Articles Posted in Compliance

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The Centers for Medicare & Medicaid Services (“CMS”) recently released a proposal that would alter the Medicare Physician Fee Schedule (“MPFS”) and significantly change evaluation and management (“E/M”) code payment rates. Payment rates for services furnished by physicians and other non-physicians are published in the MPFS, and E/M visits account for about 40% of allowed MPFS charges. CMS’ goal with this new proposal is to make documentation less time-consuming and allow providers to spend more time with their patients.  However, the proposal, which would lower reimbursement rates, has not been well-received by all providers.

Currently, E/M codes range from levels 1-5; 1 being a relatively simple service performed by a non-physician, and 5 being the most complex service performed by a physician. CMS is proposing to collapse levels 2-5 for new and established patients, creating one flat rate for levels 2-5. By having a single payment rate, CMS is expecting patient care to improve.

Normally, when documenting for the higher-level codes, physicians use boilerplate language in order to meet billing requirements. There have been concerns that this boilerplate language can be harmful to patients because the clinically important information gets lost within it. Thus, by eliminating the need for nuanced language to distinguish each level, CMS hopes that patients will have more face time with their provider. Furthermore, when patients access their charts, they will be able to clearly understand what the issue is.

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The Centers for Medicare and Medicaid Services (“CMS”) recently released a final rule that is meant to empower patients and reduce administrative burdens by advancing the MyHealthData and the CMS Patients Over Paperwork initiatives.  Payment policies and reimbursement rates are updated under the “Medicare Hospital Inpatient Prospective Payment System (“IPPS”) and Long-Term Acute Care Hospital (“LTCH”) Prospective Payment System Final Rule,” which will modernize Medicare by aiding in the shift from a fee-for-service to value-based payment system.  The final rule also creates greater transparency surrounding hospital prices, increases accessibility to Electronic Health Records (“EHR”), and allows providers to spend less time on paperwork and more time with patients.

The final rule reveals that CMS has finally decided to put an end to a special payment adjustment policy, known as the 25% rule.  The 25% rule was introduced in 2004, but its implementation had been postponed for years due to concerns about reimbursement.  The 25% rule would have reduced LTCH Medicare reimbursement if more than a quarter of the LTCH hospital had patients from a single acute-care hospital. The National Association of Long-Term Hospitals estimated that the reduced rate would have caused LTCHs to receive 50% to 60% less in reimbursement.

The rule was originally crafted by CMS because LTCHs often failed to follow payment criteria that defined qualifications for prospective payment system rates. This issue was addressed in the Bipartisan Budget Act of 2013 with the site-neutral payment policy. AHA Executive Vice President, Thomas Nickels said in a letter to CMS, “given the scale of LTCH cuts under site-neutral payment, implementing the 25% rule… would unjustifiably exacerbate the instability and strain on the field, which would threaten access for the high-acuity, long-stay patients that require LTCH-level care.” Furthermore, alternative payment models are now in place, which incentivize hospitals to follow the payment criteria.

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During a hearing on July 17, 2018, Department of Health and Human Services (HHS) Deputy Secretary Eric Hargan announced that HHS is interested in reforming the Stark law and the Anti-Kickback Statute (AKS). As value-based care is becoming more prominent in the healthcare system, coordinated care between providers is a necessity; but the Stark law and AKS are considered an impediment to coordinated care. Hargan contends that since the Stark law was created in a fee-for-service context, it “may unduly limit ways that physicians and healthcare providers can coordinate patient care [in a value-based system].”

HHS’s push for reform comes out of the “Regulatory Sprint to Coordinated Care,” which is an initiative launched by CMS that seeks to remove barriers to coordinated care while still upholding laws and rules that keep patients safe. According to Hargan, HHS is working on creating administrative rules to address these barriers.

