Recently in Michigan Healthcare News Category

August 29, 2014

Reports Show Increase in Individuals Participating in Employer-Based Health Plans

Since the passage of the Patient Protection and Affordable Care Act (ACA) in 2010, much of the media focus has been on individuals who were previously denied coverage because of preexisting conditions or financial barriers. Now, studies are focusing on the large group of individuals who, prior to the ACA, simply chose not to purchase health insurance. The reports demonstrate that due to the Individual Mandate portion of the ACA, which requires individuals to purchase health insurance, many more individuals are choosing to participate in their employers' health plans.

The increased participation in employer health plans will inevitably cost employers. Most recently, Wal-Mart announced that a dramatic increase in employees signing up for insurance through the company will cost its stockholders $500 million -- up from the company's previous estimate of $330 million. Although Wal-Mart is experiencing the employer-based insurance shift on a large scale, many employers nationwide are expected to see a jump in participation in their health plans. Recently, the National Business Group on Health announced that large employers should expect to see a 6.5% rise in healthcare costs in 2015.

Although The New England Journal of Medicine and members of the Urban Institute both note a rise in individuals signing up for insurance through their employers, other analysts predict that employers' costs will be too high, and that the employers will simply "dump" these employees into their state's health insurance marketplace. Many experts, however, expect that if such dumping were to occur, it would come from small employers who merely cannot afford to offer adequate health plans.

If you have questions regarding the ACA or how the anticipated increased participation in employer-based health plans may impact your practice, please contact an experienced healthcare attorney at 248-544-0888 or contact us here. To stay updated on healthcare news, subscribe to Wachler & Associates' health law blog by adding your email address and clicking "Subscribe" in the window on the top right of this page.

August 7, 2014

FDA to Bolster its Regulation of Diagnostic Testing

With the passage of the Food and Drug Administration Safety and Innovation Act (FDASIA) on July 9, 2012, Congress expanded the Food and Drug Administration's (FDA) authority to safeguard and advance public health. Exercising such authority, on July 31, 2014, the FDA notified Congress of its plan to publish a proposal to expand its oversight of laboratory developed tests (LDTs). LDTs are diagnostic tests, which are designed, manufactured, and used within a single laboratory. Previously, LDTs certified under the Clinical Laboratory Improvement Amendments (CLIA) could exist without FDA oversight. This exception existed because LDTs were primarily used for rare diseases. However, advances in molecular biology allowed laboratories to produce a broader range of LDTs, applicable to more common illnesses. The former exception has been touted by some as fostering laboratory independence, allowing for exponential innovation and accuracy in diagnostics. However, others like Senator Edward Markey (D-Mass.) claim that the newly implemented FDA oversight has been "long-overdue."

As a result of support from individuals like Senator Markey, more than 11,000 LDTs, housed in 2,000 different laboratories, may fall into the FDA's expanded regulations. The FDA has cited LDTs for illnesses like Lyme disease and cancer, as justification for the new regulatory framework. By subjecting LDTs to such scrutiny, the FDA's stated goal is to eliminate faulty tests that produce inaccurate diagnoses and cause patients to seek unnecessary treatment, or delay vital treatment. However, opponents of the new regulation contend that the prior independence allowed laboratories to diagnose and measure disease with far greater accuracy than ever before.

The FDA's regulatory expansion will take place over nine years and will first be applied to what are deemed the riskiest LDTs. However, some tests will remain excluded from FDA regulations. Such LDTs include those which treat rare diseases and those for which there is no FDA-approved test.

In its announcement, the FDA stated its intent to publish guidelines detailing how laboratories can notify the FDA regarding their current manufacturing and use of LDTs. Once these guidelines are released, laboratories that currently utilize LDTs should notify the FDA about their tests in order to avoid legal repercussions. The FDA will allow currently available LDTs to continue during the reviewing process, in order to prevent any disruptions.

If your laboratory utilizes LDTs or has any questions regarding the FDA's new regulations, please contact an experienced health care attorney at 248-544-0888 or email at wapc@wachler.com. Wachler & Associates will continue to keep you updated on breaking regulatory changes and other health care news.

August 1, 2014

Bipartisan House Bill Proposes Increased Medicare Coverage of Telemedicine

A bill amending Title XVIII of the Social Security Act will be proposed soon, marking the culmination of bipartisan efforts in the House of Representatives. Representatives Glenn Thompson (R-Penn.) and Mike Thompson (D-Calif.) are prepared to announce a new telehealth bill, titled the Medicare Telehealth Parity Act of 2014, which would reduce the Social Security Act's current limitations on reimbursable telemedicine technologies.

