Articles Posted in Health Law

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The Department of Health and Human Services (HHS) Office of Inspector General (OIG) reported $25.9 billion of expected recoveries and savings in fiscal year (FY) 2010.  The large amount is a combination of audit receivables, investigative receivables and other legislative and cost-saving actions that OIG recommended. 

In addition, the OIG’s semiannual report documented that it initiated 647 criminal actions and 378 civil actions against individuals or entities that engaged in crimes against departmental programs.  These actions included lawsuits under the False Claims Act (FCA), the Civil Monetary Penalties Law (CMPL) settlement and other administrative recoveries related to self-disclosure. 

Finally, the report indicated the Health Care Fraud Prevention and Enforcement Action Team’s (HEAT) success in fighting fraud.  That program alone recovered $71.3 million in investigative receivables.  

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The U.S. District Court for the Eastern District of Virginia ruled that Section 1501 of the Patient Protection and Affordable Care Act (PPACA) is unconstitutional.  Shortly after PPACA was passed in March 2010, Virginia passed a state statute that conflicted with the individual mandate found in Section 1501 of PPACA which requires that by 2014 every United States citizen, with a few exceptions, must maintain a minimum level of health insurance coverage subject to penalty.  Following the passage of its state law, Virginia filed its lawsuit alleging that the individual mandate of PPACA violated the Commerce, Necessary and Proper and General Welfare Clauses of the United States Constitution.  The U.S. Department of Health and Human Services contended that the provision was Constitutional because individuals’ decisions to not purchase health care insurance combine to have a collectively serious effect on interstate commerce.  Thus, the Commerce Clause and the Necessary and Proper Clause support the provision. 

In his opinion, Judge Henry E. Hudson of the U.S. District Court for the Eastern District of Virginia disagreed with the U.S. Department of Health and Human Services’ analysis.  The court held that the individual mandate in PPACA violates the Commerce Clause because the provision “compels” an individual to engage in commerce.  Further, since the provision violates the Commerce Clause, the Necessary and Proper Clause does not protect the provision because that clause requires that legislation be in furtherance of Congress’ constitutionally enumerated powers.  

For more information on health care reform and its impact on health care providers, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888.  

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Last week, the House and Senate passed the “Red Flag Program Clarification Act of 2010.”  The Act limits the definition of “creditor” to a person who obtains or uses consumer reports in connection with a credit transaction, furnishes information to consumer reporting agencies in connection with credit transactions, or advances funds based on the recipients’ obligation to repay.  The bill excludes from the definition persons, such as health care providers, who “advance funds” by providing services before receiving payment.  Relevant government agencies, however, are permitted to designate creditors that will be subject to the Rule.  The Agencies will designate based upon the determination that the person manages accounts that are subject to a reasonably foreseeable risk of identity theft.  These designations must be made through agency rule making. 

The enforcement of the Red Flags rule has been delayed several times, with the most recent delay expiring on January 2011.  The FTC previously determined that health care providers met the definition of “creditor.”  While the Clarification Act’s revised definition would not include most health care providers, the FTC could still designate health care providers as “creditors” through the rule making process based on the risk of medical identity theft concerns previously voiced by the FTC. 

For more information on the Red Flags rule, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888. 

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The United States Justice Department reported that in 2009 it collected $3 billion from pursuing health care fraud and other false claims against the federal government.  More than 80% of the recoveries were from healthcare fraud, including qui tam actions under the False Claims Act.  Bloomberg News reported that Tony West, Assistant Attorney General in charge of the Justice Department’s civil division, stated that the Justice Department would hold those who violate the federal False Claims Act accountable, whether they are a corporation or individual.  The $3 billion recovery in 2009, the second largest in history, is evidence of the aggressive nature with which the DOJ is pursuing False Claims Act violations. 

False Claims Act violations can give rise from submission of claims for services not rendered, submission of claims for services that were not medically necessary or were improperly coded and billed.  Further, as a result of the health care reform legislation, False Claims liability can attach to the retention of a known overpayment that is not refunded within 60 days of identification.  For more on the False Claims Act, or for assistance with health care regulatory or billing matters, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888. 

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As the focus on health care fraud continues within the federal government, Department of Health and Human Services Kathleen Sebelius and Attorney General Eric Holder recently participated in the third regional health care fraud prevention summit in Brooklyn, New York.  The stated purpose of the summit was to bring together interested parties to discuss innovative ways to curtail fraud perpetrated on the U.S. health care system.  In addition to Attorney General Holder and Secretary Sebelius, who spoke of new ways to battle fraud, there were educational panels to indentify best practices in the industry.

At the summit, the Office of the Inspector General introduced A Roadmap for News Physicians: Avoiding Medicare and Medicaid Fraud Abuse which is a tool to help explain to medical students the laws that apply to physicians and how they may comply with them.  This manual is the OIG’s way of educating doctors at the beginning of their careers in order to help prevent mistakes in billing and compliance issues.

This summit was part of President Obama’s series of summits that will be held across the country in order to educate practitioners, recognize innovative solutions, and help lower the cost of healthcare by mitigating fraud on the system.  Upcoming summits will be held in Detroit, Boston, Philadelphia and Las Vegas.

