October 2011 Archives

October 26, 2011

Recent RAC Updates

CGI Federal, RAC for region B, has recently added a new issue to its CMS-approved issue list for providers in all region B states.

  • Pharmacy Supply Dispensing Fee. Medicare pays pharmacy supply/dispensing fees for immunosuppressive, oral anti-cancer, chemotherapeutic, and oral anti-emetic drugs as well as drugs used as part of an anti-cancer chemotherapeutic regimen when they are submitted on the same claim as the drug being billed. A claim submitted with a pharmacy supply/dispensing fee in the absence of any of the previously mentioned drugs represents an overpayment and will be denied as not medically reasonable and necessary.

Connolly Healthcare, RAC for region C, added two new issues to its CMS-approved issue list for suppliers that bill CIGNA Government Services.

  • Overuse of PAP/RAD Accessories. A supplier must not dispense more than a certain quantity of PAP/RAD accessories at a time. Quantities of supplies greater than those described in the policy as the usual maximum amounts will be denied as not reasonable and necessary.
  • Osteogenesis Stimulators. An overpayment exists when a provider bills for an Osteogenesis Stimulator with an ICD-9 code that is not included in the list of covered ICD-9 codes within the applicable Local Coverage Determination document(s).

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.

October 26, 2011

CMS Announces the Creation of Its Advance Payment Model

On October 20, 2011, the Centers for Medicare and Medicaid Services (CMS) released its final rule for Accountable Care Organizations (ACO) participation in the Medicare Shared Savings Program. With this rule, in response to concerns related to start up costs associated with ACOs, CMS has also announced the creation of its Advance Payment Model, which is scheduled to commence in 2012. The Advance Payment Model was created to assist participants in the Share Savings Program that may not have the necessary funds to become and ACO (e.g. physician-owned hospitals and rural providers). These participants would be advanced future payments, which would later be recouped from future shared savings. However, if the ACO fails to complete the full agreement period or earned shared savings then it will be required to return the advance payment. An ACO would receive future payments in three ways: (1) an upfront, fixed payment, (2) an upfront, variable payment, and (3) a variable monthly payment.

The Advance Payment Model may be available to two types of organizations participating in the Shared Savings Program: (1) ACOs that do not include any inpatient facilities AND have less than $50 million in total annual revenue; and (2) ACOs in which the only inpatient facilities are critical access hospitals and/or Medicare low-volume rural hospitals AND have less than $80 million in total annual revenue. ACOs that are co-owned by a health plan will not be eligible to participate. Participants of Pioneer ACOs will also be ineligible. CMS expects to select approximately 50 ACOs that meet the above eligibility requirements to receive funding.

The Advance Payment Model will only be available for ACOs beginning participation in the Medicare Shared Savings Program in either April 2012 or July 2012.

ACOs interested in applying for the Advance Payment Model, will first need to apply for participation in the Medicare Shared Savings Program. Applications for the Advance Payment Model are expected to be available in late Fall 2011.

If you need assistance in applying for the Advance Payment Model, structuring an ACO, or have any questions regarding ACO participation in the Medicare Shared Savings Program, please contact a Wachler & Associates attorney at 248-544-0888.

October 24, 2011

20 Notable Aspects of the Final ACO Rule

On October 20, 2011, CMS released the much awaited final rule for implementation of the Medicare Shared Savings Program for providers and suppliers participating in Accountable Care Organizations (ACOs). The following are 20 notable aspects of the final rule:

•1. While the proposed rule would have required all ACOs to share risk of loss in the final year of the three year participation period, the final rule created an alternative for a "shared savings only" track (one-sided model) that will not require any sharing of losses. The final rule also retains the proposed two-sided model that will allow ACOs to share in an increased portion of savings, so long as the ACO also agrees to share in any losses to the program.

•2. The final rule will allow ACOs beginning in April 1, 2012 or July 1, 2012 to have a longer first performance year (21 months or 18 months respectively) and an option to receive an interim payment calculation following the first 12 months of participation. One-sided ACOs receiving an interim payment will be required to demonstrate a self-executing repayment mechanism similar to that which the two-sided ACOs must demonstrate.

