strategies on your top Medicaidrisk areas. HCCA’s lead role on Medicaid Compliance News ensures that stories will addressyour most serious Medicaid risks in a highly practical, no-nonsense way. The newsletter iswritten by an AIS editorial team led by Nina Youngstrom, who for the past 16 years haswritten the award-winning weekly Report on Medicare Compliance, which features inside newsand penetrating analysis of the top big-dollar issues for health care compliance officers.Atlantic Information Services, Inc.1100 17th Street, NW, Suite 300Washington, DC 20036Phone 800-521-4323www.aishealth.com6500 Barrie Road, Suite 250Minneapolis, MN 55435Phone 888-580-8373February FAX 952-988-0146 2008www.hcca-info.org52Subscribe now and you’ll receive:• 12 monthly issues packed with timely news and practical strategiesyou can use in your Medicaid compliance programs today• Optional same-day e-delivery by PDF• E-alerts when timely news breaks• $50 charter savings and $75 HCCA member savings,with a 100% money-back guaranteeHCCA member annual subscription: $292Nonmember annual subscription: $367If you're not completely satisfied with MedicaidCompliance News, our 100% money-back guaranteelets you cancel your subscription and receive a fullrefund within the first 45 days (two monthly issues),or receive a prorated refund for all unmailed issuesduring the year ahead.To order, visit www.hcca-info.org/mcnews,or call AIS at 1-800-521-4323.

Compliance 101: Physical Therapy, the Referring Physician and Stark Regulations ...continued from page 51therapy (including speech-languagepathology) and occupational therapy.Referrals to private practice and hospitaloutpatient departmentsThe majority of physicians refer patientsfor therapy services to private practiceclinics or hospital outpatient departments.Some referrals may require a detailed lookat the relationship between the referringphysician and the therapy clinic, and inevitably,a legal review by an attorney whois a Stark expert to ensure that agreementsare structured properly and that referralsclearly fall within a Stark exception. Afew such arrangements are:1) Instances where the referring physicianrefers to a hospital outpatient departmentwith which he has a compensationarrangement in place (e.g., providingmedical direction to the inpatient andoutpatient rehabilitation programs;2) Referral to a private practice where a familymember is employed; or3) Referral to a private practice where thephysician’s family member is the ownerof the practice. Where relationshipsexist with family members, whether byemployment or ownership, it is importantto determine if remuneration is receivedunder a Stark exception.Referrals for in-office therapy servicesUnder the in-office ancillary services exception,a physician may refer Medicare patients forphysical therapy services provided within thephysician practice if several requirements aremet. One requirement is that the therapyservices must be performed in the samebuilding in which at least one member ofContinued on page 55Therapy Venue Condition RisksHospital outpatient therapydepartmentPrivate practice physicaltherapy clinicIn office therapy servicesPrivate practice therapistsrenting space in referringphysician office suitePhysician on hospital staff, refers to outpatientdepartment, no financial relationship with hospital ortherapy department.Physician is Medical Director of hospital inpatient rehabfacility, and outpatient rehab services, and receivesMedical Director compensation.Physician refers based on patient preference, no financialrelationship with the private practice clinic or staff.Physician refers to a clinic where a family member isa receptionistPhysician refers to a clinic which is wholly owned bythe physician’s spouse.Physician refers to therapy clinic that is physicallylocated within and a part of the group practicePhysician personally provides physical therapy servicesto patientPhysician refers to therapy clinic that is within the officesuite, therapy is provided by an athletic trainer underthe direct supervision of the physicianPhysician refers arthritis patients to in-office physicaltherapist for a pool therapy program that is held atcommunity pool 3 miles from the clinicPhysician refers to physical therapist who rents spacein the physician office suite. The therapist is available2 half-days per week in the office suite.No apparent Stark risksPotential Stark violation: Reviewcompensation arrangementsNo apparent Stark risksPotential Stark