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The Office of Inspector General (OIG) for the Department of Health and Human Services recently announced a discovery that during the time period from July 15, 2010 through August 4, 2010 the search/verification function on the online searchable List of Excluded Individuals/Entities (LEIE) was not working properly.  Therefore, health care providers who conducted searches during this time period are advised to repeat the searches because it is possible that searches may have resulted in false negative results, i.e. individuals and/or entities that are actually excluded may have shown up as not excluded.

Medicare providers who contract with or employ excluded providers are subject to civil monetary penalties, nonpayment for services and possible exclusion themselves.

For more information regarding obligations to search the excluded providers list as well as other compliance issues, please contact a Wachler & Associates attorney 248-544-0888.

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Michigan’s Attorney General Mike Cox announced a community forum to be held next week regarding the proposed sale of the Detroit Medical Center to Vanguard Health Systems, Inc.  Earlier this year, DMC signed a purchase agreement that would require Vanguard to make $850 million in capital improvements over the next five years.  The forum will take place from 5:00-7:00pm on August 18 at the Cadillac Place in Detroit.  It will provide the public with an overview of the proposed sale, explain the Attorney General’s review process for the transaction and provide the public an opportunity to comment and question representatives of DMC and Vanguard.

For more Michigan healthcare legal news, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888. 

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The Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) published an advisory opinion regarding the Anti-Kickback Statute.  The OIG concluded that the Anti-Kickback Statute would not be implicated where a charitable donation is made in the name of a healthcare provider, so long as the healthcare provider does not receive a tax deduction or other monetary benefit from the donation.

The request of the advisory opinion created an online scheduling website for certain manufacturers (pharmaceutical, medical and diagnostic) to schedule a time to meet with healthcare providers to educate the providers about new products.  Although the manufacturers would pay a fee for the time, healthcare providers would not be paid for their availability, nor would they have to pay to participate.  Rather, healthcare providers would designate a public charity to receive donations “in name of” the healthcare provider.  Restrictions on the donation include, the healthcare provider will not be entitled to a tax deductions or other monetary benefit from the donation and neither the healthcare provider nor a member of the healthcare provider’s family may be closely affiliated with the charity (i.e. serve on the charity’s board or be employed by the charity). 

In its conclusion that this arrangement would not violate the Anti-Kickback Statute, the OIG stressed that the healthcare provider must not receive any form of remuneration, including tax incentives.  In addition, the OIG noted that the requestor had put in place several safeguards to ensure that the program was not abused.

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On July 28 the U.S. District Court of the Southern District of California granted the Department of Health and Human Services’ (HHS) motion for summary judgment in the case, Palomar Medical Center v. Sebelius.  The case, filed on May 26, 2010, challenged a magistrate judge’s recommendation that HHS is correct in its position that a decision to reopen a Medicare audit claim is not subject to appeal, regardless of whether “good cause” was given for the audit.

Palomar Medical Center originally alleged that the Centers for Medicare and Medicaid Services (CMS) unlawfully reopened a claim without showing “good case” for the reopening as required by Medicare regulations.  In addition, Palomar argued that CMS was incorrect in its position, that Administrative Law Judges (ALJs) may not review whether Medicare contractors, such as recovery audit contractors (RACs), have followed federal regulations when reopening claims.

This case has important consequences for Medicare providers because there appears to be no recourse when a Medicare contractor does not abide by CMS’ reopening rules.

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The Department of Health and Human Services (HHS) announced on July 29 that it will make available $51 million in grants to help states initiate health insurance exchanges, mandated by the Patient Protection and Affordable Care Act.  Grants of up to $1 million will be made available to each state.  The purpose of the grants is to help states develop consumer-centered health insurance marketplaces that will encourage competition and greater control in the hands of individuals and small businesses.  The exchanges will be “one stop shops” for consumers and businesses to purchase health insurance coverage.

The HHS recognized the importance of the grants to encourage the implementation of the health insurance exchanges, given states’ struggles to maintain balanced budgets.  The Secretary of the HHS, Kathleen Sebelius voiced this concern by emphasizing that, “these grants will give [states] the resources to conduct the research and planning needed to build the health insurance marketplace of the future.”

States have the option to establish and operate their own exchange or partner with another state or states to operate a regional exchange.  Secretary Sebeilus said that if a state decides not to create an exchange for its residents, the HHS will establish one on their behalf.

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The Detroit Free Press reported that an effort to give Michiganians a constitutional right to opt-out of participation in the Federal healthcare program failed to obtain enough signatures to place the proposal on the November ballot. The group, Michigan Citizens for Healthcare Freedom, estimated that it turned in between 145,000-170,000 signatures. A total of 381,000 signatures were necessary for the proposal to be included on the November ballot. The state director of the National Federation of Independent Business, Charles Owens, reported that the effort collected more signatures in less time than any other all-volunteer drive. He indicated that this fact demonstrates the widespread disagreement with the healthcare reform law.

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

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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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