Published on:

by

On September 30, 2013, Federal Judge Margaret Seymour of the United States District Court for the District of South Carolina ordered South Carolina’s Tuomey Healthcare System to pay $276.8 million for violating both Stark law and False Claims Act (FCA) provisions; however, this ordered amount was subsequently reduced by $39 million to correct a clerical error. The payment order came after a May 8, 2013 jury verdict in which the jury found that Tuomey had submitted 21,730 Medicare claims which stemmed from illegal compensation arrangements with physicians to induce patient referrals to the hospital. Tuomey has already filed a motion announcing its intent to appeal to the 4th Circuit Court of Appeals.

The Stark law prohibits a physician from making referrals for certain designated health services payable by Medicare to an entity with which he or she has a financial relationship (ownership, investment or compensation). As this case demonstrates, the penalties for violating the Stark law – denial of payment, civil monetary penalty (CMP) of $15,000 per service, and $100,000 CMP for each arrangement or scheme – are severe and can also lead to even more extreme penalties under the FCA. What many providers may not know is that although the requisite intent must exist under the FCA, the Stark law is a strict liability statute that does not take into account the intent of the providers involved. As such, providers should evaluate potential business arrangements, or reevaluate current business arrangements, to ensure such arrangement is not in violation of the Stark law. Moreover, when an arrangement potentially implicates the Stark law, providers should also be sure to analyze the arrangement under the Anti-Kickback statute and other applicable fraud and abuse laws.

If you would like assistance in analyzing a potential or existing business arrangement under the Stark law, including a detailed opinion of whether your arrangement qualifies as an exception to Stark, or if you have any other questions relating to the Stark law, Anti-Kickback statute, False Claims Act or other fraud and abuse laws, please contact an experienced health care attorney via phone at 248-544-0888 or via email at wapc@wachler.com.

Published on:

by

The Centers for Medicare and Medicaid Services (CMS) recently released a national provider Comparative Billing Report (CBR) focused on spinal orthotics and ordering providers. This CBR was conducted in response to an Office of Inspector General (OIG) report on inappropriate Medicare payments for orthotics. The Medicare Durable Medical Equipment (DME) data obtained for this report span from dates of service beginning January 1, 2012 through December 31, 2012. The final data was retrieved on August 15, 2013 from the Integrated Data Repository (IDR).

Under contract by CMS, Safeguard Services LLC is the authorized producer of all CBRs. Safeguard sends CBRs to about 5,000 ordering providers to help providers prevent improper billings. This CBR provides comparative data to orthotic providers across the nation to compare orthotics providers in terms of coding and billing practice, as well as utilization patterns. The sample spinal orthotics CBR may be useful to review if your entity did not receive one from Safeguard.

The following Healthcare Common Procedure Coding System (HCPCS) codes were analyzed in this CBR:

Continue reading
Published on:

by

The Centers for Medicare and Medicaid Services (CMS) announced during its September 26, 2013 Open Door Forum that, for a period of 90 days, CMS will not permit Recovery Audit Contractors (RAC) to review inpatient admissions of one midnight or less that begin on or after October 1, 2013. This three-month period, from October 1 through December 31, will give hospitals additional time to ensure that the necessary policies and procedures are in place to comply with CMS’s new inpatient status rules. Again, all inpatient admissions of one midnight or less will not be subject to pre-payment or post-payment review by the RACs.

As an effort to provide guidance and education to hospitals about the new inpatient rules, CMS will instruct the Medicare Administrative Contractors (MAC) to review 10 to 25 inpatient hospitals claims, per hospital, spanning less than two midnights after admission with dates of admission between October 1, 2013 and December 31, 2013. These probe reviews will be conducted by the MACs to determine whether the medical necessity of the patient status complied with the 2-midnight benchmark. The probe samples will be utilized by the MACs to evaluate hospitals’ compliance with the new inpatient rule and provide feedback to CMS to determine what additional guidance needs to be developed. If the MAC identifies issues from its review of a hospital’s inpatient admission claims, the MAC will conduct education for that hospital, as well as any additional follow up deemed necessary.

