December 17, 2014

Medicare Pilot Program Requires Prior Authorization for Ambulance Transport Services

On December 1, 2014, the Centers for Medicare and Medicaid Services ("CMS") launched a three-year pilot program ("the program") in an effort to curb improper Medicare payments to ambulances providers. Under the program, CMS requires prior authorization for repetitive, scheduled, non-emergent ambulance transport claims billed using the following HCPCS codes: (1) A0425 - BLS/ALS mileage, per mile; (2) A0426 - Ambulance service, Advanced Life Support (ALS), non-emergency transport, Level 1; and (3) A0428 - Ambulance service, Basic Life Support (BLS), non-emergency transport. CMS defines a "repetitive ambulance service" as medically necessary ambulance transportation services that are furnished three or more times in a ten-day period, or at least once per week for at least three weeks. According to CMS, these services are often used by elderly beneficiaries that require transportation for dialysis, cancer, or wound treatment.

The prior authorization the process requires the ambulance provider to request provisional affirmation of coverage by CMS before a service is rendered to a beneficiary and before a claim is submitted for payment. CMS believes that prior authorization will ensure that the ambulance service is medically necessary and meets the applicable Medicare coverage criteria. According to CMS, the Medicare Administrative Contractor (MAC) will make every effort to review the prior authorization request and postmark decisions letters win ten business days. Each prior authorization decision may affirm up to 40 round trips per request in a 60-day period. The prior authorization request submitted by an ambulance provider must include:

  • The beneficiary's name, Medicare number, and date of birth;
  • The physician's name, national provide identifier ("NPI"), and address;
  • The provider/provider's name, NPI, and address;
  • Procedure codes;
  • Submission date of the prior authorization request;
  • Start of the 60-day period;
  • Indicate is the request is an initial or resubmission review;
  • Physician certification statement;
  • Number of transports requested;
  • Documentation from the medical record to support the medical necessity of repetitive transports;
  • Information on the origin and destination of the transports; and
  • Any other relevant document as deemed necessary by the Contractor to process the prior authorization.
For prior authorization requests denied by CMS, the ambulance provider can resolve any identified deficiencies in the request and resubmit the request; this can be done an unlimited number of times. The provider may also choose to provide the service and submit the claim for payment, even when the prior authorization is denied; however, any claim submitted will be denied, and payment can be sought through the Medicare appeals process. Finally, if an ambulance provider has not requested prior authorization before the fourth round trip, any subsequent claim will be stopped and reviewed on a prepayment review basis.

The initial stages of the pilot program apply only to ambulance providers located in South Carolina, New Jersey and Pennsylvania, and do not include ambulance transports included in a covered Part A stay or provided by an institutionally-based ambulance provider. However, even if currently outside the scope of the pilot program, providers should be alerted to CMS's recent scrutiny of ambulance transport services and may be a sign that providers could be targeted for Medicare audits in the future. If you are an ambulance provider and have any questions regarding the new prior authorization rules or the implications that the new pilot program may have on your practice, please contact an experienced healthcare attorney at 248-544-0888 or via email at wapc@wachler.com.

December 12, 2014

CMS Issues Proposed Rule Postponing ACO Penalties

On December 1, 2014, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule that would postpone penalties against accountable care organizations (ACOs) for three years. The proposed rule is one of the latest measures CMS has taken to encourage ACOs to stay in the Medicare Shared Savings Program. In 2012, as part of the rollout of the Patient Protection and Affordable Care Act, the Medicare Shared Savings Program was initiated in an effort to curb spending, while improving quality of care. Since its enactment, industry stakeholders have pushed for leniency, primarily because the Medicare Shared Savings Program penalizes ACOs after the first three years unless the ACOs voluntarily take on financial risk earlier, in exchange for larger bonuses if they perform well. While policymakers supported the penalties as a means of incentivizing change in the healthcare market, providers, particularly less experienced providers, pushed back--arguing that a more moderate approach would ease the financial risk and foster more growth. Recently, the National Association of ACOs released the results of a survey, which reported that approximately 200 of the 300 ACOs in the program were somewhat or highly unlikely to continue if they were required to accept penalties.

With the issuance of the proposed rule, CMS conveyed that it wants less experienced ACOs to remain in the program. By postponing the penalties, CMS acknowledged that some ACOs might not be ready to accept the financial risks and fear these providers might exit the program in lieu of exposing their entity to liability.

However, ACOs must abide by specific criteria if they want to take advantage of the postponement. Under the proposed rule, ACOs must have reduced their spending in their first two years in the program and be prepared to assume the financial risk of penalties after six years. Additionally, CMS plans to encourage ACOs to exit the safer track and take on more risk by decreasing the safe track bonuses from fifty percent to forty percent. Furthermore, CMS proposed a third track, which would implement new methods to determine which patients are included in the ACO. Specifically, the ACOs would start the year with a list of patients, and manage those patients' costs and care. This new system should benefit ACOs because CMS will identify the patients at the start of the year, allowing for more focused improvement efforts. Lastly, the third track will also include potential bonuses and penalties.

Wachler & Associates frequently counsels healthcare providers regarding ACOs, compliance with ACO requirements, and other healthcare fraud and abuse laws. If you have any questions regarding ACOs or how CMS's proposed rule may impact your healthcare entity, please contact an experienced healthcare attorney at 248-544-0888 or via email at wapc@wachler.com.

