Compliance

Published on: March 16, 2012

HHS Settles First Breach Notification Case

The first enforcement action from a breach report required by the Health Information Technology for Economic and Clinical Health (HITECH) Act Breach Notification Rule has resulted in an agreement by Blue Cross Blue Shield of Tennessee (BCBST) to pay the Department of Health and Human Services (HHS) $1.5 million.

BCBST reported that unencrypted hard drives had been stolen from a leased storage facility in Tennessee. The hard drives contained personal health information of more than one million people, and included information such as social security numbers and dates of birth. An investigation discovered BCBST failed to ensure the facility had proper security measures in place as required by HIPAA rules. The settlement also requires BCBST to establish a corrective action plan to revise its security policies and conduct training.

The HITECH Breach Notification Rule requires HIPAA covered entities to promptly make notifications in the event of a breach that affects more than 500 individuals. The entity must notify each individual affected, the HHS Secretary, and the media. A breach of information affecting fewer than 500 individuals need only be reported to the HHS Secretary on an annual basis.

More information on the HITECH Breach Notification Rule can be found on the Department of Health and Human Services website.

HIPAA Privacy and Security Rules are enforced by the Health Human Services (HHS) Office for Civil Rights. HIPAA Security Rules establish requirements for how entities must secure and protect electronic health information, and ensure that it remains secure and protected.

More information on the HHS Office for Civil Rights can be found on their website.
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Published on: February 6, 2012

CMS Announces New Start Date for Prior Authorization of PMDs and Recovery Audit Prepayment Review Demonstration Programs

by Wachler & Associates, P.C.

The Centers for Medicare and Medicaid Services (CMS) has announced that the Prior Authorization of Power Mobility Devices (PMDs) and the Recovery Audit Prepayment Review Demonstration Programs are expected to move forward on or after June 1, 2012. On December 30, 2011, the two demonstrations were delayed from their initial January 1, 2012 start date. Although CMS initially announced the demonstration programs in November 2011, CMS decided to delay the programs’ implementations after receiving considerable feedback from the provider communities affected by the programs.

In its most recent announcement, CMS stated that the demonstrations programs will begin once they receive Paperwork Reduction Act (PRA) Office of Management and Budget control numbers.

The Prior Authorization of PMDs demonstration program will be initiated in California, Illinois, Michigan, New York, North Carolina, Florida, and Texas. These are all states with high populations of fraud- and error- prone providers. The demonstration will implement a prior authorization process for scooters and power wheelchairs.

As a result of comments CMS received from providers and suppliers, significant modifications have been made to the Prior Authorization of PMDs demonstration program. Most importantly for suppliers, the 100% pre-payment review phase has been removed. Many interested parties had raised the concern that suppliers would be adversely financially impacted by the 100% pre-payment review phase, thus CMS eliminated it and the demonstration will begin immediately with the prior authorization phase. There was also concern regarding the inconsistency of suppliers in some states experiencing 100% pre-payment review, while suppliers in other states were required to receive prior authorizations. The pre-payment review phase was planned to last from between three to nine months for each state, so while one state might only be in that phase for three months, another state might be for nine. As a result, all demonstration states will start prior authorization at approximately the same time instead of the staggered start times as originally planned.

CMS also received many concerns about the ordering physician possibly not being in the best position to submit the prior authorization request. Under the modified demonstration, the physician/treating practitioner or supplier, on behalf of the physician/treating practitioner, may perform the administrative function of submitting the prior authorization request.

The Pre-Payment Review Demonstration Program did not receive any significant changes and will be implemented as proposed in November.

Published on: January 25, 2012

CMS Publishes Important Reminder to Providers and Suppliers Regarding Referred or Ordered Services and Items

by Wachler & Associates, P.C.

The Centers for Medicare and Medicaid Services (CMS) recently published an important reminder for all providers and suppliers who provide services and items ordered or referred by other providers and suppliers. The reminder states that Medicare will only pay for items or services for Medicare beneficiaries that have been ordered by a physician or eligible profession enrolled in the Medicare program, and that the individual National Provider Identifier (NPI) of the referring provider or supplier must be included in any claim to Medicare.

CMS also emphasizes that providers and suppliers must ensure that any items or services submitted in Medicare claims were referred by Medicare-enrolled providers of a specialty type authorized to order or refer such services. Further, Medicare will only reimburse for specific items or services ordered or referred by providers or suppliers that are authorized by statute and regulation. Specifically, CMS highlighted that:

Chiropractors are not eligible to order or refer supplies or services of Medicare beneficiaries. Consequently, all services ordered or referred by a chiropractor will be denied.

