Internal Audit and Compliance Reporting Summary September 13, 2018 - PowerPoint PPT Presentation

Internal Audit and Compliance Reporting Summary September 13, 2018

Stark Law Non-Monetary Compensation BACKGROUND: The Stark Law prohibits a financial relationship between a healthcare entity and a referring Physician through the giving of gifts, business courtesies or discounts intended to induce or reward the referral of a patient. There are exceptions that allow certain non-monetary compensation to physicians and the limit for CY2016 was $392. This review focused on a detailed assessment of over 600 CY 2016 travel and expense reimbursement payments to employee physicians; directors and above; and OakCare contract physicians. RESULTS: Issues were noted in the areas of: 1) the AHS contractual relationship with OakCare, and 2) the effectiveness of internal policies and procedures to track and monitor NMC in order to ensure that AHS is in compliance with Stark Law rules. While these two issues raise some concerns for the remuneration paid to OakCare physicians, we believe that this compensation would fall under an exception of either: a) Remuneration Unrelated to DHS (designated health services), or b) Personal Services. 2

Stark Law Non-Monetary Compensation 1. OakCare Payments for GME Finding: There is currently no contractual agreement between AHS and OakCare that would allow AHS to reimburse OakCare directly for expenses; however, in 2016, AHS paid OakCare a total of $231,780. Recommendation: AHS should establish/reiterate a policy that reimbursement for expenses should: a) comply with AHS expense reimbursement policy, b) pay the OakCare provider directly, and c) track the payments by physician to ensure that the NMC for any particular physician does not exceed the annual limit. Management Response: Management agrees with this recommendation and will implement changes to our practices regarding reimbursement of expenses by 8/31/18. 3

Stark Law Non-Monetary Compensation 2. Stark Law Non-Monetary Compensation Policy Finding: There is currently no AHS policy that requires AHS to track and monitor Non- Monetary Compensation (NMC) in order to ensure that AHS is in compliance with Stark Law requirements. Recommendation: AHS should develop and implement a policy and set of procedures to ensure that AHS is in full compliance with Stark Law requirements related to Non-Monetary Compensation. Management Response: Management agrees with this recommendation and the CMO, in consultation with the General Counsel, will develop a Stark Law Monetary Compensation Policy, and detailed procedures to implement the policy, by 8/31/18. 4

FMV Physician Compensation BACKGROUND Remuneration flowing between hospitals and physicians should be at fair market value for actual and necessary items furnished or services rendered based upon an arm’s ‐ length transaction and should not take into account, directly or indirectly, the value or volume of any past or future referrals or other business generated between the parties. Valuation of FMV and Commercial Reasonableness There are three basic approaches to valuation (of any type of asset, contract, or business): (1) income, (2) market, or (3) cost. The most common and accessible information sources on physician service arrangements are national or regional compensation surveys.

FMV Physician Compensation The audit process consisted of the following components: • Contract signed by both parties; • Contract term is for at least 1 year; • Evidence of Legal review for anti-kickback statute and stark compliance; • Evidence of FMV validation for all sources of physician pay; • Market-based FMV assessments based on data from multiple published surveys, and not on a single survey source; • Evidence of commercial reasonableness that does not exceed FMV and is not determined in a manner that takes into account the volume or value of referrals or other business generated; • Evidence of time sheet or invoicing record for worked hours documented and verified; • Physician compensation agreement does not exceed the 75th percentile benchmarks unless approved by the CMO; and • Payments matched to contract terms and its required documentation.

FMV Physician Compensation FINDINGS/RECOMMENDATIONS: 1. Even though the Contracting team uses a formalized checklist for ensuring each step in drafting a physician service contract is completed, it is recommended as part of the check list to add that the actual documentation supporting the FMV assessment has been uploaded to the Legal/Physician FMV shared drive. Management Response: Management agrees with the finding and recommendation. The checklist has been modified and action complete.

FMV Physician Compensation 2. In early 2018, a FMV and Commercial Reasonableness assessment was performed by a third party for psychiatry. While this FMV assessment was noted as a “draft” document, it can be used as a benchmark for renewals and new employed psychiatrists once approved by Legal. Management Response: 3. It is recommended that a FMV and Commercial Reasonableness assessment be completed for all other UAPD physician specialties (except psychiatry since one was previously completed) and UAPD dentists to verify that the salary compensation is commercially reasonable and are within FMV. Management Response:

HIPAA Walkthrough Assessments Completed the Following:  Highland Hospital Acute  Alameda Hospital  Alameda Sub-Acute/SNFs Scheduled for completion in FY 2019  Fairmont Hospital/SNF  San Leandro Hospital  John George Psychiatric Pavilion

HIPAA Walkthrough Assessments Background  The assessments were designed to: • Verify compliance with HIPAA Privacy requirements in several key areas; • Identify opportunities for improvement in compliance with HIPAA Privacy regulations; and • Identify areas where additional HIPAA Privacy training may be needed.  The scope of the reviews included: • • Printing Exchange of PHI • • Faxing/Copying E-mail • • Storage/Disposal Mail • • Computers Notice of Privacy Practices • • Telephones Personnel Issues 10

HIPAA Walkthrough Assessments Common Themes  PHI on Shared Printers  Fax Machines not Pre-Programmed  Unsecured Filing in Public Area  Notice of Privacy Practices not Posted  Confidentiality Statements on Email  Lack of Privacy Screens on Public Facing Computers

Other Reports  FY 2018 Annual Plan – Considered Complete. Final or Draft Reports issued for all Planned Projects  FY 2018 Annual Plan – On Time  Compliance Issues – Record High for Reported Issues, Record High for Pending Issues. Currently addressing Backlog. 12

Other Reports 340B is a significant level of focus now and in FY2019. Random audits have indicated increasing error rates for UD Modifiers and dose quantity charges. 20% 40% 94% 100% 2.5% 0% 4/17 7/17 9/1717 2/18 4/18 8/18 Errors Errors Errors Errors Errors Errors 13

340B Compliance  Previous Discussion of 340B at Audit & Compliance Committee  Workgroup established with Compliance, Revenue Integrity, Patient Accounting, IT, PFS Business Systems  System Mapping Issue Identified and Fix Implemented 6/22/18  Data Validation Indicates Fix is Working, but additional Testing is Needed  Compliance to Size Issue and Reporting Requirements

340B • 340B Workgroup identified Issue • Workgroup established with Compliance, Revenue Integrity, Patient Accounting, IT, PFS Business Systems • System Mapping Issue Identified and Fix Implemented 6/22/18 • Data Validation Indicates Fix is Working, but additional Testing is Needed • July 2018 error rate 10% • August error rate 2.5% • Patient Accounting is reprocessing 36,595 transactions