Category Archives: Associations
Scenario: You have an arrangement with your local hospital. You are a urologist and your practice owns a laser machine. You lease your laser machine to Hospital A, and your lease allows you to receive additional, but fair market value, money depending on how often your machine is used. Legal?
A new Final Ruling from the Centers for Medicare and Medicaid Services (CMS) provides murky guidance.
CMS finalized the 2017 Medicare Physician Fee Schedule (PFS) rule, which took effect on January 1, 2017. There have been few major revisions to the Stark Law since 2008…until now. The Stark Law is named for United States Congressman Pete Stark (D-CA), who sponsored the initial bill in 1988. Politicians love to name bills after themselves!
Absent an exception, the Stark Law prohibits a physician from referring Medicare patients for certain designated health services (“DHS”), for which payment may be made under Medicare, to any “entity” with which the physician (or an immediate family member) has a “financial relationship.” Conversely, the statute prohibits the DHS-furnishing entity from filing claims with Medicare for those referred services.
Despite the general prohibition on potentially self-interested referrals, the Stark Law permits Medicare referrals by physicians to entities in which they have a financial interest in certain limited circumstances. But these circumstances are limited and must be followed precisely and without deviation.
These exceptions are created by legally excluding some forms of compensation agreements and ownership interests from the definition of “financial relationship,” thus allowing both the relationships and the referrals. See 42 U.S.C. § 1395nn(b)-(e).
One of such exceptions to the Stark Law is the equipment lease exception.
This equipment lease exception to Stark law allows a financial relationship between physicians and hospitals for the lease of equipment, only if the lease (1) is in writing; (2) assigns the use of the equipment exclusively to the hospital; (3) lasts for a term of at least one year; (4) sets rental charges in advance that are consistent with fair market value and “not determined in a manner that takes into account the volume or value of any referrals or other business generated between the parties”; (5) satisfies the standard of commercial reasonableness even absent any referrals; and (6) meets “such other requirements as the Secretary may impose by regulation as needed to protect against program or patient abuse.”
For example, like the scenario above, a urology group owns and leases a laser machine to Hospital A. As long as the lease meets the criteria listed above, the urologists may refer Medicare patients to Hospital A to their hearts’ content – even though the urologists benefit financially from their own referrals.
However, what if the monetary incentive is tied to the amount the machine is actually used – or the “per-click lease?”
In a court case decided in January 2015, Council for Urological Interests v. Burwell, a D.C. circuit court decided that CMS’ ban on per-click leases was unreasonable.
In CMS’ Final Ruling, effective January 1, 2017, CMS again re-issued the per-click lease ban. But CMS’ revised ban appears to be more parochial in scope. CMS states that it “did not propose and [is] not finalizing an absolute prohibition on rental charges based on units of service furnished” and that “[i]n general, per-unit of service rental charges for the rental of office space or equipment are permissible.” As CMS had previously stated, the per-click ban applies only “to the extent that such charges reflect services provided to patients referred by the lessor to the lessee.”
Considering how unclear the Final Rule is – We are banning per-click leases, but not absolutely – expect lawsuits to clarify. In the meantime, re-visit your equipment leases. Have your attorney review for Stark compliance – because for the first time since 2008, major amendments to Stark Law became effective January 1, 2017.
When you have a Medicare appeal, it is not uncommon for the appeal process to last years and years – up to 3-6 years in some cases. There has been a backlog of approximately 800,000+ Medicare appeals (almost 1 million), which, with no change, would take 11 years to vet.
A Federal Court Judge says – that is not good enough!
Judge James Boasburg Ordered that the Medicare appeal backlog be eliminated in the following stages:
- 30% reduction from the current backlog by Dec. 31, 2017 (approximately a 300,000 case reduction within 1 year);
- 60% reduction from the current backlog by Dec. 31, 2018;
- 90% reduction from the current backlog by Dec. 31, 2019; and
- Elimination of the backlog of cases by Dec. 31, 2020;
A Medicare appeal has 5 steps. See blog. The backlog is at the Administrative Law Judge (ALJ) level – or, Level 3.
