Western Maryland Health System

May 13, 2008

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Western Maryland Health System Corporate Compliance Manual

Corporate Compliance Process
1. Corporate Compliance Officer
  To ensure compliance with Western Maryland Health System's ("WMHS") Corporate Compliance Policy ("Policy"), the Audit and Compliance Committee is adopting a formal Compliance Program ("Program"). To oversee and implement this program, WMHS has appointed a Corporate Compliance Officer ("CCO") The CCO will provide education and training programs for employees, respond to inquiries from any employee regarding appropriate billing, documentation, coding and business practices, and investigate any allegations of possible impropriety.
2. Duties and Responsibilities of the Corporate Compliance Officer
  1. The duties and responsibilities of the CCO shall include, but are not limited to, the following:
    1. Working with the Audit and Compliance Committee, Chief Executive Officer, Chief Financial Officer and Legal Counsel in the preparation, development, and implementation of written guidelines on specific federal and state legal and regulatory issues and matters involving ethical and legal business practices, including without limitation, documentation, coding and billing practices with respect to requests for payments and/or reimbursements from Medicare or any other federally funded healthcare program, the giving and receiving of remuneration to induce referrals and engagement in certain business affiliations;
    2. Developing and implementing an educational training program for WMHS personnel to ensure understanding of federal and state laws and regulations involving ethical and legal business practices including, without limitation, documentation, coding and billing practices with respect to requests for payments and/or reimbursements from Medicare or any other federally funded healthcare program, the giving and receiving of remuneration to induce referrals and engagements in certain business affiliations;
    3. Handling inquiries by employees regarding any aspect of compliance in a confidential manner to the extent appropriate;
    4. Investigating any information or allegation concerning possible unethical or improper business practices and recommending corrective action when necessary;
    5. Providing guidance and interpretation to the Audit and Compliance Committee, the Chief Executive Officer, the Chief Financial Officer and other WMHS personnel, in conjunction with the Legal Counsel, on matters related to the Program;
    6. Planning and overseeing regular, periodic audits of WMHS' operations to identify and rectify any possible barriers to the efficacy of the Program;
    7. Developing policies and programs that encourage managers and employees to report suspected fraud and other improprieties without fear of retaliation;
    8. Preparing an annual compliance plan that will be submitted to the Audit and Compliance Committee for their approval. The plan will detail the expected work plan for the CCO for the upcoming fiscal year. The CCO will report the status of the work plan to the Audit and Compliance Committee on a quarterly basis. Any changes made to the work plan must be approved by the Audit and Compliance Committee;
    9. Coordinating personnel issues with Human Resources to ensure that the appropriate sanctioned provider reviews have been performed with respect to all employees, medical staff, and independent contractors;
    10. Ensuring that independent contractors and agents who furnish medical services to WMHS are aware of the WMHS Program including, without limitation, policies regarding the specific areas of documentation, coding, billing, and competitive practices; and
    11. Performing such other duties as the Audit and Compliance Committee may request.
3. Compliance Committee(s)
  1. One or more committees may be formed to advise the CCO and assist in the implementation of the Program. Membership on the committee(s) will be made by the CCO based on input given the CCO by the Chief Executive Officer, Chief Financial Officer and Legal Counsel. The purpose of providing for such committee(s) is to allow WMHS and the CCO to benefit from the combined perspectives of individuals with varying responsibilities such as, by way of example only and not obligation, operations, finance, internal audit, human resources, utilization review, social work, discharge planning, medicine, coding, and legal counsel, as well as employees of key operating units.
