complying with the new cms emergency preparedness rule for...
TRANSCRIPT
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Presenting a live 90-minute webinar with interactive Q&A
Complying With the New CMS Emergency
Preparedness Rule for Medicare and
Medicaid Providers and Suppliers Navigating Requirements for Risk Assessment, Communication,
Training and More for Participation in Medicare and Medicaid
Today’s faculty features:
1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific
WEDNESDAY, JANUARY 25, 2017
Jackie Gatz, Vice President, Grant Management and Safety, Missouri Hospital Association,
Jefferson City, Mo.
Steven D. (Steve) Gravely, Partner, Troutman Sanders, Washington, D.C.
Ted Lotchin, Partner, K&L Gates, Research Triangle Park, N.C.
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Complying With the New CMS Emergency Preparedness Rule for Medicare and
Medicaid Providers and Suppliers
Jackie Gatz
5
Background and Purpose
Challenges faced from natural and man-made disasters since 9/11 terrorist attacks.
Definition of “emergency” or “disaster”: Event affecting the overall target population or the community at large that precipitates the declaration of a state of emergency at a local, state, regional, or national level by an authorized public official
CMS reviewed a variety of emergency preparedness guidance from federal agencies, states, accrediting bodies and standard setting bodies.
6
Justification
CMS also reviewed its existing EP regulations
Conclusion: not comprehensive enough
– Doesn’t address communication, coordination, contingency planning or training
CMS concluded: Existing law, guidelines, accrediting organization EP standards, fall short of what is needed for healthcare to be adequately prepared for a disaster
Thus, EP regulations intended to establish:
“a comprehensive, consistent, flexible, and dynamic regulatory approach to EP and response that incorporates the lessons learned from the past, combined with the proven best practices of the present.”
Regulations would encourage providers and suppliers to coordinate efforts in communities and across state lines.
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11.Religious Nonmedical Health Care Institutions (RNHCIs)
12.Intermed. Care Facilities for Indiv. with Intellectual Disabilities (ICF/IID)
13.Clinics, Rehab. Agencies, & Public Health Agencies as Providers of Outpatient Physical Therapy & Speech Language Pathology Services
14.Comprehensive Outpatient Rehabilitation Facilities (CORFs)
15.Community Mental Health Centers (CMHCs)
16.Organ Procurement Organizations (OPOs)
17.End-Stage Renal Disease (ESRD) Facilities
Categories: Providers and Suppliers
1. Hospitals
2. Critical Access Hospitals (CAHs)
3. Rural Health Clinics (RHCs) & FQHCs
4. Long-Term Care Facilities (Skilled Nursing Facilities (SNF)
5. Home Health Agencies (HHAs)
6. Ambulatory Surgical Centers (ASCs)
7. Hospice
8. Inpatient Psychiatric Residential Treatment Facilities (PRTFs)
9. Programs of All-Inclusive Care for the Elderly (PACE)
10.Transplant Centers
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The Role of Hospitals
“Hospitals are often the focal points for healthcare in their respective communities; thus it is essential that hospitals have the capacity to respond…”
“Medicare participating hospitals are required to evaluate and stabilize every patient see in the ED and evaluate every inpatient at discharge – hospitals are in the best position to coordinate emergency preparedness planning with other providers and suppliers…”
9
CMS Emergency Preparedness Final Rule
Timeline
Proposed December 2013
Finalized September 8, 2016
Published in Federal Register on September 16, 2016
Effective November 16, 2016
Implement November 16, 2017
10
Noteworthy
CMS received 400 public comments to the proposed rule.
The proposed rule provided:
detailed discussion of each requirement
a methodology to establish and maintain preparedness
resources and guidance available to organizations
CMS encourages providers to reference the proposed rule, as needed.
11
Summary of Major Provisions
4 core elements to an effective and comprehensive framework. These provide framework for the rule for all provider/supplier categories.
