September 2010 Archives

September 30, 2010

OIG Continues to Permit Free Pre-Authorization Services

On September 28, the Office of Inspector General (OIG) posted Advisory Opinion 10-20 in which it analyzed another pre-authorization arrangement. This is the OIG's third Advisory Opinion issued this year that favorably reviews the provision of free pre-authorization services to referral sources (please visit our September 9 and May 14 blogs both of which address favorable pre-authorization arrangements).

Under the Proposed Arrangement, Requestor is a physician-owned provider of professional radiology services. When a patient comes to Requestor's facility, Requestor proposes to contact the insurer to provide any necessary information to obtain preauthorization. According to the Proposed Arrangement, free preauthorization services would be made available on an equal basis to all patients and referring physicians without regard to any physician's volume or value of expected of past referrals. Further, in cases when the Requestor's contract with an insurer precludes it from performing the pre-authorization services, Requestor would not do so. Under the Proposed Arrangement, the Requestor would ensure transparency by providing each physician with a copy of the information submitted to obtain the pre-authorization services, and it would make such information available to the Secretary of health and Human Services upon request. Because Requestor, ultimately, bears the risk of not getting paid by the insurance company, it offers this service to ensure that it obtains reimbursement for the services that it furnishes.

The OIG analyzed the Proposed Arrangement under the Anti-Kickback Statute (AKS) and, reiterated many concerns it expressed in its prior preauthorization opinions. However, similar to its previous opinions addressing pre-authorization issues, the OIG again concluded that even though the Proposed Arrangement could potentially generate prohibited remuneration under the AKS, it would not impose administrative sanctions as there was a low level of risk under the AKS for the following reasons:

1. The Proposed Arrangement would not target any referring physicians;

2. There are no implicit or explicit arrangements with the referring physicians to reward them for their referrals;

3. Requestor would be transparent with the insurance company--identifying itself while obtaining pre-authorization--and would provide physicians with a copy of the information submitted to the insurance companies; and

4. Requestor has a legitimate business interest in offering pre-authorization services because its payments are at stake if pre-authorization is not obtained for the services.

Advisory Opinion 10-20, the third pre-authorization opinion in four months, continues to reinforce the OIG's prevailing view that free pre-authorization services, when carefully implemented and without regard for the value or volume of referrals, pose low, limited risks under the AKS. This opinion, in particular, has particular significance insofar as the OIG analyzed a structure consistent with the common paradigm of pre-authorization arrangements among imaging providers.

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September 28, 2010

Update: FTC, CMS, and OIG October 5th Workshop on ACOs

Pursuant to our September 11, 2010 blog entry, the FTC is to hold a day-long workshop entitled "Workshop Regarding Accountable Care Organizations and Implications Regarding Antitrust, Physician Self-Referral, Anti-Kickback and Civil Monetary Penalty Laws." According to the workshop's website, those who are unable to attend the Baltimore workshop may listen in via webcast. Registration is not required for the webcast. HLP will be listening in on the webcast and will provide our readers with our summary of the workshop. Please stay tuned for more updates!

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September 28, 2010

Medicare Claims for Hospice Beneficiaries

As reiterated in the WPS Medicare Part B Legacy eNews, Medicare beneficiaries who elect hospice care, forego their rights to Medicare Part B payments for services related to treating and managing their terminal conditions, unless the services are provided by an attending physician. An "attending physician" is defined as a physician who is a doctor of medicine, doctor of osteopathy or a nurse practitioner who has been identified by the beneficiary, at the time hospice care has been elected, as having the most significant role in determining the delivery of that beneficiary's medical care. Those professional services provided by the attending physician that are reasonable and necessary for treating and managing the beneficiary are not considered hospice services. Depending on the attending physician's relationship with the hospice, either Medicare Part A ("Part A") or Medicare Part B ("Part B") will be billed for the attending physician's services.

For an attending physician who does not furnish the services under an arrangement with the hospice, the attending physician's services are billed under Part B with a GV modifier indicating that the attending physician is not employed or under a payment arrangement with the hospice. However, for an attending physician who has a payment arrangement with the hospice, then the attending physician's services are billed by the hospice to Part A. See also HLP blog discussing the recent OIG report on this topic.

