Wachler & Associates Health Law Blog

Published on: February 12, 2021

OIG Makes Multiple Updates to Work Plan in January 2021

In January 2021, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) added several new items to its work plan. The OIG work plan sets forth various projects including OIG audits and evaluations that are underway or planned to be addressed during the fiscal year and beyond by OIG. These are some of the highlights of the new additions to the work plan of which providers and suppliers should be aware.

First, due to increased use of telehealth during the COVID-19 public health emergency, OIG will conduct a series of audits of Medicare Part B telehealth services in two phases. Phase one audits will focus on making an early assessment of whether services such as evaluation and management, opioid use order, end-stage renal disease, and psychotherapy meet Medicare requirements. Phase two audits will include additional audits of Medicare Part B telehealth services related to distant and originating site locations, virtual check-in services, electronic visits, remote patient monitoring, use of telehealth technology, and annual wellness visits to determine whether Medicare requirements are met.

OIG will also evaluate home health services provided during the COVID-19 public health emergency to determine which types of skilled services were furnished via telehealth, and whether those services were administered and billed in accordance with Medicare requirements. OIG has indicated that it will report as overpayments any services that were improperly billed and will make appropriate recommendations to CMS based on the results of our review.

Published on: February 10, 2021

MDHHS Partners with Wayne State University and Wayne Health to Expand Mobile COVID-19 Testing

by Wachler & Associates, P.C.

On February 3, 2021, the Michigan Department of Health and Human Services (MDHHS) announced it will expand mobile COVID-19 testing and other public health services in partnership with Wayne State University (WSU) and Wayne Health (WH). The partnership between MDHHS, WSU, and WH began in September 2020 and is an extension of a pilot program between WSU, WH, Ford Motor Company, and The Arab Community Center for Economic and Social Services (ACCESS). According to MDHHS, the mobile health units will provide critical health services, COVID-19 testing to high-risk communities, and reduce barriers to healthcare during the COVID-19 pandemic.

The pilot program, which began in April 2020, was an extension of drive-through COVID-19 testing sites in Detroit and Dearborn, with financial support from WSU. Ford Motor Company provides vehicles, drivers, tents, sanitation, power, and Wi-Fi for mobile testing. Each mobile unit will be equipped for COVID-19 testing with medical staff and tools provided by WSU and ACCESS.

The new program will allow three mobile units to travel between sites and provide COVID-19 testing and other healthcare services to communities at the highest risk. MDHHS, WSU, and WH have expanded the pilot program to offer flu vaccinations, cardiometabolic risk factor screenings, and social determinant assessments, in addition to the already offered services such as blood pressure screening, HIV testing, and on-site referrals for public benefits including Medicaid, unemployment assistance, as well as food and shelter programs. The mobile unit program has also partnered with Detroit Parent Network (DPN) to supply community navigation services to patients who utilize the mobile health units. DPN family health advocates ensure patients are connected to the proper resource providers, such as utility assistance, child enrichment, food assistance, referrals to primary care physicians, and ensure the mobile health unit patients are available to follow-up. The services are available to all individuals who walk or drive to the mobile units, and no appointments or prescriptions are required.

Published on: February 3, 2021

A Primer on Medicare Targeted Probe and Educate Reviews

by Wachler & Associates, P.C.

Targeted Probe and Educate (TPE) reviews are a popular audit tool for Medicare Administrative Contractors (MACs) to assess a healthcare provider or supplier’s compliance with Medicare billing requirements. A TPE review consists of up to three rounds of claims review, with education to the provider after each round. A provider or supplier navigating a TPE review should take care to comply with the program’s requirements and timelines and should be aware of the potential consequences of a review.

The Centers for Medicare & Medicaid Services (CMS) initially introduced TPE reviews as a pilot program in only a few jurisdictions. In 2017, CMS expanded the program nationwide and has continued to update and refine the program since its introduction.

A provider who is placed on a TPE review will first receive a Notice of Review letter. This letter will describe the reason that the provider has been placed on TPE review and will provide a brief outline of the process. This letter will not request medical records but will generally indicate that medical records requests will be forthcoming. This letter will likely warn that, if a provider/supplier fails to improve the accuracy of its claims after three rounds, the MAC will refer the provider/supplier to CMS for additional action, such as prepayment review, extrapolation of overpayments, referral to a RAC, or other disciplinary action. Providers should be aware that a TPE can lead to revocation of Medicare billing privileges and placement on the CMS Preclusion List.

Published on: February 1, 2021

CMS Codifies Definition of “Reasonable and Necessary” in Medicare Coverage Determinations

by Wachler & Associates, P.C.