Risk assessment and planning
Policies and procedures
Communication plan
Training and testing
Emergency and standby power systems regulations only for inpatient providers (Hospitals, CAHs, LTC/SNFs)
12
Emergency Preparedness Plan and Program
Risk Assessment
– Hospital risk assessment is based on and includes a documented, facility-based and community-based risk assessment, utilizing an all hazards approach.
Emergency plan
– Emergency plan includes strategies for addressing emergency events identified by the risk assessment
Patient population and available services
– The hospital emergency plan must address its patient population, including, but not limited to, persons at-risk.
– The hospital emergency plan must address the types of services that the hospital would be able to provide in an emergency.
– All hospitals include delegations add succession planning in their emergency plan to ensure that the lines of authority during emergency are clear and the plan is implemented promptly and appropriately.
13
Emergency Preparedness Plan and Program
The hospital must have a process for cooperation and collaboration with local, tribal, regional, state, or federal emergency preparedness officials efforts to maintain an integrated response during a disaster or emergency situation, including documentation of the hospital’s efforts to contact such officials and, when applicable, its participation in collaborative and cooperative planning efforts.
allow a separately certified healthcare facility within a healthcare system to elect to be a part of the healthcare systems unified emergency preparedness program
14
Policies and Procedures Hospitals are required to develop and implement emergency
preparedness policies and procedures based on the emergency plan, the risk assessment and the communication plan, reviewed and updated annually.
Policies and procedures must address:
Subsistence needs (staff and patients)
System to track the location of staff and patients during an emergency – if evacuated, document details of their relocation
Ensure safe evacuation, transportation and placement
A means to shelter in place for patients, staff and volunteers
Systems of medical documentation to preserve, secure, and maintain availability of records
Use of volunteers during an emergency, other emergency staffing strategies and the process to utilize state and federal resources
Continuity of services – arrangements with other hospitals and providers to receive patients, due to limitations or temporary closure
the role of the hospital under an 1135 waiver, for the provision of care and treatment at an alternate care site
15
Communications Plan Hospital must develop, maintain and review annually an emergency
preparedness communication plan that complies with federal, state and local law.
Contact information for staff, entities providing services under arrangement, physicians, other hospitals and volunteers
Government agency contact information for federal, state, tribal and/or local
Establish primary and alternate communication
Method for sharing information and medical documentation for patients with providers to maintain continuity of care
Means, in the event of evacuation to release patient information, as permitted under 45 CFR 164.510(b)(1)(ii)
Means to provide information about the general condition and location of patients under the facility’s care.
Means to provide information about occupancy, needs and ability to provide assistance
16
Training and Testing Hospital develop and maintain an emergency preparedness training
and testing program that includes initial training based on hospital emergency plan, risk assessment, policies and procedures, and communication plan.
hospitals provide such training to all new and existing staff, volunteers, consistent with their expected roles and maintain documentation of such training. Training on emergency procedures occur at least annually and demonstrate staff knowledge
drills and exercises to test emergency plans
participate in a full-scale exercise annually
exemption if hospital experiences an actual incident
conduct an annual exercise of hospitals choice for second requirement
hospitals analyze their response to, and maintain documentation on all drills, tabletop exercises, and emergency events, and revise the hospital’s emergency plan as needed.
