Medicaid

Published on: October 30, 2023

CMS Expansion of Revocation Authority Requires Increased Diligence in Audit Response

In November 2021, the Centers for Medicare & Medicaid Services (CMS) published a final rule expanding their ability to revoke Medicare billing privileges of providers and suppliers. This rule went into effect January 1, 2022, and has significantly increased the importance of a diligent and careful response when faced with a CMS audit.

Prior regulations required CMS to consider the following three factors when determining whether a provider or supplier was engaged in the type of billing practices which could support a revocation: (1) the reason for any claim denials, (2) the length of time over which any pattern or practice of submitting claims that fail to meet Medicare requirements occurred, and (3) how long the provider or supplier had been enrolled in Medicare.

CMS asserted that these three considerations inhibited their ability to “target brief periods involving a significant percentage of denied claims” and therefore proposed revisions to this framework which it believed would strengthen CMS’ overall program integrity efforts. The new framework now considers the following four factors:

Published on: October 23, 2023

OIG Updates Work Plan for October 2023

by Wachler & Associates, P.C.

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) announced several new changes in its Work Plan update for October 2023. The OIG Work Plan forecasts the projects that OIG plans to implement over the foreseeable future. These projects usually include OIG audits and evaluations. Below are the highlights from the Work Plan update of which providers and suppliers should take notice.

First, OIG will perform an audit of the Morehouse School of Medicine’s National Infrastructure for Mitigating the Impact of COVID-19 (NIMIC) initiative. The NIMIC initiative is a 3-year, $40 million cooperative agreement between HHS’s Office of Minority Health and the Morehouse School of Medicine to fight COVID-19 in racial and ethnic minority, rural, and socially vulnerable communities. The Morehouse School of Medicine is leading the initiative to coordinate a strategic network to deliver COVID-19 related information to communicates hit hardest by the pandemic.

Second, OIG will audit the accuracy of the Child Care and Development Fund (CCDF) attendance records at Minnesota child care centers. The CCDF is the primary federal funding source devoted to subsidizing the child care expenditures of low-income families. OIG has stated that it identified issues with the completeness and accuracy of child care attendance records and with related billings for child care services. Minnesota, as well as possibly additional states, have been selected by OIG for a review to determine whether the state(s) complied with federal and state requirements related to attendance records and whether payments for services at child care centers were allowable.

Published on: October 19, 2023

Employee Safe Harbor Protections Affirmed in Recent OIG Advisory Opinion

by Wachler & Associates, P.C.

On October 10, 2023, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued an advisory opinion reinforcing the broad protection of physician employees under the safe harbor provision of the Anti-Kickback Statute (AKS). The AKS is a federal criminal law which prohibits payment for the inducement or reward of patient referrals or generation of business where any item or service payable by a federal healthcare program is involved. Remuneration under the law has been interpreted to mean “the transfer of anything of value, directly or indirectly, overtly or covertly, in cash or in kind.” Violation of the AKS can result in severe penalties, including imprisonment of up to 10 years, a maximum fine of $100,000, and exclusions from Medicare and Medicaid reimbursement.

There are several statutory and regulatory exceptions to the AKS, which allow for specific remuneration arrangements when certain criteria are met. One statutory exception protects payments made by employers to employees who are in bona fide employment relationships for providing covered items and services under the employment agreement. Similarly, safe harbor regulations have been promulgated by HHS which clarify that “remuneration” under the AKS does not include payments under the bona fide employer-employee relationship described above.

In the recent advisory opinion, the OIG considered whether employer payment of bonuses based on net profits to employed physicians in a multi-specialty ambulatory surgery center (ASC) would constitute a violation of the AKS. The employer practice operated two separate ASCs – noted to be divisions and not subsidiaries – and planned to compensate physician employees via a bonus structure where employed physicians who performed procedures at the ASCs would receive 30% of the practice’s net profits in addition to base employment compensation. The OIG concluded that this type of arrangement would not violate the terms set forth in the AKS.

Published on: October 2, 2023

OIG Announces Plan to Investigate Managed Care Contracts

by Wachler & Associates, P.C.

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 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 14, 2023

CMS Announces GUIDE: A Medicare Dementia Care Model

by Wachler & Associates, P.C.

On July 21, 2023, the Centers for Medicare & Medicaid Services (CMS) announced a new payment model for providers furnishing dementia care, called Guiding an Improved Dementia Experience (GUIDE). A wide range of Medicare Part-B providers and suppliers are eligible to participate, with the exception of durable medical equipment and laboratory suppliers. The model is a comprehensive package of person-centered assessments, care plans, and care coordination. Additionally, this new payment model aims to further enhance the quality of life for people living with dementia by improving dementia care, reducing strain on unpaid caregivers, and helping people with dementia remain in their homes and communities.

GUIDE’s approach to dementia care takes into account staffing considerations, quality standards, and services for beneficiaries and unpaid caregivers. Under the GUIDE model, beneficiaries are required to be screened for psychological and health-related social needs. As a GUIDE participant, providers are required to establish and maintain an interdisciplinary team consisting of a care navigator and a clinician, with the option of including additional members. The care navigator must have training in care planning and dementia assessment while the clinician is required to have dementia proficiency through experience caring for patients 65 years or older and for adults with cognitive impairment. GUIDE participants are required to provide support services alongside caregiver training.

There are two options for providers considering implementing GUIDE:

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: November 9, 2022

CMS Focuses Enforcement on Poorly Performing Nursing Homes

by Wachler & Associates, P.C.

