Category Archives: Medicaid Audits

Durable Medical Equipment and Home Health and Hospice Targeted in Region 5!

Durable Medical Equipment (DME) providers across the country are walking around with large, red and white bullseyes on their backs. Starting back in March 2017, the RAC audits began targeting DME and home health and hospice. DME providers also have to undergo audits by the Comprehensive Error Rate Testing Program (CERT).

bullseye

The RAC for Jurisdiction 5, Performant Recovery, is a national company contracted to perform Recovery Audit Contractor (RAC) audits of durable medical equipment, prosthetic, orthotic and supplies (DMEPOS) claims as well as home health and hospice claims. Medicare Part B covers medically necessary DME. The following are the RAC regions:

Region 1 – Performant Recovery, Inc.

Region 2 – Cotiviti, LLC

Region 3 – Cotiviti, LLC

Region 4 – HMS Federal Solutions

Region 5 – Performant Recovery, Inc.

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As you can see from the above map, we are in Region 3. The country is broken up into four regions. But, wait, you say, you said that Performant Recovery is performing RAC audits in region 5 – where is region 5?

Region 5 is the whole country.

The Centers for Medicare and Medicaid (CMS) has contracted with Performant Recovery to audit DME and home health and hospice across the whole country.

dmemap

DME and home health and hospice providers – There is nowhere to hide. If you provide equipment or services within the blue area, region 5, you are a target for a RAC audit.

What are some common findings in a RAC audit for DME?

Without question, the most common finding in a RAC or CERT audit is “insufficient documentation.” The problem is that “insufficient documentation” is nebulous, at best, and absolutely incorrect, at worst. This error is by auditors if they cannot conclude that the billed services were actually provided, were provided at the level billed, and/or were medically necessary. An infuriating discovery was when I was defending a DME RAC audit and learned that the “real” reason for the denial of a claim was that no one went to the consumers door, knocked on it, and verified that a wheelchair had, in fact, been delivered. In-person verification of delivery is not a requirement, nor should it be. Such a burdensome requirement would unduly prejudice DME companies. Yes, you need to be able to show a signed and dated delivery slip, but you do not have to go to the consumer’s house and snap a selfie with the consumer and the piece of equipment.

Another common target for RAC audits is oxygen tubing, oxygen stands/racks, portable liquid oxygen systems, and oxygen concentrators.  RAC auditors mainly look for medical necessity for oxygen equipment. Hospital beds/accessories are also a frequent find in a RAC audit. A high use of hospital beds/accessories codes can enlarge the target on your back.

Another recurrent issue that the RAC auditors cite is billing for bundled services separately. Medicare does not make separate payment for DME provider when a beneficiary is in a covered inpatient stay. RAC auditors check whether suppliers are inappropriately receiving separate DME payment when the beneficiary is in a covered inpatient stay.  Suppliers can’t bill for DME items used by the patient prior to the patient’s discharge from the hospital. Medicare doesn’t allow separate billing for surgical dressings, urological supplies, or ostomy supplies provided in the hospital because reimbursement for them is wrapped into the Part A payment. This prohibition applies even if the item is worn home by the patient when leaving the hospital.

As always, documentation of the face to face encounter and the prescription are also important.

You can find the federal regulation for DME documentation at 42 CFR 410.38 – “Durable medical equipment: Scope and conditions.”

Once you receive an alleged overpayment, know your rights! Appeal, appeal, appeal!! The Medicare appeal process can be found here.

Merger of Cardinal and Eastpointe: Will [Should] It Go Through?

What if, right before your wedding day, you discover a secret about your betrothed that changes the very fabric of your relationship. For example, you find out your spouse-to-be is actually gay or a heroin addict. Not that there is anything bad about being gay or a heroin addict, but these are important facts to know and accept [or reject] about your future mate prior to the ringing of the wedding bells. The same is true with two companies that are merging to become one. The merged entity will be liable for any secrets either company is keeping. In this hypothetical, Eastpointe just found out that Cardinal has been cheating – and the wedding is set for July 1!

Cardinal Innovations and Eastpointe, two of our managed care organizations (MCO) charged with managing Medicaid behavioral health care funds plan to merge, effective July 1, 2017. Together the monstrous entity would manage Medicaid behavioral funds for 32 counties.

Last week the State Auditor published a scathing Performance Audit on Cardinal. State Auditor Beth Wood found more than $400,000 in “unreasonable” expenses, including corporate retreats at a luxury hotel in Charleston, S.C.; chartering planes to fly to Greenville, Rocky Mount and Smithfield; providing monthly detailing service for the CEO’s car; and purchasing alcohol, private and first-class airline tickets and other items with company credit cards.