violation: financialrelationship of family member in theprivate practice clinic. Review for bonafide employment relationship.Stark violation: financial/family relationshipPotential Stark violation: Review forcompliance with in-office ancillary exceptionNo apparent Stark violation, personallyperformed services are not ‘referral’No apparent Stark violation if in compliancewith in-office ancillary exception;(however therapy provided by athletictrainers, does not meet the Medicaredefinition of physical therapy providedincident-to.)Potential Stark issue: Review space lease.Potential Anti-Kickback violation: buildinglocation where services are provided.Potential violation: Medicare therapyregulations regarding non-exclusive useof community poolsPotential Anti-kick-back violation. ReviewOIG Fraud Alert: Rental of Space inPhysician Offices by Persons or Entitiesto Which Physicians Refer. (Feb 2000)Health Care Compliance Association • 888-580-8373 • www.hcca-info.orgFebruary 200853

AcademiesofHealth CareComplianceUpcoming Compliance Academies in 2008…February 4 – 7SOLD OUT!Hyatt at Fisherman’s Warf | San Francisco, CAMarch 10-13Hilton Dallas Lincoln Center | Dallas, TXJune 2–5Hotel Valley Ho | Scottsdale, AZAugust 11-14Wyndam Chicago | Chicago, ILNovember 3-6Hard Rock Hotel | Orlando, FLDecember 1-4Westin Horton Plaza | San Diego, CAAdvanced ComplianceHCCA’s Advanced Compliance Academyoffers four days of intensive, in-depth health care compliance educationfor the experienced compliance professional!San Francisco, CAJune 16–19 | Hyatt at Fisherman’s Warf ResortFebruary 200854Dallas, TXOctober 20-23 | Westin City CenterRegister online at www.hcca-info.orgHealth Care Compliance Association • 888-580-8373 • www.hcca-info.org

Compliance 101: Physical Therapy, the Referring Physician and Stark Regulations ...continued from page 53the physician group practice has a practiceor services must be performed in a locationthat is used for the centralized provision ofthe therapy services. The definition of “samebuilding,” is met if it satisfies one of three testscomprised of elements related to the numberof hours the office is open, the number ofhours physician services unrelated to DHSare provided, and the presence of the referringphysician. The practice must also meet theStark definition of a “group practice.”Services provided in physicians officeRequirements for participation in theMedicare program must also be met, andthe requirements are essentially the sameas other providers of therapy services appropriateto the venue (private practice vs.CORF, for example). In a report issued in2006, the OIG reported that 91% of physicaltherapy billed by physicians and allowedby Medicare during the first 6 months of2002 did not meet program requirements,resulting in $136 million in improper payments.(Source: http://www.oig.hhs.gov/oei/reports/oei-09-02-00200.pdf )Detailed therapy requirements are easilyaccessed in the Medicare Benefits PolicyManual, Chapter 15, sections 220 and 230.Most carriers have published local coveragedeterminations that detail documentationand coding requirements, and definitions ofqualified personnel. The CMS Website alsocontains a section on therapy services: http://www.cms.hhs.gov/TherapyServices/.Therapy “caps” (BBA, 1997) also applyincluding a cap of $ 1,810 on physical therapyservices (including speech-language-pathology)for 2008. At press time, an extension to thetherapy caps exceptions process which hadbeen in place for 2006-2007 had not been putin place. There is also a separate $1,810 cap onoccupational therapy services in 2008.In certain states, such as South Carolina,there is a prohibition against a physicaltherapist working as an employee of a physician,when the physician refers patients tothe physical therapist. State practice acts forphysical therapy can be referenced online athttp://www.fsbpt.org.PT renting space from the referringphysicianVarious types of creative arrangements havepopped up related to rental of office space tooutside parties who provide therapy servicesto patients who are referred by the physicianwho owns the space. A simple and commonarrangement involves renting of space (andin some instances, therapy equipment) to aprivate practice therapist to whom the physicianrefers. In addition to rental arrangementspertinent under Stark, the OIG issued a specialfraud alert in 2000 regarding rental arrangements,specifically noting physical therapyservices, warning against rental fees far in excessof