  2. The duties of the compliance committee(s) shall include, but are not limited to, the following:
    1. Assisting in the performance of the annual risk assessment, identifying focus areas, conducting any necessary audits and self-reviews, and developing compliance objectives. Factors that will determine the areas to be reviewed include but are not limited to; Office of the Inspector General (OIG) work plan, Medicare Alerts, input received from employees and or other business partners of WMHS and past experiences at WMHS;
    2. Developing an effective Standards of Conduct Policy. The policy will be reviewed on an annual basis; and
    3. Assisting in reviewing the Compliance Plan on an annual basis.
Educational Program
1. Purpose of Educational Program
  The Program promotes WMHS' policy of adherence to the highest level of professional and ethical standards, as well as all applicable laws and regulations. WMHS will make available appropriate educational and training programs and resources to ensure that all employees are thoroughly familiar with those areas of law that apply to and affect the conduct of their respective duties, including, without limitation, the specific areas of documentation, coding, billing, compliance and competitive practices of WMHS.
2. Responsibility for Educational Program
  The CCO, in conjunction with WMHS Legal Counsel, is responsible for implementing the educational program. The program is intended to provide each employee of WMHS with an appropriate level of information and instruction regarding ethical and legal standards, competitive practices, and with the appropriate procedures to carry out the Policy. Education and training of all employees will follow the format developed by the Compliance Committee. Each educational program presented by WMHS shall allow for a question and answer period at the end of such program.
3. Subject Matter of Educational Program
  1. The educational program shall explain the applicability of pertinent laws, including, without limitation, the following:
    1. Applicable provisions of the False Claims Act.(31 U. S. C. § 3729);
    2. the civil and criminal provisions of the Social Security Act (42 U. S. C. 1320a-7a and § 1320a-7b, respectively);
    3. The patient antidumping statute (42 U. S. C. § 1395dd);
    4. Laws pertaining to the provision of medically necessary items and services that are required to be provided to members of an HMO with whom WMHS contracts (42 U. S. C. § 1320a-7(b) (6) (D));
    5. Criminal offenses concerning false statements relating to healthcare matters (18 U. S. C. § 1035);
    6. The criminal offense of healthcare fraud (18 U. S. C. § 1347);
    7. Federal anti-referral laws (42 U. S. C. § 1395nn);
    8. The anti-kickback laws (42 U. S. C. 1320a-7b(b));
    9. The Sherman Antitrust Act (15 U. S. C. § §1, 2 and 18);
    10. The Maryland Medicaid Fraud Statute (MD. CODE ANN. tit. 8 §8-508);
    11. Maryland patient referral limitations (MD. CODE ANN. tit. 1 §1-301); and
    12. The Maryland Healthcare Worker Whistleblower Protection Act (MD. CODE ANN. tit. 1 §1-105).
  2. The educational program will also address how correct and accurate documentation of all claims and services promotes and enhances compliance with these laws.
  3. As additional legal issues and matters are identified by the CCO, those areas will be included in the educational program. Each educational and/or training program conducted hereunder shall reinforce the principlethat strict compliance with the law and with WMHS policies is a condition of employment with WMHS.
4. Training Methods
  Different methods may be used to communicate information about applicable laws and regulations to WMHS employees, as determined by the CCO. WMHS may conduct training sessions regarding compliance which may be mandatory for selected employees. The training sessions will be conducted by the CCO, or Legal Counsel or, where appropriate, by WMHS managers or consultants. The CCO may require that certain employees or representatives of WMHS attend publicly available seminars covering particular areas of law. Orientation for new employees will include discussions of the Program and each employee's obligation to maintain the highest level of ethical and legal conduct and standards.
Employee Obligations
The Program imposes several obligations on WMHS employees, all of which will be enforced by the standard disciplinary measures available to WMHS as an employer. Adherence to the Program will be considered in personnel evaluations.
1. Employee Obligations
