"Health Law"

Published on: September 4, 2013

Michigan Medicaid Expansion Approved by House

On Tuesday, September 3, 2013, the Michigan House gave final legislative approval to Medicaid expansion under the Patient Protection and Affordable Care Act. This legislation, House Bill 4714, is expected to be signed by Governor Rick Snyder in the coming weeks.

The Affordable Care Act increases federal funding for states that increase eligibility standards for Medicaid enrollment. As passed in 2010, Medicaid expansion was mandatory under the Act, but was subsequently made option by a 2012 Supreme Court decision. CMS administration has announced that states do not have a deadline for deciding whether or not to expand, and in addition, states are free to terminate expansion with financial penalty from the federal government.

Federal funds are available as early as January 1, 2014, but Michigan will likely delay implementation until the spring. According to a Michigan Senate Fiscal Agency analysis published in March that examines the Snyder Administration’s proposed expansion of Michigan’s Medicaid program, the state’s decision to expand could cover an additional 400,000 Michigan residents by means of $1.7 billion in federal funding. Wachler & Associates will continue to keep you updated on Michigan’s decision to expand Medicaid enrollment and other significant healthcare law news. Please subscribe to the Wachler & Associates health law blog by adding your email address and clicking “Subscribe” in the window on the top right of this page.

Published on: August 12, 2013

Health Care for Detroit Employees and Retirees at Risk under Detroit Bankruptcy

by Wachler & Associates, P.C.

On July 18, 2013, Detroit’s emergency manager Kevin Orr filed for Chapter 9 bankruptcy protection in the Eastern District of Michigan U.S. Bankruptcy Court. Emergency manager Kevin Orr, appointed by Governor Rick Snyder, is tasked with financial control of the city and the power to liquidate city assets. Orr is focused on restructuring Detroit’s debt. Detroit is the largest municipality in United States history to file for bankruptcy.

Retiree health care program costs are a named source of Detroit’s bankruptcy filing. Kevin Orr’s bankruptcy filing, a decision authorized by Governor Snyder, occurred one day after Detroit’s two largest municipal pension funds filed suit in state court to stop Orr from cutting retiree health care benefits for Detroit residents. Detroit’s retirees are now worried about possible cuts to their promised healthcare benefits. In a press conference after the filing, Kevin Orr assured Detroit residents that for the next six months there would be no cuts to health care benefits for Detroit’s active workers and retirees.

On August 2, 2013, Kevin Orr announced a new health care plan for city workers that he believes will save the city almost $12 million per year. Orr’s proposal increases workers’ annual deductibles and caps on out-of-pocket costs. If the unions reject Orr’s proposal, then Orr still has the power to change employees’ health care plans under Michigan’s emergency manager law. According to the Detroit Free Press, union leaders are not convinced that Orr’s plan is the best alternative to the current situation.

Published on: July 30, 2013

Medicare and Medicaid Program Integrity: MACs and ZPICs out, UPICs in

by Wachler & Associates, P.C.

Last Friday, the vice president of legal affairs for the American Health Care Association (AHCA), Dianna De La Mare, reported that CMS will be combining the integrity responsibilities of the Zone Program Integrity Contractors (ZPICs) and the Medicare Administrative Contractors (MACs) into one integrity contractor. These newly designated integrity contractors, the Unified Program Integrity Contractors (UPIC), will focus on both Medicare and Medicaid integrity issues. Dianna De La Mar also reported that the new UPICs will encompass the MAC integrity responsibilities and will retire the Medicaid Integrity Contractors (MICs).

Follow the Wachler & Associates Health Law Blog for updates on UPICs and other important health law issues. If you have any questions regarding how UPICs may affect your practice, please contact an experienced health care attorney at Wachler & Associates attorney at 248-544-0888.

Published on: July 22, 2013

CMS Releases CY 2014 OPPS Proposed Rule to Influence Hospitals and Outpatient Providers

by Wachler & Associates, P.C.

On July 9, 2013, the Centers for Medicare and Medicaid Services (CMS) issued the 2014 Hospital Outpatient Prospective Payment System (OPPS) proposed rule (CMS -1601-P). This 718 page document advocates for a shift in the Medicare OPPS and Medicare ambulatory surgical center (ASC) payment system to foster payment efficiency. In the United States, over 4,000 hospitals are paid through the OPPS and close to 5,000 Medicare-participating ASCs are paid though the ASC payment system.