fair market value, and in reality servingas disguised kickbacks for referrals. This fraudalert “Rental of Space in Physician Offices byPersons or Entities to Which Physicians Refer”cautions parties in this type of instance to availthemselves of the rental of space and/or equipmentsafe harbors under the Anti-kickbackStatute, which in all cases requires that paymentsrepresent fair market value.Other more complicated rental arrangementsexist, and all arrangements should be reviewedby a health care lawyer who is an expert in theStark Law and Anti-kickback Statute.2007 UpdatesCMS issued the Stark II, Phase III regulationson September 5, 2007. The PhaseIII regulations, which became effective onDecember 4, 2007, clarify several Stark Lawdefinitions and provide additional guidanceon various “exceptions” used by physiciansto permit referral relationships that areotherwise prohibited.In the Proposed Rule, CMS notes its concernthat the in-office ancillary services exceptionhas been improperly used by physician practicesto provide DHS that are not sufficientlyconnected to the physician practice. CMSdid not propose any changes to the exceptionin the Proposed Rule, despite noting that itreceived hundreds of comments from physicaland occupational therapists during Phase IIstating that the in-office ancillary servicesexception encourages physicians to createphysical and occupational therapy practices.However, CMS did solicit comments on:1) whether certain services should notqualify for the exception (e.g., any therapyservices that are not provided on an“incident-to” basis, and services that arenot needed at the time of the office visitin order to assist the physician in his/herdiagnosis or plan of treatment);2) whether changes should be made to thedefinition of “same building” and “centralizedbuilding,” which are terms used inthe exception to define the site of servicefor the DHS;3) whether non-specialist physicians should beable to use the exception to refer patientsfor specialized services involving equipmentowned by the non-specialists; and4) any other restrictions on the ownership orinvestment in services that would curtailprogram or patient abuse.The Phase III regulations clarify that productivitybonuses can be based directly on“incident to” services that are incidental tothe physician’s personally performed services,even if they are DHS services. This meansthat a physician can be paid a productivitybonus based directly upon physical therapyContinued on page 57Health Care Compliance Association • 888-580-8373 • www.hcca-info.orgFebruary 200855

CMS’ Special Focus Facility Initiative and Nursing Home Compare ...continued from page 25has been actively mining data of nursing homes.As James Sheehan, Medicaid Inspector Generalof New York, cautioned, “We are reviewingassorted sources of quality information on yourfacility to see what it says and if it is consistent.You should be doing the same.” 28Reporting efforts such as OSCAR, MDS,and Nursing Home Compare complementthe increased use of software to aggregateand analyze the reported information. Thiscombination permits greater analysis thanever before about quality of care in individualnursing homes nationwide. Such quality datais typically not subject to any privilege ordiscovery protection; it is reported directlyto the government or government contractorand publicly posted. 29The government is quickly becoming adeptat using statistical data in its quality-of-careenforcement efforts. Last summer, a specialstrike force, consisting of federal, state, andlocal investigators, arrested approximately 38people in Florida in connection with allegedschemes to defraud Medicare, including billingMedicare for unnecessary services. 30 The strikeforce identified the individuals through its realtimeanalysis of Medicare billing data.Next steps for nursing homesNursing homes must evaluate whether theyhave sufficiently integrated quality-of-carereview into their operations and complianceprograms. Given the current enforcementenvironment, nursing homes should strive tobe just as vigilant as hospitals – if not moreso, given the public’s general attitude towardnursing homes – to develop a quality-of-carecompliance program. 