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You Open Your Mailbox and See an Email From Figliozzi. Audit! Now What?

Author By Sean GarzaPosted on

  • posted: Jun. 21, 2016
  • Hemmer DeFrank Wessels PLLC
  • Uncategorized

Written By: Scott R. Thomas

Figliozzi and Company is the designated contractor performing audits on behalf of the Centers for Medicare & Medicaid Services.  If you sought or obtained an incentive payment for either the Medicare or Medicaid EHR Incentive Program, you are subject to being audited.  A November 2012 report from the Office of Inspector General stung CMS with the conclusion that it was not doing enough to validate attestations.  This spurred CMS to ramp up its program to the point where it’s not really a question of whether you will be audited; it’s only a matter of when.

If the recipient can’t back up the attestations, CMS will recoup the incentive payment.  CMS doesn’t do partial recoupment.  Fail in one respect and they claw back all the money.  CMS may also pursue additional remedies if they smell fraud.  But don’t panic just because your number came up.  While some recipients are targeted for an audit because their numbers seem out of whack, CMS also does random audits.   The key is to acknowledge the fact you will ultimately be audited and start preparing now.

Advance preparation is critical because you typically have only two weeks to respond once you are notified of the audit.  That’s just not enough time if you wait for the mail to arrive.  Asking the auditor for an extension of the deadline implies that you don’t have your stuff in one sack.  And don’t think you can simply rely on your EHR vendor’s certification.  You are the provider and you are responsible for assuring and documenting Meaningful Use within your practice.  The good news is that there’s plenty you can get a head start on.

The first thing to do is to decide who is going to respond.  You may want to set up a team.  This is not something you want to dump on your already over-worked practice manager and forget about it.  The stakes are too high.  The doctors must be involved.  One person should be in charge so the ball doesn’t get dropped in the middle.  The Team Leader should be the sole liaison to the auditor.

The Team Leader should be the only person to have telephone conversations with the auditor.  This will minimize miscommunications.  When the phone call is over, that person should immediately email the auditor and summarize the call, e.g., “Thanks for giving us until Friday, July 15th, to get you the 2015 screen shot you requested and the documentation supporting the SRA corrective actions taken.”  Always add a catch-all such as, “Please let me know if there is anything else you need me to do that I haven’t mentioned.”  That way, you put the burden on them to tell you what they want and avoid any dispute about unfulfilled promises.  Save all the email communications related to the audit.

Put the deadline for getting the documentation into the auditor’s hands on your calendar or tickler system so it doesn’t get missed.

Then gather all your documentation to support attestation data for meaningful use objectives and clinical quality measures.  For most practices, your primary document is the report generated by your certified EHR; that generally provides the data Meaningful Use attestation.  Make sure the report on its face shows that it’s your report by reflecting your provider number, etc.  All this information has to be kept for six years so make sure it’s maintained appropriately and people know where it is.  Mark it conspicuously so no one inadvertently throws it out.   Don’t forget the electronic documentation that supports your attestation.  Store that information together.  Consider saving the data in multiple locations.  Get an external hard drive and keep a copy there as insurance against a system meltdown.

Sit down with your Certified EHR vendor.  Pull out the license agreement.  A contract with the Certified EHR vendor may suffice to prove the use of a Certified EHR.  Some vendors, however, include confidentiality requirements in their contract which may prohibit you from sharing the document with the auditors.  If your agreement has such a term, brainstorm with the vendor about how to give the auditors what they need while still honoring the agreement.

One of the best ways to prepare is to do a self-audit.  Better to iron out all the wrinkles in the tranquility of a dry run before the stress of the real event.  Put yourself in the hot seat and ask the tough questions:

