February 2012 Archives

February 24, 2012

CMS Releases Email Alert Regarding Advanced Diagnostic Imaging Accreditation

On February 23, 2012, CMS issued an email notification to all Fee-for-Service ("FFS") providers, which states the following:

CMS has received reports that providers are receiving denials for advanced diagnostic imaging (ADI) services they are accredited to perform. We have taken action to correct the situation. CMS has instructed all contractors to review each ADI claim denial, and reprocess those claims that were deemed to be incorrectly denied in a timely manner. Providers do not need to take any action in this situation.

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February 21, 2012

CMS Revises Interpretative Guidelines for Rehabilitation in Outpatient Hospitals

In response to concerns raised by the American Physical Therapy Association (APTA) and other associations, the Centers for Medicare and Medicaid Services (CMS) has revised interpretative guidelines (Transmittal 72) to eliminate the requirement that rehabilitation services furnished in outpatient hospital settings be ordered by a practitioner with medical staff privileges.

The new guidance issued to the State Survey Agency Directors on February 17, 2012 is effective immediately and includes the following language:

Requirements for Ordering Hospital Outpatient Services: Outpatient services in hospitals may be ordered (and patients may be referred for hospital outpatient services) by a practitioner who is:
• Responsible for the care of the patient;
• Licensed in, or holds a license recognized in the jurisdiction where he/she sees the patient;
• Acting within his/her scope of practice under State law; and
• Authorized by the medical staff to order the applicable outpatient services under a written hospital policy that is approved by the governing body. This includes both practitioners who are on the hospital medical staff and who hold medical staff privileges that include ordering the services, as well as other practitioners who are not on the hospital medical staff, but who satisfy the hospital's policies for ordering applicable outpatient services and for referring patients for hospital outpatient services.

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February 21, 2012

Congress Passes Legislation to Avoid SGR Cuts for Ten Months

The House and Senate passed a revised version of H.R. 3630, the Middle Class Tax Relief and Job Creation Act of 2012, which guarantees that physicians will avoid a 27.4 percent cut in Medicare reimbursement for an additional ten months. Instead of the schedule cuts which were expected to be enacted on March 1, physician payment rates will be frozen at their current level through December 31, 2012. In addition to addressing the latest cuts accredited to the flawed Sustainable Growth Rate (SGR) formula, the 20 members of Congress participating in the Conference Committee were tasked with developing a bill to extend unemployment insurance benefits and the payroll tax holiday. The total cost of the proposal is estimated at $150 billion with the "doc fix" portion of the legislation expected to cost approximately $18 billion.

Recognizing the key role Radiology plays in the health care delivery process, federal lawmakers did not include any cuts to diagnostic imaging services within H.R. 3630. Lawmakers ultimately settled on another, short-term SGR "patch" because the high cost of a permanently repealing the flawed formula is estimated to cost $319 billion.

Ultimately, the members of the Conference Committee chose to keep the scope of H.R. 3630 focused on preventing the SGR cuts, as well as extending unemployment insurance benefits and the payroll tax holiday. As a result, H.R. 3269, the Diagnostic Imaging Services Access Protection Act, was not added to the final legislation passed by the House and Senate on Friday, Feb. 17. Yet, H.R. 3269 and the effort to block the 25 percent multiple procedure payment reduction (MPPR) to the professional component (PC) of advanced diagnostic imaging services continues to gain tremendous momentum in the House of Representatives and now has generated 196 bipartisan cosponsors.

Continue reading more on SGR cuts...

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February 20, 2012

CMS Issues Proposed Rule on Reporting and Refunding Medicare Overpayments

Section 6402(a) of the Patient Protection and Affordable Care Act (PPACA) established a new section in the Social Security Act mandating that providers timely report and return Medicare overpayments. Since PPACA's passage, the healthcare community has awaited clarification on several ambiguities contained in the statute.