This backlog is largely attributable to the Medicare Recovery Audit Contractor (RAC) programs. In 2010, the federal government implemented the RAC program to recoup allegedly improper Medicare reimbursement payments. The RAC program (for both Medicare and Medicaid) has been criticized for being overly broad and burdensome and “nit picking,” insignificant paperwork errors. See blog.
While the RAC program has recovered a substantial sum of alleged overpayments, concurrently, it has cost health care providers an infinite amount of money to defend the allegations and has left Health and Human Services (HHS) with little funds to adjudicate the number of Medicare appeals, which increase every year. The number of Medicare appeals filed in fiscal year 2011 was 59,600. In fiscal year 2013, that number boomed to more than 384,000. Today, close to 1 million Medicare appeals stand in wait. The statutory adjudication deadline for appeals at the ALJ level is 90 days, yet the average Medicare appeal can last over 546 days.
The American Hospital Association (AHA) said – enough is enough!
AHA sued HHS’ Secretary Sylvia Burwell in 2014, but the case was dismissed. AHA appealed the District Court’s Decision to the Court of Appeals, which reversed the dismissal and gave the District Court guidance on how the backlog could be remedied.
Finally, last week, on December 5, 2016, the District Court published its Opinion and set forth the above referenced mandated dates for eliminating the Medicare appeal backlog.
While, administratively, the case was dismissed, the District Court retained “jurisdiction in order to review the required status reports and rule on any challenges to unmet deadlines.”
In non-legalese, the Court said “The case is over, but we will be watching you and can enforce this Decision should it be violated.”
This is a win for all health care providers that accept Medicare.
Personal Care Services: Will the Fear of the “F” Word (Medicaid Fraud) Cause PCS in the Home to Be Eradicated???
In my career, I call it the “F” word:
Its existence and fear of existence drives Medicare and Medicaid policies.
It is without question that Medicare and Medicaid fraud needs to be eliminated. In fact, for true Medicare and Medicaid fraud, I propose harsher penalties. Think about what the fraudulent provider is doing…taking health care dollars from the elderly and poor without providing services. Medicare and Medicaid recipients receive less medically necessary services because of fraudulent providers.
Just recently, in Charlotte, on April 9, 2014, V.F. Brewton, of Shelby, N.C., was sentenced to 111 months in prison, three years of supervised release and ordered to pay $7,070,426 in restitution to Medicaid and $573,392 to IRS. On April 8, 2014, co-defendant, R. S. Cannon, of Charlotte, was sentenced to 102 months in prison, three years court supervised release and ordered to pay $2,541,306 in restitution. See press release. Ouch!
On November 21, 2013, in Miami, Fla., Roberto Marrero, who ran Trust Care, was sentenced 120 months in prison. From approximately March 2007 through at least October 2010, Trust Care submitted more than $20 million in claims for home health services. Medicare paid Trust Care more than $15 million for these fraudulent claims. Marrero and his co-conspirators have also acknowledged their involvement in similar fraudulent schemes at several other Miami health care agencies with estimated total losses of approximately $50 million. See article. Ouch!
However, there are never the stories in the newspapers and media about all the services actually rendered to Medicare and Medicaid recipients by upstanding providers who do not commit fraud, but, instead, work very hard every day to stay up-to-date on regulations and policies and who do not reap much profit for the services provided. I guess that doesn’t make good journalism.
I recently attended the Association for Home and Hospice Care (AHHC) conference in RTP, NC. I met wonderful and non-fraudulent providers. Each provider I met was passionate and compassionate about their job. The only time money was brought up was to discuss the low reimbursement rates and the low profit margin for these providers.
In fact, one of the speakers even opined that, because of the alleged prevalence of fraud in home health care, the federal and state governments will continue to cut reimbursement rates for home health and hospice until over 50% of the agencies operate at a loss by 2017. That is a dismal thought! What happened to our right to pursue a career without intervention?
One provider informed me that, upon his or her information and belief, there is a chance that PCS, which is an optional program under Medicaid, may be wiped out in the near future by the General Assembly (PCS for home health and assisted living facilities, not the recipients covered by the Waiver).