  • Do you have reports from the Certified EHR vendor that validate the clinical quality measures you reported?
  • Are there any red flags at the 50,000-foot level? Do all of the percentage-based measures have the same denominator? Do the numerators and denominators match the figures you put on the CMS attestation form?  Are the figures inappropriately uniform?  For example, do all of the doctors attest with the same percentage figures?  Sniff out discrepancies and get your math right.
  • If your certified EHR doesn’t enable you to do “look backs” and show the values at any past point in time, do you have a paper or electronic screen shot of the report used for attestation purposes? Do you have screen shots from the Certified EHR during the reporting period? Do your screen shots show the level of detail needed (e.g., date, provider, name, etc.)?
  • Do you have proof of performing an adequate Security Risk Analysis per the HIPAA security rule? Did you complete it before the end of the reporting period? Do you have the documentation to memorialize the actions you took to mitigate the risks you identified?
  • If asked (for the purpose of further validating implementation), could you produce evidence of the costs incurred to train staff on the Certified EHR?
  • Is your vendor using the most up-to-date version of a Certified EHR product? Is the product you are using on the list at the Office of the National Coordinator’s website? Is there an upgrade that you haven’t obtained yet?
  • Do you have documentations to support any exclusions you claimed? This may be tricky, as you’re essentially proving a negative.
  • If necessary, would you be able to show the auditor when a particular functionality became operational?
  • The audit is likely to be done remotely but the auditor can request a site visit. The auditor can ask you to give a demonstration of your system. Do you know how you would handle that request?

Whenever you send hard-copy documents to the auditor, send them either by FedEx or by certified mail, return receipt requested.  That way, you will have proof of delivery.  Include a cover letter and make sure the contents are labeled.  Keep a complete copy of every document you provide.

The word is that one out of four recipients fails the CMS audit.  Don’t be one of them.  Sure, you have a right to appeal.  But better to get right from the beginning.  Start getting ready now.

If you would like more information about these issues, please contact Scott Thomas.   He welcomes the opportunity to help you navigate these waters.  Scott’s direct line is 859.578.3862.  You can email him at sthomas@HemmerLaw.com.  If there is a particular topic you would like to see addressed in a blog, please send Scott an email with your ideas.

 

A long and incredible journey of “making a difference”

Author By Christopher P. FinneyPosted on

Friday of last week, the Federal Elections Commission issued a series of decisions on Complaints we prepared and filed for our client David Krikorian five years ago.

Those decisions found that former Congressman Jean Schmidt, and the Turkish Coalition of America violated federal campaign finance laws in accepting payment of her legal fees in legal proceedings against our client, and fined then respectively $2,500 and $25,000 for those violations.

You may read those decisions here, here, here and here.

Making a Difference

These decisions — which sat on the desks of bureaucrats in Washington, D.C. for an inexcusable years and years — capped a tremendous and frequently disappointing journey through the halls of power of Washington and the highest Court in the land.

In the end, we overcame a system of justice that is carefully designed to protect the wealthy, the powerful, and the well-connected, veiled in secrecy, and hidebound by bureaucratic inaction– although not in the manner that the proper administration of justice would provide.

Our firm — through the fine research and writing, and tremendous patience and persistence — saw through to a successful end a complex, tortured and unfair series of legal processes to the advantage of our client.

This journey, perhaps better than any story we can tell, describes the commitment we hold to “making a difference” for our client in each and every assignment.

Ohio Elections Commission action and more

We originally were retained to represent former and future Congressional candidate David Krikorian in the defense of several “false claims” allegations brought by Congressman Jean Schmidt before the Ohio Elections Commission (“OEC”).  She claimed that in the course of the 2010 Congressional campaign, David Krikorian made certain false statements about her, essentially that she was on the payroll of the Turkish lobby in America.

Ironically, through the course of these proceedings and otherwise, she herself proved the basic premise of these allegations.

But tangential to those proceedings, we became curious that Jean Schmidt appears to have unlimited access to “free” legal services from two expensive attorneys from Washington, D.C. and a second in Columbus, Ohio.

Our lead counsel in representing Krikorian was famous Los Angeles attorney Mark Garagos, who was simply fun to work with, and inspired in his legal strategy.

That original OEC action then led to an appeal, a First Amendment challenge to the jurisdiction of the Ohio Elections Commission, and then a defamation case brought by Schmidt.  These were incredibly expensive proceedings that came at us in waves from the Schmidt camp.

The legal actions were unprecedented in that they made no economic sense, and were outside the scope of our experience with clients who have to make practical decisions about proceeding with litigation in the face of daunting obstacles of time, expense, and the difficulty of legal recovery.

Who was paying our Congressman’s legal fees?

As the matter progressed over a period of years — with depositions across the country, two days of trial before the Ohio Elections Commission and endless motions — it dawned on us that something was terribly wrong here, that Jean Schmidt was pursuing this matter because she was accepting an illegal gratuity as a Congressman and as a candidate.

