Wachler & Associates Health Law Blog

Published on: November 13, 2020

The Broadening of Provider Revocation Circumstances

A Medicare license revocation can drastically affect a provider or practice; for example, more than 90% of primary care providers accept Medicare, and Medicare beneficiaries account for at least 50% of primary care physicians’ patient population. A revocation can jeopardize providers’ livelihood and lead to other consequences, including loss of hospital staff privileges, bars on reenrollment, and harm to a provider’s reputation within the medical community. Despite these penalties, as Medicare revocation rules evolved, CMS broadened the language permitting the agency to revoke a license, without much guidance or specificity, leaving providers with little information on the exact behavior they must avoid to prevent a revocation.

Since 2008, CMS has significantly expanded the instances in which a provider’s Medicare license can be revoked. In 2008, CMS added a new reason for revocation, 42 C.F.R. § 424.535(a)(10), which allows CMS to revoke a provider’s Medicare license if the provider does not document or does not provide CMS access to certain documentation. In 2014, CMS added a new section to 424.535(a)(8), section (a)(8)(ii).

Under an (a)(8) revocation, CMS can revoke a provider’s enrollment in Medicare if the provider commits certain abuses related to billing. Prior to 2014, under the original rule, an (a)(8) revocation was limited to specific circumstances in which the provider submitted claims for services that could not have been provided to the individual on a the date of those services. These circumstances could include, the beneficiary is deceased, the physician or beneficiary is not in the location where the service were provided, or when the necessary equipment for the service were not in the location where the services occurred.

Published on: November 11, 2020

FCC Launches $100 Million Telehealth Pilot Program

by Wachler & Associates, P.C.

On November 5, 2020, the Federal Communications Commission (“FCC”) released a public notice of the new “Connected Care Pilot Program” (hereinafter, “pilot program”). This pilot program has been allotted $100 million by the Universal Service Fund to promote telehealth services, particularly to low-income Americans and veterans. The period for healthcare providers to apply for grants under the program opened on November 6, 2020, and it closes on December 7, 2020 at 11:59 pm. Applicants are encouraged to apply as soon as possible.

For a three-year period, the program will fund $100 million to not-for-profit and public healthcare providers who qualify for the pilot. The program will cover 85% of the cost of implementing telehealth at a provider’s office. Specifically, the pilot program covers: (1) patient broadband Internet access services; (2) health care provider broadband data connections; (3) connected care information services; and (4) certain network equipment. The pilot program does not cover purchases of devices or medical equipment used for patients. The remaining 15% of the costs are to be covered by the pilot recipients.

In order to apply, all applicants must have an approved FCC Form 460 and send both that form as well as other supporting documentation to the Universal Service Administrative Company (“USAC”). This verifies eligibility for the program. Once eligibility has been established, the provider must submit their proposal to the FCC explaining how they would use funds to meet the criteria of the program and implement telehealth. The FCC will give greater consideration to providers who anticipate working with a significant number of low-income or veteran patients. The Report and Order by the FCC goes into greater detail as to what should be included in every application.

Published on: November 9, 2020

HHS Proposes to Review Its Regulations Every Ten Years

by Wachler & Associates, P.C.

On November 4, 2020, the Department of Health and Human Services (“HHS”) proposed a new rule that would require HHS to review many of its regulations every ten years. HHS proposed the new rule pursuant to the Regulatory Flexibility Act (“RFA”), which was enacted under President Carter in 1980. Under the proposed rule, every ten years, HHS would review a regulation to determine whether it is still needed, whether it is having the appropriate impacts, and whether it ought to be revised or rescinded. Regulations that are not timely reviewed would expire.

Nearly all regulations would undergo a two-step review. HHS would first determine whether the RFA applies to a regulation by assessing whether they have a significant economic impact on a substantial number of small entities. If the RFA applies, HHS will then conduct a more detailed review of the regulation and consider: (1) the continued need for the rule, (2) complaints about it, (3) the rule’s complexity, (4) the extent to which it duplicates or conflicts with other rules, and (5) whether technological, economic, and legal changes favor amending or rescinding the rule. Public comments will be accepted as part of this review process.