•3. CMS will continue to require that an ACO be a separate legal entity with a distinct TIN (eliminating the ability to form ACOs solely through contractual joint ventures), but will allow ACOs to be formed under tribal or federal law, rather than being confined to state law.

•4. CMS affirmed its position that it will not require ACOs to distribute shared savings in any particular way and will, instead, require ACO participants to negotiate and determine among themselves how to equitably distribute shared savings.

•5. CMS will no longer require each Participant to be represented on the governing body, but will instead require an ACO to provide "meaningful participation" for ACO participants or their designated representatives in the composition and control of the ACO's governing body. ACOs will continue to be required to give ACO Participants 75% control.

•6. CMS is allowing ACO's increased flexibility in the establishment of governing bodies and will not require representation of particular categories of providers and suppliers or other stakeholders. ACOs will continue to be required to have beneficiary representation on the board, but there will be an option to allow for innovative ways of involving beneficiaries in ACO governance.

•7. CMS will continue to retain the flexibility to change the rules during the participation period, but ACOs will be given the option to terminate early if the ACO feels that a change in rules will impact its ability to participate.

•8. CMS will now allow ACOs to add or subtract providers/suppliers over the course of the agreement period, but the ACO must notify CMS of a "significant change". Changes could potentially require adjustment of the ACO's benchmark or could cause the ACO to no longer meet eligibility requirements (e.g., could cause assignment to fall below 5,000 beneficiaries).

•9. ACOs will no longer be required to have a mandatory antitrust review, but will be given the opportunity for a voluntary expedited review.

•10. ACOs will be permitted to contact prospectively assigned beneficiaries to notify them of their intent to request the beneficiaries' identifiable data and give the beneficiaries the option to opt-out.

•11. CMS will establish a "crosswalk" of primary care HCPCS codes to revenue center codes used by FQHCs and RHCs so that services can be included in the ACO assignment process.

•12. CMS is revising the beneficiary assignment process to reflect a "step-wise" approach. First, the beneficiaries will be assigned on the basis of utilization of primary care services by primary care physicians (based on plurality of allowed charges), but beneficiaries who are not seeing a primary care physician may be assigned to an ACO on the basis of primary care services provided by specialists or non-physician providers (based on plurality of allowed charges).

•13. CMS will provide a list of beneficiaries likely to receive care from the ACO on a prospective basis, which will be updated periodically on a rolling basis. The list would be reconciled at the end of the performance year so that only beneficiaries who were actually assigned to the ACO are included in Shared Savings calculations.

•14. CMS refused to adopt a "threshold standard" for assignment of beneficiaries, which would have required that even beneficiaries who receive very few services from an ACO will be assigned to the ACO if they receive a plurality of primary care services from the ACO. CMS will instead use the step-wise approach discussed above.

•15. CMS reduced the number of quality measures required by removing certain measures determined to be redundant or overly complex or burdensome. The measures have been reduced from 65 to 33.

•16. The demonstration of meaningful use of EHRs by the ACO's primary care physicians is no longer a requirement; rather, EHR use is a quality measure that is weighted higher than other quality measures.

•17. CMS will make additional risk adjustments based on ESRD, disabled, aged/dual eligible and aged non-dual eligible beneficiaries.

•18. CMS will allow for sharing on first dollar savings for ACOs that meet or exceed the Minimum Savings Rate (MSR).

•19. CMS eliminated the 25% withhold of shared savings and the forfeiture for early termination from the program.

•20. CMS retained the requirement for ACOs to have a compliance program and added a requirement that "probable" violations of the law should be reported to law enforcement. CMS also clarified that, while a compliance officer may have a legal education, the compliance officer must be a different individual than the ACO's legal counsel.

CMS also clarified certain misconceptions about its comments to the proposed rule, including a clarification that any and all groups of providers and suppliers that meet the eligibility requirements will be permitted to participate in the shared savings program. CMS also clarified that providers providing primary care services on which assignment is based (including physicians, specialists providing primary care services and non-physician providers such as NPs and PAS) must be exclusive by TIN, but not by NPI. In other words, a primary care physician or other individual whose primary care services are a basis for assignment can participate in more than one ACO individually, but group practices that provide primary care services upon which assignment is based must be exclusive to one ACO.

