January 2013 Archives

January 17, 2013

The Office for Civil Rights has just released the long awaited HIPAA "Omnibus Rules"

Stay tuned for many further developments - The Health Law Partners will be providing numerous valuable educational resources for its clients.

The announcement and links are below.

January 17, 2013

The U.S. Department of Health and Human Services (HHS) has announced a new rule to strengthen the privacy and security protections for health information established under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The final omnibus rule greatly enhances a patient's privacy protections, provides individuals new rights to their health information, and strengthens the government's ability to enforce the law.

The changes in the final rulemaking provide the public with increased protection and control of personal health information. The changes announced today expand many of the privacy and security requirements to business associates that receive protected health information, such as contractors and subcontractors. Business associates may also be liable for the increased penalties for noncompliance based on the level of negligence up to a maximum penalty of $1.5 million. The changes also strengthen the Health Information Technology for Economic and Clinical Health (HITECH) Breach Notification requirements by clarifying when breaches of unsecured health information must be reported to HHS.

Individual rights are expanded in important ways. Patients can ask for a copy of their electronic medical record in an electronic form. When individuals pay by cash they can instruct their provider not to share information about their treatment with their health plan. The final omnibus rule sets new limits on how information is used and disclosed for marketing and fundraising purposes, and prohibits the sale of an individual's health information without their permission.

The final omnibus rule is based on statutory changes under the HITECH Act, enacted as part of the American Recovery and Reinvestment Act of 2009, and the Genetic Information Nondiscrimination Act of 2008 (GINA) which clarifies that genetic information is protected under the HIPAA Privacy Rule and prohibits most health plans from using or disclosing genetic information for underwriting purposes.

The Rulemaking announced today may be viewed in the Federal Register at https://s3.amazonaws.com/public-inspection.federalregister.gov/2013-01073.pdf.

The HHS Press Release can be found on the HHS News page: http://www.hhs.gov/news/.

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January 15, 2013

CMS Transmittals: Medicare Claims Processing Manual, 100-04, Trans. No. 2634, January 11, 2013--Internet Only Manual (IOM) Update to Payment for Medical or Surgical Services Furnished by CRNAs. This CR rescinds and fully replaces CR 8027, (Jan. 15, 2013)

CMS released Transmittal No. 2634 to update the Medicare Claims Processing Manual in connection with the changes to payment for medical and surgical services furnished by CRNAs. In particular:

140.4.3 - Payment for Medical or Surgical Services Furnished by CRNAs
(Rev.2634, Issued: 01-11-13, Effective: 01-01-13, Implementation: 02-12-13)
B3-16003.H

Payment shall be made for reasonable and necessary medical or surgical services furnished by CRNAs if they are legally authorized to perform these services in the state in which services are furnished. Payment is determined under the physician fee schedule on the basis of the national physician fee schedule conversion factor, the geographic adjustment factor, and the resource-based relative value units for the medical or surgical service.

For the entire document click here.

Continue reading "CMS Transmittals: Medicare Claims Processing Manual, 100-04, Trans. No. 2634, January 11, 2013--Internet Only Manual (IOM) Update to Payment for Medical or Surgical Services Furnished by CRNAs. This CR rescinds and fully replaces CR 8027, (Jan. 15, 2013)" »

January 8, 2013

American Sleep Medicine Agrees to Pay $15.3 Million for Improperly Billing Sleep Tests to the Government

According to the US Department of Justice, Florida-based American Sleep Medicine LLC has agreed to pay the government approximately $15,300,000 to resolve allegations that it billed Medicare and other government payors for diagnostic sleep services that were not eligible for payment. The payment settles a qui tam or False Claims Act lawsuit brought against the company by relator Daniel Purnell.

The United States asserted that American Sleep submitted false claims to that Medicare and TRICARE programs during an eight year period from January 1, 2004 through December 31, 2011. The lawsuit alleges that the claims were false because the company performed sleep tests with technicians who did not hold the required credentials or certifications to perform sleep testing under Medicare guidelines. The government claimed that American Sleep knew it was billing tests with improperly credentialed technicians when it billed the government for these tests.

