The Department of Health and Human Services announced a “regulatory sprint to coordinated care” in June 2018, a new initiative to remove regulatory barriers that impede the transition to a coordinated, value-based health delivery system. The debate includes a discussion on the impact of Stark and AKS regulations. This summer, government agencies have been attacking these questions head on. Two Requests for Information have been published and CMS held their comment period on Stark, or the Physician Self-Referral Law. The OIG has focused primarily on AKS and how to add or alter AKS safe harbors. The comment period will end at 5pm on October 26.
It is unclear how AKS and Stark rules impede value-based care. Many argue that laws like AKS were written with a pay-for-service model in mind, and not the pay-for-performance model that today’s health leaders are working to build. Gainsharing and co-management agreements are two of the types of physician agreements that must be structured carefully to address potential regulatory concerns. The OIG aims to gather feedback on the details and exceptions to AKS that are particularly difficult for health care organizations to navigate as well as identify new safe harbors or changes that would actively promote value-based care.
Various organizations have submitted responses to both RFI’s. In response to CMS’s RFI, The American Hospital Association wrote:
To reach the full potential of a value-based system, the Stark compensation regulations must be reframed to meet the objectives of the new system, through the creation of a new exception designed specifically for value-based payment methodologies, and reforms to the personal services, employment, and risk sharing exceptions.
What should we expect moving forward? For now, officials only seem to be considering small adjustments to the laws and regulations, in response to the large number of comments from industry leaders. How far they’ll go after that, we’ll have to wait and see.
If you are looking for a valuation firm to support your organization’s compliance program, you’re going to want to do a thorough investigation of each firm under consideration before making your decision. The following guide will help ensure you get the essential information you need.
The National Association of Certified Valuation Analysts (NACVA) provides two types of credentials: the Certified Valuation Analysts (CVA) and Accredited Valuation Analysts (AVA) credentials. Take note of the credentials of the consultants you are considering.
Ask direct questions about a valuation consultant’s experience in your field. How many opinions have they done? Do they have healthcare-specific experience? This is important! Each industry is different, and healthcare compliance comes with numerous unique complexities. The valuation firm you choose should be knowledgeable and experienced when it comes to physician valuations.
Evaluate Their Work
Don’t be afraid to put a consultant to the test. Can they talk about their methodology and how they reached their conclusions? Are you comfortable with that methodology? Do they explain themselves in a clear and concise way? Be wary of too much jargon; a trustworthy expert will be straightforward with you. It is an asset if they are willing to talk to a counterparty, such as a physician, during negotiations. In the case of an audit or an external investigation, it is vital that your organization is working with a firm that can defend and justify its work.
Look at Examples
Ask for a redacted valuation. Is the opinion well-written, focused, and concise?
Examine the firm’s disclaimers. They should be sensible and minimal, without too many caveats.
Compliance is a non-negotiable priority for hospitals and hospital systems, and the valuation firm you choose plays a big role. Your organization should be working with a valuation firm that is compatible with your company culture. In order to ensure that you are getting the quality opinions you require, you should be working with experts who understand your organization’s unique needs. But what does “cultural fit” mean, in this case? Here are some MD Ranger guidelines for considering whether the valuation firm you are considering will make for a reliable, cooperative, and honest compliance sidekick.
First, consider communication style. Do you feel like you are on the same page when discussing your organization’s goals? Are they honest and open with you about what they can offer? Do they use a lot of jargon, or are they clear and concise when discussing their work? Think over your past conversations. Did you get the sense that your expectations were aligned, or did you doubt whether they understood your needs? If you have any insecurities here, dig deeper. Don’t get caught up in a situation in which your priorities are not being heard or respected. Communication style can tell you a lot about the potential of a relationship; notably, is your organization in attentive and trustworthy hands? Your compliance program needs to be boosted and supported by the valuation experts with which you work.
Work quality standards are extremely important. Do the firms you are considering meet your expectations? Do not settle here. In order to appropriately analyze, negotiate, and document FMV for physician agreements, you need high quality work done on the valuation side.
Are your philosophies aligned? It might sound unrelated to physician contract compliance, but it isn’t. It boils down to the same question of values that all organizations consider. When one organization looks to work with another, the strength of the relationship depends on a similar philosophical approach to the work at hand. During a valuation firm’s pitch to your organization, listen for their “why.” Why are they determined to serve you? What principles drive them? It’s not hard to tell when someone performs their work with integrity. Choose that person.
