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In its role of overseeing the Medicare and Medicaid Programs, the Senate Finance Committee released a staff report alleging that the four largest publicly traded home health agencies were providing medically unnecessary care by encouraging therapists to meet the 10 visit threshold in order to receive a  “bonus” payment  under the PPS system.  The report was based on an investigation initiated by Committee Chairman Max Baucus and Senior Member Chuck Grassley.  The Senators instigated the investigation based upon a Wall Street Journal analysis.

Among other findings, the report alleges that an analysis of therapy billings from these home health agencies show a pattern of concentrated billings at or just above the 10 visit threshold.  The report further alleges that the companies encouraged billing of medically unnecessary services to reach this threshold.

Home Health Agencies should be aware that Medicare contractors will likely be closely scrutinizing PT visit frequency and patterns.  Also, providers are likely to see changes in the payment system as a result of this report.

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Andrew Wachler, principal of Wachler & Associates, P.C., was quoted in last week’s American Medical News article regarding the National Practitioner Data Bank’s move to shut down public access to anonymous information about physician activities. The move was made to protect physician confidentiality after a reporter was able to identify an individual physician’s record for a news article. Mr. Wachler stated that the government acted correctly in shutting down public access, which will result in the protection of the peer review process.

If you have questions regarding Medicare, Medicaid or third party payor audits, or have any other health law questions, please contact a Wachler & Associates attorney at 248-544-0888.

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On August 29, 2011, the U.S Department of Health and Human Services, Office of Inspector General (OIG) issued a favorable advisory opinion regarding a health system’s proposal to enter into arrangements to provide neuro emergency clinical protocols and immediate consultations with stroke neurologists via telemedicine technology to certain community hospitals.

The Requestor is an operating division of a not-for-profit corporation with a mission of increasing access to quality neuroscience care by providing access to the nationally ranked neuroscience care available through its flagship program. Under the proposed arrangement, Requestor would provide the following services to community hospitals in its service area free of charge: (1) neuro emergency telemedicine technology, (2) neuro emergency clinical consultations, (3) acceptance of neuro emergency transfers, and (4) neuro emergency clinical protocols, training and medical education. The Requestor would enter into a written agreement with the participating community hospitals, which would establish all of the services that each party would provide under the agreement. In recognition of Requestor’s investment of time and capital in the proposed arrangement, the participating hospital would be required to agree not to participate in any other neuro emergency telemedicine service without prior approval of Requestor for the length of the agreement (anticipated at 2 years). The exclusivity requirement would not (1) restrict a participating hospital’s emergency or attending physician from consulting with any stroke specialist of his or her choice, (2) require either party or its physicians to refer patients to the other party, or (3) restrict the freedom of a patient or physician to request a transfer to a stroke center other than Requestor’s.

Due to the agreement creating the potential for Requestor and the participating hospital to refer federal healthcare business to one another, OIG acknowledged that the proposed arrangement could possibly implicate the Anti-Kickback Statute. However, OIG concluded that it would not subject Requestor to administrative sanctions under the Anti-Kickback Statute for the following reasons:

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The Department of Health and Human Services (HHS) Centers for Medicare and Medicaid Services (CMS) recently released a MLN Matters article providing an overview of Medicare policy regarding chiropractic services. CMS has determined, through numerous audits, that a significant portion of chiropractic service claims have been paid inappropriately. Medicare auditors have discovered that the most common errors include missing signatures, insufficient or absent documentation, and billing Medicare for medically unnecessary services. The MLN Matters article was published to help providers better understand Medicare coverage and payment requirements for chiropractic services. Proper compliance with Medicare coverage, coding and documentation requirements will result in a greater percentage of correct claim payments. Therefore CMS has provided a number of practical tips in an effort to reduce the number of improper payments being paid to chiropractors.

If you have any questions regarding Medicare coverage policies and requirements for chiropractic services, or any other health law questions, please contact a Wachler & Associates attorney at 248-544-0888.

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The Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Process was mandated by Congress through the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, which replaced the current fee schedule payment procedure for DMEPOS items with a competitive bidding process. The purpose of the statute is to set DMEPOS payment amounts in a more effective manner, which will result in saving the Medicare program money and reducing beneficiary out-of-pocket expenses.

Bids closed for Round 1 of the DMEPOS competitive bidding program on December 21, 2009. In November of 2010 CMS announced the winners of Round 1 and in January of this year implemented the contracts.

This past summer, the Centers for Medicare and Medicaid Services (CMS) began its pre-bidding supplier awareness program. For this fall, CMS will announce the bidding schedule, begin the bidder education program, and commence the bidder registration period to obtain user ID and passwords. The bidding will begin in winter 2012.

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The Centers for Medicare and Medicaid Services (CMS) recently announced it will release a national provider Comparative Billing Report (CBR) focused on chiropractors who practice in the office setting. The CBRs will be released on September 26, 2011 to 5,000 different providers. These CBRs will be similar to the ones released to chiropractors last fall; however, the new CBRs will focus on data from 2010.

