Monthly Archives: July 2013

Seminar: Fraud in the Medical Providers Office

 
 

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Preventing Fraud in the Medical
Office Practice

Join
Tredway Lumsdaine & Doyle's Matthew L. Kinley along with
representatives from The Doctors Company and HMWC CPA's as they tackle
the topic of "Preventing Fraud in the Medical Office."

The
program is intended to provide information, education, and case
examples to illustrate risks associated with fraud in documentation,
prescriptions, billing, collections, physician and employee conduct,
and the internal controls necessary to reduce your risks.

Should
you have any questions, please contact Matthew
L. Kinley
.

DATE/TIME:

·       
Tuesday, July 30, 2013

·       
6:00 PM – Dinner

·       
6:30-8:00 PM – Seminar

For
more details and to register, please click here.

 
 

 

   
         
 

Please contact Matthew L. Kinley at
mkinley@tldlaw.com or 562-901-3050.

   
         

BEST PRACTICES TO AVOID FRAUD AND THEFT IN THE MEDICAL OFFICE: PROTECTED HEALTH INFORMATION, IDENTITY THEFT AND THE LAW PRACTICE

IDENTITY THEFT, PROTECTED HEALTH INFORMATION EMRs and OTHER FEDERAL REGULATORY ISSUES

This is the second in a series of articles on
avoiding fraud and theft in healthcare professionals
offices.
The article is meant for medical professionals including physicians,
dentists, home nursing and mental health professionals. If you have any
questions about this series, feel free to contact attorney Matthew L. Kinley, a
healthcare lawyer in Long Beach, California at 562.901-3050.
 

Medical providers store all sorts of private information.  Patients give medical providers virtually every identifying fact about themselves possible.  Records kept in the office include information about the health of the patient.  Billing records have banking and other important financial contacts.

Medical providers have an obligation to protect private health infomration.  Federal and state laws impose specific obligations to protect information provided to medical providers. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) and related regulations, the Health Inforamtion TEchnology for Economic and Clinical Health  (HITECH) and realated regulations, and the California Business and Professions Codes and related regulations are all laws designed to protect patient’s privacy and to require providers to keep information private.

Medical providers, if they expect payment from Medicare, Medicaid (Medi-Cal in California) or from private payors, will have Electronic Medical Rerords systems in place.  This expansion of electronic records require medical providers to institute plans to follow complicated regulations to make sure they are able to survive government audits and in order to make sure that medical records are safe.  Failure to do so may result in penalties and fines.

ACTION ITEMS:

What to do to protect electronic information?

1.  Hire competent people. 

Take the time to carefully research people you hire.  Check their references.  Make sure they are not on the Office of Inspector Generals Excluded Persons list. (Persons on this list have been found by the OIG to be involved in some sort of fraudulent scheme.)

2.  Prepare a HIPAA Compliance Plan.  Every medical provider, no matter how small, should prepare such a plan.  Failure to do so can result in serious fines and penalties, even if no information is leaked.  The basics of such a plan include:

a.  Appointment of a privacy officer.  Takes charge of the office’s privacy efforts.

b. Security Rule Analysis.  This is the first part of preparing a HIPAA plan.

c.  Prepare a Breach Policy.  This is what to do if there’s a breach and confidential helath information is made public.

d.  Training of your employees.  All employees need to be trained in basic patient privacy.

e.  Privacy Notice.  The law requires every health provider to have and have published a Privacy Notice.

f.  Business Associate Agreements.  The provider is required to protect all information if using other entities to help with collections or other information gathering.

g.  Policies relating to release of information.   When can a patient’s information be released?  To whom can the information be released?  How is such information sent (internet? e-mail?).

Some of the nuts and bolts of your plan will include:

a. Negotiating Leases.  Make sure your landlord does not have access to protected health information.  Most leases allow the landlord to enter the premises, either upon notice or during emergencies.  These entrances into the medical space should be limited.

b. Patient sign-in sheets don’t disclose protected medical information.

c. Patient schedules can’t be seen.

d. Confidential discussions can’t be overheard.

e. Computers have proper encryption and passwords.

f.  Computer monitors can’t be seen by passersby

g. Internet use is secure.

h. Filing cabinets are locked.

i.  Use encryption.  Monitor lap tops and portable storage devices to make sure they are not lost.

e. Keys and access items are retireved from former employees.

