Articles Posted in Compliance

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On November 5, 2021, the Centers for Medicare and Medicaid Services (CMS) released an interim final rule with comment period to require COVID-19 vaccination for staff of certain healthcare providers. The rule applies only to certain providers, but is expansive in scope where it is applicable. Under the rule, affected staff must receive their first vaccine dose by December 6, 2021 and be fully vaccinated by January 4, 2022.

The CMS vaccine requirement does not apply to all Medicare-enrolled providers and suppliers. CMS issued the mandate under its authority to set Conditions of Participation for certain providers. Therefore, only these specific, Medicare-certified provider types are directly subject to the requirement:

  • Ambulatory Surgical Centers (ASCs)
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On November 8, 2021, the Department of Health & Human Services (HHS) Office of Inspector General (OIG) released a revised and renamed Provider Self-Disclosure Protocol. The OIG “Health Care Fraud Self-Disclosure Protocol” (SDP) is the first revision to the SDP since 2013. The Self-Disclosure Protocol is available only for matters that involve potential violations of federal criminal, civil, or administrative law for which civil monetary penalties (CMPs) are authorized. The OIG’s updated website provides that “Self-disclosure gives persons the opportunity to avoid the costs and disruptions associated with a Government-directed investigation and civil or administrative litigation.” The SDP expects that “the disclosing party should ensure that the conduct has ended or, at least, in the case of an improper kickback arrangement, that corrective action will be taken and the improper arrangement will be terminated within 90 days of submission to the SDP.” The Protocol also expects providers to complete all other necessary corrective action by the time of disclosure.

The following are several key takeaways from the revised SDP and highlight information that providers should be aware of before beginning the self-disclosure process:

  • Minimum Settlement Amounts Doubled. The revised SDP doubles the minimum settlement amounts required to resolve matters accepted into the SDP. When the matter is related to kickbacks, the minimum settlement amount has been increased from $50,000 to $100,000. For all other matters, the minimum settlement amount has been increased from $10,000 to $20,000. These increases follow the increased CMP maximum imposed by the Bipartisan Budget Act of 2018.
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Recent allegations by the Department of Justice (DOJ) against Kaiser Permanente (Kaiser) highlight some of the tensions in proper medical coding and in internal documentation review. DOJ recently intervened in a series of whistleblower lawsuits that alleged that internal chart reviews and amendment of medical records by Kaiser constituted improper upcoding of claims for Medicare Advantage beneficiaries. DOJ accused Kaiser of coercing its employees to retroactively change or add codes in order to increase reimbursement rates. Ultimately, DOJ claimed that the alleged upcoding resulted in an estimated 75% error rate.

DOJ alleged that Kaiser physicians changed medical records often months after care was provided in order to increase Medicare Advantage reimbursement. A whistleblower claimed that more than 50% of Kaiser physicians said that they were coerced to add diagnoses that they never considered, let alone evaluated or treated. Specifically, the lawsuit alleges that Kaiser targeted codes for atherosclerosis of the aorta as having a “high rate of reimbursement.” The whistleblower claimed that Kaiser told its facilities that 40% of their bonuses would be based on how often they coded atherosclerosis of the aorta, pointing to an email between executives that identified this upcoding as a “$40M opportunity.”

The lawsuit focuses on retroactive additions and changes to patients’ medical records. These retroactive changes are usually done during retrospective chart reviews, which are typically used promote proper coding and reimbursement for services performed. Although the practice of internally reviewing charts to identify and address documentation or coding issues is common and generally permissible, the changes should be supported by proper documentation and some documentation elements must be documented at the time of service. In this case, DOJ alleged that Kaiser’s changes were not supported by documentation and that Kaiser only performed retroactive chart reviews on patients that could receive risk-adjustment payments.

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When a Medicare provider or supplier’s Medicare billing privileges are revoked, commonly called a Medicare revocation, the provider or supplier must ask the following questions: Why? When? Will there be collateral consequences? What are the appeal rights?

Why? Federal regulations provide 22 distinct reasons that the Centers for Medicare & Medicaid Services (CMS) may use to revoke a healthcare provider’s or supplier’s Medicare billing privileges. Some of the most common revocation reasons are noncompliance with Medicare enrollment requirements, felony convictions, and failures to respond to requests for medical records. A particularly severe revocation reason is an abuse of billing privileges because it means that CMS has found that the provider or supplier has engaged in a “pattern or practice of submitting claims that fail to meet Medicare requirements.” The reason for the revocation can affect both the appeal process and the effective dates of the revocation.