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September 28, 2010 on Facebook

Health and Human Services (HHS) announced that it launched its new Facebook page. According to HHS Secretary, Kathleen Sebelius, " on Facebook offers Facebook users a new tool to understand and stay informed about the Affordable Care Act...This new page is another resource that people can use to learn about and discuss health care issues that are important to them, their family, or their small business." on Facebook provides a search function for insurance coverage, a medium through which people can discuss their healthcare ideas, and a new way to stay informed.

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September 28, 2010

OIG Finds Billing Vulnerabilities with Medicare Hospice Benefits

On September 22, 2010, the Office of Inspector General ("OIG") released its Memorandum Report: Questionable Billing for Physician Services for Hospice Beneficiaries addressing a hospice billing vulnerability that cost CMS $566,000 in 2009. The OIG noted that there are instances of billing a single service under both Medicare Parts A and B. Specifically, "physicians may be billing for services related to the terminal illness under Part B that hospices are also billing for under Part A." 11% of such practices are from Florida, the state with the most instances of duplicate billing, followed by North Carolina with 3%.

Typically, if the beneficiary's physician is an employee or under contract with the hospice, Medicare pays the hospice for the physician's services under Part A (and the hospice, then, compensates the physician). If, on the other hand, the beneficiary's physician is not an employee or under contract with a hospice, then Medicare pays the physician, directly, under Part B. Under the OIG's examination, it "identified instances in which a physician billed Part B for services provided to a hospice beneficiary for his or her terminal illness while a hospice billed Part A for services by that same physician for the same beneficiary and illness." The OIG admitted that, through its evaluation, it could not discern whether or not the inappropriate billing was a fault on a physician's part or a hospice's part, and the OIG acknowledged that the problem did not appear to be widespread. Regardless, the OIG encouraged CMS to monitor the issue and work to correct the vulnerability.

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September 27, 2010

House Passes Bill to Strengthen OIG Enforcement Under Fraud and Abuse Violations

On September 22, 2010, the House passed HR 6130: Strengthening Medicare Anti-Fraud Measures Act of 2010 (the "Bill"), introduced by Reps. Pete Stark (D-CA) and Wally Herger (R-CA). The Bill provides for an expanded "permissive exclusion from participation in Federal health care programs to individuals and entities affiliated with sanctioned entities." Summaries of the pertinent definitions are below:
- "Individuals or entities affiliated with a sanctioned entity" includes any person who has or had an ownership interest in a sanctioned entity, or affiliated entity, at the time of the fraudulent conduct and who knew, or should have known, about the conduct; any person who is or was an officer or managing employee of a sanctioned entity or affiliated entity of such sanctioned entity at the time of the conduct that formed the basis for the conviction or exclusion from Federal health care programs; or any affiliated entity of a sanctioned entity.

- "Sanctioned entity" is means an entity that has been convicted of making false statements or false claims to a Federal health care program; or an entity that has been excluded from participating in a Federal health care program or State health care program.

- "Affiliated entity" is defined as an entity affiliated with a sanctioned entity and "an entity that was so affiliated at the time of any of the conduct that formed the basis for the conviction or exclusion...."

- An entity is affiliated with another entity if one of the following apply:

One of the entities is or was, at the time in which the conduct that formed the basis for the conviction or exclusion, a person with an ownership or control interest;

There is or was, at the time in which the conduct that formed the basis for the conviction or exclusion, a person with an ownership or control interest in both entities; or

There is or was, at the time in which the conduct that formed the basis for the conviction or exclusion, an officer or managing employee of both entities.

According to Rep. Herger's press release, "the legislation expands the authority of the HHS Office of Inspector General (OIG) to allow it to ban corporate executives from doing business with Medicare if their companies were convicted of fraud. It also gives the OIG the ability to exclude parent companies that may be committing fraud through shell companies." The Bill has passed in the House and was received and read in the Senate's Committee on Finance on September 23.

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September 24, 2010

CMS Releases Stark Self-Referral Disclosure Protocol

On September 23, CMS released its Voluntary Self-Referral Disclosure Protocol ("SRDP") pursuant to Section 6409 of the Affordable Care Act ("ACA"), which "requires the Secretary of HHS to inform providers of services and suppliers of how to disclose an actual or potential violation pursuant to the protocol...." The new statutory deadline for reporting and returning over payments due to inappropriate referrals (i.e., Stark law violations) is by the later of two dates: (1) 60 days after the date on which the overpayment was identified; or (2) the date any corresponding cost report is due. Once a provider or supplier has self-disclosed, that 60-day period is suspended.

