Articles Posted in Compliance

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The Centers for Medicare & Medicaid Services (CMS) is issuing demand letters seeking recoupment of reimbursement from medical providers and suppliers for Medicare beneficiaries that, according to data from the Social Security Administration (SSA), were allegedly “incarcerated” at the time services were provided. According to the Code of Federal Regulations (42 CFR 411.4) and Section 1862(a)(2) of the Social Security Act, with limited exceptions, Medicare does not make payments under Medicare Part A or Part B for incarcerated beneficiaries’ medical services. The SSA uses the Prisoner Update Processing System (PUPS) to notify CMS contractors to stop Medicare payment for patients in custody of penal authorities.

CMS considers a beneficiary “incarcerated” in circumstances that do not only involve physical confinement. Commentary on 42 CFR 411.4 explains that this definition of “custody” is consistent with the Federal courts’ definition of custody for the purpose of habeas corpus protections of the Constitution. According to commentary on 42 CFR 411.4, as well as the related CMS bulletin, individuals in “custody” include those who are:

• Under arrest

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Recently, the Centers for Medicare and Medicaid Services (CMS) issued a final rule mandating that long term care (LTC) facilities and hospice providers enter into written agreements if the facility chooses to arrange hospice services through a Medicare-certified hospice provider. The rule becomes effective on August 26, 2013.

This final rule comes after the Department of Health and Human Services’ Office of Inspector General (OIG) raised several concerns regarding hospice care in Medicare-certified skilled nursing facilities and Medicare-certified nursing facilities. In September 2009, the OIG released a report that found nearly one-third of Medicare hospice beneficiaries lived in nursing facilities and that 82% of hospice claims for these beneficiaries did not meet the requirements for Medicare coverage. In addition, both hospices and LTC facilities are required by law to provide many similar services, which creates a greater likelihood that residents may receive duplicative or missing services.

As a result, CMS has added a new Condition of Participation (CoP) that now requires LTC facilities to have a written agreement in place to create a clear division of responsibilities between LTC facilities and contracted hospice providers. CMS believes that this new rule will improve the quality and coordination of care for LTC residents who elect to receive the hospice benefit.

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On June 24, 2013, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued an advisory opinion announcing that by request of a surgical products manufacturer (the “Requestor”), based on the certifications and information provided, a proposed tiered rebate program will meet the requirements of the discount safe harbor of the anti-kickback statute (AKS) and will not generate prohibited remuneration under the AKS. Thus, the OIG concluded that it would not impose administrative sanctions in connection with the proposed arrangement.

The AKS makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program. At the discretion of the OIG, a violation of the AKS may constitute a felony punishable by imprisonment fines, or both, possible exclusion from Federal health care programs, and possible administrative proceedings and civil monetary penalties. However, safe harbor protection may be afforded to arrangements that meet all of the conditions set forth in the applicable AKS safe harbor. The regulatory AKS safe harbor for discounts interprets the Social Security Act’s exception for discounts, which protects “a discount or other reduction in price obtained by a provider of services or other entity under a Federal health care program if the reduction in price is properly disclosed and appropriately reflected in the costs claimed or charges made by the provider or entity under a Federal health care program.”

In this advisory opinion, the Requestor, a corporation that manufactures ophthalmologic products including pharmaceuticals, surgical equipment, and vision aids, sought an advisory opinion on whether a proposed arrangement would generate prohibited remuneration under the AKS. The Requestor’s proposed arrangement involved tiered, percentage-based rebates based on customer purchases of federally reimbursable and non-federally reimbursable surgical products. The rebate would be calculated based on a customer’s total annual purchases of such products regardless of whether such products are reimbursable by Federal health care programs and would not vary based on the volume of Federally reimbursable products purchased. In addition, the Requestor certified the various manners in which it would notify all customers receiving rebates of their obligation to report any rebates received based on sales of Federally reimbursable surgical products. Further, the Requestor certified that it would refrain from doing anything to impede the customer’s ability to meet its obligations under the AKS discount safe harbor.

