Health Law

Published on: October 31, 2013

CMS Reaches Four Settlements Under the Stark Self-Referral Disclosure Protocol in August and September

The Centers for Medicare & Medicaid Services (CMS) recently announced four settlements via the Voluntary Self-Referral Disclosure Protocol (SRDP) under the federal Stark Law. CMS reached three Stark law settlements in August 2013 and on additional settlement in September 2013, totaling approximately $178,000.

On August 19, 2013, CMS settled Stark law violations by a Louisiana physician group practice. Under the SRDP, the Louisiana practice disclosed that it violated the Stark Law because two of its physician arrangements failed to satisfy the requirements of the in-office ancillary services exception to the Stark Law. The violations were settled for $13,572.

On August 20, 2013, CMS reached a settlement with a non-profit community hospital located in Minnesota which disclosed that its arrangement with a physician group practice for the rental of office space and performance of support services failed to satisfy the requirements of the applicable exception under the Stark Law. The Minnesota hospital’s violations were settled for $9,570.

Published on: October 21, 2013

OIG Report on “Questionable” Billing for Polysomnography Services May Lead to Closer Scrutiny of Sleep Laboratories

by Wachler & Associates, P.C.

The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently issued a report addressing increased Medicare spending on polysomnography services. The OIG initiated this study in response to growing concerns of Medicare prescriber fraud.

A polysomnography is a type of sleep study that diagnoses sleep disorders such as sleep apnea. The claims submitted by sleep centers that conduct these studies have been under serious scrutiny by fraud investigators in recent years. In January 2013, American Sleep Medicine LLC, a sleep testing center operator based in Florida, agreed to pay $15.3 million to resolve allegations of false polysomnography claims submitted to Medicare, TRICARE, and the Railroad Retirement Medicare Program in violation of the False Claims Act (FCA).

According to the OIG’s report, Medicare spending for polysomnography services rose 39 percent between the years 2005 and 2011. The OIG analyzed Medicare claims from hospital outpatient departments, as well as non-hospital providers such as independent diagnostic testing facilities and physician-owned sleep laboratories, starting in 2011. The OIG found that almost $17 million in Medicare claims for polysomnography services were inappropriate, meaning the claims did not meet one or more of three requirements for Medicare reimbursement, including claims that had inappropriate diagnosis codes, were same-day duplicate claims or were submitted with an invalid NPI. In addition, the report stated that out of 6,339 providers of polysomnography services, 180 providers exhibited patterns of questionable billing. “Questionable billing” patterns included providers that billed an unusually high percentage of: (1) same-day duplicate claims, beneficiaries who had polysomnography claims from one or more other providers in 2011, (3) diagnostic polysomnography claims with a titration claim for the same beneficiary on the following day, or (4) claims in which there was no visit note from the ordering provider in the preceding year.

Published on: October 16, 2013

Proposed PRIME Act Aims at “Preventing and Detecting” Medicare and Medicaid Fraud and Abuse

by Wachler & Associates, P.C.

A proposed bipartisan bill, titled the Preventing and Reducing Improper Medicare and Medicaid Expenditures (PRIME) Act, is aimed at combatting waste, fraud, and abuse in Medicare and Medicaid spending. If passed, the PRIME Act would continue CMS’ efforts to move away from the “pay and chase” model of combatting improper payments towards the more aggressive “prevent and detect” model.

The PRIME Act would enact a range of reforms designed to proactively target improper payments, including fraud, within the Medicare and Medicaid programs. The reforms include, for example, engaging Medicare beneficiaries in identifying waste and fraud through a program called the Senior Medicare Patrol (SMP). The bill also seeks to administer harsher penalties for instances of Medicare or Medicaid fraud, as well as identify theft and the sale or distribution of Medicare and Medicaid beneficiary ID numbers.

In a press release addressing the bill, Rep. Peter Roskam (R Ill.) announced,

Published on: October 7, 2013

Proposed Bill to Narrow Stark Law Exception for In-Office Ancillary Services

by Wachler & Associates, P.C.