The False Claims Act allows private citizens with knowledge of fraud to bring civil actions on behalf of the United States and share in any recovery. Relator Daniel Purnell received $2,601,228 as part of the settlement.

American Sleep is headquartered in Jacksonville, Florida and owns and operates 19 diagnostic sleep testing centers in the states of Alabama, California, Delaware, Florida, Illinois, Indiana, Kansas, Kentucky, Maryland, Missouri, New Jersey, Tennessee, Texas and Virginia.

In addition to the $15.3 million payment, American Sleep entered into a five-year Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services. This agreement requires the company to constantly monitor its sleep testing activities with internal and external reviewers and make progress reports to the government.

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January 4, 2013

HHS Announces First Settlement for Breach of HIPAA Privacy Rule Involving Fewer Than 500 Individuals

A press release from the U.S. Department of Health and Human Services ("HHS") published on January 2, 2013 announced that the Department had reached its first settlement with a covered entity for a breach of the Health and Information Portability and Accountability Act ("HIPAA") Privacy Rule affecting fewer than 500 individuals. The settlement agreement with the Hospice of North Idaho ("HONI") was the result of an investigation into HONI's privacy practices initiated after the entity self-reported to the HHS Office of Civil Rights ("OCR") that a laptop containing the unencrypted electronic protected health information ("ePHI") of 441 individuals was stolen in June of 2010.

During its investigation, OCR found that HONI had failed:

• To conduct an adequate risk analysis of the unencrypted ePHI on portable devices that HONI used for the entity's field work;
• To subsequently adopt, implement, and maintain appropriate security measures to ensure the confidentiality of the ePHI on the portable devices that it used to create, maintain, and transmit the ePHI; and
• To document the decisions it made with regards to security measures.


As a result of the settlement, HONI agreed to pay HHS $50,000 and enter into a Correct Action Plan. While the settlement resolves the investigation under the privacy and security rule, it does not absolve HONI of liability under other provisions that may apply such as section 1177 of the Social Security Act for knowing or intentional releases of PHI.

For breaches involving 500 or more individuals, the Health Information Technology for Economic and Clinical Health (HITECH) Breach Notification Rule requires covered entities to report the breach within 60 days after the discovery. Smaller breaches under 500 individuals, such as the one involving the settlement with HONI, must be reported to the Secretary on an annual basis.

Given the increased enforcement activity in the HIPAA area, providers are well advised to ensure that they have appropriate HIPAA privacy and security measures in place.

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January 4, 2013

Medicare Doc-Fix Offsets Include Reduced Payments for Advanced Imaging

As part of the deal to avert the fiscal cliff that was passed on New Year's Day, Congress extended the 2012 Physician Fee Schedule ("PFS") through December 31, 2013, effectively freezing implementation of the Sustainable Growth Rate ("SGR") formula that would have decreased Medicare physician payments by 26.5%. To pay for the cost of the SGR freeze, estimated at approximately $25.2 billion, Congress included several offsets that will reduce payments to other providers, most notably to Hospitals and for end stage renal disease payments.

In addition, as one of a number of smaller offsets, the bill seeks to save approximately $800 million by increasing the Equipment Utilization Rate ("EUR") for advanced imaging services from 75% to 90%. This change is designed to account for more efficient use of imaging equipment and will take effect as part of the 2014 PFS on January 1, 2014. CMS has previously defined "advanced imaging" as equipment costing $1 million or more.

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January 4, 2013

Congress enacts "Doc Fix" as part of a Last Minute Bill to avoid the Fiscal Cliff

Late in the evening New Year's Day, the House of Representatives passed a Senate Bill that avoids the fiscal cliff by making middle-class tax rates permanent and postponing automatic spending cuts for two months. As part of the deal, Congress included a Medicare "Doc Fix" necessary to avert a 26.5% cut to Medicare physician payments in 2013. The 26.5% cut was based on the the Sustainable Growth Rate ("SGR") formula that was originally enacted in 1997 to help balance the Federal budget and designed to reign in the growth of Federal health spending. While several attempts to find a permanent solution have been made, they have been unsuccessful and Congress has relied on the temporary Doc Fixes every year since 2003.

