Articles Posted in Medicare

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The Centers for Medicare and Medicaid Services announced last week that in the past year healthcare providers have received $158.3 million in EHR incentives. The incentives have been advocated by the Obama administration to encourage doctors and hospitals to use digital health records that meet federal standards. This encouragement coincides with the Administration’s goal to have half of Americans using digital health records by 2014.

Healthcare providers can receive $63,750 during six years from the Medicaid program and up to $44,000 during five years from the Medicare program. For more information on the meaningful use of electronic health records please contact a Wachler & Associates attorney at 248-544-0888.

Centers for Medicare and Medicaid Services

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A sleep medicine and durable medical equipment company, Areté Sleep LLC, Areté Sleep Therapy LLC, and Areté Holdings LLC will pay a $650,000 settlement pursuant to federal authorities discovering the company to have submitted false claims to Medicare over a seven year span.

According to federal prosecutors, the false claims were for diagnostic tests performed by unlicensed/uncertified technicians. These licenses/certifications are required by Medicare rules and regulations. Areté filed for Chapter 11 bankruptcy in early 2011 and has agreed to pay the settlement with the proceeds from its asset sales.

If you have any questions or concerns regarding compliance with Medicare rules and regulations, or if you have questions regarding compliance issues associated with billing for sleep studies and related DME, please contact a Wachler and Associates attorney at 248-544-0888.

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ACO Start-Up Costs

According to a study conducted by the American Hospital Association, the costs associated with starting an accountable care organization (ACO) range from $5.3 million to $12 million. The study was based on a review of the start up costs of four ACOs currently in existence. Additionally, it was discovered that the yearly operating costs in connection with the ACOs were equal to the start up costs, if not more.

The study highlighted several costs that were associated with starting an ACO. One of these costs was incurred by hiring staff to coordinate the ACO’s activities, such as risk management professionals and workers hired to develop and manage a communication network between providers. Another start up cost incurred was that included in recruiting physicians, which ranged from $100,000 to $450,000 per physician. Next, the study found that ACOs spent nearly $3 million a year developing post-acute care networks (i.e. nursing homes, rehab services, and hospice care). Equally expensive were the costs associated with the implementation of EHRs, which cost up to $2.9 million along with an additional $2.5 million for starting up an HIE, plus annual operating costs.

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Over $365 Million in Improper Payments Identified By RACs Since October 2009

CMS recently reported that RACs have identified $312.2 million in overpayments from October 2009 through March 2011. During the same period, $52.6 million in underpayments were identified. While these figures are well below the over $1 billion in improper payments identified during the demonstration program, they are expected to increase. RACs are currently reviewing large numbers of DRGs in coding and medical necessity reviews and it is anticipated that these will result in identification of more improperly billed claims. The first quarter of 2011 accounted for $184.6 million in identified improper payments and these trends can be expected to continue for the foreseeable future.

CMS also released the top approved issue for each RAC region. The top issue for RAC Region A is Ventilator Support of 96+ hours; the top issue for RAC Region B is Extensive Operating Room Procedure Unrelated to Principal Diagnosis; the top issue for RAC Region C is Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Provided During an Inpatient Stay; and the top issue for RAC Region D is Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Provided During an Inpatient Stay.

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On May 16, the Office of the Inspector General for the Department of Health and Human Services released the report from its audit of physician therapy services provided during home health episodes. The report outlines the OIG’s findings that the Centers for Medicare and Medicaid Services (CMS) made duplicate payments for the same home health services. Specifically, the payments for the same services were made to the physician under Medicare Part B and then to the home health agency under the Medicare home health prospective payment system (HH PPS). The OIG recommended that CMS eliminate duplicate payments by adjusting the HH PPS rate to exclude physician-provided therapy services or by making physician therapy services subject to the consolidated billing requirement. CMS has agreed with the OIG’s recommendations and has indicated that it will take action to address the recommendation.