A proposed bill, H.R. 2914: Promoting Integrity in Medicare Act of 2013 (PIMA), was recently introduced in the House of Representatives. Representatives Jackie Speier (D-CA), Dina Titus (D-NV), and Jim McDermott (D-WA) initiated this legislation as a result of the increase in Medicare billing for in-office ancillary services through the in-office ancillary services (“IOAS”) exception to the Stark law. The Stark law, which functions to limit physician self-referrals, contains several exceptions. The current IOAS exception to the Stark law protects advanced imaging services, anatomic pathology, radiation therapy, and physical therapy services that meet the IOAS exception’s requirements. However, the bill proposes to remove the above-listed services (advanced imaging services, anatomic pathology, radiation therapy, and physical therapy), which the bill refers to as “Specified Non-Ancillary Services,” from protection under the IOAS exception. The initiating Representatives believe that the bill will save billions of Medicare dollars.

The legislation also proposes to increase civil monetary penalties for improper claims from $15,000 to $25,000 for the above Specified Non-Ancillary Services, and increase civil monetary penalties for circumvention schemes from $100,000 to $150,000 for the above Specified Non-Ancillary Services. In addition, PIMA proposes compliance review procedures for Specified Non-Ancillary Services that may include prepayment reviews, claims audits, focused medical review, and computer algorithms designed to identify payment or billing anomalies.

If PIMA is enacted, referring physician practices that rely on Stark law’s IOAS exception to perform advanced imaging services, anatomic pathology, radiation therapy, and physical therapy services, will need legal assistance in analyzing and possibly restructuring their business arrangements in compliance with the Stark law. If you or your healthcare entity would be affected by the passage of PIMA and have any questions about PIMA or need assistance in analyzing, structuring or restructuring business arrangements to comply with PIMA, please contact our experienced healthcare attorneys via phone at 248-544-0888 or via email at wapc@wachler.com.

Published on: September 26, 2013

Special Open Door Forum on Final IPPS Rule Today at 2:00

by Wachler & Associates, P.C.

Today from 2:00-3:00 pm Eastern Time, the Centers for Medicare & Medicaid Services (CMS) will hold a special follow-up Open Door Forum to discuss the Fiscal Year (FY) 2014 Inpatient Prospective Payment System (IPPS)/Long-Term Care Hospital (LTCH) Final Rule (CMS-1599-F) as well as the CMS guidance on physician order and certification. The effective date of the Final Rule is October 1, 2013.

On August 2, 2013, CMS issued the FY 2014 IPPS/LTCH Final Rule which finalized proposals related to patient status during short-stay hospital cases, including the new standards for inpatient admission and the medical review criteria for payment of hospital inpatient services under Medicare Part A. On September 5, 2013, CMS issued sub-regulatory guidance regarding the final rule’s requirements for hospital inpatient admission order and certification, which are conditions of payment under Medicare Part A. This sub-regulatory guidance was issued in part as a result of the significant confusion surrounding CMS’s requirements for inpatient admission orders and physician certifications of inpatient services.

Questions may be sent to CMS before the Open Door Forum begins via email. Questions regarding the two midnight provision for inpatient admission in the final rule can be sent to IPPSAdmissions@cms.hhs.gov. Questions on Part B inpatient billing and clarifications regarding physician order and certification can be sent to Section3133DSH@cms.hhs.gov.

Published on: September 20, 2013

Michigan Medicaid Expansion Legislation Signed Into Law by Governor

by Wachler & Associates, P.C.

On Monday, September 16, 2013, Michigan Governor Rick Snyder signed into law legislation that will expand Medicaid coverage to hundreds of thousands of Michigan residents. Medicaid expansion is a national effort initiated through the Patient Protection and Affordable Care Act.

The Affordable Care Act increases available federal funding for states that choose to expand eligibility levels for Medicaid coverage. Medicaid expansion was made mandatory under the Act in 2010, but in a 2012 Supreme Court decision, Chief Justice Roberts held that Congress may not penalize states that choose not to participate in Medicaid expansion. As a result of this Supreme Court decision, Congress may not take away a state’s existing Medicaid funding.

If Michigan receives approval and federal waivers from the Obama administration, Michigan will have access to more than a billion dollars a year in federal funding. Beginning in 2014, the Medicaid coverage for newly-eligible adults will be fully funded by the federal government for the first three years, and will be phased down to 90% by 2020. The expansion will cover adults that earn up to 133% of the poverty level, which equates to about $15,500 for an individual and approximately $31,000 for a family of four.

Published on: September 16, 2013

CMS Issues Guidance on Physician Certification and Order

by Wachler & Associates, P.C.

