Articles Posted in Compliance

In May and June 2010, the Office of Inspector General (OIG) performed unannounced site visits at independent diagnostic testing facilities (IDTF) in the Miami and Los Angeles areas. During these visits, OIG discovered that IDTFs in both areas did not comply with certain Medicare standards. For instance, several of the facilities were found to not have a physical facility at the location on file with CMS, as well as other facilities not being open during business hours. Noncompliance with these Medicare standards could lead to the revocation of the IDTF’s Medicare billing privileges along with a number of other administrative actions.

IDTF services have been determined to be vulnerable to fraud and abuse. In 1997, OIG conducted site visits where it discovered that twenty percent of IDTFs were not at the filed CMS location. Additionally, OIG estimated that $71.5 million in improper Medicare payments were disbursed to IDTFs in 2001.

During the unannounced site visits, OIG found that 27 of the 92 Miami-area IDTFs and 46 of the 132 Los Angeles-area IDTFs failed to comply with certain Medicare standards. As a result of these findings, OIG made a number of recommendations to CMS including that CMS periodically conduct announced site visits to IDTFs, take actions against noncompliant IDTFs identified by the OIG site visits, and to immediately stop payments to IDTFs whose billing privileges are being revoked. The OIG also recommended that CMS impose a moratorium on the enrollment of IDTFs in the Los Angeles area. There was no similar recommendation for IDTFs in the Miami area because of the existing special enrollment project that screens new enrollees.

On July 28, 2011, the U.S. Department of Health and Human Services, Office of Inspector General (OIG) issued an unfavorable advisory opinion regarding two proposals by a supplier of medical supplies, equipment and related services (Supplier) seeking to enter into a contract with a county-operated skilled nursing facility (SNF) to provide such items and services.

Supplier provides medical supplies and equipment to SNFs along with providing related services (e.g. emergency delivery of medical supplies, inventory control and customized packaging). Supplier bills Medicare directly for supplies and equipment covered by Medicare Part B (covered items). For items not covered by Medicare (non-covered items), Supplier bills the SNFs directly and includes a markup which covers the costs of related services, overhead and profit. Supplier acknowledged that the amount paid by Medicare Part B for the covered items is enough to cover the costs related to the services provided to the SNF in connection with the non-covered items.

The SNF solicited bids from suppliers to be the exclusive supplier of covered items and related services to the SNF. The SNF also required all bids to include pricing for the non-covered items and related services. The SNF proposed to purchase the non-covered items at its option. Supplier was one of the bidders and the OIG analyzed two proposed arrangements that Supplier sought to use in the bidding process.

On July, 25, 2011, the U.S. Department of Health and Human Services, Office of the Inspector General (OIG) issued a favorable advisory opinion regarding an arrangement under which a company (Requestor), who provides administrative services to the State’s Medicaid program, will disburse pay-for-performance payments to physicians and dentists participating in the state’s Medical Home Program.

The Medical Home Program is the state’s enhanced primary care case management and disease management program for a number of Medicaid beneficiaries. Requestor, through a competitive bidding process, was awarded the contract to administer the disease management program on behalf of the state. The program includes a pay-for-performance program whereby Requestor is required to disburse checks, drawn from Requestor’s own bank account, to physicians and dentists who participate in the program. The payments are funded by the state’s Medicaid program, and Requestor has no discretion to revise the amount of the payments. Furthermore, the state clearly identifies itself as the payment source to the providers, as well as indicates that the Requestor is the administrator of the pay-for-performance program.

The OIG started its analysis by emphasizing that the advisory opinion only addresses the narrow question of whether Requestor’s disbursement of pay-for-performance program payments to physicians and dentists on behalf of the state implicates the anti-kickback statute. The OIG concluded that the arrangement did not implicate the anti-kickback statute and cited four reasons for its conclusion:

The Department of Health and Human Services (HHS) recently issued a report to Congress on a Medicare Ambulatory Surgical Center (ASC) Value-Based Purchasing (VBP) Implementation Plan, as required by the Patient Protection and Affordable Care Act (PPACA).

In this report, HHS sets forth a “roadmap” for ASC VBP implementation which discusses the various issues which must be considered. While the current legislation only gives HHS the authority to impose penalties for failure to report, HHS’ plan presumes that Congress will also grant authority to award better outcomes, value and innovation. The report indicates that the failure to report data could result in a 2% reduction, while, subject to the granting of Congressional authority, ASCs meeting quality targets would see increases in reimbursement. The program may also be structured to reward low performers who demonstrate improvement.

In structuring the ASC VBP, HHS will look to the current quality reporting programs for hospitals and physicians.

On July 14, 2011, the Department of Health and Human Services Office of Inspector General (OIG) issued a favorable advisory opinion regarding the use of a preferred hospital network as part of Medicare Supplemental Health insurance (Medigap) policies. Under the proposed arrangement, the requestors who offer Medigap insurance policies, would establish a preferred provider organization (PPO) comprised of certain hospitals. The PPO network would allow the requestors to receive discounts on Medicare inpatient deductibles for policyholders. Also under the proposed arrangement, the requestors would provide a $100 premium credit to policyholders who opt to use a network hospital for an inpatient stay. Any savings realized by the requestors would be filed with the state insurance departments accountable for regulating the premium rates charged by Medigap insurers.

The OIG determined that the proposed arrangement would implicate both the anti-kickback statute and Section 1128A(a)(5) of the Social Security Act which provides for the imposition of civil monetary penalties for providing remuneration to beneficiaries. However, because of several factors, the OIG concluded that the proposed arrangement would present a low risk of fraud and abuse. Although not directly on point, the OIG looked at the safe harbor for waivers of beneficiary coinsurance and deductible amounts, as well as the safe harbor for reduced premium amounts offered by health plans.

