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The Centers for Medicare and Medicaid Services (CMS) recently announced it will release a national provider Comparative Billing Report (CBR) targeting Skilled Nursing Facility (SNF) Billing Practices. The CBRs will be released to a maximum of 5,000 providers on August 31, 2012.

The CBRs are produced by Safeguard Services under contract with CMS and will provide comparative data to help show how these individual providers compare to other providers within the same field. These comparative studies are designed to help providers review their coding and billing practices and utilization patterns, and take proactive compliance measures. Providers should view CBRs as a tool, rather than a warning, as a way to aid them in properly complying with Medicare billing rules. It is also important to understand that CBRs do not contain patient or case-specific data, but rather only summary billing information as a method of ensuring privacy.

If you are a recipient of a CBR for SNF Billing Practices, or are among the other provider types that have been identified to receive CBRs (e.g. cardiology services, ordering DME, physical therapists, chiropractors, ambulance, hospice, podiatry, and sleep studies), please contact an experienced healthcare attorney at Wachler & Associates at 248-544-0888 to discuss evaluating the CBR analysis and development of an appropriate compliance plan that will reduce audit risks.

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Since the RAC Demonstration Program launched in 2005 and the final RAC program launched in 2008, Wachler & Associates, P.C. has been instrumental in the effort to obtain full Part B outpatient reimbursement for hospitals where a short-stay inpatient claim has been denied for lack of medical necessity. Although our legal arguments for Part B payment resonated with many administrative law judges (ALJs) and ALJs would issue orders for full Part B reimbursement, we have been trying to establish a precise process to effectuate the orders for full Part B reimbursement, including observation services. Last week, after our ongoing communication with Centers for Medicare & Medicaid Services (CMS) and a Medicare Administrative Contractor, we obtained a CMS memorandum which provides a very specific avenue for hospitals to obtain full Part B reimbursement in the event that an inpatient claim is denied as not being medically necessary and reasonable and the ALJ issues an order for outpatient observation services.

The CMS memorandum dated July 13, 2012, is from a number of officials from CMS to “All Fiscal Intermediaries (FIs), Carriers, and Part A and Part B Medicare Administrative Contractors (A/B MACs)”. The memorandum explains that there have been multiple ALJ decisions where the ALJ has upheld the contractors’ denials of the inpatient services as not reasonable and necessary, but then ordered the contractor to pay the hospital full Medicare Part B outpatient reimbursement, including observation. As a result of these ALJ orders, CMS issued mandatory instructions for claims administration contractors to follow in the event that an ALJ decision instructs CMS to make payments for Medicare Part B outpatient/observation services. Most importantly, the instructions require contractors to contact the provider to obtain a Part B claim within 30 calendar days of receipt of the effectuation notice from the Administrative QIC (AdQIC). The instructions note that an order for outpatient/observation services is only required if the ALJ did not specify payment for observation level of care. In instances where the ALJ’s specified coverage of “observation level of care,” observation charges may be added to the replacement claim, as the ALJ is specifically substituting the order to admit for the order for observation. The provider must send the replacement claim to the contractor within 180 days from the date the contractor contacts the provider or else the contractor must close the case and consider effectuation completed.

While the memorandum states that the Manuals do not provide support for this position, CMS recognizes that ALJs are issuing orders for Part B observation services and are directing the claims administration contractors to effectuate an adjusted payment to the hospital in accordance with these decisions. As such, CMS issued this memorandum to clearly instruct claims administration contractors how to effectuate an ALJ’s order for payment for Part B observation services.

