Articles Posted in Health Law

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The Department of Justice (DOJ) reportedly set an email to hospitals nationwide on August 30, 2012 instructing them to examine implantable defibrillator surgeries covered by Medicare to determine if they were improperly billed to Medicare. The email, as reported by modernhealthcare.com, included a “resolution model” with instructions for hospitals to self-audit, and estimate monetary penalties under the False Claims Act.

The DOJ has been conducting an investigation into improperly billed implantable defibrillator surgeries for more than two years, and the resolution model sent to hospitals is the first attempt by the DOJ to come to a settlement resolution for these instances.

The investigation centers around a National Coverage Determination (NCD) set by the Centers for Medicare and Medicaid Services (CMS) which establishes the instances in which an implantable defibrillator is covered by Medicare.
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The Centers for Medicare and Medicaid Services (CMS) will begin accepting applications on August 1, 2012 for Advance Payment Model Accountable Care Organizations (ACOs). Organizations applying for the Advance Payment Model would begin participation January 1, 2013.

Organizations participating in the Advance Payment Model would receive an advance payment on the shared savings they are expected to earn. Participating ACOs earn three types of payments:

• Upfront, fixed payment.

• Upfront, variable payment based on the number of its preliminarily prospectively assigned beneficiaries.

• A monthly payment of varying amount based on the size of the ACO, also based on the number of its preliminarily prospectively assigned beneficiaries.

The Advanced Payment ACO model is designed to test whether providing an advance on shared savings (as detailed above) will increase health organization participation in the Shared Savings Program, and to determine whether those advance payments can lead to better ACO care for beneficiaries and more savings for the Medicare program.

The Advanced Payment Model is available to participants in the Shared Savings Program, and allows organizations to receive advance payments that will be repaid from thee future shared savings they earn.

More information on Accountable Care Organizations and eligibility for the Shared Savings Program can be found here.
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Members of the United States House Energy and Commerce Committee sent a request on June 26, 2012 to the Government Accountability Office (GAO) requesting a study of redundancy in Centers for Medicare and Medicaid Services (CMS) contractor audits. The request included four specific questions that, at a minimum, the committee wants studied:

1. What process does CMS use to determine whether the contractors’ audit criteria and methodologies are valid, clear, and consistent?

2. How does CMS coordinate among these contractors to ensure that their interactions with providers are not duplicative? Is there any evidence of providers being subjected to multiple overlapping audits on the same topic? If so, how frequently does this occur? Is there any justification for a single provider being audited by multiple contractors at the same time?

3. What are the reasons for requesting that similar information be submitted to multiple contractors? Are there steps CMS is taking to limit duplicative audits, while still ensuring contractors have the tools necessary to pursue program integrity efforts?

4. Does CMS have a strategic plan to coordinate and oversee all of its audit activities and, if so, how is that plan implemented and overseen?

The request asks that all Centers for Medicare and Medicaid Services contractors be studied, including Medicare Administrative Contractors (MACs), Recovery Audit Contractors (RACs), Zone Program Integrity Contractors (ZPICs), Program Safeguard Contractors (PSCs), and Comprehensive Error Rate Testing Review contractors (CERTs).

The request asks that the GAO, “undertake a study that focuses on coordination among contractor efforts and CMS efforts to oversee these contractors to ensure that they are working efficiently and effectively while guaranteeing that beneficiaries are receiving care to which they are entitled.”
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The United States Department of Justice (“DOJ”) announced yesterday that a Detroit-area resident, Louisa Thompson, plead guilty on June 20, 2012, to one count of criminal conspiracy to commit health care fraud in the Eastern District of Michigan federal court.

The Health Care Fraud Prevention and Enforcement Action Team (HEAT) task force, a DOJ and U.S. Department of Health and Human Services (HHS) multi-agency joint venture, headed the investigation of Ms. Thompson. The HEAT task force, which is an initiative of the federal Medicare Fraud Strike Force, uses data analysis and community policing to detect health care fraud perpetrators who steal billions of dollars from the federal government.

The task force discovered that since 2006, Ms. Thompson had billed Medicare for psychotherapy services through two companies, TGW Medical Inc. and Caldwell Thompson Manor Inc., despite these services having never been performed, or performed by unlicensed staff. Ms. Thompson has yet to be sentenced in the case, and faces up to 10 years imprisonment and a $250,000 fine.

Based on recent Medicare Fraud Task Force activity, it appears the HEAT task force is targeting psychological and psychotherapy service providers aggressively, both for criminal prosecution as well as for civil actions to recover money that Medicare and Medicaid has paid. The government’s most-used tool in civil health care cases is the False Claims Act.

The False Claims Act (FCA) was drafted in1893 and was originally intended to prohibit and prevent fraudulent claims against the government during the Civil War. Its purpose was to force government contractors to deliver promised materials, hold them accountable if they did not, and deter fraudulent activity. Under the FCA a qui tam relator (whistleblower) could bring suit on behalf of the United States, and be rewarded with a percentage of the government’s recovery.

In the late-1980s the federal government began using the FCA to pursue fraud in the federal health care programs. In recent years the government has relied on the FCA to combat fraud and abuse in the healthcare arena for conduct that did not reach the standards for criminal prosecution. The penalties for violation of the FCA can be up to $11,000 per false claim as well as three times the damage to the government.
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The Centers for Medicare and Medicaid Services (CMS) has extended the deadline for submitting a Notice of Intent to Apply to June 29, 2012 for Accountable Care Organizations (ACO) interested in participating in the Shared Savings Program beginning January 1, 2013. CMS will be accepting applications for the January 2013 start date from August 1 through September 9, 2012.