When? Two dates are most important: the effective date and the length of the reenrollment bar. The effective date is the date that the revocation begins. For some revocations, the effective date will be 30 days after the letter informing the provider or supplier of the revocation. However, revocations can also be retroactive. For example, in 2021 CMS may revoke a provider for a felony conviction from 2017 and back-date the revocation to begin in 2017. This may mean that all claims for the provider’s services from 2017 to the present will be denied and overpayments sought. The reenrollment bar is the length of time that a revoked provider or supplier must wait before they can reenroll in Medicare. In general, CMS may set a reenrollment of between 1 and 10 years, depending on the severity of the denial reason. However, reenrollment bars are very often initially set at the maximum of 10 years.

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Two recent settlements illustrate some of the compliance challenges facing clinical laboratories that perform urine drug testing (UDT). Both settlements involve a clinical laboratory resolving allegations that the lab violated the False Claims Act (FCA).

In the first case, the Department of Justice (DOJ) alleged that the lab performed and then billed federal health care programs for both presumptive testing and confirmatory testing. DOJ alleged that the lab was performing both tests at approximately the same time and providing both results to providers simultaneously. DOJ alleged that this rendered one test or the other medically unnecessary: either there was no result to confirm because the presumptive test came back negative, or the presumptive test was unnecessary because the provider already had the confirmatory test in hand. The lab agreed to pay $16 million to resolve these allegations.

In the second case, a physician practice referred UDTs to its in-house clinical laboratory. DOJ alleged that the physicians ordered excessive and unnecessary UDTs for patients without any individualized assessment of clinical need and caused these claims to be submitted to federal healthcare programs. The physicians agreed to pay $3.9 million to resolve these allegations.

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The Department of Health and Human Services (HHS) recently proposed to repeal two rules implemented under the Trump Administration to moderate the power of the agency. The rules HHS seeks to repeal are the Good Guidance Rule and the Civil Enforcement Rule. Public comments on the proposal are due by November 19, 2021.

The Good Guidance Rule was implemented to make guidance documents easier for the public to access and provide input on, and created extra screening steps before HHS may implement guidance. The major provisions of the Good Guidance Rule are: (1) a requirement that each guidance document issued by HHS generally include certain information, including a statement that the guidance does not have the force and effect of law and is not binding unless specifically incorporated into a contract; (2) additional procedures for ‘‘significant guidance documents’’ (defined as those with an estimated impact of greater than $100 million), including a period of notice and comment, a requirement that the Secretary of HHS personally approve new guidance, and a requirement for submission to the Office of Information and Regulatory Affairs (OIRA) for review; (3) creation of a repository for all guidance documents along with a provision stating that guidance documents not in the repository are not effective and would be considered rescinded; and (4) procedures for the public to petition the Department to withdraw or modify any particular guidance document.

The Civil Enforcement Rule was implemented to provide greater notice to providers subject to civil enforcement actions and greater transparency of HHS’s civil enforcement actions. Under the Civil Enforcement Rule, before taking civil enforcement actions, HHS must provide the targeted party with an initial notice of the agency’s legal and factual determinations, an opportunity to object or respond, and the Department’s written response to the affected party’s objections.

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The Department of Health and Human Services (HHS) Office of Inspector General (OIG) included several new items in its work plan update in October 2021. The OIG work plan outlines the projects that OIG plans to implement over the foreseeable future. Such projects typically include OIG audits and evaluations. Below are the highlights from the work plan update that providers and suppliers should take notice of.

First, OIG plans to compare the average sales price (ASP) for certain drugs with their corresponding average manufacturer price (AMP) to assess Medicare Part B drug reimbursement. Since Congress established the ASP as the basis for Medicare Part B drug reimbursement, OIG is empowered to monitor market prices to limit excessive Medicare payment amounts. In fact, the Social Security Act requires that OIG compares the ASPs with AMPs, and if the ASP for a drug exceeds the AMP by 5% in the two previous quarters or three previous four quarters, HHS may substitute the reimbursement amount with a lower calculate rate. The memo produced from this investigation will report the number of drugs OIG identified that meet the criteria for substitution of a lower reimbursement amount. Ultimately, providers and suppliers should be aware of the findings in this memo, as they could lead to reduced Medicare Part B reimbursements.

Second, OIG announced their plans for additional oversight of the 50 state Medicaid Fraud Control Units (MFCUs). MFCUs are state agencies that investigate and prosecute Medicaid provider fraud and complaints of patient abuse or neglect in Medicaid-funded facilities, although approximately 75% of MFCU funding comes from the federal government. OIG will conduct on-site reviews of a sample of MFCUs. OIG did not specify which or how many MFCUs they would review. Additionally, OIG will provide guidance regarding Federal regulations, policy and performance through data collection and analysis. Finally, the OIG will provide technical assistance and training to improve MFCU management and operations.

