Articles Posted in Compliance

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Hospice providers must always obtain written certification that a patient meets Medicare’s hospice coverage criteria. Written certification of terminal illness needs to be obtained no later than 2 days after hospice care is initiated, and must be on file in the hospice patient’s record prior to the submission of a claim to the Medicare contractor. Certification must be made by the medical director of the hospice and, if applicable, the patient’s attending physician. Payment for hospice care will begin the date certification is obtained.

This initial certification satisfies the hospice certification requirement for the first 90-day period of coverage. Additional periods require recertification, which can be obtained 15 days prior to the next benefit period, but no later than 2 days after that period begins.

Per the Medicare Benefit Policy Manual, the written certification must include:

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On May 8, 2013 the Office of Inspector General (“OIG”) for the Department of Health and Human Services issued an Updated Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs (“the Updated Bulletin”) to replace and supersede a bulletin issued in 1999.

The Updated Bulletin reiterates, clarifies and/or provides guidance on many points, including the following with regard to the effect of exclusion on participation in Federal health care programs:

  • Payment cannot be made from a Federal health care program for items or services furnished by an excluded person or at the medical direction or on the prescription of an excluded person.
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On May 3, 2013, the Office of Inspector General (OIG) released a memorandum describing hospice general inpatient care (GIP) provided to Medicare patients in 2011, for which Medicare paid $1.1 billion. According to the memorandum, the OIG will be conducting an in-depth medical record review to evaluate the appropriateness of GIP provided by hospices. The study will be focused on the accuracy of reimbursement for GIP and the proportion of GIP provided in different settings, specifically Medicare-certified hospice inpatient units, hospitals, and skilled nursing facilities.

This ongoing study is a continuation of prior studies released by the OIG, which show that the amount of GIP services provided differs significantly depending on the setting. For example, hospices that have their own inpatient units provided GIP to 35% of their Medicare patients. In contrast, hospices that have to outsource GIP care sent only 12% of their Medicare beneficiaries to receive that care. Furthermore, hospices that provided GIP in their own inpatient units recorded 50% longer patient stays and three times the proportion of Medicare payments for GIP services than did hospices that have to outsource GIP care.

The memorandum states that the OIG will begin a new study which will use actual beneficiary medical records to determine the accuracy of reimbursement. In addition to its own investigations, the OIG advised CMS to ensure that the hospices not currently providing GIP are still providing beneficiaries with appropriate access to the types and amount of care needed at the end of their lives. These studies are part of OIG’s continuing investigations related to Medicare hospice care. In 2011, Medicare paid $13.7 billion for hospice services on behalf of 1.2 million beneficiaries, and both of those numbers are expected to increase with the aging of the baby boomer generation.

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As mandated by the American Taxpayer Relief Act of 2012, Medicare Part B outpatient therapy providers now face manual medical review of claims at or above a $3700 statutory cap. Due to some confusion in the provider community, the Centers for Medicare and Medicaid Services (CMS) published a Frequently Asked Questions to clarify the new therapy manual medical review process.

In the FAQ, CMS explains that the manual medical review process is triggered when a beneficiary’s services for that year exceed one of two threshold caps dictated in Section 603 of the Act. The cap for Occupational Therapy (OT) services is $3700 per year, per beneficiary. Separately, the combined cap for Physical Therapy (PT) and Speech Language Pathology (SLP) is $3700 per year, per beneficiary. CMS also points out that although physical therapy and speech language pathology services are combined to trigger the cap, the medical review of those claims will be conducted separately.

The FAQ states that the cap and manual medical review process applies to all Part B Outpatient Therapy settings and providers, including private practices, Part B skilled nursing facilities (SNFs), home health agencies (HHAs), outpatient rehabilitation facilities, rehabilitation agencies and hospital outpatient departments.

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Intermountain Healthcare, the largest health system in Utah, has agreed to pay $25.5 million to resolve claims that it violated the federal Stark law and False Claims Act by engaging in inappropriate financial relationships with referring physicians.

In 2009, Intermountain disclosed to federal officials that the system may have illegally paid bonuses to 37 doctors based on their patient referrals. If true, Intermountain would have been in violation of the Stark law. In addition, Intermountain disclosed that it compensated more than 170 doctors in the absence of written agreements, including via rentals of office space in several cities without written lease agreements. In total 209 physicians were involved in the violations, which spanned over a 10 year period.

