Compliance

Published on: October 21, 2013

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

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

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

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

Published on: September 30, 2013

CMS Releases Comparative Billing Reports for Spinal Orthotics and Ordering Providers

by Wachler & Associates, P.C.

The Centers for Medicare and Medicaid Services (CMS) recently released a national provider Comparative Billing Report (CBR) focused on spinal orthotics and ordering providers. This CBR was conducted in response to an Office of Inspector General (OIG) report on inappropriate Medicare payments for orthotics. The Medicare Durable Medical Equipment (DME) data obtained for this report span from dates of service beginning January 1, 2012 through December 31, 2012. The final data was retrieved on August 15, 2013 from the Integrated Data Repository (IDR).

Under contract by CMS, Safeguard Services LLC is the authorized producer of all CBRs. Safeguard sends CBRs to about 5,000 ordering providers to help providers prevent improper billings. This CBR provides comparative data to orthotic providers across the nation to compare orthotics providers in terms of coding and billing practice, as well as utilization patterns. The sample spinal orthotics CBR may be useful to review if your entity did not receive one from Safeguard.

The following Healthcare Common Procedure Coding System (HCPCS) codes were analyzed in this CBR:

Published on: September 23, 2013

Compliance with HIPAA HITECH Rule Effective Today

by Wachler & Associates, P.C.

After months of delay, compliance with the Health Insurance Portability and Accountability Act (HIPAA) Health Information Technology for Economic and Clinical Health (HITECH) Omnibus Final Rule goes into effect today. HIPAA Privacy and Security Rules are implemented by the Health and Human Services (HHS) Office for Civil Rights.

The Omnibus Final Rule was announced by HHS on January 17, 2013. According to the HHS press release, the Final Rule “expand[s] many of the requirements to business associates of [health care providers, health plans, and other entities that process insurance claims] that receive protected health information, such as contractors and subcontractors…Penalties are increased for noncompliance based on the level of negligence with a maximum penalty of $1.5 million per violation.”

The Final Rule’s safe harbor period, which ended today, gave covered entities and business associates 180 days to comply with stricter modifications which will be enforced by heavy fines. Time is of the essence for covered entities and business associates to take proper measures to comply with the new rules. It is imperative that entities review their relationships with covered entities, as the Final Rule expanded the definition of a “business associate” and entities that previously were not business associates, may be considered business associates with the implementation of the Final Rule. If an entity is a business associate with a covered entity, then certain obligations come into play, including the requirement that the business associate and covered entity enter into a business associate agreement that meets the requirements set forth in the Final Rule.

Published on: September 18, 2013

OIG Releases Report on RACs and the Actions Taken by CMS to Address Improper Payments, Fraud Referrals, and Performance

by Wachler & Associates, P.C.

In August 2013, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued a study addressing problems and vulnerabilities in Recovery Audit Contractor (RAC) activities, as well as their oversight by Centers for Medicare & Medicaid Services (CMS). RACs are tasked with identifying improper payments and are paid on a contingency fee basis according to their findings. RACs are also obligated to refer potential fraud to CMS.

The report addresses RACs’ efforts at identifying improper payments and potential fraud for the fiscal years (FYs) 2010-2011 and emphasizes the importance of effective CMS oversight over the RACs. The OIG set out to discover and report on four main objectives, including the extent to which:

1. RACs identified improper payments for services billed to the Medicare program;

Published on: August 7, 2013

CMS Issues Much Anticipated Final Rules on Payment of Medicare Part B Inpatient Services and Payment of Hospital Inpatient Services under Medicare Part A

by Wachler & Associates, P.C.

On August 2, 2013, the Centers for Medicare & Medicaid Services (“CMS”) released its much-anticipated final rules, CMS-1455-F and CMS-1599-F, finalizing two previously issued proposals that addressed payment policies related to patient status in short-stay hospital cases: (1) payment of Medicare Part B inpatient services; and (2) admission and medical review criteria for payment of hospital inpatient services under Medicare Part A. The effective date of the final rule is October 1, 2013.

Notwithstanding these final rules, CMS stated that hospitals will be permitted to follow the Part B billing timeframes established in CMS-1455R Ruling regarding appeals and the submission of Part B claims after the effective date of the final rule, provided (1) the Part A inpatient claim denial was one to which the Ruling originally applied; or (2) the Part A inpatient claim has a date of admission before October 1, 2013, and is denied after September 30, 2013, on the grounds that the medical care was reasonable and necessary, but the inpatient admission was not.

Payment of Medicare Part B Inpatient Services

Published on: July 31, 2013

The Medicare Appeals Process Is Overburdened

by Wachler & Associates, P.C.

Healthcare and healthcare law professionals across the country are noticing that as Medicare audit numbers are climbing, so too is the length of the Medicare appeals process. Once a provider or healthcare entity receives a denial from a Medicare contractor, the Medicare appeals process consists of five stages:

• Redetermination, which is filed with a Medicare Administrative Contractor (MAC)

• Reconsideration, which is filed with a Qualified Independent Contractor (QIC)

Published on: July 29, 2013

Increased Scrutiny on Medicare Sleep Study Payments

by Wachler & Associates, P.C.

Ensuring comprehensive documentation procedures are in place has become increasingly vital for all providers. However, recently compliance plans have become even more important for sleep labs, sleep centers, hospital-based sleep service providers, and non-hospital-based sleep service providers seeking Medicare reimbursement. According to a FY 2013 Department of Health & Human Services (HHS) Office of Inspector General (OIG) report, Medicare payments for sleep study services have dramatically increased since 2001, growing four-fold from $62 million in 2001 to $235 million in 2011. As a result of increased Medicare spending for sleep-related procedures, there is a spotlight on the appropriateness of Medicare-billed services.

