August 2011 Archives

August 25, 2011

CMS to Release Comparative Billing Reports for Providers Ordering DME

The Centers for Medicare and Medicaid Services (CMS) recently announced it will release a national provider Comparative Billing Report (CBR) focused on Ordering Durable Medical Equipment: Diabetic Supplies. The CBRs will be released to 5,000 providers on August 29, 2011. CMS will make two additional CBR releases to 5,000 providers, which are currently slated for September 7, 2011 and September 15, 2011.

The CBRs are produced by Safeguard Services under contract with CMS and will provide comparative data to help show how these individual providers compare to other providers within the same field. These comparative studies are designed to help providers review their coding and billing practices and utilization patterns, and take proactive compliance measures. Providers should view CBRs as a tool, rather than a warning, as a way to aid them in properly complying with Medicare billing rules. It is also important to understand that CBRs do not contain patient or case-specific data, but rather only summary billing information as a method of ensuring privacy.

If you are a recipient of a CBR on Ordering Durable Medical Equipment: Diabetic Supplies, or are among the other provider types that have been identified to receive CBRs (i.e. physical therapists, chiropractors, ambulance, hospice, podiatry, and sleep studies), please contact a Wachler & Associates attorney at 248-544-0888 to discuss evaluating the CBR analysis and development of an appropriate compliance plan that will reduce audit risks.

Click here to view an Ordering Durable Medical Equipment CBR sample.

August 24, 2011

HHS Introduces the Bundled Payments Initiative to Help Providers Coordinate Patient Care

The U.S. Department of Health and Human Services (HHS) recently initiated the Bundled Payments for Care Improvement initiative (Bundled Payments initiative) in an effort to promote better patient health, better care and lower costs. Rather than paying for services separately, the Bundled Payment initiative will bundle payments for services delivered throughout an entire episode of care. Currently, health care providers bill Medicare separately for the services that a beneficiary receives. However, this new initiative seeks to bundle all of the services that a patient receives during a single hospital stay or during recovery from that stay, giving providers greater incentive to better coordinate care with other providers who treat that patient. The Centers for Medicare and Medicaid Services (CMS) believe that this enhanced coordination will reduce unnecessary duplication of services, reduce medical errors, improve patient health, and lower costs.

The new Center for Medicare and Medicaid Innovation recently released its Request for Applications which outlines four approaches to bundled payments. Providers will be afforded flexibility in determining which services will be bundled together, allowing providers of different sizes to decide which bundle payment schemes work best for them. This flexibility is expected to quicken providers' desire to participate in the Bundled Payments initiative.

According to HHS, the initiative is based on research and successful demonstration projects, such as a Medicare heart bypass surgery demonstration that saved the program $42.3 million and saved patients $7.9 million in coinsurance. The Bundled Payments initiative is viewed as being a step forward in creating the kind of relationship that patients expect their providers to have with each other in an effort to promote better care and payment efficiency.

For more information on participating in the Bundled Payments initiative or if you have any other health law questions, please contact a Wachler & Associates attorney at 248-544-0888.

HHS News Release: http://www.hhs.gov/news/press/2011pres/08/20110823a.html

August 24, 2011

Recent RAC Updates

Additional Documentation Limits for Medicare Providers

Effective August 22, 2011, the Recovery Audit Contractors are permitted to request up to 35 records every 45 days from health care providers whose previous record request limit was set at 34 additional documentation requests or less. The limit is based on claim volumes only, and the type of claims do not factor into the limit. The maximum number of record requests remains at 300 within 45 days.

http://www.aha.org/aha/content/2011/pdf/11racadrlimits.pdf

New Approved Issues

CGI Federal, RAC for Region B, added one new issue to its CMS-approved issues list.

