Health Law

Published on: November 6, 2020

HHS Rewards Nursing Homes with $333 Million for Reduced COVID-19 Infections and Deaths

The Department of Health and Human Services (HHS) announced on Wednesday, October 28, 2020, that an additional $333 million in performance payments will be granted to nursing homes that reduced their COVID-19 death and infection rates during August and September of the COVID-19 pandemic. HHS will allocate these payments to more than 10,000 nursing homes that successfully addressed the COVID-19 pandemic and continue to incentivize infection control, training, safety improvements, and protection of the vulnerable elderly population.

These payments represent phase one of the Nursing Home Quality Incentive Program, a five phase, $2 billion incentive program, announced by HHS and the Trump Administration in September 2020. For a nursing home to qualify for payments under the incentive program, current certification as a nursing home or skilled nursing facility (SNF) is required, and the facility must receive reimbursement from CMS. Nursing facilities are also required to submit a minimum of one of three types of data sources to check eligibility and collect important provider information. These data sources include: Certification and Survey Provider Enhanced Reports (CASPER), Nursing Home Compare (NHC), and Provider of Services (POS).

The incentive program will be divided into five phases, with nursing homes receiving September payments early in November and an additional four opportunities to receive incentive payments in the following months. The five phases of the program correspond with five successive monthly periods in which nursing homes can receive incentive payments for reaching certain goals. Specific goals will vary based on local COVID-19 statistics.

Published on: November 4, 2020

Provider Relief Fund for COVID-19 Vaccine Logistics and OIG Review of HRSA

by Wachler & Associates, P.C.

In late October 2020, the Department of Health and Human Services (“HHS”) released guidance on use of Provider Relief Fund (“PRF”) payments to cover costs associated with a potential COVID-19 vaccine. Also, in late October, HHS Office of the Inspector General (“OIG”) announced a review of the Health Resource and Services Administration’s (“HRSA”) administration of the PRF. The PRF is a $175 billion fund created by Congress in the CARES Act and administered by HHS, through HRSA, to provide financial relief to healthcare providers during the COVID-19 pandemic.

A provider who retains a payment from the PRF must agree to certain restrictions on use of the payment. For example, the payment may only be used to prevent, prepare for or respond to coronavirus; to reimburse the recipient for health care related expenses or lost revenues that are attributable to coronavirus; and cannot be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. These restrictions led to speculation about how the payments could be used with regard to a potential COVID-19 vaccine, especially in light of both the required cold-storage and other logistical challenges of the vaccines currently under development as well as the Center for Medicare & Medicaid Services’ (“CMS”) promises to cover the cost of the vaccine.

After CMS announced that it would cover the cost of the vaccine, HHS clarified its position regarding the PRF. Because Medicare, Medicaid, and CHIP will pay for the doses and administration of the vaccine, providers cannot use the PRF payment to reimburse themselves for these expenses. However, PRF payments may be used for COVID-19 vaccine distribution and logistics, including purchase of additional refrigerators, personnel costs to provide vaccinations, and acquiring doses of a vaccine (including transportation costs not otherwise reimbursed). Moreover, funds may be used before an FDA-licensed or approved vaccine becomes available.

Published on: November 2, 2020

Ransomware Attacks Imminent in Healthcare Entities

by Wachler & Associates, P.C.

On October 29, 2020, the Office of Civil Rights (“OCR”) of the Department of Health and Human Services (“HHS”) announced that pursuant to credible information by HHS, the FBI, and the Cybersecurity and Infrastructure Security Agency (CISA), hospitals and healthcare providers are at an imminent risk of a cybersecurity attack. As a response to this looming threat, law enforcement is advising healthcare entities to implement best practices to avoid a cyberattack.

Specifically, CISA, HHA, and the FBI are predicting ransomware attacks. Ransomware is a type of malicious software that denies users access to targeted data. Hackers encrypt the data and hold it hostage until a random is paid. If the ransom is not paid, the hackers will permanently destroy all the data. Unfortunately for healthcare providers, the Department of Treasury recently announced that any entity that pays a ransom to get their data returned will be in violation of the International Emergency Economic Powers Act and will thus be subject to paying steep civil monetary penalties, not to exceed $250,000.

