Wachler & Associates Health Law Blog

Published on: August 10, 2018

OMHA Issues Updates to Its Case Processing Manual

The Office of Medicare Hearings and Appeals (“OMHA”) announced its updates to its OMHA Case Processing Manual (“OCPM”) last week. The OCPM was originally released in 2015 to regulate and codify procedures for adjudicative functions by using statutes, regulations, and OMHA directives as the guideline. The OCPM is revised as needed in order to keep up with changes to the Medicare appeals process. The OCPM seeks to provide clear guidance and instruction to appellants, adjudicators, and OMHA staff.

A new addition to each chapter in the OCPM is a “Chapter Overview” section that summarizes the content of the chapter. The OCPM used to be organized by four separate divisions, each addressing a different topic. The divisions were Part A/B Claim Determinations, Part C Organization Determinations, Part D Organization Determinations, and SSA Determinations. The updated OCPM is no longer organized by divisions, but instead is made up of twenty consecutive chapters. The purpose of eliminating the divisions was to improve the organization of the manual so that it is more user-friendly. The new or revised chapters are: 1, 5, 6, 7, 19, and 20.

The new chapters, 1 and 20, became effective on May 25, 2018. Prior to revision, Chapter 1 was titled “Manual Overview, Definition, and Governance,” which is also the title of the new Chapter 1. Unlike the previous version of the chapter, the updated Chapter 1 sets forth guidance on how to navigate the new organization of the manual. There are still similarities between the two versions; the general purpose of the manual, how to cite the manual, and acronyms used within the manual. However, the content regarding the organization of the manual has been completely redone.

Published on: July 27, 2018

Potential Stark Law and Anti-Kickback Statute Reforms to Support Coordinated Care

by Wachler & Associates, P.C.

During a hearing on July 17, 2018, Department of Health and Human Services (HHS) Deputy Secretary Eric Hargan announced that HHS is interested in reforming the Stark law and the Anti-Kickback Statute (AKS). As value-based care is becoming more prominent in the healthcare system, coordinated care between providers is a necessity; but the Stark law and AKS are considered an impediment to coordinated care. Hargan contends that since the Stark law was created in a fee-for-service context, it “may unduly limit ways that physicians and healthcare providers can coordinate patient care [in a value-based system].”

HHS’s push for reform comes out of the “Regulatory Sprint to Coordinated Care,” which is an initiative launched by CMS that seeks to remove barriers to coordinated care while still upholding laws and rules that keep patients safe. According to Hargan, HHS is working on creating administrative rules to address these barriers.

Aside from the regulatory hurdles that the Stark law imposes on coordinated care, HHS is also concerned about the strict liability aspect of the Stark law. Strict liability imposes civil liability with monetary penalties onto the provider, regardless of the intent underlying the Stark law violation arises from an accident. HHS believes that strict liability turns providers away from entering into coordinated care arrangements, because the complexity of the Stark law may cause providers to violate it unintentionally and become liable. A suggested change from HHS is to define “noncompliance” in a clearer manner, which would allow providers to feel more at ease with participating in coordinated care.

Published on: July 24, 2018

Azar Proposes Significant Changes to 340B Drug Discount Program

by Wachler & Associates, P.C.

The 340B drug discount program was originally created to provide affordable and comprehensive drug services to indigent patients. Manufacturers agree to provide prescription drugs to covered entities at significantly reduced prices, who can then offer the discounted prescription drugs to eligible patients. Covered entities include: HRSA-supported health centers, Ryan White clinics, State AIDS Drug Assistance programs, Medicare/Medicaid Disproportionate Share Hospitals, Children’s Hospitals, and other safety net providers.

The Department of Health and Human Service (HHS) Secretary Alex Azar is concerned about the 340B program; he suggests that there has been abuse of the program by covered entities. Azar stated that “[t]he current nature of 340B is such that it is quite possible for the program’s benefits to be diverted to unintended purposes, unrelated to supporting care for low-income patients.” In fact, many 340B hospitals are able to receive drug discounts for all of their patients, even though there are only a small amount of uninsured and underserved patients at the hospital. A report by the OIG found that a majority of 340B entities do not even offer the reduced prices to uninsured patients, allowing them to profit off the program.

In a meeting with lawmakers, Azar proposed to cut the discount to 20% of the list price, which is significantly lower than the typical 40-60% discount. This effort by HHS coincides with the Trump administration’s goal to lower prescription drug prices.

Published on: July 17, 2018

CMS Modernizing Medicare and Revitalizing the Doctor-Patient Relationship

by Wachler & Associates, P.C.

On July 12, 2018, the Centers for Medicare and Medicaid Services (“CMS”) released a statement proposing significant changes to Medicare that would modernize and restructure the Medicare program to deliver increased quality of care at a lower cost to beneficiaries. This will be done by utilizing a value-based healthcare system that works with modern-day technology. The proposal primarily alters the Medicare Physician Fee Schedule and Quality Payment Program.

