Compliance

Published on: June 11, 2013

Auditors Using Sophisticated Data Mining Techniques to Identify Fraud

Auditing entities are utilizing more sophisticated electronic data mining methods than ever before. Today’s sophisticated data mining techniques enable auditors to identify greater cost recoveries, making auditing activities both more efficient and more effective.

Auditors utilize statistical data mining testing to determine whether a provider’s billing practices are statistically different from their peers’. If data patterns from a provider’s utilization rates are significantly different from that of their peers’, auditors are able to identify situations where a provider’s practices may be improper. By mining data on a regular basis, healthcare auditors isolate potential fraud and abuse.

Comparative Billing Reports (CBRs), a tool used by CMS to educate providers about their individual billing practices, detail complex statistical analysis in the form of charts and graphs and show how a practices’ utilization rates compare to those of their peer group. Safeguard Services, LLC, a company contracted by CMS, produces and sends out CBRs to certain provider types. CBRs compare both state and national standards and may help a provider detect possible billing and coding problems for their practice.

Published on: June 10, 2013

Outpatient Therapy Services Must Assign G-Codes or Face Medicare Denials

by Wachler & Associates, P.C.

As of July 1, 2013, Change Request 8005 requires outpatient therapy service providers to report new functional G-codes and modifiers on claims for physical therapy (PT), occupational therapy (OT), and speech-language pathology (SLP) services or face Medicare payment denials. The G-codes will be used to identify the primary issue being addressed by the therapy, and the modifiers will identify the severity or complexity of the patient, as well as their change over time. The policy includes a list of 42 new non-payable G-codes, 14 sets of three codes each, and seven new severity/complexity modifiers on therapy claims.

This change became effective for therapy services with dates of service on and after January 1, 2013. However, the first six months are a testing period for providers to acclimate to the new coding requirements. During this pre-July 1 testing period, claims without G-codes and modifiers will be processed. Claims for therapy services with dates of service on or after July 1, 2013 that do not have the appropriate G-codes and modifiers will be returned or rejected. In addition, providers may not bill the patient for the rejected services.

After July 1, 2013, the correct G-codes and modifiers must be included on claim forms at the outset of the therapy episode, every 10 treatment days or every 30 calendar days (whichever is less), and at discharge. According to CMS transmittal 1196, contractors are required to alert providers, with the exception of institutional providers, to include the new G-codes with modifiers on future therapy claims through a Remittance Advice Message as of April 1, 2013.

Published on: June 6, 2013

RACs to Recover Radiation Oncology Treatment Payments

by Wachler & Associates, P.C.

Earlier this year, Connolly, Inc., the Recovery Audit Contractor (RAC) for Region C, posted a new issue to its CMS-Approved Issues List targeting Stereotactic Radiation Therapy (SBRT) and Stereotactic Radiosurgery (SRS) services for providers in the following states: Arkansas, Colorado, Delaware, District of Columbia, Florida, Louisiana, Maryland, Mississippi, New Jersey, New Mexico, Oklahoma, Pennsylvania, and Texas.

According to the issue’s description, CMS has approved auditing providers who have incorrectly billed for SBRT and SRS procedures found to be, upon review, “not medically appropriate.” Connolly will be able to audit the billed SBRT/SRS claims as far back as three years from the initial determination date of the procedures, and will be focusing its audit efforts on the outpatient hospital setting. Consequently, this Connolly initiative may affect radiology oncology providers that have performed SRS and SBRT procedures in the states mentioned above.

In response to this news, providers must ensure they are keeping accurate records regarding the rationale and medical necessity for these treatment procedures, as well as maintaining and following effective compliance plans. If you need assistance in preparing for, or defending against RAC audits, or implementing a compliance program geared towards identifying and correcting potential risk areas related to RAC audits, please contact an experienced health care attorney at Wachler & Associates at 248-544-0888.

Published on: June 4, 2013

Pharmaceutical Company Violates Anti-Kickback Statute and Pleads Guilty to Fraud

by Wachler & Associates, P.C.