Wachler & Associates will continue to monitor any further developments regarding CMS’s new inpatient admission rule. In the meantime, hospitals should use the additional three-month implementation period to ensure its admission and documentation protocols comply with the new inpatient admission standards and certification and order requirements. If you need assistance in developing an effective compliance program, or need help navigating through the complexities of the new inpatient admission rule, please contact an experienced health care attorney at Wachler & Associates via phone (248-544-0888) or email (wapc@wachler.com).

Published on:

by

Today from 2:00-3:00 pm Eastern Time, the Centers for Medicare & Medicaid Services (CMS) will hold a special follow-up Open Door Forum to discuss the Fiscal Year (FY) 2014 Inpatient Prospective Payment System (IPPS)/Long-Term Care Hospital (LTCH) Final Rule (CMS-1599-F) as well as the CMS guidance on physician order and certification. The effective date of the Final Rule is October 1, 2013.

On August 2, 2013, CMS issued the FY 2014 IPPS/LTCH Final Rule which finalized proposals related to patient status during short-stay hospital cases, including the new standards for inpatient admission and the medical review criteria for payment of hospital inpatient services under Medicare Part A. On September 5, 2013, CMS issued sub-regulatory guidance regarding the final rule’s requirements for hospital inpatient admission order and certification, which are conditions of payment under Medicare Part A. This sub-regulatory guidance was issued in part as a result of the significant confusion surrounding CMS’s requirements for inpatient admission orders and physician certifications of inpatient services.

Questions may be sent to CMS before the Open Door Forum begins via email. Questions regarding the two midnight provision for inpatient admission in the final rule can be sent to IPPSAdmissions@cms.hhs.gov. Questions on Part B inpatient billing and clarifications regarding physician order and certification can be sent to Section3133DSH@cms.hhs.gov.

Continue reading
Published on:

by

Earlier this month, U.S. District Judge Denise Page Hood of the Eastern District of Michigan sentenced 53-year-old Michigan resident Muhammad Shahab to 50 months in prison and three years of supervised release for perpetrating almost $11 million in Medicare fraud between August 2007 and October 2009. Shahab and his co-defendants were also ordered to pay over $10.8 million in restitution to the Medicare Program.

The Department of Justice Press Release reported that Shahab, who had helped finance and establish two Detroit-area home health agencies, pled guilty to one count of health care fraud back in February 2010. Plea documents revealed that Shahab “admitted that while operating or being associated with both health agencies, he and his co-conspirators billed Medicare for home health visits that never occurred.” Shahab, the leader of the fraud scheme, admitted that he and his co-conspirators falsely used the Medicare numbers and signatures of Medicare beneficiaries who were not homebound or needed physical therapy service on medical documentations. Shahab and his co-conspirators offered cash kickbacks and other inducements to these Medicare beneficiaries in exchange for their participation.

In addition, through kickback payments to physicians and other individuals associated with physicians, Shahab obtained physician referrals for medically unnecessary home health services. Shahab confessed to billing and receiving payments from Medicare for medically unnecessary services and services never rendered.

Continue reading
Published on:

by

After months of delay, compliance with the Health Insurance Portability and Accountability Act (HIPAA) Health Information Technology for Economic and Clinical Health (HITECH) Omnibus Final Rule goes into effect today. HIPAA Privacy and Security Rules are implemented by the Health and Human Services (HHS) Office for Civil Rights.

The Omnibus Final Rule was announced by HHS on January 17, 2013. According to the HHS press release, the Final Rule “expand[s] many of the requirements to business associates of [health care providers, health plans, and other entities that process insurance claims] that receive protected health information, such as contractors and subcontractors…Penalties are increased for noncompliance based on the level of negligence with a maximum penalty of $1.5 million per violation.”

