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Articles Posted in Health Law

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On March 6, 2017, House Republicans released the much-anticipated American Health Care Act (“AHCA”) bill that would effectively replace the Patient Protection and Affordable Care Act (the “ACA”), which is currently responsible for covering approximately 20 million individuals through a combination of health insurance offered through state-based and federally-run Exchanges and the expansion of healthcare coverage.

One of President Trump’s policy promises has been that “On day one of the Trump Administration, we will ask Congress to immediately deliver a full repeal of Obamacare.” Now that President Trump is in office, and Republicans control the legislative branch of the government, members of Congress are actively working through the legislative process to repeal and replace the ACA.

In fact, the AHCA passed by the House Energy and Commerce Committee and the House Ways and Means Committee on March 9, 2017 and passed the House Budget Committee on March 26, 2017.  The AHCA is proceeding to the Rules Committee, which will set the terms of the debate before the bill goes to the full House.  Upon passage by the House, the bill will move to the Senate under budget reconciliation rules.

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Recent letters from New York’s Medicaid Fraud Control Unit (“MFCU”) to those healthcare providers in New York State who have “percentage of collection” arrangements with their outside billing companies are demanding that such providers refund money paid to them by Medicaid based on MFCU’s determination that such billing arrangements are illegal under the Medicaid law and may also constitute unprofessional conduct under New York’s Education Law.

Healthcare providers, especially those who accept Medicaid, should immediately review their billing vendor service contracts to make sure they do not provide compensation to the billing company that is based on a percentage of collections.

In response to the letters recently sent to New York licensed physicians by MFCU, the Medical Society of the State of New York (MSSNY) is urging its members to amend the fees they pay to their billing companies for Medicaid claim submissions so that they reflect either: (1) payments based on time; or (2) a flat fee for claims submitted.

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On December 7, 2016, the Department of Health and Human Services Office of Inspector General (“OIG”) released a final rule (“Final Rule”) codifying new safe harbors to the Anti-Kickback Statute (“AKS”) and new exceptions to the beneficiary inducement provisions of the Civil Monetary Penalties law (“CMP”). The Final Rule will go into effect on January 6, 2017. The final rule can be found using the following link, https://www.gpo.gov/fdsys/pkg/FR-2016-12-07/pdf/2016-28297.pdf.

The Final Rule creates several new safe harbors to the AKS and new exceptions to the beneficiary inducement provisions of the CMP. Below is a summary of the newly codified Local Transportation Safe Harbor to the AKS.

The Local Transportation Safe Harbor that protects free or discounted local transportation made available by an “eligible entity” to federal health care program beneficiaries as long as the following conditions are met:

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Relief will (eventually) be granted to Medicare appellants.  After a years-long battle, on December 5, 2016, the U.S. District Court of the District of Columbia granted mandamus relief to the American Hospital Association (“AHA”) and its co-plaintiffs.

The Court requested that the parties propose actions the Secretary could take to address the backlog of pending appeals.  The AHA proposed three particular interventions, and, in the alternative, proposed a timetable by which the Secretary would be required to achieve reductions in the backlog.

The three proposed interventions included the following: (1) offer reasonable settlements to certain broad groups of providers and suppliers; (2) for some subset of disputed Medicare claims, defer providers’ duty to repay the Secretary and toll the accrual of interest on those claims awaiting adjudication beyond the statutory deadlines; and (3) impose financial penalties on Recovery Audit Contractors for high reversal rates by Administrative Law Judges (“ALJs”).

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The OIG issued a Policy Statement regarding Gifts of Nominal Value to Medicare and Medicaid Beneficiaries.

Under section 1128A(a)(5) of the Social Security Act (the Act), enacted as part of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), a person who offers or transfers to a Medicare or Medicaid beneficiary any remuneration that the person knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of Medicare or Medicaid payable items or services may be liable for civil monetary penalties (CMPs) of up to $10,000 for each wrongful act. For purposes of section 1128A(a)(5) of the Act, the statute defines “remuneration” to include, without limitation, waivers of copayments and deductible amounts (or any part thereof) and transfers of items or services for free or for other than fair market value. The statute and implementing regulations contain a limited number of exceptions.

Prior to issuing this Special Advisory Bulletin, the OIG interpreted the prohibition to permit Medicare or Medicaid providers to offer beneficiaries inexpensive gifts (other than cash or cash equivalents) or services without violating the statute in a 2002 Special Advisory Bulletin.  For enforcement purposes, inexpensive gifts or services were said to be those that have a retail value of no more than $10 individually, and no more than $50 in the aggregate annually per patient.

