Wachler & Associates Health Law Blog

Published on: August 12, 2013

Health Care for Detroit Employees and Retirees at Risk under Detroit Bankruptcy

On July 18, 2013, Detroit’s emergency manager Kevin Orr filed for Chapter 9 bankruptcy protection in the Eastern District of Michigan U.S. Bankruptcy Court. Emergency manager Kevin Orr, appointed by Governor Rick Snyder, is tasked with financial control of the city and the power to liquidate city assets. Orr is focused on restructuring Detroit’s debt. Detroit is the largest municipality in United States history to file for bankruptcy.

Retiree health care program costs are a named source of Detroit’s bankruptcy filing. Kevin Orr’s bankruptcy filing, a decision authorized by Governor Snyder, occurred one day after Detroit’s two largest municipal pension funds filed suit in state court to stop Orr from cutting retiree health care benefits for Detroit residents. Detroit’s retirees are now worried about possible cuts to their promised healthcare benefits. In a press conference after the filing, Kevin Orr assured Detroit residents that for the next six months there would be no cuts to health care benefits for Detroit’s active workers and retirees.

On August 2, 2013, Kevin Orr announced a new health care plan for city workers that he believes will save the city almost $12 million per year. Orr’s proposal increases workers’ annual deductibles and caps on out-of-pocket costs. If the unions reject Orr’s proposal, then Orr still has the power to change employees’ health care plans under Michigan’s emergency manager law. According to the Detroit Free Press, union leaders are not convinced that Orr’s plan is the best alternative to the current situation.

Published on: August 7, 2013

CMS Issues Much Anticipated Final Rules on Payment of Medicare Part B Inpatient Services and Payment of Hospital Inpatient Services under Medicare Part A

by Wachler & Associates, P.C.

On August 2, 2013, the Centers for Medicare & Medicaid Services (“CMS”) released its much-anticipated final rules, CMS-1455-F and CMS-1599-F, finalizing two previously issued proposals that addressed payment policies related to patient status in short-stay hospital cases: (1) payment of Medicare Part B inpatient services; and (2) admission and medical review criteria for payment of hospital inpatient services under Medicare Part A. The effective date of the final rule is October 1, 2013.

Notwithstanding these final rules, CMS stated that hospitals will be permitted to follow the Part B billing timeframes established in CMS-1455R Ruling regarding appeals and the submission of Part B claims after the effective date of the final rule, provided (1) the Part A inpatient claim denial was one to which the Ruling originally applied; or (2) the Part A inpatient claim has a date of admission before October 1, 2013, and is denied after September 30, 2013, on the grounds that the medical care was reasonable and necessary, but the inpatient admission was not.

Payment of Medicare Part B Inpatient Services

Published on: August 1, 2013

What Do Providers Need to Know About Medicaid RACs?

by Wachler & Associates, P.C.

In 2005, the Centers for Medicare & Medicaid started the Medicare Recovery Audit Contractor (RAC) program in three pilot states, where the program recovered over $900 million dollars during the three-year pilot. Due to the success of the pilot program, CMS expanded the program to all states in 2010, and has since recovered over three billion dollars. The success of the Medicare RACs resulted in the expansion of the current RAC program to Medicaid and Medicare Parts C and D through Section 6411 of the Affordable Care Act (ACA).

The ACA requires states to:

Contract with a RAC to ensure that overpayments and underpayments by the state Medicaid agency are identified, and that overpayments are recouped;

Published on: July 31, 2013

The Medicare Appeals Process Is Overburdened

by Wachler & Associates, P.C.

Healthcare and healthcare law professionals across the country are noticing that as Medicare audit numbers are climbing, so too is the length of the Medicare appeals process. Once a provider or healthcare entity receives a denial from a Medicare contractor, the Medicare appeals process consists of five stages:

• Redetermination, which is filed with a Medicare Administrative Contractor (MAC)

• Reconsideration, which is filed with a Qualified Independent Contractor (QIC)

Published on: July 30, 2013

Medicare and Medicaid Program Integrity: MACs and ZPICs out, UPICs in

by Wachler & Associates, P.C.

Last Friday, the vice president of legal affairs for the American Health Care Association (AHCA), Dianna De La Mare, reported that CMS will be combining the integrity responsibilities of the Zone Program Integrity Contractors (ZPICs) and the Medicare Administrative Contractors (MACs) into one integrity contractor. These newly designated integrity contractors, the Unified Program Integrity Contractors (UPIC), will focus on both Medicare and Medicaid integrity issues. Dianna De La Mar also reported that the new UPICs will encompass the MAC integrity responsibilities and will retire the Medicaid Integrity Contractors (MICs).

Follow the Wachler & Associates Health Law Blog for updates on UPICs and other important health law issues. If you have any questions regarding how UPICs may affect your practice, please contact an experienced health care attorney at Wachler & Associates attorney at 248-544-0888.

Published on: July 29, 2013

Increased Scrutiny on Medicare Sleep Study Payments

by Wachler & Associates, P.C.

Ensuring comprehensive documentation procedures are in place has become increasingly vital for all providers. However, recently compliance plans have become even more important for sleep labs, sleep centers, hospital-based sleep service providers, and non-hospital-based sleep service providers seeking Medicare reimbursement. According to a FY 2013 Department of Health & Human Services (HHS) Office of Inspector General (OIG) report, Medicare payments for sleep study services have dramatically increased since 2001, growing four-fold from $62 million in 2001 to $235 million in 2011. As a result of increased Medicare spending for sleep-related procedures, there is a spotlight on the appropriateness of Medicare-billed services.