Cardinal’s most significant funding is provided by Medicaid. Funding from Medicaid totaled $567 million and $587 million for state fiscal years 2015 and 2016, respectively. In other words, the State Auditor found that Cardinal is using our tax dollars – public money obtained by you and me – for entertainment, while concurrently, denying behavioral health care services and terminating providers from its catchment area. Over 30% of my salary goes to taxes. I do not accept Cardinal mismanaging my hard earned money – or anyone else’s. It is unacceptable!

“The unreasonable spending on board retreats, meetings, Christmas parties and travel goes against legislative intent for Cardinal’s operations, potentially resulting in the erosion of public trust,” the audit states.

Eastpointe, however, is not squeaky clean.

A June 2015 Performance Audit by the State Auditor found that its former chief financial officer Bob Canupp was alleged to have received kickbacks worth a combined $547,595. It was also alleged that he spent $143,041 on three agency vehicles without a documented business purpose. Canupp, chief executive Ken Jones and other employees also were determined to have used Eastpointe credit cards to make $157,565 in “questionable purchases.” There has not been an audit, thus far, on Eastpointe’s management of public funds. One can only hope that the results of the Cardinal audit spurs on Beth Wood to metaphorically lift the skirts of all the MCOs.

Given the recent audit on Cardinal, I would like to think that Eastpointe is hesitant to merge with such an entity. If a provider had mismanaged Medicaid funds like the State Auditor found that Cardinal did, without question, the authorities would be investigating the provider for Medicaid fraud, waste, and abuse. Will Eastpointe continue with the merger despite the potential liability that may arise from Cardinal’s mismanagement of funds? Remember, according to our State Auditor, “Cardinal could be required to reimburse the State for any payroll expenditures that are later disallowed because they were unauthorized.” – Post-payment review!!

Essentially, this is a question of contract.

We learned about the potential merger of Cardinal and Eastpointe back in January 2017, when Sarah Stroud, Eastpointe’s chief executive, announced in a statement that the agency plans to negotiate a binding agreement within weeks. The question is – how binding is binding?

Every contract is breakable, but there will be a penalty involved in breaching the contract, usually monetary. So – fantastic – if Eastpointe does back out of the merger, maybe our tax dollars that are earmarked for behavioral health care services for Medicaid recipients can pay the penalty for breaching the contract.

Another extremely troubling finding in Cardinal’s State Audit Report is that Cardinal is sitting on over $70 million in its savings account. The audit states that “[b]ased on Cardinal’s accumulated savings, the Department of Health and Human Services (DHHS) should consider whether Cardinal is overcompensated. For FY 2015 and 2016, Cardinal accumulated approximately $30 million and $40 million, respectively, in Medicaid savings. According to the Center for Medicaid and Medicare Services (CMS), Cardinal can use the Medicaid savings as they see fit.”

As Cardinal sees fit??!!?! These are our tax dollars. Cardinal is not Blue Cross Blue Shield. Cardinal is not a private company. Who in the world thought it a good idea to allow any MCO to use saved money (money not spent on behavioral health care services for Medicaid recipients) to use as it sees fit. It is unconscionable!

Because of my blog, I receive emails almost daily from mothers and fathers of developmentally disabled or mentally handicapped children complaining about Cardinal’s denials or reductions in services. I am also told that there are not enough providers within the catchment area. One mother’s child was approved to receive 16 hours of service, but received zero services because there was no available provider. Another family was told by an MCO that the family’s limit on the amount of services was drastically lower than the actual limit. Families contact me about reduced services when the recipient’s condition has not changed. Providers contact me about MCO recoupments and low reimbursement rates.

Cardinal, and all the MCOs, should be required to use our tax dollars to ensure that enough providers are within the catchment areas to provide the medically necessary services. Increase the reimbursement rates. Increase necessary services.

According to the report, “Cardinal paid about $1.9 million in FY 2015 employee bonuses and $2.4 million in FY 2016 employee bonuses. The average bonus per employee was about $3,000 in FY 2015, and $4,000 in FY 2016. The bonuses were coded to Cardinal’s administrative portion of Medicaid funding source in both years.” Cardinal employs approximately 635 employees.

Good to know that Cardinal is thriving. Employees are overpaid and receive hefty bonuses. Executives are buying alcohol, private and first-class airline tickets and other items with company credit cards. It hosts lavish Christmas parties and retreats. It sits on a $70 million savings account. While I receive reports from families and providers that Medicaid recipients are not receiving medically necessary services, that there are not enough providers within the catchment area to render the approved services, that the reimbursement rates for the services are too low to attract quality providers, that more expensive services are denied for incorrect reasons, and that all the MCOs are recouping money from providers that should not be recouped.