On January 14, 2021, the Centers for Medicare & Medicaid Services (CMS) issued a final rule codifying a definition for “reasonable and necessary” coverage under Medicare Part A and Part B. CMS hopes codifying the meaning of “reasonable and necessary” will provide clarity and consistency to the current process of coverage determination for items and services under Part A and Part B. The final rule takes effect on March 15, 2021.

The definition of “reasonable and necessary” has three components: an item or service is required to be 1) safe and effective, 2) not experimental or investigational, and 3) appropriate for Medicare patients. Whether an item or service is appropriate for Medicare patients will be based on the duration and frequency deemed appropriate for the item or service and whether the item or service:

Is provided in accordance with accepted standards of medical practice

Published on: January 27, 2021

Uncertainty Surrounding CARES Act Reimbursement for Out-of-Network COVID-19 Testing

by Wachler & Associates, P.C.

In response to the COVID-19 pandemic, Congress has attempted to make COVID-19 testing free to individuals by requiring commercial insurers to cover testing. However, federal guidance and action by commercial insurers have muddied the waters and left clinical laboratories in an unenviable position.

The Families First Coronavirus Response Act (FFCRA), passed by Congress on March 18, 2020, required commercial insurers to provide coverage of FDA-approved tests for the “detection of SARS–CoV–2 or the diagnosis of the virus that causes COVID–19,” as well as items and services relating to a visit that results in such a test, at no cost to the beneficiary. Shortly thereafter, on March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act expanded the types of approved tests that were covered by the FFCRA and set the reimbursement rate for COVID-19 testing by out-of-network laboratories. Pursuant to the CARES Act, clinical laboratories must post their “cash price” for COVID-19 testing on their public website and insurers must reimburse out-of-network laboratories for COVID-19 testing at this “cash price.”

However, in June 2020, three government agencies, Department of Health and Human Services, Department of Transportation, and Department of Labor, released guidance that created several points of confusion regarding these requirements. For example, because the FFCRA and CARES Act only require coverage for testing for the “detection or diagnosis” of COVID-19, the June 2020 guidance excluded testing for employment, travel, and monitoring purposes from that which insurers were required to cover. Instead, the guidance required that the testing be done for the “individualized diagnosis or treatment” of COVID-19. Further, despite the FFCRA’s mandate that insurers cover items and services for visits that result in a COVID-19 test, the June 2020 guidance limited coverage to the testing itself and excluded from coverage “any other items and services.”

Published on: January 25, 2021

HHS Updates PRF Reporting Requirements

by Wachler & Associates, P.C.

On January 15, 2021, the Department of Health and Human Services (HHS) released further updates on the reporting requirements for entities that received payments from the Provider Relief Fund (PRF). HHS also pushed back the opening of the PRF reporting portal. The PRF is a $175 billion fund created by Congress through the CARES Act and administered by HHS to provide financial relief to healthcare providers during the COVID-19 pandemic. HHS has subdivided the PRF into various general and targeted distributions.

Acceptance of a PRF payment is conditioned on, among other things, the provider agreeing to use the funds only for healthcare related expenses and lost revenue attributable to coronavirus, and to file reports demonstrating compliance with the conditions of the payment. Through previous guidance, HHS established that, when reviewing a recipient’s use of the PRF payment, it would first apply the payment to healthcare related expenses, then apply any remainder to lost revenue. The new guidance outlines three ways that recipients may calculate their “lost revenue attributable to coronavirus.”

First, a recipient may report the difference between 2019 and 2020 actual patient care revenue. Recipients who choose this method must submit to HHS their 2019 revenue from patient care payer mix, broken down quarterly. Second, a recipient may report the difference between 2020 budgeted and 2020 actual patient care revenue. Recipients who choose this method must submit their 2020 budget, which must have been in place prior to March 27, 2020. Third, a recipient may use “any reasonable method of estimating revenue.” Recipients who choose an alternate methodology must submit to HHS a description of the methodology and an explanation of why it is reasonable. HHS may reject the recipient’s methodology and require them to utilize one of the two pre-approved methodologies. Recipients should also be aware that HHS has warned that recipients who use alternative methodologies are more likely to face an audit of their use of the PRF payment.

Published on: January 21, 2021

CMS Implements New Prior Authorization Changes

by Wachler & Associates, P.C.

On January 15, 2021, the Centers for Medicare & Medicaid Services (CMS) finalized the agency’s “CMS Interoperability and Prior Authorization” rule to improve the prior authorization process and give patients more control in accessing and understanding their health data. Under the rule, certain payers, such as Medicaid and CHIP managed care plans, state Medicaid and CHIP fee-for-service programs (FFS) and those that issue individual market Qualified Health Plans (QHPs) on the federally-facilitated exchanges (FFEs)) must create and utilize technology known as application programing interfaces (APIs). APIs are commonly used in smartphone applications, and when incorporated into electronic health records (EHR), can enable simple and immediate access to health data for providers.