December 5, 2014

Deadlines for Certification with the American Board of Radiology Approaching Quickly

The American Board of Radiology's ("ABR") Board Eligibility Policy, implemented on January 1, 2012, limited the period of time that may elapse between the completion of residency training and achievement of Board Certification. Because a number of radiologists had completed their residencies but not yet achieved Board Certification when the policy went into effect, the ABR established a transitional phase-in period with specific time limits on the Board Eligibility period.

Importantly, the dates chosen by the ABR as the deadlines for achieving certification for certain radiologists are quickly approaching. For diagnostic radiology and radiation oncology, the termination dates for board eligibility status are as follows:

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As a result, radiologists who completed their training in 2004 or before but continue in the examination process are facing possible termination of "board eligibility" as soon as the end of this year. After the period of board eligibility expires, radiologists who have not achieved Board Certification will no longer be considered by the ABR to be "board eligible," and will no longer be permitted to designate themselves as such for credentialing purposes.

Moreover, re-entry into the certification process will require substantial effort. To return to "board eligible" status, the candidate must complete an additional year of training in a department with an Accreditation Council for Graduate Medical Education (ACGME)-accredited or Royal College of Physicians and Surgeons of Canada (RCPSC)-accredited diagnostic radiology or radiation oncology residency program. Additionally, the ABR must approve the additional year of training before it begins and the training must begin after expiration of board eligibility. During this one-year period, the candidate's status will be "not certified, not board eligible." Following the one-year training, the program director must attest to the candidate's successful completion. Once the ABR receives confirmation, the candidate will reenter the certification process and must pass the Core and Certifying examinations. Candidates will have a six-year period to pass the examinations.

Wachler & Associates will continue to monitor and provide timely updates on important ABR developments. If you have any questions regarding your board eligibility status, please contact an experienced healthcare attorney at 248-544-0888 or via email at wapc@wachler.com. To remain updated on healthcare news, subscribe to Wachler & Associates' health law blog by adding your email address and clicking "Subscribe" in the window on the top right of this page.

November 12, 2014

CMS Announces Increased Reimbursement for Telehealth

On October 31, 2014, the Centers for Medicare and Medicaid Services (CMS) released its CY 2015 Physician Fee Schedule Final Rule. The rule included several important changes as it relates to telehealth services. With respect to reimbursement rates, in the final rule CMS increased Medicare payments to telehealth originating sites by 0.8 percent.

In addition, the final rule provides seven new procedure codes that cover the following telehealth services:

  • Psychotherapy services (CPT codes 90845, 90846, and 90847);
  • Prolonged services in the office (CPT codes 99354 and 99355); and
  • Annual wellness visits (HCPCS codes G0438 and G0239).
For billing purposes, the originating site fee will be $24.83. CMS also introduced new CPT code 99490, which allows physicians to bill Medicare for chronic care management. The monthly, unadjusted, non-facility fee will be $42.60. Most importantly, CPT 99490 is considered a physician service and is, therefore, available nationwide and not restricted to rural-only telehealth.

Although these changes in the final rule have been received by many telehealth advocates and providers as welcomed developments, CMS did not eliminate the requirement for patients to be located in a rural area in order to receive telehealth services, despite suggestions from many commenters in response to the 2015 Physician Fee Schedule proposed rule to expand the reach of telehealth.

If you or your healthcare entity have any questions regarding telehealth or implications of the final rule on your telehealth practice, or are interested in introducing telehealth into your practice, please contact an experienced healthcare attorney by phone at 248-544-0888 or via email at wapc@wachler.com. Wachler & Associates will continue to keep you updated on telehealth developments, as well as other healthcare news. If you are interested, please subscribe to Wachler & Associates' health law blog by adding your email address and clicking "Subscribe" in the window on the top right of this page.

November 5, 2014

CMS Finalizes Home Health Prospective Payment System Rule

On October 30, 2014, the Centers for Medicare and Medicaid Services (CMS) announced its final rule regarding changes to the Medicare home health care prospective payment system. The changes, which are set to go into effect in calendar year 2015, will reduce payments to home health agencies (HHAs) by approximately .30 percent, or $60 million. This decrease comes as a result of the 2.1 percent home health payment update percentage. Additionally, the decrease implements the second year of the four-year phase in of the rebasing adjustments promulgated by Section 3131(a) of the Affordable Care Act.

CMS stated that the final rule is one of several to be released for calendar year 2015 aimed at reflecting a broader strategy to deliver better care at lower cost by increasing delivery efficiency. Provisions in the final rule should transition the healthcare system into one that values quality over quantity by focusing on reforms such as helping manage and improve chronic diseases, measuring for better health outcomes, focusing on disease prevention and fostering a more-efficient and coordinated system.

The Medicare program reimburses HHAs through a prospective payment system that pays higher rates for beneficiaries with greater needs. Currently, all HHAs must provide relevant data from patient assessments, which CMS uses to annually determine payment rates. In order to qualify for the Medicare home health benefit, a beneficiary must be cared for by a physician, require physical therapy or speech-language pathology, require intermittent skilled nursing care, or continue to need occupational therapy. Additionally, the beneficiary is required to be homebound and receive services from a Medicare-approved HHA. Outlined below are changes that the final rule makes to various aspects related to the home health prospective payment system.

