Category Archives: Federal Government
Oct. 1, 2019 marks the beginning of a new era of billing for skilled nursing facilities (SNFs).
Say goodbye to RUG-IV, and hello to the Patient-Driven Payment Model (PDPM).
This is a daunting task, not for the faint of heart. Under PDPM, reimbursement for Medicare Part A patients in SNFs will be driven by patient condition, rather than by therapy minutes provided. Documentation is crucial to a successful Recovery Audit Contractor (RAC) audit.
In the past, therapy documentation has been the focus of RAC audits. Now, nursing documentation is front and center. Do not try to maximize case mix index (CMI). But remember, certain documentation can easily lead to higher reimbursement. For example, if you document when a patient is morbidly obese, suffering from diabetes, and taking intravenous medication, this can lead to three times the reimbursement over the first three days. This article will explore the intricacies of RAC audits and how to maximize reimbursement while successfully maneuvering through the process.
Here is the million-dollar question: how will PDPM affect your business?
The answer is four-fold, for the purposes of this article, although this list is not exhaustive.
- Managing care: Unlike RUG-IV, which incentivizes ultra-high volumes of therapy to capture maximum payment, PDPM requires you to carefully manage how you deliver services in order to provide the right level of care for each patient. This begs the question of whether you’re getting paid to over-deliver services (or practice “defensive medicine”), or you’re getting audits and recoupments for under-delivering due to poor patient outcomes. For this reason, it can seem like you are getting pulled in two directions.
- Financial: PDPM is designed to be budget-neutral. Your reimbursements will decrease. SNFs will be able to offset the loss in therapy reimbursement with higher reimbursement for services already being provided.
- Staffing: There is less demand for therapists in a SNF setting. But you will be able to retain the best therapy sources.
- Billing: Under PDPM, you will bill using the Health Insurance Prospective Payment System (HIPPS) code that is generated from assessments with ARD. You will still be using a five-digit code, as you did with RUG-IV. But the characters signify different things. For example, under RUG-IV, the first three characters represented the patient’s RUG classification, and the last two were an assessment indicator. With PDPM, the first character represents the patient’s physical therapy (PT) and occupational therapy (OT) component. The second is the patient’s speech language therapy (SLP) component. The third is the nursing component classification. The fourth is the NTA component classification, while the fifth is an AI code.
The upshot to this is that different clinical categories can result in significant reimbursement differences. For example, consider the major joint replacement or spinal surgery clinical category. That clinical category is a major medical service, which can translate to a $42-a-day increase in reimbursement. For a 20-day stay, that clinical category would increase reimbursement by $840. You want to pick up on this type of surgery.
I received a question after a recent program segment asking whether swing beds will be affected by PDPM. In most hospitals, the answer is yes. The exception is critical access hospitals (CAHs), which will remain cost-based for their swing beds.
Final Rule: “Accordingly, all non-CAH swing-bed rural hospitals have now come under the SNF PPS. Therefore, all rates and wage indexes outlined in earlier sections of this final rule for the SNF PPS also apply to all non-CAH swing- bed rural hospitals.”
The latest changes in the MDS for swing-bed rural hospitals appear on the SNF PPS website at: http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/index.html
Listen to healthcare attorney Knicole Emanuel every Monday on Monitor Monday, 10-10:30 a.m. EST.
“Medicare for All” is the talk of the town. People are either strong proponents or avid naysayers. Most of the articles that I have seen that have discussed Medicare for All writes about it as if it is a medical diagnosis and “cure-all” for the health care disease debilitating our country. Others articles discuss the amount Medicare for All will cost the taxpayers.
I want to look at Medicare for All from a different perspective. I want to discuss Medicare for All from the health care providers’ perspectives – those who already accept Medicare and those who, currently, do not accept Medicare, but may be forced to accept Medicare under the proposed Medicare for All and the legality or illegality of it.
I want to explore the implementation of Medicare for All by using my personal dentist as an example. When I went to my dentist, Dr. L, today, who doesn’t accept Medicare or Medicaid, he was surprised to hear from the patient (me) in whom he was inserting a crown (after placing a long needle in my mouth to numb my mouth, causing great distress and pain) that he may be forced to accept Medicare in the near future. “I made the decision a long time ago to not accept Medicare or Medicaid,” he said. “Plus, Medicare doesn’t even cover dental services, does it?”