If I were Eastpointe, I would run, regardless the cost.

NC State Auditor Finds Cardinal Expenditures Unreasonable!!(Finally) #Wastedtaxdollars

The NC State Auditor Beth Wood released an audit report on Cardinal Innovations yesterday, May 17, 2017. Here are the key findings. For the full report click here.

BACKGROUND

Cardinal is a Local Management Entity/Managed Care Organization (LME/MCO) created by North Carolina General Statute 122C. Cardinal is responsible for managing, coordinating, facilitating and monitoring the provision of mental health, developmental disabilities, and substance abuse services in 20 counties across North Carolina. Cardinal is the largest of the state’s seven LME/MCOs, serving more than 850,000 members. Cardinal has contracted with DHHS to operate the managed behavioral healthcare services under the Medicaid waiver through a network of licensed practitioners and provider agencies.

KEY FINDINGS

• Cardinal spent money exploring strategic opportunities outside of its core mission

• $1.2 million in CEO salaries paid without proper authorization

• Cardinal’s unreasonable spending could erode public trust

KEY RECOMMENDATIONS

• Cardinal should consult and collaborate with members of the General Assembly before taking any actions outside of its statutory boundaries

• The Office of State Human Resources should immediately begin reviewing and approving Cardinal CEO salary adjustments

• The Department of Health and Human Services should determine whether any Cardinal CEO salary expenditures should be disallowed and request reimbursement as appropriate

• Cardinal should implement procedures consistent with other LME/MCOs, state laws, and federal reimbursement policy to ensure its spending is appropriate for a local government entity

My favorite? Recoup CEO salaries. Maybe we should extrapolate.

Trump-caid: Medicaid Under the AHCA

It is still unclear whether the American Health Care Act (AHCA), or  H.R. 1628, will be signed into law. On March 6, 2017, the House Energy & Commerce Committee (E&C) and Ways & Means Committee (W&M) officially released the draft bill. The latest action was on April 6, 2017, H.Res.254 — 115th Congress (2017-2018) was placed on the House calendar. The rule provides for further consideration of H.R. 1628. The rule also provides that the further amendment printed Rules Committee Report 115-88 shall be considered as adopted.

So what exactly would AHCA change in relation to Medicaid?

For over fifty (50) years, states have created and implemented Medicaid programs entirely dependent on federal contributions. Medicaid is based on federal law. Although each individual state may have slight variances in the Medicaid program, because the state Medicaid programs must follow federal law, the state Medicaid programs are surprisingly similar. An example of a slight variance is that some Medicaid services are voluntary, like personal care services (PCS); some states offer PCS paid by Medicaid and others do not.

Currently, the federal government does not cap the federal contribution. However much a state spends – no matter how exorbitant – the federal government will match (at whatever percentage allotted for that state). For example, the federal government pays 66.2% of North Carolina’s Medicaid spending. Which means, BTW, that $264,800.00 of Cardinal’s CEO’s salary is funded by the federal government. These percentages are called Federal Medical Assistance Percentages (FMAP).

All this may change under the American Health Care Act (AHCA), or  H.R. 1628, as approved by the House Ways and Means, Energy and Commerce, Budget, and Rules Committees.

The AHCA proposes many changes from the Affordable Care Act (ACA) germane to Medicaid. In my humble opinion, some of the replacements are stellar; others are not. No one (sane and logical) could argue that the ACA was perfect legislation for providers, employers, or recipients. It was not. It mandated that employers pay for health care insurance for their employees, which caused the number of part-time workers to explode. The ACA mandated the states to suspend Medicaid reimbursements upon a credible allegation of fraud, which, basically, could be a disgruntled employee lying with an anonymous accusation. This provision put many providers out of business without due process (Remember New Mexico?). The ACA also put levers in place that meant younger policyholders were subsidizing older ones. Healthy, young adults were paying for older adults. The ACA reduced payments for Medicare Advantage plans, hospitals, and other providers to save money. There was also a provider shortage due to the low reimbursement rates and regulatory audits. The Affordable Care Act was anything but affordable. At least the American Health Care Act does not protest itself to be affordable.

Here are some of the most poignant “repeal and replace” items in Trump-caid:

1. Health Savings Accounts

The AHCA will encourage the use of Health Savings Accounts by increasing annual tax free contribution limits. It will also modify ACA premium tax credits for 2018-2019 to increase the amount for younger adults and to reduce the amount for older adults. In 2020, the AHCA will replace ACA income-based tax credits with flat tax credits adjusted for age. Eligibility for new tax credits phases out at income levels between $75,000 and $115,000.

