Wachler & Associates Health Law BlogThis Thursday, February 21, 2013, Wachler & Associate’s Founder, Andrew Wachler, will present Medicare Appeals & Reimbursement Impacted by New OIG Report for the RAC University’s Live Webcast. Recently, the Office of Inspector General (OIG) released a report entitled Improvements are Needed at the Amdministrative Law Judge Level of Appeal. Sign up for the webcast to learn what impact the OIG’s findings and recommendations to CMS could have on your Medicare appeal strategy.
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Wachler & Associates Partner is quoted in Home Health Line Article
Wachler & Associates partner, Amy K. Fehn, was recently quoted in Home Health Line regarding an agency’s liability for a business associate’s HIPAA violations. She explains that even though business associates are separately liable for HIPAA violations, an agency will also be liable for the business associate’s noncompliance. An agency should notify affected patients of any HIPAA breach caused by a business Associate.
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CMS Releases Proposed Rule Providing an Exemption to Group Health Plan Contraceptive Coverage for Eligible Religious Organizations
On January 30, 2013, the Department of Health and Human Services (HHS) announced a proposed rule to provide women with coverage for recommended preventative care, including contraceptives, without charging the beneficiary a co-pay or deductible. A prior proposed rule regarding contraceptive coverage was issued in March 2012, followed by a public comment period. The recently released proposed rule reflects the various feedback and comments submitted by the public to HHS.
In addition to providing women with preventative care, without cost-sharing, the proposed rule also seeks to accommodate religious objections to contraceptive coverage by religious organizations. First, the proposed rules would simplify the criteria defining a “religious employer” so that it follows an Internal Revenue Code definition and primarily includes churches, other houses of worship, and their affiliated organizations. As such, eligible religious organizations, such as religious nonprofit hospitals, may be exempt from providing coverage for contraceptives. In order to be considered an eligible religious organization, the proposed rule requires that an organization must:
- Oppose providing coverage for some or all of any contraceptive services required to be covered under Section 2713 of the PHS Act, on account of religious objections;
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Department of Health and Human Services Issues Letter to Providers on Disclosures to Avert Threats to Health or Safety
The Department of Health and Human Services (HHS) has issued a letter to health care providers to ensure that they are aware of their ability under the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule to take action, consistent with their ethical standards or other legal obligations, to disclose necessary information about a patient to law enforcement, family members of the patient, or other persons, when they believe the patient presents a serious danger to himself or other people.
In the letter, HHS describes the HIPPA Privacy Rule as requiring a careful balance between protecting the patients’ privacy and ensuring the safety of the patient and others. In general, the Privacy Rule requires providers to protect the privacy of the patients’ health information. However, an exception is created when a health care provider believes in good faith that a warning is necessary to prevent or lessen a serious and imminent threat to the health or safety of the patient or others. A provider is presumed to have a good faith belief if his or her belief is based on the provider’s actual knowledge, such as through the provider’s interactions with the patient, or when the provider is relying on a credible representation by a person with apparent knowledge or authority, such as a credible family member of the patient.
If a health care provider does believe in good faith that a warning is necessary to prevent a serious and imminent threat to the health or safety of the patient or others, then the Privacy Rule allows the provider to alert those persons whom the provider believes are reasonably able to prevent or lessen the threat. In alerting such persons, the provider may disclose patient information, including information from mental health records, if necessary. Furthermore, persons “reasonably able to prevent or lessen the threat” may include police officers, the patient’s family members, or even campus security or administration.
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Fiscal-Cliff Agreement Gives Medicare Officials Five Years to Collect Overpayments
The American Taxpayer Relief Act of 2012, which became law on January 3, 2013, and is more widely known for addressing the fiscal cliff, also included a less publicized provision which changes the lookback period in the “Provider Without Fault” provisions of the Social Security Act from three years to five years. This provision is important for providers who are defending a Medicare audit. This provision previously provided that, absent evidence to the contrary, providers would be deemed to be “without fault” if an overpayment is discovered more than three years after it was paid. Thus, this provision could often be used as a defense in Medicare audits where the claims at issue were discovered more than three years prior to the audit results letter (although the “absent evidence to the contrary” language was sometimes difficult to overcome). The American Taxpayer Relief Act of 2012 in Section 638 amends section 1870 of the Social Security to allow CMS a five year reopening period.
