Georgia's Trusted Healthcare
& Medical Provider Attorneys

New Medicare Prior Authorization Process For Durable Medical Equipment In 2 Weeks

DMEStarting February 29, 2016, certain Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) must go through a prior authorization process in order to be approved for Medicare payment.

Pursuant to a Final Rule published December 30th, the Centers for Medicare and Medicaid Services (CMS) will soon require that DMEPOS items included on a Required Prior Authorization List (RPA List) undergo a review prior to being supplied to beneficiaries. The RPA List is to be updated on an annual basis and published in the Federal Register.

Providers are to initiate the process by submitting all relevant documentation for review by CMS or its contractors. After the review, CMS will provide a decision based on the documentation submitted. A claim submitted with a “provisional affirmation” decision will be paid so long as all other requirements are met. A claim submitted with a “non-affirmation” decision or a claim for items that did not undergo the mandatory prior authorization process will be denied. If a provider receives a “non-affirmation” decisions, a prior authorization request can be resubmitted.

CMS has stated that Medicare will make a reasonable effort to render an initial prior authorization determination within 10 business days. An expedited review process will also be available in certain circumstances.

The commentary published with the Final Rule states that a denial of prior authorization for DMEPOS coverage is not an appealable decision because it is not an initial determination.

CMS plans to publish sub-regulatory guidance to implement the Rule.

If you would like to review the Final Rule it is available here.

If you have any questions about the Final Rule or need assistance navigating through the prior authorization process please contact Danielle Hildebrand at dhildebrand@jeylaw.com or 678.325.3872.

“Two Midnight Rule” Clarifies Reimbursements For Hospitals

Hospital ReimbursementIn 2013, the Centers for Medicare and Medicaid Services (CMS) announced the so-called two-midnight rule in an attempt to clarify when a patient should be designated to inpatient status versus outpatient status.

Hospitals are paid differently for treating inpatients versus outpatients. The rule addressed when surgical procedures, diagnostic tests and other treatments are generally considered appropriate for inpatient hospital admission under Medicare Part A.

The two-midnight rule attempts to set a bright line test: only patients that doctors expect to spend two nights in the hospital are considered inpatient.

Although the rule was set to take effect on October 1, 2015, CMS recently announced that it would postpone the enforcement on inpatient status reviews. The rule will now go into effect December 31, 2015.

Additionally, CMS proposed that it will consider stays a physician expects to last less than two midnights to be an inpatient admission relying on the judgment of the physician and the documentation justifying the stay on a case-by-case basis. For many in the healthcare industry, this appears to be a small step in the right direction.

Lastly, CMS announced that it will shift the responsibility of educating physicians and enforcement of the two-midnight rule to quality improvement organizations (QIO) from recovery auditors.

If you have questions about the Two Midnight Rule, please contact Kimberly Sheridan at ksheridan@jeylaw.com or 678-708-4702

CMS Considers ICD-10 Test Run A Success

ICD 10 Success

With less than a month to go until the October 1 deadline for implementation of ICD-10 codes, many providers are nervous and wary of the readiness of the Centers for Medicare and Medicaid Services (CMS) systems.

According to CMS, there is little to worry about. CMS recently released the results of its July ICD-10 end-to-end testing and announced a success rate of 87%.

Approximately 1,200 voluntarily providers participated in the test.  

  • Of the 29,286 test claims received, 25,646 were accepted. (This is an 87% success rate.)
  • 1.8% of the test claims were rejected due to invalid submission of ICD-10 diagnoses or procedure codes.
  • 2.6 % of test claims were rejected due to invalid submission of ICD-9 diagnosis procedure code.  
  • Zero rejects due to front-end CMS issues.

If you are a provider, these statistics should be comforting. However, the 13% error rate is still a cause for concern. Add that number to that fact that the ICD-10 codes will have 68,000 diagnosis and procedure codes FIVE times the number of ICD-9 codes, and it can be a bit overwhelming.

Remember that that upon implementation, ICD-10 codes will be required for all HIPAA covered entities.  

Please contact Kimberly Sheridan at ksheridan@jeylaw.com or 678-708-4702 if you have questions about ICD-10 implementation.