The Final Rule’s safe harbor period, which ended today, gave covered entities and business associates 180 days to comply with stricter modifications which will be enforced by heavy fines. Time is of the essence for covered entities and business associates to take proper measures to comply with the new rules. It is imperative that entities review their relationships with covered entities, as the Final Rule expanded the definition of a “business associate” and entities that previously were not business associates, may be considered business associates with the implementation of the Final Rule. If an entity is a business associate with a covered entity, then certain obligations come into play, including the requirement that the business associate and covered entity enter into a business associate agreement that meets the requirements set forth in the Final Rule.

Continue reading
Published on:

by

On Monday, September 16, 2013, Michigan Governor Rick Snyder signed into law legislation that will expand Medicaid coverage to hundreds of thousands of Michigan residents. Medicaid expansion is a national effort initiated through the Patient Protection and Affordable Care Act.

The Affordable Care Act increases available federal funding for states that choose to expand eligibility levels for Medicaid coverage. Medicaid expansion was made mandatory under the Act in 2010, but in a 2012 Supreme Court decision, Chief Justice Roberts held that Congress may not penalize states that choose not to participate in Medicaid expansion. As a result of this Supreme Court decision, Congress may not take away a state’s existing Medicaid funding.

If Michigan receives approval and federal waivers from the Obama administration, Michigan will have access to more than a billion dollars a year in federal funding. Beginning in 2014, the Medicaid coverage for newly-eligible adults will be fully funded by the federal government for the first three years, and will be phased down to 90% by 2020. The expansion will cover adults that earn up to 133% of the poverty level, which equates to about $15,500 for an individual and approximately $31,000 for a family of four.

Continue reading
Published on:

by

In August 2013, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued a study addressing problems and vulnerabilities in Recovery Audit Contractor (RAC) activities, as well as their oversight by Centers for Medicare & Medicaid Services (CMS). RACs are tasked with identifying improper payments and are paid on a contingency fee basis according to their findings. RACs are also obligated to refer potential fraud to CMS.

The report addresses RACs’ efforts at identifying improper payments and potential fraud for the fiscal years (FYs) 2010-2011 and emphasizes the importance of effective CMS oversight over the RACs. The OIG set out to discover and report on four main objectives, including the extent to which:

1. RACs identified improper payments for services billed to the Medicare program;

Continue reading
Published on:

by

CMS Issues Guidance on Physician Certification and Order

The Centers for Medicare & Medicaid Services (CMS) has released sub-regulatory guidance entitled Hospital Inpatient Admission Order and Certification to help hospitals interpret the agency’s requirements for inpatient admission orders and certifications from the Hospital Inpatient Prospective Payment System Final Rule for FY 2014 (the “Final Rule“). After the Final Rule was issued on August 2, 2013, significant confusion surrounded CMS’s requirements for inpatient admission orders and physician certifications of inpatient services. This sub-regulatory guidance, developed by CMS and released on September 5, 2013, details the specific requirements for hospital inpatient coverage and payment under Medicare Part A.

Physician Certification

Continue reading
Published on:

by

On Tuesday, September 3, 2013, the Michigan House gave final legislative approval to Medicaid expansion under the Patient Protection and Affordable Care Act. This legislation, House Bill 4714, is expected to be signed by Governor Rick Snyder in the coming weeks.

The Affordable Care Act increases federal funding for states that increase eligibility standards for Medicaid enrollment. As passed in 2010, Medicaid expansion was mandatory under the Act, but was subsequently made option by a 2012 Supreme Court decision. CMS administration has announced that states do not have a deadline for deciding whether or not to expand, and in addition, states are free to terminate expansion with financial penalty from the federal government.

Federal funds are available as early as January 1, 2014, but Michigan will likely delay implementation until the spring. According to a Michigan Senate Fiscal Agency analysis published in March that examines the Snyder Administration’s proposed expansion of Michigan’s Medicaid program, the state’s decision to expand could cover an additional 400,000 Michigan residents by means of $1.7 billion in federal funding. Wachler & Associates will continue to keep you updated on Michigan’s decision to expand Medicaid enrollment and other significant healthcare law news. Please subscribe to the Wachler & Associates health law blog by adding your email address and clicking “Subscribe” in the window on the top right of this page.

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