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Last month the Centers for Medicare and Medicaid Services (CMS) published an MLN Matters Article regarding changes to remittance advice coding. The article is directed towards Home Health Agencies that submit claims to a Regional Home Health Intermediary (RHHI) or to the Home Health Medicare Administrative Contractor (HH MAC – National Heritage Insurance Corporation (J14 only)) for services provided to Medicare beneficiaries.

The article explains that CMS released Change Request (CR) 6897 to instruct Medicare RHHIs and the J14 HH MAC to use a new Remittance Advice Remark Code (RARC) and a changed Claims Adjustment Reason Code (CARC) for home health agencies (HHAs) that are subject to the Home Health Prospective Payment System (HH PPS) outlier limitation. Up to CR 6897, the code “CARC 45” had been used to alert HHAs that an outlier payment, which would be eligible for payment, was not eligible because the HHA’s outlier limitation had been met. CMS found that CARC 45 did not adequately explain the reasoning for the denial of the payment, and therefore created a new remittance advice remark code (RARC) to be used in situations where the outlier limitation has been met. Then new RARC is N523. In addition to N523, HHAs can expect to see the claim adjustment reason code B5 (CARC B5).

The new RARC and updated CARC are effective for claims with dates of service on or after March 1, 2010. Therefore, if a calculated outlier amount is not paid because the HHA has reached the outlier limitation, HHAs can expect to see the following on their remittance advice: (1) Group Code CO: “Contractual Obligation,” (2) Claim adjustment reason code B5 (CARC B5); (3) RARC N523.

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The Centers for Medicare & Medicaid Services (CMS) issued Change Request (CR) 6698 to clarify how Medicare claim review contractors review claims and medical documentation submitted by providers. This clarification included an outline of new rules for signatures and added language for e-prescribing.

The previous language in the Program Integrity Manual (PIM) required a “legible identifier” in the form of a handwritten or electronic signature for every service provided or ordered. CR 6698 updates these requirements to require that every service provided or ordered be “authenticated by the author” by handwritten or electronic signature; stamp signatures are generally unacceptable.

CR 6698 also provides some exceptions to the signature requirement. First, facsimiles of original written or electronic signatures are acceptable for certifications of terminal illness for hospice. Second, there are other circumstances for which an order does not need to be signed. For example, orders for clinical diagnostic tests are not required to be signed, but there must be medical documentation by the treating physician that s/he intended the clinical diagnostic test to be performed. The documentation showing intent must be authenticated by the author with a handwritten or electronic signature. Finally, other regulations and CMS instructions regarding signatures take precedence. For example, if the NCD, LCD, and CMS manuals have specific signature requirements, those signature requirements take precedence. However, if these are silent as to signature requirements, the reviewer should follow the guidelines set forth in CR 6698.

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Earlier this month, the U.S. District Court for the Western District of Michigan granted a defendant’s motion to dismiss a qui tam action against it. The court held that the relator failed to state a claim with the required particularity.

Robert Lauricia filed the qui tam action under the False Claims Act (FCA) against Stryker Corporation. Mr. Lauricia’s complaint alleged that Stryker was engaged in a kickback scheme with Dr. Hari K. Parvateneni. The scheme involved Dr. Parvateneni’s agreement to use Stryker’s medical devices for implantation into Medicare patients in exchange for Stryker’s agreements to fund the training of Parvateneni’s residents and research projects. Mr. Lauricia alleged that since Parvateneni and Stryker engaged in the illegal kickback scheme, any claims submitted for reimbursement from Medicare were violations of the FCA.

The defendants’ motion to dismiss was granted by the district court. The court expressed that the allegations failed to state a claim for relief as the relationship between the defendants was neutral on its face, with Mr. Lauricia failing to produce any specific conduct that would render it illegal. The court also noted that the claim failed to allege the time or place of the alleged misrepresentations, any injury resulting from the alleged fraud, or even a single particular fraudulent claim.

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Section 6401 of the Patient Protection and Affordable Care Act (PPACA) grants the Secretary of the Department of Health and Human Services (the “Secretary”) the authority to require health care providers to adopt compliance programs as a condition of participation in the Medicare, Medicaid and CHIP programs. Before the PPACA, a corporate compliance program was only mandatory for a healthcare provider or supplier that was operating under a Corporate Integrity Agreement or had a contract with the federal government that exceeded $5 million and lasted longer than 120 days.

Although section 6401 lacks specific direction to the Secretary with regard to the health care providers that will be subject to the mandatory compliance programs and the core elements of the programs, the section gives the Secretary the authority to make these decisions. One exception to the lack of specific direction is found in section 6102 of PPACA. That section requires skilled nursing facilities (SNFs) and other nursing facilities to establish compliance programs. According to the language in section 6102, the SNF program must be “reasonably designed, implemented, and enforced so that it will be generally effective in preventing and detecting criminal, civil and administrative violations under this Act and in promoting quality of care.” The section lists eight required components of the compliance program, and requires that the programs be in place by March 2013. The eight required components include:

  • Compliance standards and procedures must be adopted and followed by employees and other agents in a position to reduce criminal, civil and administrative violations under the PPACA.
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    The Centers for Medicare and Medicaid Services (CMS) issued a new transmittal to address concerns regarding the reporting of recoupment for overpayment on the remittance advice (RA). During the RAC demonstration project providers would receive an RA, which is a notice of payments and adjustments sent by Medicare contractors to providers, billers and suppliers. The RA would either be delivered as a companion to a claim payment, or as an explanation when no payment was made. If a RAC denied a claim and was entitled recoup money, the amount would be taken from a future payment. However, there was not a mechanism to trace the recouped payment back to the original claim that had been denied. The result was that providers were unable to maintain correct records.

