Affordable Care Act

Published on: August 6, 2024

2025 PFS Proposed Rule Includes 6-Month Suspension on the 60-Day Refund Rule

On July 31, 2024, the Centers for Medicare & Medicaid Services (CMS) published the Calendar Year 2025 Physician Fee Schedule (PFS) Proposed Rule. Among other changes, the 2025 PFS Proposed Rule includes additional proposed changes to the so-called “60-day rule” regarding returning identified overpayments. Initially established by the 2010 Affordable Care Act, the 60-day rule requires healthcare providers to report and return Medicare and Medicaid overpayments within 60 days of identifying such overpayments. The potential consequences for failing to comply with the 60-day rule are severe, and can result in the imposition of a civil monetary penalty or an alleged violation of the Federal False Claims Act. Providers should pay close attention to the potential changes to the 60-day rule included in the 2025 PFS Proposed Rule.

The 2025 PFS Proposed Rule is not the first time that CMS has proposed changes to the 60-day rule, and it likely will not be the last. In December 2022, CMS published a proposed rule that would amend the regulations regarding the standard for an “identified overpayment” under the Medicare program. Specifically, the December 2022 Overpayment Proposed Rule proposed to remove the existing “reasonable diligence” standard and adopt by reference the Federal False Claims Act definition of “knowing” and “knowingly.” To date, CMS has not finalized these proposals with respect to identified overpayments under the Medicare program.

In the 2025 PFS Proposed Rule, CMS states that it is retaining the proposals published in the December 2022 Overpayment Proposed Rule, and proposes further changes to revise the regulations regarding the timeframe for reporting and returning overpayments. Currently, the applicable regulations require that an overpayment be reported and returned by the later of: (1) the date which is 60 days after the date on which the overpayment was identified; or (2) the date any corresponding cost report is due, if applicable. However, under the 2025 PFS Proposed Rule, the deadline for returning a reported overpayment would be suspended under specified circumstances. The 2025 PFS Proposed Rule would create an entirely new regulatory provision to suspend the deadline for reporting and returning overpayments for up to 6 months to allow time for providers to investigate and calculate overpayments. Previously, in 2016 rulemaking regarding reporting and returning of overpayments, CMS discussed that under the “reasonable diligence” standard, providers would be allowed a 6-month period in which to conduct a good-faith investigation of credible information of a potential overpayment. At the time of the 2016 rulemaking, CMS had not proposed to implement this 6-month period into the applicable regulations.

Published on: November 20, 2023

OIG Issues New General Compliance Program Guidance

by Wachler & Associates, P.C.

In November 2023, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) released its General Compliance Program Guidance (GCPG). This guidance was released as part of OIG’s Modernization Initiative, which seeks to make compliance program guidance more user friendly and accessible. The document does not include new information but instead summarizes existing guidance regarding fraud and abuse risk, serving as an up-to-date comprehensive reference guide for the general healthcare community and industry stakeholders. OIG also noted that in 2024 it will begin publishing industry segment-specific CPGs (ICPGs) which will address compliance measures for industry subsectors.

The GCPG is not legally binding on any individual or entity, but contains valuable information regarding compliance with federal fraud and abuse statutes and regulations. The OIG guidance includes information regarding key fraud and abuse laws, the primary elements of an effective compliance program, program adaptations for small and large entities, other compliance considerations, and OIG resources and processes.

The GCPG begins with an overview of the principal federal fraud and abuse laws including the Anti-Kickback Statute (AKS), the Physician Self-Referral Law (PSL; also known as the “Stark law”), the False Claims Act (FCA), and the Civil Monetary Penalty law (CMP). Their stated goal in summarizing these laws is to “create awareness and provide tools and resources to aid compliance efforts in both preventing violations and identifying potential red flags early with respect to these laws and regulations.”

Published on: February 15, 2021

2021 Special Enrollment Period for the Health Insurance Marketplace

by Wachler & Associates, P.C.

