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Region A: The RAC for Region A, DCS Healthcare, posted three new issues for non-medical necessity DRG validation inpatient claims review for providers in District of Columbia, Connecticut, Massachusetts, Maine, Delaware, New Jersey, New York, New Hampshire, Pennsylvania, Rhode Island, and Vermont.

Region B: Region B’s RAC, CGI, added 20 new issues for non-medical necessity DRG-validation inpatient claims to its CMS-approved list for providers in all Region B states.

Region C: Connolly Healthcare posted 30 new issues for non-medical necessity DRG validation inpatient claims review for providers in the following Region C states: Alabama, Arkansas, Colorado, Florida, Georgia, Louisiana, Mississippi, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee and Texas.

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In a decision issued February 10, 2010, the Medicare Appeals Council reached a decision on an appeal from the RAC Demonstration Project. The Recovery Audit Contractor (RAC) initially found that the provider had received an overpayment for the inpatient services covered under Medicare Part A, but the beneficiary met the criteria for outpatient observation. Nevertheless, the RAC denied the entire claim. The provider ultimately appealed to an Administrative Law Judge (ALJ). The ALJ’s decision was “partially favorable.” The ALJ denied Medicare Part A coverage for the inpatient services, but found that the “observation and underlying care” services under Medicare Part B were warranted. The Medicare Appeals Council followed the ALJ’s decision, stating that the Centers for Medicare and Medicaid Services’ (CMS) Medicare Benefits Policy Manual clearly indicates that the payment may be made for covered hospital services under Part B, if a Part A claim is denied for one of several reasons. The Council required the RAC to work with the provider to arrange for billing under Part B, and offset any Part A overpayment.

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

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Yet another way that the Patient Protection and Affordable Care Act (the Act), otherwise known as the Health Reform bill, impacts health care providers is the strengthening of the Federal False Claims Act (FCA).

For example, Section 6402 of the Act amends Section 1128 B of the Social Security Act to expressly define services performed or billed in violation of the anti-kickback statute as false claims: “…a claim that includes items or services resulting from a violation of this section constitutes a false or fraudulent claim…”

In addition to the reinforcement of false claims liability for anti-kickback violations, Section 6402 establishes deadlines for repaying health care overpayments. Failure to meet the deadlines causes providers to be in violation of the FCA’s “reverse false claims” provision. The deadline for reporting and returning overpayments is the later of 60 days after the date the overpayment is identified, or the date any corresponding cost report is due, if applicable.

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The Patient Protection and Affordable Care Act, also known as the Healthcare Reform Bill, signed into law last week by President Obama, includes several provisions from the National Pain Care Policy Act. The National Pain Care Policy Act is legislation designed to improve pain care for the more than 76.5 million Americans affected by pain. The American Pain Foundation made an announcement regarding this inclusion, attributing the success to a grassroots effort to bring attention to improving pain care in the United States.

The provisions of the National Pain Care Policy Act 2009 included in the Patient Protection and Affordable Care Act are located in Section 4305 of the Act, “Advancing research and treatment for pain care management.”

  • Secretary of Health and Human Services is required to enter into an agreement with the Institute of Medicine of the National Academics to hold a Conference on Pain. The purpose of the conference is to increase the recognition of pain as a significant public health problem in the U.S. and to evaluate the adequacy of pain treatment.
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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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