Modern electronic information requires that all medical providers comply with the law and institute privacy procedures.  Our office provides guidance on such matters for a flat fee.  You can call for a no cost consultation at any time.

By: Matthew L. Kinley, Esq.

 

 

 

 

 

 

 

 

BEST PRACTICES TO AVOID FRAUD AND THEFT IN THE MEDICAL OFFICE: HOW TO AVOID EMBEZZLEMENT

AVOIDING EMBEZZLEMENT IN THE MEDICAL PRACTICE 

This is the first in a series of articles on avoiding fraud
and theft in healthcare professionals
offices.  The article is meant for medical
professionals including physicians, dentists, home nursing and mental health
professionals. If you have any questions about this series, feel free to
contact attorney Matthew L. Kinley, a healthcare lawyer in Long Beach,
California at 562.901-3050. 

DEFINING THE PROBLEM
OF FRAUD AND THEFT IN THE HEALTHCARE OFFICE.

          Medical provider offices are subject to fraud and theft as much any business.  According to the Association of Certified
Fraud Examiners
, the amount stolen annually from all U.S. business by employees
exceeds $50 billion.  The Association
claims that as many as 75% of all employees have stolen from their employers.  Most theft is caught by other employees
reporting the theft.  Internal audits catch
a little less than 20% of all theft caught.
Accidental discovery accounts for the same amount of captured theft.

          The
medical practice offers unique opportunities for theft.  Certainly employees steal the usual from
their employers, like supplies and computer parts and money.  Medical practices typically have a large
stream of money.  Employees in the
medical practice also have the opportunity to steal identities of their
employers and patients. There is also the opportunity to steal prescription
pads and controlled substances.

          The
medical facility also has unique risks.
Because of strict regulatory controls, not only does the medical
practice suffer the dollar lost for activities such as theft of co-payments and
identity, there is also the risk of penalties and fines. There is also the risk
of whistle blowers within your own ranks.

          There
are also legal issues associated with confronting the person who is stealing
from your practice.  Should you
electronically monitor employees?  Should you fire an employee?  Should you contact the police?

EMBEZZLEMENT

         This
first article focuses on embezzlement from the medical practice.  Embezzlement from the medical practice can go
unnoticed for several reasons. Often, the embezzler is also the person who
records the receipt of money. Usually it is a trusted employee. Usually, there
is general surprise that the individual caught has committed the crime.

          To
avoid employee theft, the office should have internal controls that immediately
record all transactions.  There should
also be a system of checks and balances to make sure that your employees aren’t
manipulating the system.

 ACTION ITEMS

1. Record all transactions: accounts
payable, accounts receivable, refunds, adjustments, copayments and even write
offs.

2.
Reconcile receivables and charges every day.

3. Issue a receipt with every
transaction; balance receipts every day with a second person verifying the
balance.

4.
Immediately stamp checks “for deposit only.”

5.
Retain charge sheets and explanation of benefit statements to support
daily transactions.

6. Routinely verify petty cash
balances.

7. Periodically hire an accountant to
conduct an audit.

8. Keep duplicates of all deposit
slips.

9. Periodically review all accounting
entries rather than just checking totals.

10. Require signatures from the
appropriate managers for all large checks.

11. Do not allow anyone to sign blank
checks.

11. Cross train employees for all
tasks. 

12. Have an outside book keeper
reconcile bank statements.

13. Have inventory cross checked by
different employees.

14.  Keep
strict controls over business credit cards.
Carefully review all statements.

Article by Matthew L. Kinley, Esq.