Garagos had the ground-breaking idea to take the deposition of Jean Schmidt’s attorney, Bruce Fein.  In all our years of litigation, it never occurred to us to take the deposition of the opposing attorney.  Schmidt’s attorneys opposed the motion, but the OEC ruled that it would proceed.

In that deposition, we asked Schmidt’s attorney “who was paying all these legal fees?” and he admitted that at the commencement of the relationship he met personally with her and her Chief of Staff and told them both that the Turkish Coalition of America (“TCA”) would foot the whole legal bill for the proceedings.

[This sworn testimony would prove key thereafter, as Schmidt steadfastly denied through multiple proceedings thereafter that she had no idea how her legal bills were being paid, over a period of years, but only that she was never invoiced for the work.]

We estimated — correctly as it turns out — that Schmidt had received more than $500,000 in legal fees from the TCA.

A thicket of confusing rules and multiple whitewashes

Our firm then began to research whether it was legal and appropriate for a sitting member of Congress to accept the payment of her legal fees, to the tune of hundreds of thousands of dollars, from a lobbying group in D.C., dedicated to influencing legislation  before Congress and policy in the administration.

The rules were complex, but the answer was pretty clearly “no” for a host of reasons:

  1.  It violated House Ethics rules to accept the gift.
  2. It was a felony to fail to report the gift on federal financial disclosure forms.
  3. It violated federal elections law to accept the gift.
  4. The gift constituted taxable income to the Congressman, which must be reported to the IRS and on which income taxes must be paid.

Thus, following the key depositions, we waited for the Congressman to file her federal financial disclosure forms for 2011, and then filed Complaints with the Office of Congressional Ethics and the Public Integrity section of the U.S. Attorney’s office.

After waiting more than a year, we learned that the Office of Congressional Ethics had properly examined the gift and referred the matter for further action to the House Ethics Committee.

But in a curious move, the House Ethics Committee ruled that the gift was illegal, and had to be paid back, but found that because Schmidt did not know who was paying her fees (in direct conflict with her own lawyer’s sworn testimony) that she would not be disciplined by the House.  It was, very simply a whitewash.

We then filed a Complaint with the IRS over the unclaimed income.  They also saw nothing untoward.  Another whitewash.

A challenge to the OEC False Claims statute and a trip to the U.S. Supreme Court

As a result of the tortured and unconstitutional proceeding before the Ohio Elections Commission, Finney Law Firm attorneys then decided to challenge the false claims statute in Federal Court.  That commenced in two other actions in 2011 and 2012,

We lost those twin law suits in the U.S. District Court, in the U.S. Court of Appeals for the Sixth Circuit, and en banc before the Sixth Circuit.  Ultimately, not a single trial or appellate Judge saw any merit to our arguments.

But then in January of 2014, the U.S. Supreme Court accepted our case for review, and the tide quickly turned.  We had oral argument in April of 2014  and a decision by June of that year.

In a Clarence Thomas-authored opinion, we won 9-0, sending the cases back to the trial Courts in Cincinnati.  It then took two more yeas of hearing and appeals, but we have prevailed in those actions and the OEC False Claims statute has been struck down as unconstitutional, a tremendous victory for justice against an entrenched bureaucracy in Columbus.

Waiting for the Federal Elections Commission

That left one more decision, a decision that curiously sat for years, and years and years in Washington.  For normal people, what in God’s name takes five years — five years — to decide.  Month after month and year after year, the FEC, shrouded in secrecy, sat and sat and sat on the Complaint that alleged that the $650,000 gift violated federal campaign finance laws.

Last week’s letter to our client from the FEC ended that waiting.  They concluded that Schmidt deserved more than a $2,500 penalty but because her campaign committee had no money and she was no longer a candidate for federal office the pithy sanctions was appropriate.  They fined the TCA more, but not nearly enough.

A Congressman loses her seat

To understand the hubris that would lead to this type of abusive conduct by a member of Congress, one needs to understand two things: (i) members of Congress simply never (almost never) lose their seats, with reelection rates reliably above 95% (read here) and (ii) they know that the House Ethics Committee and federal prosecutors won’t lay a glove on them.

Thus, it was sweet justice in May of 2012 when the voters resoundingly turned Schmidt out of office, in part because of her record of corruption as revealed by the House Ethics Committee and media reports of her mendacity.  Chris Finney even gave a series of speeches to expose the incredible tale.  (see here, here, here and here).

