Regulatory Compliance Training For Management

Arrangements with the neurosurgeons failed to comply with a Stark Law exception because those arrangements resulted in compensation in excess of fair market value. Those arrangements provided for a base salary, benefits, call pay, and a bonus equal to the difference between the base salary and the physician’s collections. According to the government’s expert witness, these arrangements resulted in compensation to the neurosurgeons in amounts over twice the compensation paid to neurosurgeons at the 90th percentile of their specialty, despite producing below the 90th percentile.

Stark Law Compliance Tips

• Meet a Stark Law exception.
• Document financial relationships with referring physicians.
• Have systems to ensure properly structured payments that reflect fair market value.
• Watch out for “lease creep” problems.
• Review productivity bonuses.
• Gifts can implicate the Stark law too.

Costs in Clinical Trials

Generally, there are two categories of costs in Clinical Trials:

1. Research Related Costs:
• Items or services required solely for the provision of the investigational item or service, the monitoring of the effects of the item or service, and the prevention of complications
• Generally funded by the sponsor of the clinical trial
• May not be billed to third party insurance
• Items or services needed for reasonable and necessary care arising from an investigational item or service
2. Standard of Care (Routine) Costs:
• Items or services that are typically provided absent a clinical trial
• Costs generally are not covered by sponsor
• May be billed to third party insurance

If the patient would receive the treatment or service regardless of her/his participation in the research then the treatment or service is considered standard of care. If not, then then the treatment or service is research related.

Double Billing

Billing Medicare, Medicaid or other third party insurers for research related items paid by the sponsor is double billing. If the beneficiary has no legal obligation to pay for the item or service then Medicare and other insurance plans don’t cover it. The beneficiary has no legal obligation to pay for the item or service if the sponsor agrees to pay (after denial) so the patient will not have that obligation.

Watch contractual terms with sponsors closely on this issue. Sponsors might not always understand Medicare reimbursement rules. Sponsors are not billing Medicare and 3rd party insurers so there is questionable liability on the part of Sponsors. Institutions should not rely on Sponsors for correct reimbursement/billing advice when it comes to Medicare.

National Coverage Decision (NCD)

The National Coverage Decision Serves to define the routine costs of clinical trials and identify the clinical trials for which payment for such routine costs should be made. Routine costs of clinical trials include all items and services that are otherwise generally available to Medicare beneficiaries.

Desirable Characteristics of a Clinical Trial

• The subject of the trial is to test whether the intervention potentially improves the participants’ health outcomes
• The trial is well supported by available scientific and medical information or it is intended to clarify or establish the health outcomes of interventions already in common use.
• The trial does not unjustifiably duplicate existing studies
• The trial design is appropriate to answer the research question being asked in the trial
• The trial is sponsored by a credible organization or individual capable of executing the proposed trial successfully.

Qualification Process for Clinical Trials

Clinical trials that meet the qualifying criteria will receive Medicare coverage of routine costs after the trials lead principal investigator (PI) certifies that the trial meets the criteria. The PI enrolls the trial in a Medicare clinical trials registry.

Some clinical trials are automatically qualified to receive Medicare coverage of their routine costs. The PI does not need to certify that the trials meet the qualifying criteria. The PI must enroll the trials in the Medicare clinical trials registry.

What Medicare Won’t Cover

• Investigational item or service itself
• Items/services not normally covered as a Medicare benefit
• Services furnished solely for data collection
• Services normally provided by the sponsor free of charge

In order to avoid erroneous bills, performance sites must be informed of research subjects and research related costs. Erroneous billing for failure to appropriately notify performance sites can be considered fraud.

Rush University

Rush University Medical Center officials admitted the hospital filed false Medicare and Medicaid claims during a six-year period but maintained it was done inadvertently. Rush agreed to pay $1 million to settle government claims.

Emory University

The government claimed Emory billed Medicare and Medicaid for clinical trial services paid by the clinical trial sponsor. Emory agreed to pay $1.5 million to settle the claim.

Audits

Who Audits the University?

• External Entities
• Federal Government
• DHHS OIG
• Department of Education
• Food and Drug Administration
• State Auditors
• Legislative Auditors
• Board of Regents
• Office of Risk Management
• LPAA
• Grant and/or Contract Sponsors
• Accrediting Agencies (SACS, AAHRP, etc.)
• Internal Entities
• LSU Internal Audit
• LSUHSC-NO Office of Compliance Programs

Key to a Successful Audit

• Organized files
• Documentation for expenses
• Appropriate and timely approvals
• Audit trails (i.e. documentation)
• Knowledge of LSU policies and regulations
• Ensure that all direct costs and revenues are posted to the appropriate projects.
• Preparing for an audit the same way you prepare the proposal.

Remember: If it’s not written down, it didn’t happen. Document! Document! Document!