17
Emergency Fuel and Generator Testing
Hospitals must meet the requirements of NFPA 99 2012 edition, NFPA 101 2012 edition, and NFPA 110, 2010 edition
18
Contact Information
Jaclyn E. Gatz, MPA
Vice President of Grant Management and Safety
Missouri Hospital Association
573/893-3700 ext. 1330
19
Healthcare Providers and Disasters TROUTMAN SANDERS LLP
Steve Gravely
Partner
Complying With the New CMS Emergency Preparedness Rule for
Medicare and Medicaid Providers and Suppliers
• Healthcare is part of the nation’s
critical infrastructure per Homeland
Security Presidential Directive 7
(2003) and Presidential Policy
Directive 21 (2013)
• A resilient healthcare system is
essential to effective disaster
response
• Being prepared to respond to a
variety of hazards is foundational to
resiliency
Healthcare Providers and Disasters
21
The Current Healthcare Environment
22
• The healthcare system is extremely vulnerable to
disruption as we have seen from large scale events
over the past 15 years
Disasters are inevitable
• Today access to electronic medical records, cloud
based services and wireless devices is essential to
healthcare operations and these systems are fragile
• Requires highly qualified staff who cannot be replaced
easily or rapidly
Healthcare is “high tech” and “high touch”
• SARS Toronto 2003
• Hurricane Katrina 2005
• Superstorm Sandy 2012
• Ebola 2014
Recent Disasters Impacting Healthcare
23
• SARS
– Virtually crippled the Toronto healthcare system
– Nurses were most affected, rampant staff shortages
– Work quarantine was invented and deployed
– Multiple government investigations, reorganizations, careers ended
– US was, miraculously, not affected
• Katrina
– Flooding of hospitals resulted in massive power failures and staff
shortages
– Evacuation was chaotic and not coordinated
– Patients were separated from families
– Memorial Hospital is infamous for patient deaths
– One doctor was indicted but acquitted of murder
Recent Disasters Impacting Healthcare
24
• Superstorm Sandy
– Flooding led to large scale generator failures and power outages
– Patient evacuation was chaotic
– Remarkable that patient toll was not great
• Ebola
– Dallas hospital unprepared for Patient Zero
– Widespread panic spread rapidly
– Governors acted without coordination re quarantine of suspected
nurses
– Staff refused to work due to fear of infection
Recent Disasters Impacting Healthcare
25
• There have been dozens of reports, studies, guidelines and
recommendations which document that healthcare is
vulnerable to disruption from natural and man-made events
• It is clear that hospitals have a duty to care for their patients
which includes a safe environment and adequate resources
• Since disasters are easily foreseeable, healthcare providers
have a duty to prepare for them
• Medicare CPs have the force and effect of law, so now all
Medicare Participating Providers have a legal requirement to
engage in disaster preparedness
Duty to Prepare
26
• Failure to comply can result in suspension or expulsion from
Medicare program which is the “death penalty” for
healthcare providers
• Medicare CPs as a “standard of care”?
– Yes, the CPs are mandatory standards and failure to comply could be
evidence that a hospital failed to meet the standard of care
• If patients are injured, or worse, because of this non-
compliance then a hospital could be held liable
Liability for Failure to Prepare
27
• Provider agrees to comply
with Conditions of
Participation upon
becoming certified by
Medicare
• There is no federal immunity for professional liability by non-
federal hospitals
• Some states have adopted special immunity statutes to
protect healthcare providers during declared emergencies
• Liability for medical malpractice is capped in many states
• However, claims for “negligent failure to prepare” might not
be med mal claims and not subject to caps
• There were multiple lawsuits filed post-Katrina and post-
SARS alleging “negligent failure to prepare” as a cause of
action - these were not med mal cases
Liability for Failure to Prepare
28
• Healthcare is subject to many federal laws and regulations on just about
every aspect of its operations including:
• Data privacy (HIPAA, HITECH, BREACH NOTIFICATION RULE)
• Treatment of all patients (EMTALA, Civil Rights, ADA, Obamacare)
• Control of medications (DEA)
• Environmental controls of biohazards (EPA)
• Billing for services (False Claims Act, False Statements Act, Civil Money
Penalties Act)
• Financial arrangements with referral sources (Anti-Kickback Statute, Stark
Law)
• Business structure and practices (IRS)
• Employment (EEOC, ADA, FLSA, FMLA)
• These federal laws are NOT automatically suspended during a disaster
• Even if the President declares a federal disaster under the Stafford Act,
the HHS Secretary must issue specific 1135 waivers in order to suspend
or modify these requirements
Liability for Failure to Prepare
29
• Katrina put this in the forefront
– Records were destroyed
– Patients were displaced
– Information was not shared that would have helped with reunification
• 11 years later during the Pulse shooting, Orlando hospitals
were still not clear about what patient info they could share
to help with reunification!
