Health Law

Published on: May 6, 2013

Therapy Providers Face Manual Review of Outpatient Therapy Claims, CMS Releases FAQ

As mandated by the American Taxpayer Relief Act of 2012, Medicare Part B outpatient therapy providers now face manual medical review of claims at or above a $3700 statutory cap. Due to some confusion in the provider community, the Centers for Medicare and Medicaid Services (CMS) published a Frequently Asked Questions to clarify the new therapy manual medical review process.

In the FAQ, CMS explains that the manual medical review process is triggered when a beneficiary’s services for that year exceed one of two threshold caps dictated in Section 603 of the Act. The cap for Occupational Therapy (OT) services is $3700 per year, per beneficiary. Separately, the combined cap for Physical Therapy (PT) and Speech Language Pathology (SLP) is $3700 per year, per beneficiary. CMS also points out that although physical therapy and speech language pathology services are combined to trigger the cap, the medical review of those claims will be conducted separately.

The FAQ states that the cap and manual medical review process applies to all Part B Outpatient Therapy settings and providers, including private practices, Part B skilled nursing facilities (SNFs), home health agencies (HHAs), outpatient rehabilitation facilities, rehabilitation agencies and hospital outpatient departments.

Published on: April 18, 2013

OIG Releases Updated Provider Self-Disclosure Protocol

by Wachler & Associates, P.C.

On April 17th, 2013, the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS) released an update to its Provider Self-Disclosure Protocol (SDP).

The SDP was established in 1998 to incentivize healthcare providers and suppliers to voluntarily disclose potential fraud related to payments received under Federal health care programs. All healthcare entities who are subject to the OIG’s Civil Monetary Penalty (CMP) authorities are eligible to use the SDP.

The SDP dictates the procedures that healthcare providers must follow to identify potentially fraudulent conduct, determine damages, and report to the OIG. Successful use of the SDP leads to a settlement that reduces the healthcare entity’s liability under the OIG’s CMP provisions. To this end, the updated SDP states the OIG’s belief that providers who disclose fraud through the SDP deserve to pay less than they would be required to pay pursuant to an investigation initiated by the government. Notably, the updated SDP explicitly references the OIG’s general practice of imposing a multiplier of 1.5 times the single damages in CMP settlements of SDP cases; however, the OIG expressly reserves the right to determine whether a higher multiplier is warranted in each case. In addition, the OIG states that corporate integrity agreements are typically not required for providers utilizing the SDP in good faith.

Published on: April 5, 2013

Intermountain Health System Agrees to $25.5 Million Settlement in Stark Violation Case

by Wachler & Associates, P.C.

Intermountain Healthcare, the largest health system in Utah, has agreed to pay $25.5 million to resolve claims that it violated the federal Stark law and False Claims Act by engaging in inappropriate financial relationships with referring physicians.

In 2009, Intermountain disclosed to federal officials that the system may have illegally paid bonuses to 37 doctors based on their patient referrals. If true, Intermountain would have been in violation of the Stark law. In addition, Intermountain disclosed that it compensated more than 170 doctors in the absence of written agreements, including via rentals of office space in several cities without written lease agreements. In total 209 physicians were involved in the violations, which spanned over a 10 year period.

Intermountain discovered the violations through its regular review process, and reported them to the government in 2009. Intermountain cites the complexities of the Stark law’s regulations as one cause of its noncompliance. According to Intermountain’s Chief Medical Officer Dr. Wallace, Intermountain should have more closely monitored the situation and although Intermountain’s management realized that penalties could be significant, they chose to self-disclose the issues.

Published on: March 29, 2013

CMS Releases Change Request 8185 to Implement Recent CMS Ruling.

by Wachler & Associates, P.C.

On March 22, 2013, the Centers for Medicare and Medicaid Services (CMS) released Change Request 8185 to implement CMS Ruling (CMS-1455-R) and provide Medicare contractors with additional guidance for accepting claims rebilled from Part A to Part B. The CMS Ruling, which was released on March 13, 2013, permits hospital providers to rebill under Part B for Part A inpatient claims denied as not reasonable and necessary.