"The SRDP is open to all health care providers of services and suppliers, whether individuals or entities, and is not limited to any particular industry, medical specialty, or type of service." CMS emphasizes good faith throughout the entire disclosure process, both at the beginning--to avoid being removed from the SRDP--as well as at the end--to, hopefully, have a reduced amount in owing. Furthermore, CMS emphasizes that every disclosure is evaluated independently and every outcome is very fact-specific. Finally, CMS will be working alongside federal law enforcement and the Office of Inspector General ("OIG") and the Department of Justice ("DOJ") to address self-disclosures.

A provider or supplier making a voluntary self-disclosure, must go through the following process:

1. Disclosure - Providers and suppliers must submit an electronic disclosure as well as an original disclosure, with 1 copy, submitted by mail

2. Disclosed Information - The following comprise the disclosure:
a. Description of the actual or potential violations - Include the names, national provider identification numbers (NPIs), CMS Certification Number(s) (CCN), and tax identification number(s) of the disclosing party; a description of the nature of the matter being disclosed; a statement from the disclosing party regarding why it believes a violation of the physician self-referral law may have occurred; the circumstances under which the disclosed matter was discovered; a statement describing whether or not the disclosing party had a history of similar conduct; a description of the compliance program; a description of appropriate notices; and an indication of whether or not the disclosing party has knowledge that the matter is under current inquiry by a Government agency or contractor.
b. Financial Analysis - Set forth the amount, itemized by year, based on the applicable "look back" period; describe the methods used to set forth the amount that is actually or potentially due and owing; and a summary of auditing activity
3. Certification - The disclosure must be certified as true by either the disclosing party or the CEO or CFO of an entity
4. Verification - CMS must verify the disclosure, which depends on how thorough and cooperative the disclosing party has been
5. Payments - CMS will not accept payments prior to CMS' completion of the investigation
6. Considering the Amount in Owing - "The factors CMS may consider in reducing the amounts otherwise owed include: (1) the nature and extent of the proper or illegal practice; (2) the timeliness of the self-disclosure; (3) the cooperation in providing additional information related to the disclosure; (4) the litigation risk associated with the matter disclosed and (5) the financial position of the disclosing party." CMS notes that while it considers these factors, it is under no obligation to reduce any amounts due and owing.

It must be emphasized that this SRDP only applies to inappropriate referrals--Stark law violations. Furthermore, because this self-disclosure protocol involves all providers and suppliers, providers and suppliers must reacquaint themselves with and, where necessary, revise and update their compliance programs and ensure that there are no inadvertent (or deliberate) inappropriate referrals. If an inappropriate referral is identified, contact your healthcare attorney immediately to determine the most effective response.

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September 23, 2010

Physicians Working Collectively to Address Patient Payment Reform

On September 21, The Hill and the American College of Cardiology ("ACC"), hosted a discussion with Sen. Tom Coburn (R-OK), Rep. Brian Baird (D-WA), Dr. Ralph Brindis--the President of ACC--Dr. Jack Lewin, and Dr. John Tooker--the CEO of American College of Physicians ("ACP") to discuss patient payment reform. While the two congressmen represent opposite parties, they had one message: the current Medicare system is not efficient and reform is imperative. Coburn attested, "we have designed exactly the tragedy that we have." Specifically, he referred to the fact that Medicare does not take the quality of care into account; rather, it only considers quantity. Likewise, Baird called for an end to Medicare and Medicaid, replacing it with a needs-based voucher system. Lewin, echoing the congressmen, stated that while health reform will not get repealed, it is up to the media, physicians, and law makers--collectively--to change the delivery and payment of healthcare. Reform "isn't about getting more money for doctors, this is really about improving the way healthcare is delivered to patients," Tooker said.

