Wachler & Associates Health Law Blog

Published on: September 20, 2013

Michigan Medicaid Expansion Legislation Signed Into Law by Governor

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.

Published on: September 18, 2013

OIG Releases Report on RACs and the Actions Taken by CMS to Address Improper Payments, Fraud Referrals, and Performance

by Wachler & Associates, P.C.

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;

Published on: September 16, 2013

CMS Issues Guidance on Physician Certification and Order

by Wachler & Associates, P.C.

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

Published on: September 4, 2013

Michigan Medicaid Expansion Approved by House

by Wachler & Associates, P.C.

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.

Published on: August 12, 2013

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

by Wachler & Associates, P.C.

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.