Currently, the Social Security Act only permits reimbursement for telemedicine uses in rural health professional shortage areas (HPSAs) and non-Metropolitan Statistical Areas (MSAs). Not only are these qualifications limiting, they are also difficult to discern. For example, in the 2000s, the Health Resource and Service Administration (HRSA) eliminated the "rural HPSA" category from its designations, resulting in confusion regarding the correct application of the term. The forthcoming bill seeks to slowly resolve these reimbursement complications through a cost-effective, four-year plan:

  • Within six months of the bill's passage, it would mandate that Medicare provide coverage for telemedicine in urban areas with a population of 50,000 or less. Additionally, the six month period would be used to increase care sites to include retail clinics.
  • Two years following the bill's passage, Medicare coverage would expand to urban areas with a population of 100,000 or less. Furthermore, the bill would include home telehealth to the list of care sites, while expanding reimbursable services to encompass physical and speech therapy.
  • Lastly, after four years have passed, the bill would make telemedicine reimbursable across the United States.
In addition to the four-year plan, the bill seeks to officially add remote patient monitoring (RPM) to the Social Security Act's list of reimbursable services. The bill defines RPM as "the remote monitoring, evaluation, and management of an individual with a covered chronic health condition . . ., insofar as such monitoring, evaluation, and management is with respect to such condition, through the utilization of a system of technology that allows a remote interface to collect and transmit clinical data between the individual and the responsible physician . . . or supplier." By offering government reimbursement for RPM services, thereby expanding RPM use, the bill hopes to increase Medicare savings over time.

Also, the Representatives' bill would task the Secretary of Health and Human Services (HHS) with developing standards for remote patient monitoring. Finally, the United States comptroller would be directed to conduct a study within two years of the bill's passage, to determine the efficacy and estimated Medicare savings from the expansion of telemedicine applications.

The bill does not address Medicaid, the Children's Health Insurance Program (CHIP), or other federal health plans, nor does it comment on licensure or liability issues. However, studies show that incorporating reimbursement strategies for telemedicine in Medicare alone will result in significant cost savings, not only in transportation costs, but also in models of delivery and access to care. According to a study conducted by Stanford University, the implementation of telemedicine is estimated to generate 7.7% to 13.3% spending reductions per Medicare patient, per quarter.

Wachler & Associates' health law attorneys will continue to monitor any further developments regarding the proposed bill and all other federal and state legislation. If you have any questions about how your entity will be impacted by the final rule or any other regulation, please contact an experienced health care attorney at Wachler & Associates via phone at 248-544-0888 or via email at wapc@wachler.com.

July 10, 2014

HHS Unveils Statistical Sampling Pilot Program for ALJ Hearings on Medicare Audit Appeals

Last week, the Office of Medicare Hearings and Appeals (OMHA) announced the Statistical Sampling Pilot Program (Pilot Program). The Pilot Program offers Medicare providers an alternative route, along with the Settlement Conference Facilitation Pilot, to reach a final determination for claims pending at the administrative law judge (ALJ) hearing level without enduring the 2-3 year delay for hearing. Although the Pilot Program offers a time-saving and perhaps more efficient option for Medicare providers, engaging in the Pilot Program also comes with risks as Medicare providers may "put all of their eggs in one basket" and rely on a single ALJ to issue a decision that affects a large volume of claims. In some cases, the provider may know the identity of the ALJ prior to agreeing to statistical sampling, but in other cases the provider will not.

The Pilot Program is available to Medicare providers that have requested an ALJ hearing following a Medicare Qualified Independent Contractor (QIC) reconsideration decision. At this time, the ALJ hearing requests must either be assigned to an ALJ or must have been filed between April 1, 2013 and June 30, 2013 and it must meet all jurisdictional requirements, including that it was filed timely. In order to be eligible for the Pilot Program, the Medicare provider must have a minimum of eligible 250 claims and the claims must be one of the following: (1) pre-payment claim denials; (2) post-payment non-RAC claim denials; or (3) post-payment RAC claim denials from one RAC. In addition, claims that are assigned to different ALJs or were requested in different consolidation groups may be incorporated into the request for statistical sampling.

A Medicare provider that meets the eligibility requirements for the Pilot Program may request statistical sampling by submitting a "Request for Statistical Sampling" form that is available on OMHA's website. The provider must also submit a spreadsheet, a template is also available on OMHA's website, that provides detailed information about the claims requested to be included in the statistical extrapolation.

