Compliance

Published on: January 14, 2014

OIG Releases Report Regarding Clinicians Associated with High Cumulative Part B Payments

The Office of the Inspector General (OIG) recently released a study detailing problems associated with overpayments to clinicians who provide Medicare Part B services. The study specifically focused on what the OIG referred to as “high cumulative payment” clinicians, who are clinicians receiving total annual payments of more than $3 million for Part B services during CY 2009. The OIG recognizes that this subset of providers poses a greater risk for improper payment or fraud in the Medicare system and will seek to implement new programs and policies to detect those problems.

The study found that from 2008 to 2011, both the number of Medicare Part B clinicians generating high cumulative payments, as well as the total amount of those payments, increased almost 78%. Most importantly, the study identified 303 clinicians who supplied more than $3 million in Part B services in 2009. Medicare administrative contractors (MACs) and Zone Program Integrity Contractors (ZPICs) further identified 104 specific individuals of the 303 (34%) for improper payments reviews. By the end of 2011, MACs and ZPICs reviewed 80 of the 104 clinicians and identified $34 million in over payments. Repercussions for these clinicians included suspended licenses and mandatory prepayment reviews, and even two indictments. The OIG recommends that CMS establish a cumulative payment threshold above which a clinician’s claims would be selected for review as well as implementing a procedure for timely identification and review of clinicians’ claims that exceed the cumulative payment threshold.

The OIG views the results of this investigation into high cumulative payment clinicians as a more useful method of identifying potentially improper payments. As a result of this study, clinicians who are reimbursed through Medicare Part B should ensure that their billing practices are in compliance with Medicare documentation and reimbursement rules, as well as determine whether their utilization rates differ significantly from their peers.

Published on: December 13, 2013

CMS Advisory Opinion Approves Proposed Hospital Expansion under Stark Law’s Whole Hospital Exception

by Wachler & Associates, P.C.

The Centers for Medicare & Medicaid Services (“CMS”) recently released a favorable advisory opinion, CMS AO-2013-03, that interprets the “whole hospital” exception to the physician self-referral prohibition commonly known as the Stark Law. CMS determined that the proposed arrangement, which adds a new observation unit and 14 observation beds to a physician-owned hospital, complies with the “whole hospital” exception’s restriction on facility expansions.

In general, the Stark Law prohibits the referral of Medicare patients for designated health services (“DHS”) to an entity in which the referring physician has a financial relationship. The law also prohibits the entity that furnishes DHS as a result of a prohibited referral from billing Medicare, the beneficiary, or any other entity.

The Stark Law contains several exceptions to which the self-referral prohibition does not apply, including the “whole hospital” exception under Section 1877(d)(3). The “whole hospital” exception allows referring physicians to have physician ownership or investment interests in a hospital provided that the referring physician is authorized to perform services at the hospital and the ownership or investment interest is in the hospital itself.

Published on: November 25, 2013

CMS Releases Update on Medicare Claim Denials for Incarcerated Beneficiaries

by Wachler & Associates, P.C.

On November 20, 2013, CMS released an update regarding the Medicare denials for claims submitted by providers and suppliers for beneficiaries who were allegedly incarcerated during the dates of service. The large volume of denials, which occurred during this past summer, were incorrect as CMS acknowledged that the systems that track whether a beneficiary is ineligible for Medicare services due to incarceration were incorrectly updated. Medicare providers and suppliers nationwide were impacted by this error as Medicare Administrative Contractors (MACs) automatically denied and in many cases recouped alleged improper claims for services provided to incarcerated beneficiaries. Although CMS acknowledged the errors in late July 2013, it is not until now that Medicare providers and suppliers have received concrete information that addresses how the errors will be fixed and how correct claims will be paid appropriately. CMS is now making strides to refund improper collections and to implement fundamental changes to its claims processing systems. Medicare Administrative Contractors (MACs) will be responsible for reprocessing claims denied in error. Please see our earlier blog posts regarding CMS’s efforts to recoup reimbursement for services provided to incarcerated beneficiaries here.

According to a FAQ Sheet available on CMS’s website, CMS anticipates that incorrectly denied or cancelled claims associated with allegedly incarcerated beneficiaries from June through August of 2013 will be refunded to suppliers via an automated process by the beginning of December. Medicare provider claims denied due to the incorrect information regarding incarcerated beneficiaries between June through August of 2013 will also be reprocessed by the MACs. According to the FAQ bulletin, CMS expects the reprocessing to be completed by the end of December.

