Articles Tagged with “Michigan Healthcare News”

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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.

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On Monday, September 16, 2013, Michigan Governor Rick Snyder signed into law legislation that will expand Medicaid coverage to hundreds of thousands of Michigan residents. Medicaid expansion is a national effort initiated through the Patient Protection and Affordable Care Act.

The Affordable Care Act increases available federal funding for states that choose to expand eligibility levels for Medicaid coverage. Medicaid expansion was made mandatory under the Act in 2010, but in a 2012 Supreme Court decision, Chief Justice Roberts held that Congress may not penalize states that choose not to participate in Medicaid expansion. As a result of this Supreme Court decision, Congress may not take away a state’s existing Medicaid funding.

If Michigan receives approval and federal waivers from the Obama administration, Michigan will have access to more than a billion dollars a year in federal funding. Beginning in 2014, the Medicaid coverage for newly-eligible adults will be fully funded by the federal government for the first three years, and will be phased down to 90% by 2020. The expansion will cover adults that earn up to 133% of the poverty level, which equates to about $15,500 for an individual and approximately $31,000 for a family of four.

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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.

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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.

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In 2005, the Centers for Medicare & Medicaid started the Medicare Recovery Audit Contractor (RAC) program in three pilot states, where the program recovered over $900 million dollars during the three-year pilot. Due to the success of the pilot program, CMS expanded the program to all states in 2010, and has since recovered over three billion dollars. The success of the Medicare RACs resulted in the expansion of the current RAC program to Medicaid and Medicare Parts C and D through Section 6411 of the Affordable Care Act (ACA).

The ACA requires states to:

  • Contract with a RAC to ensure that overpayments and underpayments by the state Medicaid agency are identified, and that overpayments are recouped;
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The Detroit Medical Center (DMC) recently announced that it has saved more than $5 million in costs in 2009 due to its system-wide Electronic Medical Records (EMR).  This is the second consecutive year that the DMC has experienced cost-savings due to the EMR system. 

The system, which started to be implemented in 1998, cut costs by effectively preventing medication errors and monitoring important hospital tasks.  DMC leaders expressed enthusiasm not only for the cost-savings, but also for the improved quality of care for patients.  In the DMC press release, the DMC’s Chief Medical Information Officer, Dr. Leland Babitch, stated that the reduction in medication errors is “…a major gain for patients – especially given the fact that medication errors account for the majority of accidental deaths and injuries at U.S. hospitals.”
The DMC’s press release comes at a time when the Obama Administration is encouraging electronic health record (EHR) systems across the country.  For instance, the Office of the National Coordinator for Health Information Technology (ONC) recently named the first technology review bodies that are authorized to certify EHR systems. 
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Michigan’s Attorney General Mike Cox announced a community forum to be held next week regarding the proposed sale of the Detroit Medical Center to Vanguard Health Systems, Inc.  Earlier this year, DMC signed a purchase agreement that would require Vanguard to make $850 million in capital improvements over the next five years.  The forum will take place from 5:00-7:00pm on August 18 at the Cadillac Place in Detroit.  It will provide the public with an overview of the proposed sale, explain the Attorney General’s review process for the transaction and provide the public an opportunity to comment and question representatives of DMC and Vanguard.

For more Michigan healthcare legal news, please visit www.wachler.com or contact a Wachler & Associates attorney at 248-544-0888.