Articles Posted in Health Law

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On August 11, 2017, a further development came in the Medicare appeals backlog saga, as the D.C. Circuit Court reached a decision on the Department of Health and Human Services’ (HHS’) appeal to the case American Hospital Association (AHA) v Burwell. The decision (“Appeal Decision”) handed down last week was decidedly pro-HHS, and is a setback for the AHA and healthcare providers with appeals pending at the administrative law judge (ALJ) level. The Appeal Decision has the potential to completely undo any progress created by the original December decision.

The Circuit Court came to a 2-1 decision, ordering the District Court to reconsider its mandate that HHS completely eliminate the Medicare appeal backlog by the end of 2020. The Circuit Court based its decision on the idea that the District Court decision had the potential of mandating that HHS violate its legal duty to only pay out legitimate Medicare claims. HHS is required to “protect” the Medicare trust fund, and in the process taxpayer dollars. However, HHS is also required by law to process ALJ appeals within 90 days, a duty which has gone unmet for years and was the basis of the District Court’s decision.

The AHA filed its initial suit in 2014, and after being initially dismissed, the AHA received a favorable decision in December 2016, a decision that is now in jeopardy of being undone. The December decision dictated certain yearly “targets” for HHS and the Center of Medicare and Medicaid Services (CMS) to meet regarding decreases to the number of backlogged appeals at the ALJ level. HHS objected to these benchmarks, and in fact to any mandated reduction, based on several arguments, including that the backlog cannot be eliminated without arbitrary settlements regardless of the actual merits of the claims.

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In July 2017, the Department of Health and Human Services Office of Inspector General (OIG) revealed its plans to review the $14.6 billion in incentive payments the Centers of Medicare and Medicaid Services (CMS) made to hospitals between January 1, 2011 and December 31, 2016, pursuant to Medicare’s electronic health record (EHR) technology program. The OIG plans to review these payments in order to identify errors and inaccuracies which may have resulted in overpayments to hospitals

This announcement comes less than a month after the June report from the OIG, titled “Medicare Paid Hundreds of Millions in Electronic Health Record Incentive Payments That Did Not Comply with Federal Requirements (the “Report”) (an official OIG summary is available here). The Report was based upon a review of EHR Incentive Program payments made to 100 professionals, which found 14 improper payments in the amount of $291,222. Extrapolating these results, the OIG estimated a total of $729.4 million in improper payments to the over 250,000 EHR incentive eligible providers in the CMS system. According to the OIG, the $729 million figure is roughly 12% of the total payments made in connection with the EHR incentive program. A majority of the 14 improper payments discovered during the OIG’s review were based on providers failing to maintain accurate and detailed records—an issue which often arises with Medicare overpayments.

The OIG completed its report by making several recommendations to CMS:

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In early June 2017 the Department of Health and Human Services (HHS) issued its second status report on the Medicare appeals backlog. The December 2016 case American Hospital Association v Burwell, in addition to dictating that HHS clear the backlog by 2020, required that HHS release a quarterly status report every 90 days to detail the progress being made toward eliminating the backlog.

The Burwell case was a significant victory for healthcare providers in their attempts to get the Medicare backlog reduced and have administrative law judge (ALJ) appeals processed within the statutory timeframes. In addition to status reports every 90 days and the complete elimination of the backlog by 2020, HHS is also required to observe several intermediary benchmarks: 30% reduction by the end of 2017, 60% by the end of 2018, 90% by the end of 2019, and then ultimately 100% elimination by the end of 2020.

However, despite these court mandated benchmarks, it has become clear to all parties involved that these goals are unlikely to be met without significant developments; HHS itself has maintained since the requirements were instituted that the elimination of the backlog would not be possible. This prediction is supported by the facts: HHS released its first status report in March, with the somber prediction that a backlog of 1,009,768 appeals would be pending by the end of 2021. June’s report saw a slightly improved projection of 950,520 claims remaining by that time, but this projection is still very far from meeting the court order.

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On March 22, 2017, Michigan’s Public Act 379 of 2016 (the Act) will take effect, altering the practice requirements for physician assistants (PAs) within the state. The Act will require PAs to enter into and comply with a written practice agreement with a “participating physician.” The Act will thus affect not only PAs, but also participating physicians and other healthcare entitles.

A “participating physician” is defined as a physician, a physician designated by a group of physicians to represent that group, or a physician designated by a health facility or agency to represent that health facility or agency.

Another important aspect to note about the Act is that it limits the ability of PAs to practice within Michigan, requiring a written agreement which fulfills the statutory requirements. A practice agreement must include:

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On February 8, 2017, the Department of Justice’s (DOJ’s) fraud section released new guidance for healthcare entities titled “Evaluation of Corporate Compliance Programs.” The new guidelines do not change any of the existing regulations, but rather provide corporate healthcare entities with added insight into how the DOJ assesses compliance violations.

