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The Centers for Medicare and Medicaid Services announced last week that in the past year healthcare providers have received $158.3 million in EHR incentives. The incentives have been advocated by the Obama administration to encourage doctors and hospitals to use digital health records that meet federal standards. This encouragement coincides with the Administration’s goal to have half of Americans using digital health records by 2014.

Healthcare providers can receive $63,750 during six years from the Medicaid program and up to $44,000 during five years from the Medicare program. For more information on the meaningful use of electronic health records please contact a Wachler & Associates attorney at 248-544-0888.

Centers for Medicare and Medicaid Services

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Healthcare providers that wish to participate in CMS’ Pioneer ACO Model program must submit a letter of intent to CMS by June 10, 2011. This program is the latest initiative in the development of ACOs. The Pioneer ACO program is an opportunity for groups of providers that are already accustomed to coordinating care and ready to share risk. The Pioneer program will offer greater risks and rewards than ACOs participating under the previously released shared savings program.

Click here to view the letter of intent form. This form must be submitted by email no later than June 10, 2011. If you wish to participate in CMS’ Pioneer ACO Model program and need assistance in doing so, please contact a Wachler & Associates attorney at 248-544-0888.

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The Office of the Inspector General issued a favorable opinion regarding an affiliation between an Air Force medical group and a community hospital. The arrangement involves an Air Force medical group (medical group) located on a military base and a community hospital located near the base. As a result of hurricane Katrina, the medical group no longer has the patient population to maintain certain residency and training programs. The community hospital has a need for certain physician specialists. Under the proposed arrangement, certain specialists from the medical group would treat the hospital’s patients; these patients would include Medicare/Medicaid beneficiaries. The medical group specialists would utilize hospital equipment and facilities to treat patients and be covered under the hospitals malpractice insurance.

The specialists will only provide services if the hospital has an identified need for a particular specialists’ services. The hospital has determined that the costs associated with this arrangement would be offset by the expenses that would be incurred by bringing in a physician specialist from a different source. The services provided by the medical group specialists will be free to the patients. The hospital will bill the appropriate party for any technical fees that are appropriate given the services provided.

The OIG noted that the arrangement’s risk of violating the Anti-Kickback statute is low for the following reasons: the medical group physicians do not bill for their services; the hospital rarely serves as a referral source for the medical group; this arrangement is in the best interest of the public; the referrals are not required to be to medical group physicians; and the arrangement’s costs are offset by expenses avoided by utilizing the arrangement. The OIG stated that since federal healthcare program beneficiaries were not improperly influenced under the arrangement, civil monetary penalties would not be applicable. Specifically, the OIG looked to the following factors: there is no advertisement that the medical groups physicians services are free of charge; the hospital bills patients for technical fees; and the patients come to the hospital fully expecting to pay for the services and it is unlikely that learning the services are free after the fact will induce patients to solicit these services.

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The Department of Health and Human Services (HHS) has issued a notice of proposed rulemaking to modify the HIPAA Privacy Rule in accordance with the Health Information Technology for Economic and Clinical Health Act (HITECH) requirement that users of electronic health records (EHRs) provide a more extensive accounting of disclosures than previously required by the Privacy Rule. The proposed rule would give individuals the right to receive an access report showing them specifically who has accessed their electronic protected health information. While the Security Rule has arguably required such tracking pursuant to the audit trail requirements, it did not have to be shared with individuals. The proposed rule also requires more detail in accounting of certain disclosures, in an attempt to curtail existing efficiency problems.

Click here to view the complete HHS announcement. You can also click here to view the proposed rule. If you have any questions regarding compliance with the new HIPAA privacy standards or any other HIPAA issues, please contact a Wachler & Associates attorney at 248-544-0888.

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A sleep medicine and durable medical equipment company, Areté Sleep LLC, Areté Sleep Therapy LLC, and Areté Holdings LLC will pay a $650,000 settlement pursuant to federal authorities discovering the company to have submitted false claims to Medicare over a seven year span.

