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As part of healthcare reform, Section 6401a of the Affordable Care Act requires all providers and suppliers who enrolled in the Medicare program before March 25, 2011 to revalidate their provider enrollment under the new screening criteria. Providers and suppliers who enrolled after March 25, 2011 do not need to revalidate at this time as they have already been screened.

The Centers for Medicare and Medicaid Services (CMS) designed and instituted new screening criteria in the provider enrollment process as another tool to curb Medicare fraud, waste and abuse. Each provider or supplier, whether newly-enrolled or revalidating, is assigned a risk level, either “limited”, “moderate” or “high”, representing the level of risk to the Medicare program for the particular category of provider/supplier. The designated provider risk level determines the amount of screening to be executed during the enrollment application process by the Medicare Administrative Contractor (MAC).

MACs will be sending revalidation notices to individual providers and suppliers between now and March 2013. Providers and suppliers must complete the enrollment forms within 60 days of receiving the request from the MACs. If a provider fails to submit the provider enrollment forms after receiving the request, it may lead to a suspension of the provider’s Medicare billing privileges.

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DCS Healthcare, RAC for Region A, added two new issues subject to medical necessity reviews to its CMS-approved issues list for providers in Maryland. DCS Healthcare also added four new issues for providers in all Region A states.

  • MS-DRG 286, 287 Cardiac Catheterization for Ischemic Heart Disease (All severity and risk of mortality levels) (Maryland only). Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary. This review will be of MS-DRG 286, 287 cardiac catheterization for ischemic heart disease.
  • MS-DRG 149 vertigo and other labyrinth disorders (All severity and risk of mortality levels) (Maryland only). Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary. This review will be of MS-DRG 149 vertigo and other labyrinth disorders.
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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 Independent Physical Therapy Providers who practice in the outpatient setting and bill Medicare with the KX Modifier, which is the billing requirement used to show that the beneficiary has exceeded the therapy cap, but requires additional medically necessary physical therapy services. Last August, physical therapists were the first provider type to receive CBRs. The CBRs currently being issued to physical therapists will be distributed to 5,000 additional or different providers and will be centered on 2010 billing data.

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 Physical Therapy CBR or are among the other provider types that have been identified to receive CBRs (i.e. 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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According to an article by the RAC Monitor, the U.S Department of Health and Human Services (HHS) recently reported that an estimated $48 billion was improperly paid to providers in 2010. However, due to HHS’s currently undeveloped comprehensive projection for the Medicare prescription drug benefit, the U.S. Government Accountability Office (GAO) has determined the estimated $48 billion in improper payments is incomplete and possibly underestimated. The GAO provided testimony before the U.S. House of Representatives Subcommittee on Government Organization, Efficiency and Financial Management, whereby the GAO produced a number of recommendations in an effort to aid the Centers for Medicare & Medicaid Services (CMS) in fortifying its ability to prevent or detect and recoup improper payments to healthcare providers.

Among other reasons, the GAO alluded to a number of key causes for the improper payments, such as coding and payment calculation errors, inadequate documentation and services deemed not to be medically necessary. In 2010, CMS initiated the Center for Program Integrity to handle all Medicare integrity issues. The GAO recently made recommendations to CMS to help strengthen its ability to minimize Medicare fraud, waste and abuse. According to the article, the GAO’s recommendations are as follows:

    1. Strengthen provider enrollment standards and procedures.

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On July, 25, 2011, the U.S. Department of Health and Human Services, Office of the Inspector General (OIG) issued a favorable advisory opinion regarding an arrangement under which a company (Requestor), who provides administrative services to the State’s Medicaid program, will disburse pay-for-performance payments to physicians and dentists participating in the state’s Medical Home Program.

The Medical Home Program is the state’s enhanced primary care case management and disease management program for a number of Medicaid beneficiaries. Requestor, through a competitive bidding process, was awarded the contract to administer the disease management program on behalf of the state. The program includes a pay-for-performance program whereby Requestor is required to disburse checks, drawn from Requestor’s own bank account, to physicians and dentists who participate in the program. The payments are funded by the state’s Medicaid program, and Requestor has no discretion to revise the amount of the payments. Furthermore, the state clearly identifies itself as the payment source to the providers, as well as indicates that the Requestor is the administrator of the pay-for-performance program.

The OIG started its analysis by emphasizing that the advisory opinion only addresses the narrow question of whether Requestor’s disbursement of pay-for-performance program payments to physicians and dentists on behalf of the state implicates the anti-kickback statute. The OIG concluded that the arrangement did not implicate the anti-kickback statute and cited four reasons for its conclusion:

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On July 29, 2011, the Centers for Medicare and Medicaid Services (CMS) issued Change Request 7436 which shifts the duty of issuing demand letters for identified overpayments from the Recovery Audit Contractors (RACs) to the Medicare Administrative Contractors (MACs). RACs will continue to be responsible for determining whether an improper payment has been made to a provider. However, after identifying an overpayment, RACs will now submit the claim to the MACs who will then send the demand letters to the identified providers. All communications regarding payment recovery and appeal process timeframes will be handled by the MACs, but a provider’s questions or concerns relating to audit specificities should be directed towards the RACs.