If you need assistance creating, implementing, or overseeing an ACO, please contact a Wachler & Associates attorney at 248-544-0888.

October 20, 2011

CMS Releases Final Rule for Accountable Care Organizations

Today, the Centers for Medicare and Medicaid Services (CMS) released its final rule for Medicare's Accountable Care Organizations (ACO). The program is designed to encourage health care providers to coordinate care in order to achieve cost-savings and improve the quality of care for Medicare patients. Due to substantial criticism from the health care industry, CMS made a number of significant modifications to the proposed rules that were released in March. According to CMS, these modifications include:

  • Greater flexibility in eligibility to participate in the Shared Savings Program
  • Multiple start dates in 2012
  • Establishment of a longer agreement period for those starting in 2012
  • Greater flexibility in the governance and legal structure of an ACO
  • Simpler and more streamlined quality performance standards
  • Adjustments to the financial model to increase financial incentives to participate
  • Increased sharing caps
  • No down-side risk and first-dollar sharing in Track 1
  • Removal of 25 percent withhold of shared savings
  • Greater flexibility in timing for the evaluation of sharing savings (claim run-out reduced to 3 months)
  • Greater flexibility in antitrust review
  • Greater flexibility in timing for repayment of losses
  • Additional options for participation of FQHCs and RHCs

If you have any questions about ACO participation, or any other health law questions, please contact a Wachler & Associates attorney at 248-544-0888.

October 20, 2011

OIG Releases Unfavorable Advisory Opinion Regarding an Arrangement Between a Physician-Invested Entity and a Pathology Laboratory

On October 3, 2011, the Department of Health and Human Services Office of Inspector General (OIG) issued an unfavorable advisory opinion regarding a proposed arrangement under which physicians would invest in a company that would provide pathology laboratory management services to a third party.

Under the proposed arrangement, a physician who owns and manages a limited liability company ("Requestor") would enter into a management contract with a pathology laboratory ("Path Lab"), whereby the Requestor would provide the Path Lab with various clinical laboratory services for a fixed number of hours each year. The Requestor would also provide utilities, furniture, fixture, the exclusive use of laboratory space and equipment, and marketing and billing services. In return, the Path Lab would pay a usage fee to the Requestor that would be calculated based on a percentage of the lab's income which would be fixed in advanced for a 12-month term.

The Requestor's owner/manager would offer an opportunity for physicians to invest in the Requestor. The new physician investors are anticipated to have little or no background experience in the clinical laboratory services field. According to the Requestor, the value of the investment interest that would be held by physician investors in a position to generate business for the Requestor through referral of laboratory specimens to the Path Lab would exceed 40 percent. Additionally, the Requestor anticipates that the business generated through referrals by physician investors would equate to substantially more than 40 percent of the Requestor's gross revenue related to the furnishing of health care items and services. Finally, the Requestor has certified that each of the physician investors would have the option of referring specimens to the Path Lab but referrals are not implicitly or explicitly a condition of the arrangement.

The OIG analyzed a number of safe harbor regulations that were potentially applicable to the proposed arrangement, which included: small entity investment, space rental, equipment rental, and services and management contracts safe harbors.

As for the small entity investment safe harbor, the OIG concluded that the Requestor failed to meet two of the requirements in order to be awarded protection. First, no more that 40 percent of an entity's investment interests may be held by investors that are in a position to influence referrals. Secondly, no more than 40 percent of an entity's gross income revenue may come from referrals or business otherwise generated from investors. Due to the Requestor certifying that the proposed arrangement would violate both of these requirements, the small entity investment safe harbor is not available.

The safe harbors for space rental, equipment rental, and for personal services and management contracts all share the same basis elements. Therefore, the OIG analyzed these claims as a group. The OIG held that the proposed arrangement could not take advantage of any of these safe harbors. The main reason for this conclusion was that the aggregate usage fees paid to the Requestor would not be set in advance. Rather, the usage fees under the proposed arrangement would be calculated based on a percentage of the Path Lab's income.