DOMA: HOW IT CHANGES BENEFITS FOR SAME SEX COUPLES

THE SUPREME COURT STRIKES DOWN DEFENSE OF MARRIAGE ACT

The decision of the United States Supreme Court in U.S. v.
Windsor, where the court struck Section 3 of the Defense of Marriage Act
(DOMA), will change many aspects of healthcare as it relates to same-sex
marriage.  The decision requires that the
federal government recognize same-sex marriages that are recognized under state
law.

SOME OF THE THINGS THE
COURT DID NOT RULE

The Feds Follow the
State
.
The Court didn’t rule that the federal government must recognize all
same-sex marriage.  Instead they
determined that marriage is traditionally an issue for the states to
decide. 

 States Follow Their Own
Path
.  The Court did not
strike down Section 2 of DOMA, which provides that no state shall be required
to recognize a same-sex marriage that is recognized by another state. This
raises a number of issues for couples who move from state to state or who live
in a state that does not recognize same-sex marriage but travel to a state that
does and marry there.

 Retroactive?.  Another open issue is retroactivity. Windsor
did not specifically address whether same-sex couples have any retroactive
rights to any benefits. For example, suppose a 401(k) plan participant entered
into a same-sex marriage, designated someone other than the same-sex spouse as
beneficiary (without obtaining the spouse’s consent), and died before the
decision. Does the surviving spouse have a claim against the plan for survivor
benefits? Do same-sex couples have a right to claim refunds for health plan
benefits that were previously treated as taxable? The Courts and the IRS will
provide guidance on retroactivity at some point. 

CALIFORNIA RECOGNIZES
SAME SEX UNIONS

In California, the Supreme Court, in a 5-4 decision issued on
the same day as U.S. v. Windsor, ruled against the backers of California’s
Proposition 8
gay marriage ban. With the court’s ruling, gay marriage is once
again officially legal in California. While many questions remain about the broader
constitutional issue concerning the right of gay and lesbian couples to get
married, June 26 will be remembered as the day California’s gay marriage ban
died. 

 DOMA:  KNOWN EFFECTS

       1. Imputation of Income.
Same-sex partners will no longer pay federal taxes on income imputed for an
employer
s
contribution to a same-sex spouse
s
medical, dental or vision coverage and employers will no longer be required to
pay federal payroll taxes on such amounts.

        2.     Employer Refunds.  Employers may be entitled to a refund for
payroll taxes previously paid.
Employers may be required to continue to impute income for state law
purposes in states that do not recognize same-sex marriage.

3.  Coverage.
Windsor does not address whether plans that provide spousal coverage must cover
same-sex spouses. Employers with self-insured plans subject to ERISA are not
required to cover spouses and if they do cover some spouses, they are not
necessarily required to cover all spouses. Employers with plans not subject to
ERISA would be subject to any applicable state laws regulating coverage.  The ACA requires coverage of offspring but
not spouses, same sex or not.

 4. Pre-tax premiums.
Employees with same-sex spouses may pay the cost of spousal health coverage by reducing
pay on a pre-tax basis.

 5. COBRA. Same-sex spouses have the same independent COBRA rights as
opposite-sex spouses.

 6.  Special
Enrollment Rights.
Marriage to or divorce from a same-sex spouse is now a
HIPAA special enrollment event under plans offering spousal coverage. Employees
may add a same-sex spouse to their health coverage outside of the open
enrollment period, if they marry or if the spouse loses coverage due to a job
loss or change.

 7.  Personal Representatives.  HIPAA provisions relating to providing
patient information will now clearly include same sex spouses. 

8.  Medical
Expenses Tax Treatment.
Eligible medical expenses incurred by a same-sex
spouse at least since the date of the Windsor decision are eligible for
tax-free reimbursement under health care flexible spending accounts, health
reimbursement arrangements, and health savings accounts. There may also be a
medical expense deduction.  An employee
and a same-sex spouse will share the deduction limit for HSA contributions and
the typical health care cost deduction.

 9.  Qualified Retirement Plans. Spouses have a
number of rights under qualified retirement plans (such as defined benefit and
401(k) plans) subject to ERISA. Some examples of these rights, which must now
be provided to same-sex spouses, include Qualified Joint and Survivor rights,
same-sex spouses who are divorced can obtain a qualified domestic relations
order dividing retirement benefits (QDRO’s), and other rights for spouses.