In a recent news release, the Department of Health and Human Services’ (HHS) Centers for Medicare & Medicaid Services (CMS) announced revisions to the Special Focus Facility Program (SFFP), which addresses poor nursing home performance, that will have the effect of increased scrutiny of these troubled facilities. According to CMS, nursing homes that consistently perform poorly in comparison to their peers will be required to comply with stricter standards and demonstrate systemic quality improvements in order to avoid enforcement actions, including exclusion from the Medicare and Medicaid programs.

The increased scrutiny stems from the Biden Administration’s recently announced plan for reforms to nursing home conditions and complicated ownership structures that HHS contends impede oversight of skilled nursing facilities. The focus of the reforms is to increase nursing home quality and safety by requiring minimum staffing levels, enhanced infection control measures, and oversight of nursing homes owned by for-profit companies, among other policies. There are currently 88 nursing homes with persistent records of noncompliance participating in the SFFP in 2022, representing about 0.5% of all nursing homes. In order to complete the program, nursing homes must pass two consecutive inspections that occur approximately every six months. Under the revised program, nursing homes will not be allowed to exit the program if inspections reveal more than a certain number of deficiencies, or if facilities have not significantly improved.

CMS recommends that skilled nursing facilities work with quality improvement organizations and external consultants to implement evidence-based interventions and make meaningful changes to staffing and leadership. State Survey Agencies are also advised to take nursing homes’ staffing levels into consideration, in addition to their compliance histories, when selecting candidates for the SFFP. If nursing homes demonstrate continued noncompliance with the quality rules or fail to demonstrate efforts to improve, CMS has indicated that it will impose severe enforcement sanctions, such as discretionary denials of payment for new admissions, civil monetary penalties, or directed plans of correction. Importantly, any facilities cited for “immediate jeopardy” deficiencies in two surveys while participating in the SFFP may be terminated from the Medicare and Medicaid programs. Lastly, CMS is extending the monitoring period for possible enforcement actions against nursing homes that have successfully completed the SFFP if their performances decline after they are no longer subject to the extra oversight. Nursing homes participating in the SFFP should be aware of the heightened scrutiny that they will be subject to and take actions to ensure compliance with the quality standards, staffing requirements, and other key focus areas under the revised program.

Published on: November 2, 2022

OIG Recommends UPICs Conduct More Medicaid Audits

by Wachler & Associates, P.C.

On October 3, 2022, the US Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued a report detailing OIG’s findings related to the efficacy of the Unified Program Integrity Contractor (UPIC) program. As many healthcare providers may know, UPICs are the primary program integrity contractors for the Centers for Medicare & Medicaid Services (CMS) and the only program integrity contractors with authority to review both Medicare and Medicaid claims. UPICs are tasked with investigating instances of suspected fraud, waste, and abuse in the Medicare and Medicaid programs. However, much of their work amounts to medical review and payment recovery, as their investigations rarely identify meaningful fraud, although it can cause tremendous damage to a provider when the UPIC accuses a provider of fraud

OIG conducted a qualitative study of each of the five UPICs’ 2019 activities, including surveying each UPIC to find out about the challenges they faced in performing program integrity activities. OIG also solicited input from CMS about the effects of the unification of Medicare and Medicaid program integrity activities, how CMS measures the effectiveness of UPICs, and any challenges UPICs face in conducting their work. Notably, OIG did not assess whether UPICs were appropriately targeting providers with audits and suspensions, or whether UPIC findings were upheld on review by other contractors or Administrative Law Judges in the administrative appeals process. Rather, OIG’s report seems to imply that more auditing is always better, regardless of its efficacy or its impact on healthcare providers.

As a result of the study, OIG found that UPICs conducted substantially more Medicare program integrity work compared to Medicaid work. The study revealed that UPICs conducted only minimal activities related to Medicaid managed care, even though most Medicaid enrollees receive services through managed care. OIG further noted that UPICs reported no data analysis projects completed or vulnerabilities identified related to Medicaid managed care in 2019. Overall, UPICs conducted disproportionately fewer Medicaid activities compared to the levels of funding they receive from CMS for Medicaid program integrity activities.

Published on: May 21, 2021

Is it Possible to Settle an Overpayment Demand? Depends on the Payor.

by Wachler & Associates, P.C.

Appealing an overpayment demand can be a challenging task for healthcare providers. Whether the demand stems from claim denials or an audit, the appeals process can involve significant amounts of documentation; complex medical, legal, or coding issues; contract or regulatory review; attorneys; and independent experts. The process may also take months or years to resolve. While some providers with strong cases will likely benefit from pursuing the full appeals process, others may ask if there is a quicker and simpler way. Is it possible to settle the overpayment demand for less than the original demand? The answer often depends on the type of payor.

Commercial insurance plans are often the most likely to entertain the possibility of settlement. Commercial plans perform much the same cost/benefit analysis as any other business and, while it may vary greatly from case to case, may be willing to discuss a final settlement of an overpayment demand. However, it is often helpful for the provider to engage with the early levels of whatever appeal process is available, including submitting documentation and refuting the plan’s assertions and arguments, in order to strengthen the provider’s position.

Where Medicaid is the ultimate payor, a provider may find limited flexibility to discuss settlement. In these cases, the provider is likely dealing directly with a state agency or a state contractor. However, because much of the funding for state Medicaid programs is federal funding, state agencies and contractors are often required to answer to federal authorities regarding the use of Medicaid funds. This dynamic often restricts the state’s ability to resolve overpayments with the provider and requires them to fully litigate the alleged overpayment through the available appeals process.