Medicare

Published on: October 3, 2013

Judge Orders Tuomey to Pay $237 Million for Stark and False Claims Act Violations

On September 30, 2013, Federal Judge Margaret Seymour of the United States District Court for the District of South Carolina ordered South Carolina’s Tuomey Healthcare System to pay $276.8 million for violating both Stark law and False Claims Act (FCA) provisions; however, this ordered amount was subsequently reduced by $39 million to correct a clerical error. The payment order came after a May 8, 2013 jury verdict in which the jury found that Tuomey had submitted 21,730 Medicare claims which stemmed from illegal compensation arrangements with physicians to induce patient referrals to the hospital. Tuomey has already filed a motion announcing its intent to appeal to the 4th Circuit Court of Appeals.

The Stark law prohibits a physician from making referrals for certain designated health services payable by Medicare to an entity with which he or she has a financial relationship (ownership, investment or compensation). As this case demonstrates, the penalties for violating the Stark law – denial of payment, civil monetary penalty (CMP) of $15,000 per service, and $100,000 CMP for each arrangement or scheme – are severe and can also lead to even more extreme penalties under the FCA. What many providers may not know is that although the requisite intent must exist under the FCA, the Stark law is a strict liability statute that does not take into account the intent of the providers involved. As such, providers should evaluate potential business arrangements, or reevaluate current business arrangements, to ensure such arrangement is not in violation of the Stark law. Moreover, when an arrangement potentially implicates the Stark law, providers should also be sure to analyze the arrangement under the Anti-Kickback statute and other applicable fraud and abuse laws.

If you would like assistance in analyzing a potential or existing business arrangement under the Stark law, including a detailed opinion of whether your arrangement qualifies as an exception to Stark, or if you have any other questions relating to the Stark law, Anti-Kickback statute, False Claims Act or other fraud and abuse laws, please contact an experienced health care attorney via phone at 248-544-0888 or via email at wapc@wachler.com.

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 25, 2013

Home Health Care Business Operator Sentenced to Prison for $11M Medicare Fraud Scheme

by Wachler & Associates, P.C.

Earlier this month, U.S. District Judge Denise Page Hood of the Eastern District of Michigan sentenced 53-year-old Michigan resident Muhammad Shahab to 50 months in prison and three years of supervised release for perpetrating almost $11 million in Medicare fraud between August 2007 and October 2009. Shahab and his co-defendants were also ordered to pay over $10.8 million in restitution to the Medicare Program.

The Department of Justice Press Release reported that Shahab, who had helped finance and establish two Detroit-area home health agencies, pled guilty to one count of health care fraud back in February 2010. Plea documents revealed that Shahab “admitted that while operating or being associated with both health agencies, he and his co-conspirators billed Medicare for home health visits that never occurred.” Shahab, the leader of the fraud scheme, admitted that he and his co-conspirators falsely used the Medicare numbers and signatures of Medicare beneficiaries who were not homebound or needed physical therapy service on medical documentations. Shahab and his co-conspirators offered cash kickbacks and other inducements to these Medicare beneficiaries in exchange for their participation.

In addition, through kickback payments to physicians and other individuals associated with physicians, Shahab obtained physician referrals for medically unnecessary home health services. Shahab confessed to billing and receiving payments from Medicare for medically unnecessary services and services never rendered.

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 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 1, 2013

CMS to Cut Payments to HHA by 1.5%

by Wachler & Associates, P.C.

On June 27, 2013, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule which would cut payments to home health agencies (HHA) by 1.5 percent, or $290 million, in calendar year (CY) 2014.

Home health agencies serve approximately 3.5 million beneficiaries, which cost Medicare about $18.2 billion in 2012. The proposed rule is designed to cut spending by updating the Home Health Prospective Payment System (HH PPS) rates. As mandated by the Affordable Care Act (ACA) the rule proposes a 4-year phase-in adjustment to the HH PPS rate updates starting in CY 2014. The payments will be adjusted by rebasing the rates to the national standardized 60 day rates, the national per visit rates, a new non-routine supplies (NRS) conversion factor, and updating the LUPA (an episode consisting of four or fewer visits within 60 days) add-on amounts.

Furthermore, the rule proposes many ICD-9-CM codes should be deleted in order to limit the eligibility of patients with less serious diseases, such as uncomplicated diabetes. This proposed rule defines CMS’s transition to ICD-10-CM coding, and states that a draft ICD-10-CM HH PPS Grouper should be on the CMS website today. The proposed rule also adds two new claims-based measures for recently hospitalized patients, as these patients are at an increased risk of further acute hospital care.

Published on: June 27, 2013

OIG Announces $3.8 Billion in Expected Recoveries

by Wachler & Associates, P.C.

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently announced that it expects to recover an estimated $3.8 billion in overall recoveries for the first half of fiscal year 2013. This report covers October 1, 2012 through March 31, 2013.

The OIG’s semiannual report is released every 6 months to keep Congress and the HHS Secretary Kathleen Sebelius informed of the OIG’s important findings, recommendations, and activities. In connection with its Medicare and Medicaid investigations, audits, and reviews, the OIG anticipates $521 million in audit receivables and $3.28 billion in investigative receivables.

In the report’s introductory message, Inspector General Daniel R. Levinson attributed the department’s success to the OIG’s cooperative activities and effective partnerships with organizations such as the Health Care Fraud Prevention and Enforcement Action Team (HEAT). The OIG featured the following items in its semiannual report:

Published on: June 27, 2013

RACs to Carefully Review IMRT Treatment Claims

by Wachler & Associates, P.C.

The Recovery Audit Contractors (RACs) have issued a complex review targeting intensity-modulated radiation therapy (IMRT). IMRT has been used in radiation oncology to treat many different types of cancer by modulating high intensity X-ray beams directed at a tumor and thus minimizing the amount of radiation to healthy tissue. In the aggregate, IMRT uses significantly lower doses of radiation than traditional treatment.

Beginning July 18, 2013, the RACs will be looking more carefully at the medical necessity of IMRT treatment as well as whether the diagnoses listed on claims for reimbursement are also listed in the local coverage determination (LCD). Practitioners should review the coding and medical necessity sections in the LCD to determine whether the patient’s condition meets these standards. The LCD also sets forth strong documentation requirements for IMRT that should be carefully reviewed, including, among other items, the need for performing IMRT, prescription of a treatment plan, target verification methodology and documentation, an approved IMRT inverse plan (PTV), immobilization and positioning documentation, fluence distribution in the phantom, monitor units, and respiratory motion.

If you need assistance defending a Medicare audit or need help creating a compliance plan, please contact an experienced health care attorney at 248-544-0888.