Providers need to be aware of this recent change in order to prevent any miscommunications that could lead to missing an appeal deadline. A small error such as this could lead to forfeiting any appeal rights that a provider is granted. If you have any questions relating to RAC audits, or any other type of Medicare or Medicaid audit, please contact a Wachler & Associates attorney at 248-544-0888.

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According to a recent article written by the Detroit Free Press, 26 individuals have been indicted in an alleged Medicare scheme. The indictment alleged that a Michigan pharmacist gave kickbacks and other bribes to doctors in exchange for them writing prescriptions for opiate pain killers and depressants (e.g. Vicodin, Xanax and Oxycontin) and directing them to one of the pharmacies owned by the pharmacist. The alleged Medicare fraud was conducted at more than 20 pharmacies throughout the state, which billed $37 million to Medicare, along with over $20 million to Medicaid. The indictment included 12 pharmacists, 4 doctors, a psychologist, an accountant, and a number of patients who agreed to have their insurers billed.

This indictment is just one of many examples of the government’s focus on the Detroit area in Medicare and Medicaid investigations. For more information on Medicare Fraud defense, or assistance with interpreting and understanding Medicare and Medicaid regulations, including the anti-kickback statute, please contact a Wachler & Associates attorney at 248-544-0888.

Detroit Free Press Article: http://www.freep.com/article/20110803/NEWS05/108030363/Metro-doctors-pharmacists-charged-1-largest-drug-scams-Michigan-history

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The Department of Health and Human Services (HHS) recently issued a report to Congress on a Medicare Ambulatory Surgical Center (ASC) Value-Based Purchasing (VBP) Implementation Plan, as required by the Patient Protection and Affordable Care Act (PPACA).

In this report, HHS sets forth a “roadmap” for ASC VBP implementation which discusses the various issues which must be considered. While the current legislation only gives HHS the authority to impose penalties for failure to report, HHS’ plan presumes that Congress will also grant authority to award better outcomes, value and innovation. The report indicates that the failure to report data could result in a 2% reduction, while, subject to the granting of Congressional authority, ASCs meeting quality targets would see increases in reimbursement. The program may also be structured to reward low performers who demonstrate improvement.

In structuring the ASC VBP, HHS will look to the current quality reporting programs for hospitals and physicians.

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On July 14, 2011, the Department of Health and Human Services Office of Inspector General (OIG) issued a favorable advisory opinion regarding the use of a preferred hospital network as part of Medicare Supplemental Health insurance (Medigap) policies. Under the proposed arrangement, the requestors who offer Medigap insurance policies, would establish a preferred provider organization (PPO) comprised of certain hospitals. The PPO network would allow the requestors to receive discounts on Medicare inpatient deductibles for policyholders. Also under the proposed arrangement, the requestors would provide a $100 premium credit to policyholders who opt to use a network hospital for an inpatient stay. Any savings realized by the requestors would be filed with the state insurance departments accountable for regulating the premium rates charged by Medigap insurers.

The OIG determined that the proposed arrangement would implicate both the anti-kickback statute and Section 1128A(a)(5) of the Social Security Act which provides for the imposition of civil monetary penalties for providing remuneration to beneficiaries. However, because of several factors, the OIG concluded that the proposed arrangement would present a low risk of fraud and abuse. Although not directly on point, the OIG looked at the safe harbor for waivers of beneficiary coinsurance and deductible amounts, as well as the safe harbor for reduced premium amounts offered by health plans.

The OIG concluded that the discounts offered on inpatient deductibles by the network hospitals would present a low risk of fraud or abuse for the following reasons:

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According to a new report released by The Department of Health and Human Services Office of the Inspector General (HHS OIG), hospice companies have quickly expanded their services to patients residing in nursing homes. HHS OIG found that total Medicare spending for hospice care for nursing home residents had grown by nearly 70 percent between 2005 and 2009. In addition, the number of hospice beneficiaries in nursing facilities has increased by 40 percent during that same time period. The report also found that 263 hospices (nearly 8 percent of all hospices) had two-thirds or more of their Medicare beneficiaries residing in nursing homes, referred to in the report as “high-percentage hospices.” Moreover, high-percentage hospices were paid an average of $3,182 more per beneficiary by Medicare. Also, high-percentage hospice beneficiaries received hospice services nearly three weeks longer than beneficiaries served by hospices overall, and the costs to high-percentage hospices were much lower due to patients requiring less services because they are already receiving similar services from the nursing facilities.

In connection with the Inspector General’s recommendation, the Centers for Medicare and Medicaid Services (CMS) has announced that it is making an effort to reduce its Medicare payments for hospice patients residing in nursing facilities. As a result, hospice providers will likely see increased audits in this area, with a specific focus on skilled nursing facility referrals. If you are a hospice provider and need assistance in preparing or defending against an audit, or seek assistance with creating a compliance program to minimize audit risk, please contact a Wachler & Associates attorney at 248-544-0888.

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