ACOs that do not file the Notice of Intent to Apply prior to the June 29 deadline will be unable to participate in the Shared Savings Program for the January 2013 start date. Furthermore, the Notice of Intent to Apply is not binding, which means that an ACO may submit its Notice and subsequently decide not to apply for the Program.
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The Office of Civil Rights (OCR) announced yesterday that its Health Insurance Portability and Accountability Act (HIPAA) Enforcement Training tools would be available to the general public today, June 5, 2012.

Since 2009, as part of the Health Information Technology for Clinical and Economic Health (HITECH) Act, State Attorneys General (SAGs) were given the authority to bring civil suit for HIPAA violations on behalf of the aggrieved patients. To assist SAGs, the OCR developed a wide range of HIPAA Privacy and Security Rules compliance, enforcement, and training tools.

Included in the materials are computer-based modules, and videos and slides from in-person training sessions covering the following topics:

  • General Introduction to the HIPAA Privacy and Security Rules
  • Analysis of the impact of the HITECH Act on the HIPAA Privacy and Security Rules
  • Investigative techniques for identifying and prosecuting potential violations
  • A review of HIPAA and State Law
  • OCR’s role in enforcing the HIPAA Privacy and Security Rules
  • SAG roles and responsibilities under HIPAA and the HITECH Act
  • Resources for SAG in pursuing alleged HIPAA violations
  • HIPAA Enforcement Support and Results

These materials may be a helpful training tool for health care providers and privacy officers. The materials highlight to whom, what, where, when, and how HIPAA Rules will be enforced and provide basic summaries of the HIPAA Privacy and Security Rule requirements.
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The Centers for Medicare and Medicaid Services (CMS) has announced that the Prior Authorization of Power Mobility Devices (PMDs) and the Recovery Audit Prepayment Review Demonstration Programs are expected to move forward on or after June 1, 2012. On December 30, 2011, the two demonstrations were delayed from their initial January 1, 2012 start date. Although CMS initially announced the demonstration programs in November 2011, CMS decided to delay the programs’ implementations after receiving considerable feedback from the provider communities affected by the programs.

In its most recent announcement, CMS stated that the demonstrations programs will begin once they receive Paperwork Reduction Act (PRA) Office of Management and Budget control numbers.

The Prior Authorization of PMDs demonstration program will be initiated in California, Illinois, Michigan, New York, North Carolina, Florida, and Texas. These are all states with high populations of fraud- and error- prone providers. The demonstration will implement a prior authorization process for scooters and power wheelchairs.

As a result of comments CMS received from providers and suppliers, significant modifications have been made to the Prior Authorization of PMDs demonstration program. Most importantly for suppliers, the 100% pre-payment review phase has been removed. Many interested parties had raised the concern that suppliers would be adversely financially impacted by the 100% pre-payment review phase, thus CMS eliminated it and the demonstration will begin immediately with the prior authorization phase. There was also concern regarding the inconsistency of suppliers in some states experiencing 100% pre-payment review, while suppliers in other states were required to receive prior authorizations. The pre-payment review phase was planned to last from between three to nine months for each state, so while one state might only be in that phase for three months, another state might be for nine. As a result, all demonstration states will start prior authorization at approximately the same time instead of the staggered start times as originally planned.

CMS also received many concerns about the ordering physician possibly not being in the best position to submit the prior authorization request. Under the modified demonstration, the physician/treating practitioner or supplier, on behalf of the physician/treating practitioner, may perform the administrative function of submitting the prior authorization request.

The Pre-Payment Review Demonstration Program did not receive any significant changes and will be implemented as proposed in November.

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In the December 19, 2011 Federal Register, CMS published a Proposed Rule to implement the “Physician Payment Sunshine Act” portion of Patient Protection and Affordable Care Act (PPACA), or health care reform, which requires drug, medical device, biological and medical supply manufacturers to track and report payments made to physicians and teaching hospitals. The Proposed Rule clarifies several components of the Physician Payment Sunshine Act, including the following:

1. Applicable manufacturers must report the required information to CMS in an electronic format by March 31, 2013 and on the 90th day of each calendar year thereafter.

2. The Physician Payment Sunshine Act will apply to any manufacturer whose products are sold or distributed in the United States regardless of where they are manufactured.

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On December 21, the Centers for Medicare & Medicaid Services (“CMS”) held a special Open Door Forum (“ODF”) for the Recovery Auditor Pre-Payment Review Demonstration Program announced on November 15 along with two other demonstration programs, all of which will become effective on January 1, 2012.

The ODF, in which 1600 callers participated, addressed the purposes and the operational aspects of the program. CMS explained that they developed the program in an effort to reduce the error rate for improper payments, prevent improper payments before they are made and to focus on claims with high improper payment rates.

The demonstration program will begin with the pre-payment review of short-stay inpatient hospital claims (two days or less) for hospitals located in the eleven states affected by the demonstration program. Specifically, one MS-DRG, 312 Syncope & Collapse, will be reviewed beginning January 1. In March and then again in May CMS will add two more MS-DRGs and in July CMS will add three more. Thus, by July there will be eight DRGs subject to pre-payment review under the demonstration program:

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CMS has announced that it is requiring Medicare to reopen claims that contractors denied because Home Health Agencies (“HHA”) allegedly did not comply with “Face-to-Face” encounter requirements put in place by the Patient Protection and Affordable Care Act (“ACA”), or Health Reform legislation.

The Face-to-Face encounter rules require that the physician certifying the patient’s need for home health care must have seen the patient “face-to-face” in order for Medicare to pay for a home healthcare episode. This encounter must take place either 90 days before the home health episode, or within 30 days of the beginning of home health care.

Providers brought to CMS’ attention that contractors were inappropriately denying claims based on the face-to-face requirement in two situations following an acute or post-acute stay:

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