On February 16, 2012, CMS released a proposed rule implementing PPACA's requirements regarding the report and return of Medicare overpayments (77 Fed. Reg. 9,179). The proposed rule applies only to Part A and Part B providers and suppliers; further guidance for other industry stakeholders, including Medicaid managed care organizations, Medicare Advantage organizations, and Prescription Drug Plan sponsors, will be issued separately.

Under the proposed rule, CMS does not vary the PPACA statutory definition of an "overpayment" - any funds that a person receives or retains under the Medicare program to which the person, after applicable reconciliation, is not entitled. CMS gives examples of situations that constitute an overpayment, such as payments for non-covered services, payments in excess of allowed amounts, errors and non-reimbursable expenditures in cost reports, and receipt of funds from Medicare when another party is primarily liable. Under the proposed rule, overpayments must be reported and returned within sixty (60) days of identification of the overpayment, or, when applicable, the date the corresponding cost report is due, whichever is later. Throughout the proposed rule, CMS provides distinctions and illustrations differentiating between providers who are refunding fee-for-service overpayments, and providers who are being reimbursed based on a cost report.

The proposed rule states that an overpayment is deemed "identified" when the provider or supplier has actual knowledge of, or acts in reckless disregard or deliberate ignorance of, the existence of the overpayment. Implicit in this meaning of "identification" is the expectation for providers or suppliers to perform reasonable self-monitoring activities aimed at detecting possible overpayments and diligently investigating and responding to any related notification or inquiries. Additionally, the proposed rule imposes a ten-year lookback period for identifying overpayments.

Failing to address industry concerns and comments, the proposed rule is silent as to whether the "actual knowledge" standard refers to when the provider identifies the existence of an issue, or whether "actual knowledge" exists when the amount of the overpayment is quantified.

Providers and suppliers are instructed to follow the existing "self-reported overpayment refund process" of their respective Medicare contractor, which includes the submission of a written report containing information on the discovery of the error, reason for the overpayment, corrective actions taken, existence of any corporate integrity agreement with the OIG, and statistical sampling methodology used to determine the overpayment. Under the proposed rule, CMS has made it explicit that, when a provider enters into a self-disclosure process under either the Stark Law or the Anti-kickback Statute, the overpayment disclosure/refund time-frame is tolled with respect to any overpayments that are associated with the Stark or AKS violation. Failure to report and return an overpayment within the established timeframes will potentially subject the provider to liability under the False Claims Act and the Civil Monetary Penalties Law.

CMS anticipates the report and refund of overpayments by an estimated 125,000 Medicare providers and suppliers annually, each of whom is expected to have three to five overpayments on average. This amounts to between approximately 375,000 and 625,000 overpayments processed each year for Part A and Part B providers and suppliers alone.

Commentators have already begun to weigh-in regarding the proposed rule, deeming it an "increased burden" on providers. The deadline for submitting comments on the proposed rule is April 16, 2012.

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February 14, 2012

CMS Releases Details of Fee-for-Service Recovery Audit Prepayment Review Demonstration and Prior Authorization Demonstration

On February 7, 2012, The Centers for Medicare and Medicaid Services (CMS) released a Request for Comments regarding two demonstration programs it intends to conduct.

The first, the Recovery Audit Prepayment Review Demonstration, will allow CMS and its agents to request additional documentation, including medical records, to support submitted claims. In Chapter 3 of the Program Integrity Manual, additional documentation includes any medical documentation, beyond what is included on the face of the claim that supports the item or service billed. When a contractor conducts a complex medical review, they specify the documentation they require in accordance with Medicare's rules and policies. This supporting information and documentation may be requested by CMS and its agents on a routine basis in instances where diagnoses on a claim do not clearly indicate medical necessity, or if there is suspicion of fraud.

The second, Prior Authorization of Power Mobility Devices (PMD) Demonstration, will allow the applicable documentation that supports a claim to be submitted prior to delivery of the item. Relevant documentation for review will be submitted before the item is delivered or services rendered. This demonstration will be conducted in California, Florida, Illinois, Michigan, New York, North Carolina and Texas. A prior authorization request can be completed by the ordering physician or treating practitioner and submitted to the appropriate Durable Medical Equipment Medical Administration Contractor (DME MAC) for initial decision. The supplier may also submit the request on behalf of the physician or treating practitioner. The "submitter" will submit to DME MAC a request for prior authorization and all relevant documentation to support Medicare coverage of the PMD item.