The following regulations will not be subject to this review: regulations that are jointly issued with other agencies, regulations that legally cannot be rescinded, and regulations issued with respect to a military or foreign affairs function or addressed solely to internal management or personnel matters. Regulations that affect the regulations of other agencies will be reviewed in conjunction with those agencies.

Published on: November 6, 2020

HHS Rewards Nursing Homes with $333 Million for Reduced COVID-19 Infections and Deaths

by Wachler & Associates, P.C.

The Department of Health and Human Services (HHS) announced on Wednesday, October 28, 2020, that an additional $333 million in performance payments will be granted to nursing homes that reduced their COVID-19 death and infection rates during August and September of the COVID-19 pandemic. HHS will allocate these payments to more than 10,000 nursing homes that successfully addressed the COVID-19 pandemic and continue to incentivize infection control, training, safety improvements, and protection of the vulnerable elderly population.

These payments represent phase one of the Nursing Home Quality Incentive Program, a five phase, $2 billion incentive program, announced by HHS and the Trump Administration in September 2020. For a nursing home to qualify for payments under the incentive program, current certification as a nursing home or skilled nursing facility (SNF) is required, and the facility must receive reimbursement from CMS. Nursing facilities are also required to submit a minimum of one of three types of data sources to check eligibility and collect important provider information. These data sources include: Certification and Survey Provider Enhanced Reports (CASPER), Nursing Home Compare (NHC), and Provider of Services (POS).

The incentive program will be divided into five phases, with nursing homes receiving September payments early in November and an additional four opportunities to receive incentive payments in the following months. The five phases of the program correspond with five successive monthly periods in which nursing homes can receive incentive payments for reaching certain goals. Specific goals will vary based on local COVID-19 statistics.

Published on: November 4, 2020

Provider Relief Fund for COVID-19 Vaccine Logistics and OIG Review of HRSA

by Wachler & Associates, P.C.

In late October 2020, the Department of Health and Human Services (“HHS”) released guidance on use of Provider Relief Fund (“PRF”) payments to cover costs associated with a potential COVID-19 vaccine. Also, in late October, HHS Office of the Inspector General (“OIG”) announced a review of the Health Resource and Services Administration’s (“HRSA”) administration of the PRF. The PRF is a $175 billion fund created by Congress in the CARES Act and administered by HHS, through HRSA, to provide financial relief to healthcare providers during the COVID-19 pandemic.

A provider who retains a payment from the PRF must agree to certain restrictions on use of the payment. For example, the payment may only be used to prevent, prepare for or respond to coronavirus; to reimburse the recipient for health care related expenses or lost revenues that are attributable to coronavirus; and cannot be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. These restrictions led to speculation about how the payments could be used with regard to a potential COVID-19 vaccine, especially in light of both the required cold-storage and other logistical challenges of the vaccines currently under development as well as the Center for Medicare & Medicaid Services’ (“CMS”) promises to cover the cost of the vaccine.

After CMS announced that it would cover the cost of the vaccine, HHS clarified its position regarding the PRF. Because Medicare, Medicaid, and CHIP will pay for the doses and administration of the vaccine, providers cannot use the PRF payment to reimburse themselves for these expenses. However, PRF payments may be used for COVID-19 vaccine distribution and logistics, including purchase of additional refrigerators, personnel costs to provide vaccinations, and acquiring doses of a vaccine (including transportation costs not otherwise reimbursed). Moreover, funds may be used before an FDA-licensed or approved vaccine becomes available.

Published on: November 2, 2020

Ransomware Attacks Imminent in Healthcare Entities

by Wachler & Associates, P.C.

On October 29, 2020, the Office of Civil Rights (“OCR”) of the Department of Health and Human Services (“HHS”) announced that pursuant to credible information by HHS, the FBI, and the Cybersecurity and Infrastructure Security Agency (CISA), hospitals and healthcare providers are at an imminent risk of a cybersecurity attack. As a response to this looming threat, law enforcement is advising healthcare entities to implement best practices to avoid a cyberattack.

