Georgia's Trusted Healthcare
& Medical Provider Attorneys

DOJ Intends to Increase Healthcare Fraud Penalties By Almost 100%

healthcare fraudThe Department of Justice (“DOJ”) recently announced that it intends to increase healthcare fraud penalties under the False Claims Act (“FCA”) on claims assessed after August 1, 2016.

DOJ’s Justification For The Increase

FCA penalties can already be high since penalties are assessed per-claim. Each false claim presented to the government can be a separate violation. The DOJ’s Interim Final Rule would increase the minimum per-claim penalty from $5,500 to $10,781 and maximum per-claim penalty from $11,000 to $21,563.

This is a steep increase over 96%. While there was a 10% cap on the amount the penalties could increase, that law was amended by the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (“2015 Act”). The 2015 Act also included a one-time “catch up provision” requiring the first increase be based changes in the consumer price index since the year the penalties were established.

What The Increase Means To Healthcare Providers

This increase could incentivize whistle-blowers to identify false claims because the whistle-blower may be able to keep a percentage of the money recovered. Healthcare providers billing the government need to ensure that all their practice’s policies and procedures adhere with federal and state regulations. Proactive and preventive measures are the best way to stay out of the government’s cross hairs for fraud.

How To Ensure Federal and State Compliance

We can help. Our attorneys have extensive experience in analyzing and bringing into compliance healthcare providers’ policies and procedures. We’ve helped hundred of providers – from small, independent providers to large national corporations ensure compliance with regulations such as the Anti-Kickback Statute and Stark. Contact DJ Jeyaram at DJ@JeyLaw.com or 678.325.3872 or Jonathan Anderson at Janderson@JeyLaw.com.

Healthcare Providers: Your Business Associates Could Cost You Millions

HIPAAHealthcare providers must ensure business associates adequately safeguard private health information

The Department of Health and Human Services (HHS) recently entered into a HIPAA settlement with a Minnesota hospital for $1.5 million because the hospital failed to have a written business associate agreement with one of its contractors.

Business associates are non-covered-HIPAA entities that require access to protected health information (PHI) to perform services for covered entities, often a contractor or subcontractor. The hospital’s policies failed to ensure the business associate adequately protected consumer’s PHI.

While HIPAA applies to certain covered entities, those entities must also ensure that any business associates also adequately secure PHI. HHS found that the Minnesota hospital overlooked two important aspects of the HIPAA rules.

  1. The hospital did not have a written, compliant business associate agreement with one of its IT contractors, and
  2. The hospital failed to have an accurate and thorough risk analysis of its entire IT infrastructure.

HHS investigated after the hospital reported that a laptop was stolen from an employee of the business associate. The laptop contained password protected but unencrypted PHI for almost 10,000 individuals.

The $1.5 million settlement underscores the importance of HIPAA compliance. Healthcare providers must ensure they have compliance agreements with anyone who has access to protected health information. One example of this is when a healthcare provider contracts IT services. Without compliance agreements, companies can be responsible for hefty fines even if a business associate actually causes the PHI security breach.

If you need help creating policies or contracts to protect safeguard private healthcare information, we can help. Please contact Jonathan Anderson at Janderson@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

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.

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 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.