March 2010 Archives

March 31, 2010

Recovery Audit Contractors (RACs) for three Regions post new issues for non-medical necessity DRG validation inpatient claims reviews

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.

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

March 31, 2010

Medicare Appeals Council requires RACs to use covered Medicare Part B services to off-set a Medicare Part A overpayment

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 http://www.racattorneys.com/ or contact a Wachler & Associates attorney at 248-544-0888.

March 28, 2010

The Patient Protection and Affordable Act of 2009 strengthens the False Claims Act (FCA)

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.

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

March 28, 2010

Healthcare Reform Bill to Enhance Pain Management Treatment

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.
  • The director of the National Institute of Health (NIH) is encouraged to expand the research program on the causes and treatments for pain.
  • The Secretary of Health and Human services has the authority to make awards of grants and agreements with health professions schools, hospices and other entities to ensure the improvement and development of programs to train health care professionals in pain care.
  • It is hopeful that this acknowledgement of the problem of chronic pain will make it easier for pain management specialists to obtain reimbursement for pain management procedures and defend audits from third party payors.

    For more information on this topic or for assistance with defending a pain management audit, please contact a Wachler & Associates attorney at 248-544-0888 or contact us through our website at www.wachler.com.

    March 24, 2010

    Rush University Medical Center Agrees to $1.5 Million Settlement to Resolve Alleged FCA Violations

    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.

    March 24, 2010

    Florida Legislation to Increase Medicaid Antifraud Efforts

    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.

    March 24, 2010

    The Department of Health and Human Services Invests More Funds to Advance the Meaningful Use of Health IT

    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.

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

    March 24, 2010

    The American Hospital Association Submits Comments to CMS on Proposed EHR Meaningful Use Rule

    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.

    In addition, AHA expressed concerns that the broad definition of hospital-based eligible professionals, defined as those who furnish at least 90% of their services in the impatient hospital, outpatient hospital, or emergency department setting, would limit the number of professionals that can participate in the program. AHA's included its alternative definition for hospital-based eligible professionals: a pathologies, anesthesiologist, emergency physician, hospitalist, intensivist, or neonatologist for whom at least 90% of his/her billed claim lines have a site of service of the inpatient, outpatient, or emergency department and for whom at least 90% of his/her claims do not contain an ambulatory care visit code (as set forth in the e-prescribing policy) and for whom the hospital funded more than 85% of the cost of the ERH.

    The AHA outlined its concerns with CMS's proposed rule, but also emphasized hospitals' desire to move forward in the meaningful use of EHR to improve care, safety, and improved health. However, AHA emphasized that its proposed alternatives to some of the rules in the CMS provision still meet the goals of the HITECH Act, but also outlines an attainable path for American hospitals to successfully adopt EHR.

    Please see the attachment to read the AHA's comment letter.

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

    March 24, 2010

    Fewer Doctors Accepting Medicaid

    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.

    Due to these drastic cuts, many doctors stress that they can no longer afford to accept Medicaid patients. The article cited doctors that stated they could not afford overhead expenses like salaries, an office mortgage, or malpractice insurance if they accepted Medicaid patients. This problem is especially potent in economically depressed communities such as Flint, Michigan. The year 2009 saw a record enrollment increase of 3.3 million people into the Medicaid program. The Medicaid program now serves 47 million people, with the control granted to states to manage spending by limiting eligibility, benefits and provider payments.

    The cuts to Medicaid payments, coupled with the increase in Medicaid enrollment could create a perfect storm with vast amounts of individuals dependent on Medicaid without access to healthcare.

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

    March 24, 2010

    Michigan Receives Health Information Technology Grant

    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.

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

    March 24, 2010

    Expansion of the RAC Program

    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.

    The expansion of the RAC Program through the Patient Protection and Affordable Care Act exhibits the continuing trend of audits of health care providers.

    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.

    March 10, 2010

    Michigan Providers Must Charge Patients Less for Copies of Medical Records

    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.

    March 10, 2010

    The Department of Health and Human Services Releases a Notice of Proposed Rulemaking for the Establishment of Certification Programs for Health Information Technology (Health IT)

    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.

    Visit the U.S. Department of Health and Human Services's Health Information Technology website for more information.

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

    March 8, 2010

    National Practitioner Data Bank Expanded

    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.

    March 8, 2010

    Medicare Physician Payment Cuts - Ten More Days

    On Monday March 1st, a 21% Medicare physician payment cut went into legal effect. However, the Obama administration directed Medicare billing companies to stop processing claims for 10 business days in order to provide lawmakers with extra time to create a solution. On March 2, 2010, Kathleen Sebelius, Secretary of the Department of Health and Human Services, addressed the American Medical Association (AMA) and assured members that she was committed to developing a permanent fix to the sustainable growth rate (SGR) that controls Medicare payments to physicians.

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

    March 2, 2010

    Expansion of Michigan's Chiropractic Scope of Practice

    On January 5, 2010, Governor Jennifer Granholm signed legislation that expands the chiropractic scope of practice in the state of Michigan. The expansion is designed to restore the scope of practice that existed prior to when the Public Health Code was rewritten. Chiropractors in Michigan may now treat neuromuscular, skeletal and joint disorders throughout the entire body.

    The Public Health Code now defines the "Practice of Chiropractic" as the discipline within the healing arts that deals with the human nervous system and the musculoskeletal system and their interrelationship with other body systems. The scope of practice also now includes the diagnosis of conditions and disorders of the human musculoskeletal and nervous systems as they relate to subluxations, misalignments, and joint dysfunctions. To evaluate the conditions or symptoms related to these conditions, a chiropractor may order advanced radiology scans if those scans were within the scope of practice as of December 1, 2009.

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

    March 2, 2010

    Michigan's Governor Establishes Health Inspector General

    On February 19, Michigan Governor Jennifer Granholm issued an Executive Order creating an independent Office of Health Services Inspector General (OHSIG) within the Department of Community Health. The Executive Order will become effective on October 1, 2010. Governor Granholm will have the responsibility to appoint the Health Services Inspector General.

    The OHSIG will further the state's fight against fraud by consolidating the responsibilities into one independent office. According to the Governor, this will ensure that the office will be able to focus on specific auditing and fraud prevention goals. The Executive Order grants the Inspector General's Office with broad powers to carry out these tasks.

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

    March 2, 2010

    First State Attorney General to Take Action against Covered Entity Responsible for Massive HIPAA Violations

    Connecticut Attorney General Richard Blumenthal filed suit against Health Net of Connecticut, Inc. for its alleged failure to secure private medical and financial information involving 446,000 Connecticut enrollees.

    The Health Information Technology for Economic and Clinical Health (HITECH) Act authorizes state attorneys general to bring actions on behalf of the public in order to enforce HIPAA. The Connecticut Attorney General's case against Health Net is the first action by a state attorney general brought pursuant to this authority.

    The case alleges that Health Net exposed protected health information and other personal information and failed to promptly notify appropriate authorities of the incident. The information had been saved on a portable computer disk drive, but, despite Health Net's policies and procedures, had not been encrypted. The computer disk, which contained approximately 27.7 million scanned pages of hundreds of different types of documents, had been missing for approximately six months before Health Net took steps to notify the Attorney General and affected individuals.

    This enforcement action serves as an important reminder to healthcare providers of the importance of HIPAA compliance. Compliance with these regulations goes beyond establishing policies and procedures, but also requires taking steps to ensure that employees are sufficiently educated and actually comply with them. This includes taking appropriate action in the event of a security breach of protected health information.

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