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The U.S. Department of Justice (DOJ) and Rush University Medical Center agreed to settle a qui tam lawsuit alleging that Rush violated the Federal False Claims Act (FCA). The lawsuit, filed on July 12, 2004, alleged that Rush had violated the FCA by submitting certain false claims for payment to the Medicare and Medicaid programs. The DOJ intervened in the action and argued that Rush’s violation of the FCA occurred through the submission of claims for services referred by physicians with whom Rush had impermissible financial relationships. The alleged impermissible financial relationships were rent concessions on medical space leased to certain physicians. The government argued that these financial relationships were in violation of Stark Law and thus, Rush was prohibited from billing Medicare and Medicaid for services referred from those physicians. Pursuant to the settlement Rush will pay the federal government $1,547,200.00, and the relators will be awarded $270,760.00.

If you would like your financial relationship reviewed for Stark compliance or for more information, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888.

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A bill in Florida’s Senate would target Medicaid fraud through the creation of a Fraud Strike Force and the expansion of the Medicaid Fraud Control Unit (MFCU) within the Florida Attorney General’s (AG’s) office. The Fraud Strike Force would direct state and local authorities to work together to more effectively investigate and prosecute Medicaid fraud and abuse. The strike force’s work begins in January 2011. It will consist of eleven state officials that will eventually recommend the best measures to coordinate state resources. The MFCU’s expansion in the Attorney General’s office includes the creation of positions committed to identifying and prosecuting Medicaid managed care fraud.

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

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Kathleen Sebelius, Secretary of the U.S. Department of Health and Human Services (HHS), announced $162 million in awards created to help states advance the meaningful use of health IT through state health information exchange. The awards are part of a $2 billion effort, funded by the American Recovery and Reinvestment Act of 2009, to advance health IT and achieve the use of electronic health records for every citizen by 2014.

In the HHS press release, Secretary Sebelius stressed the importance of these investments to “unleash the power of health information technology to cut costs, eliminate paperwork, and help doctors deliver high-quality, coordinated care to patients.” Secretary Sebelius also emphasized the critical role that states play in securing the exchange of electronic health records between providers and hospitals. A fully developed health information exchange serves as a stepping stone to enable eligible healthcare providers to receive incentive payments under the Medicare and Medicaid for the meaningful use of health IT.

The $162 million in awards will be given to 16 states and state designated entities (SDEs) to assist non-proprietary health information exchange. After this most recent award, all states have now been awarded funds to begin to advance the meaningful use of health IT and facilitate state health information exchange.

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The American Hospital Association (AHA) submitted comments to CMS on the proposed definition of “meaningful use” of Electronic Health Records (EHR). The Health Information Technology for Economic Clinical Health (HITECH) Act contains an EHR Incentive Program. That program is designed to encourage eligible providers to make “meaningful use” of EHR technology. The proposed rule defines “meaningful EHR user” as an eligible professional or eligible hospital that, during the specified reporting period, demonstrates meaningful use of certified EHR technology in a form and manner consistent with the certain objectives and measures presented in the regulation. Some of the objectives include: EHR technology to improve the quality, safety, and efficiency of health care delivery and ensures adequate privacy and security protections for personal health information.

In its comments on the proposed rule, AHA believed that CMS’s definition for “meaningful use” set too high of a standard and that very few eligible hospitals would be able to meet that standard. For instance, AHA expressed concern that CMS’s method for determining eligibility would create a larger division between small and large hospitals in that there is already research suggesting that larger hospitals are better prepared to meet the meaningful use objectives.

AHA also recommended that CMS loosen its timeline for EHR implementation, including allowing hospitals to meet the meaningful use definition if they meet 25% of the objectives in 2011 or 2012.

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A New York Times article from March 15, 2010, documents the most serious problem with cuts to Medicaid payments to doctors: doctors dropping out of the program. The article focused on doctors in and around Flint, Michigan.