Face-to-Face Encounter Regulatory Requirements Reform- Under the ACA, certifying physicians, or allowed non-physician providers, are required to have a face-to-face encounter with a beneficiary before the physician certifies the beneficiary's home health benefit eligibility. Under current requirements, the encounter must occur within 90 days before care begins, or within 30 days after care begins. In addition, part of the documentation must include a "brief narrative" that explains why the clinical findings during the encounter support that the patient is homebound and needs skilled services.

In the final rule, CMS finalized three changes to the face-to-face encounter documentation requirements that are effective for start of care episodes beginning on or after January 1, 2015. First, CMS eliminated the current narrative requirement for most services. The certifying physician must still certify that the face-to-face encounter occurred, that the encounter was related to the primary reason for home health services and document the date of such encounter. CMS will require the certifying physician to provide documentation in their medical records, or when applicable the acute/post-acute care facility's medical records, to be used as the basis for certification of the beneficiary's eligibility for home health services. CMS confirmed that the medical records should include the visit note from the face-to-face encounter. Second, CMS finalized that if a HHA claim is denied, the related physician claim for certifying or re-certifying the beneficiary's eligibility is considered non-covered as well because there is no longer a respective claim for Medicare-covered home health services. Lastly, CMS clarified that face-to-face encounters are required for certifications, rather than initial episodes. CMS also noted that certification, as opposed to re-certification, is typically considered to be whenever a new assessment is completed to initiate care.

Therapy Reassessments Modifications- The final rule eliminated the 13th and 19th visit reassessment requirements for therapists. Instead, for episodes beginning on or after January 1, 2015, a qualified therapist, not an assistant, is required to provide the needed services and reassess the patient at least once every 30 days. CMS hopes this change will reduce the burden on HHAs who formerly had to count visits. Additionally, the new policy should reduce the risk of non-covered stays, allowing therapists to focus on providing higher quality of care.

Conditions of Participation Changes for Speech-language Pathologists- In the final rule, CMS changed the Home Health Conditions of Participation for speech language pathologists (SLPs) in an effort to provide more flexibility by deferring to State licensure requirements. Following the implementation, an SLP is an individual that meets one of the following requirements:

  • Has a master's or doctoral degree in speech-language pathology, and is licensed as a speech-language pathologist by the state where they furnish services; or
  • Has a master's or doctoral degree in speech-language pathology, and successfully completed 350 hours of supervised clinical practicum (or is on the process of accumulating such supervised clinical experience), has at least nine months of supervised full-time speech-language pathology experience after obtaining a master's or doctoral degree in speech-language pathology or related field, and has successfully completed a national examination approved by the Secretary.
Wachler & Associates regularly counsels healthcare providers regarding rules and regulations involving Medicare compliance and reimbursement, including application to home health agencies. If you have questions about how CMS's final rule may impact your agency, please contact an experienced healthcare attorney at 248-544-0888 or via email at wapc@wachler.com. To stay updated on breaking healthcare news, please subscribe to the Wachler & Associates health law blog by adding your email address and clicking "Subscribe" in the window on the top right of this page.

November 4, 2014

Office of Medicare Hearings and Appeals Hosts Second Medicare Appellant Forum

On October 29th, the Office of Medicare Hearings and Appeals (OMHA) hosted its second Appellant Forum in Washington, D.C. OMHA is responsible for the Administrative Law Judge (ALJ) level of the Medicare administrative process, and thus operates the third level of appeals for Medicare audit denials. The Appellant Forum was intended to provide updates to Medicare audit appellants on the status of OMHA operations and to relay information regarding OMHA initiatives to reduce backlog in the processing of Medicare appeals.

Representatives from Wachler & Associates attended the Appellant Forum and gained valuable information for appellants facing delays in Medicare ALJ appeals. OMHA's Chief ALJ, Hon. Nancy Griswold, explained the historical backdrop that led to OMHA's current backlog in appeals and described OMHA's attempts to find a "holistic solution" to ALJ workload.

Judge Griswold also updated providers on statistics regarding OMHA's appellant workload. She explained that Medicare Part A and Part B appeals amount to 99% of the appeals pending at the ALJ level. Further, that despite increased productivity by ALJs, OMHA currently receives 4 times the amount of appeals per day as the ALJ's are able to adjudicate per day. In January 2014, OMHA received 14,000 appeal receipts per week. The unprecedented amount of appeals has caused OMHA to fail to meet its 90-day statutory requirement for adjudication. As of September 2014, the average wait time for an ALJ decision was 514 days, which again marked a significant increase from the fiscal year 2013 average.

The Appellant Forum highlighted several OMHA initiatives to address ALJ workload and pending appeals. First, OMHA received an 18.6% increase in appropriations for FY 2014, which allowed OMHA to open a Kansas City Field Office and increase adjudication staff and other resources. Additionally, OMHA has several IT initiatives under way to streamline the appeals process and improve efficiency. OMHA's IT initiatives include an "ALJ Appeal Status Information System" or AASIS, which provides appellants access to basic information regarding their appeals. OMHA hopes to roll out AASIS by the end of 2014. AASIS is OMHA's interim solution until their permanent appeal portal is in place. OMHA's permanent electronic appeal portal will be named the Electronic Case Adjudication and Processing Environment, or ECAPE. ECAPE, which is still in the development phase, will allow appellants to electronically file requests for hearing, submit electronic evidence, share records, communicate with OMHA, view ALJ assignment status, and other functions. ECAPE will be OMHA's long term solution to the modernizing the Medicare audit ALJ appeal process.