Aside from the regulatory hurdles that the Stark law imposes on coordinated care, HHS is also concerned about the strict liability aspect of the Stark law. Strict liability imposes civil liability with monetary penalties onto the provider, regardless of the intent underlying the Stark law violation arises from an accident. HHS believes that strict liability turns providers away from entering into coordinated care arrangements, because the complexity of the Stark law may cause providers to violate it unintentionally and become liable. A suggested change from HHS is to define “noncompliance” in a clearer manner, which would allow providers to feel more at ease with participating in coordinated care.

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On July 12, 2018, the Centers for Medicare and Medicaid Services (“CMS”) released a statement proposing significant changes to Medicare that would modernize and restructure the Medicare program to deliver increased quality of care at a lower cost to beneficiaries. This will be done by utilizing a value-based healthcare system that works with modern-day technology. The proposal primarily alters the Medicare Physician Fee Schedule and Quality Payment Program.

CMS’s proposal coincides with its Patients Over Paperwork initiative, because it reduces the paperwork requirements for billing, thereby enabling doctors to spend more time with their patients.  The proposed changes to the Physician Fee Schedule and Quality Payment Program will streamline documentation requirements to reduce the administrative burdens on providers. Generally, providers create medical records that use boiler plate language to satisfy Medicare billing requirements, which often contain few details specific to the patient and their personal stories. Allowing providers to designate a plan of care based upon what the provider determines from the time spent with the patient and not based upon documentation guidelines will significantly increase the quality of care.

If the proposal is effectuated, it will modernize payment policies so that telehealth will be more available to Medicare beneficiaries. When a beneficiary virtually contacts their provider (through telephone or other telecommunication devices) to determine whether they need and in-office visit or not, Medicare would cover this service. Additionally, there would be coverage for a physician’s time when they review images or videos sent to them for a diagnosis. CMS would also like to have a patient’s updated medical records follow the patient throughout the healthcare system. This would increase transparency and collaboration by allowing all of the patient’s providers to see the patient’s medical history in full.

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Settlement Conference Facilitation (SCF) is an alternative dispute resolution process which provides appellants and the Center for Medicare and Medicaid Services (CMS) an opportunity to discuss a mutually agreeable resolution for claims appealed to the Administrative Law Judge (ALJ) or Medicare Appeals Council (Council) levels of appeal. SCF is a one-day mediation, in which an OMHA facilitator assists the appellant and CMS in negotiating a lump-sum settlement on eligible claims, without making official determinations of fact or law.

OMHA has modified the program’s eligibility criteria for appellants and appeals under the new expanded program, which was officially released June 15, 2018. For appellants, any Medicare Part A or Part B provider or supplier (with an assigned National Provider Identifier number) is eligible for participation, so long as that provider or supplier has not filed for bankruptcy or expects to file for bankruptcy in the future; does not have past or current False Claims Act litigation or investigations against them or other program integrity concerns such as civil, criminal or administrative investigations; and has either: (1) 25 or more eligible appeals pending at OMHA and the Council combined, or (2) less than 25 eligible appeals pending at OMHA or the Council and at least one appeal has more than $9,000 in billed charges.

The updated appeals eligibility criteria are as follows:

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The Office of Inspector General (“OIG”) has been sending notices to providers recently, suggesting that the providers have been billing incorrectly, leading to overpayments from Medicare. The alleged issue stems from the billing of extremity venous studies. When performing these studies, providers will often bill under HCPCS Codes 93970 or 93971 and 93965 for the same patient on the same date of service.

The reporting requirements are unclear, and there are no bundling edits to stop practices from reporting both services for the same patient on the same day. Nevertheless, the OIG has been notifying providers that they are looking into the billing of both codes on the same dates of service, implicating that providers have been billing fraudulently.

