Recently in Health Law Category

March 21, 2014

Fox 2 Detroit Interviews Wachler & Associates' Andrew Wachler regarding Beaumont, Botsford, Oakwood Merger

Wachler & Associates partner Andrew Wachler appeared on Fox 2 Detroit this morning to discuss the recent announcement that Beaumont Health System, Botsford Health Care, and Oakwood Healthcare have signed a letter of intent to form a new $3.8 billion nonprofit health system.

In his interview, Mr. Wachler described the advantages this affiliation will provide in improving patient care and accessibility. He indicated that it could allow patients access to each hospitals' various specializations and also allow the hospitals to share technology and capital resources, which in time has the potential to improve quality of care and reduce costs.

Mr. Wachler also explained that the Affordable Care Act, which includes the concepts of bundled payments and Accountable Care Organizations (ACOs), incentivizes large health systems to manage care efficiently, and may consequently result in a greater focus on wellness and preventive care.

To learn more about this story, please visit Fox 2 Detroit's website. Mr. Wachler originally appeared on the 11:00am news segment. Fox 2 will air a more comprehensive version of the story at 5pm.

January 23, 2014

CMS to Make Physician Payment Information Available on Case-by-Case Basis

On January 14, 2014, the Centers for Medicare & Medicaid Services (CMS) modified their policy regarding the disclosure of physician payment information under the Freedom of Information Act (FOIA). Effective March 18, 2014, CMS will now evaluate requests for individual physician payment information on a case-by-case basis.

CMS Principal Deputy Administrator, Jonathon Blum, cites the agency's commitment to greater transparency and the benefits numerous stakeholders have identified that would result from an increase in the availability of information as reasons for the change in policy. Some benefits CMS hopes the policy will lead to include:

• Provider collaboration on improved care management and lower costs in the delivery of health care;
• Increased ability of consumers to gain broader and more reliable measures of provider quality and performance; and
• Increased ability for journalists, as well as the public at large, to identify waste, fraud, and abusive practices.

The impetus for the change in policy came in May 2013 after a federal judge in Florida vacated a 1979 injunction that prohibited the Department of Health and Human Services from disclosing certain Medicare claims data for physicians. After a balancing of the interests, the judge determined that the public interest superseded physician privacy. The Court found the law had significantly changed since the issuance of the 1979 injunction, namely that under the Privacy Act, the scope of available injunctive relief had been more narrowly construed.

Blum, acknowledging concerns over the integrity of the data, notes that CMS is committed to protecting physician privacy in addition to ensuring the accuracy of data released, as well as developing measures to protect the data from misuse. The agency considered 130 comments from over 300 organizations in coming to its decision. However, at this time, CMS has not provided any guidelines or criteria on how the agency will determine whether or not to release individual physician data.

Wachler & Associates will continue to monitor any further developments and provide guidance related to the new policy as the implementation date of March 18, 2014 is quickly approaching. If you or your health care entity has any questions relating to the new policy or any other health care law questions, please contact an experienced healthcare attorney at 248-544-0888 or at wapc@wachler.com.

January 17, 2014

OIG Approves Industry Stakeholders' Contributions to a Patient Assistance Program under the Anti-Kickback Statute

The Department of Health and Human Services (HHS), Office of Inspector General (OIG) recently released an advisory opinion that highlights long-standing OIG guidance as to how industry stakeholders can contribute to independent, bona fide charitable assistance programs. In this case, the patient assistance program ("Requestor") provides grants to patients suffering from a specific disease for insurance premiums and other expenses not covered by insurance. The Requestor is a supporting organization of a nonprofit charitable foundation ("Foundation") that exists solely to support the disease.

The Requestor's main source of funding is the Foundation. However, all funds received from the Foundation are ultimately donations by pharmaceutical manufactures of the drugs used to treat the disease. The Requestor thus sought an advisory opinion to determine if such an arrangement would be grounds for civil monetary penalties under section 1128A(a)(5) of the Social Security Act ("Act"), covering improper beneficiary inducements, or other provisions of the Act as those sections relate to the Federal anti-kickback statute.