The Appellant Forum also updated appellants on two important pilot programs that were introduced by OMHA during the initial Appellant Forum in February. OMHA's Statistical Sampling pilot is intended to allow appellants to adjudicate large volumes of appeals by drawing a random sample of claims to adjudicate before an ALJ, and then extrapolating the results of the sample to the universe of claims at issue. Jason Green, Director of OHMA's Program Evaluation and Policy Division, explained that no appeals have been adjudicated via this method and that OMHA is exploring ways to tweak the pilot's strict eligibility criteria in order to make the pilot more available to appellants. OMHA's other pilot program, the Settlement Conference Facilitation (SCF) Pilot, follows a mediation model and brings appellants and CMS together to work towards a mutually agreeable resolution of the claims. Mr. Green, who our firm views as an invaluable person in OMHA's attempt to resolve the ALJ backlog, explained that only one SCF has occurred and the parties failed to reach an agreement. Mr. Green is hopeful that the forthcoming SCF conferences will be more successful.

In all, the Appellant Forum served to update providers and suppliers on OMHA's ALJ workload and their efforts to reduce current backlog. OMHA acknowledged that their current ability to meet the 90-day requirement negatively affects the provider community, and that they continue to look for holistic solutions to reduce workload to a sustainable volume.

Wachler & Associates continues to stay up to date on issues facing Medicare audit appellants. Our attorneys work with OMHA on a regular basis and provide input on the ALJ appeals process. We currently represent providers appealing audits through the Settlement Conference Facilitation pilot program, and have experience using statistical samples to appeal large volume audits. Our firm will continue to update you regarding developments in OMHA's ALJ appeal backlog and any other developments in the Medicare audit landscape.

If you or your healthcare entity have any questions regarding OMHA's Appellant Forum or Medicare appeals pilot programs, or need assistance in defending Medicare, Medicaid or Third Party Payer audits, please contact an experienced healthcare attorney at (248) 544-0888 or by visiting our website, www.wachler.com.

October 28, 2014

CMS Extends Fraud and Abuse Waivers for ACO Shared Savings Program

On October 17, 2014, the Centers for Medicare and Medicaid Services (CMS) extended its interim final rule regarding fraud and abuse waivers for accountable care organizations (ACOs) that participate in the Medicare Shared Savings Program. The Medicare Shared Savings Program was one of the initial steps taken under the Affordable Care Act to both increase quality and lower costs in the Medicare program. ACOs that participate in the Medicare Shared Savings Program can share in the savings generated to Medicare.

Originally, the interim final rule was published in the November 2, 2011 Federal Register, and had the typical three-year period before becoming a final rule. The continuation of the interim final rule extends the timeline for an additional year, establishing a new deadline of November 2, 2015. The interim final rule offers five waivers to ACOs, which allow healthcare entities to form and operate ACOs without fear of violating federal fraud and abuse laws. The ACO waivers include:

  • An ACO participation waiver;
  • An ACO pre-participation waiver;
  • A compliance with the Physician Self-Referral (Stark) law waiver for the Gainsharing Civil Monetary Penalties (CMP) and Anti-Kickback Statute (AKS);
  • A shared savings distribution waiver; and
  • A patient incentive waiver.

    CMS offered these exemptions to the Stark law, AKS, and Gainsharing CMP to encourage ACOs to participate in the Medicare Shared Savings Program. Noting the success of the waivers, CMS extended the deadline in an attempt to prevent disruptions in the ongoing operations of ACOs. Additionally, CMS was concerned that the expiration of the interim final rule would result in considerable legal uncertainty for ACOs and, in turn, place the success of the Medicare Shared Savings Program at risk. In its announcement, CMS adamantly affirmed its commitment to establishing ACO waivers.

    CMS's deadline extension also allows time for further comments from providers, policymakers, and others with a stake in the interim final rule. Specifically, CMS requested input regarding:

  • Whether the existing waivers serve the needs of ACOs and Medicare;
  • How and to what extent ACOs are using the waivers;
  • Whether the waivers adequately protect the Medicare program and beneficiaries from the types of harms associated with referral payments or payments to reduce or limit services; and
  • Whether there are new or changed considerations that should inform the development of additional notice and comment rulemaking.

    Wachler & Associates regularly counsels healthcare providers regarding compliance with ACO requirements, the Stark Law, AKS, and other fraud and abuse laws. If you have any questions regarding ACOs or how CMS's interim final rule and ACO waivers may impact your health care entity, or seek assistance in commenting on any of the provisions, please contact an experienced healthcare attorney at 248-544-0888 or via email at wapc@wachler.com.

  • October 22, 2014

    IMPACT ACT to Standardize Data Collection for Post-Acute Care Facilities

    On October 6, 2014, the Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act) was signed into law. The bill moved swiftly through both houses due to its joint development by the House Ways and Means Committee and the Senate Finance Committee. The Post-Acute Care (PAC) community also voiced strong support for the IMPACT Act.