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September 20, 2010

CMS Posts Preview of Proposed Rules

Last week, CMS posted the Preview of the Proposed Rules, which will officially be released in Federal Register format and open for comments on September 23. The proposed rule focuses on implementing the Affordable Care Act ("Act") that will, in part:
• Establish screening procedures for suppliers and providers of services participating in Medicare, Medicaid, and the Children's Health Insurance Program ("CHIP")
The screening process will apply to "providers of services," which is defined as "health care entities that furnish services primarily payable under Part A of Medicare, such as hospitals, home health agencies, hospices, and skilled nursing facilities." Furthermore, suppliers are also to be screened. "Suppliers" are "health care entities that furnish services primarily payable under Part B of Medicare, such as independent diagnostic testing facilities (IDTFs), durable medical equipment prosthetics, orthotics, and supplies (DMEPOS) suppliers, and eligible professionals, which refers to health care suppliers who are individuals, that is, physicians and the other professionals listed in section 1848(k)(3)(B) of the Act." The screening includes a number of methodologies ranging from fingerprinting to unannounced site visits to checks across state lines.
• Impose an application fee on "each institutional provider of medical or other items or services or supplier"
This fee would be used to conduct the screening process and to fund other "program integrity efforts." An "institutional provider of medical or other items or services or suppliers" is defined as any healthcare provider that bills Medicare, Medicaid, or CHIP on a fee-for-service basis, except those entities or practitioners who submit the CMS 855I to enroll in Medicare.
• Impose temporary moratoria--suspensions--on payments, If necessary, to prevent fraud, abuse, and waste under Medicare, Medicaid, and CHIP
The temporary moratoria will be in six-month increments in the following situations:
1. CMS identifies a trend associated with a high risk of fraud, waste, or abuse;
2. A state has imposed a moratorium on enrollment in a particular geographic area, provider type, or supplier type; or
3. CMS has identified a particular provider or supplier type or a particular geographic area that has a high potential for fraud.
• Provide guidance to states on how to terminate providers and suppliers from Medicaid or CHIP if they have been terminated from Medicare, Medicaid, or CHIP
• Provide the requirements for suspension of payments pending credible allegations of fraud, abuse, and waste in Medicare and Medicaid
According to the Act, the Secretary may suspend payments if there is a credible allegation of fraud, abuse, or waste. "Credible allegation of fraud" includes "an allegation from any source, including but not limited to fraud hotline complaints, claims data mining, patterns identified through provider audits, civil false claims cases, and law enforcement investigations. Allegations are considered to be reliable when they have indicia of reliability." The rules note that, while the definition is evolving, an investigation has concluded--there has been a resolution of an investigation--when "legal action is terminated by settlement, judgment, or dismissal, or when the case is closed or dropped because of insufficient evidence."

Please check back at the end of the week for a link to the proposed rules in the Federal Register format.

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September 20, 2010

Daniel Levinson Testifies on Medicare's Coverage of DMEPOS Suppliers

On September 15, 2010, the US Department of Health and Human Services Inspector General Daniel Levinson testified before the House Subcommittee on Health of the House Committee on Energy and Commerce regarding Medicare's coverage of DMEPOS suppliers.

Stating that DMEPOS expenditures represented 2% of all Medicare expenditures--$10 billion--in 2009, Levinson notes that there is a great deal of fraud and abuse surrounding these claims. He described the OIG's response to such fraud "in the context of five principles OIG has identified as essential to combating health care fraud."

1. Enrollment - DMEPOS has become a target for fraudulent suppliers because of the "low barriers to entry and weak oversight and enforcement of enrollment standards." Thus, Levinson proposes that prospective-suppliers must be more closely scrutinized prior to enrollment in health care programs.

2. Payment - Because the Medicare reimbursement rate for DMEPOS does not match the market prices, Levinson proposes that the payment methods be "reasonable and responsive to changes in the marketplace and the medical practice."

3. Compliance - Because most DMEPOS suppliers are not ill-intentioned, the OIG will assist and educate healthcare providers and suppliers in complying with program requirements through an OIG Provider Compliance Training Initiative, which will deliver compliance training. The Training Initiatives are scheduled to begin in 2011 around the country.

4. Oversight - The OIG will continue overseeing programs for instances of fraud and abuse.

5. Response - The OIG will continue identifying instances of fraud and abuse through Strike Forces, "impos[ing] sufficient punishment to deter others, and promptly remedy[ing] program vulnerabilities."

Furthermore, Levinson noted that while the new Health Reform Act "establishes new authorities and requirements to strengthen enrollment scrutiny, oversight, and response to address fraud vulnerabilities," it does not solve the problem of the misaligned Medicare payments and market prices. Levinson noted that Competitive Bidding Program can help address these price discrepancies.