In the advisory opinion, AO No. 13-19, the OIG reiterates long-standing OIG guidance that industry stakeholders may contribute to the health care safety net for financially needy patients, including beneficiaries of Federal health care programs, by contributing to independent, bona fide charitable assistance programs. The OIG also states that such programs should not exert influence over donors, and donors should not have links to the charity that could directly or indirectly influence the charity's operations or subsidy programs. Further, such programs cannot function as a conduit for payments from donors to patients, impermissibly influence beneficiary choices, or engage in practices that effectively subsidize a donor's particular product.

In this arrangement, the OIG acknowledges that earmarking donations for a rare disease with a low number of treatment options increases the risk that the charity could serve as an improper inducement to patients that use the donor's products. However, in approving the arrangement, the OIG highlighted several factors that sufficiently decrease the risk of improper beneficiary inducement.

The OIG's decision was based on the following facts:

  1. The Requestor does not refer patients to any donor or to any provider, supplier, product, or plan and multiple products from more than one manufacturer are available to treat the disease;
  2. The Requestor does not provide assistance for copayments or deductibles, but instead pays insurance premiums and certain expenses not covered by insurance, and therefore not influencing how patients ultimately choose a provider or services;
  3. No donor or affiliate exerts direct or indirect control over the Requestor, and thus the Requestor has absolute and independent discretion over the use of donor contributions;
  4. Awards of assistance are truly independent from donors due to objective, verifiable, and uniform measure of financial need that is applied in a consistent manner and used to determine eligibility for the program;
  5. Awards of assistance are made without regard to any donor's interest or the patient's choice of providers, suppliers, products, and insurance plans, or whether to receive any services at all; and
  6. Donors do not receive any data that would allow them to correlate their donations with the amount or frequency of the use of their products or services.

Based on these factors, the OIG concluded that the arrangement does not constitute grounds for civil monetary penalties under section 1128A(a)(5)'s prohibition on beneficiary inducement. The OIG also found that, although prohibited remunerations could exist if the intent to induce or reward referrals of Federal health care business were present, the OIG will not impose sanctions under the Federal anti-kickback statute.

This advisory opinion demonstrates that proper safeguards that may be used to allow donors to contribute to healthcare charitable assistance programs that may ultimately result in increased utilization of their products or services.

Wachler & Associates has over 30 years of experience structuring healthcare arrangements to fit within federal and state regulations. If you or your healthcare entity have any questions regarding beneficiary inducements or the Federal anti-kickback statute, or wish to have your arrangement reviewed by our anti-kickback lawyers, please contact our health law attorneys at 248-544-0888.

December 13, 2013

CMS Advisory Opinion Approves Proposed Hospital Expansion under Stark Law's Whole Hospital Exception

The Centers for Medicare & Medicaid Services ("CMS") recently released a favorable advisory opinion, CMS AO-2013-03, that interprets the "whole hospital" exception to the physician self-referral prohibition commonly known as the Stark Law. CMS determined that the proposed arrangement, which adds a new observation unit and 14 observation beds to a physician-owned hospital, complies with the "whole hospital" exception's restriction on facility expansions.

In general, the Stark Law prohibits the referral of Medicare patients for designated health services ("DHS") to an entity in which the referring physician has a financial relationship. The law also prohibits the entity that furnishes DHS as a result of a prohibited referral from billing Medicare, the beneficiary, or any other entity.

The Stark Law contains several exceptions to which the self-referral prohibition does not apply, including the "whole hospital" exception under Section 1877(d)(3). The "whole hospital" exception allows referring physicians to have physician ownership or investment interests in a hospital provided that the referring physician is authorized to perform services at the hospital and the ownership or investment interest is in the hospital itself.

The Patient Protection and Affordable Care Act ("ACA") adds an additional restriction to the "whole hospital" exception. Section 6001(a)(3) limits the expansion of such hospitals' facility capacity by requiring that "the number of operating rooms, procedure rooms, and beds for which the hospital is licensed at any time on or after [March 23, 2010] is no greater than the number of operating rooms, procedure rooms, and beds for which the hospital is licensed as of such date."

The preamble to the final rule implementing this section, however, clarified that the term "for which the hospital is licensed" only referred to beds, and that the prohibition applied to operating and procedure rooms whether licensed or not. Thus, physician-owned hospitals that rely on the "whole hospital" exception to the Stark Law are prohibited from increasing the number of operating rooms, procedure rooms, or licensed beds in that hospital.