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 centered on chiropractic services in the office setting, or are among the other provider types that have been identified to receive CBRs (i.e. ordering DME, physical therapists, chiropractors, ambulance, hospice, podiatry, and sleep studies), please contact a Wachler & Associates attorney 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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On Monday, President Barack Obama gave a speech on the issues of economic growth and deficit reduction. The President released his plan on how to pay for the American Jobs Act that he recently sent to Congress and announced methods to reduce the country’s debt over time.

The plan included structural reforms to reduce the costs of health care in the Medicare and Medicaid programs. One part of the plan that will impact providers is an increased focus on decreasing wasteful subsidies and erroneous payments in the Medicare and Medicaid programs. The President’s plan specifically concentrates on reducing overpayments in Medicare and making Medicaid more efficient and accountable. Finally the President made clear that although Medicare and Medicaid will be reformed, the government “will not abandon the fundamental commitment that this country has kept for generations.”

If you have any questions relating to Medicare or Medicaid audits, including ZPICs, RACs, MACs or MICs, or any other health law questions, please contact a Wachler & Associates attorney at 248-544-0888.

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On September 13, 2011, the Office of Inspector General (OIG) responded to a letter from the Senate Finance Committee which addressed its concerns about the recent increase of physician-owned distributorships (PODs) and the potential adverse effects that these entities could have on the Medicare program and its beneficiaries.  The Committee asked the OIG to assess the adequacy of the adequacy of the guidance that the OIG has issued in regards to the legality of PODs under the Federal Anti-Kickback Statute and whether further guidance or action is required to address the growing trend of these entities.

OIG will be initiating a review of PODs that will seek to determine the extent to which PODs provide spinal implants purchased by hospitals. This study will be nationally representative of hospitals that bill Medicare for these services, and OIG will review information from hospitals to determine the prevalence of PODs, what services PODs offer to hospitals, and whether PODs save hospitals money when acquiring spinal implants. In addition, OIG will look at Medicare claims data to analyze whether the identified PODs are linked with a high use of spinal implants. OIG will use the information from this study to determine whether or not to issue further guidance relating to PODs.

Current guidance from OIG establishes that the opportunity for the referring physician to earn a profit may be deemed illegal under the Federal Anti-Kickback Statute. However, OIG makes clear in the letter to the Committee that the Anti-Kickback Statute is an intent-based statute and different POD models raise different levels of legal concern. Therefore, OIG emphasizes the view that several of the legal questions raised by the Committee depend on the specific facts of the case (e.g. the terms under which a physician-owner may invest in the entity and the return on the physician’s investment).

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Yesterday, the Centers for Medicare and Medicaid Services (CMS) released its Medicaid RACs final rule after previously delaying its expected April 1st implementation date. The Medicaid RAC program was created as a tool to fight Medicaid fraud and abuse, and the program shares many characteristics with the Medicare RAC program which has already recovered $670 million to date in 2011. The regulations are effective January 1, 2012.

According to the rule, “This final rule implements section 6411 of the Patient Protection and Affordable Care Act (the Affordable Care Act), and provides guidance to States related to Federal/State funding of State start-up, operation and maintenance costs of Medicaid Recovery Audit Contractors (Medicaid RACs) and the payment methodology for State payments to Medicaid RACs. This rule also directs States to assure that adequate appeal processes are in place for providers to dispute adverse determinations made by Medicaid RACs. Lastly, the rule directs States to coordinate with other contractors and entities auditing Medicaid providers and with State and Federal law enforcement agencies.”

Health and Human Services projects that the Medicaid RAC program will save taxpayers $2.1 billion over the next five years, of which $900 million will be returned to the states. Vice President Biden stated in a press release that, “if we’re going to spur jobs and economic growth and restore long-term fiscal solvency, we need to make sure hard-earned tax dollars don’t go to waste.”

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On September 12, 2011, The Centers for Medicare & Medicaid Services released a new Recovery Audit Contractor (RAC) Statement of Work. A number of updates and clarifications were made to the previous RAC Statement of Work. One addition institutes a new type of review known as a semi-automatic review. This is a new two-part review that can include both automated and complex reviews. The new Statement of Work also clarifies the difference between DRG Validation and Clinical Validation by adding definitions of each. The Statement of Work defines DRG Validation as the process of reviewing physician documentation and determining whether the correct codes, and sequencing were applied to the billing of the claim. Clinical validation is defined as a separate process, which involves a clinical review of the case to see whether or not the patient truly possesses the conditions that were documented. Another addition was clarification to the process known as “Allowance for a Discussion Period.” For example, if the recovery auditor is notified by the contractor during the discussion period that the provider initiated the appeals process, the recovery auditor shall immediately discontinue the discussion period and send the provider a letter stating that the recovery auditor cannot continue the discussion period once an appeal has been filed. Click here to view the entire RAC Statement of Work.

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 a Wachler & Associates attorney at 248-544-0888.

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