Wachler & Associates believes that this is an extremely important advancement in the effort to obtain accurate payment for hospitals where an inpatient short-stay claim has been denied for lack of medical necessity. Although there is still more work to be done to solidify hospitals’ ability to obtain Part B reimbursement, this memo is the most clear indication that we have received from CMS that contractors are now required to effectuate an ALJ’s order for Part B reimbursement. Persuading an ALJ to order payment for observation and all underlying outpatient care is a legal, not a clinical, argument. We have a number of legal arguments and authorities that we rely upon to persuade a judge to issue a precise order for Part B reimbursement, including observation services and underlying outpatient care.
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According to a posted response to a query in the Frequently Asked Questions section of its website, the Centers for Medicare and Medicaid Services (CMS) have begun Meaningful Use Audits of eligible professionals and eligible hospitals participating in the Medicare and Medicaid EHR Incentive Program.

CMS indicated on the website that the contractor for the audits is Figliozzi and Company. If you are selected for an audit you will receive a letter from Figliozzi and Company on CMS letterhead.

EHR Incentive Programs provide incentive payments to providers and hospitals that implement designated meaningful use EHR technologies. Payment is awarded based on attestations that are submitted by providers. Providers are cautioned to ensure that attestations are accurate. Because the attestation is a statement to receive funding from the federal government, false attestations could be the basis for liability under the Federal False Claims.

We recommend that providers include “self-audits” of meaningful use attestations as part of their compliance program to ensure that they will be able to produce documentation to support the meaningful use attestation statements at the time of a future audit.
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On August 2, 2012 the Department of Health and Human Services Office of Inspector General (OIG) issued a report on questionable billing by Home Health Agencies (HHAs). The report found that in 2010, Medicare paid home health claims totaling approximately $5 million as a result of questionable billing, with three specific errors.

The report included recommendations that CMS:

1. Implement claims processing edits or improve existing edits to prevent inappropriate payments.
2. Increase monitoring of billing for home health services.
3. Enforce and consider lowering the 10% cap on the total outlier payments an HHA may receive annually.
4. Consider imposing a temporary moratorium on new HHA enrollments in Florida and Texas.
5. Take appropriate action regarding inappropriate payments and HHAs with questionable billing.

Among the findings of the report, the OIG found that inappropriate payments were made to HHAs for home health claims that overlapped with claims for inpatient hospital stays, overlapped with claims for skilled nursing facility stays, and had service dates after beneficiaries’ deaths–these errors occurred despite the fact that Medicare has automatic edits in place to eliminate these types of errors.

The OIG also found that in 2010, of the HHAs that were found to have questionable billing practices, 80% of those HHAs were located in either: Texas, Florida, California, or Michigan. In fact, the report indicates that in just those four states, more than 2,000 HHAs had questionable billing. Further, 97% of HHAs identified to have questionable billing were located in states that did not have Certificate of Need policies in place limiting the number of HHAs eligible to operate in the state. Nearly one in four HHAs had questionable billing.

In response, CMS concurred with all five OIG recommendations. CMS did, however, disagree with the amount of inappropriate payments made for home health claims that overlapped with inpatient hospital stays and skilled nursing facility stays. CMS comments indicate that it would be difficult to determine what financial impact overlapping claims would have without specific claim data.
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The Centers for Medicare and Medicaid Services (CMS) have announced a Special Open Door Forum on the Recovery Audit Prepayment Review Demonstration Program set to begin August 27, 2012. The Special Open Door Forum will be held August 9, 2012 from 2:00-4:00pm EST. Instructions and materials can be found on the CMS website.
The Recovery Audit Prepayment Review program will allow Recovery Audit Contractors (RACs) to review claims before they are paid. The demonstration program will focus on providers in eleven states: FL, CA, MI, TX, NY, LA, IL, PA, OH, NC, and MO.
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On August 1, 2012 the Centers for Medicare and Medicaid Services (CMS) released a Provider Compliance Interactive Map. The map is an interactive online tool that allows users to view state-by-state contact information and websites for contractors and other Medicare resources. The map is intended to simplify access to contact information for providers in each state.
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In the recently issued Hospital Outpatient Prospective Payment System (OPPS) Proposed Rule for 2013, CMS is soliciting comments regarding policy changes that could be made on the issue of inpatient versus outpatient admission. (To view the CMS factsheet please click here.) CMS is seeking comments on potential changes which could provide some clarity for providers and hospitals regarding inpatient versus outpatient status for purposes of Medicare payment. Comments are due by September 4, 2012.