In the Advisory Opinion, the hospital certified that the new beds would not be used as operating rooms or procedure rooms. Most importantly, the State in which the hospital is located does not require observation beds to be licensed by the State.

CMS acknowledged the preamble discussed above, and pointed to the fact that the Hospital will not pay any "license fees" or change its current number of licensed beds under the State's regulatory scheme. Accordingly, CMS concluded that the addition of the observation unit and 14 observation beds will not result in any new "licensed" beds, and that the proposed arrangement does not violate the Stark Law and ACA restriction against facility expansion.

In this case, state specific licensing laws affected CMS's analysis of the "whole hospital" exception. The Advisory Opinion demonstrates the widespread risks inherent in any arrangement that involves physicians who have financial relationships with entities to which they refer DHS. Wachler & Associates has represented healthcare providers and suppliers in Stark Law matters since the law's inception. We pride ourselves on staying up to date with Stark Law regulations, interpretations, and advisory opinions. If you or your healthcare entity have any questions regarding the Stark Law or Anti-Kickback Statute, or wish to have your arrangement reviewed by our Stark Law attorneys, please contact our health care lawyers at 248-544-0888 or wapc@wachler.com.

November 25, 2013

CMS Releases Update on Medicare Claim Denials for Incarcerated Beneficiaries

On November 20, 2013, CMS released an update regarding the Medicare denials for claims submitted by providers and suppliers for beneficiaries who were allegedly incarcerated during the dates of service. The large volume of denials, which occurred during this past summer, were incorrect as CMS acknowledged that the systems that track whether a beneficiary is ineligible for Medicare services due to incarceration were incorrectly updated. Medicare providers and suppliers nationwide were impacted by this error as Medicare Administrative Contractors (MACs) automatically denied and in many cases recouped alleged improper claims for services provided to incarcerated beneficiaries. Although CMS acknowledged the errors in late July 2013, it is not until now that Medicare providers and suppliers have received concrete information that addresses how the errors will be fixed and how correct claims will be paid appropriately. CMS is now making strides to refund improper collections and to implement fundamental changes to its claims processing systems. Medicare Administrative Contractors (MACs) will be responsible for reprocessing claims denied in error. Please see our earlier blog posts regarding CMS's efforts to recoup reimbursement for services provided to incarcerated beneficiaries here.

According to a FAQ Sheet available on CMS's website, CMS anticipates that incorrectly denied or cancelled claims associated with allegedly incarcerated beneficiaries from June through August of 2013 will be refunded to suppliers via an automated process by the beginning of December. Medicare provider claims denied due to the incorrect information regarding incarcerated beneficiaries between June through August of 2013 will also be reprocessed by the MACs. According to the FAQ bulletin, CMS expects the reprocessing to be completed by the end of December.

Suppliers and providers should be aware that repayments "may not exactly match the original payment that was made for the claims." Factors such as CMS business processes, outstanding payments, or changes in a beneficiary's paid deductible amounts may be reflected in the final claim repayment amounts remunerated to the affected providers.

In addition to the information regarding the reprocessing of the claims, CMS stated in the FAQ that MACs are to disregard appeal filing deadlines for any claims that remain denied after the reprocessing. Providers can now wait for claims denials or overpayments related to incarcerated beneficiaries to be reprocessed by CMS, and can file appeals for denied claims regardless of previous appeal filing deadlines.

Wachler & Associates will continue to keep you updated on CMS's efforts to reprocess incarcerated beneficiary claim denials. If you or your health care entity have any questions regarding CMS's reprocessing efforts, please contact an experienced health care attorney at Wachler & Associates at 248-544-0888 or wapc@wachler.com.

November 18, 2013

"Probe and Educate" Hospital Inpatient Audits Extended an Additional 3 Months

On November 12, 2013, CMS held a third open door forum (ODF) discussing the Fiscal Year (FY) 2014 Inpatient Prospective Payment System (IPPS)/Long-Term Care Hospital (LTCH) Final Rule (CMS-1599-F). As of November 4, 2013, the patient status probe review period that was previously applicable through December 31, 2013 has been extended through March 31, 2014. CMS has issued helpful guidance on questions and answers relating to patient status reviews, selecting hospital claims for patient status reviews, and reviewing hospital claims for patient status.

