April 2012 Archives

April 30, 2012

CMS Publishes Final Rule With New Provider and Supplier Requirements

On April 27, 2012 the Centers for Medicare and Medicaid Services (CMS) published a final rule that states new provider and supplier requirements. The final rule requires all providers and suppliers that qualify for a National Provider Identifier (NPI) to include their NPI on all enrollment applications for Medicare or Medicaid, and on all claims submitted for payment. The rule further states that any claim submitted without the appropriate NPIs will be denied. The final rule also requires that all prescriptions under Medicare Part D include an NPI for the prescribing physician. The rule is intended to help more efficiently and accurately detect fraud, and is estimated to save taxpayers an estimated $1.59 billion over ten years.

In a press release, CMS announced that the rule "ensures that only qualified, identifiable providers and suppliers can order or certify certain medical services, equipment, and supplies for people with Medicare."

Additionally, the rule also requires that physicians and other professionals who are permitted to order and certify covered items and services for Medicare beneficiaries be enrolled in Medicare. In an effort to further track and monitor claims, Part B items and services ordered or referred by a physician or eligible professional can only be submitted if the physician or eligible professional has an approved enrollment record, or a valid opt out record in the Medicare Provider Enrollment, Chain, and Ownership System (PECOS).

Finally, the rule mandates document retention requirements for providers and suppliers that order and certify items and services for Medicare beneficiaries. Under the final rule providers and suppliers must maintain ordering and referring documentation, including the NPI, received from a physician or eligible non physician practitioner for seven years from the date of service. Further, failure to comply with the documentation retention requirements is reason for revocation.

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April 30, 2012

GAO Report Examines CMS Efforts to Strengthen Screening

From July 2011 to February 2012 the Government Accountability Office (GAO) conducted a performance audit of the Centers for Medicare and Medicaid Services (CMS) efforts to strengthen the screening of providers and suppliers applying to take part in, and currently taking part in, the Medicare and Medicaid programs. On April 10, 2012 the GAO released its report to the Chairman of the Senate Finance Committee.

The purpose of the study was to determine weaknesses in the CMS enrollment procedures that leave the Medicare and Medicaid programs open to fraud and abuse. CMS currently has some procedures in place for screening applicants, and the GAO study reveals that there are planned procedures that will be proposed and implemented in 2012 to further improve the applicant screening process.

The Patient Protection and Affordable Care Act of 2010 (PPACA) provided CMS with increased authority to combat fraud and abuse in Medicare. Under this authority, CMS currently uses front end automated edits to check a provider's National Provider Identifier to make sure it is active before processing a claim. PPACA also requires providers and suppliers be subject to licensure checks, and gives CMS the authority to require criminal background checks.

The GAO report addresses the extent to which CMS has implemented new provider and supplier enrollment screening procedures since the enactment of PPACA. On February 2, 2011 CMS published a final rule implementing a screening procedure based on a provider or supplier's risk of fraud, waste, and abuse. These risk categories are limited, moderate, and high. Each risk category comes with varying degrees of application screening. High risk providers and suppliers could undergo unscheduled site visits and fingerprint based criminal background checks.

The report found that there are currently new screening procedures, the implementation of which remain in progress. CMS is in the process of drafting a proposed rule which will extend surety bond requirements for home health agencies, independent diagnostic testing facilities, and potentially outpatient rehabilitation facilities. Currently, surety bonds are only required for DMEPOS suppliers.

CMS is also planning to contract with Federal Bureau of Investigation-approved contractors to handle fingerprinting of providers and suppliers, and do criminal background checks of high risk applicants. CMS expects to have contracts in place for these screening procedures by the end of 2012.

PPACA has a requirement that Medicare providers establish compliance programs that contain core elements of compliance and ethics as established by CMS and the HHS OIG. A compliance program is a set of policies and procedures that a provider organization implements to help it act ethically and within the parameters of the law. CMS is working on developing a compliance program intended to help provider organizations prevent and detect violations of Medicare regulations, but there is no current target date for the implementation of this program.

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April 17, 2012

Various Health Care Organizations Comment on CMS' New Demonstration Programs

Recently, a group of 35 health care organizations wrote a letter to the Centers for Medicare and Medicaid Services (CMS) expressing their concerns regarding CMS' new demonstration programs. The organizations requested that CMS rescind the Recovery Audit Prepayment Demonstration and revise the Prior Authorization Demonstration for power mobility devices. Both demonstrations were scheduled to begin on January 1, 2012, but were subsequently delayed due to the concerns expressed by numerous health care organizations. The revised scheduled start date for the demonstration programs is now on or after June 1, 2012.