Medicare & Medicaid Deadline For Overpayment Clarified

60 Days Medicaid and Medicare RuleFederal Court Finds Sixty Day Rule Deadline Begins to Run When Put on Notice of Potential Overpayments

When the Affordable Care Act (ACA) was passed, a new requirement for reporting overpayments was created. This new obligation, often referred to as the ‘Sixty Day Rule’ requires providers who receive an overpayment of Medicare or Medicaid funds to “report and return” the overpayment to the government.

According to the statute, an overpayment must be reported and returned within sixty days of the “date on which the overpayment was identified.” Failing to do so is a violation of the False Claims Act.

Although Centers for Medicare and Medicaid Services (CMS) has provided some guidance on when an overpayment is “identified” within the context of Medicare, now a New York Federal Court has weighed in on the meaning and application of the ACA sixty-day rule as it applies to Medicaid.

In a case before a New York Federal Court, the U.S. Department of Justice asserted that a hospital improperly billed Medicaid in 2009 and 2010 and violated the FCA by delaying the return of overpayments. Such overpayments were the result of a billing system software glitch. The case was brought with the assistance of a former employee who had investigated the issue. Such employee had provided to hospital administrators a list of around 900 claims that were likely affected by the glitch which was subsequently ignored by the hospital.

The Court had to decide how to define the key term in the statute – “identified.” In the case, the former employee had not conclusively proven the identity of any overpayments. As it turned out, hundreds of the claims he listed had not actually been overpaid. However, he did recognize nearly five hundred claims that did in fact turn out to be overpaid as worthy of attention.

After looking at the legislative history and purpose, the Court concluded that the 60-day clock begins ticking when a provider is put on notice of a potential overpayment, rather than when the overpayment is conclusively ascertained. This holding is in line with CMS’s patchwork of guidance for Medicare overpayments.

As a result, providers facing a potential overpayment must take action immediately to meet the 60 day deadline and avoid False Claims liability. Every health care practice should have a protocol in place to ensure that possible overpayments are investigated in a timely manner and such investigation is documented appropriately. Failure to report overpayments within that time frame could subject providers to huge penalties.  

If you have any questions about the 60-day rule or need assistance with investigating and reporting a potential overpayment contact Danielle Hildebrand at dhildebrand@jeylaw.com.

CMS Proposes 2 New Stark Exceptions

drIf adopted, the new exceptions will provide physicians with more options when setting up financial arrangements with hospitals.

On July 15, the Centers for Medicare & Medicaid Services (CMS) published several proposed changes to the Stark regulations as well as two new exceptions. The changes made pursuant to the proposed rule would clarify certain requirements which must be met for many of the Stark Law exceptions.

One notable change would impact several Stark exceptions (e.g., office space and equipment rental, personal service arrangements, physician recruitment arrangements, etc.) which require that an arrangement be either “in writing” or memorialized in a “written agreement.” If adopted, the proposal would make the writing requirement uniform throughout by replacing “written agreement” with “in writing.” CMS’s comments further clarify that a formal contract is not required. Rather, if under the circumstances it is appropriate, the writing requirement may be satisfied with a collection of “contemporaneous documents evidencing the course of conduct between the parties.”

CMS also provides clarification on how to satisfy Stark exception requirements that are conditioned on having an arrangement that lasts at least one year. According to CMS, a “formal contract or other document with an explicit ‘term’ provision is generally not necessary to satisfy the [one-year-term] element.” An arrangement that lasts at least one year satisfies the requirement.

The two new Stark Law exceptions involve payments related to employment of non-physician practitioners and timeshare arrangements for the use of office space, equipment, supplies, etc. The first exception would allow hospitals, Federally Qualified Health Centers and Rural Health Centers to subsidize physicians for the cost to employ physician assistants, nurse practitioners, clinical nurse specialists and certified nurse midwives up to a certain amount. The goal of the proposed exception is to promote the expansion of access to primary care services.

The other proposed exception would protect timeshare arrangements if certain requirements are met. Such arrangements would need to be between a hospital or physician organization (licensor) and a physician (licensee) for the use of the licensor’s premises, equipment, personnel, items, supplies, or services. Additionally, the licensed premises, equipment, personnel, items, supplies, and services would need to be used predominantly for evaluation and management services to patients of the physician.

If adopted, the new exceptions will provide physicians with more options when setting up financial arrangements with hospitals. However, CMS also clarifies and broadens certain limitations — the percentage of a hospital that may be owned by physicians will now encompass all physician owners, regardless of whether a physician owner refers patients to the hospital.

The CMS publication can be read here.