2. Cap on federal contributions

Beginning in 2020, the AHCA would cap federal contributions to state Medicaid programs. This will result in huge federal savings, but cause severe shortages on the state level. The federal per-enrollee caps would be based on states’ Medicaid expenditures in 2016, trended forward to 2019. A uniform, federal capped system would provide fiscal security for the federal government and shift the risk of over spending on the states.

The following categories would be exempt from the per-capita allotments (i.e. paid for outside of the per-capita caps): DSH payments, administrative payments, individuals covered under CHIP Medicaid expansion program or who receive medical assistance from an IHS facility, breast and cervical cancer patients, and partial benefit-enrollees

With the risk on the states, there is a high probability that optional Medicaid services, such as PCS, may be cut from the budget. If PCS were eliminated, more patients would enter long-term care facilities and fewer patients would be able to remain in their homes. The House bill essentially eliminates the enhanced funding levels that made possible states’ expansion of Medicaid to their poorest working-age adult residents. In all, 31 states expanded Medicaid under the ACA. While the House Bill does not prohibit Medicaid expansion; expansion will be difficult to remain funded by the states.

medicaidexpansion2017

3. Presumptive eligibility program

The House bill would end the ACA’s special hospital presumptive eligibility program, under which hospitals can temporarily enroll patients who “appear” to be eligible and begin to get paid for their care while their full applications are pending. (What in the world does “appear to be eligible” mean. Is it similar to profiling?)

4. Home equity and eligibility

Under current law, states disregard the value of a home when determining Medicaid eligibility for an individual in need of long-term community-supported care.  The bill would take away this state flexibility, capping the equity value at $500,000.

5. Disproportionate Share Hospital Payments

The AHCA would repeal the Medicaid DSH reductions set in motion by the ACA in 2018 for non-expansion States, and 2020 for expansion states.

6. Section 1115 Waivers

States with Waivers will not be penalized for having a Waiver.  In other words, the expenses and payments under the Waiver will be treated in the same manner as if the state did not have a Waiver. However, if a state’s waiver contains payment limitations, the limitations in the new law, not the Waiver, apply.

Again, the future of the AHCA is uncertain. We all remain watchful. One change that I would like to see is that due process is afforded to providers prior to suspension of all funds when there is a credible allegation of fraud.

Hospital May Lose Its Medicare Contract, Threatens CMS

Hospital is shocked to learn that its Medicare contract with Health and Human Services may be terminated by April 16, 2017. Medicaid services may also be adversely affected. The hospital was notified of the possible Medicare contract termination on March 27, 2017, and is faced with conceivably losing its Medicare contract within a month of notification. Legal action cannot act fast enough – unless the hospital requests an emergency temporary restraining order, motion to stay, and preliminary injunction and files it immediately upon learning that its Medicare contract is terminated.

The Center for Medicare and Medicaid Services (CMS) threatened Greenville Memorial Hospital, part of Greenville Health System, in South Carolina, that Medicare reimbursements will cease starting April 16, 2017. According to CMS, Memorial’s emergency department is not compliant with Medicare regulations.

A public notice in the Greenville News says: “Notice is hereby given that effective April 15, 2017, the agreement between GHS Greenville Memorial Hospital, 701 Grove Road, Greenville, S.C. 29605 and the Secretary of Health and Human Service, as a provider of Hospital Services and Health Insurance for the Aged and Disabled Program (Medicare) is to be terminated. GHS Greenville Memorial Hospital does not meet the following conditions of participation. 42 CFR 482.12 Governing Body, 42 CFR 482.13 Patients’ Rights and 42 CFR 482.23 Nursing Services.”

“The Centers for Medicare and Medicaid Services has determined that GHS Greenville Memorial Hospital is not in compliance with the conditions of coverage. The Medicare program will not make payment for hospital services to patients who are admitted after April 16, 2017.”

The findings came after an onsite audit was conducted on March 13, 2017. Memorial was notified of the report on March 27, 2017.

Memorial must have submitted a corrective action plan by April 3, 2017, but it has not been released.

The emergency department at Memorial treats about 300 patients per day. An employee of Memorial estimates that the termination would lose net revenue from Medicare and Medicaid could potentially reach around $495 million. Greenville Memorial received $305 million in Medicare funding and $190 million from Medicaid in the most recent fiscal year, accounting for nearly six in 10 patients, officials said.

While CMS and Memorial refuse to discuss the details of the alleged noncompliance, CMS’ public notice cites three CFR cites: 42 CFR 482.12 Governing Body, 42 CFR 482.13 Patients’ Rights and 42 CFR 482.23 Nursing Services.