This puts providers in a precarious position, so CISA, the FBI, and HHS have come out with various references and guides to help prevent healthcare providers’ systems from being susceptible to a ransomware attack in the first place. Some of these preventive measures include: regularly backing up data, keeping data backups offline from the network, regularly changing passwords and avoid using the same password for different accounts, using two-step verification where available, regularly updating operating systems as soon as updates are available, and always having antivirus and anti-malware programs regularly scanning and updating.

Published on: October 30, 2020

CMS Announces New Plan to Cover COVID-19 Vaccine Under Medicare

by Wachler & Associates, P.C.

The Trump Administration is slated to announce a plan, in the next few days, to cover the COVID-19 vaccine (when it is approved) under Medicare and Medicaid. According to the Centers for Medicare & Medicaid Services (CMS), it is Congress’s intent that Medicare beneficiaries have access to the vaccine once it is approved, free of cost sharing, to protect the most at-risk populations during the COVID-19 pandemic.

Congress attempted to mandate free COVID-19 vaccine coverage for all Americans in March with the CARES Act. According to the Trump Administration it is the intent that all Americans, including those receiving employer sponsored health insurance, receive the vaccine for free. However, certain hurdles are preventing Medicare and Medicaid beneficiaries from receiving the vaccine cost-free. Under the current rules, Medicare and Medicaid are not permitted to cover the cost of drugs authorized through emergency use protocols. Because this policy cannot be circumvented by Emergency Order, CMS, on October 28, 2020, released an Interim Final Rule with Comment Period (IFC) that established that any vaccine that receives Food and Drug Administration (FDA) authorization, either through an Emergency Use Authorization (EUA) or licensed under a Biologics License Application (BLA), will be covered under Medicare as a preventive vaccine at no cost to beneficiaries. Under the IFC, Medicare would reimburse vaccine administration at a rate of $28.39 for single-dose vaccines. For vaccines requiring a series of doses, Medicare would reimburse $16.94 for the first dose and $28.30 for subsequent doses.

In March, the White House initiated Operation Warp Speed (OWS), a national program to accelerate the development and distribution of a COVID-19 vaccine as well as COVID-19 diagnostics and treatments. The program is a joint operation between the federal government, scientific organizations, and the private sector, with the goal being to produce and distribute 300 million doses of safe and effective COVID-19 vaccines by January 2021. OWS will identify and select the most promising vaccine and other treatment candidates and offer coordinated government support to encourage their development. The OWS program has already invested in more than 5 vaccine candidates that have reached Phase 3 clinical trials to produce as many vaccines as possible. Investing in the vaccine candidates as well as their production will reduce the time it takes for delivery when the vaccines are available. Despite the White House’s desire to expedite vaccine distribution, the FDA will not speed up their approval process and will make solely scientific-based decisions.

Published on: October 28, 2020

Purdue Pharma Settles OxyContin Investigation

by Wachler & Associates, P.C.

On October 21, 2020, Purdue Pharma pled guilty to three criminal charges as part of their $8 billion settlement surrounding the drug OxyContin, a drug that Purdue produced. The charges included: one count of conspiracy to defraud the United States and to violate the Food, Drug, and Cosmetic Act, and two counts of conspiracy to violate the Anti-Kickback Statute. OxyContin was one of the highly addictive opioids that has been blamed for starting the national opioid epidemic, which has been linked to over 470,000 deaths in the United States in the past twenty years.

In addition to admitting that Purdue purposefully impeded the Drug Enforcement Administration, Purdue also admitted to violating the Anti-Kickback Statute. The Anti-Kickback Statute prohibits any physician or other individual from knowingly offering, paying, or soliciting remuneration to induce business payable by Medicare or Medicaid. Through a misleading program, Purdue induced physicians with payments to write more OxyContin prescriptions. Purdue also induced physicians to utilize an electronic health record that would influence the prescription of pain medicine, especially OxyContin.

In addition to admission of the above criminal charges, Purdue also entered a civil settlement with the government. The settlement will resolve the allegation that Purdue caused false claims to be submitted to government programs, in violation of the False Claims Act. It also civilly resolved Anti-Kickback Statute violations.

Published on: October 26, 2020

HHS Expands PRF Payment Use for “Lost Revenue” and Phase 3 Eligibility

by Wachler & Associates, P.C.