Suppliers and providers should be aware that repayments “may not exactly match the original payment that was made for the claims.” Factors such as CMS business processes, outstanding payments, or changes in a beneficiary’s paid deductible amounts may be reflected in the final claim repayment amounts remunerated to the affected providers.

Published on: November 18, 2013

“Probe and Educate” Hospital Inpatient Audits Extended an Additional 3 Months

by Wachler & Associates, P.C.

On November 12, 2013, CMS held a third open door forum (ODF) discussing the Fiscal Year (FY) 2014 Inpatient Prospective Payment System (IPPS)/Long-Term Care Hospital (LTCH) Final Rule (CMS-1599-F). As of November 4, 2013, the patient status probe review period that was previously applicable through December 31, 2013 has been extended through March 31, 2014. CMS has issued helpful guidance on questions and answers relating to patient status reviews, selecting hospital claims for patient status reviews, and reviewing hospital claims for patient status.

These “probe and educate” reviews will be conducted on a prepayment basis to assess whether hospitals are in compliance with the admission order requirements and 2-midnight benchmark. Because these reviews will be conducted on a prepayment basis, the MACs will deny any claims not meeting these three requirements. The initial sample probe reviews will consist of 10-25 claims per hospital with dates of admission from October 1 through December 31, 2013.

MAC review of the inpatient hospital claims will provide outreach and education about the inpatient rule and will help ensure that hospitals understand and comply with the Medicare requirements. Upon completion of the 10-25 claim reviews, if the MACs do not find any issues with the particular hospital’s claim documentation then further probes will not be conducted for that hospital (unless there are significant changes in billing patterns for admissions).

Published on: November 11, 2013

Open Door Forum on Final IPPS Rule Tomorrow at 1:00

by Wachler & Associates, P.C.

Tomorrow from 1:00-2:00 pm Eastern Time, the Centers for Medicare & Medicaid Services (CMS) will hold a third open door forum (ODF) to discuss the Fiscal Year (FY) 2014 Inpatient Prospective Payment System (IPPS)/Long-Term Care Hospital (LTCH) Final Rule (CMS-1599-F).

On August 2, 2013, CMS issued the FY 2014 IPPS/LTCH Final Rule (final rule) which finalized proposals related to patient status during short-stay hospital cases, including the new standards for inpatient admission and the medical review criteria for payment of hospital short-stay inpatient services under Medicare Part A. On September 5, 2013, CMS issued sub-regulatory guidance regarding the final rule’s requirements for hospital inpatient admission order and certification, which are conditions of payment under Medicare Part A. This sub-regulatory guidance was issued in part as a result of the significant confusion surrounding CMS’s requirements for inpatient admission orders and physician certifications of inpatient services. CMS also posted subregulatory instructions and frequently asked questions, relating to the claim selection process and preliminary review guidelines, for conducting patient status reviews of claims with dates of admission beginning in October 2013.

Questions on the two midnight provision for admission and medical review may be sent to CMS before the ODF begins via email to IPPSAdmissions@cms.hhs.gov. Questions on Part B inpatient billing and clarifications regarding physician order and certification can be sent to Section3133DSH@cms.hhs.gov.

Published on: October 31, 2013

CMS Reaches Four Settlements Under the Stark Self-Referral Disclosure Protocol in August and September

by Wachler & Associates, P.C.

The Centers for Medicare & Medicaid Services (CMS) recently announced four settlements via the Voluntary Self-Referral Disclosure Protocol (SRDP) under the federal Stark Law. CMS reached three Stark law settlements in August 2013 and on additional settlement in September 2013, totaling approximately $178,000.

On August 19, 2013, CMS settled Stark law violations by a Louisiana physician group practice. Under the SRDP, the Louisiana practice disclosed that it violated the Stark Law because two of its physician arrangements failed to satisfy the requirements of the in-office ancillary services exception to the Stark Law. The violations were settled for $13,572.

On August 20, 2013, CMS reached a settlement with a non-profit community hospital located in Minnesota which disclosed that its arrangement with a physician group practice for the rental of office space and performance of support services failed to satisfy the requirements of the applicable exception under the Stark Law. The Minnesota hospital’s violations were settled for $9,570.

Published on: October 21, 2013

OIG Report on “Questionable” Billing for Polysomnography Services May Lead to Closer Scrutiny of Sleep Laboratories

by Wachler & Associates, P.C.

The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently issued a report addressing increased Medicare spending on polysomnography services. The OIG initiated this study in response to growing concerns of Medicare prescriber fraud.