42 CFR 482.12 requires that hospitals have governing bodies and plans to follow Medicare regulations. Subsection (f) specifically requires that if a hospital has an emergency department that the hospital must follow 42 CFR 482.55 “Conditions of Participation,” which states that “The hospital must meet the emergency needs of patients in accordance with acceptable standards of practice.

(a) Standard: Organization and direction. If emergency services are provided at the hospital –

  1. The services must be organized under the direction of a qualified member of the medical staff;
  2. The services must be integrated with other departments of the hospital;
  3. The policies and procedures governing medical care provided in the emergency service or department are established by and are a continuing responsibility of the medical staff.

(b) Standard: Personnel.

  1. The emergency services must be supervised by a qualified member of the medical staff.
  2. There must be adequate medical and nursing personnel qualified in emergency care to meet the written emergency procedures and needs anticipated by the facility.”

The Memorial audit stemmed from a March 4, 2017, death of Donald Keith Smith, 48, who died as a result of traumatic asphyxiation. After an altercation, the patient was placed on a gurney, supposedly, face-down. South Carolina’s Department of Health and Environmental Controls Site Survey Agency investigated the hospital after the death and the audit found that hospital security officers improperly restrained Smith, strapping him face down to a gurney during an altercation, rendering him unable to breathe. The death was ruled a homicide.

Memorial terminated the security officers involved in the death.

Now the hospital is faced with its own potential death. The loss of Medicare and, perhaps, Medicaid reimbursements could financially kill the hospital. Let’s see what happens…

Health Care Fraud Liability: With Yates Fired – What Happens to the Memo?

“You’re fired!” President Trump has quite a bit of practice saying this line from The Apprentice. Recently, former AG Sally Yates was on the receiving end of the line. “It’s not personal. It’s just business.”

The Yates Memo created quite a ruckus when it was first disseminated. All of a sudden, executives of health care agencies were warned that they could be held individually accountable for actions of the agency.

What is the Yates Memo?

The Yates Memo is a memorandum written by Sally Quillian Yates, former Deputy Attorney General for the U.S. Dept. of Justice, dated September 9, 2015.

It basically outlines how federal investigations for corporate fraud or misconduct should be conducted  and what will be expected from the corporation getting investigated. It was not written specifically about health care providers; it is a general memo outlining the investigations of corporate wrongdoing across the board. But it is germane to health care providers.

See blog.

January 31, 2017, Sally Yates was fired by Trump. So what happens to her memo?

With Yates terminated, will the memo that has shaken corporate America that bears her name go as well? Newly appointed Attorney General Jeff Sessions wrote his own memo on March 8, 2017, entitled “Memorandum for all Federal Prosecutors.” it directs prosecutors to focus not on corporate crime, but on violent crime. However, investigations into potential fraud cases and scrutiny on providers appear to remain a top priority under the new administration, as President Donald Trump’s proposed budget plan for fiscal year 2018 included a $70 million boost in funding for the Health Care Fraud and Abuse Control program.

Despite Sessions vow to focus on violent crimes, he has been clear that health care fraud remains a high priority. At his confirmation, Sessions said: “Sometimes, it seems to me, Sen. Hirono, that the corporate officers who caused the problem should be subjected to more severe punishment than the stockholders of the company who didn’t know anything about it.” – a quote which definitely demonstrates Sessions aligns with the Yates Memo.

By law, companies, like individuals, are not required to cooperate with the Justice Department during an investigation.  The Yates Memo incentivizes executives to cooperate. However, the concept was not novel. Section 9-28.700 of the U.S. Attorneys’ Manual, states: “Cooperation is a potential mitigating factor, by which a corporation – just like any other subject of a criminal investigation – can gain credit in a case that otherwise is appropriate for indictment and prosecution.”

Even though Trump’s proposed budget decreases the Department of Justice’s budget, generally, the increase in the budget for the Health Care Fraud and Abuse Control program is indicative of this administration’s focus on fraud, waste, and abuse.

Providers accused of fraud, waste, or abuse suffer extreme consequences. 42 CFR 455.23 requires states to suspend Medicaid reimbursements upon credible allegations of fraud. The suspension, in many instances, lead to the death of the agency – prior to any allegations being substantiated. Just look at what happened in New Mexico. See blog. And the timeline created by The Santa Fe New Mexican.

When providers are accused of Medicare/caid fraud, they need serious legal representation, but with the suspension in place, many cannot afford to defend themselves.

I am “all for” increasing scrutiny on Medicare/caid fraud, waste, and abuse, but, I believe that due process protection should also be equally ramped up. Even criminals get due process.

