March 2011 Archives

March 31, 2011

ACO Proposed Regulations Issued

Today, CMS issued the long-awaited proposed regulations for accountable care organizations (ACOs). The regulations may be found here.

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March 25, 2011

OIG Views Favorably Complimentary Transportation Services in Adv. Op. 11-02

In the Office of Inspector General's (OIG) Advisory Opinion 11-02, the OIG examined a proposed arrangement in which the Requestor--a non-profit, tax-exempt corporation that operates an outpatient acute care hospital--would provide complimentary transportation services to patients and their families at physicians' offices located on, or contiguous to, the Requestor's campus (Physicians) to the Requestor's acute care facility for further evaluation and treatment (Proposed Arrangement). The Physicians are on Requestor's medical staff. If a Physician determines that a patient is in immediate need of treatment at one of Requestor's facilities, the patient is unable to walk and there are no available appropriate private transportation options, then the Physician's office may contact the Requestor to pick up and transport the patient to one of the Requestor's facilities. Even though the value of the transportation could exceed $10 per transport or $50 on an annual basis, the OIG determined the Proposed Arrangement would not subject the Requestor to sanctions for "a combination of the following reasons":

• Federal healthcare program beneficiaries would not be selectively limited. Moreover, patient eligibility for the transportation services would be uniformly determined by the Physicians according to Requestor's written policy setting forth the operational requirements of the Proposed Arrangement.


• The type of transportation--a van owned by the Requestor and driven by an EMT employed by the Requestor--would be reasonable.

• The transportation services would only be offered locally from Physicians' offices located on or contiguous to the Requestor's 108-acre campus and patients would only be transported ¼ of a mile.

• The Proposed Arrangement would not be advertised.

• There is limited access and availability of local public transportation and parking.

• The cost of the transportation would not be claimed, directly or indirectly, on any Federal healthcare program cost report or claim, nor otherwise shifted to a Federal healthcare program.

This opinion is, yet another, OIG favorable opinion pertaining complementary transportation services. Roughly 2 years ago, in March 2009, in Advisory Opinion 09-01, the OIG permitted a proposed arrangement in which skilled nursing facility would provide complimentary transportation services to for friends, residents and their families, subject to certain safeguards.

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March 21, 2011

5th and 9th Circuits Rule the HHS Hospice Cap Invalid

Following a December challenge in the Northern District of Texas, the ninth circuit (Los Angeles Haven Hospice, Inc. v. Sebelius, No. 09-56391 (9th Cir. Mar. 15, 2011)) and the fifth circuit (Lion Health Servs. V. Sebelius, No. 10-10414 (5th Cir. Mar. 11, 2011)) have both ruled that the hospice cap regulation (42 CFR 418.309(b)) is unlawful and must be set aside as it conflicts with the unambiguous statute requiring a proportional versus a single-year allocation method for the hospice cap. 42 USC 1395(i)(2) requires the amount of payment made for hospice care provided by (or under arrangements made by) a hospice program for an accounting year may not exceed the "cap amount" for the year multiplied by the number of Medicare beneficiaries in the hospice program in that year. The "number of Medicare beneficiaries" is defined as the number of individuals who have made an election with respect to the hospice program and have been provided hospice care by (or under arrangements made by) the hospice program in the accounting year, such number reduced to reflect the proportion of hospice care that each such individual was provided in a previous or subsequent accounting year or under a plan of care established by another hospice program. The corresponding regulation, 42 CFR 418.309(b), provides that the hospice cap amount is calculated by multiplying the adjusted cap amount by the number of Medicare beneficiaries who elected to receive hospice care from that hospice during the cap period. According to the 9th Circuit appeals court, "The regulation is at odds with the plain language of the statute in that it omits the individualized proportional allocation calculation expressly called for in the statute, and substitutes an 'alternative' that HHS considers more convenient and less burdensome."

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March 19, 2011

Advocacy Groups Pushing to Delay Face-to-Face Rule

Section 6407 of the Patient Protection and Affordable Care Act requires a face-to-face encounter for home health and hospice patients to qualify for Medicare coverage. On March 12, 13 prominent medical societies and advocacy groups sent a letter to the Centers for Medicare and Medicaid Services (CMS) requesting a postponement until, at least, July 1 due to industry and physician confusion in implementing the requirement. In the letter, the societies and advocacy groups request administrative simplification stating, "[w]hile section 6407 of PPACA requires that the physician document that the encounter took place, the CMS rule and interpretive guidance requires much more, including a narrative as to why the patient clinical findings specifically support Medicare coverage. As has been reported in our meetings with CMS, many physicians see this added documentation component as unnecessary, duplicative, and unduly burdensome." The letter closes with recommendations for reducing the paperwork burden on physicians in addition to increasing patients' access to the physician encounter.

