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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.

Physicians Need To Be Prepared For Increased Medicare & Medicaid Fraud Scrutiny

doctor-in-handcuffs-caption-1HHS increases resources to root out and penalize fraud:  Review existing financial arrangements NOW

On June 30th the federal Department of Health and Human Services Office of the Inspector General announced that it has created a specialized unit comprised of attorneys focused on Medicare and Medicaid fraud. This announcement comes on the heels of the OIG Special Fraud Alert reminding physicians of anti-kickback liability for illegal compensation related to arrangements with healthcare institutions.

Physicians should be prepared for increased scrutiny and an uptick in enforcement actions for kickback violations. According to OIG official Lisa Re, the new unit will be targeting kickback cases and will be going after not only the individual or organization paying the kickbacks but also the recipient of the kickbacks, e.g., the physicians.

Physicians who have financial arrangements that violate the Federal Anti-Kickback Statute would not only be subject to fines in the form of Civil Money Penalties, but could also be excluded from the Medicare and Medicaid programs.

Now is the time for physicians to review existing or proposed financial arrangements to ensure that they do not pose any risk of violating the Anti-Kickback Statute.

If you have any questions about a particular arrangement our attorneys can help. Please call Danielle Hildebrand or DJ Jeyaram at 678-325-3872 for legal counsel.

Former DCH Attorney Joins Jeyaram & Associates

Screen shot 2015-06-26 at 2.55.32 PMMr. Harrison Kohler joins Jeyaram & Associates as counsel. Mr. Kohler brings extensive criminal defense and administrative hearing experience to the firm. He represented the Department of Community Health (DCH) for nine years in both administrative hearings and negotiations with attorneys for Medicaid providers.

Prior to joining DCH, Mr. Kohler served as an Assistant Attorney General, which included 10 years as a prosecutor in the Medicaid Fraud Control Unit. During that time, he had 90 jury trials, including both criminal and civil, in 15 different superior courts and two federal districts in Georgia.

Further, Mr. Kohler has orally argued approximately 50 appellate cases. He successfully argued Georgia v. McCollum, 505 U.S. 42 (1992), in the United States Supreme Court. In 1996 the Supreme Court Historical Society named Georgia v. McCollum as one of the most significant oral arguments heard by the United States Supreme Court between the years 1955 and 1993.

Prior to pursuing a legal career, Mr. Kohler  served three years in the United States Army, including a year in Vietnam. He was awarded the combat medical badge and the Army Commendation Medal with Oak Leaf Cluster. Mr. Kohler has also been recognized by his peers as he’s earned the AV Peer Review Rating, which identifies a lawyer with “very high to preeminent legal ability, is a reflection of the firm’s expertise, experience, integrity and overall professional excellence.”

Please help us welcome Harrison to the firm!

Physicians’ Compensation For Certain Referrals Could Violate Anti-Kickback Statue

Anti-KickbackOIG Reminds Physicians That They Will Be Held Liable For Illegal Payments Under The Anti-kickback Statute

On June 9, the Department of Health and Human Services Office of Inspector General (OIG) issued a Special Fraud Alert warning against potential liability for physicians who enter into certain financial arrangements with healthcare institutions.

The Fraud Alert states that “if even one purpose of the arrangement is to compensate a physician for his or her past or future referrals” the compensation arrangement would violate the federal Anti-kickback statute.

The Fraud Alert discussed a recent settlement regarding an arrangement between several physicians and a healthcare institution. It emphasized that the following factors resulted in an OIG determination that there was improper remuneration:

  • Payments to physicians took into account the physician’s volume or value of referrals and did not reflect fair market value for the services performed
  • Physicians did not actually provide the services called for under the arrangement
  • The arrangement relieved the physician of a financial burden that such physician would have otherwise incurred, e.g., a healthcare institution paid for the physician’s office staff at his or her practice

Although the Fraud Alert does not change any existing laws, it is a reminder that physicians (not just the hospitals) will be held liable for illegal payments. Physicians should heed OIG’s warning and ensure that arrangements with healthcare institutions do not violate any laws. All arrangements must not only comply with the federal Anti-kickback statute, but also other fraud and abuse laws such as the Stark Law, the Civil Money Penalties Law (CMP Law), and the state law Stark and Anti-kickback counterparts.

The Special Fraud Alert can be found here.

If you are a physician with questions about a current or proposed arrangement with a healthcare institution, please call Danielle Hildebrand or DJ Jeyaram at 678-325-3872 for legal counsel.

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.

 

Physicians’ Medicare Payments No Longer Tied To Economy

SRGAfter almost 20 years, Congress finally passed a law repealing the Sustainable Growth Rate (SGR ). Under SRG, Medicare payments to physicians were tied to the growth rate in the economy. Because of the sluggish economy during and after the Great Recession, the growth rate formula has resulted in either a reduction or inadequate increase in Medicare reimbursement rates. As a result, Congress recently passed last minute, short-term fixes to ensure that physicians receive the appropriate fees.

With the passage of the new law, physicians will finally see stabilization in Medicare payments. The statute provides for a 0.5% increase for the next five years. Then the government will transition to a new system in which payments will be based on quality, value and accountability – the Merit-based Incentive Payment System.

The repeal of SGR is good news for physicians treating Medicare patients. Because Medicare reimbursement rates have been so unpredictable for the last decade, physician practices  have had little opportunity to arrange for innovative care models. With the new law, physicians have the chance to come up with groundbreaking care delivery models while developing patient care protocols focused on quality and gearing up for the next phase in Medicare reimbursement.

