Health Law

Published on: October 2, 2023

OIG Announces Plan to Investigate Managed Care Contracts

In August 2023, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) announced its strategic plan to investigate the life cycle of Medicare and Medicaid managed care contracts. OIG’s plan will scrutinize these contracts from inception through enrollment, reimbursement, services, and renewal. In order to address fraud, waste, and abuse risks, the goal of OIG’s plan is to hold accountable Medicare Advantage organizations (MAOs) and Medicaid managed care organizations (MCOs).

Currently, more than half of Medicare enrollees and more than 80% of Medicaid enrollees are covered by managed care programs. In order to oversee the approximate $700 billion that the federal government spent on managed care programs in 2022, OIG has set out four phases of managed care that it intends to investigate: (1) plan establishment and contracting, (2) enrollment, (3) payment, and (4) provision of services.

In the first phase, OIG intends to review activities that occur when the Centers for Medicare & Medicaid Services (CMS) or states initially establish or renew managed care contracts. In this contract review phase, OIG will evaluate whether MAOs and MCOs are providing the government with accurate information, including in their bids, and abiding by the contract terms for their plan design, service offerings, and coverage area. In the second phase, OIG will review enrollment processes. Specifically, OIG will focus on potentially aggressive marketing campaigns and inaccurate information collection.

Published on: September 22, 2023

CMS Proposes Rule Establishing New Nursing Home Accountability and Staffing Standards

by Wachler & Associates, P.C.

As part of the Biden Administration’s initiative to improve quality and safety in nursing home care, the Centers for Medicare & Medicaid Services (CMS) issued a notice of proposed rulemaking on September 1, 2023, entitled “Minimum Staffing Standards for Long-Term Care Facilities and Medicaid Institutional Payment Transparency Reporting.” This initiative resulted in part from a 2022 Nursing Home Staffing Study, which sought to establish “the level and type of staffing needed to promote acceptable quality and safety.” Notably, the study projected that the cost of implementing such new minimum staffing requirements could range from $1.5-6.8 billion, increasing the burden on an industry already struggling with personnel shortages and demanding regulatory requirements.

The proposed rule is comprised of three core staffing proposals, including establishing new minimum staffing standards for RNs and NAs, requiring an RN to always be onsite, and enhancing facility assessment requirements. There are staggered implementation protocols and possible hardship exemptions for qualifying facilities included in the proposed rule. CMS also announced a collaboration with the Health Resources and Services Administration (HRSA) to assist in training and growing the nursing workforce, by investing over $75 million in scholarships and tuition reimbursement.

The first core staffing proposal establishes a minimum staffing standard of 0.55 hours per resident day (HPRD) for RNs and 2.45 HPRD for NAs. Practically speaking, this translates to a facility with 100 residents having two RNs for each 8-hour shift and a third RN for one shift during the day, as well as ten NAs per 8-hour shift. As these are minimums, CMS noted that they expect facilities to increase staffing above this baseline pursuant to the individual facility assessment and acuity levels.

Published on: September 8, 2023

CMS Increases Scrutiny on Hospice Providers

by Wachler & Associates, P.C.

The Centers for Medicare & Medicaid Services (CMS) recently announced that it intends to increase scrutiny on hospice providers as a result of increased reports and CMS findings suggesting potential hospice services fraud. CMS stated that it is strengthening its hospice program integrity strategy through actions such as site visits and proposed regulations to minimize impacts to Medicare beneficiaries.

As part of this revitalized focus on hospice integrity, CMS has highlighted several observed situations that it views with heightened scrutiny. Certain reports cited by CMS have supposedly identified instances of hospices certifying patients for hospice care when they were not terminally ill and providing little to no services to patients. CMS has also indicated that the listed address for some hospices appears to be non-operational. One particular alleged trend CMS has focused on is known as “churn and burn,” where a new hospice opens and starts billing, but once that hospice is audited or reaches its statutory yearly payment limit, it shuts down, keeps the money, buys a new Medicare billing number, transfers its patients over to the new Medicare billing number, and starts billing again.