These "probe and educate" reviews will be conducted on a prepayment basis to assess whether hospitals are in compliance with the admission order requirements and 2-midnight benchmark. Because these reviews will be conducted on a prepayment basis, the MACs will deny any claims not meeting these three requirements. The initial sample probe reviews will consist of 10-25 claims per hospital with dates of admission from October 1 through December 31, 2013.

MAC review of the inpatient hospital claims will provide outreach and education about the inpatient rule and will help ensure that hospitals understand and comply with the Medicare requirements. Upon completion of the 10-25 claim reviews, if the MACs do not find any issues with the particular hospital's claim documentation then further probes will not be conducted for that hospital (unless there are significant changes in billing patterns for admissions).

If issues are found for a claim, the MAC will send a detailed denial letter to the provider explaining why the claim was denied. If there are moderate to significant concerns with a claim, the letter will include an offer for the MAC to call the individual provider to discuss the reasons for why the non-compliant claim was denied, to answer questions, and to provide providers with education and reference materials.

If the MACs identify an individual provider as having "moderate/significant" or "major" concerns during the initial review, then they will do a second probe review of 10-25 claims with dates of admission between January 1 and March 31, 2014. At the end of this six month period, if hospitals continue to have major issues then the MACs may select an additional 100-250 claims for review.

If you have any questions regarding the "probe and educate" reviews or compliance with the Final Rule, please contact an experienced healthcare attorney at Wachler & Associates at 248-544-0888 or wapc@wachler.com.

November 11, 2013

Open Door Forum on Final IPPS Rule Tomorrow at 1:00

Tomorrow from 1:00-2:00 pm Eastern Time, the Centers for Medicare & Medicaid Services (CMS) will hold a third open door forum (ODF) to discuss the Fiscal Year (FY) 2014 Inpatient Prospective Payment System (IPPS)/Long-Term Care Hospital (LTCH) Final Rule (CMS-1599-F).

On August 2, 2013, CMS issued the FY 2014 IPPS/LTCH Final Rule (final rule) which finalized proposals related to patient status during short-stay hospital cases, including the new standards for inpatient admission and the medical review criteria for payment of hospital short-stay inpatient services under Medicare Part A. On September 5, 2013, CMS issued sub-regulatory guidance regarding the final rule's requirements for hospital inpatient admission order and certification, which are conditions of payment under Medicare Part A. This sub-regulatory guidance was issued in part as a result of the significant confusion surrounding CMS's requirements for inpatient admission orders and physician certifications of inpatient services. CMS also posted subregulatory instructions and frequently asked questions, relating to the claim selection process and preliminary review guidelines, for conducting patient status reviews of claims with dates of admission beginning in October 2013.

Questions on the two midnight provision for admission and medical review may be sent to CMS before the ODF begins via email to IPPSAdmissions@cms.hhs.gov. Questions on Part B inpatient billing and clarifications regarding physician order and certification can be sent to Section3133DSH@cms.hhs.gov.

To access the ODF, the participant dial-in number is 1-866-501-5502, and the conference ID number is 98515298. For more information, please visit the ODF website. If you have any questions regarding the final rule or questions about the Medicare appeals process, please contact an experienced healthcare attorney at Wachler & Associates at 248-544-0888 or wapc@wachler.com.

October 31, 2013

CMS Reaches Four Settlements Under the Stark Self-Referral Disclosure Protocol in August and September

The Centers for Medicare & Medicaid Services (CMS) recently announced four settlements via the Voluntary Self-Referral Disclosure Protocol (SRDP) under the federal Stark Law. CMS reached three Stark law settlements in August 2013 and on additional settlement in September 2013, totaling approximately $178,000.

On August 19, 2013, CMS settled Stark law violations by a Louisiana physician group practice. Under the SRDP, the Louisiana practice disclosed that it violated the Stark Law because two of its physician arrangements failed to satisfy the requirements of the in-office ancillary services exception to the Stark Law. The violations were settled for $13,572.

