Medicare

Published on: October 1, 2015

OMHA to Expand the Settlement Conference Facilitation Pilot

On October 15, 2015, the Office of Medicare Hearings and Appeals (OMHA) will be hosting an open door teleconference to discuss the expansion of its Settlement Conference Facilitation (SCF) Pilot. The pilot program was originally launched in July 2014 to provide an alternative dispute resolution process for eligible Medicare providers to settle appealed Medicare claim denials pending at the Administrative Law Judge (ALJ) level of the Medicare appeals process. Under the SCF pilot program, Medicare providers had the opportunity to enter into open settlement discussions with the Centers for Medicare & Medicaid Service (CMS) with the goal of coming to a mutually agreed upon resolution for the pending ALJ claims. Since the SCF pilot program’s inception, the program was limited to providers that met specific eligibility criteria (e.g., the ALJ hearing must have been filed in 2013). However, OMHA appears set to expand the SCF program, which will be discussed in greater detail during the open door teleconference scheduled for October 15th at 1:00pm-2:00pm EST. Any parties interested in participating in the call should fill out the registration form and submit it no later than 5:00pm on October 14, 2015.

Wachler & Associates has already participated in multiple settlement negotiations on behalf of health care providers under the SCF pilot program. We will also be attending the open door teleconference to ensure our experienced attorneys are up-to-date on all matters related to the SCF program. If you or your health care entity needs assistance in pursuing the SCF program or appealing Medicare claim denials, or if you have any questions relating to the SCF program, please contact an experienced healthcare attorney at (248) 544-0888, or via email at wapc@wachler.com.

Published on: September 18, 2015

CMS Releases 2014 ACO Performance Results

by Wachler & Associates, P.C.

Recently, the Centers for Medicare & Medicaid Services (CMS) released its 2014 quality and financial performance results for Medicare Accountable Care Organizations (ACO). According to CMS, overall, 353 ACOs – 20 Pioneer ACOs and 333 Medicare Shared Savings ACOs – generated a net savings of more than $411 million in 2014. In addition, 97 ACOs met their quality standards and savings threshold, qualifying them for shared savings payments of more than $422 million. According to CMS Acting Administrator Andy Slavitt, “These results show that ac countable care organizations as a group are on the path towards transforming how care is provided. . . . Many of these ACOs are demonstrating that they can deliver a higher level of coordinated care that leads to healthier people and smarter spending.” According to CMS, some of the quality and financial performance results included:

Of the 20 Pioneer ACOs participating in 2014, 15 ACOs generated savings and 5 ACOs generated losses. Of the 15 ACOs that generated savings, 11 ACOs qualified for shared payments of $82 million due to them generating savings outside a minimum savings rate. Of the 5 ACOs that generated losses, 3 ACOs are paying $9 million in shared losses to CMS for generating losses outside a minimum loss rate.
Pioneer ACOs generated a total savings of $120 million, which equates to a 24% increase in performance from the $96 million of total savings in 2013. Further, the total model savings per ACO increased from $4.2 million per ACO in 2013 to $6 million per ACO in 2014.

Published on: July 16, 2015

U.S. Court of Appeals for the Fourth Circuit Upholds $237 Million Judgment Against Toumey Healthcare System

by Wachler & Associates, P.C.

On July 2, 2015, the U.S. Court of Appeals for the Fourth Circuit upheld a $237 million verdict against Toumey Healthcare System (“Toumey) for violations of the federal Stark law (“Stark”) and, consequently, the federal False Claims Act. The verdict marks the latest decision in the government’s longstanding legal battle against Toumey, a community hospital in South Carolina, and serves as a reminder to healthcare providers of the significant liability that can result from compensation arrangements that fail to comply with Stark’s safe harbor requirements.

In this case, the lower court determined that Toumey entered into part-time employment agreements with physicians that violated Stark. The agreements violated Stark’s limitations on physician compensation arrangements by varying with, or taking into account, the volume or value of the physicians’ referrals to the hospital. Under the False Claims Act, claims submitted for payment arising out of referrals prohibited by Stark constitute false claims, and subject providers to treble damages. In this case, the jury found that Toumey knowingly submitted 21,730 false claims, which amounted to $39.3 million in Medicare payments. The court awarded treble damages as well as other penalties.