  • Multiple DME rentals billed per month. Medicare makes payments on a monthly basis for the rental of DMEPOS Fee Schedule items. The first claim's billing date for the DMEPOS rental item is designated as the anniversary date. All subsequent billing must be dated monthly with the anniversary date. If a claim is submitted with a date that is earlier than the anniversary date and that DMEPOS item is not a replacement for a lost, stolen or irreparable damaged DMEPOS item, then the claim represents an overpayment

HealthDataInsights, RAC for Region D, added two new issues to its CMS-approved issues list.

  • Facet joints denervation billed without guidance J1-by ASC. In accordance with LCD L28288, Facet Joint Denervation requires placement of a needle in the facet joint under fluoroscopic or CT guidance. This requirement is effective for dates of service on or after September 2, 2008 in California, Nevada and Hawaii.
  • Age-appropriate code for end stage renal disease (ESRD) services. The beneficiary's age at the end of the month is the age of the patient for determining the appropriate age based ESRD-related services code.

If you need assistance in preparing for, or defending against RAC audits, or implementing a compliance program geared toward identifying and correcting potential risk areas related to RAC audits, please contact a Wachler & Associates attorney at 248-544-0888.

August 22, 2011

New Bill Introduced to Grant Physicians Greater Due Process Rights in Peer Review

A new bill was recently introduced in the House of Representative in an effort to amend the Health Care Quality Improvement Act of 1996 (HCQIA) to require greater due process rights for health care professionals before any reports are made to the National Practitioner's Data Bank (NPDB).

According to the Association of American Physicians and Surgeons, the bill, H.R. 2472, seeks to counter hospitals' current practice of reporting adverse actions taken against physicians regardless whether the physician had been afforded a hearing or adequate notice about the investigation. According to supporters of the bills, rather than granting physicians an opportunity to defend themselves against these actions, hospitals have been bypassing these due process steps and reporting the actions to the NPBD. Reports to the NPBD have proven to be extremely detrimental to physicians and have resulted in a number of physicians losing their careers.

The bill amends 42 U.S.C. 11133(a) to prohibit a review entity from reporting to the NPDB while the physician is under investigation. Also, the bill would bar a hospital's ability to submit a report to the NPDB before a physician is afforded a hearing and adequate notice of the adverse actions taken by the hospital. The amendment also seeks to change the current immunity power of a professional review body. The current HCQIA grants the professional review body immunity from actions taken against it even if the reviewer fails to follow the guidelines for adequate notice and hearing procedures described in the Act. The new bill may provide a means for a physician to bring a cause of action against a professional review body when the entity has failed to provide the required notice and hearing prior to filing a report to the NPBD or if the entity has conducted a "sham" peer review.

In addition to a right to notice and a hearing, the bill also seeks to amend 42 U.S.C. 11112, which would afford the physician and his or her attorney the right to copies of all evidence that a hospital intends to present at a peer review hearing. This amendment would allow physicians and their counsel a greater ability to defend themselves at a hearing.

If you are a physician and need assistance defending against any adverse actions before a peer review hearing, or have any medical staff privilege, or Data Bank reporting questions, please contact a Wachler & Associates attorney at 248-544-0888.

August 17, 2011

OIG Issues Unfavorable Advisory Opinion Regarding an Exclusive Provider Arrangement Between Medical Equipment Supplier and SNF

On July 28, 2011, the U.S. Department of Health and Human Services, Office of Inspector General (OIG) issued an unfavorable advisory opinion regarding two proposals by a supplier of medical supplies, equipment and related services (Supplier) seeking to enter into a contract with a county-operated skilled nursing facility (SNF) to provide such items and services.

Supplier provides medical supplies and equipment to SNFs along with providing related services (e.g. emergency delivery of medical supplies, inventory control and customized packaging). Supplier bills Medicare directly for supplies and equipment covered by Medicare Part B (covered items). For items not covered by Medicare (non-covered items), Supplier bills the SNFs directly and includes a markup which covers the costs of related services, overhead and profit. Supplier acknowledged that the amount paid by Medicare Part B for the covered items is enough to cover the costs related to the services provided to the SNF in connection with the non-covered items.