On August 20, 2013, CMS reached a settlement with a non-profit community hospital located in Minnesota which disclosed that its arrangement with a physician group practice for the rental of office space and performance of support services failed to satisfy the requirements of the applicable exception under the Stark Law. The Minnesota hospital's violations were settled for $9,570.

On August 29, 2013, CMS settled two Stark law violations by a California acute-psychiatric hospital. The California hospital disclosed under the SRDP that it violated the physician self-referral law because its arrangements with two physicians to provide psychiatric services did not satisfy the requirements of any applicable Stark law exception. The violations were settled for $67,750.

Lastly, on September 10, 2013, CMS reached a settlement with an acute care hospital located in North Carolina which disclosed Stark law violations due to the following three arrangements: (1) its arrangement with a physician to provide medical director services; (2) its arrangement with a physician group to provide medical coding and consulting services; and (3) its arrangement with a physician and a physician group practice for the lease of office space, as none of the above arrangements met the requirements of any applicable Stark law exception. CMS and the North Carolina hospital settled these violations for $87,110.

CMS maintains a list of these settlements as well as other select Stark law violations resolved under the SRDP online. Wachler & Associates attorneys have regularly counseled hospitals and other providers in navigating the Stark Law since 1995. The high amount of settlements throughout 2013 may indicate that CMS is directing increased attention towards hospitals resolving Stark law violations under the SRDP. For more information on the Stark Law, or for assistance with Stark compliance measures for your healthcare entity, please call an experienced healthcare attorney at 248-544-0888.

October 21, 2013

OIG Report on "Questionable" Billing for Polysomnography Services May Lead to Closer Scrutiny of Sleep Laboratories

The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently issued a report addressing increased Medicare spending on polysomnography services. The OIG initiated this study in response to growing concerns of Medicare prescriber fraud.

A polysomnography is a type of sleep study that diagnoses sleep disorders such as sleep apnea. The claims submitted by sleep centers that conduct these studies have been under serious scrutiny by fraud investigators in recent years. In January 2013, American Sleep Medicine LLC, a sleep testing center operator based in Florida, agreed to pay $15.3 million to resolve allegations of false polysomnography claims submitted to Medicare, TRICARE, and the Railroad Retirement Medicare Program in violation of the False Claims Act (FCA).

According to the OIG's report, Medicare spending for polysomnography services rose 39 percent between the years 2005 and 2011. The OIG analyzed Medicare claims from hospital outpatient departments, as well as non-hospital providers such as independent diagnostic testing facilities and physician-owned sleep laboratories, starting in 2011. The OIG found that almost $17 million in Medicare claims for polysomnography services were inappropriate, meaning the claims did not meet one or more of three requirements for Medicare reimbursement, including claims that had inappropriate diagnosis codes, were same-day duplicate claims or were submitted with an invalid NPI. In addition, the report stated that out of 6,339 providers of polysomnography services, 180 providers exhibited patterns of questionable billing. "Questionable billing" patterns included providers that billed an unusually high percentage of: (1) same-day duplicate claims, beneficiaries who had polysomnography claims from one or more other providers in 2011, (3) diagnostic polysomnography claims with a titration claim for the same beneficiary on the following day, or (4) claims in which there was no visit note from the ordering provider in the preceding year.

The OIG made four recommendations to the Centers for Medicare & Medicaid Services (CMS):

  1. Implement claims processing edits or improve existing edits to prevent inappropriate payments;
  2. Recover payments for claims that did not meet Medicare requirements;
  3. Consider using measures of questionable billing from this study to identify providers for further investigations; and
  4. Take appropriate action regarding providers that exhibit patterns of questionable billing.

According to the report, CMS concurred with each of the four recommendations. As a result of CMS' concurrence, sleep study providers should expect greater scrutiny of polysomnography service claims in near future (e.g., increased CMS audit activity). As such, sleep study providers should review their current billing practices and compliance policies to ensure such practices and policies are in accordance with Medicare requirements. If you need assistance in implementing an effective compliance plan, or defending against an Medicare, Medicaid or third party payor audit, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.

