Medicare

Published on: January 29, 2024

Wound Care Audits on the Rise

Medicare providers who use skin substitutes, allografts, and similar products for wound care are seeing a sharp increase in audits by Medicare contractors. These products often carry high reimbursement rates and require frequent reapplication. Therefore, they are seen by the Medicare program as high risk for improper payments or outright fraud. Providers who use these products or who are subjected to audit should know the consequences of an audit and that there are avenues to respond.

Many of these audits are conducted by Unified Program Integrity Contractors (UPICs), such as CoventBridge group. UPICs are Medicare contractors tasked with auditing providers for suspected fraud in claims submitted to the Medicare or Medicaid programs. Notably, UPICs are quick to deny claims and allege that the provider has committed fraud for any perceived noncompliance with documentation requirements, no matter how minor. A UPIC’s allegation of fraud can nonetheless have serious consequences for a provider, especially when not rebutted, but such allegations may be addressed through the timely appeal of claims denied by the UPIC.

Denial reasons in wound care audits generally include: the specific product was investigational or experimental, conservative treatment was not documented prior to application of the product, there is no documentation regarding why one product was chosen over another product or another course of treatment, the product was reapplied too many times or over too long a period, the patient did not show significant enough improvement to justify continued use, and that the product was not used for a “homologous use.” “Homologous use” is defined by statutes and regulations governing FDA approval for a product and generally means that tissue is used by the patient in the same manner as it was used by the donor. For example, auditors often claim that placental-derived products can only be used as a “wound covering” because the placenta “covers” the fetus, and that “wound healing” is a separate, inappropriate use. Each of these denial reasons can be addressed in the claims appeal process.

Published on: December 20, 2023

New Medicare Provider Enrollment Changes for 2024

by Wachler & Associates, P.C.

Recently, the Centers for Medicare & Medicaid Services (CMS) published the calendar year (CY) 2024 physician fee schedule (PFS) final rule, which solidified certain proposed changes to Medicare provider enrollment requirements. The changes discussed below go into effect January 1, 2024.

The final rule expands CMS’s current revocation and denial authorities in two significant ways. First, CMS now has the ability to revoke enrollment if a provider, supplier, or any owner, managing employee or organization, officer, or director has been convicted of a misdemeanor under federal or state law within the previous 10 years that CMS deems detrimental to the best interests of the Medicare program and its beneficiaries. Previously, CMS only had the authority to revoke a provider’s Medicare enrollment in the event of a conviction for certain felonies. CMS has stated that this could include any misdemeanor that, in its judgment, places the Medicare program or its beneficiaries at immediate risk, such as a malpractice suit that results in a conviction of criminal neglect or misconduct.

Second, the final rule expands CMS’s authority to revoke and deny enrollment if a provider, supplier, or any owner, managing employee or organization, officer, or director has had a civil judgment under the False Claims Act (FCA) imposed against them within the previous 10 years. Prior to the CY 2024 final rule, CMS did not have the authority to revoke a provider’s Medicare enrollment solely related to FCA activity. For purposes of this ground for revocation or denial, the term “civil judgment” would not include FCA settlement agreements – the provision requires a judgment against the provider or supplier.

Published on: December 18, 2023

CMS Finalizes CY 2024 Medicare Physician Fee Schedule

by Wachler & Associates, P.C.

The Centers for Medicare & Medicaid Services (CMS) recently issued the final rule for the physician fee schedule (PFS) for calendar year (CY) 2024, which implements new evaluation and management (E/M) policies and solidifies certain existing telehealth policies.

In the final rule, CMS reduced overall payment rates under the PFS by 1.25% in CY 2024 compared to CY 2023. The final CY 2024 PFS conversion factor is $32.74, which is a decrease of $1.15 (or 3.4%) from the current CY 2023 conversion factor of $33.89, representing a decrease in overall pay to physicians.

CMS has also finalized a new payment code to reflect changes in policies regarding evaluation and management (E/M) services. Beginning January 1, 2024, a separate add-on payment for healthcare common procedure coding system (HCPCS) code G2211 is being implemented for billing split (or shared) visits. Split (or shared) E/M visits refer to visits provided in part by physicians and in part by other non-physician practitioners in hospitals and other institutional settings. The new code reflects the resource costs associated with E/M visits for primary care and longitudinal care. Generally, it will be applicable for outpatient and office visits as an additional payment, recognizing the inherent costs involved when clinicians are the continuing focal point for all needed services, or are part of ongoing care related to a patient’s single, serious condition or a complex condition.

Published on: December 7, 2023

HHS OCR Announces First Ransomware Resolution Agreement and Corrective Action Plan

by Wachler & Associates, P.C.

The Department of Health and Human Services (HHS) Office of Civil Rights (OCR) recently entered into a first of its kind resolution agreement and corrective action plan to settle potential HIPAA violations arising out of a ransomware attack. The agreement to settle alleged HIPAA violations was entered into with Doctors’ Management Services (DMS), a practice management company acting as a business associate to several covered entities.

By way of background, in April 2019, OCR opened an investigation based on a breach report from DMS. The report stated that approximately 206,695 individuals were affected when the DMS network server was infected with ransomware. The initial unauthorized access to the network occurred several years prior. However, DMS did not detect the intrusion until late 2018 after ransomware was used to encrypt their files. Based on its investigation, OCR alleged that:

DMS failed to conduct an accurate and thorough risk analysis that assessed technical, physical, and environmental risks and vulnerabilities associated with handling electronic patient health information (ePHI);

Published on: November 28, 2023

Healthcare Providers See Drastic Increase in Medicare Advantage Denials

by Wachler & Associates, P.C.