Sleep study services encompass issues such as studies for obstructive sleep apnea (the most common sleep disorder), full-night sleep diagnostic studies, split-night studies, and full-night titration studies. Medicare reimburses sleep study providers at prearranged and set rates for polysomnography (the most popular tool utilized to diagnose sleep disorders), applicable services from the inpatient prospective payment system, the outpatient prospective payment system, the Physician Fee Schedule, and a range of sleep studies.

Sleep study service providers receiving Medicare payments should be prepared for the OIG’s scrutiny throughout 2013 by ensuring that claims are made according to Medicare regulations. In order to ensure proper compliance for full Medicare reimbursement, sleep study service providers must follow certain documentation and procedural requirements. Among other requirements, all documentation must provide rationale for services that were provided, as well as rationale for how providers arrived at a billing status. Detailed documentation is more important than ever.

Published on: July 24, 2013

Update on Medicare Demand Letters Issued for Incarcerated Beneficiaries

by Wachler & Associates, P.C.

In our recent blog post, CMS Issues Demand Letters to Providers and Suppliers with Claims for Services Provided to Allegedly Incarcerated Beneficiaries, we discussed the large number of demand letters CMS released regarding Medicare overpayments for incarcerated beneficiaries. Since that blog post was written, CMS has issued an update, stating that the information connected to these incarceration periods was incomplete in some cases.

CMS is currently reviewing this information and will take action to improve the procedures used to detect incarceration periods. Furthermore, CMS is trying to identify the recent overpayment demand letters that were incomplete and make corrections to those respective demand letters. CMS announced that it will continue to inform the public about this issue and the timelines for to fix their error. Such announcements can be found on the All-Fee-For-Service-Providers page on the CMS website.

In lieu of this new information, providers should not contact their CMS Regional Offices, as CMS is currently working to resolve this issue. However, we do still encourage providers to investigate this possibility of reimbursement and to contact us if they need assistance reviewing current state laws to determine whether reimbursement may be a possibility. Wachler & Associates will continue to keep you updated on this topic and other important healthcare law issues on the Wachler & Associates Blog.

Published on: July 23, 2013

CMS Issues Demand Letters to Providers and Suppliers with Claims for Services Provided to Allegedly Incarcerated Beneficiaries

by Wachler & Associates, P.C.

The Centers for Medicare & Medicaid Services (CMS) is issuing demand letters seeking recoupment of reimbursement from medical providers and suppliers for Medicare beneficiaries that, according to data from the Social Security Administration (SSA), were allegedly “incarcerated” at the time services were provided. According to the Code of Federal Regulations (42 CFR 411.4) and Section 1862(a)(2) of the Social Security Act, with limited exceptions, Medicare does not make payments under Medicare Part A or Part B for incarcerated beneficiaries’ medical services. The SSA uses the Prisoner Update Processing System (PUPS) to notify CMS contractors to stop Medicare payment for patients in custody of penal authorities.

CMS considers a beneficiary “incarcerated” in circumstances that do not only involve physical confinement. Commentary on 42 CFR 411.4 explains that this definition of “custody” is consistent with the Federal courts’ definition of custody for the purpose of habeas corpus protections of the Constitution. According to commentary on 42 CFR 411.4, as well as the related CMS bulletin, individuals in “custody” include those who are:

• Under arrest

Published on: July 22, 2013

CMS Releases CY 2014 OPPS Proposed Rule to Influence Hospitals and Outpatient Providers

by Wachler & Associates, P.C.

On July 9, 2013, the Centers for Medicare and Medicaid Services (CMS) issued the 2014 Hospital Outpatient Prospective Payment System (OPPS) proposed rule (CMS -1601-P). This 718 page document advocates for a shift in the Medicare OPPS and Medicare ambulatory surgical center (ASC) payment system to foster payment efficiency. In the United States, over 4,000 hospitals are paid through the OPPS and close to 5,000 Medicare-participating ASCs are paid though the ASC payment system.

According to the proposed rule, the statutorily mandated proposition (by Section 1833(t) of the Social Security Act) aims “to implement applicable statutory requirements and changes arising from… continuing experience with these systems.” Policies, provisions, and program requirements CMS wishes to update and refine include:

• Payment weights and conversion factors for services payable under OPPS • ASC payment rates • Hospital Outpatient Quality Reporting (OQR) Program • ASC Quality Reporting (ASCQR) Program • Hospital Value-Based Purchasing (VBP) Program • Conditions for coverage (CfCs) for organ procurement organizations (OPOs)

Published on: July 17, 2013

CMS Issues Final Rule Requiring Written Agreements Between LTC Facilities and Hospices

by Wachler & Associates, P.C.

Recently, the Centers for Medicare and Medicaid Services (CMS) issued a final rule mandating that long term care (LTC) facilities and hospice providers enter into written agreements if the facility chooses to arrange hospice services through a Medicare-certified hospice provider. The rule becomes effective on August 26, 2013.

This final rule comes after the Department of Health and Human Services’ Office of Inspector General (OIG) raised several concerns regarding hospice care in Medicare-certified skilled nursing facilities and Medicare-certified nursing facilities. In September 2009, the OIG released a report that found nearly one-third of Medicare hospice beneficiaries lived in nursing facilities and that 82% of hospice claims for these beneficiaries did not meet the requirements for Medicare coverage. In addition, both hospices and LTC facilities are required by law to provide many similar services, which creates a greater likelihood that residents may receive duplicative or missing services.

As a result, CMS has added a new Condition of Participation (CoP) that now requires LTC facilities to have a written agreement in place to create a clear division of responsibilities between LTC facilities and contracted hospice providers. CMS believes that this new rule will improve the quality and coordination of care for LTC residents who elect to receive the hospice benefit.