If you have any questions about the CMS guidance and proposed changes, our attorneys can help. Please contact Danielle Hildebrand at dhildebrand@jeylaw.com at 678-325-3872

 

ICD-10 Deadline Less Than 3 Months Away – Need Help?

CMS Announces Measures To Help Ease Transition

The countdown to the ICD-10 has begun in earnest, and the Centers for Medicaid & Medicare Services (CMS) has made it clear that it will not back down on the deadline of October 1, 2015. However, CMS announced on July 6, that it is adopting policies to help ease the transition to ICD-10.

The ICD-9 code sets used to report medical diagnoses and inpatient procedures will be replaced by ICD-10 code. ICD-10 will affect diagnosis and inpatient procedure coding for everyone covered by the Health Insurance Portability Accountability Act (HIPAA), not just those who submit Medicare or Medicaid claims.

Although the American Medical Association (AMA)  has long opposed the ICD-10 conversion, it issued a joint press release with CMS on July 6. The press release addresses some of the AMA’s concerns and offers some concessions by CMS. To assuage concerns from healthcare providers about inadvertent coding errors that could lead to audits and penalties, CMS has named a CMS ICD-10 Ombudsman to triage and answer questions about the submission of claims. The ICD-10 Ombudsman will be located at CMS’s ICD-10 Coordination Center. CMS has also released provider training videos and an outline of its implementation plan.

Additionally, CMS has announced that for one year past the Oct. 1, 2015, deadline, it will reimburse for incorrectly coded claims as long as that erroneous code is in the same broad family as the right one.

Providers should note that claims for services provided on or after the compliance date will need to be submitted with ICD-10 diagnosis codes; but claims for services provided prior to the compliance date should be submitted with ICD-9 diagnosis codes.

It is important for providers to have their practices ready to implement ICD-10 on October 1, 2015. If you need help with the ICD-10 transition and implementation, call Jeyaram & Associates’ Kimberly Sheridan at 678-708-4703.

CMS Proposes Changes In Rules For CMOs

For the first time in more than a decade, the Centers CMOfor Medicare and Medicaid Services issued proposed changes in rules affecting Care Management Organizations

On June 1, 2015, the Centers for Medicare and Medicaid Services (“CMS”) published a proposed rule affecting Care Management Organizations (CMOs) that administer Medicaid benefits.  This is the first major overhaul of the managed care system since 2002.  Most believe these changes are long overdue as CMOs now cover approximately 74 percent of all Medicaid enrollees making managed care the dominant delivery system for Medicaid.

According to CMS, the Proposed Rule will “improve beneficiary communications and access, provide new program integrity tools, support state efforts to deliver higher quality care in a cost-effective way, and better align Medicaid and CHIP managed care rules and practices with other sources of health insurance coverage.”

The Rule targets seven main areas:

  • Improvement of the beneficiary’s experience
  • State delivery system reform
  • Quality improvement
  • Program and fiscal integrity
  • Managed long-term services and supports (MLTSS) programs
  • Children’s Health Insurance Program (CHIP)
  • Alignment with Medicare Advantage and Private Coverage Plans

Public comments are due July 27, 2015. CMS has published a Fact Sheet outlining the Proposed Rule that can be found here.

We urge CMOs to familiarize themselves with the Proposed Rule and take advantage of the time period for public comment. If you have any questions involving the Proposed Rule, please contact Kimberly Sheridan at 678.325.3872.

 

CMS Proposes New Quality Reporting Measures for Medicare Payment

MedicareThe Centers for Medicare and Medicaid Services (CMS) has proposed a rule regarding Medicare payments for inpatient rehabilitation facilities. Through this new rule, CMS introduces new quality measures that will be tied to reimbursement.

Such quality measures generally focus on overall performance with respect to specific components of the health status of patients, like new or worsening pressure sores, and certain events, such as falls causing major injuries.

A facility’s failure to submit the information regarding these quality measures would result in a reduction in Medicare payments to that facility.

In the CMS publication, the government estimates the new quality reporting requirements will cost inpatient rehab facilities around $24 million. However, because the rule also proposes a modest rate increase, the government estimates that the changes under the rule will result in $130 million increase in payments to those facilities.

The Proposed Rule can be found here.

If you have questions regarding these new quality reporting requirements, please contact DJ Jeyaram or Danielle Hildebrand at 678.325.3872.