Since the OIG was unable to apply a safe harbor exception, it next had to analyze whether the proposed arrangement poses no more than a minimal risk of fraud and abuse under the anti-kickback statute. The OIG concluded that the proposed arrangement would pose more than a minimal risk of fraud and abuse for the following reasons:

  1. The fee structure would link the physician investor's profit distribution to the business they refer to the Path Lab. This would pose considerable risks of overutilization of laboratory services, distort medical decision-making, and increase costs to federal health care programs.
  2. The same risks as in (1) would also occur due to more than 40 percent of Requestor's investment interests being held by physician investors, along with substantially more than 40 percent of its gross revenue coming from business generated from its investors.
  3. The physician investors would have no experience in providing clinical pathology services. Therefore, the sole business purpose of the arrangement would be to allow physician investors to profit from their referrals to the Path Lab.

For more information on compliance with the Anti-Kickback Statute or any other health care regulations, please contact a Wachler & Associates attorney at 248-544-0888.

October 19, 2011

US District Court Denies an Ambulance Services' Request for Preliminary Injunction Against a Medicare PSC

On October 7, 2011, the United States District Court of New Jersey, made a ruling denying an ambulance services' request for a preliminary injunction against a Medicare program safeguard contractor (PSC). National Ambulance Services, Inc. ("Nationwide") sought a preliminary injunction to restrain SafeGuard Services, LLC ("Safeguard") from continuing its pre-payment audit of the ambulance service Part B claims for non-emergency ambulance transportation to patients. On January 13, 2011, the Centers for Medicare and Medicaid Services (CMS) had notified Nationwide that the PSC for its district would conduct a pre-payment process to ensure that all payments to Nationwide were consistent with Medicare policies. Subsequently, Safeguard conducted a pre-payment audit and recommended that 92.1% of Nationwide's claims should be denied Medicare reimbursement. At the time of the request for preliminary injunction, Nationwide had only appealed a portion of the total claims to an Administrative Law Judge and none of the claims had reached the Medicare Appeals Counsel level of appeal.

The district court began its analysis by holding that it does not have the authority to make a ruling that involves the interpretation of the Medicare statute in regards to the evidentiary standard for coverage. Judicial review over matters arising under the Medicare statute was not available to the plaintiff until all available administrative remedies were exhausted. The court stated that without a final judgment of the Medicare Appeals Council, the plaintiff had not exhausted its administrative remedies, and consequently, the court lacked the authority to review any claims arising under the Medicare statute.

The court next moved to the issue of awarding Nationwide a preliminary injunction. In order to issue this type of emergency relief, the court stated it must consider the following four factors: (1) the likelihood that Nationwide would succeed on the merits; (2) the extent to which Nationwide will suffer irreparable harm without injunctive relief; (3) the extent to which SafeGuard will suffer irreparable harm if the injunction is issued; and (4) the public interest in the matter.

As to the first factor, the court held that since success on the merits depended on whether or not Nationwide's services were covered by the Medicare statute, the court did not have the authority to address this claim. In regards to the second factor, the court held that the harm to Nationwide was not irreparable within the meaning of the statute. Although the court expressed its sympathies regarding Nationwide's "financial dependence on Medicare payments," it explained that a preliminary injunction could not be granted based purely on monetary harm because monetary harm may be remedied only by compensatory damages. Finally, the court held that the public interest factor weighed heavily against Nationwide. The court emphasized several times throughout the opinion that Congress intended that discretion to determine Medicare coverage is held by the Secretary of Health and Human Services, and plaintiffs are afforded several ways to challenge claims through the Medicare appeals process. Therefore, the court found that the public interest weighed against its ability to interpret the Medicare statute before the administrative remedies had been exhausted.

For more information on pre-payment review audits and the most effective audit defense strategies, please contact a Wachler & Associates attorney at 248-544-0888.