The upshot regarding the Yates Memo? Firing Yates did not erase the Yates Memo. Expect Sessions and Trump to continue supporting the Yates Memo and holding executives personally accountable for health care fraud – no more hiding behind the Inc. or LLC. Because firing former AG Yates, did nothing to the Yates Memo…at  least not yet.

Warning: Medicare/caid Billing Confusion May Lead to Jail Time

All health care providers are under serious scrutiny, that is, if they take Medicaid. In Atlanta, GA, a dentist, Dr. Oluwatoyin Solarin was sentenced to a year and six months for filing false claims worth nearly $1 million. She pled guilty, and, I would assume, she had an attorney who recommended that she plead guilty. But were her claims actually false? Did she hire a criminal attorney or a Medicaid attorney? Because the answers could be the difference between being behind bars and freedom.

Dr. Solarin was accused of billing for and receiving payments for dental claims while she was not at the office. U.S. Attorney John Horn stated that “Solarin cheated the Medicaid program by submitting fraudulent claims, even billing the government for procedures she allegedly performed at the same time she was out of the country.”

I receive phone calls all the time from people who are under investigation for Medicare/caid fraud. What spurred on this particular blog was a phone call from (let’s call him) Dr. Jake, a dentist. He, similar to Dr. Solarin, was under investigation for Medicaid fraud by the federal government. By the time Dr. Jake called me, his investigation was well on its way, and his Medicaid reimbursements had been suspended due to credible allegations of fraud for almost a year. He was accused of billing for and receiving payments for dental services while he was on vacation…or sick…or otherwise indisposed. He hired one of the top criminal attorneys, who advised him to take a plea deal for a suspended jail sentence and monetary recompense.

But, wait, he says to me. I didn’t do anything wrong. Why should I have to admit to a felony charge and be punished for doing nothing wrong?

I said, let me guess, Jake. You were the rendering dentist – as in, your NPI number was on the billed claim – but you hired a temporary dentist to stand in your place while you were on vacation, sick, or otherwise indisposed?

How did you know? Jake asks.

Because I understand Medicaid billing.

When my car breaks down, I go to a mechanic, not a podiatrist. The same is true for health care providers undergoing investigation for Medicare/caid fraud – you need a Medicare/caid expert. A criminal attorney,most likely, will not understand the Medicare/caid policy on locum tenens. Or the legal limitations of Medicaid suspensions and the administrative route to get the suspension lifted. Or the good cause exception to suspensions.

Don’t get me wrong, I am not advocating that, when under criminal, health care fraud investigation, you should not hire a criminal attorney. Absolutely, you will want a criminal attorney. But you will also want a Medicare/caid attorney.

What is Locum tenens? It is a Latin phrase that means temporary substitute. Physicians and dentists hire locum tenens when they go on vacation or if they fall ill. It is similar to a substitute teacher. Some days I would love to hire a locum tenens for me. When a doctor or dentist hires a temporary substitute, usually that substitute is paid by the hour or by the services rendered. If the payor is Medicare or Medicaid, the substitute is not expected to submit the billing and wait to be reimbursed. The substitute is paid for the day(s) work, and the practice/physician/dentist bills Medicare/caid, which is reimbursed. For billing purposes, this could create a claim with the rendering NPI number as Dr. Jake, while Dr. Sub Sally actually rendered the service, because Dr. Jake was in the Bahamas. It would almost look like Dr. Jake were billing for services billing the government for procedures he allegedly performed at the same time he was out of the country.

Going back to Dr. Jake…had Dr. Jake hired a Medicare/caid attorney a year ago, when his suspension was first implemented, he may have be getting reimbursed by Medicaid this whole past year – just by asking for a good cause exception or by filing an injunction lifting the suspension. His Medicaid/care attorney could have enlightened the investigators on locum tenens, and, perhaps, the charges would have been dropped, once the billing was understood.

Going back to Dr. Solarin who pled guilty to accusations of billing for services while out of the country…what if it were just a locum tenens problem?

Medicaid Forecast: Cloudy with 100% Chance of Trump

Regardless how you voted, regardless whether you “accept” Trump as your president, and regardless with which party you are affiliated, we have a new President. And with a new President comes a new administration. Republicans have been vocal about repealing Obamacare, and, now, with a Republican majority in Congress and President, changes appear inevitable. But what changes?

What are Trump’s and our legislature’s stance on Medicaid? What could our future health care be? (BTW: if you do not believe that Medicaid funding and costs impact all healthcare, then please read blog – and understand that your hard-working tax dollars are the source of our Medicaid funding).

WHAT IS OUR HEALTHCARE’S FORECAST?

