Health Law

Published on: July 2, 2018

Chronic Care Act Allows Medicare to Provide More Benefits for the Chronically Ill

Recently, Congress enacted a law offering additional benefits to Medicare beneficiaries with various chronic illnesses, such as diabetes, complications from injury, and heart failure. The Creating High-Quality Results & Outcomes Necessary to Improve Chronic (CHRONIC) Care Act adds coverage to nutrition, transportation, and housing in order to be proactive in the prevention and minimization of chronic illnesses.

The new measures will only apply to individuals with a Medicare Advantage (MA) plan, which is a HMO or PPO plan offered by private companies and approved by Medicare. According to Title III of the Act, the changes are part of a MA value-based insurance design, allowing MA plans to create structures that vary benefits, cost-sharing, and supplemental benefits offered to enrollees with qualifying chronic diseases. This insurance design model is being tested in a number of states, including Michigan. The model approach will inform policymakers of the services that offer the most benefits to different populations, which may prompt policymakers to expand those benefits to people in the rest of Medicare.

MA plans will include services such as in-home assistance with bathing, nursing, and medication; supervised housing for those with dementia; wheelchair ramps; transportation to doctor’s appointments; meal delivery; and expanded telehealth. The Act also expands telehealth for Accountable Care Organizations (ACOs) by allowing the patients’ homes to be designated as an originating site, and by eliminating the usual telehealth geographical limitations for ACOs. Beneficiaries dealing with end-stage renal disease (ESRD) will now be able to receive in-home dialysis via telehealth so long as the individual receives a face-to-face clinical assessment once every three months.

Published on: June 27, 2018

House Passes Bill to Increase Opioid Addiction Treatment Access

by Wachler & Associates, P.C.

On June 22, 2018, the House of Representatives passed “one of the most significant congressional efforts against a drug crisis in our nation’s history,” according to Representative Greg Walden (R-Oregon). The legislation makes it easier for providers to treat patients suffering from Substance Use Disorder (SUD) and Opioid Use Disorder (OUD). The bill passed with strong bipartisan support, with a vote of 396 to 14. The final bill, titled the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act, combined 58 smaller bills to create one comprehensive package that includes improvements to Medicaid, Medicare, and other various ways to address the opioid crisis.

The bill expands the use of telehealth services for addiction treatment and increases the accessibility to providers offering medication-assisted treatment. In addition, the Institutes for Mental Disease exclusion, a law which blocked Medicaid from funding inpatient stays in mental/behavioral health facilities, was partially repealed under the bill, so that now state Medicaid programs may cover up to 30 days of inpatient care for eligible individuals with OUD. Also, privacy protections for addicts that forbade any physician or other medical provider from sharing a patient’s medical history with another practitioner were lessened. Thus, the Department of Health and Human Services (HHS) must establish hospital protocol that makes doctors aware of a patient’s addiction history in order to prevent accidental opioid prescription to patients suffering from OUD.

Aside from those key provisions, the bill also addresses other solutions to the opioid crisis. It is expanding Medicare coverage for OUD by adding methadone clinics to the program, expanding access to Medicaid for former foster youth and those transitioning out of incarceration, and increasing money for states to fund more Medicaid providers who treat OUD. Furthermore, the bill will increase the availability of naloxone (a rescue shot for opioid overdoses), ramp up the fight against fentanyl and other synthetic drugs, and order the Food and Drug Administration to explore non-addictive pain treatments.

Published on: June 19, 2018

Chapter 2A of Michigan Business Corporations Act Amended to Clarify Inconsistencies

by Wachler & Associates, P.C.

On June 24, 2018, amendments to the Professional Service Corporation Provisions (Chapter 2A) of the Michigan Business Corporations Act (BCA) will be in effect. In 2013, the Professional Service Corporation Act was incorporated into the body of the BCA as Chapter 2A, but was drafted in a way that created conflicting language between multiple provisions. According to Justin Klimko from the Corporate Laws Committee (Business Law Section), the main goal of amending Chapter 2A this year is to clarify that entities may be shareholders in Professional Corporations (PCs) if all of their owners are properly licensed. The amendments also clarify when individuals must sever their relationships with a PC.

The inconsistent language in Chapter 2A of the BCA created confusion as to whether entities may or may not be shareholders of PCs. Various sections were amended to address the discrepancies.