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The Centers for Medicare and Medicaid Services (CMS) have recently announced a tally of 29 settlements under the Voluntary Self-Referral Disclosure Protocol (SRDP). In the month of June alone, CMS settled six different cases of violations of the physician self-referral statute, also known as the Stark law, throughout the country. Disclosing providers make SRDP submissions with the intent of resolving overpayment liability exposure for conduct that the providers voluntarily identify.

Most recently, on June 20, 2013, CMS and an acute care hospital in Pennsylvania settled a Stark violation case for $24,740 after the hospital disclosed that “arrangements for medical director services with certain physicians and a physician practice did not satisfy the requirements of any applicable [Stark] exception.” On June 18, 2013, CMS and a critical access hospital based in Wisconsin settled a case for $12,724.00. In this case, the hospital revealed a situation where a physician arrangement for emergency room call coverage services at the hospital’s nearby walk-in clinics did not meet the requirements of a Stark exception. Also on June 18, a Tennessee hospital settled a case with CMS for $72,270 after disclosing an arrangement involving a physician supervising cardiac stress tests which did not satisfy any requirements of a Stark law exception. On June 12, an acute care hospital in Alabama and CMS settled a case for $187,340 involving a physician group practice arrangement for rental of office space that did not satisfy the requirements of the applicable Stark exception. CMS announced on June 6 that Florida General Acute Hospital settled a case for $76,000 based on multiple disclosures regarding several arrangements that did not satisfy the requirements of any Stark exceptions, and on June 5, CMS announced that Florida Acute Hospital settled a case for $109,000 that involved multiple arrangements with physicians for emergency cardiology call coverage that did not meet requirements of any applicable Stark exceptions.

Wachler & Associates healthcare attorneys have regularly counseled hospitals and other providers in navigating the Stark law since 1995. The amount of high settlements announced in June involving hospitals may suggest that CMS is directing astute attention towards hospitals when resolving matters under the SRDP. For more information on the Stark law, or for assistance with Stark compliance measures for your healthcare entity, please call an experienced healthcare attorney at 248-544-0888.

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The Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently announced that it expects to recover an estimated $3.8 billion in overall recoveries for the first half of fiscal year 2013. This report covers October 1, 2012 through March 31, 2013.

The OIG’s semiannual report is released every 6 months to keep Congress and the HHS Secretary Kathleen Sebelius informed of the OIG’s important findings, recommendations, and activities. In connection with its Medicare and Medicaid investigations, audits, and reviews, the OIG anticipates $521 million in audit receivables and $3.28 billion in investigative receivables.

In the report’s introductory message, Inspector General Daniel R. Levinson attributed the department’s success to the OIG’s cooperative activities and effective partnerships with organizations such as the Health Care Fraud Prevention and Enforcement Action Team (HEAT). The OIG featured the following items in its semiannual report:

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The Recovery Audit Contractors (RACs) have issued a complex review targeting intensity-modulated radiation therapy (IMRT). IMRT has been used in radiation oncology to treat many different types of cancer by modulating high intensity X-ray beams directed at a tumor and thus minimizing the amount of radiation to healthy tissue. In the aggregate, IMRT uses significantly lower doses of radiation than traditional treatment.

Beginning July 18, 2013, the RACs will be looking more carefully at the medical necessity of IMRT treatment as well as whether the diagnoses listed on claims for reimbursement are also listed in the local coverage determination (LCD). Practitioners should review the coding and medical necessity sections in the LCD to determine whether the patient’s condition meets these standards. The LCD also sets forth strong documentation requirements for IMRT that should be carefully reviewed, including, among other items, the need for performing IMRT, prescription of a treatment plan, target verification methodology and documentation, an approved IMRT inverse plan (PTV), immobilization and positioning documentation, fluence distribution in the phantom, monitor units, and respiratory motion.

If you need assistance defending a Medicare audit or need help creating a compliance plan, please contact an experienced health care attorney at 248-544-0888.

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This morning, the Senate Finance Committee, a committee responsible for the oversight of Medicare, met with providers to discuss their experience with the Medicare Recovery Audit Contractors (RACs). The Centers for Medicare & Medicaid Services (CMS) contract RACs to detect and recuperate improper Medicare program payments.