After a request is submitted, if granted, a consent template will be sent to the Medicare provider. The consent template will request the Medicare provider to consent in writing to statistical sampling. After written consent is obtained, a pre-hearing conference will be held to confirm the consent, establish the universe of claims from which the sample will be taken and agree to other matters related to the hearing. Following the pre-hearing conference, the ALJ will issue an order and if no objections are received within 10 days of receipt of the order, the order will become binding. Once the pre-hearing conference order becomes binding, consent for the statistical sampling may not be withdrawn.

After the pre-hearing conference order becomes binding, OMHA will combine the universe of claim appeals agreed to in the pre-hearing conference under a single ALJ appeal number. The appeal will be assigned to the next ALJ on the rotation unless all of the appeals had been assigned to an ALJ prior to the statistical sampling request. The random statistical sampling will be compiled by a trained and experienced statistical expert who will develop appropriate sampling methodology in accordance with Medicare guidance. At the hearing, the ALJ will review the sample units and make a decision regarding those units. It is important to note that either CMS or a CMS contractor may participate in the hearing. The decisions on the sample units will be extrapolated to the universe of claims at issue.

The Pilot Program offers an opportunity to eligible Medicare providers with large volumes of claims to seek an alternative, and perhaps more efficient, avenue to final resolution of the claims. The new program is a welcomed creative development to solving the backlog of appeals waiting for assignment for ALJ hearing. However, Medicare providers should carefully consider before engaging in the process and fully understand the implications of agreeing to statistical sampling. Wachler & Associates will continue to provide updates on the developing Pilot Program. For more information on ALJ appeal strategies and the Pilot Program, please contact an experienced health care attorney at 248-544-0888 or wapc@wachler.com.

July 8, 2014

Michigan Passes Law Allowing Direct Access to Physical Therapists

On June 26, 2014, Michigan Governor Rick Snyder signed into law SB 690, allowing a physical therapist or physical therapist assistant to treat a patient without a physician's referral. Pursuant to the new law, which goes into effect January 1, 2015, physical therapist may now treat self-referring patients without a prescription from a physician under the following circumstances: (1) for up to 21 days or 10 treatments, whichever comes first; or (2) the patient is seeking physical therapy services to prevent injury or promote fitness. With the signing of SB 690, all 50 states, as well as the District of Columbia, now provide for some kind of direct access to physical therapists.

Under the new law, when a physical therapist is treating a patient without a prescription from a physician, the physical therapist must refer the patient to a physician if the physical therapist has reasonable cause to believe that symptoms or conditions are present that require services beyond the physical therapist's scope of practice. In addition, the law provides that the physical therapist must consult with a physician if the patient does not show reasonable response to treatment in a time period consistent with the standards of practice. The new law also provides that the physical therapist must determine that the patient's condition requires physical therapy before delegating physical therapy interventions to a physical therapist assistant.

According to the House Committee's summary of Senate Bill, these rule changes "do not create an open door to [physical therapy] services; a patient would need to obtain a prescription if more than 10 visits or three weeks of treatment were needed." Moreover, as provided in concurrently adopted Senate Bills (SB691-SB694), an insurer would not be mandated to provide coverage for treatment that was not provided pursuant to a prescription from a physician.

Wachler & Associates will continue to keep you updated on legislation regarding patient access to care, as well as other national health care 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. If you have any questions regarding the newly adopted laws, or have any other questions related to reimbursement rules for physical therapy, please contact an experienced health care attorney at 248-544-0888 or wapc@wachler.com.

June 27, 2014

Beaumont, Botsford, and Oakwood Approve Merger Agreement to Form Region's Largest Health System

Earlier this week, the boards of Beaumont Health System, Botsford Hospital, and Oakwood Healthcare approved a merger agreement to form a new $3.8 billion nonprofit organization--Beaumont Health. The deal, which still requires state and regulatory approval, would create the region's largest health system with 8 hospitals, 153 outpatient care sites, 5,000 physicians, 33,093 employees and 3,500 volunteers. Beaumont Health expects to receive approval by the Federal Trade Commission and Michigan Attorney General in time to close the transaction by this fall.

Beaumont Health joins the long list of mergers between hospital systems over the recent years as many hospitals seek to reduce costs and improve patient care through more streamlined operations, increase bargaining power with insurance companies, and take advantage of the cost-saving incentives included in the Affordable Care Act (ACA).

