Wachler & Associates Health Law Blog

Published on: July 31, 2017

OIG Reveals Plans to Scrutinize EHR Incentive Payments

In July 2017, the Department of Health and Human Services Office of Inspector General (OIG) revealed its plans to review the $14.6 billion in incentive payments the Centers of Medicare and Medicaid Services (CMS) made to hospitals between January 1, 2011 and December 31, 2016, pursuant to Medicare’s electronic health record (EHR) technology program. The OIG plans to review these payments in order to identify errors and inaccuracies which may have resulted in overpayments to hospitals

This announcement comes less than a month after the June report from the OIG, titled “Medicare Paid Hundreds of Millions in Electronic Health Record Incentive Payments That Did Not Comply with Federal Requirements” (the “Report”) (an official OIG summary is available here). The Report was based upon a review of EHR Incentive Program payments made to 100 professionals, which found 14 improper payments in the amount of $291,222. Extrapolating these results, the OIG estimated a total of $729.4 million in improper payments to the over 250,000 EHR incentive eligible providers in the CMS system. According to the OIG, the $729 million figure is roughly 12% of the total payments made in connection with the EHR incentive program. A majority of the 14 improper payments discovered during the OIG’s review were based on providers failing to maintain accurate and detailed records—an issue which often arises with Medicare overpayments.

The OIG completed its report by making several recommendations to CMS:

Published on: June 12, 2017

HHS’ 2nd Update on Appeals Backlog Shows Little Progress

by Wachler & Associates, P.C.

In early June 2017 the Department of Health and Human Services (HHS) issued its second status report on the Medicare appeals backlog. The December 2016 case American Hospital Association v Burwell, in addition to dictating that HHS clear the backlog by 2020, required that HHS release a quarterly status report every 90 days to detail the progress being made toward eliminating the backlog.

The Burwell case was a significant victory for healthcare providers in their attempts to get the Medicare backlog reduced and have administrative law judge (ALJ) appeals processed within the statutory timeframes. In addition to status reports every 90 days and the complete elimination of the backlog by 2020, HHS is also required to observe several intermediary benchmarks: 30% reduction by the end of 2017, 60% by the end of 2018, 90% by the end of 2019, and then ultimately 100% elimination by the end of 2020.

However, despite these court mandated benchmarks, it has become clear to all parties involved that these goals are unlikely to be met without significant developments; HHS itself has maintained since the requirements were instituted that the elimination of the backlog would not be possible. This prediction is supported by the facts: HHS released its first status report in March, with the somber prediction that a backlog of 1,009,768 appeals would be pending by the end of 2021. June’s report saw a slightly improved projection of 950,520 claims remaining by that time, but this projection is still very far from meeting the court order.

Published on: April 27, 2017

Lack of Business Associate Agreement Leads to $31k HIPAA Penalty

by Wachler & Associates, P.C.

On April 20, 2017, the Department of Health and Human Services, Office for Civil Rights (HHS OCR) announced that it had reached a settlement with the Center for Children’s Digestive Health (the Center) regarding the Center’s (alleged) violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The Center is a small health system specializing in pediatric care with seven clinics, all located in Illinois.

The settlement was for $31,000, and included the Center agreeing to a Corrective Action Plan (CAP). The Center’s HIPAA violation stemmed from an arrangement between the Center and one of its business associates, FileFax, Inc. The two companies began their relationship in 2003, with FileFax storing records containing protected health information (PHI) for the Center. However, through a HHS compliance review in 2015, it was discovered that there was no signed Business Associate Agreement between the parties prior to October 2015.

A Business Associate Agreement is required whenever a HIPAA-covered entity forms a relationship with a business entity, pursuant to which PHI will be transmitted. The terms of the Business Associate Agreement must include information on how the PHI will be used by the business associate, how the PHI will be safeguarded and protected, and other such details.

Published on: March 16, 2017

New Michigan Law Alters Practice Requirements for PAs

by Wachler & Associates, P.C.

On March 22, 2017, Michigan’s Public Act 379 of 2016 (the Act) will take effect, altering the practice requirements for physician assistants (PAs) within the state. The Act will require PAs to enter into and comply with a written practice agreement with a “participating physician.” The Act will thus affect not only PAs, but also participating physicians and other healthcare entitles.

A “participating physician” is defined as a physician, a physician designated by a group of physicians to represent that group, or a physician designated by a health facility or agency to represent that health facility or agency.

Another important aspect to note about the Act is that it limits the ability of PAs to practice within Michigan, requiring a written agreement which fulfills the statutory requirements. A practice agreement must include:

Published on: March 9, 2017

DOJ Provides Guidance for Corporate Compliance Programs in New Publication

by Wachler & Associates, P.C.