October 16, 2013

Proposed PRIME Act Aims at "Preventing and Detecting" Medicare and Medicaid Fraud and Abuse

A proposed bipartisan bill, titled the Preventing and Reducing Improper Medicare and Medicaid Expenditures (PRIME) Act, is aimed at combatting waste, fraud, and abuse in Medicare and Medicaid spending. If passed, the PRIME Act would continue CMS' efforts to move away from the "pay and chase" model of combatting improper payments towards the more aggressive "prevent and detect" model.

The PRIME Act would enact a range of reforms designed to proactively target improper payments, including fraud, within the Medicare and Medicaid programs. The reforms include, for example, engaging Medicare beneficiaries in identifying waste and fraud through a program called the Senior Medicare Patrol (SMP). The bill also seeks to administer harsher penalties for instances of Medicare or Medicaid fraud, as well as identify theft and the sale or distribution of Medicare and Medicaid beneficiary ID numbers.

In a press release addressing the bill, Rep. Peter Roskam (R Ill.) announced,

The problem of Medicare fraud is an urgent one--we cannot continue to allow these critical programs to be fleeced because of carelessness or criminals gaming the system. The program's current pay-and-chase model pays out even suspicious Medicare claims... By combining 21st century technology and common sense solutions, the PRIME Act can help stop fraudsters in their tracks and make Medicare and Medicaid more financially stable for the long term.

Rep. Roskam's announcement reinforces that the purpose of the PRIME Act is to aggressively detect potential improper payments before the payments are made to providers. Therefore, passage of the PRIME Act may increase pre-payment reviews. Although all audits, whether post-payment or prepayment, are burdensome for providers, prepayment reviews are often much more aggressive and could seriously affect a provider's ability to continue to provide services. As a result, it is essential that all healthcare providers review their compliance strategies and policies. For more information on how passage of the PRIME Act may affect you or for more information on pre-payment review and strategies to utilize if on pre-payment review, please contact an experienced healthcare attorney at 248-544-0888 or wapc@wachler.com.

October 7, 2013

Proposed Bill to Narrow Stark Law Exception for In-Office Ancillary Services

A proposed bill, H.R. 2914: Promoting Integrity in Medicare Act of 2013 (PIMA), was recently introduced in the House of Representatives. Representatives Jackie Speier (D-CA), Dina Titus (D-NV), and Jim McDermott (D-WA) initiated this legislation as a result of the increase in Medicare billing for in-office ancillary services through the in-office ancillary services ("IOAS") exception to the Stark law. The Stark law, which functions to limit physician self-referrals, contains several exceptions. The current IOAS exception to the Stark law protects advanced imaging services, anatomic pathology, radiation therapy, and physical therapy services that meet the IOAS exception's requirements. However, the bill proposes to remove the above-listed services (advanced imaging services, anatomic pathology, radiation therapy, and physical therapy), which the bill refers to as "Specified Non-Ancillary Services," from protection under the IOAS exception. The initiating Representatives believe that the bill will save billions of Medicare dollars.

The legislation also proposes to increase civil monetary penalties for improper claims from $15,000 to $25,000 for the above Specified Non-Ancillary Services, and increase civil monetary penalties for circumvention schemes from $100,000 to $150,000 for the above Specified Non-Ancillary Services. In addition, PIMA proposes compliance review procedures for Specified Non-Ancillary Services that may include prepayment reviews, claims audits, focused medical review, and computer algorithms designed to identify payment or billing anomalies.

If PIMA is enacted, referring physician practices that rely on Stark law's IOAS exception to perform advanced imaging services, anatomic pathology, radiation therapy, and physical therapy services, will need legal assistance in analyzing and possibly restructuring their business arrangements in compliance with the Stark law. If you or your healthcare entity would be affected by the passage of PIMA and have any questions about PIMA or need assistance in analyzing, structuring or restructuring business arrangements to comply with PIMA, please contact our experienced healthcare attorneys via phone at 248-544-0888 or via email at wapc@wachler.com.

September 26, 2013

Special Open Door Forum on Final IPPS Rule Today at 2:00

Today from 2:00-3:00 pm Eastern Time, the Centers for Medicare & Medicaid Services (CMS) will hold a special follow-up Open Door Forum to discuss the Fiscal Year (FY) 2014 Inpatient Prospective Payment System (IPPS)/Long-Term Care Hospital (LTCH) Final Rule (CMS-1599-F) as well as the CMS guidance on physician order and certification. The effective date of the Final Rule is October 1, 2013.