Making a difference

We would have preferred that the path of justice in this matter had taken several different turns — that prosecutors would have recognized the multiple felonies committed by these actors in giving and receiving the illegal gift.  The House Ethics Committee, the U.S. Attorneys’ office, the IRS, and ultimately the FEC failed in discharging their duties to punish these overt and incontrovertible misdeeds.

But the voters had the final say, and the slow, weak and intellectually dishonest bureaucrats, in a strange way, both exposed Jean Schmidt’s corruption, and their own inability to administer justice.

Read more here>> Enquirer: FEC settles Jean Schmidt ethics case

 

Christopher Finney to participate in panel discussion on new construction at the Cincinnati Area Board of Realtors

Author By Christopher P. FinneyPosted on

Former President of the Greater Cincinnati Home Builders Association and Cincinnati Home Builder Mike Hoffmaster, Realtor Jeff Rosa of Sibcy Cline. and  Finney Law Firm’s Christopher Finney will present a panel discussion before the Cincinnati Area Board of Realtors entitled “Working together in New Construction” on Thursday, July 7, 2016 at 1 PM at the offices of the Cincinnati Area Board of Realtors.

Please join us!

Information on the panel and sign-up information is here.

Today’s Washington Times features our firm’s class action against the IRS

Author By Christopher P. FinneyPosted on

Now updated to include more links:

Our firm is pleased to serve as local counsel in the class action against the Internal Revenue Service for the targeting of Tea Party and other liberty groups for extra scrutiny and delayed 501-C-3 and C-4 tax exemption applications.

Last week, the IRS finally provided the list of groups it targeted.  That development is featured in today’s Washington Times.  You may read that here.  You may recall that the production of that list was hotly contested by the IRS, and produced only

The list has grown considerably from the groups the IRS Inspector General originally claimed were targeted of 298 to 426 in the latest IRS filing, that that fails to include some 40 groups who opted out of the litigation.  In all, that means more than 462 groups nationwide were subject to enhanced IRS scrutiny and prolonged delays in processing their tax exemption applications.

That litigation is ably led by Eddie Greim of Graves Garrett  from Kansas City.

Fox News Channel has a great story as well here.

The Hill has it here.

Newsmax has it here.

That case is pending before U.S. District Court Judge Michael Barrett of the Southern District of Ohio.  District Court Judge Susan Dlott recently recused herself after more than two years presiding over the case.

Important standing decision clips wings of US EPA and vindicates property owner rights

Author By Christopher P. FinneyPosted on

The US EPA uses its broad powers under the Clean Water Act to designate, essentially, any soil that is merely wet as “waters of the United States” and thus subject to its regulatory reach.

They then enhanced their enormous procedural advantage by preventing property owners from challenging that designation unless (i) the landowner filed for and was denied a permit or (ii) if the owner was sanctioned ($37,500 per day in potential penalties) for proceeding without a permit.  The hurdles the agency erected to challenging its regulatory reach was really shameless.

Of course, both of those obstacles to standing created an impossible choice whereby the owner either exposed himself to crippling fines or waited through an interminably long process.

Fortunately, last week the United States Supreme Court unanimously ruled that the property owner does not need to mount these bureaucratic hurdles in order to challenge an over-reach of a designation of a “water of the United States.”

Chief Justice John Roberts authored the decision that found that Plaintiffs “need not assume such risks while waiting for [the Environmental Protection Agency] to drop the hammer in order to have their day in court.”.

Read more here and here.  Read the decision in Army Corps of Engineers v. Hawkes Co. here and read the Scotusblog.com page on the case here.

Earnest money failures

Author By Finney Law FirmPosted on

One pitfall in real estate purchase contracts – residential and commercial — involves the failure of the parties and the Realtors to assure that earnest money called for in the contract has in fact been collected and placed in the Realtor’s escrow account.

Earnest money is a deposit made by the buyer that is applied toward the purchase price at closing or disbursed in accordance with the purchase agreement.  The act of a paying an earnest money deposit is a good faith showing to the seller that the buyer is serious about purchasing the real estate.  (Read here and here that it is nothing more than that.)

More often than not, sellers will require buyers to deposit earnest money to avoid wasting time in an already time consuming process.  Generally in real estate transactions, the escrow is the account in which the earnest money is safely kept until the time of closing or until some other triggering event occurs.  An escrow agent or a real estate broker is appointed to manage and disburse the escrow funds in accordance with the purchase agreement.  The escrow agent or real estate broker acts as fiduciary for both the buyer and seller.