Intermountain discovered the violations through its regular review process, and reported them to the government in 2009. Intermountain cites the complexities of the Stark law’s regulations as one cause of its noncompliance. According to Intermountain’s Chief Medical Officer Dr. Wallace, Intermountain should have more closely monitored the situation and although Intermountain’s management realized that penalties could be significant, they chose to self-disclose the issues.

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On January 31, 2013, the Senate Finance Committee released a report aimed at combating waste, fraud and abuse in Medicare and Medicaid. In May of 2012, the Senate Finance Committee invited interested stakeholders to submit white papers offering recommendations and innovative solutions to improve program integrity efforts, strengthen payment reforms, and enhance fraud and abuse enforcement efforts. In response, a variety of healthcare industry experts, including Wachler & Associates, submitted nearly 2,000 pages of input and recommendations. Wachler & Associates submitted instances of egregious contractor errors, including improper recoupment of alleged overpayments, contractors sending appeals correspondence to the wrong addresses and improper referral of alleged overpayments to the Department of Treasury. Based on the Finance Committee’s review, the white papers discussed five broad themes: improper payments, beneficiary protection, audit burden, data management, and enforcement.

Improper payment issues were discussed by 44 percent of health insurers and providers who submitted white papers. Solutions regarding improper payment issues included allowing reimbursement at the outpatient service level if inpatient status is denied or for certain types of complex cases; and clarifying the guidance on or abolishing outpatient observation status. Beneficiary protection was discussed by 57 percent of insurers and providers, many of whom discussed the use of outpatient observation status by hospitals to avoid recovery audit contractor’s (RAC) scrutiny of claims, as well as provider and patient frustration with payer documentation requirements, which may lead them to forfeit certain courses of treatment or care. Furthermore, 60 percent of providers and insurers discussed audit burden issues, and were specifically concerned with the number of audit entities involved, the volume and complexity of payment rules and regulations, whether payment rules are applied consistently and whether audit entities are inappropriately overturning medical necessity decisions, audit entities interactions with providers during the audit process, difficulty communicating with audit entities during the audit process, and financial burden of payment suspensions and the impact on business.

Ninety-four percent of white papers included recommendations to combat waste, fraud, and abuse. Some of the recommendations included were:

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On November 8, 2012, the Centers for Medicare and Medicaid Services (CMS) released its final rule updating the home health prospective payment system for calendar year 2013. In particular, the final rule provides CMS with new options for surveying and sanctioning home health agencies (HHAs). According to the final rule, HHAs will be subject to a standard survey at least once every 36 months, which will be unannounced and performed by the state agency or an accrediting organization. The standard survey’s objective is to review the HHA’s compliance with a select number of conditions of participation (CoP). In addition to the standard survey, HHAs will be subject to a variety of other surveys, which include:

  • Abbreviated standard survey: similar to the standard survey, but concentrates on a smaller number of CoPs determined to be an area of concern; conducted within two months of a specific concern, receipt of complaints, or change in ownership.
  • Extended survey: used to ensure compliance with additional CoPs that were not surveyed in the standard survey, or to review certain policies and procedures in which the surveyors determined the HHA provided substandard care.
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Recently, the Centers for Medicare and Medicaid Services (CMS) released an MLN Matters article stressing the importance of providers preparing and maintaining legible medical record documentation. CMS contractors are required to deny a provider’s claim for repayment if the item or service is not reasonable and medically necessary. Submitting legible medical documentation is critical because CMS review contractors are required to rely on the submitted documentation when determining the medical necessity of the billed item or service.

When submitting medical record documentation to support a claim for payment, providers should ensure that the medical records are complete and legible. In addition, the medical records should include the legible identity of the provider and the date of service. In connection with submitting documents that contain amendments, corrections or delayed entries, CMS specified that providers must comply with the following principles: (1) any amendments, corrections or addenda must be clearly and permanently identified; (2) the author and date must be clearly indicated; and (3) all original content must be clearly identified.

Medicare also requires that providers properly authenticate any service ordered or provided. Such authentication is achieved by including the author’s signature, which can be handwritten or electronic. Contractors will disregard any order in which a signature is missing and will continue their review of the medical record as if the order was never received. When reviewing medical documentation that is not an order, the contractor will consider evidence in a signature log or attestation statement to determine the author’s identity when the original documentation is missing or illegible. However, contractors will not take into consideration a signature attestation for orders.