    Currently, PAC payments to Medicare are typically based on the setting of care. This payment system often results in PAC providers supplying comparable services, but receiving dramatically different reimbursement amounts due to their setting of care. Under the IMPACT Act, the US Department of Health and Human Services (HHS) is tasked with promulgating a reporting system for PAC providers, which includes long-term care hospitals, skilled nursing facilities, inpatient rehabilitation facilities, and home health agencies. PAC providers will be required to report standardized data regarding patient care assessment, resource use, and quality measures. This data collection will allow providers and policymakers to analyze and compare the cost, quality, and type of services offered across a range of PAC providers. It is important to note that the IMPACT Act does not apply to critical access hospitals.

    Specifically with regards to quality measures, PAC providers will be required to report on the following issues:

  • Functional status and Cognitive function and changes to either;
  • Skin integrity and changes in skin integrity;
  • Incidence of major falls;
  • Medication reconciliation; and
  • The existence of, and providing for, transfer of care preferences and health information.

    Additionally, the IMPACT Act will require PAC providers to report standardized patient care assessment data at admission and discharge regarding:

  • Mental status and cognitive function;
  • Functional status;
  • Treatments, interventions, and special services;
  • Impairments;
  • Medical conditions and comorbidities (the simultaneous presence of two conditions in a patient); and
  • Other domains that the Secretary of HHS may specify.

    With regard to resource use, the IMPACT Act mandates that PAC Providers report estimated Medicare spending per beneficiary, discharge to community, and any measures to demonstrate risk-adjusted, all-condition, potentially preventable hospital readmission rates.

    Implementation of these reporting requirements will be phased in over a three-year period starting in 2016. Once the Medicare Payment Advisory Commission (MedPAC) collects and analyzes the data, the IMPACT Act requires it to report the merits of the new system to Congress and recommend specific features of the character-based payment system, so that providers can transition away from the current, settings-based system. Eventually, MedPAC and HHS must report to Congress regarding recommendations on a PAC prospective payment system that applies to all PAC providers.

    If you have questions regarding the IMPACT Act or how it may affect your practice, please contact an experienced healthcare attorney at 248-544-0888 or via email at wapc@wachler.com. We will continue to notify you of any new federal or state healthcare legislation. To remain updated on healthcare news, subscribe to Wachler & Associates' health law blog by adding your email address and clicking "Subscribe" in the window on the top right of this page.

  • October 13, 2014

    OIG Releases Proposed Rule Affecting Anti-Kickback Statute Safe Harbors

    The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently published a proposed rule that affects providers and suppliers seeking to comply with the federal Anti-Kickback Statute (AKS) and Civil Monetary Penalty (CMP) provisions. The proposed rule alters existing safe harbors, codifies statutory changes, and adds new protections for arrangements that the OIG believes present low risk to federal health care programs.

    The AKS provides criminal penalties for individuals or entities that knowingly and willfully offer, pay, solicit, or receive remuneration in order to induce or reward the referral of business reimbursable under Federal health care programs. The law prohibits all types of remuneration, including kickbacks, bribes, and rebates. Due to the extremely broad reach of the statute, Congress authorized the OIG to develop safe harbor regulations that protect industry payment and business practices that, if structured properly, would not be treated as criminal offenses under the AKS even though they may induce referrals of business under the Federal health care programs. In authorizing these safe harbors, Congress intended that the safe harbor regulations be updated periodically to reflect changes in business practices and technology in the health care industry. The proposed rule will also codify statutory changes emanating from the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 and the Affordable Care Act of 2010.

    Specifically, the proposed rule applies to safe harbors or exceptions related to 1) referral services, 2) cost-sharing waivers, 3) agreements between Medicare Advantage (MA) plans and Federally Qualified Health Centers (FQHCs), 4) the Medicare Coverage Gap Discount Program, and 5) free or discounted local transportation services.

    Referral Services - The proposed rule makes a technical correction to the safe harbor for referral services. As currently written, the safe harbor's language resulted in an unintended ambiguity that some viewed to permit referral services to adjust their fees based on the volume of referrals made to a provider. The proposed rule alters the language to now prohibit payments based on the volume or value of referrals to, or other business generated by, either party for the other party. The rule clarifies that referral services cannot adjust fees based on the volume of business generated for a health care entity.

    Cost-Sharing Waivers - The OIG has longstanding guidance that demonstrates the potential abuse of cost-sharing waivers in the context of the AKS. Waivers of cost-sharing also implicate the CMP prohibition against beneficiary inducements. The proposed rule seeks to except from liability arrangements that meet requirements relating to (1) certain waivers or reductions by pharmacies of any cost-sharing imposed under Medicare Part D, and (2) emergency ambulance services owned and operated by a State, a political subdivision of a State, or a federally recognized Indian tribe. Accordingly, the emergency ambulance safe harbor will not apply to contracts with private outside ambulance providers or suppliers. Also, in order to meet the safe harbor for waivers or reductions of cost-sharing under Medicare Part D, a pharmacy must demonstrate that (1) the waiver is not advertised or part of a solicitation, (2) the pharmacy does not routinely waive the cost sharing, and (3) before waiving the cost sharing, the pharmacy determines in good faith that the beneficiary has a financial need or the pharmacy fails to collect the cost-sharing amount after making reasonable effort to do so. However, if the waiver is made on behalf of a subsidy-eligible individual, requirements (2) and (3) will not apply.