CMS’s proposal coincides with its Patients Over Paperwork initiative, because it reduces the paperwork requirements for billing, thereby enabling doctors to spend more time with their patients. The proposed changes to the Physician Fee Schedule and Quality Payment Program will streamline documentation requirements to reduce the administrative burdens on providers. Generally, providers create medical records that use boiler plate language to satisfy Medicare billing requirements, which often contain few details specific to the patient and their personal stories. Allowing providers to designate a plan of care based upon what the provider determines from the time spent with the patient and not based upon documentation guidelines will significantly increase the quality of care.

If the proposal is effectuated, it will modernize payment policies so that telehealth will be more available to Medicare beneficiaries. When a beneficiary virtually contacts their provider (through telephone or other telecommunication devices) to determine whether they need and in-office visit or not, Medicare would cover this service. Additionally, there would be coverage for a physician’s time when they review images or videos sent to them for a diagnosis. CMS would also like to have a patient’s updated medical records follow the patient throughout the healthcare system. This would increase transparency and collaboration by allowing all of the patient’s providers to see the patient’s medical history in full.

Published on: July 2, 2018

Chronic Care Act Allows Medicare to Provide More Benefits for the Chronically Ill

by Wachler & Associates, P.C.

Recently, Congress enacted a law offering additional benefits to Medicare beneficiaries with various chronic illnesses, such as diabetes, complications from injury, and heart failure. The Creating High-Quality Results & Outcomes Necessary to Improve Chronic (CHRONIC) Care Act adds coverage to nutrition, transportation, and housing in order to be proactive in the prevention and minimization of chronic illnesses.

The new measures will only apply to individuals with a Medicare Advantage (MA) plan, which is a HMO or PPO plan offered by private companies and approved by Medicare. According to Title III of the Act, the changes are part of a MA value-based insurance design, allowing MA plans to create structures that vary benefits, cost-sharing, and supplemental benefits offered to enrollees with qualifying chronic diseases. This insurance design model is being tested in a number of states, including Michigan. The model approach will inform policymakers of the services that offer the most benefits to different populations, which may prompt policymakers to expand those benefits to people in the rest of Medicare.

MA plans will include services such as in-home assistance with bathing, nursing, and medication; supervised housing for those with dementia; wheelchair ramps; transportation to doctor’s appointments; meal delivery; and expanded telehealth. The Act also expands telehealth for Accountable Care Organizations (ACOs) by allowing the patients’ homes to be designated as an originating site, and by eliminating the usual telehealth geographical limitations for ACOs. Beneficiaries dealing with end-stage renal disease (ESRD) will now be able to receive in-home dialysis via telehealth so long as the individual receives a face-to-face clinical assessment once every three months.

Published on: June 27, 2018

House Passes Bill to Increase Opioid Addiction Treatment Access

by Wachler & Associates, P.C.

On June 22, 2018, the House of Representatives passed “one of the most significant congressional efforts against a drug crisis in our nation’s history,” according to Representative Greg Walden (R-Oregon). The legislation makes it easier for providers to treat patients suffering from Substance Use Disorder (SUD) and Opioid Use Disorder (OUD). The bill passed with strong bipartisan support, with a vote of 396 to 14. The final bill, titled the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act, combined 58 smaller bills to create one comprehensive package that includes improvements to Medicaid, Medicare, and other various ways to address the opioid crisis.

The bill expands the use of telehealth services for addiction treatment and increases the accessibility to providers offering medication-assisted treatment. In addition, the Institutes for Mental Disease exclusion, a law which blocked Medicaid from funding inpatient stays in mental/behavioral health facilities, was partially repealed under the bill, so that now state Medicaid programs may cover up to 30 days of inpatient care for eligible individuals with OUD. Also, privacy protections for addicts that forbade any physician or other medical provider from sharing a patient’s medical history with another practitioner were lessened. Thus, the Department of Health and Human Services (HHS) must establish hospital protocol that makes doctors aware of a patient’s addiction history in order to prevent accidental opioid prescription to patients suffering from OUD.

Aside from those key provisions, the bill also addresses other solutions to the opioid crisis. It is expanding Medicare coverage for OUD by adding methadone clinics to the program, expanding access to Medicaid for former foster youth and those transitioning out of incarceration, and increasing money for states to fund more Medicaid providers who treat OUD. Furthermore, the bill will increase the availability of naloxone (a rescue shot for opioid overdoses), ramp up the fight against fentanyl and other synthetic drugs, and order the Food and Drug Administration to explore non-addictive pain treatments.

Published on: June 19, 2018

Chapter 2A of Michigan Business Corporations Act Amended to Clarify Inconsistencies

by Wachler & Associates, P.C.