Challenges at LSUHSC-NO

• Accurate charging of direct salary costs to grants and contracts
Effort certification
• Consistency in estimating, accumulating and reporting costs
• Consistency in allocating cost incurred for the same purpose

Notification of Audits

If you receive notification from an entity external to LSUHSC-NO that they will be conducting an audit, notify the Office of Compliance Programs at nocompliance@lsuhsc.edu.

Please include in your notification:

• The name of the external entity
• The grant or program being audited
• The date(s) the audit is scheduled
• The individual(s) in your area that will be meeting with the auditors

The Office of Compliance Programs will assign someone to:

• Assist you in preparing for the audit
• Participate in meetings with the external auditors
• Assist in writing the response to the audit report
• Assist with any needed corrective action
  

Federal and State Sanctions (Exclusions)

As a recipient of federal and state funds, LSUHSC-NO is responsible for ensuring that no individual or company who has been excluded from participation in federal or state programs is compensated or reimbursed from federal sources of funds. Most hospitals and other organizations affiliated with the University require that any LSUHSC-NO personnel or students working at their facilities must be eligible to participate in federal and state programs.

Federal Sanctions

There are three types of sanctions or exclusions that the federal government will impose depending upon the nature of the offense:

• Mandatory Exclusions [42 U.S.C. § 1320a-7(a)]: Office of Inspector General (OIG) is required to exclude the individual or entity for a minimum of 5 years for conviction of certain offenses (e.g., program-related crimes, patient abuse, felony health care fraud, or felony convictions relating to controlled substances).
• Permissive Exclusions [42 U.S.C. § 1320a-7(b)]: OIG may exclude individuals or entities under 16 different authorities (e.g., losing a state license to practice, failing to repay student loans, conviction of certain misdemeanors, or failing to provide quality care).
• Exclusion by another agency. Executive Orders 12549 and 12689 require that all federal agencies exclude an individual or entity from participating in federal programs if one agency excludes that individual or entity.

Effect of Federal Sanctions

No payment may be made by any Federal health care program for any items or services furnished, ordered, or prescribed by an excluded individual or entity. The prohibition applies to:

• The excluded person
• Anyone who employs or contracts with the excluded person, and
• Any hospital or other provider or supplier where the excluded person provides services.

The exclusion applies regardless of who submits the claims and also applies to all administrative and management services furnished by the excluded person.

State Sanctions

The State of Louisiana maintains two exclusion lists:

• The Louisiana State Adverse Actions List
• This list is identical to the Mandatory and Permissive exclusions described above under Federal Sanctions.
• The Louisiana Legislative Auditor Non-Compliance List
• This lists includes entities that are not in compliance with the Louisiana Audit Law R.S. 24:513. No LSUHSC-NO funds, regardless of the source, may be used to reimburse or otherwise compensate such entities. (R.S. 39:72.1)

University Responsibilities

• All new hires are required to sign a form disclosing whether they have been excluded from participation in federal programs.
• All purchase orders include language requiring the vendor to disclose whether they have been excluded from federal programs. University Responsibilities.
• A report is run monthly comparing all employees, students and vendors against federal and state exclusion databases.
• Compliance Office staff members review any matches to certify that the individual or vendor is actually the one specified in the federal or state exclusion database.

Department Responsibilities

When a department is notified that an employee, student or vendor is excluded from federal programs, the department has three options:

• Option 1 - Separate the individual from the University or cancel the agreement with the vendor. This is the cleanest choice.
• Option 2 - Allow the employment, enrollment or contract to continue. This option requires the department to develop a written plan which must be approved by the Compliance Officer to show how the department will ensure that no federal funds or state funds, as appropriate, will be used to compensate or reimburse the individual or company and that all contract terms regarding excluded individuals will be followed.
• Option 3 - Allow the employment, enrollment, or contract to continue while the individual or company seeks reinstatement with the federal or state government, if eligible.
• This option requires the department to develop a written plan in place as described above to ensure that no federal funds or state funds, as appropriate, will be used to compensate or reimburse the individual or company until reinstatement has been accomplished.
• This option is often the best compromise. It allows the department to retain the individual or contract to its benefit while limiting the effort of monitoring the individual or vendor to the time that is spent seeking reinstatement.

Reinstatement

Reinstatement is NOT automatic. Any individual or entity wishing to again participate in federal or state programs must apply for reinstatement and receive authorized notice from the excluding agency that reinstatement has been granted.