The following are my forecasted amendments for Medicaid:

  1. Medicaid block grants to states

Trump has indicated multiple times that he wants to put a cap on Medicaid expenses flowing from the federal government to the states. I foresee either a block grant (a fixed annual amount per state) or a per capita cap (fixed dollar per beneficiary) being implemented.

What would this mean to Medicaid?

First, remember that Medicaid is an entitlement program, which means that anyone who qualifies for Medicaid has a right to Medicaid. Currently, the federal government pays a percentage of a state’s cost of Medicaid, usually between 60-70%. North Carolina, for example, receives 66.2% of its Medicaid spending from Uncle Sam, which equals $8,922,363,531.

While California receives only 62.5% of its Medicaid spending from the federal government, the amount that it receives far surpasses NC’s share – $53,436,580,402.

The federal funding is open-ended (not a fixed a mount) and can inflate throughout the year, but, in return, the states are required to cover certain health care services for certain demographics; e.g., pregnant women who meet income criteria, children, etc. With a block grant or per capita cap, the states would have authority to decide who qualifies and for what services. In other words, the money would not be entwined with a duty that the state cover certain individuals or services.

Opponents to block grants claim that states may opt to cap Medicaid enrollment, which would cause some eligible Medicaid recipients to not get coverage.

On the other hand, proponents of per capita caps, opine that this could result in more money for a state, depending on the number of Medicaid eligible residents.

2. Medicaid Waivers

The past administration was relatively conservative when it came to Medicaid Waivers through CMS. States that want to contract with private entities to manage Medicaid, such as managed care organizations (MCOs), are required to obtain a Waiver from CMS, which waives the “single state entity” requirement. 42 CFR 431.10. See blog.

This administration has indicated that it is more open to granting Waivers to allow private entities to participate in Medicaid.

There has also been foreshadowing of possible beneficiary work requirements and premiums.Montana has already implemented job training components for Medicaid beneficiaries. However, federal officials from the past administration instructed Montana that the work component could not  be mandatory, so it is voluntary. Montana also expanded its Medicaid in 2015, under a Republican governor. At least for one Medicaid recipient, Ruth McCafferty, 53, the voluntary job training was Godsend. She was unemployed with three children at home. The Medicaid job program paid for her to participate in “a free online training to become a mortgage broker. The State even paid for her 400-mile roundtrip to Helena to take the certification exam. And now they’re paying part of her salary at a local business as part of an apprenticeship to make her easier to hire.” See article.

The current administration may be more apt to allow mandatory work requirements or job training for Medicaid recipients.

3. Disproportionate Share Hospital

When the ACA was implemented, hospitals were at the negotiating table. With promises from the past administration, hospitals agreed to take a cut on DSH payments, which are paid to hospitals to help offset the care of uninsured and Medicaid patients. The ACA’s DSH cut is scheduled to go into effect FY 2018 with a $2 billion reduction. It is scheduled to continue to reduce until FY 2025 with a $8 billion reduction. The reason for this deduction was that the ACA would create health coverage for more people and with Medicaid expansion there would be less uninsured.

If the ACA is repealed, our lawmakers need to remember that DSH payments are scheduled to decrease next year. This could have a dramatic impact on our hospitals. Last year, approximately 1/2 of our hospitals received DSH. In 2014, Medicaid paid approximately $18 billion for DSH payments, so the proposed reductions make up a high percentage of DSH payments.

4. Physician payment predictability

Unlike the hospitals, physicians got the metaphoric shaft when the ACA was implemented. Many doctors were forced to provide services to patients, even when those patients were not covered by a health plan. Many physicians had to  increase the types of insurance they would accept, which increased their administrative costs and the burden.

This go-around, physicians may have the ear of the HHS Secretary-nominee, Tom Price, who is an orthopedic surgeon. Dr. Price has argued for higher reimbursement rates for doctors and more autonomy. Regardless, reimburse rate predictability may stabilize.

Do the Anti-Kickback and Stark Laws Apply to Private Payors?

Good question.

Anti-Kickback statutes (AKS) and Stark law are extremely important issues in health care. Violations of these laws yield harsh penalties. Yet, many healthcare professionals have little to no knowledge on the details of these two legal beasts.

The most common question I get regarding AKS and Stark is: Do AKS and Stark apply to private payers? Health care professionals believe, if I don’t accept Medicare or Medicaid, then I don’t need to worry about AKS and Stark. Are they correct??

The general and overly broad response is that the Stark Law, 42 USC § 1395nn, only applies to Medicare and Medicaid. The AKS, 42 USC § 1320a-7b(b)),applies to any federal healthcare program.

Is there a difference between AKS and Stark?