When news of the merger first broke, Fox 2 Detroit interviewed Wachler & Associates partner Andrew Wachler, who explained that the merger could allow patients access to each hospital's specialization, while allowing the hospitals to share costs. As Mr. Wachler explained, this type of cost sharing typically leads to improved health care quality and reduced costs.

Wachler & Associates will continue to keep you updated on any further developments regarding the merger, as well as all breaking Michigan and national healthcare 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.

June 25, 2014

Federation of State Medical Boards Adopts Model Policy for the Appropriate Use of Telemedicine Technologies

Technological advancements that allow for quicker and more secure electronic communication have encouraged telemedicine. The Federation of State Medical Boards (FSMB) defines telemedicine as "the practice of medicine using electronic communications, information technology or other means between a licensee in one location, and a patient in another location, with or without an intervening healthcare provider." Telemedicine technologies allow for easier access to health care in rural areas, as well as nearly immediate contact with specialists for individuals involved in an emergency situation. However, widespread usage of telemedicine is still developing and most states have yet to take the appropriate legislative initiative to enact guidelines for state medical boards and health providers to follow when implementing telemedicine systems. As a result, the Federation of State Medical Boards (FSMB), acknowledging the benefits that telemedicine offers, decided to step in.

On April 26, FSMB adopted a Model Policy for the Appropriate Use of Telemedicine Technologies in the Practice of Medicine (Model Policy). The Model Policy comes as a result of the collaborative efforts of the FSMB-appointed State Medical Boards' Appropriate Regulation of Telemedicine (SMART) Workgroup. The SMART Workgroup, made up of state medical board representatives and telemedicine experts, was tasked with creating uniform guidelines for state medical boards and health providers after:

  • Conducting a comprehensive literature review of telemedicine services and proposed and/or recommended standards of care;
  • Identifying and evaluating existing telemedicine standards of care developed and implemented by state medical boards;
  • Revising the FSMB's 2002 policy.
In the absence of state legislation, the Model Policy offers a uniform approach to guide state medical boards and health providers in several essential areas.

First, the SMART Workgroup emphasized that the physician-patient relationship is integral in maintaining the integrity of medical care. The Model Policy notes that, before giving any medical advice, physicians utilizing telemedicine should first:

  • Fully verify and authenticate the location and, to the extent possible, the requesting patient;
  • Disclose and validate the provider's identity and applicable credential(s); and
  • Obtain appropriate consents from requesting patients after disclosures regarding the delivery models and treatment methods or limitations, including any special informed consents regarding the use of telemedicine technologies.
In addition, the Model Policy notes that an appropriate physician-patient relationship has not been established when the physician's identity is unknown to the patient. Furthermore, a patient must not be randomly assigned to a physician, but rather have a choice, whenever appropriate. So long as the standard of care is met, the physician-patient relationship can be established using telemedicine technologies.

Second, in order to avoid legal complications related to licensure issues, the Model Policy mandates that a physician must be licensed by the medical board of the state where the patient is physically located at the time he or she is receiving medical services. The SMART Workgroup also noted that physicians who wish to provide telemedicine services online must be licensed in all jurisdictions where patients receive care. As of the publication of this blog 10 states offer special purpose licenses, which allow for health professionals to have the option of obtaining a limited license for the delivery of specific health services under particular circumstances in addition to holding a full license in the state where they primarily practice. Reciprocity legislation and special purpose licenses could mitigate telemedicine boundaries created by licensure constraints.

Third, with regards to applicable scope of practice, FSMB stressed that treatment and consultation recommendations made using telemedicine technologies must be held to the same scope of practice as those in traditional, in-person settings. Furthermore, under the Model Policy physicians cannot issue prescriptions based solely on a questionnaire. In fact, prior to any treatment, the Model Policy requires that the treating physician performs a documented medical evaluation and collects the patient's relevant clinical history.

Fourth, the Model Policy states that patients should be provided easy access to follow-up care or information from the physician who conducted the consultation, or the physician's designee. In addition to follow-up services, physicians utilizing telemedicine technologies are required to provide an emergency plan to patients when there are indications that a referral to an acute care facility or emergency room is necessary. The emergency plan must also detail a formal, written protocol appropriate to the services being rendered.

Lastly, the SMART Workgroup requires that physicians should meet or exceed all applicable federal and state legal requirements of protected health information (PHI) privacy, including compliance with the Health Insurance Portability and Accountability Act (HIPAA). The Model Policy mandates that sufficient privacy and security measures must be in place and documented to assure confidentiality and integrity of PHI. All transmissions of PHI must be secured with passwords, encrypted electronic prescriptions, or other reliable techniques.