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March 18, 2011

Holder and Sebelius in Detroit, MI

On March 15, 2011, US Attorney General Eric Holder, Secretary of Health and Human Services (HHS) Kathleen Sebelius and Inspector General Daniel Levinson visited Detroit to participate in the fifth regional health care fraud prevention summit. These summits bring together a wide array of federal, state and local partners, beneficiaries, providers and other interested parties to discuss innovative ways to eliminate fraud within the U.S. health care system. The summit was closed to the public with a limited number of attendees invited to participate. Robert S. Iwrey of The HLP was honored to be selected to attend and was able to speak with numerous federal, state and local law enforcement officials regarding the need to protect the rights of legitimate providers when attempting to eliminate the fraudulent activities of a few bad actors.

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March 17, 2011

Faculty Physicians Experiencing Increased Salaries

According to an article in Modern Physician, most faculty physicians experienced an increase in their salaries from 2009 to 2010. Based on a report from the Medical Group Management Association (MGMA), "the median compensation for primary-care faculty physicians was $163,704, up 3.47% from $158,218 in 2009, and the median pay for specialty care faculty was $241,959, or 2.7% higher than $235,587 in 2009. The rate of inflation for 2010, as calculated by the Consumer Price Index, was 1.5%." While this was not the trend for all specialties, the increase in primary care appears to reflect the growing demand for higher paid hospitalists.

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March 15, 2011

ACO Regulations May Finally Be Near

Since the signing of the Patient Protection and Affordable Care Act (PPACA) last year, there has been considerable attention and interest within the industry towards accountable care organizations (ACOs). Accompanying this focus has been a series of questions regarding the compositional requirements, as well as the operational and structural opportunities to be afforded to (and limitations to be imposed upon) ACOs. Fortunately, for the myriad of hospital systems and other providers that are developing their clinical integration strategies, meaningful guidance may soon be forthcoming. At a Congressional hearing on March 11, Secretary Sebelius announced that the long-awaited ACO regulations are expected to be released within the next two weeks and that these regulations were designed to encourage a wide variety of healthcare collaborations. The Health Law Attorney Blog has been intently following ACO developments. Please check back for an update on the content of the to-be-released ACO regulations and the anticipated implications of these rules for the ever-evolving healthcare landscape.

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March 7, 2011

Pharmacist Accused Of Largest Health Care Fraud In Southern District of Indiana

According to the Associated Press (March 6, 2011), an Indiana pharmacist, John D. Love (owner of the Terre Haute Prescription Shop) "faces a possible 10-year prison sentence if convicted of health care fraud and money laundering in a scheme that netted him more than $3.57 million, federal prosecutors say." The amount of the case qualifies it as the largest case of health care fraud and money laundering ever discovered in the Southern District of Indiana.

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March 4, 2011

Recent Guidance from Wisconsin Physicians Services (WPS)

WPS, the Legacy Part B Medicare Administrative Contractor for Illinois, Michigan, Wisconsin and Minnesota, has issued recent guidance regarding documentation of discard or waste for drugs and biologicals as well as missing information on the Medicare CMS-855 provider enrollment applications. Notably, WPS voices CMS' direction that physicians, hospitals, and other providers "make good faith efforts to minimize the unused portion of a drug/biological product by ordering, scheduling, and storing in a manner in which the provider can use drugs/biologicals most efficiently in a clinically appropriate manner. Drug wastage or discard must be documented in the patient's medical record with date, time, amount wasted, and reason for wastage." CMS may deny an amount billed as non-rendered if there is a discrepancy between the amount administered and the amount billed, unless the waste is properly documented. Finally, the wasted amount must not be administered to another patient and, subsequently, re-billed.

In its other guidance, WPS indicates CMS is beginning to decrease its dependence on standard mail communication and, instead, is turning its efforts toward e-mail communication for the majority of instances for missing information on a CMS-855 provider enrollment application. CMS insists that contact persons listed on the 855 stay attentive to their e-mails and promptly respond to requests.

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March 2, 2011

MI Governor Snyder Makes Changes to Department of Energy, Labor and Economic Growth (DELEG)

Gov. Snyder's Executive Orders 2011-4 and 2011-5 reorganized DELEG, changing the name to the Department of Licensing and Regulatory Affairs (DLRA). Other notable changes include

- Transferring the Bureau of Health Professions, the Bureau of Health Systems and the Controlled Substances Advisory Commission from the Department of Community Health to the DLRA;


- Creating an Office of Regulatory Reinvention tasked with reviewing all existing and proposed rules to ensure economic growth; and

- Creating the MI Administrative Hearing System, which is an independent agency that will centralize the state's administrative hearings.

Both executive orders are set to go into effect April 24, 2011.

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March 1, 2011

South Florida: Another Pill Mill Target

South Florida has been called the "national epicenter" for the illegal dispensing of prescription drugs. Law enforcement officials have targeted South Florida for quite some time, with February 23 being no exception. On February 23, law enforcement officials and Drug Enforcement Agency (DEA) agents raided six pain clinics accused of illegally dispensing prescription drugs, arresting 22 people--five of who were doctors.

While most pain physicians do not conduct pill mills, because of the few that do, all pain physicians are subject to increased scrutiny. As such, it is important for well-intentioned pain management physicians to proactively protect themselves. For example, it is important to carefully review internal documentation practices; review any applicable state law or guidance; and establish patient narcotics agreements and consistently monitor and enforce them.

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