While Medicare doesn’t cover most dental care, dental procedures, or supplies, like cleanings, fillings, tooth extractions, dentures, dental plates, or other dental devices, Medicare Part A (Hospital Insurance) will pay for certain dental services that you get when you’re in a hospital. Part A can pay for inpatient hospital care if you need to have emergency or complicated dental procedures, even though the dental care isn’t covered. However, some Medicare Advantage Plans (Part C) offer extra benefits that original Medicare doesn’t cover – like vision, hearing, or dental. Theoretically, Medicare for All will cover dental services since Part C covers dental, although, there is a question as to how exactly Medicare for All will/would work. Who knows whether dental services would be included in Medicare for All – this is just an example. Insert any type of medical service in lieu of dental, if you wish.
Dr. L had made the decision not accept Medicaid or Medicare. He only accepts private pay or cash pay. If Medicare for All is implemented, Dr. L’s decision to not accept Medicare will no longer be his decision; it would be the government’s decision. The rates that Dr. L charges now and receives for reimbursements now could be slashed in half without Dr. L’s consent or business plan.
In a 2019 RAND study, researchers examined payment and claims data from 2015 to 2017 representing $13 billion in healthcare spending across 25 states at about 1,600 hospitals. The study showed that private insurers pay 235% of Medicare in 2015 to 241% of Medicare in 2017. The statistics differ state to state. In some states private pay reimbursed as low as 150% of Medicare, while in others private pay reimbursed up to 400% of Medicare.
To show how many providers are adverse to accepting Medicare: In 2000, nearly 80% of health care providers were taking new Medicare patients. By 2012, that number dropped to less than 60%. Currently, less than 40% of the health-care system are government run and nearly 33% of doctors won’t see new Medicaid patients. Medicare patients frequently have difficulty finding a new primary-care doctor.
My question is –
Is it legal for the government to force health care providers to accept Medicare rates by issuing a Medicare for All system?
An analogy would be that the government forced all attorneys to charge under $100/hour, or all airplane flights to be $100, or all restaurants to charge a flat fee that is determined by the government. Is this what our country has transformed into? A country in which the government determines the prices of services and products?
Let me be clear and and rebut what some readers will automatically think. This is not simply an anti-Medicare for All blog. Shoot, I’d love to get health care services for free. Instead, I am reviewing Medicare for All from a legal and constitutional perspective to discuss whether government implemented reimbursement rates will/would be legal. Or would government implemented reimbursement rates violate due process, the right to contract, the right to pursue a career, the right to life, liberty, and the pursuit of happiness, and/or our country’s history of capitalism.
The consequences of accepting Medicare can be monumental. Going back to Dr. L, due to the massive decrease of reimbursement rates under Medicare, he may be forced to downsize his staff, stop investing in high tech devices to advance the practice of dentistry, take less of a salary, and, perhaps, work more to offset the reimbursement rate reduction.
Not to mention the immense regulatory oversight, including audits, documentation productions, possible suspensions of Medicare contracts or accusations of credible allegations of fraud that comes hand in hand with accepting Medicare.
I don’t think there is one particular law that would allow or prohibit Medicare for All requiring health care providers to accept Medicare reimbursements, even against their will. Although I do think there is potential for a class action lawsuit on behalf of health care providers who have decided to not accept Medicare if they are forced to accept Medicare in the future.
I do not believe that Medicare for All will ever be implemented. Just think of a world in which there is no need for private insurance companies…a utopia, right? But the private health care insurance companies have enough money and enough sway to keep Medicare for All at bay. Hospitals and the Hospital Association will also have some input regardless the implementation of Medicare for All. Most hospitals claim that, under Medicare for All, they would close.
Regardless the conversation is here and will, most likely, be a highly contested issue in our next election.
“Gov. Michelle Lujan Grisham signed into law this week a bill (SB41) that ensures service providers accused of overbilling or defrauding Medicaid can review and respond to allegations of wrongdoing before state action is taken.” – Tripp Jennings, New Mexico In Depth.
