Published on:

by

On May 12, 2014, the U.S. Department of Health and Human Services (HHS) issued a Proposed Rule to increase the Office of Inspector General’s (OIG) authority to combat fraud and abuse under the Civil Monetary Penalty (CMP) Regulations. The Proposed Rule implements changes enacted by the Patient Protection and Affordable Care Act of 2010 (ACA), which expanded OIG’s ability to assess CMP fines against individuals or entities that defraud Federal healthcare programs. Under the proposed rule, OIG may assess CMPs against individuals or entities for:

  1. Failure to grant OIG timely access to documents, as determined on a case-by-case basis;
  2. Ordering or prescribing medicine or services that the person knows or should know may be paid for by a federal health care program while excluded;
Continue reading
Published on:

by

A Centers for Medicare and Medicaid Services (CMS) rule implemented in October of 2012, as the result of the Affordable Care Act, has some doctors very nervous. The rule, commonly dubbed the “grace period rule”, provides that individuals who purchased a government subsidized health insurance plan from the marketplace will have their medical bills covered for 30 days by their insurer if the patient falls behind on their payments for premiums. However, the rule provides that for the following 60 days, insurers may place a “stay” or even ultimately deny payments to the treating physician if the patient does not pay his or her premium. Under the rule, even if insurers cover claims during the last 60 days of the grace period, they may seek to recoup those funds if the insurance coverage is ultimately canceled. Prior to the rule’s implementation, insurers generally cancel a policy if a member falls behind more than 30 days and the insurer is usually on the hook for bills incurred before that cancellation.

The rule makes it so that physicians would have to seek payment for services rendered directly from the patient, which can be a long and uncertain process. The rule could impact solo physicians and small physicians groups, in addition to specialists, on a much greater scale due to their inability to absorb the costs of lost payments. For specialists, the high costs of their services could have an extremely negative impact on their bottom lines if they end up having to absorb the costs of lost payments for services rendered.

The American Medical Association (AMA) has publicly expressed concerns about the rule, fearing that it “could pose a significant financial risk for medical practices” and would leave doctors on the hook for unpaid patient bills after the insurer cancels the patient’s policy. The AMA has also urged the Obama administration to provide further guidance on how and when insurers must notify physicians on when their patients fall behind on premiums. The state of Washington, for example, passed a “prompt notification” law earlier in May. The Washington law would require insurance companies to provide information about whether a member is in the 90 day grace period, if a doctor or hospital requests such information. Other states are debating whether to pass legislation substantially similar to Washington’s “prompt notification” law.

Continue reading
Published on:

by

Last week, the Office of the Inspector General (OIG) released a Proposed Rule that changes its provider exclusion authority and significantly alters certain provider exclusion procedures and the substantive bases for exclusion from a Federal healthcare program. The Proposed Rule was released in conjunction with another Proposed Rule on the same date regarding Civil Monetary Penalties (CMPs). Comments regarding the rules are due on July 8.

§ 1128 of the Social Security Act grants the OIG authority to exclude certain individuals and entities from participation in Federal healthcare programs. If the OIG determines that an individual or entity has engaged in certain prohibited conduct, it must ban such a person or entity from participation in Federal healthcare programs for a statutorily mandated five year minimum period. However, many bases for exclusion are merely “permissive”, where the OIG retains discretion in deciding whether to exclude an individual or entity.

The Proposed Rule provides the OIG with three new bases upon which they may permissively exclude a provider or entity: the failure of ordering, referring, or prescribing providers to furnish payment information under Section 1128(b)(11); knowingly making, or causing to be made, false statements, omissions, or misstatements of material fact on a federal health care program application under Section 1128(b)(16); or convictions in connection with obstruction of a healthcare audit under Section 1128(b)(2).

Continue reading
Published on:

by

On May 1, Recovery Audit Contractor (“RAC”) for Region B, CGI Federal, Inc., (“CGI”) filed a lawsuit against the United States Department Health and Human Services (“HHS”) in the United States Court for Federal Claims.

In the lawsuit, CGI seeks an injunction against the HHS’s award of new RAC contracts and to eliminate the new payment terms that prohibit RACs from being paid until after the second level of appeal. The lawsuit comes after CGI’s pre-award bid protests, where CGI asked for a change to the new payment terms, were denied by the Government Accountability Office (“GAO”).

