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The Department of Health and Human Services (HHS) hosted a press conference today to announce changes to the Health Insurance Portability and Accountability Act (HIPAA) of 1996, Privacy, Security and Enforcement Rules. The rule proposed by HHS will be in a notice and comment period for the next two months, beginning July 8, 2010. During the press conference, Kathleen Sebelius, Secretary of the Department of Health and Human Services, noted that the new rule will make business associates culpable for information breaches the same as covered are currently. In addition, the penalties for breaches of information will now be raised to a maximum of $50,000 per breach, with an overall maximum of $1.5 million. The new rule will also prohibit the sale of protected information.

In addition to announcing the proposed rule, HHS outlined new resources and activities to strengthen the privacy of protected health information and educate Americans on their rights and the resources available to them to secure their protected health information. There will be two new websites that will help report and inform the public of any breaches of healthcare information privacy. The first website is the Office of Civil Rights breach notice website where entities and individuals are required to immediately post a notice of any breaches. The second website will keep the public informed on the actions and policies the government is contemplating and implementing for the protection of patient information.

Finally, questions from participants prompted a discussion of the actions HHS is taking to protect healthcare information. The HHS provided examples such as the training of a new workforce to try and protect health IT, working with the cyber security department and starting a national dialogue with consumers and providers at locations across the country to provide education on the privacy and security of protected health information.

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Last week, Michigan’s Governor Jennifer Granholm announced that Michigan could have a $560 million budget gap if Congress does not provide the funding promised in last year’s stimulus package. The Detroit News reported that Governor Granholm was concerned that without the mandated Medicaid funding programs and services would have to be cut. This would seriously impact Michiganians that rely upon Medicaid.

Governor Granholm’s announcement follows her visit to Washington D.C. with the Governors of New York and Pennsylvania. The Bloomberg News reported that the three governors traveled to the nation’s capital to appeal to the Senate to approve the extra financing for Medicaid. Last week, the Senate failed to approve $16 billion in extra financing for Medicaid and extended jobless benefits. The Senate Republicans opposed the measure because it added to the national deficit.

For more information on Michigan health care or to contact a Michigan Health Law attorney, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888.

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On June 11 we posted that the American Board of Internal Medicine (ABIM) had immediately suspended the board certifications of 139 physicians. Since that time, our office has submitted a series of written submissions and had other communications with the ABIM’s counsel in order to clarify that the “suspensions” were actually non-final recommended actions rather than immediate suspensions. In our June 18 blog entry, we announced that the notation, “Under Appeal – Suspension is not final” had been added to each of the affected physician’s entries on the ABIM website. Although this was a significant advancement, we remained concerned that ABIM’s language could cause irreparable damage to our clients’ staff privileges, employment agreements, fellowship programs and relationships with third party payors.

As a result of our efforts on behalf of our clients, last Friday (July 2), ABIM clarified the affected physicians’ entries on its website. Now these entries clearly state “Suspension Recommended” with the comment “Under Appeal – Suspension is not final.” We believe that this clarification will allow our clients to pursue their appeals without the threat of immediate loss of employment or loss of payor relationships. We are encouraged by this advancement and will continue to strive for a positive solution through communication with ABIM.

If you have received a notice of suspension by ABIM and would like assistance with the ABIM appeals process, please contact Andrew B. Wachler, Laura C. Range, or Alicia B. Chandler at 248-544-0888.

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The Office of Inspector General of the U.S. Department of Health and Human Services (OIG) released a report of its review of inpatient rehabilitation facilities’ transmission of patient assessment instruments for 2006 and 2007. Inpatient rehabilitation facilities (IRFs) are required to submit patient assessment instruments for each stay to the Centers for Medicare and Medicaid Services (CMS) National Assessment Collection Database. In 2001, CMS released guidance that required the assessments to be submitted by the 17th calendar day from the date of the beneficiary’s discharge. If the submission date is 10 calendar days late, the payment rate for the applicable case mix group should be reduced by 25 percent.

In its report released in June, the OIG reviewed calendar years 2006 and 2007 to determine if Medicare contractors were reducing case mix patient claims by 25 percent as required by the 2001 CMS rule. The CMS audit evaluated 10,338 claims, totaling $166 million in claims, for which the patient assessment instrument was submitted after 27-day deadline. Out of the over 10,000 claims, the study focused on 192 claims. The OIG report showed that in 113 of the 192 cases, the IRFs did not receive reduced payments despite the transmission of the patient assessment data past the 27-day deadline. CMS estimated that these payment errors totaled approximately $20.2 million overpayments to IRFs in 2006 and 2007.

The OIG determined that the overpayments were the result of inadequate internal controls at IRFs to ensure that the transmission date reported on the claim matched the actual date the IRF transmitted the instrument to the database. In addition, the OIG found that Medicare did not have “prepayment controls” to compare the actual dates of the patient assessment data submission with the date on the claim submitted to the fiscal intermediary.

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President Obama signed the “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010.” The law includes a provision that clarifies Medicare’s position for payment of hospital outpatient services provided on either the day of or the three days prior to an inpatient admission. The 3-day payment window policy is effective for services provided on or after June 25, 2010. Medicare may not reopen claims submitted prior to June 25, 2010 to require a separate bill for outpatient non-diagnostic services.