October 14, 2011

CMS Sends ACO Final Rule to the Office of Management and Budget for Review

According to a breaking news article by HealthData Management, the Centers for Medicare and Medicaid Services (CMS) has sent a Shared Saving/Accountable Care Organizations final rule to the Office of Management and Budget (OMB) for review. A review by OMB is one of the last stages before a rule becomes published in the Federal Register. The final rule is expected to include several changes due to the substantial amount of industry criticism the proposed rule faced during the comment period. According to HealthData Management, the concerns raised about the proposed rule included: (1) the proposed 65 measures would be excessively burdensome for newly formed ACOs, (2) allowing pathologists and laboratory professionals to be included as eligible physicians, and (3) giving ACO-enrolled patients the ability to restrict access to their health information could severely limit the ACO's ability to improve the health of the individual.

If you have any questions about ACO participation, or any other health law questions, please contact a Wachler & Associates attorney at 248-544-0888.

October 14, 2011

OIG Releases Fiscal Year 2012 Work Plan

Today, the Office of Inspector General (OIG) released the fiscal year 2012 Work Plan. The plan describes the activities the OIG plans to continue, as well as activities it plans to initiate. The 2012 fiscal year, and the programs described, runs from October 1, 2011 through September 30, 2012. Below is a list of several new and continuing OIG activities for various health care providers.

Home Health Services (New)

  • States' Survey and Certification of Home Health Agencies: Timeliness, Outcomes, follow-up, and Medicare Oversight
  • Missing or Incorrect Patient Outcome and Assessment Data
  • Questionable Billing Characteristics of Home Health Services
  • Medicare Administrative Contractors' Oversight of Home Health Agency Claims
  • Wage Indexes Used To Calculate Home Health Payments

Home Health Services (Continued)

  • Medicare's Oversight of Home Health Agencies' Patient Outcome and Assessment Data
  • Home Health Agency Claims' Compliance With Coverage and Coding Requirements
  • Home Health Prospective Payment System Requirements
  • Home Health Agency Trends in Revenues and Expenses

Hospitals (New)

  • Accuracy of Present-on-Admission Indicators Submitted on Medicare Claims
  • Medicare Inpatient and Outpatient Payments to Acute Care Hospitals
  • Acute-Care Hospital Inpatient Transfers to Inpatient Hospice Care
  • Medicare Outpatient Dental Claims
  • In-Patient Rehabilitation Facilities

Hospitals (Continued)

  • Hospital Reporting for Adverse Events
  • Reliability of Hospital-Reported Quality Measure Data
  • Hospital Admissions With Conditions Coded Present on Admission
  • Hospital Inpatient Outlier Payments: Trends and Hospital Characteristics
  • Medicare's Reconciliations of Outlier Payments
  • Hospital Claims With High or Excessive Payments
  • Hospital Same-Day Readmissions
  • Medicare Payments for Beneficiaries With Other Insurance Coverage

Nursing Homes (new)

  • Safety and Quality of Post-Acute Care for Medicare Beneficiaries
  • Nursing Home Compliance Plans
  • Questionable Billing Patterns During Non-Part A Nursing Home Stays

Nursing Homes (Continued)

  • Medicare Requirements for Quality of Care in Skilled Nursing Facilities
  • Oversight of Poorly Performing Nursing Homes
  • Nursing Home Emergency Preparedness and Evacuations During Selected
  • Hospitalizations and Rehospitalizations of Nursing Home Residents

Hospices (New)

  • Hospice Marketing Practices and Financial Relationships with Nursing Facilities

Hospices (Continued)

  • Medicare Hospice General Inpatient Care

Medical Equipment and Supplies (New)

  • Effectiveness of Edits To Prevent Payments to Multiple Suppliers of Home Blood-Glucose Testing Supplies
  • Collection of Surety Bonds for Overpayments Made to Suppliers of Durable Medical Equipment
  • Support Surface Pricing
  • Questionable Billing for Medicare Diabetic Testing Supplies

Medical Equipment and Supplies (Continued)

  • Medicare Enrollment and Monitoring for Suppliers of Durable Medical Equipment, Prosthetics, Orthotics, and Supplies
  • Medicare Qualifications of Orthotists and Prosthetists
  • Medicare Supplier Acquisition Costs for Back Orthoses
  • Medicare Payments for Various Categories of Durable Medical Equipment
  • Competitive Bidding Process for Medical Equipment and Supplies
  • Medicare DMEPOS Competitive Bidding Program: Supplier Solicitation of Physician

If you have any questions regarding the OIG's fiscal year 2012 Work Plan, or any other health law questions, please contact a Wachler & Associates attorney at 248-544-0888.