31 This requires a broadbased,coordinated approach among the administration,the medical director, supervisingnurses, therapists, nursing support staff, riskmanagers, and legal counsel.Establishing internal quality controls andidentifying areas of potential quality breakdownsare two key areas a nursing homeshould immediately address to reduce therisk of an adverse government enforcementaction. In light of the government’s qualityof care initiative, these areas should be givenequal oversight attention as areas of traditionalconcern (e.g., billing and claims submission).Such an assessment, ideally performedby objective outside counsel, can reveal thetrue operational landscape of a nursing home,which is a necessary prerequisite to identifyingand addressing the compliance implicationsof the quality of care it provides.ConclusionQuality of care, with its attendant impacton payments, public reporting, and civilenforcement, should be the primary concernof nursing homes. Addressing quality of careproactively, and integrating it with compliance,will give a nursing home a financial andoperational advantage by readying it to meetthe quality measures reported on NursingHome Compare, thereby boosting its reputationamong consumers and regulators alike.Those same investments in quality of care cansimultaneously provide additional returns byminimizing litigation exposure and enforcementactions based on poor quality. An effectiveoption nursing homes should consider isto submit their facility to an external audit forquality controls and legal risks. Such an audit,performed under the attorney-client privilegeby skilled health care counsel, can reveal to anursing home its current legal exposure, basedon quality-of-care factors. With this informationin hand, the nursing home can revise itsstructure and operations accordingly. Nursinghomes that refuse to recognize and addresstheir quality-of-care failures should not besurprised to find themselves candidates forthe SFF Initiative or, worse, excluded fromfederal programs. n1 See CMS Press Release, “CMS Publishes National List of Poor-Performing Nursing Homes, Key Tool for Families Seeking QualityCare.” (November 29, 2007).2 www.cms.hhs.gov/CertificationandComplianc/Downloads/SFFList.pdf.3 Skilled nursing facilities (“SNF”) and nursing facilities (“NF”) arerequired to be in compliance with the requirements in 42 CFR Part483(B) to receive payment under the Medicare or Medicaid programs.To certify a SNF or NF, a state surveyor completed at least a Life SafetyCode survey and a standard survey. www.cms.hhs.gov/Certificationand-Complianc/12_NHs.asp.4 See CMS’ 2007 Action Plan for (Further Improvement of) NursingHome Quality (September 2006) at p. i.5 Using an established protocol, the team interviews a sample of residentsand family members about their life within the nursing home, andinterviews caregivers and administrative staff. www.medicare.gov/NHCompare/static/Related/AboutInspections.6 www.medicare.gov/NHCompare/static/Related/AboutInspections.7 www.cms.hhs.gov/CertificationandComplianc/Downloads/SFFBackground.pdf.8 www.cms.hhs.gov/CertificationandComplianc/Downloads/SFFBackground.pdf.9 www.cms.hhs.gov/CertificationandComplianc/Downloads/SFFBackground.pdf.10 See CMS Press Release, “CMS Publishes National List of Poor-Performing Nursing Homes, Key Tool for Families Seeking QualityCare.” (November 29, 2007).11 www.cms.hhs.gov/CertificationandComplianc/Downloads/SFFBackground.pdf.12 See CMS Press Release, “CMS Publishes National List of Poor-Performing Nursing Homes, Key Tool for Families Seeking QualityCare.” (November 29, 2007).13 See CMS Press Release, “CMS Publishes National List of Poor-Performing Nursing Homes, Key Tool for Families Seeking QualityCare.” (November 29, 2007).14 See CMS Press Release, “CMS Publishes National List of Poor-Performing Nursing Homes, Key Tool for Families Seeking QualityCare.” (November 29, 2007).15 www.cms.hhs.gov/CertificationandComplianc/Downloads/SFFBackground.pdf.16 www.cms.hhs.gov/CertificationandComplianc/Downloads/SFFBackground.pdf.17 www.medicare.gov/NHCompare.18 www.medicare.gov/NHCompare/Static/Related/AboutMeasures.19 www.medicare.gov/NHCompare/Static/Related/AboutMeasures.20 www.medicare.gov/NHCompare/Static/Related/NoteToNursingHomes.21 The information on OSCAR is reviewed by state surveyors, but notformally audited for accuracy. www.medicare.gov/NHCompare/Static/Related/DataCollection.22 The complete list of quality measures from MDS, along with thelook-back time revealing the surveyors’ depth of chart review, are listedon Nursing Home Compare. www.medicare.gov/NHCompare/Static/Related/DataCollection.23 See CMS Press Release, “CMS Publishes National List of Poor-PerformingNursing Homes, Key Tool for Families Seeking