On Friday, May 24, 2013, ISTA Pharmaceuticals, Inc., a pharmaceutical company recently acquired by Bausch & Lomb, Inc., pled guilty to violating the Federal Anti-Kickback Statute and the Food, Drug and Cosmetic Act (FDCA). Under the terms of a civil settlement agreement and ISTA’s guilty plea, the pharmaceutical company has agreed to pay a total of $33.5 million to states and the federal government in fines and fees for conspiracy, misbranding, false submissions to government health care programs, and under whistleblower provisions of the False Claims Act.

The Anti-kickback Statute provides criminal penalties for companies who knowingly and willfully offer, pay, solicit or receive remuneration in order to induce business payable by Medicare or Medicaid. According to the Department of Justice’s press release, ISTA violated the Anti-kickback statute by offering doctors illegal inducements, such as wine tastings and golf outings, in order to persuade doctors to prescribe ISTA’s eye drug, Xibrom, to their patients.

Under the FDCA, companies may not introduce drugs into interstate commerce for uses that have not been approved by the Food and Drug Administration. Although the Food and Drug Administration approved ISTA’s eye drug, Xibrom, for pain and inflammation after cataract surgery, ISTA pled guilty to marketing Xibrom for unapproved uses, such as to prevent swelling of the retina and to prevent cystoid macular edema.

Published on: May 29, 2013

Hospital Lobbying Groups Push Congress to Pass RAC Bill

by Wachler & Associates, P.C.

Hospital lobbying groups are pushing for Congress to pass the Medicare Audit Improvement Act of 2013, which would put a cap on the amount of document requests that Recovery Audit Contractors (RAC) may demand from providers. Specifically, the bill would limit RAC document requests to 2% of hospital claims and a maximum of 500 additional document requests over 45 days.

The legislation was introduced in the House on March 19, 2013 by Representatives Sam Graves (R-MO) and Adam Schiff (D-CA); and was introduced two months later in the Senate by Senators Roy Blunt (R-MO) and Mark Pryor (D-AK). On March 19, 2013, Graves stated in a press release that “[d]octors and nurses should be focused on caring for patients, not trying to comply with the ever-increasing requests for documents.” Graves also stated that small, rural hospitals will benefit from this new legislation the most, since they are often ill-equipped to handle extensive document requests.

The American Hospital Association (AHA) endorsed both bills, and since the new year, has spent $4.3 million thus far in lobbying efforts. In addition, the Federation of American Hospitals and six state hospital associations also joined the AHA in its lobbying efforts. Despite this significant lobbying, neither bill has gained momentum. The same bill was also introduced last year by Graves, but failed to move out of committee. A spokeswoman for the AHA stated that the House bill was not expected to move soon. As a result, lobbying efforts have been placed on increasing the number of co-sponsors of the bill. Last year, only 26 members of Congress co-sponsored the bill, whereas the current legislation has 70 co-sponsors.

Published on: May 20, 2013

Bard Agrees to $48.26 Million Settlement for FCA Violations

by Wachler & Associates, P.C.

On May 13, 2013, the Department of Justice (DOJ) announced that C.R. Bard Inc. agreed to pay the United States $48.26 million to resolve allegations that Bard knowingly caused false claims to be submitted to Medicare in violation of the False Claims Act (FCA). Bard is a corporation based out of New Jersey which develops, manufactures, and markets medical products. The claims that purportedly violated the FCA were for brachytherapy seeds used to treat prostate cancer.

The government alleged that from 1998 to 2006, Bard delivered illegal remuneration in the form of grants, rebates, fees, marketing assistance, and/or free medical equipment to customers and physicians to induce them to purchase Bard’s brachytherapy seeds, in violation of the Anti-Kickback Statute. The government argued that the hospital bills submitted to Medicare for these seeds were rendered false due to Bard’s illegal kickback activity. The government alleged that Bard was liable for causing the submission of those false claims.

This settlement also resolves a lawsuit filed by Julie Darity, a former manager at Bard. Darity brought her claim under the whistleblower provisions of the False Claims Act, which allows private citizens to bring suits for false claims on behalf of the United States and share in the recovery obtained by the government. The former manager will receive $10,134,600 as her share of the civil settlement.

Published on: May 17, 2013

Jury Rules Tuomey Violated Stark Law and the FCA through Physician Employment Agreements

by Wachler & Associates, P.C.

