UNIVERSITY OF PENNSYLVANIA

UNIVERSITY OF PENNSYLVANIA
A formal process to reaffirm Penn’s commitment to uphold the internal and external laws which govern it

UNIVERSITY OF PENNSYLVANIA
Compliance Program
A”voluntary” undertaking by an entity or
Health Care Provider to assure compliance with governing laws
(including Medicare and Medicaid laws)
Integrity Program
Program mandated by government
(usually by IG or USAO) as a condition of continuing participation in a government program after addressing patterns of conduct by an organization which violates federal law

UNIVERSITY OF PENNSYLVANIA
RESOURCE
 To Protect Entity From Liability
 Limits Exposure Liability of Trustees, CEOs
 Mitigates Exposure/Liability of Principal Investigators and
Other Key Business Administrators
 Mitigates Risk of Civil and Criminal Exposure for all
Compliant Individuals

UNIVERSITY OF PENNSYLVANIA
 Fines and penalties
 Institution considered “exceptional” by funding agencies
 Additional oversight/monitoring by the government
 Loss of expanded authorities and participation in FDP
 Potential reduction in Federal funding
 Loss of letter of credit funding authorization
 Professional integrity compromised
 Suspension, debarment, exclusion of individuals

UNIVERSITY OF PENNSYLVANIA
HOW DO PRINCIPAL INVESTIGATORS AND
BUSINESS ADMINISTRATORS FIT INTO AN
EFFECTIVE INSTITUTIONAL COMPLIANCE
MATRIX?
 As corporate agent and manager, you set the tone at the top
 Evaluate operational impact that non compliance may have on the University, the school and you individually
 Public relations impact potential impact that public disclosure of non-compliance would have on reputational risk of institution and your professional reputation
 Effective managers have to be an active part of the solution
 Compliance is everyone’s responsibility

UNIVERSITY OF PENNSYLVANIA
FAILURE TO MANAGE THESE BUSINESS RISKS HAS
RESULTED IN REPUTATIONAL DAMAGE TO SOME OF THE
WORLD’S MOST RESPECTED INSTITUTIONS
University of Michigan
Chief Urologist charged with
University of Minnesota
Conflict of Interest
Misuse federal grants
$100,000 penalty
Thomas Jefferson University
$2.5-32 mil 1 year probation
Medicare over-billing
$12 mil
Miscellaneous Scientific Misconduct
Johns Hopkins
Harvard (2)
Yale
Public Demand for
Yale University
Medical over-billing
$5.6 mil
New York University Medical Center
Inflated research grant costs
$15.5 mil
Improved Control Stanford University
Inflated research overhead costs
$1.2 mil
University of Chicago
Research fraud and abuse
$650,000
University of Texas whistle blower
$12 mil
Duke University
Sexual harassment
$0.5 mil

UNIVERSITY OF PENNSYLVANIA
ISSUES & PERSPECTIVES
INSTITUTION ISSUES
GOVERNMENT
ENFORCEMENT
PERSPECTIVE
UNIVERSITY
PERSPECTIVE
OUTCOME
Wisconsin
Madison
Overstating # of
Sponsors on
Grant
Application
Fraud Mere Puffery -
Listed on his grant application in hopes that they actually would become sponsors
10K Fine 3 months imprisonment for PI

UNIVERSITY OF PENNSYLVANIA
ISSUES & PERSPECTIVES
INSTITUTION ISSUES
GOVERNMENT
ENFORCEMENT
PERSPECTIVE
UNIVERSITY
PERSPECTIVE
MINNESOTA
•Effort Reporting
Irregularities
•Failure to obtain informed consent in Clinical Trial
•Scientific
Misconduct
•Direct Costssupplies not related to Grant were charged to
Grant
Violations of:
•Civil False
Claims Act
•Federal
Food Drug &
Cosmetic Act
•Anti-
Kickback Act
•Scientific
Misconduct
•Public
Health
Service Act
•Title XVII
Social
Security Act
OUTCOME
Asserts that the
United States was specifically aware of wrongful conduct for nearly two decades, which it failed to communicate to the
University, and concerning which it deliberately chose not to take action, thereby itself causing the results which it pleaded in the
Complaint.
Answer to amended complaint 2/23/98 attorneys from regents of U of Minn.
32 Million
Dollar Fine
Loss of
Expanded
Authority