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September 19, 2010

The Joint Commission Extending the Accreditation Process to Primary Care Home Option in 2011

On September 7th, the Joint Commission announced that, commencing in July 2011, the Joint Commission will extend the accreditation process of accrediting ambulatory health care organizations to those who choose the Primary Home option. "A Primary Care Home is a model of care whereby services are provided to patients by a primary care provider or team that increases access to its services, tracks and coordinates a patient's care delivered by other providers and facilities, uses evidence based treatment protocols, and focuses more on patient and family education and self-management."

Michael Kulczcki, the executive director of the Ambulatory Health Care Accreditation Program of the Joint Commission states, "[t]his new optional program will help ensure that patients receive ambulatory care services in a manner that is comprehensive, accessible and coordinated. By focusing on carefully orchestrating care, patient outcomes can be improved." The governing Primary Care Home Initiative standards will be posted in November 2010 for field review with pilot testing scheduled to begin in 2011. The Joint Commission expects that the final standards are expected to be available in March 2011 and that on-site surveys will begin in July 211.

A Primary Care Home Initiative Expert Panel is developing supplemental ambulatory care accreditation standards electing the Primary Care Home Option by examining topics such as the roles and responsibilities of the primary care provider and composition of the care team, the processes necessary to ensure and support continuing care, the processes necessary to support and incorporate patient self management, and operational issues (i.e., scheduling patient appointments, etc.).

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September 14, 2010

"Per-Click" HospitalSleep Lab Service Arrangement Permissible According to OIG Opinion

On September 8, 2010, the OIG released Advisory Opinion 10-14 regarding an arrangement in which a sleep lab management company (the "Requestor") provides a Hospital sleep lab with all of the equipment, technology, supplies, and staff necessary to operate a sleep testing laboratory. No physicians have any ownership interest in Requestor and Requestor does not have any ownership interest in Hospital.

The Hospital provides the space for Requestor to conduct the sleep tests on Hospital's patients. Hospital also provides a medical director for the sleep testing facility. After a physician refers patients to Hospital's sleep testing facility, Requestor's personnel perform the sleep study and transmit the results to an interpreting physician. The Hospital bills Medicare, its patients or other third party payors for the sleep testing. The Opinion assumes that the Requestor's activities meet all of Medicare's "under arrangement" rules and regulations applicable to a hospital's Medicare outsourcing arrangements.

If the patient's physician determines that the patient needs continuous positive airway pressure (CPAP) therapy, then Requestor may perform another test "under arrangement" with the hospital to determine the appropriate CPAP pressure levels for the patient. Importantly, the OIG noted that the Requestor does not directly or indirectly dispense CPAP or any DME equipment to the Hospital or to any of the patients tested at the Hospital's managed lab.

As consideration for all of its testing services, Requestor charges Hospital a per-test or "per-click" fee calculated at an arm's-length negotiation and consistent with the fair market value for the services provided. The fees the Hospital pays Requestor do not depend on the Hospital's success in collecting payment.

On these facts, the OIG concluded that the arrangement does not meet the applicable safe harbors. The safe harbors covering equipment rental and personal services and management contracts require that the aggregate compensation payable under these arrangements be "set in advance." Because payments based on "per-click" fees cannot be set in advance, the safe harbors are inapplicable.

The OIG approved the arrangement even though it could not benefit from safe harbor protection. Failure to adhere to each aspect of an Anti-Kickback Statute safe harbor does not mean that the arrangement is illegal. Rather, each arrangement must be viewed on its facts and circumstances to determine whether safeguards exist to prevent or deter fraudulent or abusive behavior.

By applying this analysis to the facts addressed in the opinion, the OIG found that the arrangement does not contain certain "suspect" attributes found in some "under arrangement" arrangements. The "suspect characteristics" identified in the opinion include:

1. A hospital paying above-market rates to the sleep test service provider (the "Manager").

2. A Manager providing marketing services to the hospital's sleep test program.

3. A Manager's agreement to accept below market rates for its services to secure referrals from the hospital to the Manager or its owners, including affiliated suppliers and providers.

4. Direct or indirect ownership in the Manager by the hospital.

5. Direct or indirect ownership interest in the Manager by referral sources to the hospital, such as physicians or physician groups.

6. The furnishing of items ancillary or additional to the sleep test to persons who receive the test "under arrangement" at the hospital or other persons who are discharged hospital patients. Specifically, the OIG noted that "no DME or other items or services are provided by Requestor to the Hospital, Hospital patients, or patients tested at the sleep testing facility, directly or indirectly, in connection with the Arrangement."

