Articles Posted in Health Law

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On March 31, 2011, CMS released the proposed rule implementing the Medicare Shared Savings program and establishing the requirements for Accountable Care Organizations (ACOs) that wish to participate in this program.  The following is a list of some of the highlights from this Proposed Rule.

1. The proposed rule contemplates two models: a “one-sided” model in which providers do not share risk and a “two-sided” model in which providers share in risk and realize greater return on the shared savings.

2. ACOs must commit to participate in the shared savings program for three years.  Providers who select the “one-sided” option will need to agree to share risk in their final year of participation.  If an ACO wants to terminate early, they will need to give a 60 day notice to CMS, as well as a notice to beneficiaries, and will forfeit a portion of previously earned shared savings that was withheld by CMS.

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If the rumors are true, tomorrow the Centers for Medicare and Medicaid Services, the Office of the Inspector General and the Federal Trade Commission will be releasing voluminous regulations governing the formation of Accountable Care Organizations (“ACO”) and the Medicare Shared Savings Program.  But before we receive all the minutiae of the regulations, we wanted to provide a brief overview of what is already known about ACOs.

1. The purposes of ACOs are to: (1) facilitate coordination and cooperation, (2) improve the quality of care and (3) reduce unnecessary costs.

2. ACOs were created by the Affordable Care Act, which was signed by President Obama approximately one year ago.

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The OIG recently issued a favorable opinion concerning (1) the waiver of patient cost sharing amounts, without regard to patient need and (2) providing limited lodging and transportation for all patients of a network of pediatric charity hospitals.  The requestors were pediatric non-profit charity hospitals which currently provide free services to very sick and injured children.

The Requestors have not billed for their services in the past, but were seeking a favorable determination so that they could begin to bill on an “insurance only” basis without billing the patients or families for copayments, deductibles or other cost sharing amounts.  They would also continue to provide free services to uninsured patients and would not make decisions as to which families could receive the service based on insured status.

The OIG concluded that the Insurance-Only Billing would not lead to a risk of improper billing since the hospitals historically have not charged the patients or their families for services.

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The Affordable Care Act requires that all home health and hospice services be initiated by an in-person encounter with the patient and their physician in order to be covered under Medicare.  This requirement began January 1, 2011, but CMS has announced that it will not begin enforcing the requirement until April 1, 2011.  CMS has further stated that the delay in enforcement will not be further extended beyond April 1, 2011.

If you have any questions or concerns about complying with these new regulations, or any other regulations, please contact one of our attorneys at 248-544-0888 or www.Wachler.com. 

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The final rule changed several elements from the proposed rule.  One changed feature under the final rule is that one entity will be responsible for testing EHRs, and another entity will be responsible for certifying the EHRs.  No single entity will be allowed to perform both activities.

Other changes involve the process for accrediting the testing and certifying entities.  Those entities that were approved to test and certify records under the temporary program will not automatically be accredited under the permanent program and will have to meet any criterion required under the permanent program.  The permanent program is scheduled to begin January 12, 2012.

If you have any questions or concerns regarding certification of EHRs, or any compliance issues, please contact one of our attorneys at 248-544-0888 or visit www.Wachler.com for more information. 

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Due to confusion surrounding whether an IDTF was considered a “mobile” or “fixed-base” delivery structure, the DAB has explicitly stated that there are two types of mobile IDTFs.  Mobile IDTFs can either be “portable units” or a “mobile facility or unit.”  The difference between the two definitions is that a “portable unit” is one that transfers equipment to different fixed locations for diagnostic testing, while a “mobile facility or unit” is a vehicle that travels to different locations to treat patients inside the vehicle.

The DAB further clarified that rules on shared practice space between IDTFs and another Medicare enrolled provider.  These entities may share a location, but there is a clear distinction between clinical and non-clinical space.  The DAB specified that the sharing of common hallways, waiting rooms, and reception areas is permissible.  But the sharing of clinical space or diagnostic equipment is still strictly prohibited.

If you have any question or concerns regarding compliance with current CMS regulations, please contact one of our attorneys at 248-544-0888 or visit www.Wachler.com for more information.  

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The Adminstration has increased fraud prevention spending to $1.7 billion during the past fiscal year, a substantial increase from previous years.  This increase has been used to combat the estimated $60 billion lost to fraud in any given year.  The funds are going towards new law enforcement intra-agency teams called HEAT strike forces (Health Care Fraud Prevention and Enforcement Action Teams).  These teams are focused on seven cities, including Detroit, Houston, Los Angeles and Miami.  The goal is to expand these teams to 20 cities in the near future.

If you are facing any fruad or complaince related matters, please contact a Wachler and Associates attorney at 248-544-0888 or www.Wachler.com.

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The Department of Health and Human Services Office of Inspector General (OIG) released an unfavorable Advisory Opinion involving a transportation supplier’s proposal to offer skilled nursing facilities (SNFs) two payment plans for transportation of the SNF’s Medicaid-covered residents.  The OIG determined that the arrangement could potentially violate the Anti-Kickback Statute and that administrative sanctions could be imposed.

The transportation supplier (Requestor) provides transportation services in a state where SNFs receive a per-resident daily rate for ancillary and support services form the state Medicaid program.  SNFs that have residents which are eligible for Medicare and Medicaid are responsible for the amount not covered by Medicare that would otherwise be covered by Medicaid as a secondary payor.  The Requestor will offer two payment plans that respond to SNFs’ responsibilities:

(1) The first payment plan would be a capitated rate per resident per day for Medicaid transports regardless of whether the services were needed and whether Medicaid is the responsible payor.  For residents covered under Medicare and Medicaid, the payment would release the SNF from any further liability (including Medicaid deductibles).  The capitated payment would be less than the Requestor’s cost of transportation for Medicaid patients and more for Medicare patients. 

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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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