Specifically, CISA, HHA, and the FBI are predicting ransomware attacks. Ransomware is a type of malicious software that denies users access to targeted data. Hackers encrypt the data and hold it hostage until a random is paid. If the ransom is not paid, the hackers will permanently destroy all the data. Unfortunately for healthcare providers, the Department of Treasury recently announced that any entity that pays a ransom to get their data returned will be in violation of the International Emergency Economic Powers Act and will thus be subject to paying steep civil monetary penalties, not to exceed $250,000.

This puts providers in a precarious position, so CISA, the FBI, and HHS have come out with various references and guides to help prevent healthcare providers’ systems from being susceptible to a ransomware attack in the first place. Some of these preventive measures include: regularly backing up data, keeping data backups offline from the network, regularly changing passwords and avoid using the same password for different accounts, using two-step verification where available, regularly updating operating systems as soon as updates are available, and always having antivirus and anti-malware programs regularly scanning and updating.

Published on: October 30, 2020

CMS Announces New Plan to Cover COVID-19 Vaccine Under Medicare

by Wachler & Associates, P.C.

The Trump Administration is slated to announce a plan, in the next few days, to cover the COVID-19 vaccine (when it is approved) under Medicare and Medicaid. According to the Centers for Medicare & Medicaid Services (CMS), it is Congress’s intent that Medicare beneficiaries have access to the vaccine once it is approved, free of cost sharing, to protect the most at-risk populations during the COVID-19 pandemic.

Congress attempted to mandate free COVID-19 vaccine coverage for all Americans in March with the CARES Act. According to the Trump Administration it is the intent that all Americans, including those receiving employer sponsored health insurance, receive the vaccine for free. However, certain hurdles are preventing Medicare and Medicaid beneficiaries from receiving the vaccine cost-free. Under the current rules, Medicare and Medicaid are not permitted to cover the cost of drugs authorized through emergency use protocols. Because this policy cannot be circumvented by Emergency Order, CMS, on October 28, 2020, released an Interim Final Rule with Comment Period (IFC) that established that any vaccine that receives Food and Drug Administration (FDA) authorization, either through an Emergency Use Authorization (EUA) or licensed under a Biologics License Application (BLA), will be covered under Medicare as a preventive vaccine at no cost to beneficiaries. Under the IFC, Medicare would reimburse vaccine administration at a rate of $28.39 for single-dose vaccines. For vaccines requiring a series of doses, Medicare would reimburse $16.94 for the first dose and $28.30 for subsequent doses.

In March, the White House initiated Operation Warp Speed (OWS), a national program to accelerate the development and distribution of a COVID-19 vaccine as well as COVID-19 diagnostics and treatments. The program is a joint operation between the federal government, scientific organizations, and the private sector, with the goal being to produce and distribute 300 million doses of safe and effective COVID-19 vaccines by January 2021. OWS will identify and select the most promising vaccine and other treatment candidates and offer coordinated government support to encourage their development. The OWS program has already invested in more than 5 vaccine candidates that have reached Phase 3 clinical trials to produce as many vaccines as possible. Investing in the vaccine candidates as well as their production will reduce the time it takes for delivery when the vaccines are available. Despite the White House’s desire to expedite vaccine distribution, the FDA will not speed up their approval process and will make solely scientific-based decisions.

Published on: October 28, 2020

Purdue Pharma Settles OxyContin Investigation

by Wachler & Associates, P.C.

On October 21, 2020, Purdue Pharma pled guilty to three criminal charges as part of their $8 billion settlement surrounding the drug OxyContin, a drug that Purdue produced. The charges included: one count of conspiracy to defraud the United States and to violate the Food, Drug, and Cosmetic Act, and two counts of conspiracy to violate the Anti-Kickback Statute. OxyContin was one of the highly addictive opioids that has been blamed for starting the national opioid epidemic, which has been linked to over 470,000 deaths in the United States in the past twenty years.

In addition to admitting that Purdue purposefully impeded the Drug Enforcement Administration, Purdue also admitted to violating the Anti-Kickback Statute. The Anti-Kickback Statute prohibits any physician or other individual from knowingly offering, paying, or soliciting remuneration to induce business payable by Medicare or Medicaid. Through a misleading program, Purdue induced physicians with payments to write more OxyContin prescriptions. Purdue also induced physicians to utilize an electronic health record that would influence the prescription of pain medicine, especially OxyContin.