UNIVERSITY OF PENNSYLVANIA
ISSUES & PERSPECTIVES
INSTITUTION ISSUES
GOVERNMENT
ENFORCEMENT
PERSPECTIVE
UNIVERSITY
PERSPECTIVE
OUTCOME
New York
University
Federal
Research
Indirect Cost
Rates for 1982-
1993
Allegation of improper calculation of indirect cost rate leading to excessive reimbursement
Acknowledge accounting & administrative mistakes made in calculating rate
Public
Relations
$15.5
Million
Settlement

UNIVERSITY OF PENNSYLVANIA
or
“How a Seemingly Insignificant
Amount of Money Can Become an
Enormous Fine”

UNIVERSITY OF PENNSYLVANIA
 Law which targets government contractors that submit false claims for goods and services
 Has been used to combat fraud in a number of industries, most notably defense and Healthcare
 Carries both criminal and civil penalties
 Penalties include triple damages and fines of between
$5,000 and $10,000 per false claim
Source: Modern Healthcare

UNIVERSITY OF PENNSYLVANIA
(31 U.S.C. Section 3729)
(Civil)
LEGAL CONTEXT
PROHIBITS
Anyone who knowingly:
 Presents False/Fraudulent Claim for Payment From
Government
 Presents False Record or Statement to Get False or
Fraudulent Claim Paid by Government

UNIVERSITY OF PENNSYLVANIA
(Continued)
PROHIBITS
Anyone who knowingly:
 Conspires to defraud the government
 Uses False Record Statement to conceal, avoid, decrease obligation to pay money or property to government

UNIVERSITY OF PENNSYLVANIA
(Continued)
Government must prove:
 Actual Knowledge of the False Information
 Act in Deliberate Ignorance of Truth or Falsity of
Information; or
 Act in Reckless Disregard of Truth or Falsity of
Information*
*No Proof of Specific Intent to Defraud Required

UNIVERSITY OF PENNSYLVANIA
(Continued)
Civil Penalty (Per False Claim)
– Not less than $5,000; Not more than $10,000
Plus
– Treble damages
(Double damages if cooperate and no criminal proceeding)
– Also liable for costs to government in bringing civil action

UNIVERSITY OF PENNSYLVANIA
 MD Bills 50 Level “5” Cases That Should Have Been
Level “3” ($60 Difference)
 “Pattern or Practice” Established
 50 X $10,000 = $500,000
 ($60 X 50=$3,000) X (3) = $9,000
 Total Payback Could be up to $509,000 on a $3,000
“Overbill”
 Plus cost to Government in bringing action/Attorney
Fees(Qui Tam)

UNIVERSITY OF PENNSYLVANIA
(18 U.S.C. Section 287)
(Criminal)
Substantive Offense:
FALSE, FICTITIOUS OR FRAUDULENT CLAIM
 Not greater than 5 years imprisonment
 Fine not greater than $250,000*
*If submitted to Defense Department, maximum fine is
$1,000,000
(18 U.S.C. Section 3623)

UNIVERSITY OF PENNSYLVANIA
(18 U.S.C. Section 286)
(Criminal)
CONSPIRACY TO DEFRAUD GOVERNMENT WITH
RESPECT TO CLAIMS
 Not greater than 10 years imprisonment
 Fine of not greater than $250,000
 Or both

UNIVERSITY OF PENNSYLVANIA
 Action filed under seal
 If successful, “ Whistleblower”(relator) receives up to 30% of the Settlement/Judgment Against the Provider