The Fourth Circuit’s decision analyzed Toumey’s argument that since Toumey relied upon the advice of lawyers in determining that the compensation arrangements were permissible under Stark, Toumey could not have knowingly violated the False Claims Act. In rejecting this argument, the Fourth Circuit highlighted the fact that Toumey consulted with multiple attorneys, one of which raised serious concerns about the compensation arrangements, and that Toumey effectively lawyer-shopped for legal opinions that approved the employment contracts. Accordingly, the case should provide notice to providers to proceed with caution if they are contemplating obtaining multiple legal opinions in order to determine that an arrangement is compliant with health care fraud and abuse laws because of how the opinions may be scrutinized in hindsight.

Published on: July 9, 2015

Proposed Rule Shifts Medicaid Managed Care Enrollment Function to States

by Wachler & Associates, P.C.

On June 1, 2015, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule revising the Medicaid managed care regulations. One of the key components of the proposed rule is the revision to the states’ responsibilities relating to the screening and enrollment of network providers of managed care organizations (MCOs), prepaid inpatient health plans (PIHPs) and prepaid ambulatory health plans (PAHPs).

Specifically, the proposed rule provides that the state must enroll all network providers of MCOs, PIHPs and PAHPS (collectively, managed care entities (MCEs)) that are not already enrolled with the state to provide services to Medicaid fee-for-service (FFS) beneficiaries. The provisions would apply to all providers that order, refer or render health services in the context of Medicaid managed care to ensure these providers are appropriately screened and enrolled. As stated by CMS, the requirements contained in the proposed rule are to “ensure that there are no ‘safe havens’ for providers who, though unable to enroll in Medicaid FFS programs, shift participation from managed care plan to manage care plan to avoid detection.”

While the screening and enrollment of network providers is currently a role performed by the MCE, CMS believes transferring this function to the state will eliminate the need for each MCE to perform duplicative screening activities. However, the proposed rule would not prevent the MCEs from carrying out their own provider screening beyond those performed by the state. In addition, the proposed system would enable states to apply the risk classification protocols to all providers that furnish services to managed care or Medicaid FFS beneficiaries, in which screened providers would be categorized as “limited,” “moderate” or “high” risk, permitting site visits for moderate and high risk providers.

Published on: May 19, 2015

Senate Finance Committee Examines Medicare Appeals Backlog

by Wachler & Associates, P.C.

On April 28, 2015, the U.S. Senate Finance Committee held a hearing to address the rising Medicare appeals claims backlog. At the hearing, Nancy Griswold, Chief Administrative Law Judge (ALJ) at the Office of Medicare Hearings and Appeals (OMHA), blamed the backlog on a lack of funding and an unprecedented amount of appeals. ALJ Griswold stated that the average processing time for each claim has soared to 550 days, more than quadrupling over the past five years. There are currently over 500,000 Medicare appeals pending review.

While appeals continue to stack up, OMHA’s budget was increased from $69 million to $82.3 million over the past fiscal year (FY). Additionally, OMHA’s staff has expanded from 492 employees to 514 employees for the same FY. However, ALJ Griswold claimed that this boost in resources is still not enough. In FY 2013, OMHA received 700,000 claims, which represents an astonishing increase from the 60,000 claims received just two years prior. Despite the staggering amount of claims, only 60 officers are assigned to handle cases.

Although Senate Finance Committee Chairman Orrin Hatch acknowledged the importance of preventing improper Medicare payments, he emphasized the seriousness of the backlog is due to the “insurmountable increase in appeals.” Senator Hatch also noted that 60 percent of appeals are found in favor of defendants, and questioned how initial decisions are being made and whether providers are facing undue burdens.

Published on: April 3, 2015

CMS Offers Clarification to HHA Contradictory Guidance

by Wachler & Associates, P.C.

On March 18, 2015, Wachler & Associates attorneys, Andrew Wachler and Jessica Forster, highlighted contradictory guidance released by the Centers for Medicare and Medicaid Services (“CMS”) relating to home health agencies (“HHAs”) face-to-face encounter documentation. When the calendar year (“CY”) 2015 Home Health Final Rule (“Final Rule”) went into effect on January 1, 2015, new rules for HHAs face-to-face encounter documentation were implemented. Most prominently, the revised Final Rule eliminated the brief narrative requirement in almost all cases for home health face-to-face encounter documentation. Although the brief narrative requirement was removed, CMS mandated that the certifying physician’s medical record include all required elements for the physician certification. Additionally, CMS stated in the Final Rule that a HHA may communicate with and provide information to the certifying physician about the patient’s homebound status and need for skilled care and the certifying physician could incorporate the information into his or her medical record for the patient.