Answer: Yes. As discussed above, the first difference is that AKS applies to all federal healthcare programs. This stark difference (pun intended) makes the simple decision to not accept Medicare and Medicaid, thus allowing you to never worry about AKS, infinitely more difficult.

Let’s take a step back… What are AKS and Stark laws and what do these laws prohibit? When you Google AKS and Stark, a bunch of legal blogs pop up and attempt to explain, in legalese, what two, extremely esoteric laws purport to say, using words like “renumeration,” “knowing and willful,” and “federal healthcare program.” You need a law license to decipher the deciphering of AKS and Stark. The truth is – it ain’t rocket science.

The AKS is a criminal law; if you violate the AKS, you can be prosecuted as a criminal. The criminal offense is getting something of value for referrals. You cannot refer patients to other health care professionals in exchange for money, reduced rent, use of laboratory equipment, referrals to you, health services for your mother, marketing, weekly meals at Ruth’s Chris, weekly meals at McDonalds, oil changes, discounted theater tickets, Uber rides, Costco coupons, cooking lessons, or…anything of value, regardless the value. 

Safe harbors (exceptions to AKS) exist. But those exceptions better fit squarely into the definition of the exceptions. Because there are no exceptions beyond the enumerated exceptions.

AKS is much more broad in scope than Stark. Other than Medicare and Medicaid, AKS applies to any health care plan that utilizes any amount of federal funds. For example, AKS applies to Veterans Health Care, State Children’s Health Programs (CHIP), Federal Employees Health Benefit Program, and many other programs with federal funding. Even if you opt to not accept Medicare and Medicaid, you may still be liable under AKS.

Stark law, on the other hand, is more narrow and only applies to Medicare and Medicaid. I find the following “cheat sheet” created by a subdivision of the Office of Inspector General to be helpful in understanding AKS and Stark and the differences between the two:

One other important aspect of Stark is that is considered “strict liability,” whereas AKS requires a proving of a “knowing and willful” action.

Feel free to print off the above chart for your reference. However, see that little asterisk at the bottom of the chart? It applies here as well.

Look into My Crystal Ball: Who Is Going to Be Audited by the Government in 2017?

Happy New Year, readers!!! A whole new year means a whole new investigation plan for the government…

The Department of Health and Human Services (HHS) Office of Inspector General (OIG) publishes what is called a “Work Plan” every year, usually around November of each year. 2017 was no different. These Work Plans offer rare insight into the upcoming plans of Medicare investigations, which is important to all health care providers who accept Medicare and Medicaid.

For those of you who do not know, OIG is an agency of the federal government that is charged with protecting the integrity of HHS, basically, investigating Medicare and Medicaid fraud, waste, and abuse.

So let me look into my crystal ball and let you know which health care professionals may be audited by the federal government…

crystal-ball

The 2017 Work Plan contains a multitude of new and revised topics related to durable medical equipment (DME), hospitals, nursing homes, hospice, laboratories.

For providers who accept Medicare Parts A and B, the following are areas of interest for 2017:

  • Hyperbaric oxygen therapy services: provider reimbursement
  • Inpatient psychiatric facilities: outlier payments
  • Skilled nursing facilities: reimbursements
  • Inpatient rehabilitation hospital patients not suited for intensive therapy
  • Skilled nursing facilities: adverse event planning
  • Skilled nursing facilities: unreported incidents of abuse and neglect
  • Hospice: Medicare compliance
  • DME at nursing facilities
  • Hospice home care: frequency of on-site nurse visits to assess quality of care and services
  • Clinical Diagnostic Laboratories: Medicare payments
  • Chronic pain management: Medicare payments
  • Ambulance services: Compliance with Medicare

For providers who accept Medicare Parts C and D, the following are areas of interest for 2017:

  • Medicare Part C payments for individuals after the date of death
  • Denied care in Medicare Advantage
  • Compounded topical drugs: questionable billing
  • Rebates related to drugs dispensed by 340B pharmacies

For providers who accept Medicaid, the following are areas of interest for 2017:

  • States’ MCO Medicaid drug claims
  • Personal Care Services: compliance with Medicaid
  • Medicaid managed care organizations (MCO): compliance with hold harmless requirement
  • Hospice: compliance with Medicaid
  • Medicaid overpayment reporting and collections: all providers
  • Medicaid-only provider types: states’ risk assignments
  • Accountable care

Caveat: The above-referenced areas of interest represent the published list. Do not think that if your service type is not included on the list that you are safe from government audits. If we have learned nothing else over the past years, we do know that the government can audit anyone anytime.

If you are audited, contact an attorney as soon as you receive notice of the audit. Because regardless the outcome of an audit – you have appeal rights!!! And remember, government auditors are more wrong than right (in my experience).