Sleep study services encompass issues such as studies for obstructive sleep apnea (the most common sleep disorder), full-night sleep diagnostic studies, split-night studies, and full-night titration studies. Medicare reimburses sleep study providers at prearranged and set rates for polysomnography (the most popular tool utilized to diagnose sleep disorders), applicable services from the inpatient prospective payment system, the outpatient prospective payment system, the Physician Fee Schedule, and a range of sleep studies.

Sleep study service providers receiving Medicare payments should be prepared for the OIG’s scrutiny throughout 2013 by ensuring that claims are made according to Medicare regulations. In order to ensure proper compliance for full Medicare reimbursement, sleep study service providers must follow certain documentation and procedural requirements. Among other requirements, all documentation must provide rationale for services that were provided, as well as rationale for how providers arrived at a billing status. Detailed documentation is more important than ever.

Published on: July 23, 2013

CMS Issues Demand Letters to Providers and Suppliers with Claims for Services Provided to Allegedly Incarcerated Beneficiaries

by Wachler & Associates, P.C.

The Centers for Medicare & Medicaid Services (CMS) is issuing demand letters seeking recoupment of reimbursement from medical providers and suppliers for Medicare beneficiaries that, according to data from the Social Security Administration (SSA), were allegedly “incarcerated” at the time services were provided. According to the Code of Federal Regulations (42 CFR 411.4) and Section 1862(a)(2) of the Social Security Act, with limited exceptions, Medicare does not make payments under Medicare Part A or Part B for incarcerated beneficiaries’ medical services. The SSA uses the Prisoner Update Processing System (PUPS) to notify CMS contractors to stop Medicare payment for patients in custody of penal authorities.

CMS considers a beneficiary “incarcerated” in circumstances that do not only involve physical confinement. Commentary on 42 CFR 411.4 explains that this definition of “custody” is consistent with the Federal courts’ definition of custody for the purpose of habeas corpus protections of the Constitution. According to commentary on 42 CFR 411.4, as well as the related CMS bulletin, individuals in “custody” include those who are:

• Under arrest

Published on: July 17, 2013

CMS Issues Final Rule Requiring Written Agreements Between LTC Facilities and Hospices

by Wachler & Associates, P.C.

Recently, the Centers for Medicare and Medicaid Services (CMS) issued a final rule mandating that long term care (LTC) facilities and hospice providers enter into written agreements if the facility chooses to arrange hospice services through a Medicare-certified hospice provider. The rule becomes effective on August 26, 2013.

This final rule comes after the Department of Health and Human Services’ Office of Inspector General (OIG) raised several concerns regarding hospice care in Medicare-certified skilled nursing facilities and Medicare-certified nursing facilities. In September 2009, the OIG released a report that found nearly one-third of Medicare hospice beneficiaries lived in nursing facilities and that 82% of hospice claims for these beneficiaries did not meet the requirements for Medicare coverage. In addition, both hospices and LTC facilities are required by law to provide many similar services, which creates a greater likelihood that residents may receive duplicative or missing services.

As a result, CMS has added a new Condition of Participation (CoP) that now requires LTC facilities to have a written agreement in place to create a clear division of responsibilities between LTC facilities and contracted hospice providers. CMS believes that this new rule will improve the quality and coordination of care for LTC residents who elect to receive the hospice benefit.

Published on: July 16, 2013

OIG Reports Surgical Products Rebate Program Qualifies for Safe Harbor Protection from Anti-Kickback Statute

by Wachler & Associates, P.C.

On June 24, 2013, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued an advisory opinion announcing that by request of a surgical products manufacturer (the “Requestor”), based on the certifications and information provided, a proposed tiered rebate program will meet the requirements of the discount safe harbor of the anti-kickback statute (AKS) and will not generate prohibited remuneration under the AKS. Thus, the OIG concluded that it would not impose administrative sanctions in connection with the proposed arrangement.

The AKS makes it a criminal offense to knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program. At the discretion of the OIG, a violation of the AKS may constitute a felony punishable by imprisonment fines, or both, possible exclusion from Federal health care programs, and possible administrative proceedings and civil monetary penalties. However, safe harbor protection may be afforded to arrangements that meet all of the conditions set forth in the applicable AKS safe harbor. The regulatory AKS safe harbor for discounts interprets the Social Security Act’s exception for discounts, which protects “a discount or other reduction in price obtained by a provider of services or other entity under a Federal health care program if the reduction in price is properly disclosed and appropriately reflected in the costs claimed or charges made by the provider or entity under a Federal health care program.”

In this advisory opinion, the Requestor, a corporation that manufactures ophthalmologic products including pharmaceuticals, surgical equipment, and vision aids, sought an advisory opinion on whether a proposed arrangement would generate prohibited remuneration under the AKS. The Requestor’s proposed arrangement involved tiered, percentage-based rebates based on customer purchases of federally reimbursable and non-federally reimbursable surgical products. The rebate would be calculated based on a customer’s total annual purchases of such products regardless of whether such products are reimbursable by Federal health care programs and would not vary based on the volume of Federally reimbursable products purchased. In addition, the Requestor certified the various manners in which it would notify all customers receiving rebates of their obligation to report any rebates received based on sales of Federally reimbursable surgical products. Further, the Requestor certified that it would refrain from doing anything to impede the customer’s ability to meet its obligations under the AKS discount safe harbor.