need a compliance blueprint? - hcca official site · 2016-03-24 · 3/16/2016 1 need a compliance...
TRANSCRIPT
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Need a Compliance Blueprint?: Constructing a Comprehensive Real Estate Compliance
Work Plan Designed to Address Your Organization’s Risk
April 19, 2016
HCCA Compliance Institute – Las Vegas
Session Objectives
• Understand the current environment and regulatory considerations for real estate compliance in health care
• Conduct a compliance risk assessment for your organization’s real estate interests and identify who needs to be at the table
• See and share examples of communications, templates, and tools to help improve the overall health of the real estate compliance program at your organization
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Compliance Program Structure - Overview
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Compliance Program “Matrix”
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Office of General Counsel (OGC) Overview/Structure
Office of General Counsel
Business Line
Leaders
ComplianceAudit
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What Does OGC Do?• Counsel business lines on
structuring compliant transactions; advise on legal and regulatory requirements and limitations
• Work with Compliance on crafting policies and procedures; advise on changes to compliance regulatory landscape
• Work with Audit to remediate issues identified through periodic and targeted audits; help identify risk areas for targeted audits
Real Estate
The Current Healthcare Compliance Environment
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So Why Do We Care?The HEAT (Health Care Fraud Prevention and
Enforcement Action Team) is on
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So Why Do We Care?
• Detroit Medical Center (12/10) – $30MM settlement of FCA, AKS and Stark violations; claims included lack of written, executed leases and leases that were not
commercially reasonable or FMV
• Parkridge Medical (HCA) (9/12)– $16.5MM to settle FCA and Stark violations; rental payments above FMV to help physicians meet mortgage obligations, plus
release of lease obligation
• St. James/Sisters of Charity (12/13)– $3.85MM settlement related to physician-hospital joint venture owner of MOB leasing to physicians at below FMV rates; below
FMV rent for land
• New England Sinai Hospital, Inc. (9/12)– $1.14MM settlement of CMP allegations, including remuneration in the form of free or less than FMV space
• Renown Health (12/15) – $598,213.50 settlement of CMP allegations, including failure to execute a lease and provision of more space and services than
initially agreed upon
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Should YOU care?
• Leases with physicians are financial relationships subject to Stark and AKS
• Provision of space to physicians without rent is remuneration
• Even if your organization does not lease space as a landlord or tenant, ask if you provide space to physicians or any party with a referral relationship
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What did we consider?
• Stark Law
• Anti-Kickback Statute
• Time-Share Issues
• Space Sharing Issues
• Provider-Based Regulations
• Private Use Requirements
• State Laws (e.g., NC law re: conflicts of interest)
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Compliance Risk Assessment
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Enterprise-wide participation and leadership in the Risk Assessment Process is critical to successfully identify the highest risk compliance issues for
inclusion in the Risk Area’s Work Plan.
• A key component of our Compliance Program Effectiveness strategy
• Helps us understand where our largest risks are enterprise-wide and locally
• Data-driven, considering internal and external sources
• Most successful when it involves all the key stakeholders (i.e. FCOs, FCCs, and FCAs)
Risk AssessmentIdentify
MeasurePrioritize
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Risk Assessment at CHS (continued)
Leadership Requests
Internal & External
Environment Monitoring
Compliance Matrix Input
Single view document with a standardized approach to categorize, prioritize and manage compliance risks identified above.