What are personal care services (PCS)?
In the world of Medicaid and Medicare, there are a number of different types of PCS. No, actually, I think it is more apropos to say there are a number of different PCS recipients in the world of Medicaid and Medicare.
First, the definition/eligibility requirements:
Personal Care Services (PCS) are available to individuals who have a medical condition, disability, or cognitive impairment and demonstrate unmet needs for, at a minimum three of the five qualifying activities of daily living (ADLs) with limited hands-on assistance; two ADLs, one of which requires extensive assistance; or two ADLs, one of which requires assistance at the full dependence level. The five qualifying ADLs are eating, dressing, bathing, toileting, and mobility. See DMA website.
PCS are provided to developmentally disabled people under the 1915 b/c Waivers, people who reside in nursing homes and long-term assisted living facilities, and people who qualify to receive PCS in their homes. For purposes of this blog, I am writing about the latter three types of recipients. All 50 states allow PCS for qualified individuals, but the qualifications differ among the states.
In this day and age, the “F” word drives Medicaid and Medicare policies. Without question Medicaid fraud exists. Whether Medicaid fraud is as prevalent as some may believe, I am not sure. I have certainly witnessed honest providers accused of Medicaid fraud.
And home health care providers are viewed by some, generally, as the providers who can most easily commit Medicaid fraud (with which I do not agree, but must concede that home health care is more difficult to monitor). For example, a home health care provider goes to a person’s home and provides services. Who would know whether the home health care provider was billing for services on days he or she did not go to the recipient’s house? Not the recipient, because the recipient has no idea for what dates the provider is billing. Unlike an assisted living facility or nursing home that is easier to monitor and would have the documentation to show that the recipient actually lived in the facility.
Because of the alleged prevalence of fraud in home health care, apparently, (and with no independent verification on my part) some in North Carolina are questioning whether we should continue to reimburse PCS with Medicaid dollars, particularly as to home health. But if we stopped reimbursing for PCS in the homes, what would be the alternative? How would it affect North Carolinians? Would eliminating PCS save tax dollar money? Stop fraud?
When we evaluate the effects of whether to continue to reimburse for PCS with Medicaid dollars, we aren’t only talking about those served by PCS, but also the companies and all employees providing the home health. In 2012 in NC, approximately 40,000 were employed in home health.
Why is home health care important (or is it?)? Should we allow the “F” word to erase PCS in home health?
What is the alternative to home health? Answer: (1) Assisted living facilities? (2) Nursing homes? (3) A dedicated, family caregiver? (4) Nothing?
While there are, I am sure, many reasons that PCS in home health care is vital to our community, for the purposes of this blog, I am going to concentrate on cost savings to the taxpayers. Home health costs us (taxpayers) less money than other alternatives to home health.
Also, understand please that I am not advocating that everyone should receive home health instead of entering nursing homes or assisted living facilities. Quite the contrary, as both nursing homes and assisted living facilities are essential to NC. I am merely pointing out that all the services (home health, nursing homes, and assisted living facilities) are important.
What is the difference between assisted living and nursing homes?
An assisted living community provides communal living, usually with social activities, a cafeteria, laundry service, etc. I always think of my grandma at Glenaire in Cary, NC. She plays bridge, attends a book club, and even takes a computer course! She actually joined Facebook a couple of years ago!
A nursing home, on the other hand, provides 24-hour supervision by a licensed or registered nursing staff. Generally, the folks eligible to be admitted into an assisted living facility will be eligible to receive PCS (see the above definition/eligibility requirements). So, logically, the clientele in an assisted living facility receiving PCS could, in some cases, also be eligible to receive PCS in their home. Obviously a number of factors come into play to determine whether a person goes into an assisted living facility versus staying at home and receiving home health care: eligibility, family issues, money, condition of your home, money, desire for independence, money, health issues, and money.
Because of the level of supervision and skill required in a nursing home, a nursing home will be much more expensive than an assisted living facility. Insomuch as the assisted living facility will be less expensive than a nursing home, home health care, because you are paying for your own room and board, will be cheaper than both.