On August 2, 2013, CMS issued the FY 2014 IPPS/LTCH Final Rule which finalized proposals related to patient status during short-stay hospital cases, including the new standards for inpatient admission and the medical review criteria for payment of hospital inpatient services under Medicare Part A. On September 5, 2013, CMS issued sub-regulatory guidance regarding the final rule's requirements for hospital inpatient admission order and certification, which are conditions of payment under Medicare Part A. This sub-regulatory guidance was issued in part as a result of the significant confusion surrounding CMS's requirements for inpatient admission orders and physician certifications of inpatient services.

Questions may be sent to CMS before the Open Door Forum begins via email. Questions regarding the two midnight provision for inpatient admission in the final rule can be sent to IPPSAdmissions@cms.hhs.gov. Questions on Part B inpatient billing and clarifications regarding physician order and certification can be sent to Section3133DSH@cms.hhs.gov.

To access the open door forum, the participant dial-in number is 1-800-837-1935, and the conference ID number is 68257949. For more information, please visit the open door forum website. If you have any questions regarding the Final Rule or questions about the Medicare appeal process, please contact an experienced healthcare attorney at Wachler & Associates at 248-544-0888.

September 20, 2013

Michigan Medicaid Expansion Legislation Signed Into Law by Governor

On Monday, September 16, 2013, Michigan Governor Rick Snyder signed into law legislation that will expand Medicaid coverage to hundreds of thousands of Michigan residents. Medicaid expansion is a national effort initiated through the Patient Protection and Affordable Care Act.

The Affordable Care Act increases available federal funding for states that choose to expand eligibility levels for Medicaid coverage. Medicaid expansion was made mandatory under the Act in 2010, but in a 2012 Supreme Court decision, Chief Justice Roberts held that Congress may not penalize states that choose not to participate in Medicaid expansion. As a result of this Supreme Court decision, Congress may not take away a state's existing Medicaid funding.

If Michigan receives approval and federal waivers from the Obama administration, Michigan will have access to more than a billion dollars a year in federal funding. Beginning in 2014, the Medicaid coverage for newly-eligible adults will be fully funded by the federal government for the first three years, and will be phased down to 90% by 2020. The expansion will cover adults that earn up to 133% of the poverty level, which equates to about $15,500 for an individual and approximately $31,000 for a family of four.

While federal funds are available for many states as early as January 1, 2014, Michigan will delay implementation until late March or April. Wachler & Associates will continue to keep you updated on the Medicaid expansion and other significant healthcare law news. If you have questions about how the Medicaid expansion will affect your practice, please contact an experienced healthcare attorney at 248-544-0888.

September 16, 2013

CMS Issues Guidance on Physician Certification and Order

CMS Issues Guidance on Physician Certification and Order

The Centers for Medicare & Medicaid Services (CMS) has released sub-regulatory guidance entitled Hospital Inpatient Admission Order and Certification to help hospitals interpret the agency's requirements for inpatient admission orders and certifications from the Hospital Inpatient Prospective Payment System Final Rule for FY 2014 (the "Final Rule"). After the Final Rule was issued on August 2, 2013, significant confusion surrounded CMS's requirements for inpatient admission orders and physician certifications of inpatient services. This sub-regulatory guidance, developed by CMS and released on September 5, 2013, details the specific requirements for hospital inpatient coverage and payment under Medicare Part A.

Physician Certification

First, CMS addressed the content that must be included in the physician certification. The physician must verify that the inpatient services were ordered in accordance with Medicare regulations governing the inpatient order. This includes certification that the inpatient services are reasonable and necessary, and in the case of services or procedures not specified as inpatient-only, that they are provided in accordance with the 2-midnight benchmark. Furthermore, physicians must provide justification for inpatient services, an estimated duration of a beneficiary's stay, and plans for post-hospitalization care.

Second, CMS addressed the proper timing of the certification, stating that the inpatient admission begins with certification, which (with some exceptions) must be completed, signed, dated, and documented in the medical record prior to discharge.