Finally, find out if the valuation experts you’re talking to have walked in your shoes. Although not a reason to cross someone off your list, it’s a bonus when someone has had similar experience. They will likely show more empathy for the challenges you face and be more attentive and communicative about their work for you.
When a hospital or other healthcare entity violates the False Claims Act, there are consequences. Often these include entering into a Corporate Integrity Agreement (CIA) with the U.S. Office of the Inspector General (OIG). The purpose of a CIA is to strengthen an organization’s compliance program with policies and procedures approved by the government. The OIG must have confidence that the organization is taking steps to prevent new violations.
What is a Corporate Integrity Agreement?
A CIA is a tool used by the OIG to address violations at healthcare organizations through policies and procedures designed to enforce compliance with regulations. A CIA is usually coupled with a civil settlement between the provider and the government to avoid exclusion from federal health programs.
Who is subject to a CIA?
CIAs have been issued for all types of healthcare entities ranging from hospitals and health systems to physician practice groups, individual physicians, post-acute facilities, dialysis companies, pharmaceutical manufacturers, durable medical equipment suppliers, and many more.
Historically, the OIG always issued a CIA when violations occurred. However, in recent cases where the OIG is confident that the violation(s) will not reoccur, a CIA has not been put into place. Because the OIG can assess a violators’ capacity to change noncompliant behaviors, they can identify organizations who are low risk for repeat violations. To determine whether or not an organization should enter into a CIA, the OIG looks at many factors, including how long ago the violations occurred, whether there was a pattern of misconduct, the compliance procedures in place, and other elements. If an organization self discloses their violations, the OIG may not require a CIA because self disclosure is evidence of an effective compliance program.
What’s in a CIA?
CIAs generally focus on one or more categories of violations: claims review, focus arrangements, quality of care, and covered functions review. CIAs are fairly uniform; however, most include specific requirements tailored to the violation(s) that led to the settlement. CIAs typically run 3-5 years.
All CIAs require:
- Establishment of a compliance officer and compliance committee
- Imposition of compliance duties for the Board of Directors
- Adoption of a code of conduct and applicable policies and procedures
- Training and education on the code of conduct, policies, and procedures within the first 90 to 120 days as well as annually thereafter
- Internal reviews in addition to reviews by an Independent Review Organization (IRO) that organizations hire as a third party opinion
- Screening for ineligible persons, i.e. those excluded from federal health programs and those who have convictions that entail mandatory exclusion
- Reporting to the OIG of ongoing investigations or legal proceedings, any alleged fraudulent behavior, repayment of overpayments in accordance with the ACA, as well as any other compliance breach or any change in the location or structure of the organization
The OIG publishes all of the CIAs it issues on its website.
Why would an organization accept a CIA?
Typically, an organization enters into a CIA in order to continue participation in Medicare and Medicaid. The OIG will only offer a CIA as an alternative to exclusion if the situation merits it.
In “An Open Letter to Health Care Providers” written in November 2001, the OIG sought to clarify how they determine if a CIA is a good alternative to exclusion. They outlined eight factors:
- Whether the provider self-discloses the alleged misconduct
- The amount of monetary damage to Federal programs
- Whether the case involves a merger or acquisition where the buying entity is liable for the selling entity’s past and future liabilities
- Whether the provider is still participating in Federal health care programs or whether they are still in the line of business that gave rise to the fraudulent conduct
- Whether the alleged conduct is capable of repetition
- The age of the conduct
- Whether the provider has an effective compliance program and would agree to limited compliance or integrity measures, and if they would agree to annually certify such compliance to the OIG
- Other circumstances, as appropriate. 1
Who enforces CIAs?
Once an organization is under a CIA, the OIG assigns a Monitor. The Monitor has a collaborative role, and works primarily with the organization’s Compliance Officer. The team ensures the compliance program is preventing violations by identifying problems and correcting them. Even organizations under CIAs have compliance challenges; in fact, the OIG has been suspicious if they don’t hear of problems in organizations under a CIA.
What happens if an organization fails to comply with a CIA?
Failure to meet CIA obligations can result in a fine, often of $2,500 per day after the missed deadline outlined in the CIA. While it is rare, a “material breach” of the CIA can lead to a five-year exclusion from federal programs. CIAs define a “material breach” as:
- Repeated or flagrant violations of the CIA’s requirements
- Failing to report a reportable event, take corrective action, and make the appropriate refunds
- Failing to engage and use the required Independent Review Organization or Monitor
- Failing to meet a deadline or request for information from the OIG
1An Open Letter to Health Care Providers written in November 2001: https://oig.hhs.gov/fraud/docs/openletters/openletter111901.htm