In regards to the Recover Audit Contractors (RAC) prepayment demonstration, the organizations have requested that CMS rescind the program in its entirety. The reasons for this request include:

  • The demonstration would threaten patient access to care because patients who have the conditions under the targeted prepayment code sets may be inappropriately turned away due to the high level of cost-related scrutiny prescribed by the hospital's policies and procedures. The organizations believe that physicians, when making potentially life-threatening diagnoses, should not be influenced by the hospital's reservations that stem from increased government scrutiny and the risk of losing payments.
  • CMS' use of RACs to perform prepayment review is an inappropriate utilization because: (1) RACs are currently inefficient at providing timely determinations and communications relating to post-payment audits; (2) RACs ability to make accurate prepayment decisions is suspect due to their poor record on appeal, which ultimately leads to a waste of providers' time and money in defending the often inaccurate and unwarranted accusations; (3) RACs primary purpose of educating providers does not come to fruition because providers are consistently unsuccessful at directly communicating with RACs, which results in a unchanging improper payment rate; and (4) RACs are compensated on a contingency fee basis, which leads to extensive "fishing expeditions" that are overly burdensome on providers.

As it pertains to the Prior Authorization Demonstration for power mobility devices, the organizations have requested that CMS make the following revisions:

  • The demonstrations should focus on extreme statistical outliers, rather than on every provider who orders power mobility devises within the targeted states, because providers who infrequently order such devices will be unreasonably impacted.
  • CMS should consider the demonstration's impact on the beneficiaries' health due to the resulting delay in treatment associated with submitting prior authorization.

Finally, the organizations requested that CMS provide its methodology for determining the burden estimates and respondent costs (i.e. estimated time and costs that providers spend dealing with the prior authorization and prepayment process) , as well as consider the additional costs involved with erroneous determinations and the subsequent appeals process. The organization urged CMS to take a more "global view" when analyzing the demonstrations' costs on the federal health care programs in general.

In addition their requests, the organizations posed a number of recommendations to CMS regarding the prepayment and prior authorization demonstrations, which include:

  • Engage with the Center for Program Integrity (CPI)
  • Require demonstration contractors to operate under existing guidelines
  • Hire a full time medical director at the Office of Financial Management (OFM)
  • Publish contact information for MAC medical directors
  • Publish Comprehensive Error Rate Testing (CERT) reports in their entirety
  • Utilize the OIG's evaluation of the CERT program

If you have any questions regarding the Recovery Audit Prepayment Demonstration or the Prior Authorization Demonstration for power mobility devices, or if you have any other concerns regarding CMS audit activities, please contact an experienced health law attorney at Wachler & Associates at 248-544-0888.

April 13, 2012

OIG Releases Its Updated List of Excluded Individuals and Entities

On April 12, 2012, the Office of Inspector General (OIG) for the Department of Health and Human Services (HHS) published an updated list of excluded providers, persons and entities from Medicare, Medicaid and other Federal health care programs, known as the List of Excluded Individuals and Entities (LEIE).

HHS is authorized by Section 1128 of the Social Security Act to exclude persons from participating in Federal health care programs. HHS has delegated this authority to the OIG. This delegation grants the OIG the authority to exclude individuals and entities from participating in Medicare, Medicaid and other Federal health care programs, as well as the authority to impose civil money penalties (CMP) for program-related misconduct. In addition, the Balanced Budget Act (BBA) of 1997 authorizes the OIG to impose additional CMP against any health care entity or provider that employs or enters into contracts with an excluded individual or entity if such an agreement involves providing any item or service to Federal program beneficiaries.

If an individual or entity is excluded from Federal health care programs, no federal payment may be made for any items or services. These items or services not only include those furnished by an excluded individual or entity, but also include any item or service that was directed or prescribed by an excluded physician when the furnishing entity knew or should have known of the exclusion and whether or not the payment is made to the non-excluded provider.

Section 1128 of the Social Security Act establishes which individuals and entities are excluded from Federal health care programs. The Act includes both mandatory and permissive exclusions. As the phrase implies, a mandatory exclusion is that in which the OIG must exclude from Federal health care programs (e.g. felony conviction relating to health care fraud). On the other hand, a permissive exclusion enables the OIG to use its discretion in determining whether exclusion is the correct remedial action to enforce (e.g. individuals controlling a sanctioned entity).

An excluded party may be subject to CMP if it violates its exclusion. A violation will be found if the excluded party submits, or causes to be submitted, a claim for Federal reimbursement for providing an item or service to a Federal program beneficiary. Furthermore, since program reinstatement is not automatic, a violation of an exclusion may severely diminish any possibility of being reinstated into Federal health care programs in the future. In addition, further CMP may be sought for any health care provider who employs or contracts with an excluded individual or entity when such agreement involves rendering any item or service that is to be reimbursed, directly or indirectly, by a Federal health care program.

