Health Law

Published on: December 22, 2011

CMS’ Special Open Door Forum on Recovery Auditor Pre-Payment Review Demonstration Program

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:

Published on: December 20, 2011

CMS to Reopen Home Health Claims Denied Based on Face-to-Face Requirements

by Wachler & Associates, P.C.

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:

Published on: November 29, 2011

CMS Releases Part A to B Rebilling Demonstration Program Enrollment Application

by Wachler & Associates, P.C.

This week CMS released more information regarding the Part A to Part B Rebilling Demonstration Program. Now available on CMS’ website is the enrollment application for hospitals to complete to seek to participate in the program. The enrollment application includes language which reiterates that participation in the Demonstration Program is based on a first-come first-served process and applications will be classified based on facility size. According to the application, 80 large facilities (300+ Beds), 120 moderate facilities (100-299 Beds), and 180 small facilities (fewer than 100 Beds) will be allowed to participate.

In addition to the enrollment application, CMS published a 14-page document which outlines some of the Demonstration Program’s details. The document, which may have been released in anticipation of the upcoming Open Door Forums, includes four requirements that participating providers must follow: (1) Not file an appeal; (2) Not bill the beneficiary more than any Part A inpatient deductible already collected from the beneficiary; (3) Refund to the beneficiary the difference between any Part A deductible/coinsurance and Part B deductible/coinsurance; (4) Not bill observation services (G0378). The requirement that participants do not file an appeal still evokes questions, specifically whether the bar on filing an appeal prevents participants from appealing a medical necessity determination for inpatient services if they volunteer for the demonstration program.

For more information on the AB Demonstration Program or assistance with determining a hospital’s eligibility to participate in the program, please contact a Wachler & Associates attorney at 248-544-0888.

Published on: November 17, 2011

CMS Announces RAC Pre-Payment Review Demonstration Program

by Wachler & Associates, P.C.

The Centers for Medicare & Medicaid Services announced a Recovery Audit Contractor (“RAC”) Pre-Payment Review Demonstration Program on November 15, 2011. The announcement of this program is a major shift in the RAC program because previously RACs were only allowed to conduct post-payment reviews of providers. Although the program is a demonstration and will only affect providers in 11 states, it confirms that CMS policy has shifted from the “pay and chase” model to a more aggressive, proactive and preventative model.

The Pre-Payment Review Demonstration Program (“Demonstration Program”) will be conducted for three years from January 1, 2012 to December 31, 2014. It will be implemented in 11 states. Seven of the states were chosen because of “a high level of fraudulent claims and providers” (MI, FL, CA, TX, NY, LA and IL) and the remaining four states were chosen because of high claims volumes of short inpatient hospital stays (PA, OH, NC and MO). The Demonstration Program will build on the RACs’ existing infrastructure to review claims and will initially focus on inpatient hospital claims, specifically short stays. CMS will choose more specific claim types of reviews as the Demonstration Program continues and RACs will review the claims selected.

The Pre-Payment Review RAC Demonstration Program reflects the ongoing difficulty to balance Medicare program integrity and the detrimental effect a pre-payment review has on Medicare providers. Pre-payment review is an aggressive method for contractors to audit providers and proactively prevent improper payments. However, pre-payment review threatens providers because it significantly impacts cash flow and there are no substantive criteria or procedures in place to determine placement on or removal from pre-payment review. With the harsh impacts of pre-payment review on providers, we also have concerns about RAC auditors being financially incentivized through a contingency fee to place providers on pre-payment review.

Published on: November 16, 2011

CMS Announces Part A to Part B Rebilling Demonstration Program

by Wachler & Associates, P.C.

Yesterday, the Centers for Medicare & Medicaid Services (“CMS”) announced the Part A to Part B Rebilling Demonstration Program (“Demonstration Program”). The Demonstration Program will allow a select number of hospitals to receive 90 percent reimbursement of the Part B payment for Part A inpatient short stay claims that are denied on the basis that an inpatient claim was not medically necessary and reasonable because the services were not provided in the appropriate care setting.

Wachler & Associates, P.C. has been instrumental in the effort to obtain Part B reimbursement for hospitals with Part A claims denied as not medically necessary and reasonable. Along with the American Hospital Association (“AHA”) and other industry leaders, Wachler & Associates has met with CMS three times since 2009 to realize Part B reimbursement for hospitals. From the CMS announcement on November 15, it appears that the persistence has resulted in a Demonstration Program that achieves some, but not all, of the industry’s goals.

The Demonstration Program will be conducted for 3 years, beginning on January 1, 2012 and ending on December 31, 2014. Up to 380 hospitals will be chosen to participate in the Demonstration Program and will be accepted on a first-come, first-served basis. In addition, there will be a maximum amount for small, medium and large facilities.