The Change Request reiterates the numerous revisions to the Part B payment policy when a Part A claim is denied as not reasonable and necessary. While the CMS Ruling remains in effect, the Change Requests instructs hospitals to submit Part B inpatient claims with the condition code “W2.” By attaching the “W2” condition code, the hospital is acknowledging that the Part B claim is a duplicate of the Part A claim that was previously denied, no payment shall be made for items or services included on the Part A claim, and the beneficiary will be refunded for any amounts collected from the beneficiary with respect to the Part A claim. Furthermore, by including the “W2” condition code, the hospital attests that no appeals are pending with respect to the previously submitted Part A claim and that any previous appeal of the Part A claim has become final, binding or dismissed, and no further appeal will be filed on the Part A claim. Any Part B inpatient claim submitted under the CMS Ruling that does not include condition code “W2” will be rejected by the contractor. The effective date of the Change Request mirrors that of the CMS Ruling, which took immediate effect on March 13, 2013. However, the implementation date of the Change request is July 1, 2013. Despite the delayed implementation date of the Change Request, hospitals may submit their Part B claims prior to the implementation date, according to CMS.

Wachler & Associates will continue to monitor the developments of CMS’s revised policy on Part B billing following the denial of a Part A inpatient hospital claim. If you have any questions regarding these developments or questions regarding the Medicare appeals process, please contact an experienced health care attorney at Wachler & Associates at 248-544-0888.

Published on: March 27, 2013

OCR Issues ICR on HIPAA Audit Program

by Wachler & Associates, P.C.

The Office for Civil Rights (OCR) enforces the Health Insurance Portability and Accountability Act (HIPAA) and oversees health information privacy in the Department of Health and Human Services (HHS). On Tuesday, a notice was published in the Federal Register asking for input and comments on the OCR’s HIPAA Audit Review Survey. The Information Collection Request (ICR) collected in this online survey looks at 115 Covered Entities (health plans, clearinghouses and providers) that were audited in 2012 by OCR.

The survey looks to collect information on just how effective these audits are and solicits opinions on the audit process itself. As part of that review, the online survey will be used to:

• Measure the effect of the HIPAA Audit program on covered entities • Gauge their attitudes towards the audit overall and in regards to major audit program features, such as the document request, communications received, the on-site visit, the audit-report findings and recommendations • Obtain estimates of costs incurred by covered entities, in time and money, spent responding to audit-related requests • Seek feedback on the effect of the HIPAA Audit program on the day-to-day business operations • Assess whether improvements in HIPAA compliance were achieved as a result of the Audit program

Published on: March 18, 2013

MACs to Recover Annual Wellness Visit Overpayments

by Wachler & Associates, P.C.

Medicare administrative contractors (MACs) are expected to begin recouping money for annual wellness visits (AWV) erroneously paid to both facilities and physicians for the same visit.

For the past two years, CMS has erroneously allowed an AWV on a professional and institutional claim for the same patient on the same day. In some cases, this resulted in double billing to CMS. The erroneous collecting began with dates of service processed on or after April 4, 2011, and could continue through March 31, 2013 because the new policy will not take effect until April 1, 2013. CMS will recoup the double payments made from January 1, 2011 through March 31, 2013 from whoever billed the second claim. The new policy, Change Request 8107, will only allow payment for the professional service, regardless of whether it is paid on a professional or institutional claim.

If you need assistance determining how this new policy may affect your practice, or if you have any other health care law questions, please contact an experienced health care attorney at Wachler & Associates at 248-544-0888.

Published on: March 14, 2013

The United States Senate Committee on Finance Released a Comprehensive Report to Combat Waste, Fraud, and Abuse in Medicare and Medicaid

by Wachler & Associates, P.C.

