February 2010 Archives

February 21, 2010

RACs Reporting Potential Cases of Fraud

February 22, 2010: In a report released last week, CMS revealed that Recovery Audit Contractors (RACs) referred two cases of potential fraud to the Department of Health and Human Services Office of Inspector General (OIG) during the RAC Demonstration Program between March 2005 and March 2008.

The published report states that fraud detection was not a part of the scope of work for demonstration RACs. However, RACs were to report claims that they determined to be potentially fraudulent to the CMS Project Officer. The CMS Project Officer had the responsibility to send the referrals to the Program Integrity Group at CMS to determine if the referral should be sent to the PSC and/or law enforcement.

The two cases of potential fraud referred by RACs to CMS during the demonstration project were sent by one RAC. The RAC reported the potential fraud to the CMS Project Officer. According to the RAC's report to CMS, it did not have contact with the providers with regards to the potential fraud and completed its review of the providers.

Another RAC reported that it notified CMS of claims involving millions of dollars in improper payments. In this situation, CMS directed the RAC to cease its review of the claims. CMS then referred the claims to the PSC and/or law enforcement.

During the Demonstration Program CMS did not provide formal training to the RACs regarding the identification of Medicare fraud. However, CMS has revealed that in the permanent program it plans to educate and train RACs on the identification and referral of potential fraud.

In its report the OIG supported this training and recommended that CMS provide permanent RACs with mandatory training on identification of potential fraud, and to develop guidelines for RACs to assist when determining whether to report cases of potential fraud.

Click here read the report in its entirety.

For more information visit our RAC website at http://www.racattorneys.com/, or contact one of our RAC attorneys at 248-544-0888.

February 21, 2010

Preventing the 21 percent cut in Medicare payments - Hurdles to Overcome in the Senate

February 2010: In November 2009, the U.S. House of Representatives passed the Medicare Physician Payment Reform Act of 2000, a bill that blocks a 21.2 percent physician-payment cut. Specifically, the bill would amend the Social Security Act to reform the Medicare Sustainable Growth Rates (SGR) payment system for physicians. The SGR was originally created in 1997 to control Medicare spending by cutting payments to doctors if costs exceeded predetermined levels. Only in 2002 did lawmakers allow payment cuts to take place. In other years, lawmakers intervened to prevent payment cuts in order to prevent doctors from leaving the Medicare program. According to the American Medical Association (AMA), if the bill fails to pass, the payment cut for physicians could grow to about 40 percent by 2016. Proponents of the bill argue that such payment cuts will cause fewer doctors to accept Medicare patients and that it is time to implement a permanent fix.

The bill was placed on the Senate Legislative Calendar on December 24th, and read for a second time on January 20th. There is speculation, however, as to whether the bill will be passed in the Senate. Opponents to the bill argue that it will increase the federal government's already record-breaking budget deficit. An additional hurdle the bill must overcome is its characterization by some as part of the Administration's effort to overhaul the healthcare system. This depiction brings the effort into controversial political territory, thus making the effort to have it passed more difficult.

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

February 21, 2010

Home Health Providers See Changes to Payments in 2010

February 2010: In November 2009, the Centers for Medicare and Medicaid Services (CMS) announced changes to Medicare's 2010 home health prospective payment system rates and modifications to the home health outlier policy. The rule became effective January 1, 2010.

In recent years, CMS has become more attuned to the growth in outlier payments, specifically very high outlier payments in certain areas of the country. An outlier payment is made for an episode that has a cost which exceeds a threshold amount. A Home Health Agency must bear a fixed dollar loss (FDL) before an episode becomes eligible for outlier payments. In 2009 CMS did not raise the FDL ratio due to the extremely high outlier payments in designated areas.

For CY 2010, CMS underwent an analysis of all providers who received outlier payments, focusing on total HH PPS payments, total outlier payments, number of episodes, number of outlier episodes, and location of provider. This analysis prompted CMS to propose an agency level outlier cap: in any given calendar year, an individual HHA will receive a maximum of 10 percent of its total HH PPS payments in outlier payments. In addition, CMS proposed to reduce the FDL ratio to .67 for CY 2010 (from .89 in CY 2009).

See the attachment to read the rule as published in the Federal Register on November 10, 2009.

For more information regarding the impact of this rule on Home Health Providers, please visit http://www.wachler.com/ or contact a Wachler & Associates attorney at 248-544-0888.