    FQHCs and MA Organizations - The Medicare Modernization Act amended the AKS to protect any remuneration between a Federally Qualified Health Center (FQHC) and an Medicare Advantage (MA) organization pursuant to a written agreement. The amended law requires that the written agreement between the two entities specifically provide that the MA organization will pay the contracting FQHC no less than the level and amount of payment that the plan would make for the same services if the services were furnished by another type of entity. The proposed rule would incorporate these changes by implementing this exception into the safe harbor regulations pursuant to a new section, 42 CFR 1001.952(z).

    Medicare Coverage Gap Discount Program - The proposed rule will protect discounts in the price of applicable drugs furnished to applicable beneficiaries under the Medicare Coverage Gap Discount Program, so long as the manufacturer participates in, and is in full compliance with, the Discount Program. The proposed rule would incorporate by reference certain definitions found in the Medicare Coverage Gap Discount Program law.

    Free or Discounted Local Transportation Services
    - The new rule proposes to establish a new safe harbor to protect free or discounted local transportation (within 25 miles) services provided to Federal health care program beneficiaries. The proposed rule requires that the transportation services only be offered to established patients, for medically necessary services, and be determined in a manner unrelated to the past or anticipated volume or value of Federal health care program business. The OIG proposes to limit the protection of the safe harbor to an "eligible entity," which may exclude DME suppliers, pharmaceutical companies, and laboratories. The OIG also expressed concerns and sought comments as to whether the safe harbor should be available to the home health industry. Additionally, the safe harbor will include several restrictions that limit providers' ability to offer free transportation based on the volume or value of a patient's anticipated federal health care program business. Further, the safe harbor will not apply to air, luxury, or ambulance level-transportation. Lastly, the transportation services cannot be marketed, cannot involve marketing, and cannot accept per-beneficiary payments for transportation.


    Please note that these changes are all a part of the OIG's "proposed rule," and therefore are open to provider input via the OIG comment solicitation process. Also, please be aware that the proposed rule includes changes to the OIG's CMP authorities regarding beneficiary inducements and "gainsharing" that are not addressed in this blog.

    Wachler & Associates PC counsels healthcare providers nationwide regarding compliance with the Anti-Kickback State and safe harbors. If you or your healthcare entity seek clarification as to how the OIG's proposed rule may impact your healthcare entity, or seek assistance in commenting on any of the provisions found in the proposed rule, please contact an experienced healthcare attorney at 248-544-0888 or via email at wapc@wachler.com

    October 6, 2014

    Office for Civil Rights Advisor Warns Providers on HIPAA Audits: "Get Your House In Order"

    On September 9, Linda Sanches, the Senior Advisor for the U.S. Department of Health and Human Services' Office for Civil Rights (OCR) warned that Health Insurance Portability and Accountability Act (HIPAA) audits are forthcoming. Speaking at the HIMSS Privacy and Security Forum in Boston, Sanches cautioned attendees that the best defense to an audit is conducting periodic and comprehensive risk analyses focused on administrative and technical protections, as well as human error vulnerabilities. "The onus is on you to prove that you had the proper systems in place," Sanches warned, advising providers to proactively perform risk analyses in advance of a HIPAA audit.

    To attendees' disappointment, Sanches did not unveil a start date for the HIPAA audits. Instead, Sanches explained that the OCR has postponed initiating HIPAA auditing to implement new technology with increased auditing capacities. Originally, the OCR intended to conduct a total of 400 desk audits. However, Sanches confirmed that now the OCR will likely perform fewer than 200 targeted desk audits and an unconfirmed number of on-site audits. A variety of providers across practice area, size, and geographic location should expect to be audited. Audited entities will be responsible for compliance with both the HIPAA Privacy Rule and the HIPAA Security Rule. In addition, providers should have available an updated list of business associates with contact information and services provided. Sanches warned that the OCR will use a provider's business associate list to select business associates for HIPAA auditing.

    Providers with patterns in reported breaches are more likely to face HIPAA auditing. Sanches emphasized that providers who fail to demonstrate compliance with the HIPAA privacy rule and HIPAA security rule may face hefty settlement fines based on the amount of harm and provisions violated. When discussing fines, Sanches stated, "It's basic math. How many people were affected?"

    Since the inception of the HIPAA Privacy and Security Rules, Wachler & Associates has counseled providers and other covered entities in HIPAA compliance. In order to attain compliance, providers should update security policies and procedures, business associate agreements, privacy policies and procedures, and HIPAA privacy notices. Additionally, all employees should receive regular training in HIPAA compliance. If your entity does not already have these procedures in place Wachler & Associates can help you implement these important compliance measures. If you have any questions regarding HIPAA, HIPAA audits or require assistance developing a HIPAA compliance plan, please contact an experienced healthcare attorney at 248-544-0888 or via email at wapc@wachler.com.

    October 2, 2014

    CMS Open Door Forum Clarifies Key Points of 68% Settlement Offer to Hospitals

    On September 30, the Centers for Medicare & Medicaid Services (CMS) held a Hospital & Hospital Quality Open Door Forum on a variety of topics pertinent to hospitals. CMS opened the forum with an unexpected update on CMS' recently announced 68% settlement offer for patient status claim denials. As many providers are already aware, CMS has offered to pay 68% of the net payable value of eligible patient status claim denials in exchange for hospitals' withdrawal of all pending eligible appeals.

