Wachler & Associates Health Law Blog

Published on: November 12, 2014

CMS Announces Increased Reimbursement for Telehealth

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.

Published on: October 6, 2014

Office for Civil Rights Advisor Warns Providers on HIPAA Audits: “Get Your House In Order”

by Wachler & Associates, P.C.

On September 9, Linda Sanches, the Senior Advisor for the U.S. Department of Health and Human Services’ Office for Civil Rights (OCR) warned that Health Insurance Portability and Accountability Act (HIPAA) audits are forthcoming. Speaking at the HIMSS Privacy and Security Forum in Boston, Sanches cautioned attendees that the best defense to an audit is conducting periodic and comprehensive risk analyses focused on administrative and technical protections, as well as human error vulnerabilities. “The onus is on you to prove that you had the proper systems in place,” Sanches warned, advising providers to proactively perform risk analyses in advance of a HIPAA audit.

To attendees’ disappointment, Sanches did not unveil a start date for the HIPAA audits. Instead, Sanches explained that the OCR has postponed initiating HIPAA auditing to implement new technology with increased auditing capacities. Originally, the OCR intended to conduct a total of 400 desk audits. However, Sanches confirmed that now the OCR will likely perform fewer than 200 targeted desk audits and an unconfirmed number of on-site audits. A variety of providers across practice area, size, and geographic location should expect to be audited. Audited entities will be responsible for compliance with both the HIPAA Privacy Rule and the HIPAA Security Rule. In addition, providers should have available an updated list of business associates with contact information and services provided. Sanches warned that the OCR will use a provider’s business associate list to select business associates for HIPAA auditing.

Providers with patterns in reported breaches are more likely to face HIPAA auditing. Sanches emphasized that providers who fail to demonstrate compliance with the HIPAA privacy rule and HIPAA security rule may face hefty settlement fines based on the amount of harm and provisions violated. When discussing fines, Sanches stated, “It’s basic math. How many people were affected?”

Published on: October 2, 2014

CMS Open Door Forum Clarifies Key Points of 68% Settlement Offer to Hospitals

by Wachler & Associates, P.C.

On September 30, the Centers for Medicare & Medicaid Services (CMS) held a Hospital & Hospital Quality Open Door Forum on a variety of topics pertinent to hospitals. CMS opened the forum with an unexpected update on CMS’ recently announced 68% settlement offer for patient status claim denials. As many providers are already aware, CMS has offered to pay 68% of the net payable value of eligible patient status claim denials in exchange for hospitals’ withdrawal of all pending eligible appeals.

While the September 30 Open Door Forum covered a variety of topics unrelated to the settlement offer, CMS clarified key points regarding the settlement offer and providers should take note.

First and foremost, CMS clarified that Part A patient status denials submitted for re-billing under Part B are eligible for inclusion in the settlement so long as the hospital has not received payment on the rebilled claim. In response to a question, CMS specified that as long as the hospital has not received Part B payment on a rebilled claim on the date that the settlement request is submitted, the claim is eligible for inclusion in the settlement process. CMS indicated that this issue will be discussed in greater detail during the October 9 Open Door Forum. Additionally, CMS indicated that it is not contemplating an extension to the October 31, 2014 filing deadline.

Published on: October 1, 2014

OCR Offers Guidance on HIPAA Privacy Rule and Same-sex Marriage

by Wachler & Associates, P.C.

In September 2014, the U.S. Department of Health and Human Services Office for Civil Rights (OCR) released guidance to assist covered entities in understanding their obligations under the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule in light of the Supreme Court’s 2013 decision in United States v. Windsor. In Windsor, the Supreme Court struck down Section 3 of the Defense of Marriage Act (DOMA), which restricted interpretations of “spouse” and “marriage” in federal law to opposite-sex marriages, as a violation of the Due Process Clause of the Fifth Amendment. As a result, OCR opined that covered entities and applicable business associates must take into account lawfully married same-sex couples when applying federal law.

OCR noted that the Privacy Rule’s definition of “family members” includes the terms “spouse” and “marriage.” Under the Privacy Rule, a spouse is defined as any individual who is in a legally valid marriage sanctioned by a state, territory, or foreign jurisdiction (assuming that the marriage performed in a foreign jurisdiction would be recognized by a U.S. jurisdiction). OCR clarified that “marriage” includes same-sex marriages, a family member includes dependents of that marriage, and that these terms apply to individuals who are legally married, “whether or not they live or receive services in a jurisdiction that recognizes their marriage.”

OCR also provided two examples how this clarified definition of a family member would be applied to specific provisions in the Privacy Rule. Specifically, §164.510(b) Standard: uses and disclosures for involvement in the individual’s care and notification purposes allows protected health information to be shared with a patient’s spouse and family members. OCR opined that in light of Windsor, covered entities must consider legally married same-sex spouses, regardless of where they live, to be family members.

Published on: September 30, 2014

Medicare to Introduce More Star Ratings to Compare Providers

by Wachler & Associates, P.C.

CMS recently announced that it will soon be adding additional star ratings to the Medicare.gov website by 2015. CMS has already implemented the star rating system to provide consumers quality and safety information regarding nursing homes and physician groups on a five-star scale. The system is supposed to allow consumers to make informed decisions about their provider, while giving providers something to strive for. CMS Deputy Administer for Innovation and Quality, Dr. Patrick Conway, stated that the star rating system is based on scientific standards of both accuracy and rigor. Because providers differ on the quality of care and services they offer to customers, CMS touts its star rating system as giving consumers a “snap-shot” of the care an individual provider offers. By 2015, CMS plans to add hospital groups and dialysis and homecare providers to the rating system.

While advocates of the consumer-oriented star-rating system are excited about the inclusion of more provider types, many providers are speaking out against the system. According to a recent article on Modern Healthcare, after being notified of dialysis and homecare providers’ inclusion, a spokesman for Kidney Care Partners–a coalition of dialysis providers–claimed that the star rating system compares apples and oranges. The spokesman argued that the inaccurate comparison results in confused patients not really understanding what the amount of stars mean. Proponents of the rating system try to rebut views like those expressed by Kidney Care Partners, by arguing that the health care community should stress transparency, rather than worry about the imperfections in the rating system. Echoing these sentiments, Dr. John Santa, the Medical Director for Consumer Reports, stated that no provider will score well on every rating system, but the abundance of ratings will eventually provide a clearer picture of providers’ quality of care and safety.

Although proponents of the star rating system continue to espouse its positive aspects, many providers remain concerned. Because providers can lose accreditation for scoring poorly on certain measures of safety and quality, and even face fines, these ratings are becoming more important. Several providers urge CMS to delay the inclusion of more provider types to the rating system until it can provide a more complete performance rating. They assert that the measurement differences may result in one provider scoring high in one program and low in another and, although the system does not have to be perfect, it must be reliable. Opponents say that to allow otherwise is to misguide patients and may potentially lead to unfair financial penalties on the entities.