According to federal prosecutors, the false claims were for diagnostic tests performed by unlicensed/uncertified technicians. These licenses/certifications are required by Medicare rules and regulations. Areté filed for Chapter 11 bankruptcy in early 2011 and has agreed to pay the settlement with the proceeds from its asset sales.

If you have any questions or concerns regarding compliance with Medicare rules and regulations, or if you have questions regarding compliance issues associated with billing for sleep studies and related DME, please contact a Wachler and Associates attorney at 248-544-0888.

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ACO Start-Up Costs

According to a study conducted by the American Hospital Association, the costs associated with starting an accountable care organization (ACO) range from $5.3 million to $12 million. The study was based on a review of the start up costs of four ACOs currently in existence. Additionally, it was discovered that the yearly operating costs in connection with the ACOs were equal to the start up costs, if not more.

The study highlighted several costs that were associated with starting an ACO. One of these costs was incurred by hiring staff to coordinate the ACO’s activities, such as risk management professionals and workers hired to develop and manage a communication network between providers. Another start up cost incurred was that included in recruiting physicians, which ranged from $100,000 to $450,000 per physician. Next, the study found that ACOs spent nearly $3 million a year developing post-acute care networks (i.e. nursing homes, rehab services, and hospice care). Equally expensive were the costs associated with the implementation of EHRs, which cost up to $2.9 million along with an additional $2.5 million for starting up an HIE, plus annual operating costs.

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Over $365 Million in Improper Payments Identified By RACs Since October 2009

CMS recently reported that RACs have identified $312.2 million in overpayments from October 2009 through March 2011. During the same period, $52.6 million in underpayments were identified. While these figures are well below the over $1 billion in improper payments identified during the demonstration program, they are expected to increase. RACs are currently reviewing large numbers of DRGs in coding and medical necessity reviews and it is anticipated that these will result in identification of more improperly billed claims. The first quarter of 2011 accounted for $184.6 million in identified improper payments and these trends can be expected to continue for the foreseeable future.

CMS also released the top approved issue for each RAC region. The top issue for RAC Region A is Ventilator Support of 96+ hours; the top issue for RAC Region B is Extensive Operating Room Procedure Unrelated to Principal Diagnosis; the top issue for RAC Region C is Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Provided During an Inpatient Stay; and the top issue for RAC Region D is Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Provided During an Inpatient Stay.

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On May 16, the Office of the Inspector General for the Department of Health and Human Services released the report from its audit of physician therapy services provided during home health episodes. The report outlines the OIG’s findings that the Centers for Medicare and Medicaid Services (CMS) made duplicate payments for the same home health services. Specifically, the payments for the same services were made to the physician under Medicare Part B and then to the home health agency under the Medicare home health prospective payment system (HH PPS). The OIG recommended that CMS eliminate duplicate payments by adjusting the HH PPS rate to exclude physician-provided therapy services or by making physician therapy services subject to the consolidated billing requirement. CMS has agreed with the OIG’s recommendations and has indicated that it will take action to address the recommendation.

For more information on proper billing practices for home health services, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888.

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As of April 20, 2011, a statement, writing, or action by a health care professional to an individual, or an individual’s family, that expresses sympathetic feelings towards that individual’s pain or death cannot be used against the professional in an action for medical malpractice. However, this bill does not apply to additional statements of fault or other culpable conduct. Click here to view the full version of the Act. If you have any questions or concerns about the legal effects of your actions, please contact a Wachler attorney at 248-544-0888.

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DCS Healthcare: The Region A RAC added three new medical necessity claims to its approved issues list. These claims are:

  • Peripheral/cranial nerve and other nervous system procedures with MCC (MS-DRG 040);
  • ECMO or tracheostomy with MV 96+ hrs or PDX except face, mouth and neck with major O.R. (MS-DRG 003);
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