On February 8, 2017, the Department of Justice’s (DOJ’s) fraud section released new guidance for healthcare entities titled “Evaluation of Corporate Compliance Programs.” The new guidelines do not change any of the existing regulations, but rather provide corporate healthcare entities with added insight into how the DOJ assesses compliance violations.

The guidance mainly focuses on updated “Filip Factors,” which are the criteria under which the DOJ evaluates fraud. When a corporate healthcare entity comes under investigation for fraud under laws such as the False Claims Act (FCA), the DOJ has used the Filip Factors to evaluate the next steps to take, including whether to bring charges. Traditionally, characteristics such as whether the corporation has a suitable compliance program in place have been looked at closely when determining the severity of sanctions, and the new guidance continues with that trend.

The new guidance separates its factors into eleven different categories, and provides many example inquiries for each:

Published on: December 14, 2016

Settlement Opportunity Available for Eligible Hospitals with Medicare Patient Status Denials

by Wachler & Associates, P.C.

The Centers for Medicare and Medicaid Services (CMS) released the details of its Medicare hospital patient-status appeals settlement (“the 2016 Settlement”), following CMS’ initial announcement of the reopening on September 28th.

The 2016 Settlement comes as the successor of CMS’ 2014 68% settlement (the 68% Settlement), where eligible hospitals were able to settle their Medicare inpatient-status appeals for 68% of the net payable amount. The 68% Settlement successfully settled 346,000 claims with 2,022 hospitals. Since then, providers and other industry advocates (including Andrew Wachler of Wachler & Associates) have been pressuring CMS to offer another comparable settlement, and CMS responded positively with the 2016 Settlement.

The 2016 Settlement has comparable terms to the 68% Settlement, but there is one major difference: the 2016 Settlement only reimburses hospitals for 66% of the net payable amount on pending eligible claims. 2% is no minor adjustment on such a large scale, and will lead to millions of dollars less being paid out to providers. To scale, if the 68% Settlement had been for only 66%, the payout would have been roughly $1.42 billion rather than $1.47 billion. Still, with the Medicare appeals backlog as substantial as ever, many hospitals welcome the opportunity for an expedient and largely favorable resolution to their pending patient-status appeals. This is especially true considering the uncertainty of whether there will be other settlements offered in the future.

Published on: October 3, 2016

CMS Reopens Hospital Appeals Settlement

by Wachler & Associates, P.C.

On September 28, 2016, the Centers for Medicare & Medicaid Services (“CMS”) announced that it intends to reopen the hospital inpatient status settlement that was initially released in 2014. CMS’ announcement means that eligible providers will be able to to settle their inpatient status claims currently pending appeal. While specific details of the settlement have yet to be released, if the upcoming program has terms similar to CMS’ 2014 68% settlement, it may provide a viable opportunity for eligible providers to resolve their pending appeals without enduring the delay for an administrative law judge (ALJ) hearing due to the appeals backlog.

CMS’ decision to reopen the settlement is the result of the efforts from several actors including the Office of Medicare Hearings and Appeals (OMHA), American Hospital Association, RAC Monitor, Steven Greenspan of Optum Executive Health Resources, and Wachler & Associates, P.C. Specifically, OMHA participated in communications with CMS and supported the proposal for CMS to reopen the 68% settlement. In addition, the American Hospital Association’s (“AHA”) lawsuit challenging the excessive appeals backlog that has resulted in delays of over two years past the statutory requirement is likely an important factor in CMS’ decision to reopen the appeals backlog.

Furthermore, the combined efforts of RAC Monitor, Steven Greenspan, and Andrew Wachler of Wachler & Associates, P.C. also likely aided in the reopening. RAC Monitor provided a platform for Steven Greenspan and Andrew Wachler to present the concept of reopening the appeals settlement to RAC Monitor listeners and RAC Monitor listeners responded in full force. Through these combined efforts, it is hoped that the reopened appeals settlement will help to clear the appeals backlog of the approximately 200,000 inpatient site of service pending of appeals. Although this solution will not completely eliminate the backlog, it can assist hospitals that chose not to participate in the original settlement and hopefully help other non-eligible providers move through the appeals process at a slightly more efficient rate.

Published on: September 28, 2016

Mounting Pressure on HHS to Remedy Backlogged Medicare Appeals

by Wachler & Associates, P.C.

September 19^th saw the Washington D.C. District Court (the Court) pass down a decidedly pro-Medicare provider decision, ultimately holding that the Department for Health and Human Services (HHS) would not be granted a stay of proceedings as they had yet to make significant progress in reducing the Medicare appeals backlog. The case is American Hospital Association (AHA) v. Burwell (acting in her official capacity as HHS Secretary), and it was before the Court for the second time following an Order of Remand by the D.C. Circuit in February of 2016.