The guidance mainly focuses on updated “Filip Factors,” which are the criteria under which the DOJ evaluates fraud. When a corporate healthcare entity comes under investigation for fraud under laws such as the False Claims Act (FCA), the DOJ has used the Filip Factors to evaluate the next steps to take, including whether to bring charges. Traditionally, characteristics such as whether the corporation has a suitable compliance program in place have been looked at closely when determining the severity of sanctions, and the new guidance continues with that trend.

The new guidance separates its factors into eleven different categories, and provides many example inquiries for each:

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On September 28, 2016, the Centers for Medicare & Medicaid Services (“CMS”) announced that it intends to reopen the hospital inpatient status settlement that was initially released in 2014.  CMS’ announcement means that eligible providers will be able to to settle their inpatient status claims currently pending appeal.  While specific details of the settlement have yet to be released, if the upcoming program has terms similar to CMS’ 2014 68% settlement, it may provide a viable opportunity for eligible providers to resolve their pending appeals without enduring the delay for an administrative law judge (ALJ) hearing due to the appeals backlog.

CMS’ decision to reopen the settlement is the result of the efforts from several actors including the Office of Medicare Hearings and Appeals (OMHA), American Hospital Association, RAC Monitor, Steven Greenspan of Optum Executive Health Resources, and Wachler & Associates, P.C.  Specifically, OMHA participated in communications with CMS and supported the proposal for CMS to reopen the 68% settlement.  In addition, the American Hospital Association’s (“AHA”) lawsuit challenging the excessive appeals backlog that has resulted in delays of over two years past the statutory requirement is likely an important factor in CMS’ decision to reopen the appeals backlog.

Furthermore, the combined efforts of RAC Monitor, Steven Greenspan, and Andrew Wachler of Wachler & Associates, P.C. also likely aided in the reopening.  RAC Monitor provided a platform for Steven Greenspan and Andrew Wachler to present the concept of reopening the appeals settlement to RAC Monitor listeners and RAC Monitor listeners responded in full force.  Through these combined efforts, it is hoped that the reopened appeals settlement will help to clear the appeals backlog of the approximately 200,000 inpatient site of service pending of appeals.  Although this solution will not completely eliminate the backlog, it can assist hospitals that chose not to participate in the original settlement and hopefully help other non-eligible providers move through the appeals process at a slightly more efficient rate.

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On July 12, 2016, Noridian Healthcare Solutions announced a new policy on denial of related claims, termed “Cross Recovery.”  Noridian purports that this policy will help it to fulfill its obligations to the Centers for Medicare and Medicaid Services (CMS) by assuring that all Medicare claims are for medically necessary and reasonable services. Whatever the motivation behind Cross Recovery is, it reawakens the specter of related claim denials for Medicare providers, and is a development which should be watched closely in the coming months.

Noridian’s new program comes in the wake of several previously released CMS transmittals regarding the denial of related claims. Though later rescinded, CMS originally introduced a policy which broadly allowed MACs to deny related claims when issuing an adverse determination of an original claim. After receiving feedback from the provider community regarding concerns about the policy, CMS narrowed the scope of “related claims” power to only Part B surgery claims via Transmittal 541. Transmittal 541 allowed for such Part B surgeon services to be recouped following a denial of a Part A inpatient surgical claim as not reasonable and necessary. However, since the issuing of Transmittal 541, MACs have only very rarely invoked their discretion to deny such Part B surgical claims on Transmittal 541 grounds. Noridian’s new Cross Recovery policy may change this trend, and it is yet to be seen whether other MACs will take the opportunity to expand their own related claim denials.

Noridian’s statement (as linked above) was very brief, but significant. The statement cites section 3.2.3(A.) of CMS’ Internet Only Manual 100-008 Chapter 3, which states in relevant part that “MAC[s] and ZPIC[s] have the discretion to deny other “related” claims submitted before or after the claim in question, subject to CMS approval [.]” Noridian announced that it has received such CMS approval to “Cross Recover” professional claims related to denied institutional facet injection services (CPT codes: 64493— 64495; 64635—64636).

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On July 6, 2016, the Substance Abuse and Mental Health Services Administration (SAMHSA), an agency within the Department of Health and Human Services (HHS),  published a final rule implementing changes to the Controlled Substances Act (CSA), as amended by the Drug Addiction Treatment Act of 2000 (DATA 2000). The final rule will go into effect August 8, with perhaps the most significant modification being the increase in the number of patients that a physician can treat with buprenorphine, a medication which is prescribed as part of medication-assisted treatment (MAT) for opioid addiction.

Under the CSA buprenorphine is a Schedule III drug, which is defined by the Drug Enforcement Administration (DEA) as a drug with “a moderate to low potential for physical and psychological dependence.” DATA 2000 allows for qualified physicians to obtain a waiver to prescribe buprenorphine without needing to register as an opioid treatment center. Prior to the passage of the final rule, a physician whose waiver request was approved could initially prescribe buprenorphine to only 30 patients at a time, with this cap rising to 100 after the physician has complied with the program for one year and filed a request for the patient increase. This final rule will significantly raise the maximum number of patients allowed, from 100 to 275.

