Wachler & Associates Health Law Blog

Published on: December 22, 2014

Final Rule Tightens Provider Enrollment Policies, Expands CMS Authority

On December 3, 2014, the Centers for Medicare and Medicaid Services (“CMS”) released a final rule that broadens its authority to deny providers or suppliers from enrolling in Medicare and revoke providers already participating. The final rule, which is scheduled to go into effect on February 3, 2015, permits CMS to deny or revoke enrollment of providers with abusive billing patterns or practices, deny enrollment of providers affiliated with unpaid Medicare debt and deny or revoke enrollment of providers if a managing employee has been convicted of certain felonies.

CMS plans to identify improper billing by analyzing several factors such as:

The percentage of denied claims;
The reason for the denials; and
The length of any billing irregularities.

Providers and suppliers affiliated with entities with unpaid Medicare debt may prevent the enrollment denial or revocation if they agree to a structured repayment plan or pay the debt in full. The purpose of this provision is to prevent entities from incurring substantial Medicare debt, exiting the program and then re-enrolling as a new entity. Currently, CMS can only deny enrollment to those who have overpayments. The final rule explicitly expands this power to include Medicare debt, which includes overpayments as well as other financial obligations.

Published on: December 17, 2014

Medicare Pilot Program Requires Prior Authorization for Ambulance Transport Services

by Wachler & Associates, P.C.

On December 1, 2014, the Centers for Medicare and Medicaid Services (“CMS”) launched a three-year pilot program (“the program”) in an effort to curb improper Medicare payments to ambulances providers. Under the program, CMS requires prior authorization for repetitive, scheduled, non-emergent ambulance transport claims billed using the following HCPCS codes: (1) A0425 – BLS/ALS mileage, per mile; (2) A0426 – Ambulance service, Advanced Life Support (ALS), non-emergency transport, Level 1; and (3) A0428 – Ambulance service, Basic Life Support (BLS), non-emergency transport. CMS defines a “repetitive ambulance service” as medically necessary ambulance transportation services that are furnished three or more times in a ten-day period, or at least once per week for at least three weeks. According to CMS, these services are often used by elderly beneficiaries that require transportation for dialysis, cancer, or wound treatment.

The prior authorization the process requires the ambulance provider to request provisional affirmation of coverage by CMS before a service is rendered to a beneficiary and before a claim is submitted for payment. CMS believes that prior authorization will ensure that the ambulance service is medically necessary and meets the applicable Medicare coverage criteria. According to CMS, the Medicare Administrative Contractor (MAC) will make every effort to review the prior authorization request and postmark decisions letters win ten business days. Each prior authorization decision may affirm up to 40 round trips per request in a 60-day period. The prior authorization request submitted by an ambulance provider must include:

The beneficiary’s name, Medicare number, and date of birth;

Published on: December 12, 2014

CMS Issues Proposed Rule Postponing ACO Penalties

by Wachler & Associates, P.C.

On December 1, 2014, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that would postpone penalties against accountable care organizations (ACOs) for three years. The proposed rule is one of the latest measures CMS has taken to encourage ACOs to stay in the Medicare Shared Savings Program. In 2012, as part of the rollout of the Patient Protection and Affordable Care Act, the Medicare Shared Savings Program was initiated in an effort to curb spending, while improving quality of care. Since its enactment, industry stakeholders have pushed for leniency, primarily because the Medicare Shared Savings Program penalizes ACOs after the first three years unless the ACOs voluntarily take on financial risk earlier, in exchange for larger bonuses if they perform well. While policymakers supported the penalties as a means of incentivizing change in the healthcare market, providers, particularly less experienced providers, pushed back–arguing that a more moderate approach would ease the financial risk and foster more growth. Recently, the National Association of ACOs released the results of a survey, which reported that approximately 200 of the 300 ACOs in the program were somewhat or highly unlikely to continue if they were required to accept penalties.

With the issuance of the proposed rule, CMS conveyed that it wants less experienced ACOs to remain in the program. By postponing the penalties, CMS acknowledged that some ACOs might not be ready to accept the financial risks and fear these providers might exit the program in lieu of exposing their entity to liability.

However, ACOs must abide by specific criteria if they want to take advantage of the postponement. Under the proposed rule, ACOs must have reduced their spending in their first two years in the program and be prepared to assume the financial risk of penalties after six years. Additionally, CMS plans to encourage ACOs to exit the safer track and take on more risk by decreasing the safe track bonuses from fifty percent to forty percent. Furthermore, CMS proposed a third track, which would implement new methods to determine which patients are included in the ACO. Specifically, the ACOs would start the year with a list of patients, and manage those patients’ costs and care. This new system should benefit ACOs because CMS will identify the patients at the start of the year, allowing for more focused improvement efforts. Lastly, the third track will also include potential bonuses and penalties.

