January 2012 Archives

January 18, 2012

OIG Issues "Compliance Program Basics" HEAT Provider Compliance Training Video

Recently the OIG released the 7th of 11 videos that cover major health care fraud and abuse laws, the basics of health care compliance programs, and what to do when a compliance issue arises. The videos are from the Health Care Fraud Prevention and Enforcement Action Team (HEAT) Provider Compliance Training initiative.

Compliance Programs, simply stated, are a set of internal policies and procedures written and implemented within a health care provider that comply with the law. Effective compliance programs, (1) Enhance organizational performance, (2) Improve quality of care, and (3) Reduce overall cost. The OIG stresses that Compliance programs are way for providers to be proactive instead of reactive. They allow an organization to identify problems on the front-end and correct them before they become systemic and costly.

Compliance Program Guidances (CPGs) put out by the OIG, provide principles to follow when coming up with an effective compliance program that suits a provider's organizational needs. There are seven basic elements to an effective compliance program:

1.Written policies and procedures: have up-to-date policies and procedures and implement them as the organization grows and changes.

2.Designate a Compliance Professional: have a designated Compliance Officer to monitor changes in the law and keep your policies as up-to-date as possible.

3.Effective Training: educate employees about policies and procedures so they are better able to identify a problem, should the occasion arise.

4.Effective Communication: facilitate a way for employees to communicate with the designated compliance professional, such as an open door policy or comment box, as a way to report misconduct and prevent retaliation.

5.Internal Monitoring: conduct regular audits to identify a potential problem and correct it before it becomes costly.

6.Enforcing Standards: ensure effective enforcement of the compliance program within your organization by holding employees responsible for knowing compliance standards.

7.Response to Issues: promptly respond to issues by looking into the problem and taking steps to resolve it.

The HEAT "Compliance Basics" video gives organizations a better insight into what to put into an effective compliance program to be proactive in identifying problems and/or issues, and to resolve them before they become costly.

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January 16, 2012

Inpatient Admission v. Outpatient Observation

When a patient presents at an emergency department of a hospital, they are evaluated by a ER physician to determine whether they should be admitted as inpatient or outpatient observation. An inpatient admission occurs when a person is admitted to a hospital for bed occupancy for purposes of receiving inpatient hospital services. The criteria when evaluating for a patient to be inpatient or outpatient are, but not limited to:

1. The severity of the signs and symptoms exhibited by the patient
2. The medical predictability of something adverse happening to the patient
3. The need for further diagnostic studies to assist in assessing whether the patient should be admitted
4. The availability of diagnostic procedures at the time and location that the patient presents

Sometimes, it may be too difficult to determine an inpatient admission within the first few hours the patient presents with their condition. At which point, the physician and caregivers can elect to utilize observation status. Observation status is used for patients who are presenting with an unknown cause of condition, for further diagnostics or monitoring, or if a patient has a complication from an outpatient procedure, or until the decision is made to admit the patient as inpatient.

Most inpatient admissions usually require a stay of 24-hours or longer, however, there is no specified time frame for a short-stay inpatient admission and inpatient claims are not covered solely on the basis of the length of time that the patient spent as an inpatient. The physician must write an order that describes the reason for the admission.
The change in a patient's status from observation to inpatient is based on the change in clinical status. This change in status must be documented before the patient's discharge and billing submission. Several scenerios may occur:

1. When changing inpatient status to outpatient (observation), services are billed with a condition code 44 on a 13X bill type
2. When changing outpatient status to inpatient, services performed prior to the admission decision are billed as outpatient, while services billed post-inpatient decision are billed as inpatient
3. In the event that an inpatient procedure claim is denied for failure to meet inpatient criteria, and no appeal is planned, the provider may bill professional services using a 12X bill type

"The National Government Services Mobile Medical Review Team, along with other agencies such as the recovery audit contractors (RAC), are currently reviewing inpatient admissions with one day stays with the objective of determining if claims are paid correctly as inpatient admissions (versus observation outpatient claims). Findings are similar throughout the RAC and the Mobile Medical Review Team. Notably, that the majority of one day inpatient stays reviewed do not qualify for inpatient admissions per Medicare guidelines."

According to the CMS IOM Publication 100-08, Medicare Program Integrity Manual, Chapter 6, Section 6.5.2.A:
"Inpatient care rather than outpatient care is required only if the patient's medical condition, safety, or health would otherwise be significantly and directly threatened if care was provided in a less intensive setting."

Providers should clearly document all contributing factors that impacted the decision to admit a patient as an inpatient. Factors such as comorbidities, surgical history, current medical needs (including medications), abnormal vital signs, presenting or persistent symptoms, availability of diagnostic procedures, and the safety of the patient should all be taken into consideration during the provider's decision making period. It is also critical that these decisions be clearly documented in the medical record.