CMS Issues Guidance on Physician Certification and Order

The Centers for Medicare & Medicaid Services (CMS) has released sub-regulatory guidance entitled Hospital Inpatient Admission Order and Certification to help hospitals interpret the agency’s requirements for inpatient admission orders and certifications from the Hospital Inpatient Prospective Payment System Final Rule for FY 2014 (the “Final Rule“). After the Final Rule was issued on August 2, 2013, significant confusion surrounded CMS’s requirements for inpatient admission orders and physician certifications of inpatient services. This sub-regulatory guidance, developed by CMS and released on September 5, 2013, details the specific requirements for hospital inpatient coverage and payment under Medicare Part A.

Physician Certification

Published on: September 4, 2013

Michigan Medicaid Expansion Approved by House

by Wachler & Associates, P.C.

On Tuesday, September 3, 2013, the Michigan House gave final legislative approval to Medicaid expansion under the Patient Protection and Affordable Care Act. This legislation, House Bill 4714, is expected to be signed by Governor Rick Snyder in the coming weeks.

The Affordable Care Act increases federal funding for states that increase eligibility standards for Medicaid enrollment. As passed in 2010, Medicaid expansion was mandatory under the Act, but was subsequently made option by a 2012 Supreme Court decision. CMS administration has announced that states do not have a deadline for deciding whether or not to expand, and in addition, states are free to terminate expansion with financial penalty from the federal government.

Federal funds are available as early as January 1, 2014, but Michigan will likely delay implementation until the spring. According to a Michigan Senate Fiscal Agency analysis published in March that examines the Snyder Administration’s proposed expansion of Michigan’s Medicaid program, the state’s decision to expand could cover an additional 400,000 Michigan residents by means of $1.7 billion in federal funding. Wachler & Associates will continue to keep you updated on Michigan’s decision to expand Medicaid enrollment and other significant healthcare law news. Please subscribe to the Wachler & Associates health law blog by adding your email address and clicking “Subscribe” in the window on the top right of this page.

Published on: August 12, 2013

Health Care for Detroit Employees and Retirees at Risk under Detroit Bankruptcy

by Wachler & Associates, P.C.

On July 18, 2013, Detroit’s emergency manager Kevin Orr filed for Chapter 9 bankruptcy protection in the Eastern District of Michigan U.S. Bankruptcy Court. Emergency manager Kevin Orr, appointed by Governor Rick Snyder, is tasked with financial control of the city and the power to liquidate city assets. Orr is focused on restructuring Detroit’s debt. Detroit is the largest municipality in United States history to file for bankruptcy.

Retiree health care program costs are a named source of Detroit’s bankruptcy filing. Kevin Orr’s bankruptcy filing, a decision authorized by Governor Snyder, occurred one day after Detroit’s two largest municipal pension funds filed suit in state court to stop Orr from cutting retiree health care benefits for Detroit residents. Detroit’s retirees are now worried about possible cuts to their promised healthcare benefits. In a press conference after the filing, Kevin Orr assured Detroit residents that for the next six months there would be no cuts to health care benefits for Detroit’s active workers and retirees.

On August 2, 2013, Kevin Orr announced a new health care plan for city workers that he believes will save the city almost $12 million per year. Orr’s proposal increases workers’ annual deductibles and caps on out-of-pocket costs. If the unions reject Orr’s proposal, then Orr still has the power to change employees’ health care plans under Michigan’s emergency manager law. According to the Detroit Free Press, union leaders are not convinced that Orr’s plan is the best alternative to the current situation.

Published on: August 7, 2013

CMS Issues Much Anticipated Final Rules on Payment of Medicare Part B Inpatient Services and Payment of Hospital Inpatient Services under Medicare Part A

by Wachler & Associates, P.C.

On August 2, 2013, the Centers for Medicare & Medicaid Services (“CMS”) released its much-anticipated final rules, CMS-1455-F and CMS-1599-F, finalizing two previously issued proposals that addressed payment policies related to patient status in short-stay hospital cases: (1) payment of Medicare Part B inpatient services; and (2) admission and medical review criteria for payment of hospital inpatient services under Medicare Part A. The effective date of the final rule is October 1, 2013.

Notwithstanding these final rules, CMS stated that hospitals will be permitted to follow the Part B billing timeframes established in CMS-1455R Ruling regarding appeals and the submission of Part B claims after the effective date of the final rule, provided (1) the Part A inpatient claim denial was one to which the Ruling originally applied; or (2) the Part A inpatient claim has a date of admission before October 1, 2013, and is denied after September 30, 2013, on the grounds that the medical care was reasonable and necessary, but the inpatient admission was not.

Payment of Medicare Part B Inpatient Services