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February 13, 2012

Did CVS Go Too Far?

As we reported in a previous blog entry, HHS recently encouraged prescription drug plans to delay the payment of suspicious claims and to take proactive measures to prevent prescription drug fraud such as requiring pre-authorizations and limiting payment of controlled substances beyond a thirty-day supply . Now, it seems that CVS has decided to take matters further. A spokesperson for CVS has announced that the pharmacy sent out letters to a small number of Florida physicians informing them that the prescriptions they write for Schedule II narcotics will no longer be filled at any of their locations due to allegations of criminal wrongdoing. The spokesperson was quoted in his emailed announcement as saying, "While we regret any inconvenience this may cause for our customers, we treat the dispensing of controlled substances with utmost care and seriousness. CVS/pharmacy is unwavering in its compliance and measures to prevent drug abuse and keep controlled substances out of the wrong hands." Five of the physicians on the list have been arrested on healthcare related charges, but none of them have been resolved up to this point. The Florida Department of Health has also recommended that several of the other physicians on the list have their licenses suspended or revoked.

This is the first time a major pharmacy chain has publicly taken this kind of action. CVS will not state their motive behind taking this action. Some are applauding CVS' actions for attempting to reduce the amount of prescriptions that are being obtained fraudulently. Others are criticizing CVS for "jumping the gun" and treating these physicians as criminals prior to any conviction or final resolution.

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February 10, 2012

OIG Alerts Physicians to Exercise Caution When Reassigning Their Medicare Payments

OIG recently issued an alert for physicians who reassign their right to bill the Medicare program and receive Medicare payments by executing the CMS-855R application, which says they may be liable for false claims submitted by entities to which they have reassigned their Medicare benefits.

OIG has advised physicians to use increased scrutiny of entities prior to reassigning their Medicare payments. Physicians should cautiously consider entities to which they choose to reassign their Medicare payments and ensure that the entities are legitimate providers or suppliers of health care items and services.

Recently, OIG has reached settlements with eight physicians who violated the Civil Monetary Penalties Law by causing the submission of false claims to Medicare from physical medicine companies. In exchange for Medical Directorship positions, physicians reassigned their Medicare payments to various physical medicine companies. There was evidence that the services the physical medicine companies claimed the physicians performed were not actually performed or we not performed as billed.

The deficiency of the physicians to monitor the services billed using their reassigned provider number resulted in individuals with little to no medical background serving as physical therapy "technicians." These unlicensed "technicians" including retail cashiers and massage therapists, rendered unsupervised in-home physical therapy services to Medicare and Medicaid beneficiaries. The physical medicine companies falsely billed Medicare using the physicians' reassigned provider numbers as if the physicians personally rendered the services or directly supervised a "technician" rendering the services. A number of the owners and operators of the physical medicine companies were criminally prosecuted. OIG determined that the physicians were an integral part of the scheme a pursued their liability under the Civil Monetary Penalties Law.

Note: A physician who reassigns to any entity his or her right to bill the Medicare program and receive Medicare payments has the right to access the entity's billing information concerning the services the physician is alleged to have performed and for which the entity billed Medicare. Physicians have unrestricted access to claims submitted by an entity for services that the entity billed using the physicians' reassigned provider numbers to provide added assurances that the services for which the entity billed Medicare were, in fact, performed and were performed as billed.

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February 8, 2012

RAC Audits: OIG Releases Recovery Act Oversight Monthly Reports

On February 8, 2012, the Office of Inspector General published the November and December Recovery Act Oversight Monthly Reports. The most recent figures indicate that in November 2011, $12,589,859.00 dollars of Recovery Act funds were used on Recovery Audit activities. In December 2011, $13,161,164.00 dollars of Recovery Act funds were used on Recovery Audit activities.