This provision appears to have been included in the Act in response to the Office of Inspector General’s (OIG) assertions that the three year lookback period was an obstacle to overpayment recovery.
Providers should note that other provisions of the “Provider Without Fault” language in section 1870 of the Social Security Act may still present a viable defense to the extent that the provider complied with all pertinent regulations, made full disclosure of all material facts, and on the basis of the information available, had a reasonable basis for assuming that the payment was correct.
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RACs Correct $2.4 Billion in Improper Payments in FY 2012
According to the latest figures released by the Centers for Medicare and Medicaid Services (CMS), Recovery Audit Contractors (RACs) corrected a total of $2.4 billion in improper payments in fiscal year (FY) 2012, of which $2.29 billion was attributable to overpayments collected and $109.4 million was from underpayments returned. The amount of total corrections in FY 2012 was an enormous increase from the $939.3 million in total corrections reported in FY 2011. Since October 2009, the RACs have corrected a total of $3.43 billion, of which roughly 92% has been attributable to overpayments collected.
Medical necessity of cardiovascular procedures was reported to be the top issue for overpayments in RAC regions A, B and C. In RAC region D, the top issue for overpayments was found to be minor surgery and other treatments billed as inpatient. The top RAC issues for underpayments were not provided by CMS.
If you need assistance in preparing for, or defending against RAC audits, or implementing a compliance program geared toward identifying and correcting potential risk areas related to RAC audits, please contact an experienced health care attorney at Wachler & Associates attorney at 248-544-0888.
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New Home Health Issues Added to CMS-Approved Issues List for RAC Region B
Recently, CGI Federal, the RAC for Region B, added two new home health issues to its CMS-approved issues list. In the past, RACs have primarily focused their attention on hospitals due to the high bounty they receive for correcting improper claims. However, as displayed in the 2011 RAC statement of work, CMS has directed RACs to begin pursuing other provider types beyond hospitals. The newly approved home health issues for Region B include:
- No skilled service: To qualify for the home health benefit, a patient must need a skilled service. When a skilled service is needed, dependent services may also be covered. Dependent services are not covered for a patient who no longer needs a skilled service. Claims with no skilled service billed will be reviewed to determine whether the qualifying criteria of having an ongoing skilled service has been met.
- Skilled nurse length of stay: Late episodes (third and later) receive increased payments, therefore payment incentives exist for extended home health care. Medicare covers skilled nursing services when they are reasonable and necessary. Extended nursing care for observation and assessment may not be covered. Claims for nursing services into the third episode and after will be reviewed to determine if all Medicare coverage criteria is met.
In addition to the new home health issues, CGI Federal also added two new issues targeting physicians in Region B, which include:
- Incorrect Billing of Diagnosis Codes for Colonoscopy and Sigmoidoscopy: This is an automated review to ensure correct reporting of diagnosis codes for colonoscopy and sigmoidoscopy services.
- Professional Trastuzumab Off-Label Uses: The purpose for this automated edit is to identify claims for Traztuzumab (Herceptin®) being used for off-label indications
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CMS Releases Final Rule for New Survey and Sanction Options for Home Health Agencies
On November 8, 2012, the Centers for Medicare and Medicaid Services (CMS) released its final rule updating the home health prospective payment system for calendar year 2013. In particular, the final rule provides CMS with new options for surveying and sanctioning home health agencies (HHAs). According to the final rule, HHAs will be subject to a standard survey at least once every 36 months, which will be unannounced and performed by the state agency or an accrediting organization. The standard survey’s objective is to review the HHA’s compliance with a select number of conditions of participation (CoP). In addition to the standard survey, HHAs will be subject to a variety of other surveys, which include:
- Abbreviated standard survey: similar to the standard survey, but concentrates on a smaller number of CoPs determined to be an area of concern; conducted within two months of a specific concern, receipt of complaints, or change in ownership.