In two separate CMS conference calls, representatives provided contradictory information with regards to physician documentation responsibilities. The first conference call held by CMS properly reinforced the Final Rule’s statement that HHAs could provide information to the certifying physician that the physician could incorporate into his or her medical record (a) if the physician signed/dated the documentation and (b) if the physician’s own entries corroborated the information from the HHA. The Final Rule and the first conference call both said that this information from the HHA would be considered by medical reviewers to determine if the certification requirements were met. It was only during the second conference call, on March 11, that CMS contradicted prior guidance by stating that the physician’s own documentation must meet the certification requirements and that medical reviewers were advised of this instruction. The CMS representative reiterated that even if a certifying physician signs and dates a HHA’s documentation that does not mean that the documentation becomes part of the physician’s medical record. Wachler & Associates reached out to CMS for clarification.

On March 23, 2015, CMS clarified the contradiction. In its reply, CMS stated that the patient’s medical record must support the certification of eligibility and documentation in the patient’s medical record shall be used as a basis for certification of home health eligibility. Importantly, CMS also noted that reviewers will consider HHA documentation if it is incorporated into the patient’s medical record and signed off by the certifying physician.

Published on: March 2, 2015

CMS to Audit All Home Health Agencies

by Wachler & Associates, P.C.

In response to a report issued by the U.S. Department of Health and Human Services Office of Inspector General (“OIG”) titled Limited Compliance with Medicare’s Home Health Face-to-Face Documentation Requirements, the Centers for Medicare and Medicaid Services (“CMS”) has decided to audit all home health agencies (“HHAs”) in the country. In its report, OIG detailed its findings stemming from a review of 644 home health face-to-face encounter documents that were analyzed to determine if they confirmed encounters and contained the required elements. OIG reported that 32 percent of home health claims that required face-to-face encounters did not meet Medicare requirements. OIG estimated that this resulted in $2 billion in inappropriate payments. After reviewing the study’s results, OIG recommended that CMS:

Consider requiring a standardized form to ensure that physicians include all elements required for the face-to-face documentation;
Develop a specific strategy to communicate directly with physicians about the face-to-face requirement; and
Develop other oversight mechanisms for the face-to-face requirement.

At the end of the OIG report, CMS concurred with these three recommendations. In response, CMS reported that it is implementing an oversight plan of HHAs through the Supplemental Medical Review Contractor (“SMRC”), one of CMS’s newest tools meant to ensure program integrity. CMS stated that “the SMRC will perform approximately five document-only reviews for every HHA in the country to validate that the most recent/valid face-to-face encounter is in the medical record.” CMS reported that this will be a one-year, service-wide review of every HHA and CMS will provide further recommendations after reviewing the results.

Additionally, CMS has published proposed electronic and paper versions of its clinical documentation template to assist physicians in documenting their home health face-to-face encounters. Because it is the first time CMS has provided the healthcare industry templates for a progress note, it is soliciting comments on the templates. Those interested in the home health face-to-face proposed templates may participate in Special Open Door Forums occurring in March, April and May 2015. Should the templates be adopted, their use will be voluntary. CMS’s proposal for the templates comes at a time when HHAs are revising their policies and protocols for face-to-face encounter documentation in light of the elimination of the physician brief narrative requirement in most cases effective January 1, 2015.

HHAs should be aware of the imminent nationwide SMRC audit. It is important that HHAs develop an effective compliance program that provides proactive measures to educate staff and certifying physicians on documentation requirements and prepare for an audit. If you have any questions regarding CMS’s impending audit or need assistance in creating a compliance plan to meet the home health face-to-face encounter documentation requirements, please contact an experienced healthcare attorney via email at wapc@wachler.com or 248-544-0888.

Published on: February 20, 2015

CMS Considers Shortening the Meaningful Use Reporting Period

by Wachler & Associates, P.C.

On January 29, 2015, the Centers for Medicare and Medicaid Services (“CMS”) announced that it will consider shortening the meaningful use reporting period for electronic health record (“EHR”) systems. Specifically, CMS stated that it intends to reduce the 2015 reporting period from 12 months to 90 days. Under the meaningful use incentive program, providers have faced the risk of a Medicare penalty if they failed to satisfy the program’s requirements. A shortened reporting period of 90 days may increase compliance with Stage 2 of the program and reduce the reporting burden on providers. Additionally, providers can schedule their reporting period for the second half of 2015, providing additional time for providers to implement the EHR systems at Stage 2.