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A proposed settlement agreement was filed in the federal District Court of Vermont on October 16, 2012 which, if approved, would clarify Medicare coverage for beneficiaries of skilled nursing facilities (SNFs), home health services (HH), and outpatient therapy services (OPT).

Jimmo v Sebelius.pdf

The settlement proposal is the result of Jimmo v. Sebelius, a class action lawsuit brought by a class of Medicare beneficiaries that challenges Medicare contractors’ consistent denials of home health services provided to Medicare beneficiaries because a beneficiary’s condition failed to improve or did not have the possibility for improvement. The home health provider community and Medicare beneficiary supporters have consistently advocated that Medicare contractors’ denial of home health services based on the alleged “improvement standard” was inconsistent with Medicare policy and regulations. The class action lawsuit challenged the “improvement standard” arguing that medically necessary home health services may be provided to Medicare beneficiaries with chronic conditions because although their conditions may not “improve,” the home health services will prevent the beneficiaries from deteriorating further. The proposed settlement, filed in October, includes provisions that would require the Centers for Medicare & Medicaid Services (CMS) to not only revise portions of the Medicare Manuals to clarify that an “improvement” requirement does not exist for medically necessary home health services, but to also educate Medicare contractors and other reviewers on the appropriate standards to apply when reviewing home health services.

Among the provisions of the settlement proposal are revisions to the Medicare Benefit Policy Manual. Revisions would be made to chapters 7, 8, and 15 of the manual, and would clarify coverage standards for SNF, HH, and OPT care to cover patients that have no improvement potential, but still need maintenance care in their current state of health. The clarified standards would allow for coverage of skilled SNF, HH, and OPT services for maintenance of a patient’s condition even if there is no restoration or improvement potential. Currently, most Medicare contractors consistently deny coverage for home health services that are provided to beneficiaries with no restoration or improvement potential. In addition to the revisions to the Medicare manuals, the proposed settlement would include two review periods for the plaintiffs to review changes to the Medicare Benefit Policy Manual before any of the terms are implemented as rules in the Medicare manuals. During the two review periods, 21 and 14 days respectively, Plaintiffs would be allowed to provide comments and suggestions which the Centers for Medicare and Medicaid Services (CMS) must make a good faith effort to utilize.

CMS would also be required under the settlement agreement to engage in an educational campaign about the revisions for providers, suppliers, and contractors. The campaign would include written materials communicated via MLN Matters articles and program transmittals, as well as changes to CMS call center customer service scripts.

In addition to the educational materials, the settlement would also require CMS to hold an open door forum on the manual revisions, as well as hold two national calls. The two national calls, one for providers & suppliers and one for contractors & adjudicators, would communicate the policy clarifications related to the revisions.

The proposed settlement, if approved, would have a major impact on home health providers and Medicare beneficiaries. Consistently during the Medicare appeals process, on behalf of our clients we have advocated against Medicare contractors’ improper denial of home health services because the beneficiary did not “improve” during the certification period. Although we have experienced some success on behalf of our clients, particularly at the Administrative Law Judge hearing stage of appeal, the inconsistent standards applied by lower level Medicare contractors meant that our clients were forced to spend their time and resources appealing improper claim denials. If approved, the proposed settlement could eliminate inconsistent decisions and help facilitate home health care providers’ reimbursement for medically necessary services.
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The American Hospital Association (AHA) sent a letter to the Department of Health and Human Services Inspector General Daniel Levinson on October 24, 2012, urging the Office of Inspector General (OIG) to focus on inappropriate claim denials by Recovery Audit Contractors (RACs). The letter stresses that RAC effectiveness needs to be evaluated and integrity programs need to be streamlined.

According to the AHA’s RACTrac survey data, seventy-five percent of appealed RAC denials are reversed. The AHA asserts that because the RACs are paid on a contingency fee basis, there is a strong financial incentive to deny more claims and increase contingency payments. The implication is that RACs are not monitored effectively and are thus allowed to inappropriately deny claims to increase contingency payments. The letter explicitly states that, “[d]enying payment for an entire inpatient stay is far more lucrative for the contractors than identifying an incorrect payment amount or an unnecessary medical service.”

The AHA further urges that more provider education is needed to improve the rates of payment errors. According to the RACTrac survey, more than half of the respondents indicated that they have received no education from the Centers for Medicare and Medicaid Services (CMS) on avoiding payment errors. The letter stresses that program integrity could be strengthened with provider education.
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