Wachler & Associates Health Law Blog

Published on: October 5, 2020

Final Update on AAP Recoupment Delay

On Wednesday, September 30, 2020, the Senate passed the bipartisan government funding bill that will relax Medicare loan repayments in the wake of the 2019 Novel Coronavirus (“COVID-19”) pandemic. The House passed this bill the week prior to the Senate vote, and the President signed the bill into law the very same day that the Senate approved the bill.

Providers who initially received a loan through the CARES Act Advanced and Accelerated Payment Program (“AAP”) will now have one year from when the loan was issued before recoupment will begin. This gives providers much more time to repay these loans, as opposed to the initial 120-day recoupment period that was previously intact. Furthermore, the extension speaks to the AAP’s intent—AAP loans were meant to keep Medicare-reimbursed providers financially stable during the nationwide pandemic, which is still ongoing.

In addition to the recoupment period being extended, the recoupment rate will also be lowered. Initially, it would have been 100% recoupment until the loan was repaid. Moving forward, after the one year passes and recoupment begins, the Centers for Medicare and Medicaid Services (“CMS”) will recoup 25% for the first 11 months and then 50% for the following 6 months. Lastly, the interest rate on the AAP loans has been lowered from 9.6% to 4%.

Published on: October 2, 2020

Expedited Certification Process Available for Laboratories to Provide COVID-19 Testing

by Wachler & Associates, P.C.

On September 25^th 2020, and in response to the 2019 Novel Coronavirus (“COVID-19”) pandemic, the Centers for Medicare & Medicaid Services (“CMS”) announced a new Quick Start Guide and expedited review process to make it easier for laboratories pursuing Clinical Laboratory Improvement Amendments (“CLIA”) certification to offer COVID testing. These tools will reduce delays in and aid laboratories in understanding the certification process to help address the COVID-19 crisis.

CMS regulates all human laboratory tests through the CLIA program. The intent of the CLIA program is to provide safe, quality testing and ensure that results are accurate regardless of where the test was conducted. In addition to meeting quality assurance and performance standards to show that they can offer reliable and accurate testing, laboratories must also pay CLIA administration fees prior to certification. CLIA fees are calculated depending on the type of certificate requested by the laboratory and the amount and type of tests being performed.

CMS has implemented various measures to address the need to expand laboratory capacity during the COVID-19 public health emergency. CMS now allows pathologists to review laboratory data and results remotely to increase capacity while minimizing exposure risks to healthcare providers. CMS also stated that it will not enforce the requirement to have a separate certificate for laboratories participating at temporary COVID testing sites, as long as the primary location of the laboratory does possess a certificate. Furthermore, laboratories in hospital or university campuses in adjoining buildings and under the same director only need one certificate if located at the same physical location or address. This reduces the number of CLIA certificates labs must apply for, allowing them to begin COVID testing more rapidly.

Published on: September 30, 2020

Due Process Issues Abound in Medicare Revocation Cases

by Wachler & Associates, P.C.

Revocation of Medicare billing privileges means much more than the simple loss of the ability to bill Medicare. It can also lead to loss of staff privileges or to termination by commercial payors, severely impacting the livelihood of a revoked physician or provider. Moreover, the Centers for Medicare & Medicaid Services (CMS) recently expanded its authority to issue more severe reenrollment bars and revocation is often accompanied by placement of the CMS Preclusion List, which further tarnishes a provider’s reputation by labeling them a “bad actor.” Given the devastating impacts that a Medicare revocation can have, CMS and Medicare Administrative Contractors (MACs) give surprisingly little heed to due process in meting out revocations.

In general, the due process clause of the U.S. Constitution prevents the government from interfering with a protected liberty or property interest without due process of law. Federal courts around the country are split on whether healthcare providers have protected interests at stake and what those interests may be. Some courts hold that providers have a property interest in their participation in the Medicare program due to the complex rules and regulations that provide payments to providers. Some courts hold that providers have a liberty interest in their reputation and integrity. Some grounds for revocations, such as “Abuse of Billing Privileges,” may impact a provider’s reputation more than others.

Once a protected interest is established, the essential elements of due process require that a person be given prior notice of an allegation against them and the opportunity to respond before a decision is made. However, CMS and MACs often revoke providers without notifying them of the allegations or giving providers the chance to respond. Instead, many providers receive a letter notifying them that the revocation decision has already been made. Providers then face the difficult task of trying to convince the agency to reverse its own decision, a decision in which the agency has already become entrenched, —the very situation due process is meant to prevent.

Published on: September 28, 2020

CMS Expands Prior Authorization Ambulance Payment Model

by Wachler & Associates, P.C.

The Centers for Medicare & Medicaid Services (CMS) announced on September 22, 2020 that the Medicare Prior Authorization Model for Repetitive, Scheduled Non-Emergent Ambulance Transport (RSNAT) will be expanded nationwide. Under this system, Medicare pays ambulances for the transport of patients to their scheduled, non-emergency healthcare appointments.

