Wachler & Associates Health Law Blog

Published on: August 1, 2013

What Do Providers Need to Know About Medicaid RACs?

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.

Published on: July 16, 2013

OIG Reports Surgical Products Rebate Program Qualifies for Safe Harbor Protection from Anti-Kickback Statute

by Wachler & Associates, P.C.

On June 24, 2013, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued an advisory opinion announcing that by request of a surgical products manufacturer (the “Requestor”), based on the certifications and information provided, a proposed tiered rebate program will meet the requirements of the discount safe harbor of the anti-kickback statute (AKS) and will not generate prohibited remuneration under the AKS. Thus, the OIG concluded that it would not impose administrative sanctions in connection with the proposed arrangement.

The AKS makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program. At the discretion of the OIG, a violation of the AKS may constitute a felony punishable by imprisonment fines, or both, possible exclusion from Federal health care programs, and possible administrative proceedings and civil monetary penalties. However, safe harbor protection may be afforded to arrangements that meet all of the conditions set forth in the applicable AKS safe harbor. The regulatory AKS safe harbor for discounts interprets the Social Security Act’s exception for discounts, which protects “a discount or other reduction in price obtained by a provider of services or other entity under a Federal health care program if the reduction in price is properly disclosed and appropriately reflected in the costs claimed or charges made by the provider or entity under a Federal health care program.”

In this advisory opinion, the Requestor, a corporation that manufactures ophthalmologic products including pharmaceuticals, surgical equipment, and vision aids, sought an advisory opinion on whether a proposed arrangement would generate prohibited remuneration under the AKS. The Requestor’s proposed arrangement involved tiered, percentage-based rebates based on customer purchases of federally reimbursable and non-federally reimbursable surgical products. The rebate would be calculated based on a customer’s total annual purchases of such products regardless of whether such products are reimbursable by Federal health care programs and would not vary based on the volume of Federally reimbursable products purchased. In addition, the Requestor certified the various manners in which it would notify all customers receiving rebates of their obligation to report any rebates received based on sales of Federally reimbursable surgical products. Further, the Requestor certified that it would refrain from doing anything to impede the customer’s ability to meet its obligations under the AKS discount safe harbor.

Published on: July 15, 2013

Six Stark Self-Referral Disclosure Protocol Settlements in June

by Wachler & Associates, P.C.

The Centers for Medicare and Medicaid Services (CMS) have recently announced a tally of 29 settlements under the Voluntary Self-Referral Disclosure Protocol (SRDP). In the month of June alone, CMS settled six different cases of violations of the physician self-referral statute, also known as the Stark law, throughout the country. Disclosing providers make SRDP submissions with the intent of resolving overpayment liability exposure for conduct that the providers voluntarily identify.

Most recently, on June 20, 2013, CMS and an acute care hospital in Pennsylvania settled a Stark violation case for $24,740 after the hospital disclosed that “arrangements for medical director services with certain physicians and a physician practice did not satisfy the requirements of any applicable [Stark] exception.” On June 18, 2013, CMS and a critical access hospital based in Wisconsin settled a case for $12,724.00. In this case, the hospital revealed a situation where a physician arrangement for emergency room call coverage services at the hospital’s nearby walk-in clinics did not meet the requirements of a Stark exception. Also on June 18, a Tennessee hospital settled a case with CMS for $72,270 after disclosing an arrangement involving a physician supervising cardiac stress tests which did not satisfy any requirements of a Stark law exception. On June 12, an acute care hospital in Alabama and CMS settled a case for $187,340 involving a physician group practice arrangement for rental of office space that did not satisfy the requirements of the applicable Stark exception. CMS announced on June 6 that Florida General Acute Hospital settled a case for $76,000 based on multiple disclosures regarding several arrangements that did not satisfy the requirements of any Stark exceptions, and on June 5, CMS announced that Florida Acute Hospital settled a case for $109,000 that involved multiple arrangements with physicians for emergency cardiology call coverage that did not meet requirements of any applicable Stark exceptions.

Wachler & Associates healthcare attorneys have regularly counseled hospitals and other providers in navigating the Stark law since 1995. The amount of high settlements announced in June involving hospitals may suggest that CMS is directing astute attention towards hospitals when resolving matters under the SRDP. For more information on the Stark law, or for assistance with Stark compliance measures for your healthcare entity, please call an experienced healthcare attorney at 248-544-0888.