The OIG concluded that the discounts offered on inpatient deductibles by the network hospitals would present a low risk of fraud or abuse for the following reasons:

With the rise of the health-related mobile application market, the Food and Drug Administration (FDA) proposed its first-ever regulations on the industry. The regulations target three types of applications that require the FDA’s approval: an application that acts as an accessory to a regulated medical device, turns the mobile technology into a regulated medical device or makes recommendations pertaining to a patient’s treatment or diagnosis. The FDA believes that just because a medical device is used with a cellular phone, it should still face the same regulations as its traditional non-mobile counterpart.

The FDA plans to collect feedback over a 90 day period from manufacturers and other health care providers, and until this happens the regulations will not take effect. According to the Washington Post, some concerns have already surfaced in regards to the proposed regulations, such as the FDA’s ability to monitor the technology when the mobile industry faces such rapid changes. Another concern is the willingness of investors and companies to back these products when facing this sort of regulatory uncertainty. Jeff Shuren, director for the FDA’s Center for Devices and Radiological Health, said that the FDA will likely take a more subtle approach in reviewing the mobile applications due to the speeding change of the industry, such as focusing on the design of the product and eliminating the requirement of clinical trials.

If you have any questions relating to mobile application compliance with FDA regulations or any other compliance issues, please contact a Wachler & Associates attorney at 248-544-0888.

The face-to-face requirements for Medicaid home health services will follow a similar timeframe to that set forth for Medicare. The timeframes were established by the Patient Protections and Affordable Care Act (PPACA), and CMS intends to enforce the regulation. A proposed rule creates the requirement that physicians document the existence of a face-to-face encounter with Medicaid beneficiaries within 90 days prior to the ordering of home health services. However, in circumstances where it is deemed not to be possible to meet the 90 day requirement, the face-to-face encounter would be satisfied by an encounter with the beneficiary occurring within 30 days after the start of home health services. Additionally, states that currently allow use of telehealth or telemedicine when delivering services under Medicaid will remain able to use these techniques to fulfill the face-to-face encounter.

If you have any questions pertaining to the Medicare or Medicaid face-to-face requirement, telemedicine rules or any other regulations under PPACA, please contact a Wachler & Associates attorney at 248-544-0888.

In collaboration with Kaiser Health News, the New York Times recently reported on the concerns over the rising costs associated with hospice care. While Medicare is praised for its reimbursement of providers for hospice services because of the medical and emotional support hospice gives to dying patients, there are concerns that hospice is being misused. According to the article, four in 10 Medicare beneficiaries use hospice services before they die and the cost of hospice care has risen from $2.9 billion in 2000 to $12 billion in 2009.

In response to the growing anxiety that hospice is being abused, the Office of Inspector General of the Department of Health and Human services examined the provision of hospice services in nursing homes. The OIG found that hospices routinely failed to document whether the patients belong in hospice care or that the patients received the care they were entitled to. This discovery prompted the OIG to investigate any unusual patterns in hospice stays.

In light of this recent scrutiny of hospice costs, hospice providers should take extra precautions with regard to compliance programs and should consider conducting self-audits to identify potential risk areas within their organizations.

In contradiction of President Obama’s campaign promises to let states create their own policies regarding medical marijuana use, the Obama administration released a memo approving federal prosecution of anyone in the business of cultivating or supplying marijuana to patients, whether or not they comply with state law. The original guidelines that were set in October 2009 were put in place as a way to spare seriously ill patients and their caregivers from prosecution. However, the memo stated that these guidelines caused an increase in the commercial cultivation, sale, distribution and use of medical marijuana, in which many of these activities casts suspicion on whether it is truly for medical purposes. In the memo, Deputy Attorney General James Cole stated, “persons who are in the business of cultivating, selling, or distributing marijuana, and those who knowingly facilitate such activities, are in violation of the Controlled Substances Act, regardless of state law.”

There have already been raids on suppliers in the 16 states where medical marijuana is legal under state law. Additionally, officials in 10 states have recently received warnings about possible prosecution if they authorized marijuana-selling dispensaries. These warnings have caused states, such as Washington and Rhode Island, to abandon plans that would legalize medical marijuana dispensaries. Other states, including Delaware and Vermont, have decided to continue in their efforts to legalize medical marijuana by approving a number or dispensaries for patients in need of the drug.

If you are a provider with questions regarding participation in the certification of patients for medical marijuana usage and compliance with state or federal law, including compliance with the Michigan Medical Marihuana Act or the Michigan Medical Marihuana Program, please contact at Wachler & Associates attorney at 248-544-0888.

The University of California at Los Angeles Health System (UCLAHS) has agreed to settle potential HIPAA violations stemming from an investigation conducted by the U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR). UCLAHS has agreed to pay $865,500, along with implementing a plan of correction to ensure future compliance with HIPAA.

The investigation was sparked by two separate complaints filed with OCR from two celebrity patients. Allegedly, UCLAHS employees repeatedly viewed the electronic health information of these patients without the necessary authorization. OCR also discovered that the employees looked at the electronic protected health information of a number of other patients over a span of three years.

Under HIPAA, entities must reasonably restrict access to patient information to those employees who have a legitimate work-related reason to view the information. Furthermore, entities are required to sanction employees who have violated these policies. OCR maintains a firm stance that entities should properly train all employees about the current laws protecting patient health information and should have policies in place to ensure compliance with these policies.