For a practitioner to be qualified to treat any patients with buprenorphine, they must: be a physician; possess a valid license to practice medicine; be registered with the DEA; have the ability to refer patients to addiction counseling and other ancillary services; and have completed a required training regime. In order to be eligible to treat 275 patients with buprenorphine, a physician needs to be currently authorized to treat 100 patients, and must hold “additional credentialing.” Additional credentialing is defined within the final rule as “board certification in addiction medicine or addiction psychiatry by the American Board of Addiction Medicine or the American Board of Medical Specialties or certification by the American Osteopathic Academy of Addiction Medicine, the American Board of Addiction Medicine, or the American Society of Addiction Medicine.”

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Recently, the Office of Inspector General (OIG) published an alert spotlighting recent fraud, waste, and abuse in the home healthcare setting.  Specifically, the alert focused on various types of violations and improper conduct alleged against home health agencies (HHAs), individual physicians, and heads of home-visiting physician groups.

The OIG alleges that HHAs have been entering into improper referral and/or compensation arrangements with physicians in violation of the federal Anti-Kickback Statute (AKS).  These AKS violations involve HHAs paying money to physicians in return for referrals of the physicians’ Medicare patients to the HHAs for home health services. The converse also occurs, with physicians soliciting referrals to the HHAs in return for monetary compensation.  Not all compensation arrangements between HHAs and physicians are prohibited, as is noted by the OIG, but an arrangement may implicate the AKS if even a single purpose of the arrangement is to remunerate physicians for referring (including past and future referrals) Medicare or Medicaid patients to the HHA.  Additionally, even in the absence of patient referrals, any compensation arrangement between HHAs and physicians is required to be commercially reasonable and based on the fair market value of the services rendered.

In addition to the alleged AKS violations, other federal laws were said to have been violated by HHAs and physicians pursuant to these compensation schemes.  Examples outlined in the OIG alert include: HHAs billing for nursing home services rendered to Medicare patients who were not actually confined to the home; physicians falsely certifying patients as homebound; physicians billing for up-coded levels of home visit evaluation and management (E/M) services; and physicians billing for care plan oversight (CPO) services that were not actually provided.

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On June 28, 2016, CMS held its second special open-door forum (ODF) regarding the Pre-Claim Review Demonstration for home health services (the “Demonstration”). The Demonstration will take place in six states (Illinois, Florida, Texas, Michigan and Massachusetts), all initiating by January 1, 2017, with the earliest start being August 1, 2016 in Illinois. However, as the initial implementation date approaches, home health agencies (HHAs) continue to express concerns regarding the Demonstration. CMS maintains that this Demonstration will benefit HHAs in the long run, but no matter whether or not they agree, HHAs across the country, particularly those located within the six Demonstration states, are paying close attention to the new developments.

The interest in the Demonstration was made evident by CMS’ statement that there had been 2,600 participants in the first open door forum on the Demonstration, which took place on June 14, 2016. CMS also gave repeated notice regarding its Demonstration FAQ page, which had been updated as recently as four days prior to the second ODF, and may be updated again before the Demonstration begins. Following these preliminary remarks during the second ODF, as well as a rehashing of the Demonstration’s basic tenets, CMS went right to the question and answer period.  The moderators were uncertain about some issues, such as to whether an electronic referral order would fulfill the plan of care requirement—but on other questions CMS was very sure and adamant in their answers.

The main focus of the ODF, due to the continued interest of HHAs, was the plan of care requirement.  During the second ODF, CMS clarified that in order for a pre-claim review request (PCRR) to be approved, HHAs must submit a physician signed and dated plan of care. Several callers commented that this would impose an undue hardship onto HHAs because of the difficulty already associated with physicians signing plans of care. The HHAs explained that requiring signed plans of care prior to submitting their PCRR would be substantially burdensome and had the potential to lead to delayed or unfiled PCRRs.  The HHAs also opined that despite CMS’ insistence that the Demonstration would not alter documentation requirements, demanding signed plans of care so early in the certification period appears to heighten the requirements as set out in the current regulations.  Relevantly, Chapter 7, Section 30.2.4 of the Medicare Benefit Policy Manual states the following: “The plan of care must be signed and dated by a physician […] before the claim […] is submitted for the final percentage payment.” Despite this, CMS held firm to its stance that the Demonstration did nothing to limit coverage and imposed no new requirements, citing that beneficiaries had always needed to be under a physician’s care. And while technically true, there is undoubtedly a new encumbrance upon HHAs’ Medicare reimbursement, as the Demonstration would require that the plan of care is submitted not only prior to the final claim, but also prior to the PCRR.