At the hearing, Chairman Max Baucus (D-Mont.) and Ranking Member Orrin G. Hatch (R- Utah) urged the seriousness of the improper Medicare payments problem. The senators issued statements stressing the importance of RACs working efficiently to ensure the best use of the Medicare trust fund. They voiced their concerns at the high numbers of RAC decisions which are overturned on appeal and the senseless red tape which frustrates providers.

Two providers and one prominent contractor gave witness testimonies to the Committee. Jennifer J. Carmody, CPA, Director of Reimbursement Services for the Billings Clinic of Billing, Montana, discussed the time and expense her organization has incurred appealing inappropriate payment denials. In her witness testimony, she disclosed, “… the combined audit activity becomes overwhelming. In total, we are currently being audited by the Medicare RAC, Medicaid, Medicare Advantage, commercial payers and others.” The Billings Clinic pays an outside contractor, EHR, to assist the clinic with their overflow of audits and appeals. Amongst other recommendations, Ms. Carmody told the Finance Committee that clearer guidance, a limit to the number of record requests, and more effective supervision of the RACs’ performance would help improve the overall RAC process.

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Today the Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued a report revealing new data on prescribers with questionable billing patterns under the Medicare Part D program. The OIG conducted this study to investigate rising concerns of Medicare prescriber fraud.

According to the OIG’s report, over 700 of nearly 87,000 general-care providers had “questionable” Part D prescribing patterns. A total of 2,238 general-care providers were labeled as outliers, but 736 doctors had what the OIG considered to be “extreme” prescriber patterns. A majority of these “extreme” outlier physicians ordered what the OIG considered to be extraordinary quantities of Schedule II or III drugs. Other examples of “extreme” patterns included doctors writing over 400 prescriptions for one patient and the number of pharmacies dispensing a single doctor’s orders. The OIG’s report noted that “Although some of this prescribing may be appropriate, such questionable patterns warrant further scrutiny.”

The Centers for Medicare and Medicaid Services (CMS) contracts with sponsors that provide drug coverage to beneficiaries enrolled in Medicare Part D. In addition, CMS contracts with a Medicare Drug Integrity Contractor (MEDIC), a contractor responsible for detecting and preventing fraud and abuse. The OIG recommended that CMS heighten its oversight of the Medicare Part D program by working in conjunction with MEDIC and the private insurers. According to the report, CMS has agreed to the OIG’s following recommendations:

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On June 18, 2013, Julian Kimble was sentenced to 17 years in federal prison and ordered to pay $3,676,587 to the Medicare program as restitution following his 2011 convictions for conspiracy to commit health care fraud and other crimes.

In November 2011, Kimble pled guilty to conspiracy to commit healthcare fraud, money laundering, and tax evasion. Kimble admitted to owning four ambulance companies – Tamimi International Inc, Monarch Ambulance, HKO Group Inc, and Houston EMS – and that he frequently billed basic life support to Medicare for ambulance transports and services that were not medically necessary or not provided at all. Kimble and the other conspirators often transported multiple beneficiaries together in cars or vans, and then billed Medicare for individual transports in ambulances with trained emergency medical personnel.

Furthermore, Kimble received kickbacks from several owners of community mental health centers in exchange for transferring patients to their facilities. The patients also received payments in exchange for assenting to be transported to different facilities in the Houston area. In total, Kimble’s ambulance companies billed Medicare nearly $8.7 million and received over $3.6 million.

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Congressman Adrian Smith (R-NE), along with 13 co-sponsors, introduced a new bill on June 12, 2013, titled the Administrative Relief and Accurate Medicare Payments Act of 2013. This initiative, House Rule (H.R.) 2329, aims to ease administrative burdens on healthcare providers and efficiently allocate energy and resources related to Medicare payment and audits.

In addition to addressing the concerns of administrative burdens and short timeliness-of-filing requirements, the bill also seeks to improve payment accuracy. By increasing the filing period for claims and making other changes to streamline the appeals process, the Act is designed to ease the burden on hospitals.

In a press release, Congressman Smith announced,

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