A polysomnography is a type of sleep study that diagnoses sleep disorders such as sleep apnea. The claims submitted by sleep centers that conduct these studies have been under serious scrutiny by fraud investigators in recent years. In January 2013, American Sleep Medicine LLC, a sleep testing center operator based in Florida, agreed to pay $15.3 million to resolve allegations of false polysomnography claims submitted to Medicare, TRICARE, and the Railroad Retirement Medicare Program in violation of the False Claims Act (FCA).

According to the OIG’s report, Medicare spending for polysomnography services rose 39 percent between the years 2005 and 2011. The OIG analyzed Medicare claims from hospital outpatient departments, as well as non-hospital providers such as independent diagnostic testing facilities and physician-owned sleep laboratories, starting in 2011. The OIG found that almost $17 million in Medicare claims for polysomnography services were inappropriate, meaning the claims did not meet one or more of three requirements for Medicare reimbursement, including claims that had inappropriate diagnosis codes, were same-day duplicate claims or were submitted with an invalid NPI. In addition, the report stated that out of 6,339 providers of polysomnography services, 180 providers exhibited patterns of questionable billing. “Questionable billing” patterns included providers that billed an unusually high percentage of: (1) same-day duplicate claims, beneficiaries who had polysomnography claims from one or more other providers in 2011, (3) diagnostic polysomnography claims with a titration claim for the same beneficiary on the following day, or (4) claims in which there was no visit note from the ordering provider in the preceding year.

Published on: September 30, 2013

CMS Releases Comparative Billing Reports for Spinal Orthotics and Ordering Providers

by Wachler & Associates, P.C.

The Centers for Medicare and Medicaid Services (CMS) recently released a national provider Comparative Billing Report (CBR) focused on spinal orthotics and ordering providers. This CBR was conducted in response to an Office of Inspector General (OIG) report on inappropriate Medicare payments for orthotics. The Medicare Durable Medical Equipment (DME) data obtained for this report span from dates of service beginning January 1, 2012 through December 31, 2012. The final data was retrieved on August 15, 2013 from the Integrated Data Repository (IDR).

Under contract by CMS, Safeguard Services LLC is the authorized producer of all CBRs. Safeguard sends CBRs to about 5,000 ordering providers to help providers prevent improper billings. This CBR provides comparative data to orthotic providers across the nation to compare orthotics providers in terms of coding and billing practice, as well as utilization patterns. The sample spinal orthotics CBR may be useful to review if your entity did not receive one from Safeguard.

The following Healthcare Common Procedure Coding System (HCPCS) codes were analyzed in this CBR:

Published on: September 23, 2013

Compliance with HIPAA HITECH Rule Effective Today

by Wachler & Associates, P.C.

After months of delay, compliance with the Health Insurance Portability and Accountability Act (HIPAA) Health Information Technology for Economic and Clinical Health (HITECH) Omnibus Final Rule goes into effect today. HIPAA Privacy and Security Rules are implemented by the Health and Human Services (HHS) Office for Civil Rights.

The Omnibus Final Rule was announced by HHS on January 17, 2013. According to the HHS press release, the Final Rule “expand[s] many of the requirements to business associates of [health care providers, health plans, and other entities that process insurance claims] that receive protected health information, such as contractors and subcontractors…Penalties are increased for noncompliance based on the level of negligence with a maximum penalty of $1.5 million per violation.”

The Final Rule’s safe harbor period, which ended today, gave covered entities and business associates 180 days to comply with stricter modifications which will be enforced by heavy fines. Time is of the essence for covered entities and business associates to take proper measures to comply with the new rules. It is imperative that entities review their relationships with covered entities, as the Final Rule expanded the definition of a “business associate” and entities that previously were not business associates, may be considered business associates with the implementation of the Final Rule. If an entity is a business associate with a covered entity, then certain obligations come into play, including the requirement that the business associate and covered entity enter into a business associate agreement that meets the requirements set forth in the Final Rule.

Published on: September 18, 2013

OIG Releases Report on RACs and the Actions Taken by CMS to Address Improper Payments, Fraud Referrals, and Performance

by Wachler & Associates, P.C.

In August 2013, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued a study addressing problems and vulnerabilities in Recovery Audit Contractor (RAC) activities, as well as their oversight by Centers for Medicare & Medicaid Services (CMS). RACs are tasked with identifying improper payments and are paid on a contingency fee basis according to their findings. RACs are also obligated to refer potential fraud to CMS.

The report addresses RACs’ efforts at identifying improper payments and potential fraud for the fiscal years (FYs) 2010-2011 and emphasizes the importance of effective CMS oversight over the RACs. The OIG set out to discover and report on four main objectives, including the extent to which:

1. RACs identified improper payments for services billed to the Medicare program;