On January 31, 2013, the Senate Finance Committee released a report aimed at combating waste, fraud and abuse in Medicare and Medicaid. In May of 2012, the Senate Finance Committee invited interested stakeholders to submit white papers offering recommendations and innovative solutions to improve program integrity efforts, strengthen payment reforms, and enhance fraud and abuse enforcement efforts. In response, a variety of healthcare industry experts, including Wachler & Associates, submitted nearly 2,000 pages of input and recommendations. Wachler & Associates submitted instances of egregious contractor errors, including improper recoupment of alleged overpayments, contractors sending appeals correspondence to the wrong addresses and improper referral of alleged overpayments to the Department of Treasury. Based on the Finance Committee’s review, the white papers discussed five broad themes: improper payments, beneficiary protection, audit burden, data management, and enforcement.

Improper payment issues were discussed by 44 percent of health insurers and providers who submitted white papers. Solutions regarding improper payment issues included allowing reimbursement at the outpatient service level if inpatient status is denied or for certain types of complex cases; and clarifying the guidance on or abolishing outpatient observation status. Beneficiary protection was discussed by 57 percent of insurers and providers, many of whom discussed the use of outpatient observation status by hospitals to avoid recovery audit contractor’s (RAC) scrutiny of claims, as well as provider and patient frustration with payer documentation requirements, which may lead them to forfeit certain courses of treatment or care. Furthermore, 60 percent of providers and insurers discussed audit burden issues, and were specifically concerned with the number of audit entities involved, the volume and complexity of payment rules and regulations, whether payment rules are applied consistently and whether audit entities are inappropriately overturning medical necessity decisions, audit entities interactions with providers during the audit process, difficulty communicating with audit entities during the audit process, and financial burden of payment suspensions and the impact on business.

Ninety-four percent of white papers included recommendations to combat waste, fraud, and abuse. Some of the recommendations included were:

Published on: March 6, 2013

DOJ and HHS Report Record Recoveries from Healthcare Fraud

by Wachler & Associates, P.C.

The Health and Human Services Department (HHS) and the Department of Justice (DOJ) recovered a record $4.2 billion from healthcare fraud investigations last year, according to their jointly issued Health Care Fraud and Abuse Control Program Annual Report for Fiscal Year 2012. DOJ and HHS reported that it deposited the $4.2 billion to U.S. Department of Treasury and Centers for Medicare & Medicaid Services (CMS) accounts. On average over the last three years, the federal government has recovered $7.90 for every dollar it spends investigating healthcare fraud and abuse. This is the highest three-year average return on investment in the 16-year history of the Health Care Fraud and Abuse (HCFAC) Program.

The bulk of these recoveries, it appears, are from pharmaceutical and device manufacturers and wholesalers. In July 2012, GlaxoSmithKline paid over $3 billion in a settlement deal to resolve its criminal and civil liability arising from the company’s failure to report certain safety data, its alleged false price reporting practices, and its unlawful promotion of certain prescription drugs. In November 2011, Merck Sharp & Dohme paid $950 million to resolve its criminal and civil liabilities related to its promotion and marketing of the painkiller Vioxx. In April 2012, McKesson Corporation paid $190 million to resolve claims that it violated the FCA by reporting inflated pricing information for a large number of prescription drugs, causing Medicaid to overpay for those drugs.

The DOJ also reported the number of its enforcement actions. In 2012, the DOJ opened 1,131 new criminal and 885 new civil healthcare fraud investigations. The DOJ also reported that 826 criminal defendants were convicted of healthcare fraud-related crimes during the FY 2012. Furthermore, the Office of Inspector General (OIG) excluded 3,131 individuals and entities based on criminal convictions for crimes related to Medicare and Medicaid, patient abuse or neglect, and as a result of licensure revocations.

Published on: February 5, 2013

CMS Releases Proposed Rule Providing an Exemption to Group Health Plan Contraceptive Coverage for Eligible Religious Organizations

by Wachler & Associates, P.C.

On January 30, 2013, the Department of Health and Human Services (HHS) announced a proposed rule to provide women with coverage for recommended preventative care, including contraceptives, without charging the beneficiary a co-pay or deductible. A prior proposed rule regarding contraceptive coverage was issued in March 2012, followed by a public comment period. The recently released proposed rule reflects the various feedback and comments submitted by the public to HHS.