If you are a physician with questions about Medicare reimbursement or enrollment, or need healthcare regulatory advice, please contact DJ Jeyaram at DJ@jeylaw.com or Danielle Hildebrand at Dhildebrand@jeylaw.com.

Supreme Court Rules Medicaid Providers Cannot Sue To Enforce Their Rights

US Supreme CourtOn March 31, 2015, in a 5-4 decision, the United States Supreme Court issued its opinion in Armstrong v. Exceptional Child Center, Inc.[1] This decision essentially precludes all Medicaid providers from bringing a private cause of action to enforce their rights under the Medicaid Act.

Through Medicaid, the federal government subsidizes the States’ providing of medical services to qualified people. To get the federal monies, a state must adopt, and the federal government must approve, its Medicaid plan. Section 30(A) of the Medicaid Act requires that a state Medicaid plan must contain procedures to ensure that reimbursement rates for healthcare providers “are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers” to meet the need for care and services in the geographic area.

In Armstrong, a group of providers filed suit under the Supremacy Clause to enforce the provisions of Section 30(A) and to enjoin the Idaho Health and Welfare Department officials from continuing to reimburse the providers at rates lower than rates set forth in a provider cost study that had recommended increasing reimbursement rates. The 9th Circuit ruled that the Supremacy Clause gave the providers an implied right of action to bring suit. The Supreme Court disagreed.

The majority of the Supreme Court reasoned that while the Supremacy Clause instructs the courts to give federal law priority when there is a clash between a federal law and a state law, it does not create a cause of action.

The Majority went on to hold that the providers could not proceed in equity because the power of the federal courts to enjoin unlawful state action must be set out expressly or implicitly in statute. Here, the court reasoned that the Medicaid Act set out an express provision of a single remedy for the State’s failure to comply with the Medicaid act. That remedy is found in 42 U.S.C. Section 1396(c) and stated that the Secretary of Health and Human Services may withhold Medicaid funds if the State is failing to comply with the Medicaid Act.

What are the real life implications of this suggested remedy? As pointed out in Justice Sotomayor’s dissent, the Majority’s suggested remedy-withholding state funds will lead to the very result the law was enacted to prevent: depriving the poor of essential medical assistance.

What is the potential impact of this decision? If low rates cannot be challenged, Medicaid recipients will have fewer choices of health care providers because lower reimbursement rates make it harder for healthcare providers to choose to provide care to Medicaid recipients.[2]

What remedies are left for a provider? In Georgia, a Medicaid provider’s relationship with the State is based in contract, so remedies under the contract may still exist. If you are a provider and have a question about your rights under the Medicaid Act, please contact Kimberly Sheridan at Jeyaram & Associates at 678-709-4703.

[1] For the full opinion, please go to http://www.supremecourt.gov/opinions/14pdf/14-15_d1oe.pdf

[2] http://harvardcrcl.org/supreme-court-threatens-medicaid-reimbursement-accountability/

 

Court Finds DCH’s Handling of Mass Reprocessing “Inconsistent and Misleading”

DCHIn a decision last week, the Office of State Administrative Hearings (OSAH) reversed the Department of Community Health’s (DCH) denial of a Request for Administrative Review by a group of Children Intervention Services (“CIS”) providers. The CIS providers had requested a review of recoupment actions that stemmed from two 2014 Mass Reprocessings by the Department, one involving NCCI edits that included claims dating back to 2010.  The Department argued that the providers missed the 30 day deadline to file a Request for Administrative Review.

Attorney Kimberly Sheridan of Jeyaram & Associates represented the group of CIS providers in the administrative hearing and argued that the providers should be granted a review because they followed all the instructions specific to the mass reprocessing posted by the Department in several banner messages and emails, as well as in-person conversations. Through the banner and email message instructions, the Department departed from its standard deadlines in its policy manuals.  The Court found that the Department’s position was “illogical and wholly unfair,” and that its instructions to the providers after the mass reprocessing were “inconsistent and misleading.” The Court also said the providers had justifiably relied on these instructions and could not now be penalized for their reliance.

At this time, the Department has not made it known if it will appeal the decision.

If you are a provider subject to a recoupment and need help, or if you need to appeal DCH’s decisions, Jeyaram & Associates has extensive experience and success with these cases. Contact Kimberly Sheridan at ksheridan@Jeylaw.com or 678.325.3872.

Healthcare Providers Need To Examine Billing Practices To Ensure Compliance

healthcare fraudLast month, the Department of Health and Human Services released its annual report for the Health Care Fraud and Abuse Control Program. According to the report, in 2014 more than 900 new criminal health care fraud investigations were opened by the Department of Justice. There was a slight increase in the number of criminal cases and convictions from last year, with 496 cases and 735 defendants convicted of criminal health care fraud. Civil cases alone resulted in $2.3 Billion in settlements and judgments.

The government’s press release reiterated that detecting and eliminating fraud and abuse continues to be a top priority. The government attributes its high recoveries to a change in strategy which uses real-time data analysis to detect fraud more quickly. The Centers for Medicare and Medicaid currently uses advanced analytics on Medicare fee-for-service claims. The goal of this is to detect aberrant and suspicious billing patterns which would then trigger an investigation or enforcement action by the government.

Now is the time to for Medicare and Medicaid providers to review their billing practices and financial relationships to ensure that they are compliant with federal laws. Charges against providers were made under the False Claims Act, as well as Anti-Kickback Statute, the Stark Law (Physician Self-Referral Law), and other federal laws.

The full annual report is available at www.oig.hhs.gov/publications/hcfac.asp.

If you have any questions about the legality of your billing practices or financial relationships, please contact DJ Jeyaram at DJ@jeylaw.com or Danielle Hildebrand at dhildebrand@jeylaw.com.