Under the previous language, PCs were prohibited from issuing shares “to anyone other than an individual who is licensed…” This language was inconsistent with other sections of Chapter 2A because it seemed to exclude entities. Thus, the new amendments resolve this contradiction by clarifying that a PC may issue shares to “an entity that is directly or beneficially owned only by persons that are licensed persons in 1 or more of the professional services provided by the professional corporation.” Furthermore, the amendments added to the definition of “licensed person” to allow the entity itself to be a licensed person if the entity is licensed to practice a professional service.

Published on: May 24, 2018

Rebranding of the Medicare and Medicaid EHR Incentives Program

by Wachler & Associates, P.C.

On May 7, 2018, the Centers for Medicare and Medicaid Services (“CMS”) released a proposed rule that would rebrand the current Medicare and Medicaid Electronic Health Records (“EHR”) Incentives program into the Promoting Interoperability program (“PI”).

The EHR incentives program, created in 2011, encouraged eligible providers to adopt, implement, upgrade and demonstrate meaningful use of certified electronic health record technology (“CEHRT”). This program awarded over 544,000 health care providers with payment by February 2018.

With the great success of the incentives program, CMS is proposing changes that would create more transparency between patients and providers through greater access to health care information. To relieve burden to patients, and increase the ability to exchange health information among providers and patients, sharing and extracting files across systems is a new CEHRT requirement. Moreover, it will support increased patient access to their personal health information through secure email transmissions. The proposed PI program would also provide patients access to hospital price information via the internet.

Published on: May 15, 2018

OIG Issues Report on Toxicology Overpayments

by Wachler & Associates, P.C.

Urine drug testing is medical protocol for patients prescribed opioid drugs in order to monitor compliance and expose possible drug abuse or diversion. In the wake of the opioid crisis, there has been an increase in the frequency and cost of urine drug tests, resulting in a corresponding increase in spending by Medicare and private insurance on such tests. Between 2011 and 2014, spending on urine drug screens and genetic tests by Medicare and private insurance quadrupled to an estimated $8.5 billion per year.

The increase in the cost of urine drug tests is attributable to more expensive and high-tech ways of running the tests. Presently, laboratories are moving away from simple urine screenings and installing machines for urine drug tests. There is a financial incentive attached to machine tests; under Medicare rules, each drug tested for within a single specimen validity test may be billed individually.

The spike in reimbursement by Medicare and private insurance has caught the attention of the federal government. In 2010, the Centers for Medicare & Medicaid Services (“CMS”) imposed stricter rules on billing for simple urine screens; however, these rules do not cover machine testing. In addition, in 2011, the federal government settled with Millennium Health, LLC, one of the largest urine drug testing laboratories in the United States, for $256 million after it was alleged to have billed medically unnecessary urine drug and genetic tests.

Published on: April 11, 2018

OIG Issues Report on Outpatient PT Overpayments

by Wachler & Associates, P.C.

In March of 2018, the Department of Health and Human Services Office of the Inspector General (OIG) issued a report titled “Many Medicare Claims for Outpatient Physical Therapy Services Did Not Comply With Medicare Requirements” [summary] (the “Report”) identifying millions of dollars of overpayments for outpatient physical therapy services and signaling potential for increased governmental scrutiny to practitioners within the discipline.

The Report revealed that an audit found $367 million in improper payments for outpatient physical therapy services between July 1 and December 31, 2013. The finding was based upon data extrapolation, in which the OIG reviewed 300 sample claims and determined that 184 of the claims (61.33%) did not comply with Medicare requirements for medical necessity, documentation, or coding.

The OIG directly faulted the Centers for Medicare and Medicaid (CMS) for the overpayments, finding that the current controls in place are insufficient to prevent improper payments to providers. The OIG issued three recommendations to CMS in order to prevent future incorrect expenditures:

Published on: April 11, 2018

Court Orders AHA to Provide Strategies for Eliminating Medicare Appeals Backlog

by Wachler & Associates, P.C.

On March 22, 2018, the latest development in American Hospital Association (AHA) v. Azar (formerly referred to as AHA v Burwell) emerged as Judge Boasberg issued an order to have the AHA develop strategies to assist the Department of Health and Human Services (HHS) in reducing the Medicare appeals backlog. The request comes in response to a lack of effective action by HHS to reduce the number of backlogged appeals.

Major events in the case include:

May 22, 2014: Initial complaint filed by the AHA, alleging that HHS was violating Federal law by failing to process appeals within the legally-mandated timeframes. The problem was and continues to be highlighted at the administrative law judge (ALJ) level of appeals, where wait times for the processing of claims regularly takes years;

Published on: January 22, 2018

DOJ and Kmart Reach $32.3 Million Settlement to Pharmacy False Claims Suit

by Wachler & Associates, P.C.