The 2016 CPT Code Book describes the codes as the following:

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On May 24, 2018, the U.S. Department of Justice announced a $23.85 million settlement with Pfizer, Inc., to settle anti-kickback claims against the company. The settlement arose after an investigation led by U.S. Attorney Andrew Lelling, which looked into the drug industry’s support of patient assistance charities. Pfizer is now among a group of multiple drug companies (Celgene Corp., Aegerion Pharmaceuticals, and Jazz Pharmaceuticals) who have settled with the Department of Justice for their use of patient assistance charities. Pfizer also signed a five-year monitoring agreement with the Department of Health and Human Services Office of Inspector General, and is required to implement measures to ensure that its arrangements with patient assistance charities are in compliance with the law

Pfizer was allegedly using an “independent” charity to pay illegal kickbacks to Medicare patients, covering out of pocket costs for prescription drugs. Pfizer made donations to Patient Access Network Foundation (PAN), a copay assistance nonprofit organization, and used a specialty pharmacy, Advanced Care Scripts, to direct Medicare patients taking its drugs toward the foundation to cover their copays.

The scheme centered around three drugs, two for kidney cancer (Sutent and Inyalta), and one for arrhythmia (Tikosyn). Pfizer was allegedly aware that PAN used their donations to cover the copays of patients taking these drugs. In fact, PAN and the pharmacy would notify Pfizer when patients using these drugs got the copay assistance. Price increases of the drugs were concealed from patients but left Medicare with a higher bill.

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On May 7, 2018, the Centers for Medicare and Medicaid Services (“CMS”) released a proposed rule that would rebrand the current Medicare and Medicaid Electronic Health Records (“EHR”) Incentives program into the Promoting Interoperability program (“PI”).

The EHR incentives program, created in 2011, encouraged eligible providers to adopt, implement, upgrade and demonstrate meaningful use of certified electronic health record technology (“CEHRT”). This program awarded over 544,000 health care providers with payment by February 2018.

With the great success of the incentives program, CMS is proposing changes that would create more transparency between patients and providers through greater access to health care information. To relieve burden to patients, and increase the ability to exchange health information among providers and patients, sharing and extracting files across systems is a new CEHRT requirement. Moreover, it will support increased patient access to their personal health information through secure email transmissions. The proposed PI program would also provide patients access to hospital price information via the internet.

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Urine drug testing is medical protocol for patients prescribed opioid drugs in order to monitor compliance and expose possible drug abuse or diversion.  In the wake of the opioid crisis, there has been an increase in the frequency and cost of urine drug tests, resulting in a corresponding increase in spending by Medicare and private insurance on such tests.  Between 2011 and 2014, spending on urine drug screens and genetic tests by Medicare and private insurance quadrupled to an estimated $8.5 billion per year.

The increase in the cost of urine drug tests is attributable to more expensive and high-tech ways of running the tests.  Presently, laboratories are moving away from simple urine screenings and installing machines for urine drug tests. There is a financial incentive attached to machine tests; under Medicare rules, each drug tested for within a single specimen validity test may be billed individually.

The spike in reimbursement by Medicare and private insurance has caught the attention of the federal government.  In 2010, the Centers for Medicare & Medicaid Services (“CMS”) imposed stricter rules on billing for simple urine screens; however, these rules do not cover machine testing.  In addition, in 2011, the federal government settled with Millennium Health, LLC, one of the largest urine drug testing laboratories in the United States, for $256 million after it was alleged to have billed medically unnecessary urine drug and genetic tests.

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In March of 2018, the Department of Health and Human Services Office of the Inspector General (OIG) issued a report titled “Many Medicare Claims for Outpatient Physical Therapy Services Did Not Comply With Medicare Requirements” [summary] (the “Report”) identifying millions of dollars of overpayments for outpatient physical therapy services and signaling potential for increased governmental scrutiny to practitioners within the discipline.

The Report revealed that an audit found $367 million in improper payments for outpatient physical therapy services between July 1 and December 31, 2013. The finding was based upon data extrapolation, in which the OIG reviewed 300 sample claims and determined that 184 of the claims (61.33%) did not comply with Medicare requirements for medical necessity, documentation, or coding.

The OIG directly faulted the Centers for Medicare and Medicaid (CMS) for the overpayments, finding that the current controls in place are insufficient to prevent improper payments to providers. The OIG issued three recommendations to CMS in order to prevent future incorrect expenditures:

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