Significantly, although RACs and NGS routinely take the position that "the majority of one day inpatient stays reviewed do not qualify for inpatient admissions per Medicare guidelines," this is not a position supported by Medicare guidelines. In fact, Medicare guidelines expressly indicate that patients expected to need 24 hours or more of care ought to be admitted as an inpatient. Pursuant to the Medicare Benefit Policy Manual, CMS Pub. 100-02, Chapter 1, Section 10, "Generally, a patient is considered an inpatient if formally admitted as inpatient with the expectation that he or she will remain at least overnight and occupy a bed even though it later develops that the patient can be discharged or transferred to another hospital and not actually use a hospital bed overnight. The physician or other practitioner responsible for a patient's care at the hospital is also responsible for deciding whether the patient should be admitted as an inpatient. Physicians should use a 24-hour period as a benchmark, i.e., they should order admission for patients who are expected to need hospital care for 24 hours or more, and treat other patients on an outpatient basis... Admissions of particular patients are not covered or noncovered solely on the basis of the length of time the patient actually spends in the hospital..."

Furthermore, it should be noted that hospitals appealing short stay inpatient denials have experienced success. That is, the Administrative Law Judges ("ALJs") that review these types of cases have not agreed that "the majority of one day inpatient stays reviewed do not qualify for inpatient admissions per Medicare guidelines." During the RAC demonstration program, of those claims reviewed, 64.4 percent of appealed claims were decided in the provider's favor. http://www.cms.gov/Recovery-Audit-Program/Downloads/DemoAppealsUpdate61410.pdf

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January 6, 2012

CMS Halts Anti-Fraud Projects Among Heavy Provider Opposition

Modern Healthcare reports that two anti-fraud demonstration projects announced in November by CMS were delayed after they drew heavy provider opposition.

The first project would require pre-authorization for scooters and power wheelchairs prescribed to Medicare beneficiaries in any of the seven states with the highest concentration of fraud or billing errors, including, California, Michigan, New York, Illinois, North Carolina, Florida and Texas. According to CMS, the process of preauthorization was developed to ensure that medical conditions warrant the proper medical equipment.

Recovery Audit Contractor (RAC) authority expansion is the second anti-fraud project, which allows RACs to review claims before they are paid. The focus is on the seven states with the highest rates of improper payments (California, Michigan, New York, Illinois, Texas, Florida and Louisiana) and claims with high volumes for short inpatient hospital stays in four other states.

CMS plans to notify providers at least 30 days before the delayed projects begin.

For more information about this topic, please contact Abby Pendleton or Jessica Gustafson at (248) 995-8510 or visit The Health Law Partners at www.thehealthlawpartners.com

January 5, 2012

DME RAC Contingency Fee Up 5% to 17.5%

On December 30, 2011, CMS issued an informational bulletin CPI-B 12-01 entitled, Affordable Care Act Program integrity Provisions - Guidance to States - Section 6411(a) - Expansion of the Recovery Audit Contractor (RAC) Program to Medicaid ("Bulletin").

By way of brief background, Section 6411(a) of the Patient Protection and Affordable Care Act ("PPACA") expands the RAC Program to Medicaid and requires, in part, that the fees paid to the contractors be made on a contingent basis. 42 CFR §455.510 provides that States determine the contingency fees to be paid to the Medicaid RACs. 42 CFR §455.510(b)(4) delineates the requirements for paying Medicaid RACs, specifically stating the following:

Except as provided in paragraph (5) of this section, the contingency fee may not exceed that of the highest Medicare RAC, as specified by CMS in the Federal Register, unless the State submits, and CMS approves, a waiver of the specified maximum rate. If a State does not obtain a waiver of the specified maximum rate, any amount exceeding the specified maximum rate is not eligible for FFP, either from the collected overpayment amounts, or in the form of any other administrative or medical assistance claimed expenditure.

According to the Bulletin, CMS increased the contingency fee for recovery of improper payments associated with durable medical equipment ("DME") claims. The contingency fee paid to a Medicare RAC is now 17.5% (up 5%) for DME claims. As such, absent a waiver, the Medicaid RAC contingency fees may not exceed 17.5% for DME claims.

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January 4, 2012

AseraCare Hospice Sued by U.S. Over Alleged False Claims Act Violations

Hospice provider AseraCare is accused of submitting "false and fraudulent" Medicare claims for payment to the U.S. It has been alleged that the hospice has been claiming charges to the Federal Government for those patients who were not admitted to hospice. Hospice care is provided to Medicare recipients who have a prognosis of six months or less to live and need hospice care.

The complaint stems from a whistleblower lawsuit filed by two former employees in 2009; originally filed by Dawn Richardson and Marsha Brown, named United States ex rel. Richardson and Brown v. Golden Gate National Senior Care LLC dba Golden Living et al., No. 2:09-cv-00627 (N.D. Ala.).

The False Claims Act allows private citizens with knowledge of fraud to file whistleblower suits on behalf of the United States and to share in any recovery. The U.S. is seeking three times the damages and a penalty of $5,500 to $11,000 per claim.

According to the lawsuit, Aseracare, owned by Golden Living, (one of the largest nursing home chains in the U.S.) is based in Fort Smith, Arkansas and runs 65 hospice centers in 19 states, including Alabama, Georgia, and Wisconsin. The federal complaint is part of an effort by the Justice Department of Justice (DOJ) and the Office of the Inspector General (OIG) at the U.S. Department of Health, to crackdown on suspected hospice fraud in the Medicare program.

This case is U.S. v. Golden Gate Ancillary LLC, 09-00627, U.S. District Court, Northern District Court of Alabama (Birmingham).

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