Sample Auditing and Monitoring Precess for The Anti-Kickback Statute

Note: the following sample auditing and monitoring process is based upon a similar sample we have used throughout this compliance guidance. It is designed to be a sample only, to assist providers in developing their own auditing and monitoring program, and to demonstrate one possible way of thinking about and approaching auditing and monitoring for potential kickback violations. We’ve approached auditing and monitoring in this sample as a series of three categories of questions designed to prompt providers to ask key questions that can help avoid and detect potential kickback violations, consisting of the following questions:

1. Specifically what are we auditing and monitoring (i.e., what are the specific issues we are looking for in this part of our auditing/monitoring process)?
2. What specific sources of information will we examine to find that information (e.g., facility contracts, invoices for services or items purchased, interviews with facility staff and outside contractors, referral patterns and sources, etc.) and specifically, who in the facility or company (by title) will be responsible for each of the individual information source examinations and on what schedule (i.e., how often and when) will they perform these tasks?
3. What will we do with the information we obtain as a result of steps 1 – 3, above?

This approach can be applied to each of the business arrangements in which nursing facilities engage, each of which should be reduced to a written contract. The OIG has identified the following “business partners” to whom nursing facilities make referrals or from whom they receive referrals. Each of these should be subjected to the auditing/monitoring analysis described below (or a different one adopted by the provider):

• Physicians
• Other health care professionals
• Hospitals and hospital discharge planners
• Hospices
• Home health agencies
• Other nursing facilities
• DME providers
• Laboratories
• Diagnostic testing facilities
• Long term care pharmacies
• Speech, physician and occupational therapy companies.

With respect to the Anti-Kickback Statute, the OIG has identified seven specific risk areas that present potential kickback issues. Those are:  free goods and services; services contracts including both physician services contracts and contracts for other non-physician services; discounts including price reductions and swapping arrangements; hospice services; and reserved bed payments.  Each of these is discussed separately in this compliance guidance. In addition, the sample auditing and monitoring program described below can be applied to each of these seven specific risk areas, as well as others identified by a provider which may present kickback issues.

Specifically what are we auditing and monitoring (i.e., what are the specific issues we are looking for in this part of our auditing/monitoring process)?

1. Do we give, receive, arrange for or solicit any prohibited items of value (cash or in-kind), directly or indirectly, to induce or reward any other party with whom we do business for referrals of health care business paid for in whole or in part by any federal health care program (Medicare, Medicaid, Tristar, etc.)?
2. Do we engage in any of the prohibited violations described in item 1, above, in connection with referral of residents, purchasing, leasing, ordering or arranging for or recommending the purchase, lease or ordering of items or services paid for by any federal health care program?  [To assist in answering questions 1 and 2, above, ask:]
• Do we or any of our representatives or affiliates provide anything of value to any person in a position to influence or generate federal health care program business for us or any of our affiliates, either directly or indirectly; and/or
• Do we or any of our representatives or affiliates receive anything of value from any person for whom we are in a position to influence or generate federal health care program business to them or any of their affiliates, either directly or indirectly; and/or
• Can any of our business arrangements with other vendors/providers be viewed as having as one purpose of the arrangement the inducement of or rewarding for business paid for in whole or in part by a federal health care program?
3. If the answer to any of questions 1 – 2, above, is or may be “yes,” then ask the following [the following are “aggravating factors” the OIG has identified as making business arrangements which involve any of the issues identified in questions 1-5, above, more suspect]:
• Does the arrangement at issue have the potential to interfere with or skew objective clinical decision-making?
• Does it have the potential to increase costs to any federal health care program?
• Does it have the potential to increase the risk of overutilization or inappropriate utilization of items or services paid for in whole or part by any federal health care program?
• Does it potentially raise resident safety or quality of care concerns?
• If the arrangement at issue involves appropriate and medically necessary services, is the payment being made by us or received by us for those items or services consistent with fair market value for similar items and services?
4. If any of the answers to the questions above suggest potential problems (i.e., transactions which do or could be viewed as involving a prohibited kickback), have we structured that arrangement to fit precisely within one of the available “safe harbors” which protect the transaction from kickback liability?  If the answer is “yes,” then the transaction is protected from kickback liability.  [To determine the answer to this question, involve legal counsel experienced in fraud and abuse to examine the arrangement at issue].  For nursing facilities the primary safe harbors usually available include:
• The investment interest safe harbor;
• The space rental safe harbor;
• The equipment rental safe harbor;
• The personal services and management contracts safe harbor;
• The discounts safe harbor;
• The employee safe harbor;
• The electronic health records items and services safe harbor; and
• The managed care and risk sharing arrangements safe harbor.
5. If the answers to the above questions indicate that we have not identified any business arrangements that suggest potential kickback violations in terms of how our business arrangements with third parties are structured, then are we actually implementing those business arrangements on a daily basis consistent with our written contracts describing each arrangement?
6. If not, are we implementing any of these arrangements in a manner which does, or may, include a potential prohibited kickback?  If so, refer to senior management and legal counsel for analysis.

What specific sources of information will we examine to find that information  and specifically, who in the facility or company (by title) will be responsible for each of the individual information source examinations and on what schedule (i.e., how often and when) will they perform these tasks?

1. Prepare a list of all outside arrangements the facility has that involve the referral of residents to or from the facility and/or the purchase by the facility of items and/or services from third parties or the sale of items or services by the facility to third party health care providers. Designate the person by title to prepare this list and update it at least annually.
2. Ensure that each of the arrangements in item 1, above, is the subject of a written agreement that has been reviewed and approved by management and, where appropriate, by legal counsel.  Designate the person by title to prepare this list and update it at least annually.
3. Review each contract periodically (on a designed time frame) against the actual implementation of the agreement to ensure the referrals (to or from the facility) and the purchase or sale of items or services to or from the facility is consistent in practice with each written agreement. Designate the person by title to prepare this list and update it at least annually.
• Include in this task interviews with facility staff, outside vendors and referral sources to determine if the arrangement is being implemented consistent with the applicable contract. 
• Review facility documentation of referrals made and received to ensure all such referrals are consistent with facility contracts, where they apply, or facility policies regarding the acceptance or making of referrals.
• Review facility purchasing and sales invoices to ensure all purchases and/or sales by the facility covered by written agreements are being made consistent with the applicable agreement. 
4. Periodically review OIG fraud alerts and advisory opinions (use counsel for this if available) to ensure that all existing contracts governing referrals and purchases/sales of items or services are consistent with new issuances or statements by the OIG on kickbacks.  Designate the person by title to prepare this list and update it at least annually.
5. Update contracts with the involvement of management and counsel where appropriate based on step 4, above.

What will we do with the information we obtain as a result of steps 1 – 3, above?

1. The information obtained through the preceding steps will be shared with the facility’s compliance officer and committee and, where appropriate and at the direction of the compliance officer, with the facility’s Quality Assurance Committee.
2. Where the above reviews suggest an actual or potential kickback violation, legal counsel will be consulted to determine the appropriate steps to remedy the situation and prevent its recurrence, as well as any legal obligations to report the situation to appropriate law enforcement authorities.
3. This information will be provided on a periodic basis by the compliance officer to senior management and the facility’s owners/Board of Directors, including the findings of the auditing/monitoring, any corrective actions implemented, and any actions implemented to prevent a recurrence.
4. Where appropriate, revised policies and/or procedures will be developed and implemented, and then reviewed (define period for reviews) to ensure they are being consistently implemented.