The average national cost for an assisted living facility in 2012 was $3,550/month. That’s $42,600/year. The average cost for an assisted living facility in 2012 in NC was $2900/month.
The average cost for a nursing home in NC for a semi-private room is $73,913 and $82,125 for a private room. That’s $225/day for a private room. For that price, you could get a room at a Ritz Carlton! (albeit not in a touristy area).
You think nursing homes are expensive in NC? Don’t move to NY!! In NY, for a semi-private room it costs $124,100/year and $130,670/year for a private room ($358/day!). Florida is a bit more expensive that NC too. In Florida, on average, a semi-private room in a nursing home costs $83,950 and a private room is approximately $91,615.
On the flip side, the average cost for a homemaker is $38,896. A home health aide costs, on average, $40,040.
If, in fact, NC ceases to reimburse PCS in home health, many of the people residing in their homes and relying on Medicaid-covered PCS will be forced to leave their homes for, in some case, more expensive alternatives.
Though the odd contrast may not be easily seen, there is an argument that erasing PCS in the home may actually cost the tax payers more. Not to mention that erasing PCS in home health would drive agencies bankrupt and staff jobless.
Remember, I have no verification that our General Assembly would or would not eradicate PCS in the home environment. It was mere speculation in a conversation. But the conversation got me thinking about the delicate balance of Medicaid services in NC. And how one abrupt and drastic change could change our health care system and capitalist ideas so quickly.
And, arguably, all because of the speculative “F” word. What is that political phrase we heard so much in the last elections? Oh, yes, maybe we should use a scalpel, not an ax?
The unknown. No one likes the unknown. Especially people, like me, who try so desperately to maintain control over our lives.
But the future of Medicaid in North Carolina is unknown. We have all heard Governor McCrory talk about expanding managed care to all Medicaid services, not just behavioral health care, but for all medical services. Here in NC, our experience with managed care organizations (MCOs) has not been all sunshine and roses. So, when we hear…let’s expand the MCO system to all Medicaid services, I am reminded of the feeling I had this past Saturday as I stood on the side of the Wells Fargo building, 30-stories up, facing background, with a harness and a helmet on, when the rappel guy said, “Ok…now lean back and let go…”
OK….so is anyone wondering how I managed rappelling down the 30-story Wells Fargo building downtown Raleigh this past Saturday in the name of Special Olympics North Carolina?
Answer: I DID NOT MANAGE WELL!!!
I do not kid you when I say that I thought that I would enjoy rappelling. I envisioned myself bouncing off the side of the building, laughing, and doing straddle jumps. I envisioned myself getting to the bottom with an adrenaline rush and an immediate need to sign-up for next year’s Over The Edge charity event.
So, what actually happened? Picture this:
I am standing on the edge of a 30-story building. I have 20 pounds of equipment attached all around my body. I am donning a helmet and gloves. I have never seen any of the equipment that is wrapped around my body. The pro-rappellers are saying things like “rigger,” “descenders,” and “carabiners.” They are obviously all hard-core, banging rapellers, which I, most certainly, am not.
In order to get on the ledge of the building, you have to climb up onto the ledge…as in, take your 2 arms and hoist your body up onto the ledge…sit down on your bum with your back to the 30-story view…and, then, completely stand up…. on a ledge… in order to lean back and jump off the building.
If you can envision preparing yourself for a jump off a 30-story building without your heart racing, then you are way cooler than I.
Ever heard the saying, “The first step is the hardest?” Whoever said that had, obviously, rappelled off the Wells Fargo building. Just prior to actually going over the edge, not only did my body have to battle the physical issues (shaking, breathing, and sweating), but my brain kicked into high gear. I wanted to cry. I cussed at the nice rappellers trying to comfort me. My brain told me to give up and descend as we are meant to…via elevators.
The rappeller-volunteer said, “Lean back and let go!”
I cussed. I screamed, “Get me off this building!!” to the nice rappeller-volunteers. But, eventually (and, definitely, NOT gracefully) I started the descent down the building. The entire way down, which, by the way, takes at least 15 minutes, I panicked; I hyperventilated; I prayed; I cussed; I tried to not spin; I made a very weak attempt of actually using the lever attached to my rope to make myself go down (No, I do not know the term for the apparatus); my muscles failed me….for 15 minutes.