Published on: November 8, 2011

Physician Payment Sunshine Act Rules Delayed

by Wachler & Associates, P.C.

HHS this week announced that it would again delay publishing rules implementing the Physician Payments Sunshine Act (“PPSA”), established in last year’s Patient Protection and Affordable Care Act (“PPACA” or “health reform”). PPSA requires drug and medical device manufacturers to publicly report gifts and payments made to physicians and teaching hospitals. While the law requires public disclosure on an annual basis, it does not limit financial relationships between drug and device manufacturers and physicians.

The penalties for non-compliance with this law are fines up to $10,000 per occurrence, not to exceed $150,000 per year, and for each knowing failure to report, the fines are increased to up to $100,000 per occurrence and $1 million aggregate per year.

Beginning January 1, 2012 all drug and device manufacturers must record all gifts and payments to physicians and teaching hospitals. Manufactures must report this information to HHS by March 31, 2013, for HHS publication beginning September 30, 2013.

Published on: October 24, 2011

20 Notable Aspects of the Final ACO Rule

by Wachler & Associates, P.C.

On October 20, 2011, CMS released the much awaited final rule for implementation of the Medicare Shared Savings Program for providers and suppliers participating in Accountable Care Organizations (ACOs). The following are 20 notable aspects of the final rule:

•1. While the proposed rule would have required all ACOs to share risk of loss in the final year of the three year participation period, the final rule created an alternative for a “shared savings only” track (one-sided model) that will not require any sharing of losses. The final rule also retains the proposed two-sided model that will allow ACOs to share in an increased portion of savings, so long as the ACO also agrees to share in any losses to the program.

•2. The final rule will allow ACOs beginning in April 1, 2012 or July 1, 2012 to have a longer first performance year (21 months or 18 months respectively) and an option to receive an interim payment calculation following the first 12 months of participation. One-sided ACOs receiving an interim payment will be required to demonstrate a self-executing repayment mechanism similar to that which the two-sided ACOs must demonstrate.

Published on: October 14, 2011

CMS Sends ACO Final Rule to the Office of Management and Budget for Review

by Wachler & Associates, P.C.

According to a breaking news article by HealthData Management, the Centers for Medicare and Medicaid Services (CMS) has sent a Shared Saving/Accountable Care Organizations final rule to the Office of Management and Budget (OMB) for review. A review by OMB is one of the last stages before a rule becomes published in the Federal Register. The final rule is expected to include several changes due to the substantial amount of industry criticism the proposed rule faced during the comment period. According to HealthData Management, the concerns raised about the proposed rule included: (1) the proposed 65 measures would be excessively burdensome for newly formed ACOs, (2) allowing pathologists and laboratory professionals to be included as eligible physicians, and (3) giving ACO-enrolled patients the ability to restrict access to their health information could severely limit the ACO’s ability to improve the health of the individual.

If you have any questions about ACO participation, or any other health law questions, please contact a Wachler & Associates attorney at 248-544-0888.

Published on: October 14, 2011

OIG Releases Fiscal Year 2012 Work Plan

by Wachler & Associates, P.C.

Today, the Office of Inspector General (OIG) released the fiscal year 2012 Work Plan. The plan describes the activities the OIG plans to continue, as well as activities it plans to initiate. The 2012 fiscal year, and the programs described, runs from October 1, 2011 through September 30, 2012. Below is a list of several new and continuing OIG activities for various health care providers.

Home Health Services (New)

States’ Survey and Certification of Home Health Agencies: Timeliness, Outcomes, follow-up, and Medicare Oversight

Published on: October 11, 2011

Senate Finance Committee Publishes Report About Home Health Agencies

by Wachler & Associates, P.C.

In its role of overseeing the Medicare and Medicaid Programs, the Senate Finance Committee released a staff report alleging that the four largest publicly traded home health agencies were providing medically unnecessary care by encouraging therapists to meet the 10 visit threshold in order to receive a “bonus” payment under the PPS system. The report was based on an investigation initiated by Committee Chairman Max Baucus and Senior Member Chuck Grassley. The Senators instigated the investigation based upon a Wall Street Journal analysis.

Among other findings, the report alleges that an analysis of therapy billings from these home health agencies show a pattern of concentrated billings at or just above the 10 visit threshold. The report further alleges that the companies encouraged billing of medically unnecessary services to reach this threshold.

Home Health Agencies should be aware that Medicare contractors will likely be closely scrutinizing PT visit frequency and patterns. Also, providers are likely to see changes in the payment system as a result of this report.