Towards the end of 2013 and the beginning of 2014, CMS sent out a request for quotes (RFQ) for new RAC contracts. The Statement of Work, which accompanied the RFQ, contained most of the changes to which CGI objects. CGI’s main objection is to the changes in the payment terms. Under the current system, RACs bill and receive their contingency fees after the first level of appeal of a claim determination, which takes roughly 120 days. Under the new model, RACs would not receive their contingency fees until after the second level of appeal, which could span anywhere from 120 to over 400 days.

Continue reading
Published on:

by

On Wednesday, New York Presbyterian Hospital and Columbia University agreed to settle claims with the Department of Health and Human Services (HHS) Office for Civil Rights for a collective $4.8 million stemming from a data breach in 2010. This matter, along with other similar cases, should serve as an important warning to healthcare providers and other HIPAA covered entities that personal health information (PHI) of patients must be protected, especially in the electronic age. If a data network is breached and PHI is made available, HHS will use its enforcement powers to assess punitive penalties and institute corrective actions in order to achieve compliance.

Under the terms of the settlement, New York Presbyterian will pay $3.3 million while Columbia University will pay $1.5 million. Both entities must also institute corrective action plans. The settlement represents the highest combined total financial penalty issued to an entity covered by HIPPA. As part of the settlement, the entities must undergo a risk analysis, develop a risk management plan, revise policies and procedures, train staff and provide progress reports.

The investigation and subsequent settlement were brought on by a data breach incident in 2010 where the shared data system for New York Presbyterian and Columbia University was breached and the records of 6,800 patients were made available on the internet. The data breach occurred when a physician attempted to deactivate a personally owned computer server on the network. The Office for Civil Rights alleged that that due to a lack of technical safeguards, deactivation of the server resulted in PHI being accessible via internet search engines.

Continue reading
Published on:

by

Earlier this month, CMS released its first set of Medicare Provider Utilization and Payment Data for physicians and physician practices. As part of the Obama Administration’s efforts to make Medicare more transparent, CMS has prepared a public data set providing information on services and procedures provided to Medicare beneficiaries under Medicare Part B. This information includes the types and number of services and procedures provided by physicians, as well as the amount of payments each physician received from the Medicare program in calendar year 2012.

According the data, office/outpatient evaluation and management services (e.g., CPT codes 99213 and 99214) were the most frequently billed services by physicians and accounted for nearly $11 billion of the $77 billion in Medicare payments to physicians in 2012.

Physician evaluation and management (E/M) services have been an increasing focus of audits by CMS contractors – typically, Medicare Administrative Contractors (MACs) and Zone Program Integrity Contractors (ZPICs). Furthermore, with the moratorium on Recover Audit Contractors (RACs) ability to audit Part A hospital claims being extended to March 2015, we expect the RACs to shift their audit focus from Part A to Part B claims. Based on the changing audit landscape and the utilization and payment data recently released by CMS, physicians can only expect to be an even greater target of Medicare audits.

Continue reading
Published on:

by

With the “doc-fix” bill extending the enforcement delay of the two-midnight rule to March 31, 2015, the American Hospital Association (AHA) has decided to use that time challenging the new inpatient admission rules. Earlier this week, AHA filed a lawsuit in the United States District Court for the District of Columbia challenging the “arbitrary standards and documentations requirements” of the new inpatient admission rules which “deprive hospitals of Medicare reimbursement to which they are entitled.”

Specifically, AHA is challenging the definition of “inpatient” under the two-midnight rule, alleging that CMS’s “inpatient” definition requiring a patient to spend two nights in the hospital is arbitrary and capricious because it bears no resemblance to the actual definition of “inpatient” and CMS has made no attempt to explain its reasoning for adopting such a meaning. Additionally, AHA is challenging the Final Rule’s application of the one year time limit to file a Part B claim when a Part A inpatient claim is denied as not being medically necessary and reasonable. Recovery audit contractors (RACs) typically conduct post-payment reviews of inpatient hospital admissions with dates of admission in which the one year rebilling deadline has already elapsed. Finally, AHA asserts that CMS’s new requirement that all short-stay inpatient admissions include a physician order for admission as a condition of Part A payment is unlawful. Through its lawsuit, AHA seeks for the court to vacate and set aside the two-midnight rule, the one year time limit, and the physician order policy.

Wachler & Associates will continue to monitor the current AHA lawsuit, as well as any further developments regarding CMS’s new inpatient admission policies. If you have any questions pertaining to the two-midnight rule or the physician certification and order requirements, please contact an experienced health care attorney at Wachler & Associates via phone at 248-544-0888 or via email at wapc@wachler.com.