  1. Reporting Obligation. Employees must immediately report to the CCO any suspected or actual violations (whether or not based on personal knowledge) of applicable law or regulations by WMHS or any of its employees. Any employee making a report may do so anonymously if he or she chooses. Once an employee has made a report, the employee has a continuing obligation to update the report as new information comes into his or herpossession. All information reported to the CCO by any employee in accordance with the Program shall be kept confidential by WMHS to the extent that confidentiality is possible in the context of any resulting investigation. There may, however, be a point where an employee's identity may become known or may have to be revealed in certain instances when governmental authorities become involved.
  2. Acknowledgement Statement. Each employee must sign and complete an Acknowledgement Statement to the effect that the employee fully understands the Program, and acknowledges his or her commitment to comply with the program as an employee of WMHS. Each Acknowledgment Statement shall be a part of the personnel file of each employee. It shall be the responsibility of each manager to ensure that all employees under his or her supervision who are materially involved in any of the documentation, coding, and billing for healthcare services have executed such an acknowledgement on a bi-annual basis.
2. WMHS Assessment of Employee Performance Under Compliance Program
  1. Violation of Applicable Law or Regulation. If an employee violates any law or regulation in the course of his or her employment, the employee will be subject to sanctions by WMHS.
  2. Other Violations of the Program. In addition to direct participation in an illegal act, employees will be subject to disciplinary actions by WMHS for failure to adhere to the principles and polices set forth in the Program. Examples of actions or omissions that will subject an employee to discipline on this basis include, but are not limited to, the following:
3. Employee Evaluation
  Employee participation in, and adherence to, the Program and related activities will be an element of each employee's annual personnel evaluations including without limitation, annual personnel evaluations of WMHS supervisors, managers, directors and officers. As such, it will affect decisions concerning compensation, promotion and retention.
4. Nonemployment or Retention of Sanctioned Individuals
  WMHS shall not knowingly employ any individual or contract with any person or entity who has been convicted of a criminal offense related to healthcare or who is listed by a federal agency as debarred, excluded, or otherwise ineligible for participation in federally funded healthcare programs. Until resolution of such criminal charges or proposed debarment or exclusion, any individual who is charged with criminal offenses related to healthcare or has been proposed for exclusion or debarment shall be removed from direct responsibility for, or involvement in, documentation, coding or billing for medical services while such action or proposal is pending. If resolution results in conviction, debarment, or exclusion of the individual, WMHS shall terminate the employment of such individual.
Response to Reports of Violations
WMHS shall promptly respond to and investigate all allegations of wrongdoing by WMHS employees, whether such allegations are received through the Compliance Hotline or through any other manner. WMHS shall confer with Legal Counsel on its legal obligations in connection with any allegations that are substantiated in a review or audit.
1. Investigation
  1. On discovering a potential material violation of the law or of the Policy, WMHS will undertake an investigation or review of the allegation. The investigation will be coordinated by the CCO and with WMHS Legal Counsel where necessary.
  2. Based upon the results of the investigation or review, WMHS will take all appropriate steps, including immediate corrective action to rectify the violation, possible sanction or disciplinary action against the employee or outside party involved in the violation, and reporting of the violation to the appropriate regulatory body as required by law.
  3. WMHS shall amend its operational or compliance polices in any manner deemed appropriate to improve or prevent any similar violation(s) in the future.
Auditing and Monitoring
It is critical to the WMHS Policy that it conducts regular auditing and monitoring of the activities of WMHS and that employees identify and promptly rectify any potential barriers to such compliance.