    While the September 30 Open Door Forum covered a variety of topics unrelated to the settlement offer, CMS clarified key points regarding the settlement offer and providers should take note.

    First and foremost, CMS clarified that Part A patient status denials submitted for re-billing under Part B are eligible for inclusion in the settlement so long as the hospital has not received payment on the rebilled claim. In response to a question, CMS specified that as long as the hospital has not received Part B payment on a rebilled claim on the date that the settlement request is submitted, the claim is eligible for inclusion in the settlement process. CMS indicated that this issue will be discussed in greater detail during the October 9 Open Door Forum. Additionally, CMS indicated that it is not contemplating an extension to the October 31, 2014 filing deadline.

    CMS announced that it will post additional Frequently Asked Questions on its Inpatient Hospital Reviews website later this week.

    Wachler & Associates healthcare attorneys will continue to monitor the ongoing developments regarding CMS' 68% settlement offer. If you have any questions regarding the settlement offer, its potential implications on your pending appeals, or if you need assistance in submitting a settlement request, please contact an experienced healthcare attorney at (248) 544-0888 or at wapc@wachler.com.

    October 1, 2014

    OCR Offers Guidance on HIPAA Privacy Rule and Same-sex Marriage

    In September 2014, the U.S. Department of Health and Human Services Office for Civil Rights (OCR) released guidance to assist covered entities in understanding their obligations under the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule in light of the Supreme Court's 2013 decision in United States v. Windsor. In Windsor, the Supreme Court struck down Section 3 of the Defense of Marriage Act (DOMA), which restricted interpretations of "spouse" and "marriage" in federal law to opposite-sex marriages, as a violation of the Due Process Clause of the Fifth Amendment. As a result, OCR opined that covered entities and applicable business associates must take into account lawfully married same-sex couples when applying federal law.

    OCR noted that the Privacy Rule's definition of "family members" includes the terms "spouse" and "marriage." Under the Privacy Rule, a spouse is defined as any individual who is in a legally valid marriage sanctioned by a state, territory, or foreign jurisdiction (assuming that the marriage performed in a foreign jurisdiction would be recognized by a U.S. jurisdiction). OCR clarified that "marriage" includes same-sex marriages, a family member includes dependents of that marriage, and that these terms apply to individuals who are legally married, "whether or not they live or receive services in a jurisdiction that recognizes their marriage."

    OCR also provided two examples how this clarified definition of a family member would be applied to specific provisions in the Privacy Rule. Specifically, §164.510(b) Standard: uses and disclosures for involvement in the individual's care and notification purposes allows protected health information to be shared with a patient's spouse and family members. OCR opined that in light of Windsor, covered entities must consider legally married same-sex spouses, regardless of where they live, to be family members.

    In addition, §164.502(a)(5)(i) Use and disclosure of genetic information for underwriting purposes prohibits health plans from disclosing or using genetic information for underwriting purposes. Applying Windsor, OCR stated that the genetic tests of a same-sex spouse of the individual, or the manifestation of a disease or disorder in the same-sex spouse of the individual would fall within this prohibition.

    OCR concluded by indicating that it planned to provide more written guidance or rulemaking that would address the topic of same-sex spouses acting as personal representatives under the Privacy Rule.

    Wachler & Associates continues to monitor and provide timely updates on important developments under HIPAA. If you have questions regarding OCR's guidance, how the Windsor decision may impact your practice, or a more general HIPAA inquiry, please contact an experienced healthcare attorney at 248-544-0888 or via email at wapc@wachler.com. To stay updates on healthcare news, subscribe to Wachler & Associates' health law blog by adding your email address and clicking "Subscribe" in the window on the top right of this page.

    September 30, 2014

    Medicare to Introduce More Star Ratings to Compare Providers

    CMS recently announced that it will soon be adding additional star ratings to the Medicare.gov website by 2015. CMS has already implemented the star rating system to provide consumers quality and safety information regarding nursing homes and physician groups on a five-star scale. The system is supposed to allow consumers to make informed decisions about their provider, while giving providers something to strive for. CMS Deputy Administer for Innovation and Quality, Dr. Patrick Conway, stated that the star rating system is based on scientific standards of both accuracy and rigor. Because providers differ on the quality of care and services they offer to customers, CMS touts its star rating system as giving consumers a "snap-shot" of the care an individual provider offers. By 2015, CMS plans to add hospital groups and dialysis and homecare providers to the rating system.

    While advocates of the consumer-oriented star-rating system are excited about the inclusion of more provider types, many providers are speaking out against the system. According to a recent article on Modern Healthcare, after being notified of dialysis and homecare providers' inclusion, a spokesman for Kidney Care Partners--a coalition of dialysis providers--claimed that the star rating system compares apples and oranges. The spokesman argued that the inaccurate comparison results in confused patients not really understanding what the amount of stars mean. Proponents of the rating system try to rebut views like those expressed by Kidney Care Partners, by arguing that the health care community should stress transparency, rather than worry about the imperfections in the rating system. Echoing these sentiments, Dr. John Santa, the Medical Director for Consumer Reports, stated that no provider will score well on every rating system, but the abundance of ratings will eventually provide a clearer picture of providers' quality of care and safety.