Published on:

by

In a report released on Thursday, April 10, the Office of the Inspector General (“OIG”) found that, thus far, there has been limited compliance with the face-to-face documentation requirement for home health providers. As a result, the OIG determined that Medicare paid $2 billion to home health providers that should not have been paid. In an effort to increase compliance with the face-to-face requirement, the OIG has outlined specific recommendations that CMS could implement which would impact home health providers. The OIG’s findings and recommendations should serve as an alert to home health providers to carefully review their compliance with face-to-face encounter documentation requirements.

The Patient Protection and Affordable Care Act (“ACA”) included language that established the face-to-face encounter requirement. Although initially scheduled to be effective January 1, 2011, the Centers for Medicare and Medicaid Services (CMS) delayed implementation until April 1, 2011.

The face-to-face encounter documentation requirement provides that for initial certification periods only, a home health agency must obtain documentation from the certifying physician that the physician had a face-to-face encounter with the patient. The face-to-face documentation must be signed and dated by the physician. It must include the date the encounter occurred, and include a brief narrative that describes why the patient is homebound and why the skilled services are medically necessary to treat the patient’s illness or injury. A home health agency’s reimbursement for the home health services for an initial certification period is dependent upon the certifying physician’s proper documentation of the face-to-face encounter.

Continue reading
Published on:

by

On Wednesday, March 12, Moody’s Investor Services released a report predicting that Medicare’s new inpatient admissions policy, the “Two-Midnight rule”, will negatively affect hospitals’ bottom lines. The Two-Midnight rule instructs physicians and hospitals to use a two-midnight benchmark and order admission for patients expected to require hospital care crossing at least two midnights.

The Moody’s report stated that “on average, the [Two-Midnight] rule could cause revenue reduction averaging $3,000 to $4,000 per case.” The report suggests that these reduced reimbursement rates will be especially devastating since the cost of treating patients will remain the same. The report also suggests that the Two-Midnight rule will expedite the already increasing trend of more outpatient observation stays, which will put more pressure on hospital revenues. The impetus for this increasing trend of outpatient care observation stays has been the frequent challenges by RACs to the medical necessity requirement of short-stay admissions.

The report also concludes that under the Two-Midnight rule, hospitals with shorter lengths of stay will be most affected. The hospitals that are expected to be most affected are classified as ‘low acuity’ community hospitals. While these types of hospitals tend to have a larger number of cases resulting in shorter hospital stays, these stays typically still consume a large of amount of resources, such as diagnostic testing.

Continue reading
Published on:

by

On April 1, 2014, President Barack Obama signed into law a bill (H.R. 4302) extending the enforcement delay of the two-midnight rule. Under the newly adopted law, Recovery Audit Contractors (RACs) will not conduct patient status reviews of inpatient hospital admissions on a post-payment basis until March 31, 2015. The two-midnight rule, which took effect October 1, 2013, provides that inpatient hospital admissions are generally appropriate when the physician expects the beneficiary will require medically necessary hospital services for 2 or more midnights. Since taking effect, hospitals’ inpatient admission claims under the two-midnight rule have been free from review by the RACs.

Prior to the extended enforcement delay to March 31, 2015, the enforcement of the two-midnight rule was previously delayed by CMS to March 31, 2014, and again to September 30, 2014. Also extended to March 31, 2015 under the new law is the Medicare Administrative Contactors’ (MACs) ability to conduct “Probe and Educate” reviews of a limited set – 10-25 claims depending on the size of the hospital – of inpatient admission claims for each hospital, which are conducted on a prepayment basis. When conducting “Probe and Educate” reviews, CMS has instructed the MACs to review hospital’s compliance with the admission order requirements, the certification requirements, and the two-midnight benchmark.

Until March 31, 2015, hospital inpatient admissions under the two-midnight rule will be subjected only to a limited number of prepayment claim reviews by the MACs. Thus, for inpatient claims with dates of admission October 1, 2013 through March 31, 2015, the RACs will not conduct prepayment reviews, and both the RACs and the MACs will not conduct post-payment reviews.

Continue reading
Contact Information
210 E 3rd St #204
Royal Oak, MI 48067
Phone: 248-544-0888
Fax: 248-544-3111

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Please do not include any confidential or sensitive information in a contact form, text message, or voicemail. The contact form sends information by non-encrypted email, which is not secure. Submitting a contact form, sending a text message, making a phone call, or leaving a voicemail does not create an attorney-client relationship.

Copyright © 2016 – 2025, Wachler & Associates, P.C.
JUSTIA Law Firm Blog Design