Telemedicine will continue to be integrated into health care services in the coming years. The FSMB Model Policy serves as a helpful guide in the absence of state regulations. However, any provider interested in telemedicine should contact a Wachler & Associates attorney. Wachler & Associates will continue to keep you updated on breaking telemedicine legislation and other health care news. For more information on telemedicine or how to utilize telemedicine technologies in your practice, please contact an experienced health care attorney at 248-544-0888 or email at wapc@wachler.com.

June 13, 2014

Physicians Nationwide Face Terminations as Insurance Plans Move to Narrow Networks

In the past year, thousands of health care providers across the country have been excluded without cause from their insurance plan's provider networks. The proliferation of narrow networks - defined as health insurance plans that limit the doctors and hospitals available to their subscribers - has caused a backlash amongst providers, who claim the insurers' terminations will squeeze beneficiaries on access to care, and disrupt longstanding patient-physician relationship, emergency department care, and referral networks.

Although the Affordable Care Act did not create narrow networks, the reform law accelerated the trend by limiting insurer's ability to continually lower benefits and exclude unhealthy individuals. Without other ways to compete, controlling providers and limiting choice is the insurers' best way to lower premiums and thus compete on the exchanges. Insurers claim that narrow networks control costs and allow for higher quality, better coordinated care.

In most cases, however, patients choose insurance plans based on the plan's access to a specific provider network. Patients subscribe and re-subscribe to one-year commitments with the primary intent to access their long-term primary care physicians or other regularly seen providers. Patients often build relationships with these providers over several years, even decades. Now, without notice or the ability to switch their plan, the patients' physician is suddenly out-of-network and cost-prohibitive.

For physicians, a termination from a single insurance provider can be career threatening. Physicians receiving terminations and non-renewals lose critical access to patient groups and are excluded from the referral networks they developed throughout their career.

Providers across the country are reporting terminations, often without cause, from Medicaid, Medicare Advantage, and private insurance plans. Medicaid Managed Care and Medicare Advantage plans often cover the most vulnerable patient populations. These patients will suffer from losing their primary care physicians and often lack the ability to effectively manage their own healthcare. In some states, Attorney Generals and provider groups are challenging the insurance providers in Court, and asking state agencies to take action.

Our firm currently represents physicians challenging terminations via their insurance plans' appeal processes. However, as the appeal processes are often limited to determining if the insurance provider followed the termination or nonrenewal procedures in their provider agreements, we have reached out to state regulators and healthcare agencies to seek assistance in protecting provider and patient rights. The insurance plans' ability to move to a narrow network is not the issue. Instead, the real issue is that in the narrowing of networks, patients must have right to keep their primary care provider in the plan or otherwise be allowed to disenroll and transfer plans to continue to see their primary care physician. Medicare and Medicaid authorities, including the states' contracts with the plans, recognize patients' right to provider choice. Those rights are enhanced with regard to primary care physicians. Provider terminations sever long standing physician-patient relationship and may lead to lower quality, less personalized care. Further, with the increase in enrollment under the Affordable Care Act, the large volume of terminations will significantly reduce access to care, a primary objective of government-provided health care.

We are challenging whether the insurance providers, specifically those operating Medicaid Managed Care and Medicare Advantage plans, are breaching the requirements of the Social Security Act and other Medicare and Medicaid laws. Further, we believe providers and patients have extensive rights emanating out of contracts between states and the insurance plan. Our position is that all laws, regulations, codes, and policies regarding the insurance providers' operation of Medicaid and Medicare Advantage plans serve to define the relationship between the state, the plan, the provider, and Medicare and Medicaid beneficiaries. Insurance companies terminating plans also may have breached common law contract principles by the manner in which they induce patients via providers that the plan has already determined to terminate.

Please let our firm know if you have received a network termination or nonrenewal, and seek assistance in challenging the action via an appeal to the insurance plan or other action. Wachler & Associates has over 25 years of experience representing healthcare providers across the country. Our firm has successfully challenged insurance company actions countless times, often obtaining extremely beneficial resolutions for our clients. Further, our attorneys' industry relationships allow us to connect with state representatives and other healthcare groups to together and efficiently challenge these improper methods of termination.

If you would like to speak to one of our experienced health care attorneys, please contact us via our website or call our offices at 248-544-0888. Our attorneys are currently challenging network terminations and will be happy to assist in your appeal.


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.