    Although proponents of the star rating system continue to espouse its positive aspects, many providers remain concerned. Because providers can lose accreditation for scoring poorly on certain measures of safety and quality, and even face fines, these ratings are becoming more important. Several providers urge CMS to delay the inclusion of more provider types to the rating system until it can provide a more complete performance rating. They assert that the measurement differences may result in one provider scoring high in one program and low in another and, although the system does not have to be perfect, it must be reliable. Opponents say that to allow otherwise is to misguide patients and may potentially lead to unfair financial penalties on the entities.

    If you have questions regarding the Medicare five-star rating system or how the anticipated inclusion of provider-types to the rating system may impact your practice, please contact an experienced healthcare attorney at 248-544-0888 or via email at wapc@wachler.com. We will continue to monitor the rating system and notify you of any changes. To stay updated on healthcare news, subscribe to Wachler & Associates' health law blog by adding your email address and clicking "Subscribe" in the window on the top right of this page.

    September 29, 2014

    Federation of State Medical Boards Releases Model Legislation to Expedite Physician Licensure in Lieu of Telemedicine Push

    As the demand for telemedicine increases across the country, states continue to grapple with licensure issues arising from physicians working across state lines. In an effort to resolve the dilemma, the Federation of State Medical Boards (FSMB) published model legislation designed to assist in the implementation of a multistate compact, by which physicians from one state can be expeditiously licensed in another state to practice telemedicine.

    FSMB's model legislation requires a minimum of seven states to participate, with each state providing representatives for a governing commission. When at least seven states have joined, the commission would openly share disciplinary and credentialing information in a joint effort to quickly license physicians that are already licensed in one of the other participating states. This sharing of information would allow the participating states to license physicians without being saddled with the responsibility of independently collecting the large amount of paperwork required to license a physician. The governing commission of the compact would not have any licensing power itself, but rather would serve to facilitate the quick transfer of information between participating states. As an example, if Illinois, Michigan, and Indiana joined the multi-state compact, a physician licensed in Michigan, wishing to practice telemedicine in Illinois and Indiana, would have the compact commissioner obtain the necessary credentialing information and approval from the Michigan medical board, collect the licensing fees mandated in Illinois and Indiana, and then process an expedited license.

    Members of the FSMB are hopeful for support of their model legislation because it ensures that licensure remains a state right and avoids federal intervention. A multi-state compact will hopefully solve the licensure dilemma, allowing physicians, for example, to use telemedicine technologies to offer specialized care to rural communities. One such state is Wyoming, which relies on telemedicine to care for its residents. The Executive Director of the Wyoming State Board of Medicine, Kevin Bohnenblust, stated that Wyoming has approximately 3,000 licensed physicians, but only 1,200 physicians that actually live in the state. As a prominent "importer" of telemedicine, Wyoming is hopeful that the FSMB policy takes effect. Bohnenblust also notes that states with renowned hospitals like Michigan, Minnesota, and Ohio, could benefit as "exporters" of telemedicine.

    Although there are few opponents of the FSMB model legislation, some are leery of establishing new governmental organizations. However, FSMB has considerable support from the American Medical Association, which recently stated that the multi-state compact legislation aligns with their efforts to modernize state licensure frameworks.

    As previously addressed on this blog, with the release of the model legislation, FSMB continues to be a strong supporter of integrating telemedicine practices across state lines. Providers interested in introducing telemedicine technologies into their practices should review state licensure laws, as well as any Fraud & Abuse issues that may arise from adding a new line of business to their practice. If you or your healthcare entity needs guidance regarding the practice of telemedicine, please contact a Wachler & Associates attorney by phone at 248-544-0888 or via email at wapc@wachler.com. Our firm will continue to keep you up to date on legislative developments applicable to telemedicine, as well as all other healthcare law news. If interested, please subscribe to Wachler & Associates' health law blog by adding your email address and clicking "Subscribe" in the window on the top right of this page.

    September 25, 2014

    CMS Final Rule Provides Greater Flexibility for Meeting EHR Meaningful Use Requirements

    On August 29, 2014, the Department of Health and Human Services (HHS) published a Centers for Medicare & Medicaid Services (CMS) final rule allowing providers more flexibility in meeting the meaningful-use requirements for the electronic health records (EHR) incentive program. The final rule, which was an adoption of the May 2014 proposed rule, aims to assist providers in utilizing Certified EHR Technology (CEHRT) by giving eligible providers another year to continue using the 2011 Edition CEHRT, or a combination of the 2011 and 2014 Edition CEHRT. However, providers should be aware that in 2015 they are required to use the 2014 Edition CEHRT software.

    Additionally, the final rule extends Stage 2 of meaningful use through 2016, thus delaying implementation of Stage 3. For those providers who first became meaningful users of EHR in 2011 or 2012, Stage 3 of meaningful use is now scheduled to begin in 2017. According to CMS, the updates in the final rule will better enable providers to participate and meet meaningful use objectives, including:

    • Electronic prescribing;
    • Checking for drug allergies and interactions;
    • Providing clinical summaries to patients;
    • Reporting on key public health data; and
    • Reporting on quality measures.

    Wachler & Associates will continue to monitor CMS rule-making and guidance related to EHR meaningful-use criteria, as well as other breaking health care news. If you need help understanding the meaningful-use requirements or assistance with negotiating EHR contracts, please contact an experienced healthcare attorney at Wachler & Associates via phone at 248-544-0888 or email at wapc@wachler.com.