Attendance and Leave

As a manager or supervisor, you are responsible for ensuring that the employees under your supervision are, in fact, at work when and where they are supposed to be, and when they are not, they take the appropriate leave. You are also responsible for ensuring the required documentation for attendance and leave is properly maintained. This means:

• For faculty and unclassified employees:
1. All requests for leave are submitted via the University's online system.
2. For unclassified employees, supervisors must ensure leave is reported in an initial half-hour increment and that all subsequent time is reported in quarter-hour increments.
3. For situations in which prior notification is not possible (e.g. have to call in sick), supervisors should ensure the employee enters the online leave request immediately upon returning to work.
4. In situations where the employee’s original amount leave on the approved leave slip differed from the amount taken, ensure that a corrected leave is entered into the system and the original leave request is deleted.
5. Ensure that Monthly Attendance Certifications are submitted online by all unclassified employees (both Leave and Non-leave earning faculty and staff) by the 10th of the month following the pay period of the certification.
6. You are responsible for completing the supervisor certification statement online for all your unclassified employees who have certified by the 15th of the month following the pay period of the certification.
• For classified and hourly employees
1. All requests for leave are submitted on a completed University approved Application for Leave Form for all types of leave (i.e. annual, sick, Leave without Pay, funeral, educational, military, civil).
2. A classified employee’s available leave is on her/his check stub for the previous period.
3. For all approved leave, ensure that the supervisor approval is appropriately documented (i.e. signed) on the leave form prior to forwarding to the timekeeper.
4. For situations in which prior notification is not possible (e.g. have to call in sick), supervisors should ensure the employee completes the Application for Leave immediately upon returning to work.
5. In situations where the employee’s original amount leave on the approved leave slip differed from the amount taken ensure that a corrected Application for Leave is completed or the original leave slip is amended and initialed by both the employee and supervisor.
6. If the incorrect leave amount was submitted on the monthly Attendance and Leave Voucher ensure a corrected leave voucher is submitted to Human Resource Management.
7. Ensure that individual work schedules are maintained in the department for all employees (Full and Part-time). Actual schedules worked for part-time employees must be included with the LWOP leave slip in order to verify the accurate dollar amount of LWOP.
8. For employees whose time is recorded in PeopleSoft Time & Labor, review all Time Detail Reports for accuracy and to ensure that the employees’ signatures are present. Both the employee’s and the supervisor’s signatures must be present prior to submitting to the timekeeper for input. In rare cases where an employee is on extended leave and the deadline for the time sheets transmittal to the Payroll Office or timekeeper is at hand, signing and noting “employee is on extended leave” is acceptable. If the employee has time worked on the Time Detail report, the employee must sign the form immediately upon their return to work.
9. Ensure that all student workers sign the Time and Labor Detail Report. All student time sheets should be maintained in the home department for audit purposes in accordance with the University’s retention schedule.
10. Ensure that the timekeeper enters all “Applications of Leave” into PeopleSoft (Monitor Absence) accurately and on a timely basis.  All “Applications for Leave” for a pay period must be entered by the day before Payroll starts the subsequent monthly payroll process.  See the “ Calendar of Payroll Schedule ” on the Office of Payroll webpage for the specific dates.
11. Ensure the timekeeper reconciles all academic and unclassified employees “Applications for Leave” to PeopleSoft by the tenth of the month subsequent to entering the leave. (The reconciliation of leave entered in September should be done by October 10th)
12. Ensure that all original “Applications for Leave” and reconciliations are maintained in the department for audit purposes in accordance with the University’s retention schedule.
13. In compliance with good business practices, PeopleSoft will not allow employees to enter their own leave.  Therefore, ensure your department has an alternate timekeeper to record the other timekeeper’s leave and act as a backup.
• For all employees:
1. Ensure that the employee has available leave prior to approval. Leave cannot be taken in advance.
2. Ensure that, in addition to the completed leave request or Application for Leave, a Per-3 is completed and forwarded to Human Resource Management for all instances of LWOP of 30 consecutive calendar days or more. (The approved Application for Leave Form located on Human Resource Management's website is required.)
3. For all employees on LWOP for 30 consecutive calendar days or more, service time, for leave earning purposes, will be adjusted, i.e. the leave accrual change date will move forward for the amount of time on LWOP.
4. For LWOP that involves a partial day, the specific hours must be noted and highlighted in the comment section.
5. Ensure emails are submitted to the appropriate distribution list as soon as the department is aware of an employee on LWOP, Separation from the University, and/or Change in FTE.
6. Ensure all employees report all instances of military deployment to the department business office and to Human Resource Management’s Employee Relations Manager to ensure compliance with applicable federal law and university policy. This would apply to the usual annual active duty requirement as well as activation for any other reasons and includes any absence for military reasons, whether it is charged to military leave, annual leave, or leave without pay.  
• Take any necessary disciplinary actions against any employee who is not following the University and LSU System’s policies and procedures related to attendance and leave.

For your reference we have included links to Human Resource Management’s Attendance and Leave Policy and Attendance and Leave Procedures ’ documents.  Please take time to review them and refer back to them as needed.  They are also located on Human Resource Management’s webpage.

Getting Help

If you have any questions, please contact the Office of Compliance Programs by:

• Email: nocompliance@lsuhsc.edu
• Phone: 504-568-5135
• In Person: RCB, suite 807
• Website