- Extended survey: used to ensure compliance with additional CoPs that were not surveyed in the standard survey, or to review certain policies and procedures in which the surveyors determined the HHA provided substandard care.
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CMS Reminds Providers to Prepare and Maintain Legible Medical Records
Recently, the Centers for Medicare and Medicaid Services (CMS) released an MLN Matters article stressing the importance of providers preparing and maintaining legible medical record documentation. CMS contractors are required to deny a provider’s claim for repayment if the item or service is not reasonable and medically necessary. Submitting legible medical documentation is critical because CMS review contractors are required to rely on the submitted documentation when determining the medical necessity of the billed item or service.
When submitting medical record documentation to support a claim for payment, providers should ensure that the medical records are complete and legible. In addition, the medical records should include the legible identity of the provider and the date of service. In connection with submitting documents that contain amendments, corrections or delayed entries, CMS specified that providers must comply with the following principles: (1) any amendments, corrections or addenda must be clearly and permanently identified; (2) the author and date must be clearly indicated; and (3) all original content must be clearly identified.
Medicare also requires that providers properly authenticate any service ordered or provided. Such authentication is achieved by including the author’s signature, which can be handwritten or electronic. Contractors will disregard any order in which a signature is missing and will continue their review of the medical record as if the order was never received. When reviewing medical documentation that is not an order, the contractor will consider evidence in a signature log or attestation statement to determine the author’s identity when the original documentation is missing or illegible. However, contractors will not take into consideration a signature attestation for orders.
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OIG Releases Report Addressing Improvements Needed at the ALJ Appeal Level
Recently, the Office of Inspector General (OIG) released a report focusing on various areas of concerns pertaining to Medicare appeals at the Administrative Law Judge (ALJ) level. In 2005, the responsibility for conducting ALJ appeals was transferred from the Social Security Administration to the Department of Health and Human Services (HHS). Upon this transfer, HHS established the Office of Medicare Hearings and Appeals (OMHA) which formed a group of ALJs committed to deciding Medicare appeals. In addition, ALJs were required to follow new regulations that addressed the application of Medicare policies, acceptance of new evidence, and the participation of the Centers for Medicare and Medicaid Services (CMS) in the appeals. In its report, the OIG assessed the impact of these changes on ALJ appeals by gathering and analyzing appeals data from fiscal year (FY) 2010.
The report contains several findings in which the OIG determined to be significant. For instance, the OIG found that 85 percent of all appeals decided by ALJs in FY 2010 were filed by providers, compared to 11 percent filed by beneficiaries and 3 percent filed by State Medicaid agencies. Moreover, the OIG found that a small subset of these providers were frequent filers, accounting for nearly one-third of all appeals.
The OIG also found that ALJs reversed prior-level appeals and granted fully favorable decisions to appellants 56 percent of the time. Meanwhile, Qualified Independent Contractors (QICs) decided fully in favor of appellants in only 20 percent of appeals. The OIG determined that these differences in fully favorable decisions were due to a number of key factors. One factor was the tendency of ALJs to interpret Medicare policies less strictly than QICs, finding that ALJs often granted fully favorable decisions when the intent of a Medicare policy was met, rather than the strict letter of the policy, whereas QICs strived to follow Medicare policies more strictly. Another reason stated in the OIG’s report for the favorable outcome disparity was due to the difference in the degree of specialization in Medicare program areas between ALJs and QICs. Each of the QICs specialize in a particular Medicare program area (e.g. Part A, Part B and DMEOPS appeals), while ALJs receive randomly assigned appeals that involve all Medicare program areas.