In response to these purported findings, CMS embarked on a nationwide hospice site visit program, making unannounced site visits to every Medicare-enrolled hospice. As of mid-August 2023, CMS has visited over 7,000 hospices, and indicated that nearly 400 hospices are being considered for potential administrative action as a result. While many of these hospices may very well be able to demonstrate compliance with Medicare requirements, if CMS finds grounds to conclude that a hospice is allegedly non-compliant, this may result in significant consequences such as suspension or revocation. Further, CMS has noted that rapid hospice growth trends in four states – Arizona, California, Nevada, and Texas – has led the Centers to implement a provisional period of enhanced oversight in these states. During this provisional period, CMS plans to conduct medical reviews before making payments on claims submitted by newly enrolling hospices.

Published on: September 1, 2023

CMS Announces New Voluntary Primary Care Model in Eight States

by Wachler & Associates, P.C.

The Centers for Medicare & Medicaid Services (CMS) recently announced the Making Care Primary (MCP) Model, a new voluntary primary care model that will be tested in eight states. The new model aims to improve care management and care coordination, equip primary care clinicians with tools to form partnerships with healthcare specialists, and leverage community-based connections to address patients’ health needs as well as their health-related social needs, such as housing and nutrition. CMS plans to work with eight state Medicaid agencies to engage in full care transformation across payers, with plans to engage private payers in the future. The MCP Model is slated to launch July 1, 2024 in eight participating states – Colorado, North Carolina, New Jersey, New Mexico, New York, Minnesota, Massachusetts, and Washington.

The MCP Model is a 10.5-year multi-payer model with three participation tracks that build upon previous primary care models. MCP’s overarching goal is to improve care for beneficiaries by supporting the delivery of advanced primary care services, which are foundation for a high-performing health system. To achieve this goal, the Model will provide a pathway for primary care clinicians with varying levels of experience in value-based care to gradually adopt prospective, population-based payments while building infrastructure to improve behavioral health and specialty integration and drive equitable access to care. The Model also attempts to strengthen coordination between patients’ primary clinicians, specialists, social service providers, and behavioral health clinicians, ultimately leading to chronic disease prevention, fewer emergency room visits, and better health outcomes.

Three domains define the MCP Model’s care delivery approach:

Published on: August 21, 2023

HHS, DOL, and Treasury Issue Long-Awaited Mental Health Parity Proposed Regulations

by Wachler & Associates, P.C.

On August 3, 2023, the US Departments of the Treasury, Labor, and Health and Human Services (Departments) issued proposed rules under the Mental Health Parity and Addiction Equity Act (MHPAEA) to reduce barriers to access to mental health and substance use disorder treatment. The proposed rules emphasize the Departments’ focus on mental health parity and aligns with their overarching goal to better ensure that health plans afford access to mental health or substance use disorder benefits as easily as medical or surgical benefits.

By way of background, in 1996, the Mental Health Parity Act of 1996 was enacted by Congress, requiring parity in aggregate dollar and annual dollar limits for mental health benefits. In 2008, the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) added additional requirements, expanding the Mental Health Parity Act of 1996. The MHPAEA requires group health plans and insurance issuers to ensure that financial requirements and treatment limitations are not more restrictive for mental health or substance use disorder benefits than medical or surgical benefits. The Consolidated Appropriations Act in 2021 further expanded the MHPAEA by requiring health plans that cover both medical or surgical benefits and mental health or substance use disorder benefits to conduct and document comparative analyses of non-quantitative treatment limitations (NQTL) for both types of benefits.

Although the Departments have issued a fair amount of sub-regulatory guidance regarding the NQTL comparative analysis requirement, the proposed regulations are the first formal regulatory guidance they have issued in about ten years. Recently, audits by the Departments of health plans have directed their focus to MHPAEA compliance. Plan sponsors have expressed frustration with the lack of guidance and varying applications of the existing guidance, complaining that the Departments’ requests are not supported by law, not practical in application, and contradictory.