On January 28, 2021, The Department of Health and Human Services (HHS), through the Centers for Medicare & Medicaid Services (CMS), and in accordance with an Executive Order issued by the Biden Administration, announced a Special Enrollment Period (SEP) for individuals and families to gain coverage on the Affordable Care Act (ACA) health insurance Marketplace. Due to the uncertainty caused by the COVID-19 pandemic, CMS determined that the public health emergency poses exceptional circumstances for consumers in obtaining health insurance. The SEP will be available to individuals in 36 states which participate in Marketplaces using the Healthcare.gov platform. CMS is encouraging states using their own Marketplace platform to offer a similar SEP. CMS’s goal is to guarantee quality, affordable coverage to more families during the COVID-19 pandemic.

The SEP will begin on February 15, 2021, and end on May 15, 2021. Marketplaces using Healthcare.gov will make operational a SEP for all eligible Marketplace users in the state. Eligible consumers who are submitting a new application, or current users who are modifying an existing application, may apply for coverage. Users will be able to access the SEP through various platforms, including Healthcare.gov, the Marketplace call center, or direct enrollment outlets. Consumers can obtain assistance with coverage from a network of more than 50,000 agents and brokers registered with the Marketplace and over 8,000 individuals trained in assisting with Marketplace coverage.

States with their own Marketplaces can, but are not mandated, to offer a similar enrollment period, although it is CMS’s recommendation that these states establish a SEP as well. Marketplace coverage is prospective; therefore, it will begin the first day of the month after an individual enrolls using Healthcare.gov. Current users must update their existing application to claim the SEP and to receive a determination on whether they are eligible. No additional application questions, documentation, verification requirements, or qualifying events such as job loss or the birth of a child, will be necessary for consumers to show they qualify for the SEP. Some consumers may already qualify for existing SEPs, Medicaid, or the Children’s Health Insurance Program (CHIP), and can find out if they are eligible using Healthcare.gov. Beginning February 15, 2021, consumers seeking to enroll using the SEP can find out if they qualify by using Healthcare.gov, and are no longer limited to calling the Marketplace call center. Eligible consumers will have 30 days after submitting an application to select a plan. Current enrollees will be able to switch to any plan available in their area without being restricted to the same coverage level as their current plan.

Published on: September 18, 2020

Special Enrollment Periods Available for Michigan Residents Affected by COVID-19

by Wachler & Associates, P.C.

Due to the 2019 Novel Coronavirus (“COVID-19”) pandemic, many Michigan residents have found themselves without any health insurance coverage. On September 15, 2020, the Michigan Department of Insurance and Financial Services (“DIFS”) released a press statement informing Michigan residents that extended health insurance enrollment periods are available for qualified residents through the Health Insurance Marketplace.

Special Enrollment Periods (“SEPs”) allow individuals who missed the yearly open enrollment period but have experienced a specific life event to sign up for health insurance. Generally, individuals have 60 days before and 60 days after a qualifying life event to enroll in an insurance plan through the Health Insurance Marketplace. Life events that qualify individuals to enroll in an SEP include: household changes, such as marriage, divorce, or the birth of a child; changes in residence; and a loss of health insurance. Typically, if an individual misses an SEP enrollment window, he or she must wait until the next open enrollment period to apply.

Individuals who have lost healthcare coverage due to job loss during the COVID-19 pandemic may still be eligible for coverage through various healthcare outlets. Those who have lost health insurance as a result of job loss may become eligible for Medicaid if they live in a state with expanded Medicaid under the Affordable Care Act (“ACA”) and meet certain income limits. Michigan is one such state that has expanded Medicaid coverage under the ACA. Additionally, ACA Marketplace coverage is available to those who do not have employer sponsored health insurance and do not qualify for Medicaid. Furthermore, subsidies may be available to individuals with a family income between 100% and 400% of the poverty line. COBRA is another option for those who lost job-based health insurance. COBRA will allow employer-based coverage to continue after employment ends, however, this is often a costly option because the individual must pay the entire premium as well as an additional 2%.

Published on: January 13, 2015

House Republicans Release Proposal to Eliminate Two-Midnight Rule

by Wachler & Associates, P.C.

In November 2014, Republicans in the U.S. House of Representatives circulated a “discussion draft,” which proposed significant reforms to the process by which Medicare reimburses hospitals for short stays. Perhaps most notably, the GOP proposal would eliminate the two-midnight rule. Since its enactment, the two-midnight rule has remained controversial among healthcare providers. Under the two-midnight rule, an admission is appropriate only when the patient remains in the hospital for two midnights. However, since its adoption, the rule has created confusion and elicited criticism from providers who claim that it undermines their clinical decision-making process. Acknowledging the issue, the Centers for Medicare and Medicaid Services (CMS) limited enforcement of the two-midnight rule and solicited stakeholders for suggestions on improving it.