The SNF solicited bids from suppliers to be the exclusive supplier of covered items and related services to the SNF. The SNF also required all bids to include pricing for the non-covered items and related services. The SNF proposed to purchase the non-covered items at its option. Supplier was one of the bidders and the OIG analyzed two proposed arrangements that Supplier sought to use in the bidding process.

Proposed Arrangement A

Under Proposed Arrangement A, Supplier would submit a bid to: (1) be the exclusive supplier of covered items of SNF, (2) provide non-covered items at the price listed in its bid if the SNF opts to exercise that option, and (3) provide related services for the covered and non-covered items purchased by SNF. In regards to the non-covered items, Supplier proposed to offer the items and related services to the SNF at a price below Supplier's costs of furnishing the items. Supplier offered below-cost pricing because it believed that the SNF would not select its bid to be the exclusive provider of covered items otherwise. However, Supplier would not be bound by the prices listed in the bid if its bid was not selected. Moreover, Supplier had stated that the Medicare Part B payments it would receive supplying the SNF with covered items would offset any losses accrued from offering the non-covered items at below-cost.

The OIG began its analysis by stating, "if any direct or indirect link exists between a price offered by a supplier or provider to a nursing facility for items or services that the nursing facility pays for out-of-pocket and referrals of federal business for which the supplier or provider can bill a federal healthcare program, the anti-kickback statute is implicated." The OIG found that a nexus may exists between the below-cost pricing of non-covered items and related services offered to the SNF and referrals of other Federal health care program business for three reasons: (1) the SNF is in a position to direct business to the Supplier for covered items when the SNF is not the entity paying for the items, (2) a link between covered items and non-covered items is inferred because they are included in the SNF's single request for proposals, and (3) both Supplier and the SNF have obvious motives for contracting for non-covered items at below-cost (e.g. Supplier to secure business as exclusive supplier to SNF and for SNF to minimize out-of-pocket costs).

Proposed Arrangement B

Proposed Arrangement B was exactly the same proposal as Arrangement A, except that Supplier's owners would form a new company and submit a joint bid to the SNF, whereby one company provides the covered items and the other provides the non-covered items.

The OIG found that the same risks created by Arrangement A existed in Arrangement B. This arrangement created a means for the Supplier and SNF to swap the below-cost rates on non-covered items for which the supplier bears the business risk in exchange for the profitable non-discounted covered items, from which Supplier can recoup any losses occurring from the below-cost pricing of the non-covered items furnished to the SNF. Despite the fact that the non-covered items would now be provided by the new company, the OIG stated that, "it is the substance, not the form, of an arrangement that governs under the anti-kickback statute."

For more information on compliance with the anti-kickback statute, medical supply contracts or other Medicare or health care regulations, please contact a Wachler & Associates attorney at 248-544-0888.

OIG Advisory Opinion 11-11: http://oig.hhs.gov/fraud/docs/advisoryopinions/2011/AdvOpn11-11.pdf

August 16, 2011

Affordable Care Act Requires Medicare Providers to Revalidate Their Enrollment By March 2013

As part of healthcare reform, Section 6401a of the Affordable Care Act requires all providers and suppliers who enrolled in the Medicare program before March 25, 2011 to revalidate their provider enrollment under the new screening criteria. Providers and suppliers who enrolled after March 25, 2011 do not need to revalidate at this time as they have already been screened.

The Centers for Medicare and Medicaid Services (CMS) designed and instituted new screening criteria in the provider enrollment process as another tool to curb Medicare fraud, waste and abuse. Each provider or supplier, whether newly-enrolled or revalidating, is assigned a risk level, either "limited", "moderate" or "high", representing the level of risk to the Medicare program for the particular category of provider/supplier. The designated provider risk level determines the amount of screening to be executed during the enrollment application process by the Medicare Administrative Contractor (MAC).

MACs will be sending revalidation notices to individual providers and suppliers between now and March 2013. Providers and suppliers must complete the enrollment forms within 60 days of receiving the request from the MACs. If a provider fails to submit the provider enrollment forms after receiving the request, it may lead to a suspension of the provider's Medicare billing privileges.