The purpose of the Recovery Act Oversight initiative is to assess whether HHS is using Recovery Act funds in accordance with legal and administrative requirements and is meeting the accountability objectives defined by the Office of Management and Budget (OMB).

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February 1, 2012

BREAKING NEWS: The HLP Welcomes New Attorneys and Opens Office in Lake Success, NY

BREAKING NEWS: The HLP Welcomes New Attorneys and Opens Office in Lake Success, NY

The Health Law Partners proudly announces that a group of prominent attorneys, widely considered among the top-tier of health care lawyers in NY, are joining our firm effective February 1. In addition to our Southfield, MI, Atlanta, GA and Manhattan offices, they will be opening our second New York office in Lake Success.

The Health Law Partners would like to formally welcome:

Joel M. Greenberg, Esq. - Mr. Greenberg has counseled health care professionals for decades on countless legal and business issues that confront them every day. Mr. Greenberg practices in all areas of health law. He assists providers in preparing their employment, partnership, and shareholder agreements and serves as a guide navigating clients through sensitive fraud, abuse, self-referral, and professional misconduct laws. Mr. Greenberg is a trusted advisor for providers in every phase of the life cycle of their professional needs - from choosing the best form of entity in which to practice, understanding their malpractice insurance options, in the purchase, sale, or dissolution of their professional practice and everything in between. Mr. Greenberg is named co-author/editor of The Legal Manual for New York Physicians(2012, Third Edition) which is published by the New York State Bar Association (NYSBA).

Claudia Hinrichsen, Esq.- Ms. Hinrichsen has over two decades of experience representing health care clients. Ms. Hinrichsen practices in all areas of health law including fraud and abuse, corporate compliance, transactional arrangements, patient-related legal issues, and HIPAA compliance. She has published numerous professional articles and frequently lectures before hospitals, medical groups, and professional associations.

Ron Lebow, Esq..- Mr. Lebow practices in all areas of health law, including business, contract, corporate and related matters. He has extensive experience in drafting and negotiating agreements and structuring arrangements for physicians, dentists, podiatrists, chiropractors and other health care professionals and facilities, and providing strategic regulatory and compliance guidance in connection with such arrangements. Mr. Lebow has been appointed Chair of the New York City Bar Association's Health Law Committee commencing in the Fall of 2011 to serve for a three year term. Mr. Lebow also co-authored The Legal Manual for Physicians (2012, Third Edition) and Guardianship Practice in New York State, each published by the New York State Bar Association (NYSBA).

Lori LaSalle, Esq. -Ms. LaSalle practices in all areas of health law and represents a vast array of clients including hospitals, nursing homes, independent practice associations (IPAs), Federally Qualified Health Centers (FQHCs), and physician practices. With two decades of experience practicing law, she counsels providers on issues such as corporate compliance, fraud and abuse, HIPAA, EMTALA, human-subject research, and advanced directives. In addition, she assists providers with a number of transactions including commercial and government audits, managed care contracting, drafting and negotiating services and software agreements and physician arrangements. She is general counsel to the Long Island Patient Information Exchange and a member of the North Shore-LIJ Health System Institutional Review Board. Ms. La Salle also co-authored The Legal Manual for Physicians (2012, Third Edition).

Gina Dolan, Esq..- Ms. Dolan counsels providers in a variety of legal matters, including licensing, billing, and claims issues, health insurance audits, managed care contracting, regulatory compliance, and fraud and abuse. She has experience in assisting clients with implementation of corporate compliance and HIPAA compliance programs and training for physician practices, hospitals, billing companies, and nursing homes. Ms. Dolan has counseled providers on the formation and development of independent practice associations and assisted clients with Medicare, Medicaid, and third-party reimbursement issues.

In our decision to strengthen and expand our presence in the New York health care market, HLP is building upon and enhancing the fundamentals that it believes to be the core of its client relationships: providing the highest level of scholarship and mastery of health care law, responsiveness, cost-sensitivity and attentiveness to our clients' business objectives.

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