On May 8, 2013, in a retrial of a 2010 case, a federal jury found that Tuomey Healthcare System (Tuomey) in Sumter, SC violated both the Stark Law and the False Claims Act (FCA). The jury found that Tuomey violated the FCA by submitting 21,730 claims to the Medicare program that were tainted by illegal compensation arrangements which induced physicians to refer patients to the hospital in violation of the Stark Law.

The underlying employment arrangements were made for 19 surgeons who each received base pay, significant benefits, and potentially two bonuses. The jury agreed with the government’s contentions that the pay was not consistent with fair market value and was not commercially reasonable. The government argued that the excess compensation was evidence that the employment agreements took into account the volume or value of the physicians’ referrals to Tuomey.

The jury assessed damages against Tuomey in the amount of $39,313,065, which is the full amount of the Medicare claims at issue. In addition, under the FCA, the government may seek up to three times the amount of damages plus $11,000 per claim, meaning Tuomey could potentially face up to $357 million in liabilities under the FCA. However, since Tuomey is a community hospital, they are likely to receive a penalty less than that amount. Each side will now submit motions interpreting what they think are the appropriate amount of damages, with a final damage amount coming sometime in the future.

Published on: May 15, 2013

Recovery Auditors (RACs) target Hospice Face-to-Face Recertifications

by Wachler & Associates, P.C.

Hospice providers must always obtain written certification that a patient meets Medicare’s hospice coverage criteria. Written certification of terminal illness needs to be obtained no later than 2 days after hospice care is initiated, and must be on file in the hospice patient’s record prior to the submission of a claim to the Medicare contractor. Certification must be made by the medical director of the hospice and, if applicable, the patient’s attending physician. Payment for hospice care will begin the date certification is obtained.

This initial certification satisfies the hospice certification requirement for the first 90-day period of coverage. Additional periods require recertification, which can be obtained 15 days prior to the next benefit period, but no later than 2 days after that period begins.

Per the Medicare Benefit Policy Manual, the written certification must include:

Published on: May 9, 2013

OIG Issues Special Advisory on Exclusion Issues

by Wachler & Associates, P.C.

On May 8, 2013 the Office of Inspector General (“OIG”) for the Department of Health and Human Services issued an Updated Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs (“the Updated Bulletin”) to replace and supersede a bulletin issued in 1999.

The Updated Bulletin reiterates, clarifies and/or provides guidance on many points, including the following with regard to the effect of exclusion on participation in Federal health care programs:

Payment cannot be made from a Federal health care program for items or services furnished by an excluded person or at the medical direction or on the prescription of an excluded person.

Published on: May 8, 2013

OIG Release Report Focusing on Hospice’s Use of General Inpatient Care

by Wachler & Associates, P.C.

On May 3, 2013, the Office of Inspector General (OIG) released a memorandum describing hospice general inpatient care (GIP) provided to Medicare patients in 2011, for which Medicare paid $1.1 billion. According to the memorandum, the OIG will be conducting an in-depth medical record review to evaluate the appropriateness of GIP provided by hospices. The study will be focused on the accuracy of reimbursement for GIP and the proportion of GIP provided in different settings, specifically Medicare-certified hospice inpatient units, hospitals, and skilled nursing facilities.

This ongoing study is a continuation of prior studies released by the OIG, which show that the amount of GIP services provided differs significantly depending on the setting. For example, hospices that have their own inpatient units provided GIP to 35% of their Medicare patients. In contrast, hospices that have to outsource GIP care sent only 12% of their Medicare beneficiaries to receive that care. Furthermore, hospices that provided GIP in their own inpatient units recorded 50% longer patient stays and three times the proportion of Medicare payments for GIP services than did hospices that have to outsource GIP care.

The memorandum states that the OIG will begin a new study which will use actual beneficiary medical records to determine the accuracy of reimbursement. In addition to its own investigations, the OIG advised CMS to ensure that the hospices not currently providing GIP are still providing beneficiaries with appropriate access to the types and amount of care needed at the end of their lives. These studies are part of OIG’s continuing investigations related to Medicare hospice care. In 2011, Medicare paid $13.7 billion for hospice services on behalf of 1.2 million beneficiaries, and both of those numbers are expected to increase with the aging of the baby boomer generation.