Providers may revalidate their enrollment information by using Internet-based Provider Enrollment, Chain, and Ownership System (PECOS). Institutional providers are required by the Affordable Care Act to pay an application fee during the enrollment or revalidation process.

For more information about the provider enrollment or revalidation process, please contact a Wachler & Associates attorney at 248-544-0888.

August 15, 2011

Recent RAC Updates

DCS Healthcare, RAC for Region A, added two new issues subject to medical necessity reviews to its CMS-approved issues list for providers in Maryland. DCS Healthcare also added four new issues for providers in all Region A states.

  • MS-DRG 286, 287 Cardiac Catheterization for Ischemic Heart Disease (All severity and risk of mortality levels) (Maryland only). Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary. This review will be of MS-DRG 286, 287 cardiac catheterization for ischemic heart disease.
  • MS-DRG 149 vertigo and other labyrinth disorders (All severity and risk of mortality levels) (Maryland only). Medicare pays for inpatient hospital services that are medically necessary for the setting billed. Medical documentation will be reviewed to determine that services were medically necessary. This review will be of MS-DRG 149 vertigo and other labyrinth disorders.
  • National correct coding initiative (CCI) - Part B (All Region A states). Application of the Part B National Correct Coding Initiative (Mutually exclusive and non-mutually exclusive). Deny Column II code when billed by the same provider and same date of service as a Column I code.
  • New patient visits (All Region A states). Identification of overpayments relating to the same provider group and specialty billing more than on new patient Evaluation and Management services within a 3 year period of time.
  • Add-on codes paid without a paid required primary procedure (All Region A states). Claims overpaid for add-on codes when the required primary procedure is not billed by the same provider on any claim (same or different) for the same date of service.
  • Global surgery - Pre and post-operative visits (All Region A states). Identification of overpayments associated to minor and major surgical services.
    1. E/M services (as specifically defined in the IOM) billed the day prior to a major (90-day) surgical service without modifiers 57 or 25.
    2. E/M services (as specifically defined in the IOM) billed the day of a major (90-day) or minor (0- or 10-day) surgical service billed without modifier 25 or 57.
    3. E/M services (as specifically defined in the IOM) billed 10 days following a 10-day minor surgical service or 90 days following a 90-day major surgical service and billed without modifier 24 (unrelated visit in post op period). 

If you need assistance in preparing for, or defending against RAC audits, or implementing a compliance program geared toward identifying and correcting potential risk areas related to RAC audits, please contact a Wachler & Associates attorney at 248-544-0888.

August 11, 2011

CMS to Release Comparative Billing Reports for Outpatient Physical Therapy Services with the KX Modifer

The Centers for Medicare and Medicaid Services (CMS) recently announced it will release a national provider Comparative Billing Report (CBR) targeting Independent Physical Therapy Providers who practice in the outpatient setting and bill Medicare with the KX Modifier, which is the billing requirement used to show that the beneficiary has exceeded the therapy cap, but requires additional medically necessary physical therapy services. Last August, physical therapists were the first provider type to receive CBRs. The CBRs currently being issued to physical therapists will be distributed to 5,000 additional or different providers and will be centered on 2010 billing data.

The CBRs are produced by Safeguard Services under contract with CMS and will provide comparative data to help show how these individual providers compare to other providers within the same field. These comparative studies are designed to help providers review their coding and billing practices and utilization patterns, and take proactive compliance measures. Providers should view CBRs as a tool, rather than a warning, as a way to aid them in properly complying with Medicare billing rules. It is also important to understand that CBRs do not contain patient or case-specific data, but rather only summary billing information as a method of ensuring privacy.

If you are a recipient of a Physical Therapy CBR or are among the other provider types that have been identified to receive CBRs (i.e. physical therapists, chiropractors, ambulance, hospice, podiatry, and sleep studies), please contact a Wachler & Associates attorney at 248-544-0888 to discuss evaluating the CBR analysis and development of an appropriate compliance plan that will reduce audit risks.