Home Health Agency (HHA) services may only be ordered or referred by a Doctor of Medicine (M.D.), Doctor of Osteopathy (D.O.) or Doctor of Podiatric Medicine (DPM). Thus, claims for HHA services ordered by any other practitioner specialty will be denied.

Portable X-Ray services may only be ordered by a Doctor of Medicine or Doctor of Osteopathy. Portable X-Ray services ordered by any other practitioners will be denied.

Through this “important reminder,” CMS emphasizes the necessary standards and documentation for healthcare providers and suppliers to successfully bill for providing referred services or items. The reminder demonstrates CMS’ continued focus on ensuring proper referral arrangements and supporting documentation.

Published on: January 23, 2012

RACs Target Skilled Nursing Facilities with High Therapy Resource Utilization Groups

by Wachler & Associates, P.C.

Recent Recovery Audit Contractor (RAC) activity demonstrates that the Centers for Medicare and Medicaid Services (CMS) may soon allow RACs to target skilled nursing facilities (SNFs) with certain levels of Ultra High Therapy Resource Utilization Groups (RUGs).

Although Ultra High Therapy Resource Utilization Groups are not currently a CMS-approved audit topic, RACs are permitted to audit “test claims” and suggest new audit activity based on the results. In a recent demand letter, the RAC stated that the Office of Inspector General (OIG) of the U.S. Department of Health & Human Services has found an “overwhelming majority of error in assignments by providers under the RUGs categorization system to Ultra High Therapy RUGs, resulting in overpayments to SNFs.”

These claims arose out of a 2010 OIG report which alleged that 1) SNFs are increasingly billing higher-paying RUGs, 2) for-profit SNFs are more likely than nonprofit SNFs to bill for higher-paying RUGs, and 3) in general, many SNFs maintain questionable billing for therapy services.

Published on: December 23, 2011

Ten Highlights from the Proposed Physician Payment Sunshine Act Rule

by Wachler & Associates, P.C.

In the December 19, 2011 Federal Register, CMS published a Proposed Rule to implement the “Physician Payment Sunshine Act” portion of Patient Protection and Affordable Care Act (PPACA), or health care reform, which requires drug, medical device, biological and medical supply manufacturers to track and report payments made to physicians and teaching hospitals. The Proposed Rule clarifies several components of the Physician Payment Sunshine Act, including the following:

1. Applicable manufacturers must report the required information to CMS in an electronic format by March 31, 2013 and on the 90^th day of each calendar year thereafter.

2. The Physician Payment Sunshine Act will apply to any manufacturer whose products are sold or distributed in the United States regardless of where they are manufactured.

Published on: November 8, 2011

Physician Payment Sunshine Act Rules Delayed

by Wachler & Associates, P.C.

HHS this week announced that it would again delay publishing rules implementing the Physician Payments Sunshine Act (“PPSA”), established in last year’s Patient Protection and Affordable Care Act (“PPACA” or “health reform”). PPSA requires drug and medical device manufacturers to publicly report gifts and payments made to physicians and teaching hospitals. While the law requires public disclosure on an annual basis, it does not limit financial relationships between drug and device manufacturers and physicians.

The penalties for non-compliance with this law are fines up to $10,000 per occurrence, not to exceed $150,000 per year, and for each knowing failure to report, the fines are increased to up to $100,000 per occurrence and $1 million aggregate per year.

Beginning January 1, 2012 all drug and device manufacturers must record all gifts and payments to physicians and teaching hospitals. Manufactures must report this information to HHS by March 31, 2013, for HHS publication beginning September 30, 2013.

Published on: October 24, 2011

20 Notable Aspects of the Final ACO Rule

by Wachler & Associates, P.C.

On October 20, 2011, CMS released the much awaited final rule for implementation of the Medicare Shared Savings Program for providers and suppliers participating in Accountable Care Organizations (ACOs). The following are 20 notable aspects of the final rule:

•1. While the proposed rule would have required all ACOs to share risk of loss in the final year of the three year participation period, the final rule created an alternative for a “shared savings only” track (one-sided model) that will not require any sharing of losses. The final rule also retains the proposed two-sided model that will allow ACOs to share in an increased portion of savings, so long as the ACO also agrees to share in any losses to the program.

•2. The final rule will allow ACOs beginning in April 1, 2012 or July 1, 2012 to have a longer first performance year (21 months or 18 months respectively) and an option to receive an interim payment calculation following the first 12 months of participation. One-sided ACOs receiving an interim payment will be required to demonstrate a self-executing repayment mechanism similar to that which the two-sided ACOs must demonstrate.