Regular, periodic reviews shall be conducted with the assistance of the WMHS Legal Counsel when appropriate. Such reviews shall evaluate WMHS' compliance with the Program and determine what, if any, compliance issues exist. Such reviews shall be designed and implemented to ensure compliance with the WMHS Program all applicable federal, state, and local laws.

Compliance audits shall be conducted by the CCO and shall include, at a minimum the following processes:
1. Once the risk assessment has been completed, an annual Compliance Review Plan ("Plan") will be developed by the CCO. The Plan will be reviewed with Senior Management of WMHS and will ultimately be presented to the Audit and Compliance Committee and the Board of Directors for their approval. Once the Plan receives such approval, it will be the responsibility of the CCO to complete the Plan and report the status of the Plan to the Audit and Compliance Committee on a quarterly basis. Any amendments and/or changes to the plan must be approved by the Audit and Compliance Committee.
2. In connection with the current records reviews that are performed, develop a process to include in said reviews a method to ensure that appropriate medical necessity and diagnoses documentation exists for all services rendered and/or submitted for Medicare or Medicaid coverage. The CCO will work with the Medical Records Director and the independent medical records reviewing organization to analyze the results of the reviews and develop action plans to address any deficiencies that may be noted. These independent reviews will involve enhancing the current compliance review process to include the high risk areas identified in the risk assessment process referenced in section I.B.2 of this Manual. These independent reviews will be part of the annual Plan and will be subject to review by the Audit and Compliance Committee.
3. As part of the annual independent audit, a review of WMHS' Program will be performed. The review will be performed by the compliance specialist of an independent auditor retained by WMHS and coordinated through WMHS Legal Counsel to the extent necessary and appropriate. Any issues addressed by the audit will be reported to both management of WMHS and the Audit and Compliance Committee. It will be the responsibility of the CCO to work with management and WMHS Legal Counsel to address any issues that are identified.
Compliance with Applicable Fraud Alerts and Other Fraud and Abuse Laws
The CCO shall regularly and periodically monitor the issuance of compliance guidance from the Office of the Inspector General of the Department of Health and Human Services and other government agencies such as the Centers for Medicare and Medicaid Services, the Food and Drug Administration, and their Maryland State counterparts listed below. Compliance guidance shall be reviewed with WMHS Legal Counsel when appropriate. WMHS shall revise and amend this Program, as necessary, in accordance with government compliance guidance.
1. Deficit Reduction Act of 2005 (DRA) (Pub. L. No. 109-171, § 6031, 120 Stat. 72, 70-72 (2006) amending 42 U.S.C. §1396(g)):
  Section 6032 of the DRA requires that providers establish written policies for all employees and for any contractor or agent of the entity that provide detailed information about the False Claims Act. It also requires the policies to address administrative remedies for false claims and statements as well as any State laws pertaining to civil or criminal penalties for false claims and statements. The policies must discuss whistleblower protections under state and federal laws and the role of those laws in preventing and detecting fraud, waste, and abuse in Federal health care programs. The policies must also include detailed provisions regarding policies and procedures for detecting and preventing fraud, waste and abuse.
  
  The written policies must be addressed in the employee handbook in a way that specifically discusses the Federal False Claims Act and related State fraud and abuse laws, whistleblower protections under such laws, and procedures for preventing fraud, waste and abuse.
2. Federal False Claims Act Civil and Criminal Provisions (31 U.S.C. §3729 et seq., 18 U.S.C. §1035)
  1. Section 3729 (civil statute) provides that a person is liable to the United States Government for "knowingly" presenting or causing to be presented to an "officer or employee of the United States Government" a "false or fraudulent claim for payment or approval." The claim does not actually have to be paid or approved to constitute a false claim. The submission alone violates the statute. Any person who is caught violating this statute can be held liable for at least $5,000 or at most $10,000, plus three times the actual amount of damages, for each instance of the violation.
    
    A private individual may bring an action in the name of the Federal Government against an entity for violating these laws. However, if the individual is convicted of criminal conduct arising out of the role he or she played in the violation, the individual will be dismissed from the action and cannot receive any share of a recovery.
    
    No discriminatory actions can be taken against an employee who initiates or assists in such an action. If any such discriminatory actions are taken, the employee is entitled to reinstatement to the same position from which he or she was let go with the same seniority status, two times the amount of back pay with interest, and compensation for any other damages arising out of the discrimination.
    