On October 22, 2020, the Department of Health and Human Services (“HHS”) announced changes to the allowable uses of a Provider Relief Fund (“PRF”) payment and also expanded the categories of providers eligible to receive a payment in the Phase 3 General Distribution. The PRF is a $175 billion fund created by Congress in the CARES Act and administered by HHS to provide financial relief to healthcare providers during the COVID-19 pandemic.

Acceptance of a PRF payment is conditioned on the acceptance by the provider of certain restrictions on how the payment may be used and the filing of reports in which the provider demonstrates compliance with these restrictions. One such restriction is that the funds may be used for “lost revenue attributable to the coronavirus.” When HHS first released the reporting requirements for PRF payments, it indicates that such lost revenues would be demonstrated by a negative change in year-over-year net patient care revenue from 2019 to 2020. Many saw this as placing an arbitrary cap on the amount of financial relief that struggling providers could receive from the PRF. In response to feedback, HHS has amended this requirement. Regarding use of the PRF payment to cover lost revenue attributable to coronavirus, HHS now requires that, “after reimbursing healthcare related expenses attributable to coronavirus that were unreimbursed by other sources, providers may use remaining PRF funds to cover any lost revenue, measured as a negative change in year-over-year actual revenue from patient care related sources.” (emphasis added).

HHS also announced expansion of the categories of providers who are eligible to apply for payments as part of the Phase 3 General Distribution of the PRF. The PRF previously included $30 billion Phase 1 and $20 billion Phase 2 General Distributions to eligible providers, primarily those that bill Medicare or Medicaid. The $20 billion Phase 3 General Distribution, announced October 1, 2020, was intended to provide financial relief to for providers who were either excluded from the initial two phases, or who were eligible under the first two phases but require additional funding to cover ongoing financial losses accrued during the pandemic. On October 22, 2020, HHS announced it was expanding Phase 3 eligibility to include the following providers, regardless of whether they accept Medicare or Medicaid:

Published on: October 19, 2020

MACs Resuming Post-Payment Review

by Wachler & Associates, P.C.

Medicare Administrative Contractor (“MAC”) CGS announced that beginning in October 2020, it would conduct post-payment reviews of hospice general inpatient (GIP) claims. Specifically, the reviews will be conducted if the claims were for 7 or more days of service, utilized revenue code 0656, and were submitted before March 1, 2020. These claims are particularly being targeted by CGS because GIP claims encompass a level of care intended for short term interventions, wherein symptoms can be controlled within 48 to 72 hours from the GIP setting. As such, if the claims were for 7 days or longer, CGS will flag the claim for review.

Common reasons for a denial following a hospice post payment review include: (1) Documentation does not indicate the patient had a terminal prognosis of 6 months or less; (2) Basic patient information is missing from the Notice of Election; (3) The physician narrative statement is not a true clinical narrative; (4) Failure to meet Face-to-Face requirements; and (5) The documentation did not support that the GIP level of care was reasonable or necessary.

An uptick in post-payment reviews leading to full-blown audits is to be expected for all provider types. As of August 3, the Centers for Medicare & Medicaid Services (“CMS”) announced that its suspension of Medicare claim audits would be lifted. Due to the 2019 Novel Coronavirus (“COVID-19”), CMS had suspended most audits on March 30, specifically pre- and post-payment reviews conducted by MACs. As such, providers should be vigilant about following their compliance plans. Not only are Medicare audits resuming, but private payors have also resumed audits. Specifically, laboratories are expected to see a large amount of private payor audits surrounding COVID-19 testing.

Published on: October 16, 2020

White House will not Delay Hospital Price Transparency Requirements

by Wachler & Associates, P.C.

Recently, the White House announced it will not postpone implementation of the hospital price transparency rule, set to take effect on January 1, 2021. Based on President Trump’s Executive Order on Improving Price and Quality Transparency in Healthcare, issued on June 24, 2019, CMS released the “Ambulatory Surgical Center (ASC) Price Transparency Requirements for Hospitals to Make Standard Charges Public Final Rule.” The rule allows patients to access hospital pricing information easily so that they have an idea of potential charges prior to receiving a bill and thus can shop for lower cost services.

Under the rule, hospitals are required to publish negotiated rates, gross charges, and discounted cash prices in a public, online format. The data must be free, in an easily accessible format, include a description of each item or service, and be updated yearly. Furthermore, hospitals must create a minimum of 300 “shoppable” healthcare services and display them in a consumer-friendly manner. Shoppable services are services that are often offered by multiple providers, so patients can research ahead of time and compare these services among various providers and make informed decisions on quality and cost. The goal is that as consumers have more price transparency and are more able to shop for their healthcare services, competition among hospitals and insurance providers will potentially increase and reduce healthcare costs as a result.