    Transmittal 659 addresses this concerning by instituting a system that will assign a control number at the point a recoupment demand is made. The control number will stay attached to the claim and will later be used on the RA when the payment is offset from the provider’s reimbursement. Therefore, the control number will identify a particular claim and providers will be able to maintain accurate records.

    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 & Human Services Office for Civil Rights (OCR) published a request for information (RFI) on the Health Information Technology for Economic and Clinical Health (HITECH) Act’s expansion of an individual’s right to receive an accounting of disclosures under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy Rule. Pursuant to the HITECH Act, covered entities will soon be required to account for disclosures of protected health information (PHI) made for treatment, payment, and healthcare operations if the entity utilizes an electronic health record (EHR) system. This is a significant change from current guidance, by which covered entities are not required to provide an accounting of any disclosures made for purposes of treatment, payment, or healthcare operations. As the OCR prepares to develop specific regulations, it has issued the RFI to pose specific questions to and request comments from covered entities, EHR system vendors, and individual and consumer advocates regarding the new requirement.

    Specific questions posed to covered entities include: (1) How do covered entities inform individuals of their rights to an accounting of disclosures? (2) How many accounting of disclosures requests a covered entity has received? (3) Whether a covered entity uses a single EHR system and whether that system creates an automatic accounting of disclosures, or whether there is a separate system to generate this information? and (4) Whether the HITECH Act’s requirement that covered entities that acquire EHR systems after January 1, 2009 account for disclosures for treatment, payment, and healthcare operations by January 1, 2011 is a feasible deadline, and, if not, how long it would take a covered entity to install a feature to track these disclosures?

    Other requests for comments are directed at individuals, consumer advocates, and EHR system vendors. The questions directed at individuals and consumer advocates inquire into the benefits of an accounting of disclosures, whether individuals are aware of their right to receive an accounting of disclosures, and whether an individual was provided requested information. The RFI also requested information from EHR system vendors as to whether the EHR system is able to distinguish between PHI “uses” and “disclosures” and as to the additional burdens that would be imposed on the EHR system to account for disclosures for treatment, payment, and healthcare operations and the feasibility of an EHR module to account for these disclosures.

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    The first defendant to receive a prison sentence for a HIPAA privacy violation was sentenced to four months in prison after admitting to illegally accessing protected health information contained in electronic medical records of celebrities and others. The defendant, a former UCLA Health System surgeon, pleaded guilty in January to four misdemeanor counts of violating the HIPAA privacy rule. The incidences occurred in 2003 when the surgeon accessed and read the medical records of his immediate supervisor, other co-workers, and celebrities who had visited the health system after receiving notice that he was being dismissed from his job. He illegally accessed patient records 323 times over a 3 week period.

    For more information on HIPAA privacy and security rules, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888.

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    The Consumer Assessment of Healthcare Providers and Systems (CAHPS) Home Health Care Survey is designed to measure the experiences of individuals receiving home health care from Medicare-certified home health care providers. The CAHPS has three broad goals: (1) to produce comparable data on the patient’s perspective that allows objective and meaningful comparisons between home health agencies on domains that are important to consumers; (2) public reporting of survey results so as to create incentives for agencies to improve their quality of care; and (3) public reporting to enhance public accountability in health care by increasing the transparency of the quality of care provided in return for public investment.

    The home health care CAHPS (HHCAHPS) survey began in October 2009 with agencies that wished to implement the survey on a voluntary basis. The data collected during the voluntary period will be posted in Spring 2011. Agencies will have the option to suppress the reporting of their data collected during the voluntary period.

    However, the Home Health Prospective Payment System (HHPPS) Final Rule (November 10, 2009) stated that HHCAHPS will be linked to the quality reporting requirement for the CY 2012 annual payment update (APU). The Centers for Medicare & Medicaid Services (CMS) strongly encourages that the designated quality staff in all Medicare-certified home health agencies (HHAs) read the Final Rule.

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    The RAC for Region C, Connolly Healthcare, has added 20 new DRG Validation issues to the list of CMS-approved audit issues. In addition, earlier this month several issues were approved for Region C providers in Virginia and West Virginia.

    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 Patient Protection and Affordable Care Act (PPACA), also referred to as the Healthcare Reform Legislation, made significant changes for Medicare providers. One change found in Section 6404 of the PPACA reduces the Medicare Parts A and B claims filing deadline to one (1) calendar year after the date of service furnished on or after January 1, 2010. The Section also gives the Secretary of the Department of Health and Human Services discretion to specify “exceptions” to the filing deadline. However, the PPACA did not specify the exceptions and it will be necessary to wait until the Centers for Medicare and Medicaid Services (CMS) begins the rulemaking process to implement the new filing deadlines. Regardless of the lack of specification of the exceptions to the filing deadlines, the new timely filing deadlines are self-executing.

    It is also important to note that Section 6404 of the PPACA alters the timely filing deadline for claims under Medicare Parts A and B with dates of service prior to January 1, 2010. Claims with dates of service prior to January 1, 2010 must be filed by December 31, 2010.

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

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