Click here to view an Outpatient Physical Therapy Services CBR sample.

August 10, 2011

HHS Estimates $48 Billion of Improper Payments Were Paid to Healthcare Providers in 2010

According to an article by the RAC Monitor, the U.S Department of Health and Human Services (HHS) recently reported that an estimated $48 billion was improperly paid to providers in 2010. However, due to HHS's currently undeveloped comprehensive projection for the Medicare prescription drug benefit, the U.S. Government Accountability Office (GAO) has determined the estimated $48 billion in improper payments is incomplete and possibly underestimated. The GAO provided testimony before the U.S. House of Representatives Subcommittee on Government Organization, Efficiency and Financial Management, whereby the GAO produced a number of recommendations in an effort to aid the Centers for Medicare & Medicaid Services (CMS) in fortifying its ability to prevent or detect and recoup improper payments to healthcare providers.

Among other reasons, the GAO alluded to a number of key causes for the improper payments, such as coding and payment calculation errors, inadequate documentation and services deemed not to be medically necessary. In 2010, CMS initiated the Center for Program Integrity to handle all Medicare integrity issues. The GAO recently made recommendations to CMS to help strengthen its ability to minimize Medicare fraud, waste and abuse. According to the article, the GAO's recommendations are as follows:

1. Strengthen provider enrollment standards and procedures.

2. Improve prepayment reviews.

3. Focus post-payment reviews on vulnerable areas.

4. Improve oversight of contractors.

5. Create a robust process to address identified vulnerabilities.

With the expected improvements to CMS's strategies to recoup improper payments, providers need to make sure that they are in full compliance to be protected against a potential audit. If you need help defending against Medicare/Medicaid audits or investigations, or assistance with implementation of a proactive corporate compliance program, please contact a Wachler & Associates attorney at 248-544-0888.

GOA Report: http://www.gao.gov/new.items/d11409t.pdf

RAC Monitor Article: http://www.racmonitor.com/news/43-special-bulletin/630-gao-reports-billions-in-improper-medicare-payments.html

August 9, 2011

OIG Issues Favorable Advisory Opinion Regarding a Pay-for-Performance Compensation Plan

On July, 25, 2011, the U.S. Department of Health and Human Services, Office of the Inspector General (OIG) issued a favorable advisory opinion regarding an arrangement under which a company (Requestor), who provides administrative services to the State's Medicaid program, will disburse pay-for-performance payments to physicians and dentists participating in the state's Medical Home Program.

The Medical Home Program is the state's enhanced primary care case management and disease management program for a number of Medicaid beneficiaries. Requestor, through a competitive bidding process, was awarded the contract to administer the disease management program on behalf of the state. The program includes a pay-for-performance program whereby Requestor is required to disburse checks, drawn from Requestor's own bank account, to physicians and dentists who participate in the program. The payments are funded by the state's Medicaid program, and Requestor has no discretion to revise the amount of the payments. Furthermore, the state clearly identifies itself as the payment source to the providers, as well as indicates that the Requestor is the administrator of the pay-for-performance program.

The OIG started its analysis by emphasizing that the advisory opinion only addresses the narrow question of whether Requestor's disbursement of pay-for-performance program payments to physicians and dentists on behalf of the state implicates the anti-kickback statute. The OIG concluded that the arrangement did not implicate the anti-kickback statute and cited four reasons for its conclusion:

1. The payments are funded by the state's Medicaid Program and not by Requestor;

2. Requestor is merely acting as an agent of the state and has no discretion or control over the payments issued to the physicians and dentists;

3. Reasonable steps have been taken by the parties to lessen any misimpressions that Requestor is paying the providers for Medicaid referrals because the state indicates on the check that Requestor is the administrator of the program;

4. The state supervises all disbursements and is able to audit Requestor's performance.

For more information on compliance with the anti-kickback statute, pay-for-performance contracts or other Medicare or health care regulations, please contact a Wachler & Associates attorney at 248-544-0888.