Published on: December 5, 2014

Deadlines for Certification with the American Board of Radiology Approaching Quickly

by Wachler & Associates, P.C.

The American Board of Radiology’s (“ABR”) Board Eligibility Policy, implemented on January 1, 2012, limited the period of time that may elapse between the completion of residency training and achievement of Board Certification. Because a number of radiologists had completed their residencies but not yet achieved Board Certification when the policy went into effect, the ABR established a transitional phase-in period with specific time limits on the Board Eligibility period.

Importantly, the dates chosen by the ABR as the deadlines for achieving certification for certain radiologists are quickly approaching. For diagnostic radiology and radiation oncology, the termination dates for board eligibility status are as follows:

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As a result, radiologists who completed their training in 2004 or before but continue in the examination process are facing possible termination of “board eligibility” as soon as the end of this year. After the period of board eligibility expires, radiologists who have not achieved Board Certification will no longer be considered by the ABR to be “board eligible,” and will no longer be permitted to designate themselves as such for credentialing purposes.

Published on: November 12, 2014

CMS Announces Increased Reimbursement for Telehealth

by Wachler & Associates, P.C.

On October 31, 2014, the Centers for Medicare and Medicaid Services (CMS) released its CY 2015 Physician Fee Schedule Final Rule. The rule included several important changes as it relates to telehealth services. With respect to reimbursement rates, in the final rule CMS increased Medicare payments to telehealth originating sites by 0.8 percent.

In addition, the final rule provides seven new procedure codes that cover the following telehealth services:

Psychotherapy services (CPT codes 90845, 90846, and 90847);
Prolonged services in the office (CPT codes 99354 and 99355); and
Annual wellness visits (HCPCS codes G0438 and G0239).

For billing purposes, the originating site fee will be $24.83. CMS also introduced new CPT code 99490, which allows physicians to bill Medicare for chronic care management. The monthly, unadjusted, non-facility fee will be $42.60. Most importantly, CPT 99490 is considered a physician service and is, therefore, available nationwide and not restricted to rural-only telehealth.

Although these changes in the final rule have been received by many telehealth advocates and providers as welcomed developments, CMS did not eliminate the requirement for patients to be located in a rural area in order to receive telehealth services, despite suggestions from many commenters in response to the 2015 Physician Fee Schedule proposed rule to expand the reach of telehealth.

Published on: November 5, 2014

CMS Finalizes Home Health Prospective Payment System Rule

by Wachler & Associates, P.C.

On October 30, 2014, the Centers for Medicare and Medicaid Services (CMS) announced its final rule regarding changes to the Medicare home health care prospective payment system. The changes, which are set to go into effect in calendar year 2015, will reduce payments to home health agencies (HHAs) by approximately .30 percent, or $60 million. This decrease comes as a result of the 2.1 percent home health payment update percentage. Additionally, the decrease implements the second year of the four-year phase in of the rebasing adjustments promulgated by Section 3131(a) of the Affordable Care Act.

CMS stated that the final rule is one of several to be released for calendar year 2015 aimed at reflecting a broader strategy to deliver better care at lower cost by increasing delivery efficiency. Provisions in the final rule should transition the healthcare system into one that values quality over quantity by focusing on reforms such as helping manage and improve chronic diseases, measuring for better health outcomes, focusing on disease prevention and fostering a more-efficient and coordinated system.

The Medicare program reimburses HHAs through a prospective payment system that pays higher rates for beneficiaries with greater needs. Currently, all HHAs must provide relevant data from patient assessments, which CMS uses to annually determine payment rates. In order to qualify for the Medicare home health benefit, a beneficiary must be cared for by a physician, require physical therapy or speech-language pathology, require intermittent skilled nursing care, or continue to need occupational therapy. Additionally, the beneficiary is required to be homebound and receive services from a Medicare-approved HHA. Outlined below are changes that the final rule makes to various aspects related to the home health prospective payment system.

Published on: November 4, 2014

Office of Medicare Hearings and Appeals Hosts Second Medicare Appellant Forum

by Wachler & Associates, P.C.

On October 29th, the Office of Medicare Hearings and Appeals (OMHA) hosted its second Appellant Forum in Washington, D.C. OMHA is responsible for the Administrative Law Judge (ALJ) level of the Medicare administrative process, and thus operates the third level of appeals for Medicare audit denials. The Appellant Forum was intended to provide updates to Medicare audit appellants on the status of OMHA operations and to relay information regarding OMHA initiatives to reduce backlog in the processing of Medicare appeals.