October 12, 2011

Recent RAC Updates

DCS Healthcare, the RAC for Region A, posted four new issues to its CMS-approved issues list for providers in Maryland.

  • Medical Necessity Review (MNR)- MDC 5 conditions of the circulatory system (medical) MS-DRGs: 286-293, 299-305, and 308- 316. 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. MS-DRGs: 286-293, 299-305, and 308- 316.
  • Medical necessity: acute inpatient admission neurological disorders MS-DRG's: 068-074, 103, 312 (Collaborative). RACs will review documentation to validate the medical necessity of short stay, uncomplicated admissions. Medicare only pays for inpatient hospital services that are medically necessary for the setting billed and that are coded correctly. Medical documentation will be reviewed to determine that the services were medically necessary and were billed correctly for MS-DRG's, 068-074, 103, and 312.
  • Medical necessity: acute inpatient admission respiratory conditions (collaborative) the MS DRGs affected are MS DRG 177-180, MS DRG 190-198 and MS DRG 202-206. RACs will review documentation to validate the medical necessity of short stay, uncomplicated admissions. Medicare only pays for inpatient hospital services that are medically necessary for the setting billed and that are coded correctly. Medical documentation will be reviewed to determine that the services were medically necessary and were billed correctly. The MS DRGs affected are MS DRG 177-180, MS DRG 190-198 and MS DRG 202-206.
  • Medical necessity review (MNR)- MDC 6 diseases and disorders of the digestive system MS-DRGs: 347-358, 368-395. 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. MS-DRGs: 177-180, MS DRG 190-198 and MS DRG 202-206.

CGI Federal, RAC for Region B, posted four new issues to its CMS-approved issues list for providers in all region B states.

  • Verteporfin and ocular photodynamic therapy without fluorescein angiography. The purpose of this audit is to identify overpayments associated with providers billing for Verteporfin (J3396) and Ocular Photodynamic Therapy (OPT) (67221-67225) in the absence of fluorescein angiography (92235) or indocyanine-green angiography (92240) performed prior to each treatment.
  • Multiple dose allergy vials. The purpose of this complex review is to ensure accurate reporting of CPT code 95165 (preparation and provision of antigens for allergen immunotherapy).
  • Excessive billing of positive airway pressure (PAP) and respiratory assist device (RAD) accessories. Medicare allows payment of PAP and RAD accessories when coverage criteria for the devices have been met. However, the National Government Services Local Coverage Determination (LCD) for Positive Airway Pressure (PAP) Devices for the Treatment of Obstructive Sleep Apnea (L27230) state that when supplies are dispensed more frequently or in quantities of supplies greater than usual maximum amounts are dispensed, they will be denied as not medically reasonable and necessary.
  • Leuprolide 3.75mg incorrect code reported - outpatient. The purpose of the complex review is to identify the incorrect use of HCPCS code and corresponding number of units billed for services of Leuprolide (depot suspension) 3.75mg. An overpayment exists when a provider(s) bills for greater than 3 units of service for HCPCS code J1950, as defined by applicable Local Coverage Determination documents.

Connolly Healthcare, RAC for region C, has added 33 new issues to its CMS-approved issues list. Listed below are the approved issues for inpatient hospital claims. Please visit Connolly's website to view the remaining issues.

  • Acute readmission - No B4. Same day readmission to the same facility for similar/same symptoms should be considered as 1 stay and hospital should adjust to make the entire stay on one claim only.
  • Post-acute transfer - underpayments. Inpatient claims were identified with discharge disposition to an acute care inpatient facility (02), skilled nursing facility (03), home health (06), Inpatient rehab facility (62), long-term care facility (63), or psychiatric facility (65). These inpatient claims fall under the Post Acute Transfer policy and are reimbursed on per diem rate, up to full MS-DRG reimbursement. However, there is no identified claim submission from a receiving facility.