Quality Care”(November 29, 2007); see also CMS’ 2007 Action Plan for (FurtherImprovement of) Nursing Home Quality (September 2006).24 CMS’ 2007 Action Plan for (Further Improvement of) Nursing HomeQuality (September 2006) at pp. 31-32.25 CMS’ 2007 Action Plan for (Further Improvement of) Nursing HomeQuality (September 2006) at p. 32.26 CMS’ 2007 Action Plan for (Further Improvement of) Nursing HomeQuality (September 2006) at p. 31.27 31 U.S.C. §§ 3729-3733.28 February 6, 2007.29 Certain protections exist for health care quality information (e.g., statelaws protecting from discovery certain medical staff peer review information,privileged attorney-client communications, certain informationreported to a Patient Safety Organization (PSO) under the PatientSafety and Quality Improvement Act (PSQIA)). However, the publiclyavailablequality data the government uses for data mining is not subjectto those protections and can be a source for False Claims Act liability.30 Press Release, U.S. Department of Health and Human Services, StrikeForce Formed to Target Fraudulent Billing of Medicare Program byHealth Care Companies (May 9, 2007), available at http://www.hhs.gov/news/press/2007pres/05/pr20070509c.html.31 The Wall Street Journal ran a front page article highlighting the excessiveuse of prescription antipsychotic medications to chemically restrainresidents at U.S. nursing homes. Federal and some state regulators arequestioning such off-label use of antipsychotic drugs and issuing citationsagainst nursing homes for using them in ways that violate federalrules. “Prescription Abuse Seen In U.S. Nursing Homes: PowerfulAntipsychotics Used to Subdue Elderly, Huge Medicaid Expense,” WallStreet Journal (December 4, 2007).February 200856Health Care Compliance Association • 888-580-8373 • www.hcca-info.org

Freature focus: 2008 OPPS Final Rule...continued from page 35continue to receive an applicablepercentage of outpatient reimbursementunder the Deficit Reduction Actof 2005, and rural sole communityhospitals (SCHs) along with essentialaccess community hospitals (EACHs),will continue to receive 7.1% paymentincrease in 2008. And yes, the Inpatient-Only list (SI C) is alive and well for2008!Be prepared to react as CMS will publishfurther coding and billing instructions at alater date. Working as a team to implement,update, and manage the comprehensive2008 OPPS and CPT updates will ensureyour outpatient revenue cycle is “APCready”,compliant, and financially sound. nFYI ...continued from page 47HealthSouth and Physicians Pay $14.9Million, Resolve Health Care Fraud ChargesOn December 14, 2007, the U.S. Departmentof Justice announced that HealthSouthCorporation and two physicians have agreedto pay the United States a total of $14.9million to settle allegations that the Birmingham,Ala.-based company submitted falseclaims to the government and paid illegalkickbacks to physicians who referred patientsfor care in some of its hospitals, outpatientrehabilitation clinics, and ambulatory surgerycenters. For more: http://www.usdoj.gov/opa/pr/2007/December/07_civ_1007.htmlHealthSouth Settlement Agreement: http://www.usdoj.gov/usao/aln/Docs/December%202007/HealthSouth%20Settlement%20Agreement%20Fully%20Executed.pdf nCompliance 101: Physical Therapy, the ReferringPhysician and Stark Regulations ...from page 55services that are provided as incident to thephysician’s services.If you have decided that providing physicaltherapy or occupational therapy in your officeis the right step for your practice, consultwith a health care attorney in your state whois knowledgeable in both the Stark Law andAnti-kickback Statute, as well as any statespecificrequirements. You should ask for areview, not only of pertinent federal and stateregulations governing self-referrals, but forany prohibitions on hiring therapists in yourstate as well. nNote: the author wishes to thank DouglassFarnsworth, Esq. and Dick Jacobs, Esq. ofthe law firm Trenam Kemker in St. Petersburg,Florida for their technical assistance and recommendationsin support of this article.St. Vincent Charity Hospital – care that nurtures body and soul.When you join the dedicated team at St. Vincent Charity Hospital, you’re joining a modern and vitalorganization committed to meeting the changing healthcare needs of our community. Located in theheart of downtown Cleveland for over 140 years, we offer our patients comprehensive, compassionatecare—and you the rare opportunity to serve all the entities in our