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On March 31, 2011, CMS released the proposed rule implementing the Medicare Shared Savings program and establishing the requirements for Accountable Care Organizations (ACOs) that wish to participate in this program.  The following is a list of some of the highlights from this Proposed Rule.

1. The proposed rule contemplates two models: a “one-sided” model in which providers do not share risk and a “two-sided” model in which providers share in risk and realize greater return on the shared savings.

2. ACOs must commit to participate in the shared savings program for three years.  Providers who select the “one-sided” option will need to agree to share risk in their final year of participation.  If an ACO wants to terminate early, they will need to give a 60 day notice to CMS, as well as a notice to beneficiaries, and will forfeit a portion of previously earned shared savings that was withheld by CMS.

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The proposed legislation would allow Michigan healthcare providers to apologize to patients without fear that those comments will be used against them in legal proceedings.  The law will not provide total immunity to comments, but allow for greater leeway when it comes to expressing remorse for procedures that did not achieve the desired result.  

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If the rumors are true, tomorrow the Centers for Medicare and Medicaid Services, the Office of the Inspector General and the Federal Trade Commission will be releasing voluminous regulations governing the formation of Accountable Care Organizations (“ACO”) and the Medicare Shared Savings Program.  But before we receive all the minutiae of the regulations, we wanted to provide a brief overview of what is already known about ACOs.

1. The purposes of ACOs are to: (1) facilitate coordination and cooperation, (2) improve the quality of care and (3) reduce unnecessary costs.

2. ACOs were created by the Affordable Care Act, which was signed by President Obama approximately one year ago.

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Thirteen medical societies and several senior citizen advocacy groups have requested that CMS delay the enforcement of the new face-to-face encounter requirement.  These groups are seeking to delay the effective date to no sooner than July 1, 2011.  This new requirement stipulates that physicians, or a nurse practitioner working with the physician, conduct an in person consultation before the patient is covered by Medicare for certain procedures.  The requirement, which was enacted by the Affordable Care Act, was already delayed from  its original effective date of January 1, 2011, to April 1, 2011.  For a full explanation of the rule and its requirments, please see a recently authored article by Wachler & Associates attorneys Amy K. Fehn and Jennifer Colagiovanni entitled New Audit Risk for Home Health Agencies: Face to Face Certification Requirements.

Regardless of whether the new rule is delayed, having an up to date and effective compliance program will be necessary to ensure Medicare coverage of services.  To review an existing compliance program, or create a new program, contact an attorney at Wachler & Associates at 248-544-0888.

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A Republican Senator out of Iowa, Chuck Grassley, has introduced a new bill to the Senate.  This bill, which is entitled the Strengthening Program Integrity and Accountability in Health Care Act of 2011, seeks to amend the Social Security Act in a way that prevents improper billing, either through fraud or abuse, and waste in Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP).  These amendments would serve to bolster and expand upon the prevention measures implemented in last year’s Patient Protection and Affordable Care Act.

This Proposed legislation, which is part of a larger trend towards eliminating fraud and abuse in the health care arean, highlights the importance of providers maintaining up to date and comprehensive compliance programs.  To discuss new and existing compliance requirements and ways to meet these requirements, please contact a Wachler & Associates attorney at 248-544-0888. 

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The Department of Health and Human Service’s Office for Civil Rights will be conducting a series of workshops to help educate and train state Attorney Generals in enforcing the Health Insurance Portability and Accountability Act of 2009 (HIPAA).  These workshops will include reviews of HIPAA and state privacy laws and the new enforcement role of the Attorney Generals as promulgated under the Health Information Technology for Economic and Clinical Health Act (HITECH).

These workshops are part of a larger plan to increase awareness about HIPAA compliance and enforcement.  Experts anticipate an increase in HIPAA related enforcement activity in the coming months.  To discuss possible improvements to your current compliance program, or to develop a new program, contact a Wachler & Associates Attorney at 248-544-0888.

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The Government Accountability Office released a report on March 2, 2011, which concludes that inefficiencies and duplication in Government Programs are costing taxpayers billions every year.  This report, entitled “Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars and Enhance Revenue,” was issued to aid lawmakers in setting the federal budget.  The report claims that 10% of all Medicare payments are either fraudulent or otherwise improper and that these payments cost the federal government roughly $48 billion.  The report goes on further to specifically call on CMS and HHS to reign in these, and other health care related costs.  Reports such as this will undoubtedly increase audit activity from CMS contractors in an already aggressive audit environment.  If you are the subject of an audit from a RAC, ZPIC, MAC or other Medicare or CMS contractor, please contact a Wachler & Associates attorney.

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The Justice Department is seeking clarification on a ruling made by U.S. District Court Judge Roger Vinson.  Judge Vinson, in his ruling on the implementation of the Patient Protection and Affordable Care Act, suggested that the government was enjoined from implementation of the Act.  The DOJ now wants the Judge to clarify whether or not there is an injunction on the implementation of the Act.  This injunction would only be applicable to the 26 states that were a party to the suit.

The ruling on this case could have a significant impact on individuals and providers in the affected states and should be carefully watched.  For information on health care reform and compliance with the various provisions, please contact a Wachler & Associates attorney. 

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CGI, the Recovery Audit Contractor (RAC) for Region B, recently removed four DRG validation issues from its list.  This means that providers in Region B will no longer be subject to RAC audits on these particular procedures.

Connolly has added several new RAC issues to its CMS approved list.  One issue, Duplicate Claims, has been added for outpatient hospital claims.  Twelve issues have been added to DRG validation claims, and twenty-four issues have been added for medical necessity claims.  Providers in Region C need to be aware and prepared for these new issues being audited.

Some examples of the new medical necessity issues include: Skin graft and/or debridement DRG 577; Endocrine, nutritional and metabolic disorders DRG 639; Acute inpatient admission, MS-DRG 491.  For a full list of the new issues in Region C, please visit Connolly’s website.

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Effective February 14, 2011, CMS has limited the number of records RACs may request when reviewing Medicare claims from Physicians and other practitioners.  These requests for medical records, which are used in connection with complex claims reviews, will be limited based on the size of the group/office being audited.

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

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