A recent report published by the Syntellis Performance Solutions and the American Hospital Association demonstrated a shocking 56% increase in Medicare Advantage (MA) claim denials from January 2022 to July 2023. The report was based on an analysis of data from over 1,300 health systems and hospitals, and further showed a 20% increase in commercial payor denials. The findings are especially concerning given that healthcare systems across the U.S. experienced drastic increased in operating expenses over the period, with a nearly 90% increase in maintenance costs, 33% increase in professional fees costs, 24% increase in labor costs, and a 35% increase in utility costs.

The substantial decrease in payments and significant increase in costs has put several health systems in the precarious position of being less equipped to navigate unforeseen market shifts. The serious physician and nursing labor shortage currently seen in the United States compounds the problem even further. Beneficiaries have also seen an increase in MA denials, which has led to increased congressional and regulatory scrutiny.

The increase of MA claim denials has led to increased scrutiny over the use of AI by insurance companies to evaluate claims for denial. A recent class action lawsuit was filed against UnitedHealth Group by MA beneficiaries, who claim the company’s AI algorithm systematically denies elderly patient’s claims. UnitedHealth began using an AI algorithm developed by its subsidiary NaviHealth, known as nH Predict, which the lawsuit alleges is used to “prematurely and in bad faith discontinue payment for healthcare services.”

Published on: November 20, 2023

OIG Issues New General Compliance Program Guidance

by Wachler & Associates, P.C.

In November 2023, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) released its General Compliance Program Guidance (GCPG). This guidance was released as part of OIG’s Modernization Initiative, which seeks to make compliance program guidance more user friendly and accessible. The document does not include new information but instead summarizes existing guidance regarding fraud and abuse risk, serving as an up-to-date comprehensive reference guide for the general healthcare community and industry stakeholders. OIG also noted that in 2024 it will begin publishing industry segment-specific CPGs (ICPGs) which will address compliance measures for industry subsectors.

The GCPG is not legally binding on any individual or entity, but contains valuable information regarding compliance with federal fraud and abuse statutes and regulations. The OIG guidance includes information regarding key fraud and abuse laws, the primary elements of an effective compliance program, program adaptations for small and large entities, other compliance considerations, and OIG resources and processes.

The GCPG begins with an overview of the principal federal fraud and abuse laws including the Anti-Kickback Statute (AKS), the Physician Self-Referral Law (PSL; also known as the “Stark law”), the False Claims Act (FCA), and the Civil Monetary Penalty law (CMP). Their stated goal in summarizing these laws is to “create awareness and provide tools and resources to aid compliance efforts in both preventing violations and identifying potential red flags early with respect to these laws and regulations.”

Published on: November 15, 2023

CMS Finalizes 2024 OPPS and ASC Payment Rates and Policies

by Wachler & Associates, P.C.

On November 2, 2023, the Centers for Medicare & Medicaid Services (CMS) issued a final rule outlining the 2024 Medicare payment rates and policy updates for hospital outpatient and Ambulatory Surgical Center (ASC) services. The CMS final rule represents an annual update to the Medicare payment system and includes updates to the Outpatient Prospective Payment System (OPPS) and ASC payment rates, implementation of regulations aimed to improve hospital price transparency, and expansion of behavioral health services through the establishment of new payments and policies.

For calendar year (CY) 2024, CMS finalized an increased payment rate of 3.1% for OPPS and ASC services. This update reflects a projected hospital market basket increase of 3.3%, reduced by 0.2% for the productivity adjustment. This rate has been criticized by many leaders in the healthcare industry as inadequate to meet the financial burdens faced by hospitals and ASCs. American Hospital Association (AHA) Executive Vice President Stacey Hughes released the following statement in response to the final rule: “The AHA is concerned that CMS has again finalized an inadequate update to hospital payments… Most hospitals across the country continue to operate on negative or very thin margins that make providing care and investing in their workforce very challenging day to day. Hospitals’ and health systems’ ability to continue caring for patients and providing essential services for their communities may be in jeopardy, which is why the AHA is urging Congress for additional support by the end of the year.”

The final rule also made changes to the CMS hospital price transparency requirements. All hospitals will now be required to display standard charge information through the use of a CMS template. The template is offered in various formats and requires hospitals to encode its standard charge information into the template. The rule also requires hospitals to place a “footer” at the bottom of their homepage linking users to the Hospital Price Transparency machine readable file (MRF). There will also be an affirmation statement requirement in which hospitals affirm they have made a good faith effort to ensure the MRF data is true, accurate, and complete.

Published on: November 8, 2023

WHO Publishes AI Considerations in Healthcare

by Wachler & Associates, P.C.

In light of the rapid technological advancements and increasing utilizations of artificial intelligence (AI), the World Health Organization (WHO) issued a publication outlining key regulatory considerations on AI for healthcare. The publication highlights emerging best practices for the development and use of AI in healthcare and aims to lay out an overview of regulatory considerations on AI for healthcare covering six general topic areas discussed below.

As the publication explains in greater detail, the WHO recommends that stakeholders take into account the following considerations as they continue to develop frameworks and best practices for the use of AI in healthcare:

Documentation and transparency: Pre-specifying and documenting the intended medical purpose and development process should be considered in a manner that allows for the tracing of the development steps as appropriate. A risk-based approach should also be considered for the level of documentation and record-keeping utilized for the development and validation of AI systems.

Published on: October 30, 2023

CMS Expansion of Revocation Authority Requires Increased Diligence in Audit Response

by Wachler & Associates, P.C.

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.