OIG Advisory Opinion 11-10: http://oig.hhs.gov/fraud/docs/advisoryopinions/2011/AdvOpn11-10.pdf

August 8, 2011

MACs Now Responsible for Issuing Medicare Audit Overpayment Demand Letters

On July 29, 2011, the Centers for Medicare and Medicaid Services (CMS) issued Change Request 7436 which shifts the duty of issuing demand letters for identified overpayments from the Recovery Audit Contractors (RACs) to the Medicare Administrative Contractors (MACs). RACs will continue to be responsible for determining whether an improper payment has been made to a provider. However, after identifying an overpayment, RACs will now submit the claim to the MACs who will then send the demand letters to the identified providers. All communications regarding payment recovery and appeal process timeframes will be handled by the MACs, but a provider's questions or concerns relating to audit specificities should be directed towards the RACs.

Providers need to be aware of this recent change in order to prevent any miscommunications that could lead to missing an appeal deadline. A small error such as this could lead to forfeiting any appeal rights that a provider is granted. If you have any questions relating to RAC audits, or any other type of Medicare or Medicaid audit, please contact a Wachler & Associates attorney at 248-544-0888.

August 3, 2011

Michigan Pharmacists and Doctors Indicted for Fraudulently Billing Millions of Dollars to Medicare

According to a recent article written by the Detroit Free Press, 26 individuals have been indicted in an alleged Medicare scheme. The indictment alleged that a Michigan pharmacist gave kickbacks and other bribes to doctors in exchange for them writing prescriptions for opiate pain killers and depressants (e.g. Vicodin, Xanax and Oxycontin) and directing them to one of the pharmacies owned by the pharmacist. The alleged Medicare fraud was conducted at more than 20 pharmacies throughout the state, which billed $37 million to Medicare, along with over $20 million to Medicaid. The indictment included 12 pharmacists, 4 doctors, a psychologist, an accountant, and a number of patients who agreed to have their insurers billed.

This indictment is just one of many examples of the government's focus on the Detroit area in Medicare and Medicaid investigations. For more information on Medicare Fraud defense, or assistance with interpreting and understanding Medicare and Medicaid regulations, including the anti-kickback statute, please contact a Wachler & Associates attorney at 248-544-0888.

Detroit Free Press Article: http://www.freep.com/article/20110803/NEWS05/108030363/Metro-doctors-pharmacists-charged-1-largest-drug-scams-Michigan-history

August 3, 2011

ASC Pay-for-Performance Program Coming Soon

The Department of Health and Human Services (HHS) recently issued a report to Congress on a Medicare Ambulatory Surgical Center (ASC) Value-Based Purchasing (VBP) Implementation Plan, as required by the Patient Protection and Affordable Care Act (PPACA).

In this report, HHS sets forth a "roadmap" for ASC VBP implementation which discusses the various issues which must be considered. While the current legislation only gives HHS the authority to impose penalties for failure to report, HHS' plan presumes that Congress will also grant authority to award better outcomes, value and innovation. The report indicates that the failure to report data could result in a 2% reduction, while, subject to the granting of Congressional authority, ASCs meeting quality targets would see increases in reimbursement. The program may also be structured to reward low performers who demonstrate improvement.

In structuring the ASC VBP, HHS will look to the current quality reporting programs for hospitals and physicians.

The full report can be accessed here: http://www.cms.gov/ASCPayment/Downloads/C_ASC_RTC%202011.pdf

For more information on ASC conditions of participation, reimbursement, and compliance, please contact a Wachler & Associates attorney at 248-544-0888.