The 3-day payment window, which has been unofficially followed by Medicare since 1991, allows a hospital to charge for all diagnostic services and non-diagnostic services “related” to the inpatient stay that are provided during the 3-day payment window.

The law defines “other services related to the admission” as including services that are not diagnostic services (other than ambulance and maintenance renal dialysis services) for which payment may be made by Medicare that are provided to a patient by a hospital: (1) on the date of the patient’s inpatient admission; (2) during the 3 days immediately prior to the date of admission, unless the hospital shows that the services provided were not related to the admission.

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Three Recovery Audit Contractors (RACs) posted new issues.

  • The RAC for Region A, DCS Healthcare, posted 23 new approved issues. One new issue applies to DME supplier claims and applies to providers in all Region A states.
  • Connolly Healthcare, the RAC for Region C, posted 3 new issues for non-medical necessity DRG validation reviews. These issues apply to providers in: AL, AK, CO, FL, GA, LA, MS, NM, NC, OK, PR, SC, TN, TX, VI, VA and WV.
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    In its report, “The Medicare RAC Program: Update to the evaluation of the three-year demonstration,” the Centers for Medicare and Medicaid Services (CMS) reveals that providers have been winning more appeals since its last report in January 2009. The report first noted that the number of reported claims for appeal have decreased significantly since the January 2009 report. The decrease is due to a more accurate method of counting claims, i.e., claims are now counted only once regardless of how many levels of appeal the provider pursues. In addition, CMS removed claims from the category of “appealed” if the denial was reversed by the contractor after it received additional documentation from the provider.

    CMS’s report also found that providers chose to appeal 12.7 percent (76,073) of the RAC determinations. Of those appealed claims, 64.4 percent were overturned on appeal.

    If you need assistance with a RAC or third party payor audit or for more information, please visit www.racattorneys.com or contact a Wachler & Associates attorney at 248-544-0888.

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    The U.S. Department of Health and Human Services Office of Inspector General (OIG) issued Advisory Opinion 10-08 to address the provision of dietitian and social worker services at a freestanding radiation oncology center (Center) at no extra charge to the beneficiaries. The OIG determined that the proposed arrangement would not violate the Federal Anti-Kickback Statute and thus, the OIG would not impose administrative sanctions.

    The proposed arrangement involved patients at the Center receiving dietitian and social worker services at no additional charge. The OIG addressed the arrangement as it affected Medicare beneficiaries. The services would not be advertised as “free” or “at no charge.” Patients would receive the dietitian services after being identified for risk of nutritional complications and social worker services would be provided during the patient’s treatment. Under the proposed arrangement, the services would not be separately billed, and the applicable cost sharing amounts for the Medicare beneficiaries would not be routinely waived.

    The Centers for Medicare and Medicaid Services (CMS) informed the OIG that the dietitian and social worker services provided at the Center would fall within the reimbursement the Center received for the patients. Thus, the amounts that the Medicare beneficiaries pay to share the costs would be partially attributable to the costs of the dietitian and social worker services and the Center would not be provided the services free because of this reimbursement. If this form of reimbursement had not been factored into the proposed arrangement, then the services would not be part of the reimbursement and could implicate the Anti-Kickbac Statute.

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    On June 18 the U.S. Senate passed a six-month plan to prevent the Medicare physician 21 percent payment cut. The measure, which will cost $6.4 billion, was pushed through with the concern that the steep payment cut would raise the possibility that medical providers would turn away patients covered by Medicare. It will delay the cuts until November 30, 2010 while Congress tries to create a long-term plan. The plan was passed unanimously and lawmakers attribute its passage to the efforts to offset its attributed costs.

    Almost immediately after the U.S. Senate announced the passage of the plan, Medicare announced that it would process Medicare claims received for June at the lower rate. This is because the U.S. House of Representatives will not be able to consider the plan until next week. However, there are indications that the bill’s success in the House may be complicated. House Speaker Nancy Pelosi announced that the House will not pass the Senate bill until the Senate agrees to act on job-creation legislation. If the bill does pass in the House, Medicare providers will have the burden to resubmit their claims to be made whole.

    For more information on Medicare payments or the physician fee cut, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888.

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    Michigan’s budget may be threatened by U.S. Congressional action. Crain’s Detroit Business reported that Congress’ concern over the nation’s deficit may affect its willingness to pay for an estimated $24 billion in Medicaid assistance to states and other financial assistance, leading to the removal of the enhanced Federal Medical Assistance Percentage (FMAP) provision from legislation pased by the U.S. House in May.

    Due to these cuts, Michigan lawmakers are concerned that Michigan may not receive $514 million in Medicaid “matching” funds from the federal government. The amount was already factored into the fiscal year 2011 budget for the Michigan Department of Community Health. If Michigan does not receive this funding it may result in deep cuts in various programs, such as Medicaid prescription drug coverage, payments to Medicaid providers, mental health services, revenue sharing and university funding.

    For more information on Michigan health care, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888.

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