In addition to providing women with preventative care, without cost-sharing, the proposed rule also seeks to accommodate religious objections to contraceptive coverage by religious organizations. First, the proposed rules would simplify the criteria defining a “religious employer” so that it follows an Internal Revenue Code definition and primarily includes churches, other houses of worship, and their affiliated organizations. As such, eligible religious organizations, such as religious nonprofit hospitals, may be exempt from providing coverage for contraceptives. In order to be considered an eligible religious organization, the proposed rule requires that an organization must:

Oppose providing coverage for some or all of any contraceptive services required to be covered under Section 2713 of the PHS Act, on account of religious objections;

Published on: October 31, 2012

Proposed Settlement Agreement Filed in Federal Court Which Could Change SNF and Home Health Coverage

by Wachler & Associates, P.C.

A proposed settlement agreement was filed in the federal District Court of Vermont on October 16, 2012 which, if approved, would clarify Medicare coverage for beneficiaries of skilled nursing facilities (SNFs), home health services (HH), and outpatient therapy services (OPT).

Jimmo v Sebelius.pdf

The settlement proposal is the result of Jimmo v. Sebelius, a class action lawsuit brought by a class of Medicare beneficiaries that challenges Medicare contractors’ consistent denials of home health services provided to Medicare beneficiaries because a beneficiary’s condition failed to improve or did not have the possibility for improvement. The home health provider community and Medicare beneficiary supporters have consistently advocated that Medicare contractors’ denial of home health services based on the alleged “improvement standard” was inconsistent with Medicare policy and regulations. The class action lawsuit challenged the “improvement standard” arguing that medically necessary home health services may be provided to Medicare beneficiaries with chronic conditions because although their conditions may not “improve,” the home health services will prevent the beneficiaries from deteriorating further. The proposed settlement, filed in October, includes provisions that would require the Centers for Medicare & Medicaid Services (CMS) to not only revise portions of the Medicare Manuals to clarify that an “improvement” requirement does not exist for medically necessary home health services, but to also educate Medicare contractors and other reviewers on the appropriate standards to apply when reviewing home health services.

Among the provisions of the settlement proposal are revisions to the Medicare Benefit Policy Manual. Revisions would be made to chapters 7, 8, and 15 of the manual, and would clarify coverage standards for SNF, HH, and OPT care to cover patients that have no improvement potential, but still need maintenance care in their current state of health. The clarified standards would allow for coverage of skilled SNF, HH, and OPT services for maintenance of a patient’s condition even if there is no restoration or improvement potential. Currently, most Medicare contractors consistently deny coverage for home health services that are provided to beneficiaries with no restoration or improvement potential. In addition to the revisions to the Medicare manuals, the proposed settlement would include two review periods for the plaintiffs to review changes to the Medicare Benefit Policy Manual before any of the terms are implemented as rules in the Medicare manuals. During the two review periods, 21 and 14 days respectively, Plaintiffs would be allowed to provide comments and suggestions which the Centers for Medicare and Medicaid Services (CMS) must make a good faith effort to utilize.

CMS would also be required under the settlement agreement to engage in an educational campaign about the revisions for providers, suppliers, and contractors. The campaign would include written materials communicated via MLN Matters articles and program transmittals, as well as changes to CMS call center customer service scripts.

In addition to the educational materials, the settlement would also require CMS to hold an open door forum on the manual revisions, as well as hold two national calls. The two national calls, one for providers & suppliers and one for contractors & adjudicators, would communicate the policy clarifications related to the revisions.

The proposed settlement, if approved, would have a major impact on home health providers and Medicare beneficiaries. Consistently during the Medicare appeals process, on behalf of our clients we have advocated against Medicare contractors’ improper denial of home health services because the beneficiary did not “improve” during the certification period. Although we have experienced some success on behalf of our clients, particularly at the Administrative Law Judge hearing stage of appeal, the inconsistent standards applied by lower level Medicare contractors meant that our clients were forced to spend their time and resources appealing improper claim denials. If approved, the proposed settlement could eliminate inconsistent decisions and help facilitate home health care providers’ reimbursement for medically necessary services.
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