    A potential defendant may limit its liability under this section if it discloses the violation within thirty days of learning of it, if it is not already subject to civil, criminal, or administrative actions for the violation.
  2. Section 1035 (criminal) states that anyone who "knowingly and willfully falsifies, conceals, or covers up…a material fact, or makes any materially false, fictitious or fraudulent statements or representations…in connection with the delivery of or payment for health care benefits, items or services" will be fined and can be imprisoned for up to five years.
3. Maryland Medicaid Fraud Statute (Md. Code Ann. tit. 8 §8-508 et seq.)
  The Medicaid Fraud Statute enumerates the actions which constitute Medicaid fraud and the penalties for commencing such actions. This title applies to any "State health plan" as defined by Title XIX of the Social Security Act, a medical assistance plan established by the State, a private health insurance carrier, or "other person who provides or contracts to provide health care services which are eligible for Title XIX reimbursement by the State." The prohibitions under this statute are as follows:
  1. A person may not:
    1. Knowingly and willfully defraud or attempt to defraud a State health plan in connection with the delivery of or payment for a health care service;
    2. Knowingly and willfully obtain or attempt to obtain through a false representation money, property, or any thing of value in connection with the delivery of or payment for a health care service that wholly or partly is reimbursed by or is a required benefit of a State health plan;
    3. Knowingly and willfully defraud or attempt to defraud a State health plan of the right to honest services; or
    4. Make a false representation relating to a health care service or to a State health plan with the intent to defraud.
  2. The statute also applies to actions for conversion, bribes or kickbacks, referrals, false representation of qualification for reimbursement, obtaining a benefit by fraud, and unauthorized possession of a benefit card.
  3. This statute has both criminal and civil penalties ranging from up to three times the amount of the overpayment under the civil statute to death under the criminal statute
4. Maryland Patient Referral Limitations (Md. Code Ann. tit. 1 §1-301 et seq.)
  Maryland regulates physician referral of patients to "another health care entity outside the health care practitioner's office or group practice" or who "request[s] or establish[es]...a plan of care for the provision of health care services outside the health care practitioner's office or group practice."
  1. A health care entity is a business entity that:
    1. Provides health care services for the testing, diagnosis, or treatment of human disease or dysfunction; or
    2. Dispenses drugs, medical devices, medical appliances, or medical goods for the treatment of human disease or dysfunction.
    3. While these rules generally are more relevant to physician practice settings than hospitals, an overview should be provided in any compliance materials.
  This section of the Maryland Code prohibits referrals by a practitioner to a health care entity if the practitioner or the practitioner's immediate family has a beneficial interest or compensation arrangement. If a service is rendered where such interest or arrangement exists, the practitioner cannot present a claim or any other demand for payment or reimbursement for those services. Certain exemptions and disclosures may apply.
  
  Failure to comply is a misdemeanor and could carry a fine of up to $5,000. A practitioner who does not comply with this statute may also be subject to disciplinary action by the "appropriate regulatory board."
Retention of Compliance Records and Reports
WMHS shall document its Program activities and efforts. All records and reports created in conjunction with WMHS' Program are confidential and shall be maintained by WMHS, through the CCO, in a secure location until such time as the CCO, through consultation with WMHS Legal Counsel, determines that the destruction of such documentation is appropriate and in accordance with any applicable federal and state laws.
Establishment of a Hotline
1. The CCO shall have an open-door policy with respect to receiving reports of violations or suspected violations of the law or of the Policy. The open-door policy extends to answering employee questions concerning adherence to the law and to the Policy. In addition, WMHS has established an anonymous toll-free Compliance Hotline for reporting and/or questions. The telephone number for the Hotline is 1-866-463-2246. Telephone calls to the Hotline may come from WMHS employees, patients of WMHS or others, regardless of affiliation with WMHS.
2. All information reported to the Hotline by any employee in accordance with the Program shall be kept confidential by WMHS to the extent that confidentiality is possible in the context of any resulting investigation. There may, however, be a point at which an employee's identity may become known or may have to be revealed in certain instances when governmental authorities become involved.
3. The telephone number for the Hotline, along with a copy of the Program, shall be posted in conspicuous locations throughout WMHS. The CCO shall track all reporting events in a compliance log and report on such events to the Audit and Compliance Committee. The reporting log shall track the date and nature of event, any subsequent action by the CCO, the date of reporting to the Audit and Compliance Committee, and the nature and date of resolution, where appropriate.
4. Under no circumstances shall the reporting of any such information or possible impropriety serve as a basis for any retaliatory actions to be taken against any employee, patient or other person making the report to the CCO or the Hotline.