The prior authorization model was launched in 2014 by CMS in select states that displayed a higher utilization of RSNAT services. RSNAT services are essential medical services that have been previously scheduled and require non-emergency ambulance transportation for at least three round trips within ten days, or a minimum of once a week for at least three weeks. These types of ambulance services are covered under Medicare Part B, provided that the services are deemed medically necessary. Under the payment model, the ambulance transportation company must submit a prior authorization request to their Medicare administrative contractor (MAC) on behalf of the beneficiary and include a physician certification statement noting the medical necessity of the service. Once the physician certification statement has been reviewed, the MAC will issue a determination as to whether the beneficiary qualifies for RSNAT.

The purpose of the prior authorization model is to decrease Medicare spending through the reduction of ambulance transportation services that are not covered by Medicare and do not meet coverage standards, without negatively impacting access to care for beneficiaries. The prior authorization model began in 2014 with New Jersey, Pennsylvania, and South Carolina participating, and in 2016 expanded to Delaware, the District of Columbia, Maryland, North Carolina, Virginia, and West Virginia. The model will now be expanded nationwide as a result of the success in those nine states.

Published on: September 25, 2020

CMS Releases Reporting Requirements for Provider Relief Fund

by Wachler & Associates, P.C.

On September 19, 2020, the Department of Health and Human Services (HHS) released the much-anticipated reporting requirements for providers who received payments under the Provider Relief Fund (PRF). The PRF is a $175 billion fund created Congress through the CARES Act and administered by HHS to provide financial relief to healthcare providers during the COVID-19 pandemic. HHS previously amended the reporting requirements to require that any provider who received more than $10,000 from the PRF must file a report by February 15, 2021 and indicated that further details on reporting would be released at a later date. The new reporting system opens to payment recipients on October 1, 2020.

HHS breaks down the new reporting requirements into four date groups of data elements. First, providers must report Demographic Information, such as the Reporting Entity (whether the entity is reporting for a PRF payment it received or is reporting for a payment its subsidiary received), TIN, NPI, fiscal year-end date, and federal tax classification.

Second providers must report “expenses attributable to coronavirus not reimbursed by other sources.” Expenses attributable to coronavirus may be incurred in treating confirmed or suspected cases of coronavirus, preparing for possible or actual coronavirus cases, maintaining healthcare delivery capacity, etc. Providers who received between $10,000 and $499,999 in aggravated PRF payments need only report their net expenses that are attributable to coronavirus and not reimbursed by another source. These expenses need only be reported in two aggregate categories: (1) General and Administrative expenses and (2) other healthcare related expenses. However, providers who received $500,000 or more in aggregate PRF funds must report in significant detail on sub-categories of these expenses.

Published on: September 24, 2020

Update on CARES Act Advanced and Accelerated Payments Program Recoupments

by Wachler & Associates, P.C.

On September 14, 2020, Wachler & Associates posted a blog detailing all of the speculation surrounding recoupment of the CARES Act Advanced and Accelerated Payments (“AAP”) Program. As of then, CMS had not yet made a statement on when CMS would begin AAP loan recoupments. Originally, providers were told to expect to see recoupments on these loans 120-days from issuance of the loan. Many providers, however, had surpassed their 120-day time limit but did not see any indication that payments were being recouped to repay the loan.

On Friday, September 18, 2020, CMS Administrator Seema Verma confirmed that CMS would not begin recouping AAP loans until Congress passes legislation on the matter. This timely statement comes just before the House passed H.R. 8337, FY 2021 Continuing Resolution, through December 11, 2020 (Appropriations), on September 22, 2020. This bill would give providers with AAP loans one year from issuance before CMS begins recoupment, instead of the original time limit of 120-days from issuance. This bill would also lower the recoupment rate and the interest rate. It is not yet known when there will be a vote in the Senate on the bill, but the bill is expected to pass the Senate.

For over 35 years, Wachler & Associates has represented healthcare providers and suppliers nationwide in a variety of health law matters, and our attorneys can assist providers and suppliers in understanding new developments in the CARES Act and when to expect accelerated payment recoupment to begin. If you or your healthcare entity has any questions pertaining to healthcare compliance, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.

Published on: September 23, 2020

Glow Inc. Settlement and Other Data Security News

by Wachler & Associates, P.C.

On September 17, 2020, technology company Glow, Inc. (“Glow”) settled with the California attorney general in response to a data breach on Glow’s fertility-tracking app. This app was created so that women could compile their personal medical information as it relates to cycle and ovulation tracking. Between the years of 2013 and 2016, this app was subject to numerous allegations regarding its security.

According to the California attorney general, the app failed to require authorization from any user who would share their information with another user. This led to data sharing without proper consent. It also did not require a user to enter its old password before creating a new one, so any user could be locked out of their own account by someone attempting to steal data. The California attorney general alleged that these, among other privacy issues, violated California’s consumer protection and privacy laws. The settlement will require Glow to pay $250,000 and increase the privacy and security on the app. The settlement also requires Glow to obtain affirmative consent from all users before sharing any personal medical information.