system. Please join us as our:COMPLIANCE OFFICERThis professional is responsible for the development, implementation and maintenance of our system-widecompliance program for all five entities within UHHS/CSAHS, including St. Vincent CharityHospital; St. John West Shore Hospital; Westshore Primary Care, Cuyahoga; Physician Network; and Professional Medical Equipment,Inc. This program is designed to assist Cuyahoga’s employees and business partners in meeting their legal, professional,and ethical responsibilities.You’ll need a firm understanding of the laws and regulations impacting healthcare and non-profit organizations, and the diplomacyto handle confidential matters. Well-honed management and communication skills will help you supervise and motivate yourteam. Use your solid communication talents to effectively work with internal and external constituencies at all levels, includingthe Cuyahoga Board of Directors.We’re looking for someone with a Bachelor’s in Business Administration, Law or the equivalent, and atleast 10 years’ experience in health care, finance, auditing, legal, or regulatory compliance. Determination,adaptability, and the willingness to travel is required.We offer a very attractive compensation package. For confidential consideration, please submit resume bymail or fax to:ST. VINCENT CHARITY HOSPITALAttn: Gail Robb, Director of Human Resources2351 East 22nd St.Cleveland, Ohio 44115FAX: 216-363-2591gail.robb@csauh.comEOE, M/F/D/VFaith In Action© 2007 NAS(Media: delete copyright notice) Health Care Compliance Association • 888-580-8373 • www.hcca-info.orgCompliance TodayFebruary 200857

Call for SpeakersFor HCCA 2008National ConferencesThe Health Care Compliance Association is looking for topics and quality speakers for our 2008National Conferences (listed below). If you would like to be considered as a speaker or knowof someone who would be a good speaker for any of these conferences, please complete theappropriate form on our Web site at www.hcca-info.org under the Events tab.The deadline for all submissions is February 25, 2008(except for the Fraud & Compliance Conference, for which submissions will bedue March 7, 2008).Quality of Care Compliance ConferenceSeptember 28–30, 2008Philadelphia, PAConference Planner Jennifer Jansen | jennifer.jansen@hcca-info.orgPhysician Practice Compliance ConferenceOctober 1–3, 2008Philadelphia, PAConference Planner Melanie Gross | melanie.gross@hcca-info.orgFraud & Compliance ConferenceOctober 5–7, 2008Baltimore, MDConference Planner Jennifer Jansen | jennifer.jansen@hcca-info.orgResearch Compliance ConferenceOctober 19–22, 2008Chicago, ILConference Planner Melanie Gross | melanie.gross@hcca-info.org6500 Barrie Road, Suite 250Minneapolis, MN 55435888-580-837358www.hcca-info.orgFebruary 2008Medicare Part D Compliance ConferenceDecember 7–9, 2008Baltimore, MDConference Planner Melanie Gross | melanie.gross@hcca-info.orgHealth Care Visit Compliance our Web Association site for more • 888-580-8373 details at • www.hcca-info.org

About HCCA’s 2008 National ConferencesQuality of CareCompliance ConferenceThe Quality of Care conference focuseson organizational change: improvingquality and compliance for your organizationwithout forgoing the businessmodel. This conference is designedfor those involved in improving theirorganization’s quality and complianceinitiatives, as well as managers and academics.Topics include defining how thequality of care initiatives intersect withcompliance and regulations, what pay forperformance and improved quality willmean for improved business, and more.Physician PracticeCompliance ConferenceThe Physician Practice Conference willoffer presentations to assist physicians,compliance officers, coders and managersin managing an effective complianceprogram. The goal at the completion of theconference is that participants will understandcompliance program developmentand management as it relates to physicianpractices; current government initiatives inthe field of health care compliance specificto physicians and their group practices;correct documentation, billing, and codingpractices for physicians; and best practicesutilized in physician practices.Fraud & ComplianceConferenceYou won’t want to miss the 2008 Fraudand Compliance Forum, designed specificallyfor compliance officers and healthattorneys who must advise their clientsand institutions on the latest developmentsin fraud and abuse and compliance issues.Attendees will hear from leading