HEALTHCARE SPECIFIC
ISSUES

Impact on Medicaid/CHIP
Eligibility. 
With
the invalidation of DOMA, states that recognize gay marriage must treat
married, same-sex couples as part of the same household. To determine whether
an individual is eligible for Medicaid/CHIP, states assess a household’s
composition and countable income as a percentage of the federal poverty level.

Treating same-sex couples as spouses can make it more likely that they are eligible
for Medicaid/CHIP by increasing the size of their households or it can make a
household less likely to be eligible by increasing the total family income.
Ultimately, in terms of Medicaid/CHIP eligibility, whether a same-sex couple
benefits or loses from being treated as one household depends on the amount of
income each spouse contributes.

The DOMA decision will affect the access married, same-sex
couples have to many government programs, as well as to employer-sponsored
health insurance. With DOMA no longer in place:

           Same-sex
spouses of federal employees will be entitled to federal healthcare           coverage.

           Same-sex
spouses of military personal will be eligible to receive TRICARE           coverage.

           Individuals in
same-sex marriages
like
those in heterosexual marriages
will
be able to qualify for Medicare based
on a spouse
s
work history.

 OTHER ISSUES

FMLA

The FMLA now will provide entitlement to take leave to care
for a same-sex spouse to the same extent as an opposite-sex spouse.

Medicare Secondary Payer Rules

Same-sex spouses will now be treated as spouses, such that
plans covering spouses of active employees will be considered primary for
Medicare purposes.

Prohibited Transaction Rules

Spouses are treated as “family members” in
determining whether a person is a disqualified person for purposes of
prohibited transaction rules. Same-sex spouses are now disqualified persons to
the same extent that opposite-sex spouses are.

 Ownership Attribution Rules

 The same-sex spouse of a 5% owner of employer stock is now
considered to be a 5% owner by attribution, including for purposes of
identifying highly compensated employees and for top hat purposes.

ACTION
ITEMS

 1.  Begin reimbursing
medical care expenses for same-sex spouses of participants.
Notify employees of the window (typically 30-days) under the
cafeteria plan for family status changes and special enrollment rights for
same-sex spouses and their dependents.

 2. Review definitional and choice-of-law provisions of benefit
plans concerning the definition of “spouse.”  Start obtaining spousal consent from same-sex
spouses for any defined benefit plan retirement distributions.

3. Advise employees married to same-sex spouses to review
their death beneficiary designations; if proper spousal consent has not been
obtained, their designations will be void.

4. Employers will want to ensure that same-sex spouses are
identified for its records in the same manner opposite-sex spouses are
identified. If the employer does not currently distinguish between same-sex
spouses and domestic partners in company records, for example, or identifies
opposite-sex spouses, but not same-sex spouses in its record keeping, the
employer should consider modifying its practices.

5.  Review all plan
documents, in particular the eligibility provisions, to determine if provisions
that were designed to provide coverage to domestic partners or same sex spouses
or designed to restrict coverage to opposite sex spouses should be changed or modified.

6.  Be sure that, at
least after the date of the Windsor decision, retirement plans in operation
provide lawfully married same-sex spouses residing in states where same-sex
marriages are recognized the benefit rights to which opposite sex spouses are
entitled. (See the lists above.)

7.  Cease imputing
income on health coverage and other benefits provided to same-sex spouses
residing in states that recognize same-sex marriage if income imputation is not
required for opposite-sex coverage.

 8. Permit employees to pay the 2013 cost of health care
coverage for lawfully married same-sex spouses residing in states where
same-sex marriages are recognized with pre-tax reductions in pay.

9.Consider whether to seek a refund for employment taxes paid
on imputed income for same-sex spouse benefits for open tax years.

10.  Begin a review of all
employee benefit plans, policies, procedures and handbooks to consider whether
changes are needed or desirable.

Matthew L. Kinley, Esq.