Articles Posted in Compliance

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AARP recently unveiled an online tool aimed at helping senior citizen beneficiaries fully understand their quarterly health care statements. This tool will aid in fully informing seniors of all charges the Medicare program has paid, along with dates, billing codes and a description of the medical service. The AARP website urges senior citizens to use this tool to identify errors on their bill as well as to spot fraud.

CMS has made numerous efforts over the years to enlist the help of Medicare beneficiaries to detect and report Medicare Fraud.

An effective compliance program is the best defense against billing errors that can lead to complaints or allegations of Medicare fraud by beneficiaries. If you have any questions regarding Medicare billing or development of a compliance program, please contact a Wachler & Associates attorney at 248-544-0888.

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The Office of Inspector General (OIG) recently reported that it believes Medicaid is being inappropriately billed for certain nonmedical services (e.g. bathing, dressing and light housework). As a result of two recent audits, OIG has requested that North Carolina and Washington refund the federal government more $61 million resulting from improper Medicaid claims. It was discovered that these claims lacked the necessary documentation. Additionally, it was determined that the claims weren’t included in the states’ plan of care, were provided without medical supervision and the qualifications for the in-home providers could not be verified.

If you have any questions relating to home health compliance or Medicaid/Medicare billing requirements, please contact a Wachler & Associates attorney at 248-544-0888.

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A sleep medicine and durable medical equipment company, Areté Sleep LLC, Areté Sleep Therapy LLC, and Areté Holdings LLC will pay a $650,000 settlement pursuant to federal authorities discovering the company to have submitted false claims to Medicare over a seven year span.

According to federal prosecutors, the false claims were for diagnostic tests performed by unlicensed/uncertified technicians. These licenses/certifications are required by Medicare rules and regulations. Areté filed for Chapter 11 bankruptcy in early 2011 and has agreed to pay the settlement with the proceeds from its asset sales.

If you have any questions or concerns regarding compliance with Medicare rules and regulations, or if you have questions regarding compliance issues associated with billing for sleep studies and related DME, please contact a Wachler and Associates attorney at 248-544-0888.

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On June 1, 2011, the Office of Inspector General (OIG) announced that it expects to recover an estimated $3.4 billion in connection with its Medicare and Medicaid investigations, audits, and reviews. The amount was accrued between October 2010 and March 2011 in the form of penalties, fines, and settlements. Of the estimated $3.4 billion in recoveries, $222 million stems from audits while $3.2 billion arose from 349 criminal and 197 civil actions. The OIG featured the following items in its Semiannual Report to Congress:

•· 100 healthcare professionals were arrested for their participation in various healthcare-related crimes (e.g. violating the anti-kickback statute and money laundering) which resulted in $225 million in false billing.

•· Two drug companies, GlaxoSmithKline and Allergan USA, agreed to pay $750 million and $600 million, respectively, to resolve various charges.

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The Centers for Medicare & Medicaid Services (CMS) intends to roll out its Part D RAC program during the third quarter of 2011. In implementing the program, CMS has contracted with ACLR Strategic Business Solutions to be the Part D recovery audit contractor. This company has already recovered tens of millions of dollars through its auditing process for government contractors. John Spiegel, director of the Medicare Program Integrity Group, stated that “CMS is working on business planning, technology requirements, staffing and communications initiatives to achieve the program goals.” He also mentioned that CMS intends to implement a website that will provide additional Medicare Parts C and D RAC information.

Medicare Part D plans and sponsors should consider conducting internal audits and implementing compliance programs at this time in order to be in the best position to avoid or defend against a RAC audit.

If you need assistance in preparing for, or defending against Part D RAC audits, or implementing a corporate compliance program geared toward identifying and correcting potential risk areas for Part D RAC audits, please contact a Wachler & Associates attorney at 248-544-0888.

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The Office of the Inspector General issued a favorable opinion regarding an affiliation between an Air Force medical group and a community hospital. The arrangement involves an Air Force medical group (medical group) located on a military base and a community hospital located near the base. As a result of hurricane Katrina, the medical group no longer has the patient population to maintain certain residency and training programs. The community hospital has a need for certain physician specialists. Under the proposed arrangement, certain specialists from the medical group would treat the hospital’s patients; these patients would include Medicare/Medicaid beneficiaries. The medical group specialists would utilize hospital equipment and facilities to treat patients and be covered under the hospitals malpractice insurance.