In a statement following CMS’s announcement, the President of the American Medical Association (“AMA”), Steven J. Stack, MD, expressed the organization’s support of the proposed shortening of the reporting period. However, Stack criticized the incentive program, stating that “EHRs are intended to help physicians improve care for their patients, but unfortunately, today’s EHR certification standards and the stringent requirements of the meaningful-use program do not support that goal and decrease efficiency.”

In its announcement, CMS also stated its intent to align the meaningful use reporting periods to the calendar year in an effort to give hospitals more time to integrate the 2014 Edition software and better coordinate with CMS quality programs. Although the proposed changes to the reporting period will not delay CMS’s rollout of the forthcoming Stage 3 proposed rule, expected in March, CMS plans to limit the scope of the Stage 3 proposed rule to the criteria and requirements for meaningful use in 2017 and subsequent years.

Published on: February 17, 2015

CMS Modifies Manual Medical Review Process for Outpatient Therapy Claims Above Cap

by Wachler & Associates, P.C.

The Protecting Access to Medicare Act of 2014 extended the process for exceptions to Medicare’s outpatient therapy caps through March 2015. Exceptions to Medicare’s outpatient therapy caps are allowed for medically necessary and reasonably therapy services. However, claims above $3,700 for physical therapy and speech language pathology services combined, and above $3,700 for occupational therapy services, are subject to manual medical review by recovery audit contractors (RACs). The caps are calculated per beneficiary, per year. While manual medical reviews of outpatient therapy claims above the cap were put on hold last year, existing RACs received approval on January 16, 2015 to resume sending additional documentation requests (ADRs) to Part B providers.

However, CMS recently introduced a new post-payment review system that requires RACs to review outpatient therapy claims using a new manual medical review process. RACs will now be required to review claims using a tiered approach to ADRs. The process allows for 100% review of provider claims above the $3,700 therapy caps (“eligible claims”), but prevents the RACs from requesting large and potentially unmanageable amounts of records at one time.

Beginning in January 2015, the new manual medical review process permits RACs to review 100% of a provider’s eligible claims using a 5-step approach to ADRs. A RAC’s first ADR may only review one claim, but additional ADRs may request records for an increasing percentage of claims. The second ADR may review up to 10% of eligible claims, the third ADR may review up to 25% of eligible claims, and the fourth ADR may review up to 50% of eligible claims. Finally, a RAC’s fifth ADR to a particular provider may review 100% of the provider’s total eligible claims. Please note that the new tiered approach retains the RAC’s cycle of 45 days between ADRs.

Published on: January 29, 2015

HHS Sets Timelines for Focus of Reimbursement to Shift from Quantity to Quality

by Wachler & Associates, P.C.

On January 26, 2015, the U.S. Department of Health and Human Services (“HHS”), for the first time ever, announced a timeline and corresponding goals to shift the basis of Medicare reimbursement away from the quantity of care provided towards the quality furnished to beneficiaries. With the passage of the Patient Protection and Affordable Care Act (“ACA”) in 2010, Congress created several new payment models, including Accountable Care Organizations (“ACOs”), primary care medical homes, and new models of payment bundling for care. These models all share the commonality that they incentivize physicians to coordinate care for their beneficiaries, maintain quality, and control costs. With the proliferation of these models that focus on quality over quantity, HHS was compelled to reform the Medicare reimbursement process.

Specifically, HHS announced its goal of tying 30 percent of fee-for-service Medicare payments to quality output through alternative payment models, like ACOs or bundled payment arrangements, by the end of 2016. Furthermore, HHS plans on increasing that amount to 50 percent by the end of 2018. If this goal is met, half of all payments to physicians and hospitals will be made through alternative payment models by 2018. Additionally, HHS set a timeline for tying 85 percent of fee-for-service, or traditional, Medicare payments to quality output by 2016 through the Hospital Value Based Purchasing and Hospital Readmissions Reduction Programs. This number is also set to increase to 90% by 2018.

To accomplish this, HHS has created the Health Care Payment Learning and Action Network (“the Network”). The Network is an organization made up of health care stakeholders including private payers, consumers, providers, employers, and state Medicaid programs. The Network, which will hold its first meeting in March 2015, plans to expand alternative payment models nationwide into all areas of health care. HHS hopes that the intensity exhibited by the Network will even surpass its initial goals for program expansion.