HCCA 17 TH ANNUAL COMPLIANCE INSTITUTEWASHINGTON, DC

APRIL 21, 2013

S U S A N C . L Y N C H , E S Q .U . S . D E P A R T M E N T O F J U S T I C E

S U S A N . L Y N C H @ U S D O J . G O V2 0 2 3 5 3 7 1 7 1

The Department of Justice’s Focus on Failure of Care Fraud Cases

Opinions Expressed Herein or Otherwise are those of the Speaker and do not Necessarily Reflect the Views of the U.S. Department of Justice.

Agenda

Role of DOJ and USAOs in Failure of Care Enforcement

Legal Authorities

Remedies

Settlements

Overuse of Antipsychotics

Why does the Department of Justice Focus on these Cases?

The United States is not getting what it pays for. Cases typically involve harm, suffering and

sometimes death for frail residents. Abuse and neglect cost the Medicare and Medicaid

programs billions. It’s our job to enforce the relevant laws.

Federal Enforcement of Failure of Care Fraud Cases

Enforcement priority DOJ and US Attorney’s Offices HHS Office of Inspector General State and local prosecutors Pursue criminal, civil and administrative cases

Federal Prosecution Options

Criminal Federal Health Care Fraud, Wire Fraud, Etc.

Civil False Claims Act, 31 U.S.C. 3729 Civil Rights of Institutionalized Persons Act, 28 U.S.C. § 1997 Common Law

Breach of ContractCommon Law Fraud

Equitable ClaimsUnjust enrichment

Federal Civil False Claims Act (FCA) 31 U.S.C. § 3729

Any person who: Knowingly presents, or causes to be presented, a false or

fraudulent claim for payment or approval; or Knowingly makes, uses, or causes to be made or used, a false

record or statement material to a false or fraudulent claim

Is liable for treble damages and penalties of $5,500 to $11,000 per false claim.

False Claims Act (continued)8

FCA Defines “Knowingly” as: Having Actual Knowledge, or Acting in Deliberate Ignorance or Reckless Disregard of the

Truth or Falsity of the Information Submitted in Support of the Claim.

FCA not intended for mere negligence.

Billing for Worthless Services = Fraud

Providers who: knowingly render grossly substandard care or no care at all, that harms or kills frail patients, (not a required element, but

usually present), and bill Medicare or Medicaid for the alleged care,

can be pursued under the False Claims Act.

The United States has Brought Cases against the following Providers:

Nursing Facilities Assisted Living Facilities (ALFs) Board and care or adult care homes Psychiatric and Acute Care Hospitals Group homes for people with intellectual or mental

disabilities

The United States’ Prosecution of Failure of Care Cases

Systemic Facility or Chain Problems Clear Failures of Care and Violations of Law that

have Led to Egregious Outcomes

Serious Injury or Death Not a Necessary Element for Criminal or Civil Liability

Types of Cases DOJ Does NOT Pursue

DOJ does not . . . Bring malpractice cases

But malpractice cases are not a bar to government cases Bring administrative cases to enforce survey results (such

cases are pursued by state survey agencies and CMS) But survey findings may be some evidence in an enforcement

matter

Failure of Care Examples

Wound care - maggots in wounds Excessive falls and fractures Impacted feces Residents lying in their own waste Dehydration and malnutrition Excessive medication errors Chronic staff shortages

FCA Failure of Care Settlements

Approximately 40 settled cases with long term care providers

Significant quality of care injunctive relief and/or HHS-OIG compliance obligations imposed

Monetary awards

Remedies in FCA cases

Money damages

Monitoring and other injunctive relief

HHS-OIG remedies (Corporate Integrity Agreements (CIA), exclusion)

HHS-OIG Corporate Integrity Agreements

Do not replace CMS or state survey Focus on systemic issues, internal quality assurance

and improvement mechanisms Chain-wide (often multi-state) approach Facility, corporate and regional visits Meetings with corporate boards Periodic reports to OIG and provider

CIA Quality of Care Monitor

• Key provision in all quality of care CIAs.• Provider pays for an outside monitor appointed

by the OIG.• Monitor has extensive access to facilities,

residents, staff, corporate management, and records.

• Monitor plays oversight/consultative role.

Examples of Settlements

Cathedral Rock (ED MO 2010) $1 million in criminal fines and penalties $628,000 in civil damages and penalties Forced sale of facilities Five year CIA

Examples of Settlements

AHM Management Co. (ED MO 2005) $1,250,000 damages and penalties Exclusion of individual owner and entities Criminal plea by owner

Chestercare (ED PA) Consent Decree $400,000 civil damages and penalties Temporary manager and independent monitor Exclusion of owner

National Partnership to Improve Dementia Care

CMS Developed a National Partnership to improve dementia care and optimize behavioral health

CMS hopes to reduce unnecessary antipsychotic medication use in nursing homes and eventually other care settings

CMS Partnership First Year Goals

Reduce national prevalence rates of antipsychotic medication use in long-stay nursing home residents by 15% by the end of 2012

In December 2011, the national rate in long-stay residents was 23.9% (based on MDS data)

The denominator will include all residents except those with schizophrenia, Tourette’s, or Huntington’s Disease

Antipsychotic Medication in Nursing Homes

High Prevalence rates of antipsychotic medication use in nursing home residents has been reported in residents with a diagnosis of dementia

According to the CMS Quality Measures/Quality Indicator reports between July and September 2010, 39% of nursing home residents nation-wide who had cognitive impairment and behavioral issues but no diagnosis of psychosis received anti-psychotic medication

Antipsychotic Medication in Nursing Homes

Antipsychotic medication can be dangerous and has significant side effects for the elderly

Use of antipsychotic medication can be expensive for consumers and for Medicare; atypical antipsychotic medication costs more than $13B in 2007, which is nearly 5% of all US drug expenditures

Partnerships and state-based coalitions

CMS has engaged three different partnerships and stakeholder to address antipsychotics in nursing homes National Partnership to Improve Dementia Care Work Through the Quality Improvement Organizations (QIOs) Local Area Network for Excellence (LANEs)

The Survey Process

Surveyors will be looking more intensively at persons with dementia on antipsychotics

Surveyors will look for systematic processes that providers and practitioners are using to determine the underlying cause of behaviors in persons with dementia

Surveyors will look to see that care plans include plans for residents with dementia that address behaviors, include input from residents to the extent possible, and/or family or representatives, and that those plans are carried out

The Survey Process (continued)

For those residents for whom antipsychotics or other medications are warranted, the lowest possible dose for the shortest duration should be used

Surveyors will be looking at whether medications prescribed by a practitioner in an urgent situation are re-evaluated by the primary care team and discontinued when possible

Public Reporting

Rates of antipsychotic medication use by facilities became available on Nursing Home Compare beginning in July 2012.

Conclusion

Failure of Care Cases Present Important Issues for All Parties

DOJ Involved at both Civil and Criminal Levels Involvement only where Necessary