Published on: August 16, 2023

OIG Final Rule Implementing Information Blocking Penalties

by Wachler & Associates, P.C.

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued a final rule (Final Rule) on June 27, 2023, which implements statutory provisions for specific individuals or entities subject to the information blocking requirements established by the 21^st Century Cures Act (Cures Act). The Cures Act imposes civil money penalties (CMP) of up to $1 million per violation of information blocking, which is defined as “a practice that interferes with, prevents, or materially discourages access, exchange, or use of electric health information,” except as required by law or covered by an exception.

The Final Rule authorizes HHS to impose CMPs, assessments, and exclusions on individuals and entities that engage in alleged fraud or other misconduct related to HHS grants, contracts, and other agreements, as well as increases the maximum penalties for certain CMP violations. OIG may impose CMPs of up to $1 million per violation of information blocking on a health information technology (Health IT) developer of certified health IT or a health information network or health information exchange (HIN/HIE), as those terms are defined by OIG.

Penalties may be imposed on certified Health IT developers and HIN/HIEs that do not actually interfere with access, exchange, or use of electronic health information (EHI) if the requisite intent is present. Specifically, such individual or entity may have CMP exposure under the Final Rule if it knew or should have known that a practice was likely to interfere with access, exchange, or use of EHI. Additionally, OIG has clarified that a discrete action by an actor that implicates information blocking would be viewed as a single violation. Thus, it appears that the number of violations will be directly connected to the number of discrete acts.

Published on: August 9, 2023

OIG Declines to Impose Sanctions on Online Healthcare Directories

by Wachler & Associates, P.C.

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) released Advisory Opinion 23-04 (Advisory Opinion) on July 11, 2023, addressing arrangements between online healthcare directories and certain third-party websites (Directories) with federal healthcare program beneficiaries. In the Advisory Opinion, the OIG declined to impose sanctions on healthcare provider Directories offering these sort of advertising services to providers.

Under the proposed arrangement, healthcare provider Directories are serving as marketplaces in which users and potential patients can book medical appointments with physicians and other healthcare providers (Providers) who are listed on the online Directories. Patients can filter their results by searching for different types of medical providers, and the Directories generate personalized results using a proprietary algorithm.

Although no fee is charged to the patients for using the directory, Providers pay a fee to be included in the directory through an array of payment methods. Whenever potential patients click on a Provider’s profile during their searches, a “per-click” fee is charged to Providers. A “per-booking” fee is also charged to Providers for each new patient the Providers receive through the Directory which may vary in amount based on location, specialty, and other factors impacting the fair market value of the marketing service. Providers can also set spending caps, which would remove the Providers from the directory once a certain amount of booking fees has been met.

Published on: August 7, 2023

CMS Proposes Extension of Virtual Direct Supervision

by Wachler & Associates, P.C.

On July 13, 2023, the Centers for Medicare & Medicaid Service (CMS) released the Calendar Year 2024 Physician Fee Schedule Proposed Rule, proposing to extend remote supervision. The proposed rule continues to define “direct supervision” by allowing supervising physicians and practitioners the ability to continue “direct supervision” through real-time audio and visual interactive telecommunications through December 21, 2024.

Typically, to be payable under Medicare Part B, specific types of services must be provided under certain levels of “direct supervision” by a practitioner or physician. These services often include many diagnostic tests and other services furnished by auxiliary personnel incident to the services of the billing physician. “Direct supervision” usually requires the “immediate availability” of a supervising professional — both in-person and physical availability. However, during the COVID-19 Public Health Emergency (PHE), CMS allowed flexibility in what constituted “direct supervision” by allowing “immediate availability” to include virtual presence using two-way, real-time audio or video technology, instead of requiring physical presence. This policy allowing remote direct supervision was originally set to expire at the end of 2023.