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UnitedHealth Group has agreed to reprocess the entirety of its commercial claims related to COVID-19 vaccine administration. The move comes after federal investigators concluded that UnitedHealth, as the nation’s largest insurer, paid “millions” of providers 40% less than the Medicare rate for vaccinating patients. According to a letter from the Senate Aging Committee, UnitedHealth is responsible for identifying how many providers’ bills from March to July 2021 need to be repaid and must provide the Committee with information regarding to who and how much the insurer owes by November 5. UnitedHealth’s change in position is a welcome occurrence for healthcare providers, who have often encountered difficulties when seeking reimbursement from commercial insurers for COVID-19 related services, especially vaccine administration and COVID-19 diagnostic testing.

This past week, the UnitedHealth added a statement to its website explaining that it understands “the importance of reimbursement to providers and the effect it has on ensuring they are able to provide vaccinations” and that it will adjust claims paid below the Medicare rate between March 15 and June 30, 2021. The statement further informs providers that UnitedHealth will repay in-network providers and will adjust claims paid less than $40 during that period. The company also notes that, in response to questions it has received about COVID-19 vaccine reimbursement rates for in-network providers, it has “been using the CMS $40 reimbursement value as the basis to pay providers since July 1st,” and in-network providers “do not need to take any action for these adjustments to be processed.”

Although UnitedHealth is not legally required to pay providers the recommended federal rate, federal investigators confirmed it was the only national insurance carrier that had not agreed to pay at least $40 for vaccine administration. Unlike many other medical services, federal legislation in this area prohibits providers from balance billing patients for costs related to the COVID-19 vaccine. Following a determination earlier this year in March by the American Medical Association that the existing rate did not cover the costs associated with administering the vaccine, CMS significantly increased the average payment for COVID-19 immunizations from $28 to $40 for single-dose vaccines and from $45 to $80 for two-dose vaccines. The agency expressed its expectation that commercial carriers should follow suit in offering clinicians a reasonable rate.

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Your practice, agency, or business has been audited by Medicare and now Medicare has stopped paying your claims or is claiming that you owe significant funds that must be repaid to Medicaid. These difficult circumstances can lead to many questions. Who performed the audit? Why are they denying claims or demanding an overpayment? How can you respond?

There are several entities that perform Medicare audits. The federal agency that oversees Medicare, the Centers for Medicare & Medicaid Services (CMS), performs few audits itself, but outsources these duties to a series of independent contractors, such as Medicare Administrative Contractors (MACs), Unified Program Integrity Contractors (UPICs), and the Supplemental Medical Review Contractor (SRMC). The vast majority of audits are performed by these contractors, although they will often use CMS’s name or logo in their correspondence and may answer phone calls by saying that they are “with Medicare.”

A healthcare provider’s options in responding to a Medicare audit are available from the very beginning. Sometimes providers receive Additional Document Requests (ADRs) from the contractor demanding information or documentation on a claim or claims. These requests should be reviewed carefully; however, they often contain boilerplate or generic language and it may be difficult to determine which specific documentation the contractor is requesting. Once the contractor reviews any additional documentation that the provider supplies, the contractor will issue its audit findings and determine to pay or to deny certain claims. Other times, the contractor will audit claims dates or other information and issue audit findings without requesting additional information from the provider.

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The Department of Health and Human Services (HHS) recently issued a notice restoring the rulemaking authority of the Food and Drug Administration (FDA). Under the Trump Administration, HHS had issued a memorandum, in September 2020, which required that all rules promulgated from the department’s agencies and offices would need to be signed by the secretary. The new notice specifically “revoked the September 15 Memorandum as it applied to FDA and reinstates any delegations to FDA rescinded by the September 15 Memorandum.” HHS’s recent notice delegating rulemaking authority to the FDA includes the authority to issue regulations pursuant to the Federal Food, Drug, and Cosmetic Act (FD&C Act), applicable portions of the Public Health Service Act (PHS Act), and other authorities governing functions of the FDA.

According to an HHS press release at the time, the goal of the September 2020 memorandum was to minimize “litigation risk for the department’s public health actions” and prevent potential abuse of authority. Some HHS rules have been challenged in court under claims that officials who signed the rules did not have the proper rulemaking authority. Rules must undergo a formal clearance process prior to being published. That process includes review by the agency writing the rule, HHS, press staff, the Office of the General Counsel (OGC), and the Office of Management and Budget. Other offices and departments may be involved in the rulemaking process if they are relevant to the subject matter of the proposed rule.

While some applauded the September 2020 memorandum for reigning in the FDA’s authority during the COVID-19 pandemic, when the agency’s burdensome regulations prevented much-needed products, especially COVID-19 testing devices, from reaching patients, others expressed concern over its possible negative effects. Former FDA Commissioner Scott Gottlieb at the time described the move as a “major distraction” that creates “an implication, or at least a specter” that the FDA’s independence is being “eroded or influenced.” After the new notice was issued, Gottlieb applauded the move in a tweet, saying that the “decision by current HHS will restore an essential element of FDA’s independent judgment and allow the agency to act faster.”

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