Why?? Fear of the unknown. I was in a completely new situation, and one in which I had no control.
Similarly, the unknowns of the future of Medicaid terrify providers, recipients, and advocates alike. “Just lean back and let go!”
I am currently at the Association for Home and Hospice Care of North Carolina (AHHC) Leadership Convention in Wrightsville Beach. (Which, BTW, is a great association). The morning speaker, Scott Carbonara was fantastic. He spoke about engaging fully in life, work, and family.
During lunch, I ended up sitting next to another attorney (unbeknownst to me at the time of sitting), who works for the National Council on Medicaid.
Another person who wants to talk about Medicaid sitting next to me during lunch? I felt like I drew the lucky straw.
Then she said that she helps implement managed care throughout the country. She may as well have said that she teaches medical providers to refuse Medicaid and provide horrible services to Medicaid recipients.
You have to understand, if you have read my blogs, my opinion as to MCOs and mental health.
She must’ve read my horror on my face. She said…”Oh, I know. Most people do not have positive reactions when I explain my job.”
Me? I felt like I was standing on edge of the ledge with an unknown rappeller telling me to, “Lean back and let go!” Trust me…
We proceeded to have a rather lengthy conversation. I explained the effects of the MCOs on Medicaid recipients and behavioral health care providers here in NC.
I explained to her that some MCOs are denying medically necessary assertive community treatment team services (ACTT) (a highly intense, 24-hour/day service for the most severely mentally ill) even when the recipients meet the continued stay criteria and do not meet discharge criteria. I explained that the recipients who were undergoing discharge from ACTT were becoming hospitalized, incarcerated, homeless, and sometimes all of the above.
She was horrified.
“Why would the MCOs deny ACTT services if discharge criteria is not met?” She said. “It ends up costing more money, with the hospitalizations and incarcerations, than it would cost if the MCO actually authorized the mental health care needed.” In other words, providing medically necessary services saves money, if you look at the totality of circumstances.
“Where is CMS?”
You win a prize! Ding! Ding! Ding!
I explained that our management of Medicaid services is bifurcated. The MCOs are only in charge of behavioral health, not the total patient care. The monetary incentive for the MCOs in NC is to provide the least expensive services to the least amount of Medicaid recipients through the least amount of Medicaid providers.
She said, “Well, the providers can choose to deal with the MCOs, right?”
Not in NC. As the MCOs are jurisdictional, if the MCO in one county says that you cannot see your patients, another MCO in a different MCO may say otherwise.
She explained that her MCOs work completely differently. (Here I was on the edge of the Wells Fargo building again). We are just supposed to trust that other MCOs would act differently?
Then she told me why her MCOs would not act like our current MCOs.
In her MCO world, the MCOs manage ALL Medicaid services. If a recipient suffers high blood pressure, diabetes, and schizophrenia, the MCO handles all the recipients’ medical issues. That MCO is in charge of the totality of the recipient’s care. If the MCO denies ACTT services and the recipient is hospitalized, then the MCO has the burden of paying for that more expensive ER visit. If the MCO denies ACTT services and the recipient is incarcerated without the proper care and medication, then that MCO has the burden of paying for all crisis care for the recipient that may occur from not receiving necessary services. It costs less to provide proper care rather than let the recipient decompress and pay higher emergency costs.
She wanted to get a representative of one her MCOs to listen to my horror stories. She tried to convince me that the MCOs she has worked with would approve all necessary services. It’s just cheaper in the long run.
But, to me, there is fear of the unknown.
What if the MCOs she has worked with do NOT authorize services like she is describing??
How do we know that a new system would be better? I mean, we’ve all seen how great the new billing system NCTracks is…New is not always better. Change is unknown, and the unknown is scary.
I guess we all have to ask ourselves: Is the current NC MCO system bad enough to warrant a change to the unknown?
When you are standing on top the 30-story building, and are told to “Lean back and let go…”
Or do you take the elevators?