For more information on proper billing practices for home health services, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888.

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Recovery Audit Contractors (RAC) recovered $237.8 million in the six-month period that ended in March. This amount is already three times more than the amount of money recovered in the previous year. According to recent estimates, CMS alleges that the total sum of Medicare improper payments exceeds $47 billion annually. If you have been audited by a RAC, ZPIC, MAC, carrier or other Medicare contractor and need assistance with the defense of the audit, please contact a Wachler & Associates attorney at 248-544-0888.

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The Durable Medical Equipment (DME) Competitive Bidding Program was implemented as a means to lower costs and improve beneficiary services in the DME industry. It consists of a bidding and selection process based on certain criteria determined by CMS. The Round 1 Rebid competition went into effect in 2009 across 9 Metropolitan Statistical Areas (MSAs) (basically large metropolitan areas). Focus now turns to Round 2, which will increase the MSAs involved by 91, bringing the total to 100. CMS anticipates that the Round 2 contracts and payment amounts will become effective January 1, 2013. A list of the current and projected MSAs where the program is or will be implemented is available on the CMS website.

We will continue to provide updates on Round 2 as the information becomes available. Compliance with the program and its participation requirements are critical to all DME providers in the MSAs. If you have any questions or concerns, please contact a Wachler & Associates attorney at 248-544-0888.

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If the rumors are true, tomorrow the Centers for Medicare and Medicaid Services, the Office of the Inspector General and the Federal Trade Commission will be releasing voluminous regulations governing the formation of Accountable Care Organizations (“ACO”) and the Medicare Shared Savings Program.  But before we receive all the minutiae of the regulations, we wanted to provide a brief overview of what is already known about ACOs.

1. The purposes of ACOs are to: (1) facilitate coordination and cooperation, (2) improve the quality of care and (3) reduce unnecessary costs.

2. ACOs were created by the Affordable Care Act, which was signed by President Obama approximately one year ago.

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Time Magazine published an article on January 4 outlining the Federal Government’s increased measures to combat Medicare fraud.  The article outlined that although there is not an official figure on the cost of government health program fraud, the National Health Care Anti-Fraud Association estimates that it is at least $60 billion per year, approximately 10% of Medicare and Medicaid’s combined annual funding.  However, some experts believe this estimation is below the actual cost because most fraud goes undetected.

To decrease the amount of undetected fraud, the Federal government has enlisted the help of Medicare beneficiaries.  According to the Times article, there are 47 million Medicare beneficiaries and the number is expected to rise to 80 million by 2030.  The government intends to use Medicare beneficiaries for fraud detection.  Senior Medical Patrols (SMPs) are volunteers that have been spread across the country to spread the word to seniors about detecting Medicare fraud.  The government is requesting that seniors keep track of their Medicare Summary Notices (MSNs), which outline the services and equipment that a beneficiary has been provided through Medicare.  Seniors that thoroughly check their MSNs can likely detect if the statement includes a service or equipment that the beneficiary did not receive.  Although some complain that the MSNs are not user-friendly, Washington is trying to simplify them.  In addition, the government has considered switching from quarterly MSNs to monthly MSNs.  This would help the government detect fraud more quickly, before the money can change hands and the fraudulent practice closedown. 

Finally, even absent Medicare beneficiary’s involvement, the government hopes that the publicity on Medicare Fraud crackdowns will help inform doctors of the legal risks of being lured into Medicare scams.  However, criminal enterprises have begun to rely on identity theft to curtail the need of doctors at all.

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Last week President Obama signed legislation that will delay Medicare payment cuts for one more year.  The reduction in pay, 25 percent, had been scheduled to begin on January 1, 2011.  The American Medical Association strongly advocated for the delay that is longer than the previous five delays over the past year.  Over the upcoming year, Congress will work to develop a long-term solution to the Medicare physician payment problem. 

For more information on Medicare payments or the physician fee cut, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888. 

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