privatepractitioners and representatives from theOffice of Counsel to the Inspector General,the Department of Justice, and the Centersfor Medicare and Medicaid Services.ResearchCompliance ConferenceThis is the research conference youcannot miss if you work for a sponsor, aresearch site, or for clinicians who conductresearch. Learn about latest trendson compliance with research accountingstandards, clinicial trial billing andprocess improvement, effort reporting,scientific misconduct, conflicts of interest,off-label use issues, FDA compliance,and government enforcement trends.Medicare Part DCompliance ConferenceThis comprehensive conference offersessential information provided by atalented faculty made up of leadingregulatory and enforcement representativesand industry experts. It will offerneed-to-know information on criticaldevelopments and compliance issuesfaced by all stakeholders, including PartD plans, pharmacy benefit managementorganizations, pharmacies, long-termcare facilities, and hospitals.HCCA MissionHCCA exists to champion ethicalpractice and compliance standardsand to provide the necessaryresources for ethics and complianceprofessionals and others who sharethese principles.Health Care Compliance Health Association Care Compliance • 888-580-8373Association • 888-580-8373 • www.hcca-info.orgFebruary 200859

February 200860New HCCA MembersThe Health Care Compliance Associationwelcomes the following new members andorganizations. Please update any contactinformation using the Member Center on theWeb site, or e-mail Karrie Hakenson(karrie.hakenson@hcca-info.org) withchanges or corrections.Pennsylvanian Marlene Evans, Capital BlueCrossTennesseen James Cruz, Team Healthn Thomas C. Frundle, The Center for SpinalSurgeryn Jana G. Gee, Dialysis Clinic Inc.n Anita Tipton, Dialysis Clinic Inc.Texasn Shauna Baughcum, CPC, Texas TechHealth Sciences Centern Eric Bowie, FLMI, FFSI, AIRC, UnitedAmerican Insurance Companyn Scot Eibel, Children’s Medical Center Dallasn Joseph Nelson, Fulbright & Jaworski, LLPn Sherri Shockey, Parkland Health & HospitalSystemn Shelly Smith, Reimbursement MgmtConsultants, Inc.n Michelle Turner, Children’s Medical CenterDallasn Melissa Wilburn, Children’s Medical CenterDallasVirginian Todd Bibb, AMERI GROUPn Elizabeth Lowry, Bon Secours Hlth SystemInc.n Rea Sasseville, Government ManagementServicesn Joseph Viel, Amerigroup Corp.Vermontn Michael R. Kelliher, Brattleboro MemorialHospWashingtonn Terri A. Brame, MBA, CPC-GENSG,CPC-, UW Dept of Surgeryn Corinne E. Jedynak-Bell, Puget SoundHealth Partnersn Pamela B. Joy, Seattle Childrens Hospn Nancy Jean Ricci, Children’s Hosp &Regional Med CtrWisconsinn Mark J. Peterson, Group Hlth Cooperativeof Eau ClaireWyomingn Lisa J. Adamson, Cheyenne VAMCAlaskan Kali A. Stern, Caridad Home Care, IncArizonan Julie Barton, Banner Healthn Susan Codega, NARBHAn Kip I. Dean, Banner Health Svcsn Kathy Kotin, Banner Good SamaritanHospitaln Debi A. Pomeroy, Verde Valley GuidanceClinicCalifornian JoEllen Cowan, RHIT CCS, CatholicHealthcare Westn Lisa Davies, Chapa-De Indian HealthProgramn Thea Giboney, Kaiser Permanenten Ken Harvey, Adventist Healthn Barbara Haverty, Aptium Oncologyn John A. Hodge, Sierra View Hospitaln Suzanne D. Houraney, Coastal CommunitiesHospitaln Melissa B. Juelis, JD, Kaiser Permanenten Todd Landreneau, Kaiser Permanenten Gail A. Miller, Kaiser Permanenten Barbara Naimark, Kaiser Permanenten Brandi C. Peneran Ravi Perumal, Kaiser PermanenteHealth Care Compliance Association • 888-580-8373 • www.hcca-info.orgn Pehnee Poblete, Kaiser Permanenten Gail Ptacek, RN, Kaiser Permanenten Xuan Ta, Kaiser Medical Centern Joyce Thomas, MHA, Health Care CodingAdministratorsn Duane A. White, Kaiser PermanenteColoradon Diane Hathaway, Big Thompson MedicalGroupConneticutn Rachel DeScenza, AmerigroupCorporationn Gerald DeSimone, Esq., Tyler CooperLLPn Joy Dorin, Athena Heatlh Care Systemsn James I. Glasser, Wiggin & Dana LLPn Pam Heon, Mosaicn Joseph Martini, Wiggin & Dana LLPn Elizabeth Schlaff, Central CT HealthAllianceWashington, DCn Nadine Robinson, Ernst & Young, LLPDelewaren Brian Williamson, Nemours FoundationFloridan Susan Baker, Pediatrix Medical Groupn Alex Cabale, Medica Health Plans ofFlorida, Incn Heardley R. Murdock, Waterman Communitiesn Lori J. Spencer, National Auditn Maria G. Watts, Bayfront Medical Centern Lawrence Williams, MPA, DevereuxFoundationGeorgian Kimberly Herron, Ethica Health & RetirementCommunitiesn Renee McGee, Gateway Foundation, Inc.