HealthDataInsights, RAC for region D, has added 36 new issues to its CMS-approved issues list for providers in all region D states. Listed below are two examples of approved issues for short-term acute care hospitals. Please visit HealthDataInsights' website to view the remaining issues.

  • Acute Inpatient Hospitalization - Coronary Bypass without Cardiac Cath without MCC (DRG 236). 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.
  • Acute Inpatient Hospitalization - Viral Meningitis without CC/MCC (DRG 076). 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.

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.

October 12, 2011

Recent RAC Updates

CGI Federal, the RAC for Region B, added two new issues to its CMS-approved issues list. In addition, two more issues were added to the CMS-approved issues list for DME suppliers who bill CIGNA Government Services.

CGI Federal New Issues

  • Leuprolide 3.75mg incorrect code reported (Region B). The purpose of the complex review is to identify the incorrect use of HCPCS code and corresponding number of units billed for services of Leuprolide (depot suspension) 3.75mg. An overpayment exists when a provider bills for greater than 3 units of service for HCPCS code J1950, as defined by applicable Local Coverage Determination documents.
  • Pharmacy supply dispensing fee (Region B). Medicare pays pharmacy supply/dispensing fees for immunosuppressive, oral anti-cancer, chemotherapeutic, and oral anti-emetic drugs as well as drugs used as part of an anti-cancer chemotherapeutic regimen when they are submitted on the same claim as the drug being billed. A claim submitted with a pharmacy supply/dispensing fee in the absence of any of the previously mentioned drugs represents an overpayment and will be denied as not medically reasonable and necessary.

CIGNA Government Services New Issues

  • Osteogenesis stimulators (DME suppliers who bill CIGNA Government Services). An overpayment exists when a provider bills for an osteogenesis stimulator with an ICD-9 code that is not included in the list of covered ICD-9 codes within the applicable Local Coverage Determination documents.
  • Overuse of PAP/RAD accessories (DME suppliers who bill CIGNA Government Services). A supplier must not dispense more than a certain quantity of PAP/RAD accessories at a time. Quantities of supplies greater than those described in the policy as the usual maximum amounts will be denied as not reasonable and necessary.

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.

October 11, 2011

Senate Finance Committee Publishes Report About Home Health Agencies

In its role of overseeing the Medicare and Medicaid Programs, the Senate Finance Committee released a staff report alleging that the four largest publicly traded home health agencies were providing medically unnecessary care by encouraging therapists to meet the 10 visit threshold in order to receive a  "bonus" payment  under the PPS system.  The report was based on an investigation initiated by Committee Chairman Max Baucus and Senior Member Chuck Grassley.  The Senators instigated the investigation based upon a Wall Street Journal analysis.

Among other findings, the report alleges that an analysis of therapy billings from these home health agencies show a pattern of concentrated billings at or just above the 10 visit threshold.  The report further alleges that the companies encouraged billing of medically unnecessary services to reach this threshold.

Home Health Agencies should be aware that Medicare contractors will likely be closely scrutinizing PT visit frequency and patterns.  Also, providers are likely to see changes in the payment system as a result of this report.

If you have any questions regarding Medicare or Medicaid coverage policies, or need assistance with a Medicare audit or investigation, please contact a Wachler & Associates attorney at 248-544-0888.

October 6, 2011

Andrew Wachler Quoted in the American Medical News Regarding National Practitioner Data Bank's Move to Shut Down Public Access

Andrew Wachler, principal of Wachler & Associates, P.C., was quoted in last week's American Medical News article regarding the National Practitioner Data Bank's move to shut down public access to anonymous information about physician activities. The move was made to protect physician confidentiality after a reporter was able to identify an individual physician's record for a news article. Mr. Wachler stated that the government acted correctly in shutting down public access, which will result in the protection of the peer review process.

If you have questions regarding Medicare, Medicaid or third party payor audits, or have any other health law questions, please contact a Wachler & Associates attorney at 248-544-0888.