However, due to the increased reliance on virtual direct supervision by physicians and beneficiaries alike, CMS expressed several concerns regarding the expiration of the policy. In its proposed rule, CMS noted that, despite the new patterns of virtual direct supervision that were established and often maintained during the PHE, evidence showing that patient safety is compromised by virtual direct representation is entirely absent. Moreover, telehealth services have overall allowed individuals in rural and undeserved areas to have improved access to care. Expiration of this policy could create substantial barriers to access of many healthcare services, including those furnished incident-to a physician’s service.

Published on: March 6, 2023

New Rural Emergency Hospital Provider Type Offers Potential Solution for Struggling Rural Hospitals

by Wachler & Associates, P.C.

Under the Consolidated Appropriations Act (CAA), a new Medicare provider type, the rural emergency hospital (REH), has been created with the goal of preserving access to outpatient hospital services in rural communities. Rural providers already face numerous financial and operational challenges, and the high number of recent closures of rural hospitals has only compounded the health disparities in rural communities. The introduction of this new provider type offers a targeted solution for small rural providers that cannot continue to operate a full-service hospital.

Under the new classification, an REH is a Medicare-enrolled provider that must furnish emergency department services and observation care. REHs may also provide other outpatient services, but may not provide inpatient services, except for certain skilled nursing facility services. Currently, for outpatient services, an REH’s annual per patient average length of stay cannot exceed 24 hours. Additionally, REHs benefit from two basic payment policies: a monthly facility payment of $272,866 per month in 2023 and payment at 105% of the Outpatient Prospective Payment System (OPPS) rate for services that qualify as REH services.

To enroll as an REH, eligible providers must submit a Form CMS-855A change of information application, rather than an initial enrollment application. This process avoids the gap in payment that typically accompanies initial enrollment and helps ease the burden that would otherwise fall on prospective REHs. The provider must also submit an action plan for initiating REH services, including a transition plan that lists the services the provider will retain, modify, add, and discontinue. The action plan must also include a description of the services the REH elects to provide, in addition to the required emergency department services and observation care, and a description of how it will use the facility payment. An eligible provider may only become an REH by converting from a critical access hospital (CAH) or rural hospital. Only providers that were a CAH or rural hospital with 50 beds or less on the enactment date of the CAA (December 27, 2020) are eligible to convert to an REH.

Published on: November 7, 2022

CMS Seeks Comments on Proposed National Healthcare Provider Directory

by Wachler & Associates, P.C.

On October 7, 2022, the Centers for Medicare & Medicaid Services (CMS) published a request for information (RFI) notice seeking public comment on a proposed national healthcare provider directory. CMS states in the RFI that the directory would be a “centralized data hub” for healthcare provider, facility, and entity directory information across the country. Under the proposal, CMS would establish and maintain the national directory and validate the data against primary sources. The national directory would also be application programming interface (API)-enabled.

While patients already use provider directories to locate healthcare providers and learn about the services they offer, these directors are typically maintained by individual payers and may not be the most accurate source of provider information. Moreover, reporting contact and services data to payers places a significant administrative burden on providers. In the RFI, CMS cites a 2019 study conducted by the Council for Affordable Quality Healthcare (CAQH), which found that physician practices collectively spend around $2.7 billion annually on directory maintenance. Viewed differently, that figure equates to about $1,000 per month per practice, or one staff member workday per week. According to CAQH, a single streamlined platform for reporting provider directory information would save practices over $4,700 each year, or approximately $1.1 billion in collective annual savings nationwide. Although it is worth noting that payors would likely still require providers to report contact and services data to them, meaning CMS is only adding an additional administrative burden.

CMS’s proposed nationwide directory purports to streamline existing data across its system and publish easily accessible information using interoperable technology in a centralized location. According to CMS, the proposed directory would not only give patients more accurate provider information, but also improve health data exchange and care coordination between providers. A national directory also has the potential to improve public health reporting, a major challenge for the healthcare industry during the COVID-19 pandemic.