The OIG found the arrangement to be reasonably acceptable in the absence of these suspect characteristics.

Contracted Joint Ventures Analysis
The OIG next analyzed the arrangement under its "Contracted Joint Venture" Bulletin. The OIG believes that contractual arrangements between potential referral sources - such as the "under arrangement" arrangement here - must be closely scrutinized to determine if they are disguised vehicles for the payment of improper kickbacks.

The OIG also concluded that this arrangement poses an acceptably low risk of improperly influencing or rewarding referrals under its Contracted Joint Ventures analysis for four reasons:

1. First, the physicians ordering the sleep testing services do not have a direct or indirect financial interest in Requestor and Hospital does not have a direct or indirect ownership interest in Requestor.

2. Second, because the per-test fees were determined through arm's-length transactions and reflect the fair market value for reasonable services actually rendered, while not considering the volume or value of referrals, there is a lesser likelihood of remuneration to induce referrals.

3. Third, Requestor charges Hospital regardless of whether Hospital was successful in receiving reimbursement for the rendered sleep testing services.

4. Finally, Hospital has assumed the business risk of this arrangement and Hospital and Requestor are each reimbursed in proportion to each entity's respective contribution--including risk assumption, but not referrals.

The OIG concluded that although the arrangement could potentially generate prohibited remuneration under the Anti-Kickback Statute, it would not impose administrative sanctions on the parties for this arrangement. The OIG reached its conclusion based on the absence of suspect characteristics attendant to some "under arrangement" arrangements and in light of the low risk of improper patient steering under the Contracted Joint Ventures analysis. Thus, the OIG found that the arrangement poses a low risk of fraud and abuse in connection with the Anti-Kickback Statute.

Continue reading ""Per-Click" HospitalSleep Lab Service Arrangement Permissible According to OIG Opinion" »

September 13, 2010

Home Sleep Test Provider Settles False Claims Act Allegations

Sleep Solutions, Inc. ("Sleep Solutions")--a Maryland diagnostic service provider of in-home sleep tests--settled with the United States for $500,000 to settle claims that it violated the False Claims Act by submitting false claims to TRICARE and the Federal Employees Health Benefit Program. The United States contends that from February 2003 through December 2009, Sleep Solutions submitted claims for unattended home sleep studies as if they were attended by a sleep technologist. Attended sleep tests command higher reimbursement than unattended sleep tests.

The United States also alleged that Sleep Solutions billed TRICARE and the Federal Health Employees Benefit Program, even though these federal programs did not reimburse unattended sleep tests during most the of period in question. TRICARE began covering certain unattended home sleep tests on May 29, 2008. Sleep Solutions denies these allegations.

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September 11, 2010

FTC, CMS and OIG To Hold October 5th Workshop On ACOs

The Federal Trade Commission ("FTC"), Centers for Medicare and Medicaid Services ("CMS"), and Department of Health and Human Services Office of Inspector General ("OIG") have announced their plans to co-host an October 5th workshop on accountable care organizations ("ACOs"). According to a September 8th News Release, the workshop is intended principally to assist providers in their efforts to develop ACOs. Substantively, the October 5th workshop is expected to address and solicit public comments on the legal issues raised by the different ACO structural models, focusing on those of interest to physicians, physician associations, hospitals, health systems, payors, and other stakeholders. For example, it would be anticipated that the federal agencies will discuss legal considerations for the use of physician-hospital organizations as a platform for ACOs. Topics to be covered, which will be further discussed with greater specificity in an upcoming notice to be published in the Federal Register, will include the antitrust, physician self-referral, anti-kickback, and civil monetary penalty laws related to ACOs. Those interested in submitting comments to the FTC, CMS and OIG, on the topics to be discussed during the workshop are invited to deliver such comments by September 27th. Please check HLP's THE HEALTH LAW ATTORNEY BLOG for updates as additional information is released regarding ACOs, in general, and the October 5th workshop, in particular.

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September 10, 2010

CMS Provides Guidance on Hospice Benefits for Children Pursuant to Healthcare Reform

CMS recently issued guidance on Section 2302 of the Patient Protection and Affordable Care Act--the 2010 healthcare reform law. "Section 2302 of the law amends sections 1905 (o)(1) and 2110(a)(23) of the Social Security Act to remove the prohibition of receiving curative treatment upon the election of the hospice benefit by or on behalf of a Medicaid or Children's Health Insurance Program (CHIP) eligible child." CMS continues to explain that "[t]he Affordable Care Act does not change the criteria for receiving hospice services; however, prior to enactment of the new law, curative treatment of the terminal illness ceased upon election of the hospice benefit. This new provision requires States to make hospice services available to children eligible for Medicaid and children eligible for Medicaid-expansion CHIP programs without forgoing any other service to which the child is entitled under Medicaid for treatment of the terminal condition."