As part of the deal passed Tuesday, Congress avoided the 26.5% cut by extending 2012 fee schedule rates until December 31, 2012. The $25.1 billion cost of the one year patch was offset by reductions to other providers, namely to Hospitals, dialysis clinics, and pharmacies. Examples of Some key offsets include:

• Recouping past overpayments to Hospitals based on how the Hospitals coded services under the Medicare Severity Diagnosis Related Groups ("MS-DRGs") payment system;
• Re-pricing the cost of end-stage renal disease payments;
• Reducing payments for multiple therapy procedures performed the same day;
• Reducing the Equipment Utilization Rate for Advanced Imaging Equipment.
• Requiring competitive bidding for diabetes testing strips sold at retail pharmacies; and
• Eliminating all funding for the Medicare Improvement Fund.

Congress also extended several Medicare and Medicaid Payment policies that were set to expire December 31, 2012, including lower Medicaid payments to hospitals servicing a large number of uninsured or low-income beneficiaries ("Disproportionate Share Hospitals"), continuing the physician work index that accounts for differences in geographic resource costs, and reductions in payments for some ambulance services.

If you have questions regarding this issue or other related issues, please contact the Health Law Partners at (248) 996-8510, or visit the HLP website.

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January 3, 2013

New York ACO Law Amended

New York State Governor Andrew Cuomo recently signed into law legislation that provides significant amendments to the state's law governing accountable care organizations ("ACOs"). The new law became effective on October 3, 2012.

New York's ACO law, enacted in March 2011 as a demonstration program, provided that an entity that wants to operate as an ACO in the state must obtain a certificate of authority (a "CA") from the NYS Commissioner of Health. The Commissioner was to issue regulations establishing the criteria for the issuance of a CA and was limited to issuing no more than 7 CAs. To date, the Commissioner has not issued any such regulations for the issuance of CAs and no CA has been issued to any applicant to operate as an ACO in NY. Moreover, there has been uncertainty as to whether the law, including the requirement to obtain a CA, would apply to ACOs that are approved by CMS to participate in the Medicare Shared Savings Program.

The new state legislation amends the ACO law to remove the 7 CA limit and requires the Commissioner to establish a program to promote and regulate ACOs. In addition, an ACO approved by CMS may apply for a CA as a "Medicare-only ACO" and the Commissioner "shall" issue such certificate to an entity that documents its status as approved by CMS. The CA will apply only to the Medicare-only ACO's actions in relation to Medicare beneficiaries under its authorization from CMS.

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January 2, 2013

OIG Advisory Opinion Provides Guidance on Electronic Health Record Connectivity Arrangements

On December 19, 2012, The Office of Inspector General ("OIG") published an advisory opinion ("OIG AO 12-20") wherein the agency concluded it will not impose sanctions under the Anti-kickback Statute ("AKS") on a Hospital ("Hospital") for its proposal to provide a free electronic interface ("the Interface") to community physicians and physician practices to allow electronic transmission of orders and results for laboratory and diagnostic services. The OIG found that the free access to the Interface did not constitute remuneration and therefore the Interface did not violate the AKS.

Under the proposal the Hospital would:

1) Provide the Interface free of charge to any physician that requested it;
2) Provide support services, through a contractor, to maintain and update the Interface; and
3) Limit the physician's use of the Interface to transmitting orders for and receiving results from certain laboratory diagnostic services provided by the Hospital.

Physicians and practices participating in the arrangement would remain responsible for all aspects of acquiring and maintaining their own EHR system, including any installation and maintenance costs.

As a threshold question, the OIG considered whether the Interface constituted remuneration. Because the Interface was limited to transmitting orders and receiving results for laboratory and diagnostic services, it was integrally related to the Hospital's services and, therefore, would have no independent value to the referring Physician. Thus, the Interface was not remuneration and would not result in sanctions under the AKS.


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