The discussion draft also proposes the establishment of a new Medicare payment system for hospital stays. Under the proposal, the payment system would go into effect in fiscal year 2020 and unify the currently separate inpatient and outpatient payment systems. During the five years before the implementation, CMS would be tasked with developing a transitional, per-diem payment system for short-term hospital stays. Additionally, CMS would restrain Recovery Audit Contractors (RAC) until the new payment system is adopted. This reprieve is important when establishing a new payment system because of the RAC program’s onerous presence in the healthcare industry. Just last year, the RAC program recouped over $3 billion in Medicare overpayments, and audit appeals have created such a backlog that many appellants are waiting over three years for a decision. The backlog of appeals violates the statutory requirement for Administrative Law Judges to decide Medicare appeals within 90 days of the request for hearing.

Also included in the GOP’s discussion draft is a partial elimination of the Patient Protection and Affordable Care Act’s (ACA) moratorium on the expansion of physician-owned hospitals. Currently, the law prohibits new physician-owned hospitals, expansion of existing physician-owned hospitals, and an increase in the percentage of physician ownership in existing physician-owned hospitals. Any reduction of the physician-owned hospital limitation would be welcomed news in the physician community. Further, in an effort to curb costs, the proposal also includes provisions that would promulgate a nationwide bundled payment program. Upon analyzing these proposals, many stakeholders believe that the circulation of the discussion draft indicates the direction of the anticipated Medicare debate in Congress and expect several of these provisions to be at the forefront of discussions in the next congressional session.

Published on: October 28, 2014

CMS Extends Fraud and Abuse Waivers for ACO Shared Savings Program

by Wachler & Associates, P.C.

On October 17, 2014, the Centers for Medicare and Medicaid Services (CMS) extended its interim final rule regarding fraud and abuse waivers for accountable care organizations (ACOs) that participate in the Medicare Shared Savings Program. The Medicare Shared Savings Program was one of the initial steps taken under the Affordable Care Act to both increase quality and lower costs in the Medicare program. ACOs that participate in the Medicare Shared Savings Program can share in the savings generated to Medicare.

Originally, the interim final rule was published in the November 2, 2011 Federal Register, and had the typical three-year period before becoming a final rule. The continuation of the interim final rule extends the timeline for an additional year, establishing a new deadline of November 2, 2015. The interim final rule offers five waivers to ACOs, which allow healthcare entities to form and operate ACOs without fear of violating federal fraud and abuse laws. The ACO waivers include:

An ACO participation waiver;

Published on: August 29, 2014

Reports Show Increase in Individuals Participating in Employer-Based Health Plans

by Wachler & Associates, P.C.

Since the passage of the Patient Protection and Affordable Care Act (ACA) in 2010, much of the media focus has been on individuals who were previously denied coverage because of preexisting conditions or financial barriers. Now, studies are focusing on the large group of individuals who, prior to the ACA, simply chose not to purchase health insurance. The reports demonstrate that due to the Individual Mandate portion of the ACA, which requires individuals to purchase health insurance, many more individuals are choosing to participate in their employers’ health plans.

The increased participation in employer health plans will inevitably cost employers. Most recently, Wal-Mart announced that a dramatic increase in employees signing up for insurance through the company will cost its stockholders $500 million — up from the company’s previous estimate of $330 million. Although Wal-Mart is experiencing the employer-based insurance shift on a large scale, many employers nationwide are expected to see a jump in participation in their health plans. Recently, the National Business Group on Health announced that large employers should expect to see a 6.5% rise in healthcare costs in 2015.

Although The New England Journal of Medicine and members of the Urban Institute both note a rise in individuals signing up for insurance through their employers, other analysts predict that employers’ costs will be too high, and that the employers will simply “dump” these employees into their state’s health insurance marketplace. Many experts, however, expect that if such dumping were to occur, it would come from small employers who merely cannot afford to offer adequate health plans.