Compliance Today Editorial BoardThe following individuals make up the Compliance Today Editorial Advisory Board:Christine Bachrach, CHCSenior Vice President –Compliance OfficerHealthSouthCynthia Boyd, MD, MBAAssociate Vice PresidentChief Compliance OfficerRush University Medical CenterPhoto NotAvailableBonnie-Lou BennigDirector of Corporate Compliance& Quality ImprovementVanguard Healthcare Services, LLCDavid HoffmanPresidentDavid Hoffman & AssociatesBecky Cornett, PhD, CHCDirector, Fiscal IntegrityFinance AdministrationThe Ohio State UniversityMedical CenterGabriel Imperato, JD, CHCManaging PartnerBroad and CasselEric Klavetter, JD, MS, MAPrivacy and Compliance OfficerMayo ClinicF. Lisa Murtha, JD, CHCManaging DirectorHuron Consulting GroupKirk Ruddell, CHC, MBACompliance OfficerIsland HospitalDeborah Randall, JDPartnerArent Fox LLPLisa Silveria, RN BSNHome Care ComplianceCatholic Healthcare WestJames G. Sheehan, JDNew York StateMedicaid Inspector GeneralCheryl Wagonhurst, JD, CCEPPartnerFoley & Lardner LLPFoley & Lardner LLPDebbie Troklus, CHC, CCEPAssistant Vice President forHealth Affairs/ComplianceUniversity of LouisvilleSchool of MedicineHealth Care Compliance Association • 888-580-8373 • www.hcca-info.orgFebruary 200861

Your HCCA Staff888-580-8373 | 952-988-0141 | fax 952-988-0146Sarah AnondsonGraphic Artistsarah.anondson@hcca-info.orgGary DeVaanIT Manager/Graphic Artistgary.devaan@hcca-info.orgMargaret DragonDirector of Communicationsmargaret.dragon@hcca-info.orgDarin DvorakDirector of Conferencesand Exhibitsdarin.dvorak@hcca-info.orgWilma EisenmanHR Director/Office Manager/Compliance Officerwilma.eisenman@hcca-info.orgNancy G. GordonManaging Editornancy.gordon@hcca-info.orgMelanie GrossAudio/Web Conference Plannermelanie.gross@hcca-info.orgKarrie HakensonData Entry/Member Relationskarrie.hakenson@hcca-info.orgElizabeth HergertCertification Coordinatorelizabeth.hergert@hcca-info.orgPatti HoskinDatabase Associate/Member Relationspatti.hoskin@hcca-info.orgJennifer JansenConference Plannerjennifer.jansen@hcca-info.orgMeghan KosowskiReceptionistmeghan.kosowski@hcca-info.orgJennifer PowerConference Plannerjennifer.power@hcca-info.orgApril KielDatabase Administrator/Member Relations/Marketingapril.kiel@hcca-info.orgCaroline Lee BivonaProject Specialistcaroline.leebivona@hcca-info.orgPatricia MeesCommunications Editorpatricia.mees@hcca-info.orgBeckie SmithConference Plannerbeckie.smith@hcca-info.orgRoy SnellChief Executive Officerroy.snell@hcca-info.orgCharlie ThiemChief Financial Officercharlie.thiem@hcca-info.orgNancy VangAdministrative Assistantnancy.vang@hcca-info.orgFebruary 200862Allison WillfordAccountantallison.willford@hcca-info.orgJulie WolbersAccountantjulie.wolbers@hcca-info.orgHealth Care Compliance Association • 888-580-8373 • www.hcca-info.org

What!!!Joint Commissionwill be herethis afternoon?

HCCA 2008 Conference Calendarwww.hcca-info.org toll free 888-580-8373 local 952-988-0141 fax 952-988-0146Conference City DateCompliance Academy San Francisco, CA February 4-7Audit & Compliance Committee Academy Scottsdale, AZ February 11-13Southwest Local Area Conference Dallas, TX February 15Southeast Local Area Conference Atlanta, GA February 29Compliance Academy Dallas, TX March 10-13Compliance Institute New Orleans, LA April 13-16Upper North Central Local Area Conference Grand Rapids, MI May 2Mid Atlantic Local Area Conference New York, NY May 16Compliance Academy Scottsdale, AZ June 2-5Pacific Northwest Local Area Conference Seattle, WA June 6Research Compliance Academy San Francisco, CA June 9-12Advanced Compliance Academy San Francisco, CA June 15-20West Coast Local Area Conference Los Angeles, CA June 27Alaska Local Area Conference Anchorage, AK July 10-11Compliance Academy Chicago, IL August 11-14New England Local Area Conference Boston, MA September 5Upper Midwest Local Area Conference Minneapolis, MN September 12Midwest Local Area Conference Kansas City, MO September 26Quality of Care Compliance Conference Philadelphia, PA September 28-30Physician Practice Compliance Conference Philadelphia, PA October 1-3North Central Local Area Conference Chicago, IL October 3AHLA/HCCA Fraud & Compliance Forum Baltimore, MD October 5-7Central Atlantic Local Area Conference Pittsburgh, PA October 10Hawaii Local Area Conference Honolulu, HI October 16-17Research Compliance Conference Chicago, IL October 20-22Advanced Compliance Academy Dallas, TX October 20-23Mountain Local Area Conference Denver, CO October 24Audit & Compliance Committee Academy Ft. Lauderdale, FL October 27-29Compliance Academy Orlando, FL November 3-6South Central Local Area Conference Nashville, TN November 7Mid Central Local Area Conference Louisville, KY November 14Compliance Academy San Diego, CA December 1-4Medicare Part D Compliance Conference Baltimore, MD December 7-9Research Compliance Academy Location TBD Fall, 2008