In addition to admission of the above criminal charges, Purdue also entered a civil settlement with the government. The settlement will resolve the allegation that Purdue caused false claims to be submitted to government programs, in violation of the False Claims Act. It also civilly resolved Anti-Kickback Statute violations.

Published on: October 26, 2020

HHS Expands PRF Payment Use for “Lost Revenue” and Phase 3 Eligibility

by Wachler & Associates, P.C.

On October 22, 2020, the Department of Health and Human Services (“HHS”) announced changes to the allowable uses of a Provider Relief Fund (“PRF”) payment and also expanded the categories of providers eligible to receive a payment in the Phase 3 General Distribution. The PRF is a $175 billion fund created by Congress in the CARES Act and administered by HHS to provide financial relief to healthcare providers during the COVID-19 pandemic.

Acceptance of a PRF payment is conditioned on the acceptance by the provider of certain restrictions on how the payment may be used and the filing of reports in which the provider demonstrates compliance with these restrictions. One such restriction is that the funds may be used for “lost revenue attributable to the coronavirus.” When HHS first released the reporting requirements for PRF payments, it indicates that such lost revenues would be demonstrated by a negative change in year-over-year net patient care revenue from 2019 to 2020. Many saw this as placing an arbitrary cap on the amount of financial relief that struggling providers could receive from the PRF. In response to feedback, HHS has amended this requirement. Regarding use of the PRF payment to cover lost revenue attributable to coronavirus, HHS now requires that, “after reimbursing healthcare related expenses attributable to coronavirus that were unreimbursed by other sources, providers may use remaining PRF funds to cover any lost revenue, measured as a negative change in year-over-year actual revenue from patient care related sources.” (emphasis added).

HHS also announced expansion of the categories of providers who are eligible to apply for payments as part of the Phase 3 General Distribution of the PRF. The PRF previously included $30 billion Phase 1 and $20 billion Phase 2 General Distributions to eligible providers, primarily those that bill Medicare or Medicaid. The $20 billion Phase 3 General Distribution, announced October 1, 2020, was intended to provide financial relief to for providers who were either excluded from the initial two phases, or who were eligible under the first two phases but require additional funding to cover ongoing financial losses accrued during the pandemic. On October 22, 2020, HHS announced it was expanding Phase 3 eligibility to include the following providers, regardless of whether they accept Medicare or Medicaid:

Published on: October 21, 2020

Medicare to Cut Payment for COVID-19 Testing That Takes More Than Two Days

by Wachler & Associates, P.C.

Beginning January 21, 2021, only COVID-19 diagnostic tests that are completed within two days will be paid at the current rate by Medicare. Since the outbreak of the COVID-19 pandemic, diagnostic testing has been an important part of strategies to combat the virus. In an early push to expand COVID-19 diagnostic testing capacity, on April 15, 2020, the Centers for Medicare & Medicaid Services (“CMS”) announced that Medicare would increase the payment to laboratories for high-throughput COVID-19 diagnostic tests from approximately $51 to $100 per test.

However, on October 15, 2020, CMS announced a change to this policy. Beginning January 1, 2021, COVID-19 diagnostic tests run on high-throughput technology will be paid at a base rate of $75 per test. A $25 per test add-on payment will then be paid to laboratories for a high throughput COVID-19 diagnostic test if the laboratory: (1) completes the test in two calendar days or less, and (2) completed the majority of all the previous months’ high-throughput COVID-19 diagnostic tests in two calendar days or less. The second requirement includes all of a laboratory’s high-throughput COVID-19 diagnostic tests in the precious month, not just those that are billed to Medicare. Thus, only tests that meet both these requirements will continue to be paid at $100 per test, while others will be paid at $75 per test. CMS indicates that this change is intended to support faster testing and also reflect the resource costs laboratories face to complete testing in a timely fashion.

In the event of an audit, CMS indicates that a laboratory that received the $25 per test add-on would be required to produce documentation of timeliness based on their performance in the month preceding the date of the test. These increased documentation requirements could effectively begin as early as December 2020. Because the new payment rates become effective January 1, 2021 but take into account tests completed in the previous month, laboratories will likely have to complete the majority of their tests run in December 2020 in two days or less to qualify for the add-on payment in January 2021.