February 9, 2010

CMS Rescinds Change Request 6375

On February 5, 2010 the Centers for Medicare and Medicaid Services (CMS) rescinded Change Request(CR) 6375, Transmittal 1873, dated December 11, 2009. The rescinded CR contained instructions regarding place of service (POS) and date of service (DOS) for the professional component (i.e. interpretation) and technical component of diagnostic tests. The accompanying MLN Matters article, MM6375, is also rescinded. CMS intends to publish a replacement CR once there is policy clarification on these issues.

For more information, visit www.wachler.com or contact one of our attorneys at 248-544-0888.

February 7, 2010

CMS Announces Modified Additional Documentation Request Limits for Institutional Providers

On January 28, 2010, the Centers for Medicare and Medicaid Services (CMS) announced modified additional documentation request limits for institutional providers for the RAC program in FY 2010. The limits will be annually set by each RAC in accordance with this CMS guidance to create a per campus cap on the maximum number of medical records that may be requested within a 45-day period.

In accordance with this announcement, the RAC for Region D, HealthDataInsights (HDI), has announced that it will soon begin sending Additional Document Request (ADR) letters to hospitals in the Region. The ADR letters will be mailed to the contact names listed on HDI's provider portal. If no contact information has been provided, the letter will be sent to the hospital's compliance officer or the chief financial officer.

For additional information regarding the RAC program and relevant updates, please visit our RAC website at http://www.racattorneys.com/ or contact a Wachler & Associates attorney at (248) 544-0888.

February 3, 2010

Health Professionals Petition the FTC for Relief from Red Flags Rule

On January 27, 2010, leaders of the American Dental Association (ADA), American Medical Association (AMA), American Osteopathic Association (AOA), and the American Veterinary Medical Association (AVMA) sent a letter to the Federal Trade Commission (FTC) Chairman Jon Leibovitz requesting that health professionals be excluded from the "Red Flags" Rule, a new regulation intended to combat identity theft.

The letter was prompted by a recent decision from the U.S. District Court for the District of Columbia involving a suit was brought by the American Bar Association (ABA) against the FTC. The court ruled that lawyers should be excluded from the requirements of the Red Flags Rule. The court stated that the application of the Red Flags Rule to attorneys "is both erroneous and inconsistent with the purpose underlying enactment of the [Fair and Accurate Credit Transactions Act of 2003 (FACT Act)]."

Similarly, the leaders of these health professional organizations called upon the FTC to exclude health professionals from the Red Flags Rule. The joint letter to the Chairman requests that the FTC take two actions: (1) announce that the Rule will not be applied against licensed healthcare professionals (LHCPs) until at least ninety days after final resolution of the ABA litigation; and (2) confirm that if the final resolution of the ABA litigation is that the Rule will not be applied to attorneys, the Rule will also not be applied to LHCPs.

The letter argues that the application of the Rule to healthcare professionals exceeds the scope of the FTC's authority under the FACT Act, would increase health care costs, and imposes burdens on healthcare professionals without benefit to the public.

For more information on compliance with the Red Flags Rule, visit our website or contact one of our attorneys at 248-544-0888.

February 3, 2010

Region D RAC Approves Anesthesia Services for Review

The RAC for Region D, HealthDataInsights (HDI), recently approved "anesthesia care package" and evaluation and management services for RAC review. Specifically, HDI stated:

Under NCCI Edit rules, the anesthesia care package consists of preoperative evaluation, standard preparation and monitoring services, administration of anesthesia, and post-anesthesia recovery care. Anesthesia CPT codes 00100 to 01999 (except 01996) include Evaluation & Management (E&M) services rendered on the day before anesthesia (pre-operative day), the day of anesthesia and all post-operative days. CPT code 01996 includes E&M services rendered on the same day as the 01996 service only. Physicians can indicate that E&M services rendered during the anesthesia period are unrelated to the anesthesia procedure by submitting modifiers 24, 25, 57 and/or 59, depending on claim specific circumstances, on E&M service. Only critical care E&M services are payable during the anesthesia post-operative period. The post-operative period is defined as the day immediately following the anesthesia service and any subsequent days during the same inpatient hospital admission as for the anesthesia service.

To date, HDI is the only RAC to approve the review of anesthesia care package and E&M services, although other RACs are likely to follow. RAC Region D includes Alaska, Arizona, California, Hawaii, Iowa, Idaho, Kansas, Missouri, Montana, North Dakota, Nebraska, Nevada, Oregon, South Dakota, Utah, Washington, Wyoming, Guam, American Samoa, and Northern Marianas.

For more additional information and updates relevant to the RAC program, please visit our RAC website at http://www.racattorneys.com/ or contact one of our attorneys at (248) 544-0888.