Although this state case focused on issues from 2013-2016, this settlement is very timely and accurately reflects issues currently facing healthcare providers. During the 2019 Novel Coronavirus (“COVID-19”) pandemic, the Office of Civil Rights (“OCR”) has decided to temporarily stop giving penalties for noncompliance with HIPAA. The purpose of this is so that providers can continue to care for their patients while maintaining social distance protocol and implement telehealth in place of in-person office visits.

Published on: September 21, 2020

CMS Announces Grants for Rural Healthcare Pilot Program

by Wachler & Associates, P.C.

On September 15, 2020, the Centers for Medicare & Medicaid Services (CMS) announced $75,000,000 in grants for rural providers. Grant recipients would participate in a seven-year payment test model designed to improve healthcare in rural communities. Applications are due February 16, 2021.

The grants are part of the Community Health Access and Rural Transformation (CHART) Model. The CHART Model is part of CMS’s Rethinking Rural Health initiative, which aims to ensure individuals in rural America have access to high quality, affordable health care by offering new and creative payment models. According to CMS, the CHART Model “will test whether aligned financial incentives, increased operational flexibility, and robust technical support promote rural health care providers’ capacity to implement effective health care delivery system redesign on a broad scale.” The impact of the model will be evaluated by the Center for Medicare & Medicare Innovation (CMMI). The CHART Model contains two tracks: the Community Transformation Track and the Accountable Care Organization (ACO) Transformation Track. The newly announced grants are for the Community Transformation Track only.

Under the Community Transformation Track, CMS anticipates awarding 15 grants in the amount of $5,000,000 each, for a total of $75,000,000. Eligible applicants must serve a county or set of counties that are rural, as defined by the Federal Office of Rural Health Policy, and that includes at least 10,000 Medicare fee-for-service beneficiaries whose primary residence is within the county or set of counties. CMMI encourages applicants to submit letters of intent prior to submitting an application. Letters of intent are due January 18, 2021 and final applications are due February 16, 2021.

Published on: September 18, 2020

Special Enrollment Periods Available for Michigan Residents Affected by COVID-19

by Wachler & Associates, P.C.

Due to the 2019 Novel Coronavirus (“COVID-19”) pandemic, many Michigan residents have found themselves without any health insurance coverage. On September 15, 2020, the Michigan Department of Insurance and Financial Services (“DIFS”) released a press statement informing Michigan residents that extended health insurance enrollment periods are available for qualified residents through the Health Insurance Marketplace.

Special Enrollment Periods (“SEPs”) allow individuals who missed the yearly open enrollment period but have experienced a specific life event to sign up for health insurance. Generally, individuals have 60 days before and 60 days after a qualifying life event to enroll in an insurance plan through the Health Insurance Marketplace. Life events that qualify individuals to enroll in an SEP include: household changes, such as marriage, divorce, or the birth of a child; changes in residence; and a loss of health insurance. Typically, if an individual misses an SEP enrollment window, he or she must wait until the next open enrollment period to apply.

Individuals who have lost healthcare coverage due to job loss during the COVID-19 pandemic may still be eligible for coverage through various healthcare outlets. Those who have lost health insurance as a result of job loss may become eligible for Medicaid if they live in a state with expanded Medicaid under the Affordable Care Act (“ACA”) and meet certain income limits. Michigan is one such state that has expanded Medicaid coverage under the ACA. Additionally, ACA Marketplace coverage is available to those who do not have employer sponsored health insurance and do not qualify for Medicaid. Furthermore, subsidies may be available to individuals with a family income between 100% and 400% of the poverty line. COBRA is another option for those who lost job-based health insurance. COBRA will allow employer-based coverage to continue after employment ends, however, this is often a costly option because the individual must pay the entire premium as well as an additional 2%.

Published on: September 16, 2020

President Trump Issues Executive Order on Prescription Drug Prices

by Wachler & Associates, P.C.

On September 13, 2020, President Trump issued an executive order targeting prescription drug process paid by Medicare under Part B and Part D. The order, titled “Executive Order on Lowering Drug Prices by Putting Americans First,” outlines a new policy that Medicare should not pay more for Part B or Part D prescription drugs than the “most-favored-nation price.”

The order defines the “most-favored-nation price” as the lowest price, after adjusting for volume and differences in GDP, for a drug that the manufacturer sells to an Organization for Economic Co-operation and Development (“OECD”) member country with a comparable GDP per capita. For reference, Norway, Austria, and the Netherlands are all OECD member countries with a GDP per capita comparable to the United States.

The order has no immediate effect on prescription drug prices. Change will only occur once regulations have been promulgated, and this process has not yet begun. However, the order directs the Department of Health and Human Services (“HHS”) to “immediately” implement a test payment model. The test model would apply the new policy to certain high-cost prescription drugs and biological products covered by Part B to determine whether paying the “most-favored-nation price” leads to better clinical outcomes and/or cost-saving. The order also directs HHS to develop and implement a similar test payment model for Part D prescription drugs but does not impose a timeline on HHS to do so.