Step 2: Measurement & Assessment of Risks
FCOsFCAsFCCs
ReferAdditional Info Req’d
AddressNo Action
Req’d
Investigation Findings
Inquiries
OIGCMSDOJ
Audit Results
Step 1: Identification
ofRisks
Step 3: Prioritization & Management of Risks
Stakeholders Around the Table
• Compliance
• Legal Counsel
• Real Estate Services Department (if applicable)
• Construction Management (if applicable)
• Facilities Management (if applicable)
• Finance
• Administrators responsible for overseeing contracts
• Audit Services
***Endorsement by Senior Leadership
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Stakeholder Meeting Objectives
Key: Recognize the need for multiple sessions to review, research, refine:
Agenda(s):
• Why we are here: Develop a compliance plan to address risks in this area
• Focus the conversation around relevant compliance issues (including defining “compliance”)
• Identify and narrow down the “highest risk” items
• Discuss current infrastructure, processes and policies
• Discuss what must be internally monitored
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The Compliance Work Plan
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Our Work Plan Strategy
• Auditing & MonitoringA
• Program ManagementB
• EducationC19
Auditing and Monitoring Metrics
1. Real Estate Leases– Leases and subleases for full-time use of space
2. License Agreements for Part-time Use of Space– Periodic uses of space, sometimes called “hotelling” or “time-share arrangements”
3. Fair Market Value Appraisals– Standards required for third party appraisals or broker’s opinions of value to ensure
proper determination of FMV
4. Space Use– Onsite reviews of actual space use conducted to verify that actual use of space is in line
with terms of applicable document (lease, sublease, license agreement)
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Real Estate Lease Agreement Considerations
• Lease term
• Effective date and termination date
• Floor plan or legal description
• Space measurement accuracy
• Space use restrictions
• Common areas
• Additional services
• Lease rental rate
• Lease escalator clause
• Rental rate is FMV
• No “per click” language
• Lease signed by all parties
• Lease fully executed prior to effective date
• Bond financed space considerations/private use
• No sanctions/exclusions of participants
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Part-Time Use License AgreementsConsiderations
• Schedule is specified
• Interval rent is specified
• Common and exclusive areas are accurately described
• Proximity to hospital not considered
• Rental rate calculation methodology
• Frequency of lease amendments
• “Key Man Space” stipulations; identification and proper valuation of equipment and services
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Appraisals or Broker Opinions of Value
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• Recites Stark and AKS definitions of FMV
• Analyzes services offered to tenant
• Includes length of proposed lease term
• Takes tenant improvement allowances into account
• Considers other concessions
• Based on comparables
• Does not take into account proximity of hospital or referral sources
• Does not take into account other buildings owned by the organization (for owned MOBsso not artificially setting the market)
• Rental rate set forth as a range
Space Use
• Space conforms to lease specifications
• Use periods/times conform to lease specifications
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Program Management (Process/Policy) Considerations
• Inventory of all real estate holdings
• Fair market value review process
• New space leases
• Contract management
• Rent reconciliation processes
• Shared space & timeshare leases
• Tax-exempt status considerations
• Environmental protections
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How is Compliance “Gauged”?
• For each metric, consider the risks to be assessed
• Initially, every risk is equally weighted
• Select a manageable sample (across multiple portfolios, as necessary)
• Trend outcomes, by facility and across enterprise
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Ask:
• What weakness caused the error?
• What corrective action plans worked well?
• What standardized controls can be implemented and shared?
• Does Senior Leadership and the Board need to be made aware?
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Expect Challenges
• Resource limitation (time)
• Resource limitation (knowledge)
• The need for a plan to manage “exceptions”
• Advocating for leadership “buy-in”
• Requirement to engage internal or external Counsel
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Communication & Implementation Strategy
• Identify constituents across the enterprise
• Understand and communicate how the plan will fit into the overall Compliance Program structure
• Allow for time to “vet” and refine the plan
• Establish a firm timeline for implementation
• “Right size” the approach as appropriate
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Session Recap
We discussed:
• The current environment and regulatory considerations for real estate compliance in health care
• How to conduct a compliance risk assessment for your organization’s real estate interests and who needs to be at the table
• Examples of communications, templates, and tools to help improve the overall health of the real estate compliance program at your organization
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Questions?
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Speaker Contact Information
• Katie Dever, Vice President, Compliance– [email protected]
– 704.512.5900
• Ashley Pearson, Associate General Counsel– [email protected]
– 704.355.3063
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