According to the proposed rule, the statutorily mandated proposition (by Section 1833(t) of the Social Security Act) aims “to implement applicable statutory requirements and changes arising from… continuing experience with these systems.” Policies, provisions, and program requirements CMS wishes to update and refine include:

• Payment weights and conversion factors for services payable under OPPS • ASC payment rates • Hospital Outpatient Quality Reporting (OQR) Program • ASC Quality Reporting (ASCQR) Program • Hospital Value-Based Purchasing (VBP) Program • Conditions for coverage (CfCs) for organ procurement organizations (OPOs)

Published on: June 13, 2013

New Research Reveals Bundled Payment Program Success

by Wachler & Associates, P.C.

A recent study published by Bailit Health Purchasing, has revealed that bundled payment programs are an effective option for organizations interested in an alternative to fee-for-service reimbursement for providers. Bundled payment differs from fee-for-service reimbursement by compensating a provider for all of the services a patient receives during a single hospital stay or during recovery from that stay on the basis of expected costs for an episode of care. Bundled payment initiatives seek to give providers greater incentive to better coordinate care with other providers, thereby reducing unnecessary duplication of services, reducing medical errors, improving patient health, and lowering costs.

Bailit Health Purchasing was commissioned by the Health Care Incentives Improvement Institute to research the viability of 19 active programs that have piloted bundled payment initiatives. Bailit released an initial report in May 2012. Bailit’s most recent study, published on May 30, 2013, provides a status update on the 19 active programs and highlights early adopters that have been successful in making bundled payment part of their permanent reimbursement strategy.

Bailit’s study, shared on Tuesday at the National Bundled Payment Summit in Washington, DC, highlights two successful case studies that have moved a bundled payment program from a pilot stage to a permanent reimbursement strategy: Blue Cross Blue Shield of North Carolina (BCBSNC) and Horizon Healthcare Services, Inc. (Horizon). The case studies reveal factors that have helped carry BCBSNC and Horizon to successful application of bundled payment.

Published on: June 22, 2012

Medicare Fraud Task Force Targets Psychotherapy Providers

by Wachler & Associates, P.C.

The United States Department of Justice (“DOJ”) announced yesterday that a Detroit-area resident, Louisa Thompson, plead guilty on June 20, 2012, to one count of criminal conspiracy to commit health care fraud in the Eastern District of Michigan federal court.

The Health Care Fraud Prevention and Enforcement Action Team (HEAT) task force, a DOJ and U.S. Department of Health and Human Services (HHS) multi-agency joint venture, headed the investigation of Ms. Thompson. The HEAT task force, which is an initiative of the federal Medicare Fraud Strike Force, uses data analysis and community policing to detect health care fraud perpetrators who steal billions of dollars from the federal government.

The task force discovered that since 2006, Ms. Thompson had billed Medicare for psychotherapy services through two companies, TGW Medical Inc. and Caldwell Thompson Manor Inc., despite these services having never been performed, or performed by unlicensed staff. Ms. Thompson has yet to be sentenced in the case, and faces up to 10 years imprisonment and a $250,000 fine.

Based on recent Medicare Fraud Task Force activity, it appears the HEAT task force is targeting psychological and psychotherapy service providers aggressively, both for criminal prosecution as well as for civil actions to recover money that Medicare and Medicaid has paid. The government’s most-used tool in civil health care cases is the False Claims Act.

The False Claims Act (FCA) was drafted in1893 and was originally intended to prohibit and prevent fraudulent claims against the government during the Civil War. Its purpose was to force government contractors to deliver promised materials, hold them accountable if they did not, and deter fraudulent activity. Under the FCA a qui tam relator (whistleblower) could bring suit on behalf of the United States, and be rewarded with a percentage of the government’s recovery.

In the late-1980s the federal government began using the FCA to pursue fraud in the federal health care programs. In recent years the government has relied on the FCA to combat fraud and abuse in the healthcare arena for conduct that did not reach the standards for criminal prosecution. The penalties for violation of the FCA can be up to $11,000 per false claim as well as three times the damage to the government.
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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.