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The New York State Office of the Medicaid Inspector General (OMIG) issued guidance on its requirements for Medicaid compliance, effective October 26, 2016.  This Compliance Program Review Guidance (“Guidance”) will assist the Medicaid Required Provider (“Required Provider”) community in developing and implementing compliance programs that meet the requirements of Social Services Law Section 363-d (“SSL 363-d”) and title 18 New York Codes of Rules and Regulations Part 521 (“Part 521”).

For the purposes of this Guidance, “Required Provider” means a provider meeting any of criteria listed: (a) persons subject to the provisions of articles twenty-eight or thirty-six of the public health law; (b) persons subject to the provisions of articles sixteen or thirty-one of the mental hygiene law; or (c) other persons, providers or affiliates who provide care, services or supplies under the medical assistance program or persons who submit claims for care, services, or supplies for or on behalf of another person for which the medical assistance program is or should be reasonably expected by a provider to be a substantial portion of their business operations.

The comprehensive Guidance addresses all requirements under each of the eight program elements. Invariably in compliance program guidance there are seven key elements of an effective compliance program which are as follows: written policies and procedures, compliance oversight, effective training/ education, effective communication, internal monitoring and auditing, enforcement of standards and corrective action with the OMIG Guidance adding an eight element in the form of a policy on non-intimidation and non-retaliation.

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Following a lengthy dispute process and significant delays, on October 31, 2016, CMS awarded new Medicare Fee-for-Service RAC contracts to the following contractors:

  • Region 1 – Performant Recovery, Inc.
  • Region 2 – Cotiviti, LLC
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Private practitioners who wish to remain independent, but who are struggling to survive because of decreased third-party reimbursements and increasing overhead expenses, are being aggressively courted by various business entities that will analyze-often for free-whether the concierge model of medicine, or some variation thereof, might add significant profitability to the practice’s bottom line.

The earliest concierge models generally required patients to pay an annual membership fee in order to receive enhanced accessibility to their physician. In return, the physician would agree to limit his patient base to, say, 600 patients. In this way, the physician would conceptually be able to spend more time with each individual patient, yet still maintain (if not increase) his historic revenue stream. This meant that those patients who chose not to participate in the physician’s new concierge program would be required to leave the practice in order to find another physician to care for their healthcare needs.

In the past, many patients who have been approached to transition to a physician’s concierge practice chose not to do so because they did not perceive that the enhanced accessibility to their physician was worth the cost of the annual membership fee. Oftentimes, they were already able to get same day or next day appointments, and prompt return phone calls from their doctor so, the thought went, why pay all that money? What does one get in return?

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Medicare has developed a new incentive payment framework (“MACRA”) which is intended to fundamentally change the way in which the Federal Government evaluates and pays for the healthcare services that are provided to Medicare beneficiaries. It is designed to move us away from a volume-based “fee-for-service” reimbursement system to one which emphasizes the quality of the care provided. The new reimbursement program is scheduled to begin on January 1, 2017.

To avoid penalties and qualify for bonuses under MACRA, physicians must participate in the new Merit Based Incentive Payment System (MIPS, for short) unless they have a substantial amount of their revenue at risk under a qualifying alternative payment model (“APM”) — and the vast majority of physicians do not.

Physicians were supposed to start reporting performance data next year, and many complained that smaller practices in particular wouldn’t be ready. The framework calls for them to choose from an array of measures in four categories: 1. quality; 2. resource use; 3. clinical practice improvement; and 4. meaningful use of electronic health records.

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On July 28th, 2016, researchers from Harvard, in conjunction with researchers from several hospitals, published a study in the BMJ which found that the implementation of new electronic health records (EHRs) systems does not have material repercussions on patient care in hospitals.

The study observed 17 hospitals implementing new EHRs, along with a control group of 399 hospitals in the same hospital referral region. Researchers looked at 6-month periods both before and after this implementation, and found that 30-day mortality and adverse safety event rates did not vary significantly. There was an unadjusted decrease in 30-day readmission rates, from 19.9% to 19.0%, however, the researchers confirmed that “there was no significant change in any outcome between pre-implementation and post-implementation periods.”

Despite increasing alarm over patients’ safety  after hospital-wide transitions to EHR systems, it appears that hospitals are able to overcome any disruptions associated with the transition, with no overall negative effect on short-term inpatient mortality, adverse safety events, or higher rates of hospital readmissions.

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