Under the standard Cincinnati Area Board of Realtors contract, there is a section below the buyers’ and seller’s signatures where the Realtor is supposed to acknowledge receipt of the earnest money.  If that is completed and signed by the Realtor, the buyer and seller should be able to rely upon that signed receipt in proceeding with the transaction.  If the check later bounces, the Realtor holding the escrow likely has a duty to inform the parties of that occurrence.

Conversely, if the receipt is not signed by the Realtor, the Seller should assume that the earnest money has not been paid, and – assuming that is a material part of the consideration he wants to assure buyer performance under the contract – he should follow up with the buyer’s Realtor to assure that check has been received and deposited, and get a signed receipt for the same.  Absent that assurance, the seller could and likely should terminate the purchase contract and sell it to a more reliable buyer.

A failure to deposit the earnest money in the escrow account will likely constitute a breach of the purchase agreement by the buyer.  Once a breach occurs, the seller may be able to force specific performance from the buyer or completely walk away from the deal.  A buyer in breach who still wants to purchase the real estate may be out of luck if the seller decides to terminate the contract or renegotiate for a larger sum.

We have seen circumstances in which real estate investors who are simply trying to tie up property to see if they can quickly flip it, will sign a contract with loads of contingencies, and never actually pay the promised earnest money.  (Read more about that here.)  Obviously, sellers want to avoid tying up their property with these bogus buyers.

The lesson here is that the seller should confirm the earnest money deposit is in the selling Realtor’s escrow account by getting written acknowledgement of that.  Buyers are forewarned that in this hot real estate market, the failure to pay that promised sum into escrow could result in termination of the contract by the seller.

 

41 Secret Service Agents disciplined over targeted attacks on Congressman

Author By Christopher P. FinneyPosted on

Our firm is pleased to “make a difference” for our clients, including in challenging abuse of power by government officials.  Some people fail to understand the pernicious nature of the abuse of power and the impact it can have on our republic.

Thus, we were bolstered in our belief that abuse of power is pervasive, and persistent in this article from today’s Yahoo! News detailing how 41 Secret Service agents — you read that right, 41! — were disciplined for targeting congressman Jason Chaffetz of Utah with illegal searches of their database, and release of damaging information to media.

 

Freddie Mac predicts 2016 will be best housing market in a decade

Author By Christopher P. FinneyPosted on

We are seeing the activity with our Realtor and lender clients , we are seeing the activity in our title insurance company, Ivy Pointe Title, LLC, we are seeing the activity with investors making money in development and new construction, and we are seeing the activity in excited families making their first move into a new house or in upgrading their residence.

Now Freddie Mac confirms it: They predict 2016 will be the best housing market in a decade.  Now, candidly, many parts of the past decade have been downright bleak, so it’s not comparing to much, but we are seeing record activity and that’s great news for our Realtor, lender, and investor clients.

The article is here.  Enjoy it while it lasts!

Judge rules that Obama Administration spent $5 billion per year on ObamaCare that was unauthorized

Author By Christopher P. FinneyPosted on

Our firm is proud to have an active but small practice area devoted to public interest law.  People frequently ask “what is public interest law?”

For our firm it is assuring that government actors — legislators, school boards, county commissioners, City Council members, as well as administrators — Mayors, City Managers, zoning officials, the IRS, and others — stay within the bounds of their constitutional and statutory authority.  When they exceed those bounds, many times there is a cause of action and Judge who will stop them in their tracks.  We are glad to represent plaintiffs  in those actions.

There is no better example of this practice area than the U.S. House of Representatives’ suit against the Obama administration for spending $5 billion per year on the Affordable Care Act a/k/a ObamaCare without express authorization from Congress to spend the money.  This is indicative of an administration raging out of control.

The House of Representatives under then-Speaker John Boehner authorized and pursued the suit.  Liberal pundits across the nation argued that the House lacked standing to sue, and that it was a foolish waste of money.  Both turned out to be untrue.

Today, U.S. District Judge Rosemary M. Collier ruled that the administration’s spending of those funds was unconstitutional and that it had to stop.  Read more about that decision here.  Read the whole decision here.

This is an important decision with broad-ranging implications for reining in the Presidency and out-of-control federal agencies.

 

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