Articles Posted in Medicare

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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 January 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 will perform a nationwide audit to determine whether hospitals that received Provider Relief Fund (PRF) payments and attested to the associated terms and conditions complied with the balance billing requirement for COVID – 19 inpatients. Under the PRF terms and conditions, hospitals are eligible for PRF distribution payments if they attest to specific requirements, including a requirement that providers, such as hospitals, must not pursue the collection of out-of-pocket payments from presumptive or actual COVID – 19 patients in excess of what the patients otherwise would have been required to pay if the care had been provided by in-network providers. OIG plans to assess how bills were calculated for out-of-network patients admitted for COVID-19 treatment, review supporting documentation for compliance, and assess procedural controls and monitoring to ensure compliance with the balance billing requirement.

Second, OIG will perform a nationwide review of Medicare beneficiary hospice eligibility. OIG indicated that a number of recent compliance audits have identified findings related to beneficiary eligibility. In its review, OIG plans to focus on those hospice beneficiaries that haven’t had an inpatient hospital stay or an emergency room visit in certain periods prior to their start of hospice care.

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Medicare audits often include a statistical extrapolation to estimate the full extent of an alleged overpayment. Medicare contractors are authorized to review the merits of only a small “sample” of submitted claims and extrapolate the results of that review to a large “universe” of claims to estimate the overpayment amount. This practice can lead contractors to allege overpayments of hundreds of thousands or millions of dollars despite only reviewing and denying a small handful of claims. Medicare contractors generally have broad authority to use a wide array of statistical methods when extrapolating the overpayment amount, which can lead to grossly overestimated overpayment determinations.

When conducting the statistical sampling and extrapolation, the contractor will select the period for review and establish the universe and sample frame. The sample frame is the large group of claims from which the sample is randomly selected, and the universe is the group of claims over which the results of the review are projected. The sample frame and universe may or may not be identical. The universe and sample frame may be defined by specific codes, dates of services, beneficiaries, or some combination thereof. From here, the contractor will select a random sample from the sample frame,  review the claims within the designated sample, and extrapolate the results of the review of the sample to all claims in the established universe.

A statistical extrapolation is subject to appeal, similar to any Medicare overpayment determination. However, there are several issues unique to appealing a statistically extrapolated overpayment. First, it adds increased importance to appealing the denial of each claim in the sample. While an individual claim may not represent significant monetary value on its own, it may represent tens of thousands of dollars after it has been statistically projected over a large universe. Second, there are special procedural rules for appealing an extrapolation. For example, providers are generally prevented from arguing before an Administrative Law Judge (ALJ) that the extrapolation was flawed unless they included specific language in their request for ALJ review.

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Late last year, the Centers for Medicare & Medicaid Services (CMS) released new guidance for hospital co-location. Co-location occurs when two Medicare certified hospitals or a Medicare certified hospital and another healthcare entity are located on the same campus or in the same building and share space, staff, or services. Hospitals, especially in rural areas, may co-locate to achieve greater efficiencies and improve patient care.

All co-located hospitals must demonstrate independent compliance with the hospital Conditions of Participation. Specifically, each hospital’s space, contracted services, staffing and emergency services must independently comply with the hospital Conditions of Participation. Where hospitals share space, patient record confidentiality and infection prevention and control are particular areas of concern. Where hospitals contract for services, it is important to note that these services are provided under the oversight of the hospital’s governing body and would be treated as any other service provided directly by the hospital. Where hospitals share staff, each must independently meet the Conditions of Participation, including adequate staff training, education, and oversight. Lastly, a co-locating entity that does not provide emergency services may generally transfer emergency patients to the entity with which it co-locates, such as a rehab hospital that co-locates with an acute care hospital. However, in this scenario, the non-emergency provider must have policies and procedures in place to address potential emergency scenarios typical of the patient population for which it routinely cares and ensure staffing that would enable it to provide safe and adequate initial treatment of an emergency prior to transfer.

CMS also provided new guidance for survey procedures for co-located hospitals. In general, survey procedures for co-located hospitals are the same as for any other hospital, as each must independently comply with the Conditions of Participation. However, where a survey of one co-located entity identifies an alleged deficiency, it may be imputed to the other co-located entity and may lead to a survey of or complaint against the other co-located entity. For example, where two hospitals share a storage room and a leaky pipe drips water onto and damages the supplies of one hospital, CMS indicated that this may lead to a complaint against the other hospital because the deficiency was found in the shared space.

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After a hiatus during the height of the COVID-19 pandemic, Medicare audits have resumed in full force. Providers and suppliers should be prepared to respond to audits that were paused during the pandemic, the initiation of new audits, and audits relating to the various pandemic relief programs.

In early 2020, the Centers for Medicare and Medicaid Services (CMS) directed its contractors to pause audit activities as auditors were unable to work in the office and healthcare providers were reeling from the multiple impacts of the pandemic. CMS both paused in-progress audits and temporarily halted the initiation of new audits.

In late 2020, CMS authorized Medicare Administrative Contractors (MACs) to resume post-payment audits. Over the last year, CMS has authorized the resumption of nearly every type of audit and the initiation of new audits. As Medicare contractors process these directives and restart their audit activities, Medicare provides are seeing a wave of documentation requests, audit determinations, overpayment demands, and appeal decisions. Audits and claims appeals that have been dormant for a year or longer are suddenly active. New audits are being initiated for the first time in over year. And, in addition to audits by Medicare and other payors, providers must face compliance challenges and potential audits from pandemic relief programs, such as the Provider Relief Fund.

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The Centers for Medicare & Medicaid Services (CMS) recently issued the CY 2022 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Final Rule, which finalized Medicare payment rates for hospital outpatient and ASC services. In addition to updating the payment rates, the 2022 Final Rule includes updates to the Inpatient Only and ASC code list, as well as policies aimed at addressing the healthy equity gap, fighting the COVID-19 Public Health Emergency (PHE), encouraging transparency in the health system, and promoting safe, effective, and patient-centered care. The provisions of the final rule take effect January 1, 2022.

When setting the OPPS and ASC rates, CMS typically uses recent available claims data so that the payment rates can accurately reflect estimates of the costs associated with furnishing outpatient services. The recent claims data CMS uses usually reflects the two years prior to the calendar year that is the subject of rulemaking. However, due to the unprecedented impact of COVID-19 PHE-related factors on CY 2020 claims data, CMS has concluded that CY 2019 data is the most recent complete calendar year of data that will generally provide a better approximation of expected costs for CY 2022 hospital outpatient services for rate-setting purposes. As a result, CMS is generally using CY 2019 claims data to set the CY 2022 OPPS and ASC payment system rates.

Since the OPPS was originally established, CMS has maintained the Inpatient Only (IPO) list, which is a list of services that Medicare will only pay for when performed in the inpatient setting, in large part due to their medical complexity. In the CY 2021 OPPS/ASC final rule, CMS finalized a policy to eliminate the IPO list over a three-year period and removed 298 services from the IPO list in the first elimination phase. Following the issuance of the 2021 final rule, CMS reported that it received significant public comments against the IPO elimination policy primarily due to patient safety concerns. In response, CMS is halting the elimination of the IPO list and adding back to the IPO list the 298 services removed in 2021, except for CPT codes 22630 (Lumbar spine fusion), 23472 (Reconstruct shoulder joint), 27702 (Reconstruct ankle joint), and their corresponding anesthesia codes.

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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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