On December 22, 2017, the U.S. Department of Justice (DOJ) announced a $32.3 million settlement (the Settlement) with Kmart Corporation, to settle False Claim Act (FCA) allegations against the company. The Settlement was based upon allegations that Kmart’s in-store pharmacies misled government payers by knowingly failing to report discounted prices and representing its drug prices as being higher than what was offered to the general public. Per the Settlement, Kmart does not admit to any wrongdoing.

The Settlement arises from a whistleblower suit filed in 2008. The suit alleged that Kmart failed to report discounted drug prices to Medicare Part D, Medicaid, and TRICARE. To determine reimbursement rates for medications, the government generally relies on a pharmacy’s “usual and customary prices” charged to consumers. According to the allegations, Kmart offered discounts to certain cash-paying customers but did not disclose those discounted prices when reporting its pricing to the government. Kmart argued that the special discount prices offered to a limited consumer base did not constitute “usual and customary” costs, but this argument was rejected in favor of increased transparency by pharmacies.

The Settlement sends a message to pharmacies regarding the importance of transparency, and that even prices offered only to a limited number of patients should be reported to the government. According to Acting Assistant Attorney General Chad Readler of the DOJ, “This settlement should put pharmacies on notice that there will be consequences if they attempt to improperly increase payments from taxpayer-funded health programs by masking the true prices that they charge the general public for the same drugs.” The whistleblower who brought the original suit will receive $9.3 million of the $32.3 million settlement, potentially sending a strong message to prospective whistleblowers as well.

Published on: August 18, 2017

AHA v Burwell Questioned by DC Circuit Court

by Wachler & Associates, P.C.

On August 11, 2017, a further development came in the Medicare appeals backlog saga, as the D.C. Circuit Court reached a decision on the Department of Health and Human Services’ (HHS’) appeal to the case American Hospital Association (AHA) v Burwell. The decision (“Appeal Decision”) handed down last week was decidedly pro-HHS, and is a setback for the AHA and healthcare providers with appeals pending at the administrative law judge (ALJ) level. The Appeal Decision has the potential to completely undo any progress created by the original December decision.

The Circuit Court came to a 2-1 decision, ordering the District Court to reconsider its mandate that HHS completely eliminate the Medicare appeal backlog by the end of 2020. The Circuit Court based its decision on the idea that the District Court decision had the potential of mandating that HHS violate its legal duty to only pay out legitimate Medicare claims. HHS is required to “protect” the Medicare trust fund, and in the process taxpayer dollars. However, HHS is also required by law to process ALJ appeals within 90 days, a duty which has gone unmet for years and was the basis of the District Court’s decision.

The AHA filed its initial suit in 2014, and after being initially dismissed, the AHA received a favorable decision in December 2016, a decision that is now in jeopardy of being undone. The December decision dictated certain yearly “targets” for HHS and the Center of Medicare and Medicaid Services (CMS) to meet regarding decreases to the number of backlogged appeals at the ALJ level. HHS objected to these benchmarks, and in fact to any mandated reduction, based on several arguments, including that the backlog cannot be eliminated without arbitrary settlements regardless of the actual merits of the claims.

Published on: July 31, 2017

OIG Reveals Plans to Scrutinize EHR Incentive Payments

by Wachler & Associates, P.C.

In July 2017, the Department of Health and Human Services Office of Inspector General (OIG) revealed its plans to review the $14.6 billion in incentive payments the Centers of Medicare and Medicaid Services (CMS) made to hospitals between January 1, 2011 and December 31, 2016, pursuant to Medicare’s electronic health record (EHR) technology program. The OIG plans to review these payments in order to identify errors and inaccuracies which may have resulted in overpayments to hospitals

This announcement comes less than a month after the June report from the OIG, titled “Medicare Paid Hundreds of Millions in Electronic Health Record Incentive Payments That Did Not Comply with Federal Requirements” (the “Report”) (an official OIG summary is available here). The Report was based upon a review of EHR Incentive Program payments made to 100 professionals, which found 14 improper payments in the amount of $291,222. Extrapolating these results, the OIG estimated a total of $729.4 million in improper payments to the over 250,000 EHR incentive eligible providers in the CMS system. According to the OIG, the $729 million figure is roughly 12% of the total payments made in connection with the EHR incentive program. A majority of the 14 improper payments discovered during the OIG’s review were based on providers failing to maintain accurate and detailed records—an issue which often arises with Medicare overpayments.

The OIG completed its report by making several recommendations to CMS: