Recently in Michigan Healthcare News 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.

September 25, 2013

Home Health Care Business Operator Sentenced to Prison for $11M Medicare Fraud Scheme

Earlier this month, U.S. District Judge Denise Page Hood of the Eastern District of Michigan sentenced 53-year-old Michigan resident Muhammad Shahab to 50 months in prison and three years of supervised release for perpetrating almost $11 million in Medicare fraud between August 2007 and October 2009. Shahab and his co-defendants were also ordered to pay over $10.8 million in restitution to the Medicare Program.

The Department of Justice Press Release reported that Shahab, who had helped finance and establish two Detroit-area home health agencies, pled guilty to one count of health care fraud back in February 2010. Plea documents revealed that Shahab "admitted that while operating or being associated with both health agencies, he and his co-conspirators billed Medicare for home health visits that never occurred." Shahab, the leader of the fraud scheme, admitted that he and his co-conspirators falsely used the Medicare numbers and signatures of Medicare beneficiaries who were not homebound or needed physical therapy service on medical documentations. Shahab and his co-conspirators offered cash kickbacks and other inducements to these Medicare beneficiaries in exchange for their participation.

In addition, through kickback payments to physicians and other individuals associated with physicians, Shahab obtained physician referrals for medically unnecessary home health services. Shahab confessed to billing and receiving payments from Medicare for medically unnecessary services and services never rendered.

This case was brought as part of the Medicare Fraud Strike Force, a joint initiative between the Department of Justice and the Department of Health and Human Services (HHS) designed to fight Medicare fraud.

Nationally coordinated takedowns have charged hundreds of individuals in connection with Medicare fraud and have uncovered billions of dollars in fraudulent billing. Health care providers must ensure that they have the necessary compliance plans and policies in place to detect and prevent potentially fraudulent or abusive practices. For assistance in creating a proactive compliance plan, or if you have other healthcare related questions, please contact an experienced healthcare attorney 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 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.

August 12, 2013

Health Care for Detroit Employees and Retirees at Risk under Detroit Bankruptcy

On July 18, 2013, Detroit's emergency manager Kevin Orr filed for Chapter 9 bankruptcy protection in the Eastern District of Michigan U.S. Bankruptcy Court. Emergency manager Kevin Orr, appointed by Governor Rick Snyder, is tasked with financial control of the city and the power to liquidate city assets. Orr is focused on restructuring Detroit's debt. Detroit is the largest municipality in United States history to file for bankruptcy.

Retiree health care program costs are a named source of Detroit's bankruptcy filing. Kevin Orr's bankruptcy filing, a decision authorized by Governor Snyder, occurred one day after Detroit's two largest municipal pension funds filed suit in state court to stop Orr from cutting retiree health care benefits for Detroit residents. Detroit's retirees are now worried about possible cuts to their promised healthcare benefits. In a press conference after the filing, Kevin Orr assured Detroit residents that for the next six months there would be no cuts to health care benefits for Detroit's active workers and retirees.

On August 2, 2013, Kevin Orr announced a new health care plan for city workers that he believes will save the city almost $12 million per year. Orr's proposal increases workers' annual deductibles and caps on out-of-pocket costs. If the unions reject Orr's proposal, then Orr still has the power to change employees' health care plans under Michigan's emergency manager law. According to the Detroit Free Press, union leaders are not convinced that Orr's plan is the best alternative to the current situation.

Local health care insurers have contracts with the city of Detroit and provide thousands of city of Detroit employees, retirees, and family members with health insurance. In the past, Detroit has been forced to borrow money to meet operating costs for programs such as health insurance for city workers. A Crain's Detroit Business article reports that, "Health care insurers and hospitals under contracts or that provide services to city of Detroit employees and retirees could be on the hook for unpaid bills depending on how the city's bankruptcy proceedings go." The Crain's article further states that, "... officials for several hospital systems said they did not expect bankruptcy to affect their operations." Nevertheless, metro Detroit hospitals such as Beaumont Health System, Henry Ford Health System, and Oaklwood Healthcare have voiced apprehension of the repercussions hospitals may face if Detroit is unable to pay for its local health plans.

The Wachler & Associates Health Law blog will continue to update readers on important health law topics sweeping our nation. If you would like to subscribe to our health law blog, please add your email address and click "Subscribe" on the top right window of this page.

August 1, 2013

What Do Providers Need to Know About Medicaid RACs?

In 2005, the Centers for Medicare & Medicaid started the Medicare Recovery Audit Contractor (RAC) program in three pilot states, where the program recovered over $900 million dollars during the three-year pilot. Due to the success of the pilot program, CMS expanded the program to all states in 2010, and has since recovered over three billion dollars. The success of the Medicare RACs resulted in the expansion of the current RAC program to Medicaid and Medicare Parts C and D through Section 6411 of the Affordable Care Act (ACA).

The ACA requires states to:

  • Contract with a RAC to ensure that overpayments and underpayments by the state Medicaid agency are identified, and that overpayments are recouped;
  • Create an appeal process for entities to appeal adverse RAC determinations; and
  • Coordinate with other governmental entities performing audits to improve recovery efforts.

States were required to implement their Medicaid RAC programs by January 1, 2012. Importantly, the ACA requires states to contract with RACs, but states are free to contract with any RAC. As a result, there is significant variability between the states - there are 50 different sets of rules, and 50 different appeal processes. Furthermore, since legislation in each state regarding the Medicaid RAC rules is different, information on such processes may be difficult to find. In addition, since Medicaid is open to people of all ages, there will also be considerably more medical procedures for Medicaid RACs to audit. Finally, the look-back period also varies by state - although most states have a three year period, some states have five and six year periods.

In response to this Medicaid RAC variability, providers should understand where their Medicaid RAC is and stay alert to their approved issues and what they are focusing on. As always, providers should maintain excellent documentation regarding the physician's rationale for the services provided and the rational for how the provider arrived at the billing status. If you or your healthcare entity need help understanding your state's Medicaid RAC, or if you have been audited by a Medicaid RAC, please contact an experienced healthcare attorney at 248-544-0888.

June 13, 2013

New Research Reveals Bundled Payment Program Success

A recent study published by Bailit Health Purchasing, has revealed that bundled payment programs are an effective option for organizations interested in an alternative to fee-for-service reimbursement for providers. Bundled payment differs from fee-for-service reimbursement by compensating a provider for all of the services a patient receives during a single hospital stay or during recovery from that stay on the basis of expected costs for an episode of care. Bundled payment initiatives seek to give providers greater incentive to better coordinate care with other providers, thereby reducing unnecessary duplication of services, reducing medical errors, improving patient health, and lowering costs.

Bailit Health Purchasing was commissioned by the Health Care Incentives Improvement Institute to research the viability of 19 active programs that have piloted bundled payment initiatives. Bailit released an initial report in May 2012. Bailit's most recent study, published on May 30, 2013, provides a status update on the 19 active programs and highlights early adopters that have been successful in making bundled payment part of their permanent reimbursement strategy.

Bailit's study, shared on Tuesday at the National Bundled Payment Summit in Washington, DC, highlights two successful case studies that have moved a bundled payment program from a pilot stage to a permanent reimbursement strategy: Blue Cross Blue Shield of North Carolina (BCBSNC) and Horizon Healthcare Services, Inc. (Horizon). The case studies reveal factors that have helped carry BCBSNC and Horizon to successful application of bundled payment.

Proven factors for success in implementing a bundled payment initiative include support from engaged and committed leadership, adequate resources, transparent data sharing, internal capabilities for complex data analysis, and an open mind to new ideas. These concepts and strategies will likely prove useful to other organizations seeking an alternative payment model.

Thoughtful payment reform is key to CMS' Bundled Payments for Care Improvement initiative, CMS' initiative begins this upcoming fall on October 1, 2013. CMS has selected 450 organizations to participate in this initiative, which aims to reward quality and reduce waste, ultimately lowering costs to Medicare. As Bailit's study exposes, bundled payment is a viable alternative to fee-for-service payment.

If you need assistance understanding or negotiating the terms of health care reform initiatives such as bundled payments, please contact an experienced health care attorney at Wachler & Associates at 248-544-0888.

May 14, 2013

Blue Cross Blue Shield of Michigan Auditing Physicians Performing In-Office Drug Screens

Blue Cross Blue Shield of Michigan (BCBSM) is auditing physicians who have conducted in-office Drug of Abuse (DOA) screening test. The purpose of these BCBSM audits is to determine whether the services, treatment, devices, and procedures that the physician billed to BCBSM conformed to Current Procedural Terminology (CPT) codes at the time of billing.

In auditing physicians who billed drug screening procedure codes, BCBSM is alleging that those physicians have incorrectly billed under current CPT codes for dates of services prior to the effective date of the current billing policies. In these cases, BCBSM sent notices to physicians enclosing current copies of the Physician Office Laboratory List (POLL) - a list of payable laboratory services allowed to be performed in the physician office setting - instead of the relevant POLL covering the audited time period. The drug screening procedure code at issue is CPT code 80101 [drug screen, qualitative; single drug class method (e.g., immunoassay, enzyme assay), each drug class], which is not listed on the current POLL. Instead, BCBSM states that codes 80104 and G0434 are the proper and payable drug screening tests when performed in the physician's office. BCBSM is seeking returns of alleged overpayments from these physicians who billed 80101 in the office setting, as opposed to billing the lesser-paying drug screening procedure codes.

BCBSM may not hold physicians retroactively accountable for recent changes in billing. We are currently representing a number of physicians that have been audited by BCBSM. Based upon our review, we believe these audits can be successfully defended and the amount for overpayment substantially reduced. If you have been audited by BCBSM, we believe we can help, as we are currently representing physicians in similar cases and have been successfully defending providers against BCBSM audits since 1980. For further information on BCBSM audits, please contact an experienced Wachler & Associates healthcare attorney at 248-544-0888.

September 2, 2011

Medicare Fraud Indictments in Detroit

Nearly a month after the federal government handed down indictments to defendants involved in one of Michigan's largest prescription drug schemes, the federal government indicted 18 more people allegedly involved in Medicare fraud schemes.  According to a Detroit Free Press article, the U.S. District Court indicted people for their alleged involvement in a number of different health care fraud operations.  One of the charges was handed down to a Troy doctor who allegedly billed for home health services when she was out of the country, as well as for certain services that were physically unable to be completed in a single day.  Another indictment was handed down to an owner of a Detroit company who is being accused of billing Medicare for psychotherapy for numerous beneficiaries who were no longer alive.  Combined, all 18 defendants are accused of billing Medicare for $28 million.

The Medicare Fraud Task Force has no charged 138 people in Detroit with allegations of fraudulent billings totaling nearly $150 million.  According to Maureen Reddy, a Detroit-based FBI special agent, home health fraud is currently the largest type of fraud in the Detroit area.  The recent indictments also establish that Medicare fraud investigations are also expanding to other areas of health care services, such as psychotherapy.

These indictments are another example of the government's focus on the Detroit area in Medicare and Medicaid investigations.  For more information on Medicare Fraud defense, or assistance with interpreting and understanding Medicare and Medicaid regulations, including the anti-kickback statute, please contact a Wachler & Associates attorney at 248-544-0888.

April 13, 2011

Ambulatory-care Physicians Satisfied with EHR Systems

Those practices with electronic health record systems (EHR) in place appear to be very happy with the results. A survey conducted by the Medical Group Management Association found that 72% of practices with implemented EHR systems were "satisfied" with the results. Further, those practices which have optimized their EHR systems have reported an 82% level of satisfaction.

If you have any questions or concerns about the compliance or regulatory issues involved with the implementation of a EHR system, please contact an attorney at Wachler & Associates at 248-544-0888.

April 1, 2011

Proposed Law Would Protect Michigan Hospitals That Apologize To Patients For Mistakes

The proposed legislation would allow Michigan healthcare providers to apologize to patients without fear that those comments will be used against them in legal proceedings.  The law will not provide total immunity to comments, but allow for greater leeway when it comes to expressing remorse for procedures that did not achieve the desired result.  

January 4, 2011

DMC to Pay a $30 Million Settlement to the Federal Government

The Detroit Free Press reported that the Detroit Medical Center has agreed to pay $30 million to the federal government to settle claims that involved violations of the Anti-Kickback Statute and Stark from improper financial relationships with referring physicians.  The majority of the relationships at issue in the DMC matter involved office lease agreements and independent contractor relationships that were either not consistent with fair market value or not in writing.  If you are a provider and would like to ensure that your relationships comply with Stark and the Anti-Kickback Statute, please contact Wachler & Associates. 

November 22, 2010

Proposed Purchase Of DMC Has Been Conditionally Approved

The proposed purchase of the Detroit Medical Center by Vanguard Health Systems Inc. has been conditionally approved by the Attorney General of Michigan Mike Cox.  This sale would bring a purported $1.5 billion in funding for the center.  The deal is tentatively set to take place on December 31, 2010 but there are still many issues that need to be worked out for the transaction to be completed.  One of the major issues still needing resolution before the final deal is the transferring of Medicare and Medicaid billing procedures from the nonprofit DMC to the for profit Vanguard.

For information on compliance issues associated with health care transactions please contact a Wachler & Associates attorney at 248-544-0888.

November 1, 2010

The U.S. Justice Department Files Lawsuit Against Blue Cross Blue Shield of Michigan

The U.S. Justice Department filed a lawsuit against Blue Cross Blue Shield of Michigan (BCBSM) on Monday, October 18.  The Justice Department alleges that BCBSM violated antitrust laws by using its strong presence in the market to increase prices for its competitors, which resulted in Michigan residents paying higher health care and health insurance costs.  Specifically, the Justice Department says that BCBSM required hospitals to charge competitors more.  The Detroit Free Press reported that the Michigan attorney general's office stated, "the investigation showed that Blue Cross increased its payouts to many hospitals to guarantee the hospitals would in turn charge all other insurers up to 40 percent more, pricing them out of the market and raising prices on all Michigan consumers." 

The Detroit Free Press reported that BCBSM adamantly refuted the allegations.  BCBSM stated that the lawsuit was without merit and that its responsibility in contracting with hospitals is to negotiate on behalf of its members and costumers, not to negotiate against other health care insurers.

For more information on Michigan health care news, please visit the Michigan Healthcare News section on the Wachler Blog. 

October 13, 2010

U.S. District Judge Refuses to Grant Injunction Against Health Care Reforms Implemented through the Affordable Care Act

On October 8, U.S. District Judge George Steeh refused to grant an injunction that would prevent the implementation of the federal health reforms enacted through the Affordable Care Act.  Judge Steeh also dismissed several substantive portions of the suit, determining that Congress did not exceed its constitutional authority by requiring most people to buy health insurance.  The lawsuit was brought by the Thomas More Law Center, an Ann Arbor-based Christian legal center and four plaintiffs.  The Detroit Free Press reported that an attorney for the law center, Robert Muise, stated that the plaintiffs will appeal the decision.

The Michigan lawsuit is one of several lawsuits filed challenging provisions of the Affordable Care Act.  Another lawsuit filed by several attorney generals, including Michigan Attorney General Mike Cox, is in the appeals process with oral arguments scheduled for December 16.

For more information on federal healthcare reform, please visit or contact a Wachler & Associates attorney at 248-544-0888.