• Healthcare providers must assume that all federal and state
laws and regulations remain in full force and effect during a
disaster and find ways to continue operations in a compliant
manner
Liability for Failure to Prepare
30
• Failure to comply with any of these federal laws
can trigger administrative fines and penalties
which can be substantial
• In the past, regulators have been tolerant of non-
compliance during disasters
• Now that the CPs require that hospitals be
prepared, will they be able to claim that their
failure to comply is an extraordinary event?
Liability for Failure to Prepare
31
• There are other risks, such as
cyber, that we are only now
beginning to wrestle with in the
healthcare industry
Steve Gravely
Troutman Sanders
401 9th Street, N. W.
Suite 1000
Washington, D.C. 20004
202.274.2950
Thank You
32
© Copyright 2017 by K&L Gates LLP. All rights reserved.
Ted Lotchin
K&L Gates LLP
Living in a Material World - Emergency
Preparedness Requirements for Medicare and
Medicaid Providers and Suppliers
January 25, 2017
Federal Civil False Claims Act
Federal Civil False Claims Act
Prohibits a BROAD range of activities, including: Presenting a false or fraudulent claim for payment or approval
Making, using, or causing to be made or used, a false record or
statement MATERIAL to a false or fraudulent claim
Making, using, or causing to be made or used, a false record or
statement MATERIAL to an obligation to pay or transmit money or
property to the Government
"Knowingly" defined as: Having actual knowledge of the information;
Acting in deliberate ignorance of the truth or falsity of the information; or
Acting in reckless disregard of the truth or falsity of the information.
"Material" means "having a natural tendency to influence, or be capable
of influencing, the payment or receipt of money or property"
klgates.com 35
Potentially Catastrophic Liability
Penalties: Civil penalty between $10,781.40 and $21,562.80 (effective 8/1/16) per
false claim, plus 3 times the amount of damages sustained by the
Government
Each item or service billed to Medicare or Medicaid is considered a
claim, which means penalties accrue rapidly
Qui Tam Provisions: Private individuals (or, relators) can file a lawsuit on behalf of the U.S.
Whistleblower entitled to a percentage of any recoveries in the case
Commonly include disgruntled employees, former investors, hospital
executives, compliance officers, billing and administrative staff, patients,
and/or competitors
klgates.com 36
Significant Financial Recoveries
$4.7 billion in FCA recoveries in 2016 $2.5 billion from health care industry
7th straight year of recoveries over $2.0 billion from health care industry
$31.3 billion in FCA recoveries since 2009 $19.3 billion from health care industry
30 qui tams filed in 1986 702 in 2016 $2.9 billion in qui tam recoveries related to qui tams in 2016
Government intervenes in roughly 20% of qui tam complaints
Over 90% of cases in which government intervenes result in settlement
or judgment against defendant
Over 90% of declined qui tams are subsequently dismissed
klgates.com 37
Implied False Certification
False or Fraudulent Claim
Factual Falsity Claim is factually false on its face
Billing for services that were never provided
Upcoding and/or billing under incorrect CPT code
Legal Falsity "Express Certification" typically refers to false representation of
compliance with a federal statute, rule or regulation
"Implied Certification" predicated on theory that the act of submitting a
claim for reimbursement implicitly certifies compliance with relevant
ancillary requirements
klgates.com 39
Historical Circuit Split
Seventh Circuit – Only express or affirmative falsehoods
can render a claim false or fraudulent The “FCA is simply not the proper mechanism for government to
enforce violations of conditions of participation contained in—or
incorporated by reference into—a [program participation agreement].”