On June 24, 2018, amendments to the Professional Service Corporation Provisions (Chapter 2A) of the Michigan Business Corporations Act (BCA) will be in effect. In 2013, the Professional Service Corporation Act was incorporated into the body of the BCA as Chapter 2A, but was drafted in a way that created conflicting language between multiple provisions. According to Justin Klimko from the Corporate Laws Committee (Business Law Section), the main goal of amending Chapter 2A this year is to clarify that entities may be shareholders in Professional Corporations (PCs) if all of their owners are properly licensed. The amendments also clarify when individuals must sever their relationships with a PC.

The inconsistent language in Chapter 2A of the BCA created confusion as to whether entities may or may not be shareholders of PCs. Various sections were amended to address the discrepancies.

Under the previous language, PCs were prohibited from issuing shares “to anyone other than an individual who is licensed…” This language was inconsistent with other sections of Chapter 2A because it seemed to exclude entities. Thus, the new amendments resolve this contradiction by clarifying that a PC may issue shares to “an entity that is directly or beneficially owned only by persons that are licensed persons in 1 or more of the professional services provided by the professional corporation.” Furthermore, the amendments added to the definition of “licensed person” to allow the entity itself to be a licensed person if the entity is licensed to practice a professional service.

Published on: June 15, 2018

OMHA Releases Details on Long-Awaited Settlement Conference Facilitation Expansion

by Wachler & Associates, P.C.

Settlement Conference Facilitation (SCF) is an alternative dispute resolution process which provides appellants and the Center for Medicare and Medicaid Services (CMS) an opportunity to discuss a mutually agreeable resolution for claims appealed to the Administrative Law Judge (ALJ) or Medicare Appeals Council (Council) levels of appeal. SCF is a one-day mediation, in which an OMHA facilitator assists the appellant and CMS in negotiating a lump-sum settlement on eligible claims, without making official determinations of fact or law.

OMHA has modified the program’s eligibility criteria for appellants and appeals under the new expanded program, which was officially released June 15, 2018. For appellants, any Medicare Part A or Part B provider or supplier (with an assigned National Provider Identifier number) is eligible for participation, so long as that provider or supplier has not filed for bankruptcy or expects to file for bankruptcy in the future; does not have past or current False Claims Act litigation or investigations against them or other program integrity concerns such as civil, criminal or administrative investigations; and has either: (1) 25 or more eligible appeals pending at OMHA and the Council combined, or (2) less than 25 eligible appeals pending at OMHA or the Council and at least one appeal has more than $9,000 in billed charges.

The updated appeals eligibility criteria are as follows:

Published on: June 4, 2018

OIG Notifying Providers of Incorrect Billing Practices

by Wachler & Associates, P.C.

The Office of Inspector General (“OIG”) has been sending notices to providers recently, suggesting that the providers have been billing incorrectly, leading to overpayments from Medicare. The alleged issue stems from the billing of extremity venous studies. When performing these studies, providers will often bill under HCPCS Codes 93970 or 93971 and 93965 for the same patient on the same date of service.

The reporting requirements are unclear, and there are no bundling edits to stop practices from reporting both services for the same patient on the same day. Nevertheless, the OIG has been notifying providers that they are looking into the billing of both codes on the same dates of service, implicating that providers have been billing fraudulently.

The 2016 CPT Code Book describes the codes as the following:

Published on: May 31, 2018

Pfizer Agrees to Pay $24 Million to Settle Anti-Kickback Claims

by Wachler & Associates, P.C.

On May 24, 2018, the U.S. Department of Justice announced a $23.85 million settlement with Pfizer, Inc., to settle anti-kickback claims against the company. The settlement arose after an investigation led by U.S. Attorney Andrew Lelling, which looked into the drug industry’s support of patient assistance charities. Pfizer is now among a group of multiple drug companies (Celgene Corp., Aegerion Pharmaceuticals, and Jazz Pharmaceuticals) who have settled with the Department of Justice for their use of patient assistance charities. Pfizer also signed a five-year monitoring agreement with the Department of Health and Human Services Office of Inspector General, and is required to implement measures to ensure that its arrangements with patient assistance charities are in compliance with the law

Pfizer was allegedly using an “independent” charity to pay illegal kickbacks to Medicare patients, covering out of pocket costs for prescription drugs. Pfizer made donations to Patient Access Network Foundation (PAN), a copay assistance nonprofit organization, and used a specialty pharmacy, Advanced Care Scripts, to direct Medicare patients taking its drugs toward the foundation to cover their copays.

The scheme centered around three drugs, two for kidney cancer (Sutent and Inyalta), and one for arrhythmia (Tikosyn). Pfizer was allegedly aware that PAN used their donations to cover the copays of patients taking these drugs. In fact, PAN and the pharmacy would notify Pfizer when patients using these drugs got the copay assistance. Price increases of the drugs were concealed from patients but left Medicare with a higher bill.