Third, the guidance identifies who is authorized to sign the certification. The certification may be signed by a "physician who is a doctor of medicine or osteopathy..." The signing physician must be responsible for the case, or have knowledge of the case and be authorized to do so by the responsible physician or the hospital's medical staff. Non-physicians may sign the certification, but will need a physician to co-sign.

Fourth, CMS addressed proper format, stating that there must be separate, signed statements for each certification and recertification. In lieu of a specific form that the hospital uses for certification, CMS also detailed the "Default Methodology for Initial Certification," which describes what Medicare contractors will look for, in the absence of specific forms or statements, for certification in order to meet the initial inpatient certification requirements:

1. The signature of the inpatient admission order by the certifying physician will satisfy the authentication requirement for the practitioner order.
2. The diagnosis and plan of care in the inpatient admission assessment will satisfy the requirement to certify the reason that hospital inpatient services are medically required.
3. The inpatient admitting written in accordance with the 2-midnight benchmark will satisfy the estimated time requirement.
4. The physician notes or discharge planning instructions will satisfy the post hospital care plan requirement.

Practitioner Order

First, CMS addressed the content that must be included in the physician order. It must include the instruction that the beneficiary should be formally admitted for hospital inpatient care.

Second, CMS detailed the qualifications that the ordering or admitting practitioner must have to properly admit a patient to inpatient care. The ordering practitioner must be: (a) licensed by the state to admit inpatients to hospitals, (b) granted privileges from the hospital to admit inpatients, and (c) knowledgeable about the patient's hospital course, plan of care, and current condition at the time of admission. The ordering practitioner does not have to be the same physician who signs the certification, and the order does not have to be co-signed by a physician unless the order was signed by a resident.

If a verbal order is made, the verbal inpatient admission order may be initially documented in the medical record by the staff receiving the order as provided above, including identification of the ordering practitioner. Verbal orders must be authenticated by the practitioner (or by another practitioner with the required admitting qualifications) in the medical record prior to discharge.

Third, CMS stated that the ordering practitioner must have knowledge of the patient. Fourth, CMS requires that the order must be in the record at or before the time of admission. Fifth and finally, CMS provides that the order for inpatient admission must specifically state that the order is for "inpatient" services," or admit "to inpatient," or "as an inpatient." If the word "inpatient" is not mentioned, the admission may remain consistent with Medicare regulations provided that the intent to admit as an inpatient is clear.

For Critical Access Hospitals (CAHs), physicians must certify that the beneficiary may reasonably be anticipated to be discharged or transferred to a hospital within 96 hours after admission to the CAH. The CAH certification must be completed no later than one day before the date on the claim for payment is submitted. In the absence of a certification form, the CAH 96 hour expectation requirement will be met by physician notes or actual discharge within 96 hours.

Wachler & Associates will continue to monitor any further developments and guidance related to the Final Rule as the implementation date of October 1, 2013 is quickly approaching. If you or your health care entity need help developing compliance plans or reviewing and refining existing audit defense strategies in light of the Final Rule or this sub-regulatory guidance, please contact an experienced healthcare attorney at 248-544-0888.

September 4, 2013

Michigan Medicaid Expansion Approved by House

On Tuesday, September 3, 2013, the Michigan House gave final legislative approval to Medicaid expansion under the Patient Protection and Affordable Care Act. This legislation, House Bill 4714, is expected to be signed by Governor Rick Snyder in the coming weeks.

The Affordable Care Act increases federal funding for states that increase eligibility standards for Medicaid enrollment. As passed in 2010, Medicaid expansion was mandatory under the Act, but was subsequently made option by a 2012 Supreme Court decision. CMS administration has announced that states do not have a deadline for deciding whether or not to expand, and in addition, states are free to terminate expansion with financial penalty from the federal government.

Federal funds are available as early as January 1, 2014, but Michigan will likely delay implementation until the spring. According to a Michigan Senate Fiscal Agency analysis published in March that examines the Snyder Administration's proposed expansion of Michigan's Medicaid program, the state's decision to expand could cover an additional 400,000 Michigan residents by means of $1.7 billion in federal funding. Wachler & Associates will continue to keep you updated on Michigan's decision to expand Medicaid enrollment and other significant healthcare law news. Please subscribe to the Wachler & Associates health law blog by adding your email address and clicking "Subscribe" in the window on the top right of this page.