According to the article, in 2008 Medicaid reimbursements averaged only 72 percent of the rates paid by Medicare. Michigan, at 63 percent, had the sixth-lowest rate in the country. However, that low ranking does not even take into account the 8 percent Medicaid payment cut implemented last fall in Michigan.

To add to the strain on doctors that accept Medicaid, Michigan’s Governor Jennifer Granholm, has revived a proposal to impose a 3 percent tax on physician revenues. Without the tax, the Governor has warned that the state may have to reduce Medicaid payments by 11 percent.

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The U.S. Department of Health and Human Services awarded the Michigan Department of Community Health (MDCH) and the Michigan Department of Information Technology (MDIT) a $14.9 million grant to encourage the expansion and success of health information technology (HIT) in Michigan.

The funds, provided through the American Recovery and Reinvestment Act of 2009, will be used to create the first statewide HIT network and increase the state’s use of HIT. The state’s goal is to increase the accessibility to individual patient records and healthcare information.

To reach these goals, the state will use the grant to implement the technological infrastructure to coordinate local and regional health information exchanges, health systems, state of Michigan systems, and integrated delivery networks. Once the system is in place, healthcare providers will be able to effectively communicate and share information, increasing healthcare quality and patient safety while reducing healthcare costs.

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The Patient Protection and Affordable Care Act passed signed into law by President Obama impacts providers in several ways. One of the areas of impact to providers is the expansion of the Recovery Audit Contractor (RAC) Program.

The Act expands the RAC Program to Medicaid by requiring that each state contract with at least one RAC to identify underpayments and overpayments. These contracts must be in place no later than December 31, 2010. The Act also expands the RAC Program to Medicare Parts C and D by the end of this year.

The Reconciliation Act of 2010 may cause some changes to the Act, however, if it is passed in its current form the RAC Program will still be expanded to Medicaid and Medicare Parts C and D.

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For the first time, Michigan providers must charge patients less than the previous year for copies of medical records. The Michigan Medical Access Act of 2004 regulates the access to and disclosure of medical records. Under the Act, the Department of Community Health has the responsibility to adjust on an annual basis the fees that may be charged by a Michigan provider to any patient requesting copies of medical records. The adjustment is based on the Detroit Consumer Price Index. This year, for the first time the fee has been decreased from the previous calendar year. In CY 2009, the initial fee for copies was $22.08, but in CY 2010, the initial fee is $21.95.

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

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The Notice of Proposed Rulemaking (NPRM) was issued in order to establish programs by which health IT technologies will be tested and certified. Such programs were mandated by the HITECH Act, which provides incentive payments to providers who demonstrate meaningful use of certified electronic health record (EHR) technologies. Companion regulations have also been introduced which propose standards and criteria that will be necessary to demonstrate meaningful use and which propose the functional capabilities that EHR technologies must have in order to be eligible for certification.

The NPRM proposes a temporary certification program for EHR systems and modules, and lays the foundation for a permanent program that will eventually replace the temporary program. The temporary program is designed to ensure that certified technologies are in place so that providers may take advantage of the incentive payments at the earliest opportunity before the permanent program has been fully implemented.

The NPRM comes after the initial meaningful use NPRM and the Standards & Certification Interim Final Rule (IFR), published in January 2010. The Standards & Certification IFR establishes an initial set of standards, implementation specifications, and certification criteria for Complete Electronic Health Records (EHR) and EHR Modues for aodption by the HHS Secretary. The Certification Programs NPRM and the Standards & Certification IFR will operate jointly to create confidence in the security and effectiveness of electronic health IT produces and systems.

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A final rule published by the Department of Health and Human Services expanded the scope of the National Practitioner Data Bank to now include disciplinary information on all licensed health care professionals, including nurses, podiatrists, chiropractors, and physician assistants. Prior to this new rule, the databank, established under the federal Health Care Quality and Improvement Act of 1986, collected adverse findings only against physicians and dentists by state licensing agencies and credentialing bodies. Similar information involving other health professionals was collected in a separate reporting database.

Please see the attachment to read the final rule.

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

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