The Court’s September 19^th decision came as a response to Secretary Burwell (the “Secretary”)’s motion to stay proceedings on remand. The motion was based on the Secretary’s claim that significant progress had been made toward reducing the Medicare appeals backlog. A decision in the Secretary’s favor would have suspended the case until the last day of September, 2017. However, the Court rejected the purported progress by HHS, finding that more extreme measures had to be taken, ultimately concluding the stay in proceedings was not warranted.

The Secretary’s motion for a stay was heavily supplemented with examples of the efforts the government has been taking to reduce the appeals backlog. The Secretary cited administrative actions such as efforts to promote settlements, changes to the administrative appeals process, front-end limitations on provider activity and changes to the Recovery Audit Contractor (“RAC”) Program. Two specific programs mentioned were CMS’ 68% settlement, which resolved 260,000 inpatient hospital claims; and the settlement conference facilitation program, which is projected to reduce the number of appeals pending by 27,000 by the end of the 2020 fiscal year.

Published on: September 21, 2016

Noridian Announces CMS Approved “Cross Recoveries” for Related Claims

by Wachler & Associates, P.C.

On July 12, 2016, Noridian Healthcare Solutions announced a new policy on denial of related claims, termed “Cross Recovery.” Noridian purports that this policy will help it to fulfill its obligations to the Centers for Medicare and Medicaid Services (CMS) by assuring that all Medicare claims are for medically necessary and reasonable services. Whatever the motivation behind Cross Recovery is, it reawakens the specter of related claim denials for Medicare providers, and is a development which should be watched closely in the coming months.

Noridian’s new program comes in the wake of several previously released CMS transmittals regarding the denial of related claims. Though later rescinded, CMS originally introduced a policy which broadly allowed MACs to deny related claims when issuing an adverse determination of an original claim. After receiving feedback from the provider community regarding concerns about the policy, CMS narrowed the scope of “related claims” power to only Part B surgery claims via Transmittal 541. Transmittal 541 allowed for such Part B surgeon services to be recouped following a denial of a Part A inpatient surgical claim as not reasonable and necessary. However, since the issuing of Transmittal 541, MACs have only very rarely invoked their discretion to deny such Part B surgical claims on Transmittal 541 grounds. Noridian’s new Cross Recovery policy may change this trend, and it is yet to be seen whether other MACs will take the opportunity to expand their own related claim denials.

Noridian’s statement (as linked above) was very brief, but significant. The statement cites section 3.2.3(A.) of CMS’ Internet Only Manual 100-008 Chapter 3, which states in relevant part that “MAC[s] and ZPIC[s] have the discretion to deny other “related” claims submitted before or after the claim in question, subject to CMS approval [.]” Noridian announced that it has received such CMS approval to “Cross Recover” professional claims related to denied institutional facet injection services (CPT codes: 64493— 64495; 64635—64636).

Published on: August 5, 2016

SAMHSA Final Rule Increases Patient Limits for Physicians Prescribing Buprenorphine

by Wachler & Associates, P.C.

On July 6, 2016, the Substance Abuse and Mental Health Services Administration (SAMHSA), an agency within the Department of Health and Human Services (HHS), published a final rule implementing changes to the Controlled Substances Act (CSA), as amended by the Drug Addiction Treatment Act of 2000 (DATA 2000). The final rule will go into effect August 8, with perhaps the most significant modification being the increase in the number of patients that a physician can treat with buprenorphine, a medication which is prescribed as part of medication-assisted treatment (MAT) for opioid addiction.

Under the CSA buprenorphine is a Schedule III drug, which is defined by the Drug Enforcement Administration (DEA) as a drug with “a moderate to low potential for physical and psychological dependence.” DATA 2000 allows for qualified physicians to obtain a waiver to prescribe buprenorphine without needing to register as an opioid treatment center. Prior to the passage of the final rule, a physician whose waiver request was approved could initially prescribe buprenorphine to only 30 patients at a time, with this cap rising to 100 after the physician has complied with the program for one year and filed a request for the patient increase. This final rule will significantly raise the maximum number of patients allowed, from 100 to 275.

For a practitioner to be qualified to treat any patients with buprenorphine, they must: be a physician; possess a valid license to practice medicine; be registered with the DEA; have the ability to refer patients to addiction counseling and other ancillary services; and have completed a required training regime. In order to be eligible to treat 275 patients with buprenorphine, a physician needs to be currently authorized to treat 100 patients, and must hold “additional credentialing.” Additional credentialing is defined within the final rule as “board certification in addiction medicine or addiction psychiatry by the American Board of Addiction Medicine or the American Board of Medical Specialties or certification by the American Osteopathic Academy of Addiction Medicine, the American Board of Addiction Medicine, or the American Society of Addiction Medicine.”