Second Circuit – Only non-compliance with a condition
of payment "[I]mplied false certification is appropriately applied only when the
underlying statute or regulation upon which the plaintiff relies expressly
states the provider must comply in order to be paid."
klgates.com 40
Historical Circuit Split
First Circuit – Include conditions of participation,
quality standards, and contract provisions that are
material to payment decision Rejected argument that claim can only be false or fraudulent if it fails to
comply with a precondition of payment expressly identified in statute or
regulation.
"[C]onditions of payment need not be expressly designated as such to
be a basis for [FCA] liability."
Precondition of payment need not be found in a statute or regulation.
klgates.com 41
UHS v. U.S. ex rel. Escobar
Recent Supreme Court opinion resolved circuit split and
provided guidance on materiality requirement Teenage Medicaid beneficiary received counseling and medication
management services at mental health facility
Experienced seizures in response to medication prescribed to treat
bipolar disorder and ultimately died
State investigation determined that very few counselors providing
services were actually licensed and/or supervised appropriately
Regardless, facility billed for individual and family therapy as if provided
by licensed clinical social workers
Beneficiary's parents alleged that facility provided inadequate care by
using underqualified and unsupervised personnel to deliver services
Argued facility "impliedly certified" services were provided by specific
types of professionals in accordance with state Medicaid requirements
klgates.com 42
Validates Implied Certification
False or fraudulent claims include more than just claims
containing express falsehoods Every claim for payment implicitly certifies compliance; OR
Nondisclosure of legal violations absent some special duty
Theory upheld where: Claim for payment makes specific representations about goods or
services provided; AND
Failure to disclose non-compliance with material statutory, regulatory,
or contractual requirements makes those representations misleading
klgates.com 43
Only Material Non-Compliance
Misrepresentation about compliance with a statutory,
regulatory, or contractual requirement must be
MATERIAL to the Government's payment decision
Reaffirms that material means "having a natural
tendency to influence, or be capable of influencing, the
payment or receipt of money or property"
Materiality under any standard “look[s] to the effect on
the likely or actual behavior of the recipient of the alleged
misrepresentation.”
klgates.com 44
“Demanding” Materiality
Does not depend on whether requirement is labeled a
“condition of payment” – relevant not dispositive
Cannot be found where non-compliance is minor or
insubstantial
Government consistently refuses to pay claims based on
non-compliance with statutory, regulatory, or contractual
provision
Government pays claim in full despite actual knowledge
of non-compliance with statutory, regulatory, or
contractual provision
klgates.com 45
A Glimmer of Hope
“Rigorous” materiality standard
FCA is not a means of "imposing treble damages and
other penalties for insignificant regulatory or contractual
violations" "This case centers on allegations of fraud, not medical malpractice."
FCA is not “an all-purpose antifraud statute”
klgates.com 46
Living in a Material World
Post-Escobar, courts are being asked to define which
requirements are material to a payment decision
At least six federal courts of appeal and 20+ district courts have
decided Escobar-related motions
End of bright line distinction for conditions of payment and
participation means more stringent pleading requirements Materiality requirement is both “rigorous” and “demanding,” and must be
pled with particularity
Conclusory statements will not be sufficient
klgates.com 47
Living in a Material World
First Circuit – U.S. ex rel. Escobar v. UHS “[C]ourts are to conduct a holistic approach to determining materiality in
connection with a payment decision, with no one factor being
necessarily dispositive.”
Licensing and supervision requirements go to the "very essence” of
MassHealth’s contractual relationships with various healthcare providers
under the Medicaid program
Seventh Circuit – U.S. v. Sanford–Brown, Ltd. Department of Education reviewed for-profit college’s compliance with
Higher Education Act and did not pursue administrative penalties or
program termination
Establishing that non-compliance “would have entitled the government
to decline payment” will not meet materiality standard
klgates.com 48
Living in a Material World
Eighth Circuit – U.S. ex rel. Miller v. Weston Educational False statement is “material” if (1) a reasonable person would likely
attach importance to it; OR (2) defendant knew or should have known
that government would attach importance to it.