August 2, 2011

OIG Issues Favorable Opinion Regarding the Use of a Preferred Hospital Network as Part of Medicare Supplemental Health Insurance Policies

On July 14, 2011, the Department of Health and Human Services Office of Inspector General (OIG) issued a favorable advisory opinion regarding the use of a preferred hospital network as part of Medicare Supplemental Health insurance (Medigap) policies. Under the proposed arrangement, the requestors who offer Medigap insurance policies, would establish a preferred provider organization (PPO) comprised of certain hospitals. The PPO network would allow the requestors to receive discounts on Medicare inpatient deductibles for policyholders. Also under the proposed arrangement, the requestors would provide a $100 premium credit to policyholders who opt to use a network hospital for an inpatient stay. Any savings realized by the requestors would be filed with the state insurance departments accountable for regulating the premium rates charged by Medigap insurers.

The OIG determined that the proposed arrangement would implicate both the anti-kickback statute and Section 1128A(a)(5) of the Social Security Act which provides for the imposition of civil monetary penalties for providing remuneration to beneficiaries. However, because of several factors, the OIG concluded that the proposed arrangement would present a low risk of fraud and abuse. Although not directly on point, the OIG looked at the safe harbor for waivers of beneficiary coinsurance and deductible amounts, as well as the safe harbor for reduced premium amounts offered by health plans.

The OIG concluded that the discounts offered on inpatient deductibles by the network hospitals would present a low risk of fraud or abuse for the following reasons:

  1. The waivers would not increase or affect per service Medicare payments because payments to hospitals under Part A for inpatient services are fixed and unaffected by beneficiary cost-sharing.
  2. The discounts should not increase utilization because the discounts would not be visible to patients.
  3. Membership in the network of hospitals would be open to any accredited Medicare-certified hospital that meets the requirements of applicable state laws, and therefore would not affect competition.
  4. The arrangement would not impact professional judgment of physicians because the inpatient's physician would not receive any remuneration under the proposed agreement and the policyholder would not be penalized for choosing a non-network hospital.

The premium credit provision was also determined to present a low risk of fraud and abuse, according to the OIG pursuant to the same analysis. The OIG stated that the premium credit provision of the proposed agreement would implicate the prohibition on inducements to beneficiaries, however, the statutory exception for differentials in coinsurance and deductible amounts as part of a benefit design plan would apply so long as the proper disclosure has been given to the affected parties regarding the differentials.

Finally, the OIG found that the proposed arrangement has the potential to lower Medigap costs for the policyholders who opt to utilize the services of network hospitals.

For more information on compliance with the anti-kickback statute, the prohibition on patient remuneration or other Medicare or health care regulations, please contact a Wachler & Associates attorney at 248-544-0888

OIG Opinion: http://oig.hhs.gov/fraud/docs/advisoryopinions/2011/AdvOpn11-09.pdf

August 2, 2011

CMS Announces Intentions of Reducing Medicare Payments for Hospice Patients Residing in Nursing Facilities

According to a new report released by The Department of Health and Human Services Office of the Inspector General (HHS OIG), hospice companies have quickly expanded their services to patients residing in nursing homes. HHS OIG found that total Medicare spending for hospice care for nursing home residents had grown by nearly 70 percent between 2005 and 2009. In addition, the number of hospice beneficiaries in nursing facilities has increased by 40 percent during that same time period. The report also found that 263 hospices (nearly 8 percent of all hospices) had two-thirds or more of their Medicare beneficiaries residing in nursing homes, referred to in the report as "high-percentage hospices." Moreover, high-percentage hospices were paid an average of $3,182 more per beneficiary by Medicare. Also, high-percentage hospice beneficiaries received hospice services nearly three weeks longer than beneficiaries served by hospices overall, and the costs to high-percentage hospices were much lower due to patients requiring less services because they are already receiving similar services from the nursing facilities.

In connection with the Inspector General's recommendation, the Centers for Medicare and Medicaid Services (CMS) has announced that it is making an effort to reduce its Medicare payments for hospice patients residing in nursing facilities. As a result, hospice providers will likely see increased audits in this area, with a specific focus on skilled nursing facility referrals. If you are a hospice provider and need assistance in preparing or defending against an audit, or seek assistance with creating a compliance program to minimize audit risk, please contact a Wachler & Associates attorney at 248-544-0888.