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The United States Supreme Court refused to hear a legal challenge to the healthcare reform law, the Patient Protection and Affordable Care Act (PPACA).  The Court declined without comment to hear the case originally filed in federal court in California by Steve Baldwin and the Pacific Justice Institute.  The plaintiffs challenged the constitutionality of the mandate that every American purchase health insurance by 2014.  Because a federal appeals court in California is still considering its decision, it would have been highly unusual for the Supreme Court to hear the challenge at this time. 

The California challenge to PPACA is only one of multiple challenges in courts around the country.  For instance, in Michigan a legal challenge was brought by the Thomas More Law Center.  In addition, there is another lawsuit filed by several states, the National Federation of Independent Business and two individuals. 

For more information on healthcare reform and its impact on providers, please visit www.wachler.com or contact a Wachler & Associates attorney 248-544-0888.

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The device manufacturer, ELA Medical, Inc. agreed to pay the United States $9,178,000 to settle allegations that it violated the False Claims Act by giving kickbacks to cardiologists in exchange for the cardiologists ordering and causing hospitals to order ELA’s cardiac devices.  The settlement resolves a qui tam action from 2006 that was filed by a former ELA employee.  According to the allegations the cardiologists were given gifts, meals and entertainment, tickets to sporting events, travel to medical conferences, travel to Costa Rica, fishing and boating trips and payment of travel expenses for the physicians’ spouses.  In addition to the settlement payment, ELA agreed to pay $485,000 to the relator’s attorneys and ELA also agreed to enter into a Corporate Integrity Agreement with the Officer of Inspector General of the U.S. Department of Health and Human Services (OIG).  The relator’s share of the settlement amount is approximately $1.9 million.

There is also a second qui tam action pending against ELA.  The relator in that action alleges that ELA paid kickbacks to cardiologists by paying excessive compensation for training services.  The parties in the second qui tam action have reported that they are engaged in settlement discussions and that the case has been administratively closed due to those discussions. 

For more information on the False Claims Act and Anti-Kickback Statute, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888.

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Cardiac Pacemaker Implantations and Cardiac Defibrillator Implantations were two of the most targeted services from an overpayment standpoint during the RAC demonstration period.  This makes them potential prime targets for the permanent RACs in the future.  As such, sufficient documentation of the need for services provided at the inpatient level of care are paramount when providing these services, due to increased scrutiny they will undoubtedly receive from the permanent RACs once approved.  CMS recently noted the high probability of overpayment in connection with these claims in an MLN Matters article.

To date, neither pacemaker implants nor defibrillator implants have been approved for medical necessity reviews by the RACs.  But the potential for recoupment suggests these procedures will be approved for medical necessity review in the future.  Currently, the permanent RACs are reviewing percutaneous cardiovascular procedures and other vascular procedures for medical necessity in all four regions.

Providers need to be prepared to show the medical necessity of the inpatient stay for cardiac implantations in the medical record.  If you would like additional information regarding preparing for RAC reviews or would like to have your current procedures reviewed for compliance, please contact a Wachler & Associates attorney at 248-544-0888.

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In September the Joint Commission announced that it will begin to accredit patient-centered medical home models for physicians by July 2011.  A medical home model is a method to deliver care that is based on the ability to demonstrate evidence-based protocols, self-management education and care coordination with specialists and other facilities.  The Joint Commission’s final standards will be available in March 2011 and on-site surveys will begin in July 2011. 

The American Medical Association supports patient-centered medical homes, but stated to American Medical News that it will continue to work with the Joint Commission to ensure that proposed accreditation standards will focus on patient safety and access to physician care.  Currently, some of these practices follow the standards published by a Washington D.C.-based organization, National Committee for Quality Assurance (NCQA).  NCQA argues that more accreditation or recognition bodies will complicate the accrediting landscape and will cause confusion among providers.

For more information on patient centered medical homes or other health care reform concepts, please contact a Wachler & Associates attorney at 248-544-0888.

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The Office of the Inspector General recently released the Work Plan for fiscal year (FY) 2011. The Work Plan describes areas the OIG will focus on in the upcoming year; something all practitioners concerned with compliance should pay attention to.  Medical devices, radiation therapy quality and safety, and an expanded focus on the three and one day payment windows are all covered.

Part of the focus for FY 2011 is on quality and billing concerns.  In particular, brachytherapy reimbursement, replacement of devices received at no cost or reduced cost, safety and quality of intensity-modulated radiation therapy (IMRT) and the safety and quality of image guided radiation (IGRT) are areas receving increased scrutiny.  When it comes to billing issues, particularly for a difficult billing area such as medical devices, providers need to be aware of the correct procedure.  Conducting a thorough and in depth compliance audit of a provider’s billing procedures is a smart and effective way to make sure that office practices do not run afoul of proper procedures.

With respect to the payment window rules, the Work Plan has added a one day payment window for non-IPPS facilities.  This rule is akin to the three day payment window available to IPPS facilities and it requires payments to non-IPPS facilities for diagnostic services provided the day before an inpatient claim to be included, along with other services related to admission on the day before admission, as part of the inpatient claim.

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