Currently, when a patient presents to the hospital in a short-stay case, the hospital must decide whether to admit the patient as an inpatient or treat him/her as an outpatient. This decision is not always clear in light of existing Medicare guidance, and the wrong choice can have severe repercussions for the hospital. If the provider orders an inpatient stay, and later, the Recovery Audit Contract (RAC) concludes that the care should have been provided at an outpatient level, the care is deemed not medically reasonable and necessary. Under the current system for reimbursement, the hospital is not reimbursed under Part B for the outpatient services provided unless the hospital undertakes an appeal of the claim denial and is successful before an Administrative Law Judge (ALJ).

Hospitals, in an effort to mitigate costs, err on the side of outpatient care. CMS notes that this practice has doubled in the last four years and that it has a detrimental effect on Medicare beneficiaries.
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On July 17, 2012 the United States Attorney’s Office for the Southern District of New York issued a press release announcing the arrest of 48 individuals in what the release calls the largest single prescription drug diversion scheme ever charged at one time. The result of an organized effort by nearly a dozen state and federal agencies, the government has charged the defendants with operating a massive fraud scheme which diverted half a billion dollars’ worth of prescription drugs dispensed to Medicaid patients in the New York City area.

The government alleges the defendants participated in a scheme to buy prescription drugs from patients, to whom the drugs were legitimately dispensed, and then sell them up a chain of buyers where the drugs eventually ended up in the hands of large scale wholesalers. The defendants are alleged to have fraudulently repackaged and labeled the diverted drugs to make them appear as if they were new, before they sold them to unwitting end-users.. In some cases these diverted prescriptions included HIV/AIDS drugs that were expired and potentially no longer medically effective, yet were still dispensed to unknowing patients.

Because many of the patients who sold the drugs received them through a Medicare or Medicaid benefit, and many of the patients who received the drugs from illegal wholesalers used Medicare or Medicaid benefits to obtain the drugs, the press release is calling the alleged fraudulent scheme a double fraud on the health care system. Medicare and Medicaid essentially paid for these drugs twice, once for the legitimate patient who sold their medication, and then once for the end-user, who obtained the drugs from the wholesalers.
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On Friday, July 13, 2012 the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that if finalized would change the face-to-face requirements of a home health encounter. Under the current rule, before certifying a patient’s eligibility for the home health benefit the physician must document a face-to-face encounter with the patient. In lieu of the physician having a face-to-face encounter, an allowed non-physician practitioner (NPP) may have the face-to-face encounter with the patient and notify the certifying physician. Allowed NPPs under the current rule are nurse practitioners, clinical nurse specialists, certified nurse-midwives, and physician assistants.

Under the current rule, a physician who cared for a patient in an acute or post-acute care facility, and had privileges at that facility, could perform the face-to-face encounter and inform the certifying physician. The proposed rule would allow a NPP working in collaboration with a physician in an acute or post-acute care facility to perform the face-to-face encounter, report it to the acute care physician, who would then report it to the certifying physician. The proposed rule is intended to provide the certifying physician with the most accurate and timely assessment of the patient’s current clinical condition.
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CGI has added a new issue to its approved issues list for Region B:

Outpatient Bevacizumab (Avastin) services: Bevacizumab (Avastin) represents 10mg per unit and should be billed one (1) unit for every 10mg per patient. Claims for J9035 should be submitted so that the billed units represent the administered units, not the total number of milligrams.

HealthDataInsights has posted a new issue to its approved issues list:

Multi-use vial wastage: Herceptin (Trastuzumab). Multi-use vials are not subject to payment for discarded amounts of drug or biological. Per, the manufacturer label, J9355 Injection, Trastuzumab, 10mg (Herceptin) is only supplied in a multi-use vial. Providers should only bill the units associated with the dose administered to the patient.
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