Each payer obligated under this rule must build a documentation search program driven by an API, and make the program public, allowing providers to access health documentation and prior authorization requirements from various EHR platforms. Once a provider determines what each prior authorization requires, the authorization can then be submitted electronically. Moreover, the payers are required to implement, under the already established Patient Access API, laboratory results and other claims and encounter data, as well as information regarding a patient’s pending and active prior authorizations.

Payers must also communicate this data with a patient’s provider if asked, and with other payers, should a patient’s coverage or provider change. This will allow patients, providers, and payers to have all the necessary data when needed, automating the process and reducing the administrative burden on providers. As a result, providers will be less likely to work with incomplete health information and the likelihood of repeat prior authorization requests will decrease, resulting in more time the provider has to spend with the patient. Notably, Medicare Advantage plans are not included in this new rule and not subject to its requirements; however, CMS is continuing to consider whether Medicare Advantage plans should be included.

Published on: January 18, 2021

CMS Finalizes Changes to Medicare Advantage and Part D Prescription Drug Programs

by Wachler & Associates, P.C.

On January 15, 2021, the Centers for Medicare & Medicaid Services (CMS) finalized a rule to help strengthen and streamline the Medicare Advantage and Part D prescription drug programs, with the goal to decrease enrollee cost sharing on expensive prescription drugs. Effective for the 2022 plan year, enrollees will be able to have advance notice and thus compare out-of-pocket costs for various prescription drugs. CMS estimates the final rule will result in $75.4 million in savings to the federal government over ten years.

According to CMS, the rule will provide drug cost transparency regarding out-of-pocket costs, especially for senior citizens, who may be unaware of prescription drug prices, changes in pricing, and on a fixed income. Additionally, Part D plans will have more power to negotiate lower prescription drug prices with drug manufacturers. Under the final rule, Part D plans must offer a real time benefit comparison tool for enrollees to receive information about lower cost alternatives under their plan. Using the tool, which must be offered by Part D plans by January 1, 2023, enrollees can compare cost sharing to find the best priced prescription drugs based on their health requirements. For example, if an enrollee’s provider recommends a certain prescription drug, the enrollee can search and see what the co-pay would be, and see if any similar drugs are more cost effective, allowing the individual to know exactly what he or she will pay before reaching the pharmacy.

Currently, in the Medicare Part D program, enrollees select the plan that best suits their health needs. Plans typically categorize prescription drugs into different tiers. All prescription drugs that fall into a plan’s specialty tier, the tier with the most expensive drugs, have equivalent cost sharing. With the final rule, Part D plans will have the ability to create a “preferred”, specialty tier of more expensive prescription drugs, that have lower cost sharing compared to the other specialty tier. This change will allow Part D plans to negotiate lower prices on the more expensive drugs, resulting in reduced out-of-pocket expenses for enrollees, if the plan categorizes these drugs on the “preferred” specialty tier.

Published on: January 15, 2021

HHS Increases Fairness and Notice in Civil and Administrative Proceedings

by Wachler & Associates, P.C.

On January 12, 2021, the Department of Health and Human Services (HHS) issued sweeping new directives regarding the procedures the Department will follow when relying on guidance documents, initiating enforcement actions, making jurisdictional determinations, and allowing prior notice and opportunity to be heard on agency determinations. These directives apply to civil and administrative enforcement proceedings and adjudications and take effect immediately.

First, HHS directed that the Department may not use guidance documents to impose binding requirements or prohibitions on persons outside of the executive branch except as authorized by law or expressly incorporated into a contract. That is, noncompliance with a standard or practice found only in a guidance document will not constitute a violation of the applicable statute or regulation. Further, the Department may refer to a guidance document in a civil enforcement action only if it has notified the public of the guidance in advance.

Second, HHS directed that the Department will only apply standards and practices, including in initiating a civil enforcement action or making an agency decision, that have been publicly stated in a way that would not cause unfair surprise. Of note, HHS defined “unfair surprise” to include when the Department initiates litigation following a lengthy period of conspicuous inaction.

Published on: January 13, 2021

OCR and HHS Issue Guidance on Health Information Exchanges

by Wachler & Associates, P.C.

On December 18, 2020, the Office for Civil Rights (OCR) at the U.S. Department of Health and Human Services (HHS) issued new guidance on the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The guidance addresses important questions related to the definition of a health information exchange (HIE), when covered entities can disclose protected health information (PHI) to an HIE without the individual’s authorization, whether covered entities need a direct request from the public health authority (PHA) to disclose PHI, and whether a covered entity must provide notice to individuals regarding disclosures of PHI for public health purposes. In addition, the guidance provides examples for providers and entities relevant to HIPAA and the COVID-19 pandemic.

Questions addressed in the guidance include:

What is a health information exchange (HIE)?