Representatives from Wachler & Associates attended the Appellant Forum and gained valuable information for appellants facing delays in Medicare ALJ appeals. OMHA’s Chief ALJ, Hon. Nancy Griswold, explained the historical backdrop that led to OMHA’s current backlog in appeals and described OMHA’s attempts to find a “holistic solution” to ALJ workload.

Judge Griswold also updated providers on statistics regarding OMHA’s appellant workload. She explained that Medicare Part A and Part B appeals amount to 99% of the appeals pending at the ALJ level. Further, that despite increased productivity by ALJs, OMHA currently receives 4 times the amount of appeals per day as the ALJ’s are able to adjudicate per day. In January 2014, OMHA received 14,000 appeal receipts per week. The unprecedented amount of appeals has caused OMHA to fail to meet its 90-day statutory requirement for adjudication. As of September 2014, the average wait time for an ALJ decision was 514 days, which again marked a significant increase from the fiscal year 2013 average.

Published on: October 28, 2014

CMS Extends Fraud and Abuse Waivers for ACO Shared Savings Program

by Wachler & Associates, P.C.

On October 17, 2014, the Centers for Medicare and Medicaid Services (CMS) extended its interim final rule regarding fraud and abuse waivers for accountable care organizations (ACOs) that participate in the Medicare Shared Savings Program. The Medicare Shared Savings Program was one of the initial steps taken under the Affordable Care Act to both increase quality and lower costs in the Medicare program. ACOs that participate in the Medicare Shared Savings Program can share in the savings generated to Medicare.

Originally, the interim final rule was published in the November 2, 2011 Federal Register, and had the typical three-year period before becoming a final rule. The continuation of the interim final rule extends the timeline for an additional year, establishing a new deadline of November 2, 2015. The interim final rule offers five waivers to ACOs, which allow healthcare entities to form and operate ACOs without fear of violating federal fraud and abuse laws. The ACO waivers include:

An ACO participation waiver;

Published on: October 22, 2014

IMPACT ACT to Standardize Data Collection for Post-Acute Care Facilities

by Wachler & Associates, P.C.

On October 6, 2014, the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) was signed into law. The bill moved swiftly through both houses due to its joint development by the House Ways and Means Committee and the Senate Finance Committee. The Post-Acute Care (PAC) community also voiced strong support for the IMPACT Act.

Currently, PAC payments to Medicare are typically based on the setting of care. This payment system often results in PAC providers supplying comparable services, but receiving dramatically different reimbursement amounts due to their setting of care. Under the IMPACT Act, the US Department of Health and Human Services (HHS) is tasked with promulgating a reporting system for PAC providers, which includes long-term care hospitals, skilled nursing facilities, inpatient rehabilitation facilities, and home health agencies. PAC providers will be required to report standardized data regarding patient care assessment, resource use, and quality measures. This data collection will allow providers and policymakers to analyze and compare the cost, quality, and type of services offered across a range of PAC providers. It is important to note that the IMPACT Act does not apply to critical access hospitals.

Specifically with regards to quality measures, PAC providers will be required to report on the following issues:

Published on: October 13, 2014

OIG Releases Proposed Rule Affecting Anti-Kickback Statute Safe Harbors

by Wachler & Associates, P.C.

The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently published a proposed rule that affects providers and suppliers seeking to comply with the federal Anti-Kickback Statute (AKS) and Civil Monetary Penalty (CMP) provisions. The proposed rule alters existing safe harbors, codifies statutory changes, and adds new protections for arrangements that the OIG believes present low risk to federal health care programs.

The AKS provides criminal penalties for individuals or entities that knowingly and willfully offer, pay, solicit, or receive remuneration in order to induce or reward the referral of business reimbursable under Federal health care programs. The law prohibits all types of remuneration, including kickbacks, bribes, and rebates. Due to the extremely broad reach of the statute, Congress authorized the OIG to develop safe harbor regulations that protect industry payment and business practices that, if structured properly, would not be treated as criminal offenses under the AKS even though they may induce referrals of business under the Federal health care programs. In authorizing these safe harbors, Congress intended that the safe harbor regulations be updated periodically to reflect changes in business practices and technology in the health care industry. The proposed rule will also codify statutory changes emanating from the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 and the Affordable Care Act of 2010.

Specifically, the proposed rule applies to safe harbors or exceptions related to 1) referral services, 2) cost-sharing waivers, 3) agreements between Medicare Advantage (MA) plans and Federally Qualified Health Centers (FQHCs), 4) the Medicare Coverage Gap Discount Program, and 5) free or discounted local transportation services.