The OIG advises health care providers to check the OIG List of Excluded Individuals/Entities prior to engaging in any agreement with another provider. The OIG website is updated regularly and provides up-to-date lists of all exclusions and reinstatements to the Federal health care programs. The lists for March of 2012 have recently been added to the database.

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April 10, 2012

HHS Announces Proposed Rule to Simpify the Administrative Process for Health Care Providers

Yesterday, the Department of Health and Human Services (HHS) announced a proposed rule that would simplify the administrative processes for health care providers by establishing a unique health plan identifier (HPID) under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). HHS estimates that the HPID would save the entire health care industry up to $4.6 billion over the next ten years.

Currently, multiple identifiers are used to identify health plans in standard transactions. These identifiers differ in length and format, which has created frustration among health care providers. Due to the current lack of a standard identifier, health care providers are faced with onerous burdens that lead to an inefficient use of their time. HHS has highlighted several of the problems associated with the lack of a standard identifier, which include: misrouting of transactions, rejected transactions due to insurance identification errors, and difficulty determining patient eligibility.

The proposed rule has been designed to eliminate the above mentioned problems by simplifying the administrative process for providers. The rule proposes that health plans have a unique identifier of a standard length and format in order to increase standardization within the HIPAA standard transactions. The standardization will enhance the automation and simplification in the provider's administrative process. HHS believes that these enhancements will enable providers to avoid greater administrative costs by decreasing the amount of time providers will need to spend interacting with health plans, as well as decrease unnecessary material costs because the automated process will shift the currently-used manual transactions to an electronic transaction.

In addition to establishing a unique HPID, the proposed rule also adopts the use of an "other provider" identifier (OEID) for entities that are not health plans, health care providers, or individuals, but still need to be identified in HIPAA standard transactions. Finally, the proposed rule would also delay the required compliance date in which covered entities must comply with the International Classification of Diseases, 10th Edition (ICD-10), which are the new codes used to classify diseases. The compliance date for ICD-10, originally set for October 1, 2013, will be pushed back to October 1, 2014.

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April 6, 2012

Recent RAC Activity

On April 2, 2012 DCS Healthcare posted new approved issues to its approved issues list for some Region A states. Among them were two issues for skilled nursing facilities:

· CT Scans, Head and Neck, Incorrect Billing: Potential incorrect billing of CT scans not supported by medical necessity (NGS LCD 28516 (A48015))

· CT Scans, Trunk and Extremities, Incorrect Billing: Potential incorrect billing of CT scans not supported by medical necessity (NGS LCD 28516 (A48015))

In late March 2012, CGI posted a new approved issue to its approved issues list for Region B states. The new issue involves a complex medical necessity review:

· Minor Musculoskeletal Procedures ; MS-DRGs 479, 484, 494, 497, 499, 502, 508, 509, 512, 517 (Medical Necessity): The purpose of this complex review is to identify claims that have been reviewed validating medical necessity in short stay, uncomplicated admissions. This review will identify if medical necessity was met per Medicare guidelines.

On March 23, 2012, Connolly added new approved issues to its approved issues list for Region C states:

· Hospice Related Services -Outpatient CMS Issue Number: C000162012: Services related to a Hospice terminal diagnosis provided during a Hospice period are included in the Hospice payment and are not paid separately.

· Excessive Drug Units Billed - Carrier (At this time, Medical Necessity will be excluded from this review) CMS Issue Number: C001562011: Drugs and Biologicals should be billed in multiples of the dosage specified in the HCPCS code long descriptor. The number of units billed should be assigned based on the dosage increment specified in that HCPCS long descriptor, and correspond to the actual amount of the drug administered to the patient, including any appropriate, discarded drug waste. If the drug dose used in the care of a patient is not a multiple of the HCPCS code dosage descriptor, the provider rounds to the next highest unit. Drug waste should be coded according to the requirements of the local contractor. Claims billed with excessive units will be reviewed to determine the correct number of billable/payable units.

On March 19, 2012, HealthDataInsights added several new issues to its approved issues list for Region D states:

· Acute Inpatient Hospitalization - Major Male Pelvic Procedures with CC/MC (DRG 707): 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 Admission - OR Procedure with Principal Diagnosis of Mental Illness (DRG 876): 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.

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April 5, 2012

CMS to Release Comparative Billing Reports for Cardiology Services

The Centers for Medicare and Medicaid Services (CMS) recently announced it will release a national provider Comparative Billing Report (CBR) targeting Cardiology Services. The CBRs will be released to a maximum of 5,000 providers on April 23, 2012.

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.

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