For those states with independent CHIP programs, they still are not required to provide hospice services; however, if hospice services are provided, the concurrent curative treatment must be offered. CMS contends that this will increase utilization of hospice services.

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September 9, 2010

OIG Permits Hospital to Seek Pre-Authorization for Diagnostic Imaging Services

The OIG released Advisory Opinion 10-13 on August 31, 2010, concerning a proposed-arrangement where a hospital would be providing pre-authorization services for diagnostic imaging. Requestor, a non-profit hospital, provides diagnostic imaging services to patients. Because many commercial insurers have begun requiring pre-authorization prior to covering diagnostic imaging services, the hospital has proposed to provide free pre-authorization services for all patients. Under this proposed arrangement, when a patient comes to the hospital, if the patient's imaging procedure requires pre-authorization, the hospital's Pre-Access Department contacts the patient's insurer, provides it with the necessary information, and obtains the pre-authorization. The patient is not charged for this service and it is provided to all patients and referring physicians without regard to the volume or value of referrals. No physicians are paid under this arrangement.

The OIG determined that the potential remuneration generated under this arrangement did not rise to the level of sanctioning the hospital for the following reasons. First, while this service may relieve a physician's administrative duties of obtaining pre-authorization him/herself, the arrangement does "not target any particular referring physicians" and any relief of administrative duties would "occur by chance, not design." Furthermore, this service is offered to all patients and physicians, without regard to referrals. Second, the hospital will "not make payments to physicians under the...[a]rrangement, and it has no ancillary agreements with referring physicians that would otherwise reward referrals" to the hospital. Third, the hospital's Pre-Access Department is transparent with insurers and physicians. Finally, the hospital has a "legitimate business interest in offering uniform pre-authorization services" because it is the hospital's payments that are at stake if pre-authorization is not obtained.

Thus, the OIG has determined that, under this particular proposed-arrangement, a hospital providing pre-authorization for imaging services for patients seeking diagnostic imaging procedures is permissible.

This opinion is the second opinion the OIG has released regarding pre-authorization for imaging services. On May 14, 2010, we blogged on the first opinion, Opinion 10-04, in which the OIG approved a proposed-arrangement where an imaging center would provide free pre-authorization services under a similar arrangement as was proposed in Opinion 10-13.

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September 7, 2010

HLP's Adrienne Dresevic, Esq. Quoted in Kaiser Health News

Founding partner, Adrienne Dresevic, Esq. was quoted in Kaiser Health News on August 23, 2010 in an article on the recent regulations pertaining to physician disclosure requirements involving imaging machines. Dresevic often writes articles and speaks across the nation about the laws and policies surrounding imaging arrangements.

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September 6, 2010

Fifth Circuit Ruling Affirms that Psychologists are Not immune from Fraud and Abuse Scrutiny

Dr. Sam Smith Hill, III's 2008 healthcare fraud conviction was affirmed by the 5th Circuit on August 25, 2010 (US v. Hill, No. 09-40749 (5th Cir. Aug. 25, 2010). Found guilty in five counts of healthcare fraud by a jury, Dr. Hill's indictment alleged that he fraudulently billed Medicaid from 2001 to 2008. Having founded a children's behavioral clinic in Corpus Christi, Texas that provides psychological services to underprivileged children, the indictment contended that Dr. Hill billed Medicaid for services performed by his Licensed Psychological Associates (LPAs). The Texas Medicaid guidelines prohibit billing Medicaid for services not rendered by a physician. Dr. Hill asserted that he only billed for the work he performed; however, the 5th Circuit disagreed, citing Dr. Hill's statements to FBI agents claiming "that he knew he was violating Medicaid billing rules, but that the rules were 'wrong and immoral.'" The court, thus, found there to be "sufficient evidence from which the jury could conclude that the billing included the LPA time," affirming the lower court's conviction.

While not given as much attention as other fraud and abuse violations, even mental health professionals must be aware of increased fraud and abuse scrutiny.

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