Hospitals oppose the transparency rule, claiming that it violates hospitals’ First Amendment rights and that CMS does not have the power to require hospitals to disclose their negotiated prices. Hospitals also claim the rule will increase administrative work, requiring more compliance costs. Although the American Hospital Association filed suit over the rule, a federal judge upheld it in June, concluding that CMS can mandate that hospitals reveal their negotiated prices. The AHA appealed the decision and oral arguments are scheduled for October 15.

Published on: October 14, 2020

Hospitals Must Report COVID Data by December 9 or Risk Medicare/Medicaid Termination

by Wachler & Associates, P.C.

On October 6, 2020, the Centers for Medicare & Medicaid Services (CMS) released guidance giving hospitals until December 9, 2020 to comply with COVID-19 reporting requirements or risk termination from the Medicare and Medicaid Programs. CMS also released reporting requirements for influenza data, which are currently optional but which CMS plans to make mandatory in the coming weeks.

The COVID-19 reporting requirements were initially published in guidance by the Department of Health and Human Services (HHS) on July 29, 2020 and were incorporated into a Final Rule on September 2, 2020. Hospitals are required to report, on a daily basis, several data elements relating to their COVID-19 response. These data points include inpatient bed and ICU bed capacity and occupancy, total number of ventilator and total number of ventilators in use, total suspected or confirmed positive COVID-19 patients, numbers of COVID-19 patients receiving certain treatments, emergency department overflow, and the previous day’s COVID-19 deaths. CMS indicates this information is used to coordinate the federal response to the virus.

Beginning October 7, 2020, hospitals that are not in compliance with the reporting requirements or that are not reporting currently began receiving notifications from CMS. These letters gave hospitals three weeks to bring their reporting into compliance. Hospitals that do not come into compliance will continue to receive a series of enforcement letters. On December 9, 2020, hospitals that have been out of compliance with the reporting requirements for 14 weeks (beginning September 2, 2020, the release of the Final Rule) will be sent by CMS a letter terminating them from the Medicare and Medicaid programs. The termination will be effective within 30 days of the date of the notification of termination. Any terminated hospital will have the right to appeal, the ability come into compliance to avoid termination, and the opportunity to avail themselves of a 30-day reasonable assurance period under 42 CFR § 489.57. CMS indicates that the 14-week compliance window only applies to current enforcement. Future enforcement actions related to these reporting requirements will be subject to a shorter process.

Published on: October 12, 2020

Provider Relief Fund Introduces Phase 3 General Distribution

by Wachler & Associates, P.C.

At the beginning of the 2019 Novel Coronavirus (“COVID-19”) pandemic, Congress created the Provider Relief Fund (“PRF”) through the CARES Act in order to help providers who were financially impacted by COVID-19. In total, Congress approved $175 million for the PRF, to be distributed by the Department of Health and Human Services (“HHS”). Up until October 1, 2020, there were two phases for general funding, and multiple targeted allocations. The Phase 1 General Distribution allocated $30 billion to eligible providers, and the Phase 2 General Distribution allocated $20 billion to eligible providers. In addition to those general distribution, HHS also provided several targeted allocations, including to areas which were highly impacted by COVID-19, rural healthcare providers, and skilled nursing facilities

On October 1, 2020, HHS announced it would be allocating an additional $20 billion as its Phase 3 General Distribution. This Phase 3 General Distribution is intended for providers who were either excluded from the initial two phases, or who were eligible under the first two phases but require additional funding to cover ongoing financial losses accrued during the pandemic. The application period for this funding opened on October 5, 2020 and will end on November 6, 2020. HHS urges providers to apply as soon as possible. The applications are accepted on a rolling basis, so HHS asks that providers not apply the last day or week that the application period is open.

The following providers are eligible for Phase 3 General Distribution funding: (1) Providers who have previously received, rejected or accepted a General Distribution PRF payment; (2) behavioral health providers, including those that have previously received funding; and (3) healthcare providers that began practicing January 1, 2020 through March 31, 2020. All providers who receive payments must attest to receiving the payment and accept the associated Terms and Conditions.