Materiality depends on whether for-profit college’s promise to maintain
accurate grade and attendance records influenced the government's
decision to enter into its relationship with the college.
klgates.com 49
Living in a Material World
E.D. Va. – U.S. ex rel. Beauchamp v. Academi Training
Centers, Inc. “[S]trains credulity” to argue that payment decision would not have been
affected if the government knew that private security contractors had not
fulfilled weapons training requirements
N.D. Cal. – Rose v. Stephens Institute Compliance with federal law that prohibits colleges from providing
incentive compensation to college recruiters is material to government’s
payment decision
Department of Education’s decision not to take action against college
despite its awareness of allegations of non-compliance not “terribly
relevant” to materiality
klgates.com 50
Living in a Material World
S.D. Ala. – U.S. v. Crumb Falsified diagnoses to ensure reimbursement for botox and other
cosmetic procedures material to payment decisions
E.D. N.Y. – U.S. ex rel. Lee v. Northern Adult Daily
Health Care Center Failed to allege that discriminatory treatment of residents in violation of
Title VI of the Civil Rights Act and Department of Housing regulations
would have influenced payment decision
D.D.C. – U.S. v. Dynamic Visions Compliance with plan of care requirements for home health services
material to D.C. Medicaid’s payment decision
klgates.com 51
Emergency Preparedness
Legacy Conditions of Participation
Historically, limited potential for liability created by non-
compliance with emergency preparedness requirements
N.D. N.Y. – U.S. ex rel. Blundell v. Dialysis Clinic, Inc. Claims included failure to adequately train employees on emergency
preparedness
Analyzed under the majority view that required non-compliance with
conditions of payment
Complaint dismissed because allegations only involved conditions of
participation
No indication that emergency preparedness requirements would be
material to government’s payment decision
klgates.com 53
New Conditions of Participation
Four core elements to an effective and comprehensive
framework Risk assessment and planning
Policies and procedures
Communication plan
Training and testing
Question – Will non-compliance with any of these
elements be material to government payment decisions?
klgates.com 54
Potential Arguments for Materiality
Holistic approach - Emergency preparedness
requirements go to the “very essence” of the bargain
with participating providers
Preamble puts providers on notice that government will
attach importance to emergency preparedness
requirements
In light of recent mass casualty events and public health
emergencies, “strains credulity” to believe that
government payment decisions would not be affected
klgates.com 55
Potential Arguments Against Materiality
FCA is not “an all-purpose antifraud statute”
Condition of participation, not payment
Non-compliance is minor or insubstantial
Government pays for provider services despite actual
knowledge of non-compliance with emergency
preparedness COPs
Non-compliance would only have entitled government to
decline payment for services
klgates.com 56
Case Study - Cybersecurity
Cyberattacks in the Health Care Industry
Hacker collective Anonymous targets Boston Children’s
Hospital (2014)
Fourteen hospitals attacked with ransomware (2016)
OIG report on hospital contingency planning for EHR
disruption (2016)
Cyberattacks responsible for roughly 30% of all major
HIPAA breaches (2016)
klgates.com 58
All-Hazards Emergency Planning
Integrated approach to planning that focuses on critical
capacities and capabilities for a full spectrum of
emergencies or disasters.
Specific to the location of the provider or supplier
Considers the particular types of hazards most likely to
occur
Risk assessment and emergency planning can include
processes to account for cyberattacks
klgates.com 59
New Theories of Liability
Duty to prepare?
Liability for failure to prepare?
Implied false certification? Material to government’s payment decision?
Minor or insignificant non-compliance?
“Essence” of contractual obligations?
Increased government enforcement puts providers on notice?
klgates.com 60