The specialists will only provide services if the hospital has an identified need for a particular specialists’ services. The hospital has determined that the costs associated with this arrangement would be offset by the expenses that would be incurred by bringing in a physician specialist from a different source. The services provided by the medical group specialists will be free to the patients. The hospital will bill the appropriate party for any technical fees that are appropriate given the services provided.

The OIG noted that the arrangement’s risk of violating the Anti-Kickback statute is low for the following reasons: the medical group physicians do not bill for their services; the hospital rarely serves as a referral source for the medical group; this arrangement is in the best interest of the public; the referrals are not required to be to medical group physicians; and the arrangement’s costs are offset by expenses avoided by utilizing the arrangement. The OIG stated that since federal healthcare program beneficiaries were not improperly influenced under the arrangement, civil monetary penalties would not be applicable. Specifically, the OIG looked to the following factors: there is no advertisement that the medical groups physicians services are free of charge; the hospital bills patients for technical fees; and the patients come to the hospital fully expecting to pay for the services and it is unlikely that learning the services are free after the fact will induce patients to solicit these services.

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A sleep medicine and durable medical equipment company, Areté Sleep LLC, Areté Sleep Therapy LLC, and Areté Holdings LLC will pay a $650,000 settlement pursuant to federal authorities discovering the company to have submitted false claims to Medicare over a seven year span.

According to federal prosecutors, the false claims were for diagnostic tests performed by unlicensed/uncertified technicians. These licenses/certifications are required by Medicare rules and regulations. Areté filed for Chapter 11 bankruptcy in early 2011 and has agreed to pay the settlement with the proceeds from its asset sales.

If you have any questions or concerns regarding compliance with Medicare rules and regulations, or if you have questions regarding compliance issues associated with billing for sleep studies and related DME, please contact a Wachler and Associates attorney at 248-544-0888.

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ACO Start-Up Costs

According to a study conducted by the American Hospital Association, the costs associated with starting an accountable care organization (ACO) range from $5.3 million to $12 million. The study was based on a review of the start up costs of four ACOs currently in existence. Additionally, it was discovered that the yearly operating costs in connection with the ACOs were equal to the start up costs, if not more.

The study highlighted several costs that were associated with starting an ACO. One of these costs was incurred by hiring staff to coordinate the ACO’s activities, such as risk management professionals and workers hired to develop and manage a communication network between providers. Another start up cost incurred was that included in recruiting physicians, which ranged from $100,000 to $450,000 per physician. Next, the study found that ACOs spent nearly $3 million a year developing post-acute care networks (i.e. nursing homes, rehab services, and hospice care). Equally expensive were the costs associated with the implementation of EHRs, which cost up to $2.9 million along with an additional $2.5 million for starting up an HIE, plus annual operating costs.

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Over $365 Million in Improper Payments Identified By RACs Since October 2009

CMS recently reported that RACs have identified $312.2 million in overpayments from October 2009 through March 2011. During the same period, $52.6 million in underpayments were identified. While these figures are well below the over $1 billion in improper payments identified during the demonstration program, they are expected to increase. RACs are currently reviewing large numbers of DRGs in coding and medical necessity reviews and it is anticipated that these will result in identification of more improperly billed claims. The first quarter of 2011 accounted for $184.6 million in identified improper payments and these trends can be expected to continue for the foreseeable future.

CMS also released the top approved issue for each RAC region. The top issue for RAC Region A is Ventilator Support of 96+ hours; the top issue for RAC Region B is Extensive Operating Room Procedure Unrelated to Principal Diagnosis; the top issue for RAC Region C is Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Provided During an Inpatient Stay; and the top issue for RAC Region D is Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Provided During an Inpatient Stay.

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On May 16, the Office of the Inspector General for the Department of Health and Human Services released the report from its audit of physician therapy services provided during home health episodes. The report outlines the OIG’s findings that the Centers for Medicare and Medicaid Services (CMS) made duplicate payments for the same home health services. Specifically, the payments for the same services were made to the physician under Medicare Part B and then to the home health agency under the Medicare home health prospective payment system (HH PPS). The OIG recommended that CMS eliminate duplicate payments by adjusting the HH PPS rate to exclude physician-provided therapy services or by making physician therapy services subject to the consolidated billing requirement. CMS has agreed with the OIG’s recommendations and has indicated that it will take action to address the recommendation.

For more information on proper billing practices for home health services, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888.

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