For those of you who don’t know, in 2013, the State of New Mexico, suspended the Medicaid reimbursements of 15 behavioral health care providers based on “credible allegations of fraud.” 42 CFR 455.23. The Attorney General eventually determined that no fraud existed as to ANY of the 15 behavioral health care providers. These providers constituted 87.5% of the behavioral health care providers in New Mexico, which is predominantly Medicaid and has the highest suicide rate of any state, if you consider the Native American population.
There was no due process. The providers were informed of the immediate Medicaid suspension in a group meeting without ever being told what exactly the “fraud” was that they allegedly committed. They were informed by, then assistant Attorney General, Larry Hyeck, that fraud existed and because of the ongoing investigation nothing could be divulged to those accused. Supposedly, the evidence for such “fraud” was based on an independent audit performed by Public Consulting Group (PCG). However, according to testimony from an employee of PCG at the administrative hearing of The Counseling Center (one of the 15 accused behavioral health care providers), PCG was not allowed by the Human Services Department of NM (HSD) to complete its audit. According to this employee’s testimony, it is PCG’s common practice to return to the providers which are the subject of the audit a 2nd or even 3rd time to ensure that all the relevant documents were collected and reviewed. Human error and the sheer amount of medical records involved in behavioral health care suggest that a piece of paper or two can be overlooked, especially because this audit occurred in 2013, before most of the providers had adopted electronic medical record systems. Add in the fact that PCG’s scanners were less than stellar and that the former Governor Susan Martinez, Optum’s CEO, and the HSD Secretary -at the time- had already vetted 5 Arizona companies to overtake the 15 NM behavioral health care companies – even prior to PCG’s determination – and the sum equals a pre-determined accusation of fraud. PCG’s initial report stated that no credible allegations of fraud existed. However, PCG was instructed to remove that sentence.
Almost all the providers were forced out of business. The staff were terminated or told to be employed by the new 5 AZ companies. The Medicaid recipients lost their mental health services. One company remained in business because they paid the State for fraud that they never committed. Another company held on by a very thin thread because of its developmental disability services. But the former-CEO became taxed and stepped down and many more left or were let go. The 13 other providers were financially ruined, including the largest behavioral health care provider in NM, which serviced over 700 Medicaid recipients and employed hundreds of clinical staff. It had been servicing NM’s poor and those in need of mental health services for over 30 years. Another company had been in business over 40 years (with the same CEO). The careers and live’s work were crumbled in one day and by one accusation that was eventually proven to be wrong.
No one ever foresaw this amount of abuse of discretion to occur by government agents.
Now, today, in 2019, the new Governor of NM, Gov. Michelle Lujan Grisham, signed a law introduced by Senator Mary Kay Papen, a long proponent and advocate that the 15 behavioral health care providers were unjustly accused and forced out of business, that will protect Medicaid providers in NM from ever being subjected to the unjust and arbitrary suspension of Medicaid funds and unfounded allegations of Medicaid fraud.
Even though 42 C.F.R. 455.23 requires a state to suspend Medicaid funding upon “credible allegations of fraud,” NM has taken the first step toward instituting a safeguard for Medicaid providers. Already too few health care providers accept Medicaid – and who can blame them? The low reimbursement rates are nothing compared to the regulatory scrutiny that they undergo merely for accepting Medicaid.
NM SB41 contradicts the harsh language of 42 CFR 455.23, which mandates that a State “must” suspend payments upon a credible allegation of fraud. NM SB41 provides due process for Medicaid providers accused of fraud. Which begs the question – why hasn’t anyone brought a declaratory action to determine that 42 CFR 455.23 violates due process, which happens to be a constitutional right?
Part of the due process enacted by New Mexico is that a suspension of Medicaid reimbursements should be released upon a post of a surety bond and that the posting of a surety bond shall be deemed good cause to not suspend payments during the investigation. Although the new law also states that the Medicaid reimbursement suspension must be released within 10 days of the posting of the surety bond “in the amount of the suspended payment.” After 4 administrative hearings in New Mexico, I can assure you that the provider and HSD will have two disparate views of the “amount of the suspended payment.” And by disparate, I mean REALLY disparate.
Regardless, I view this new law as a giant leap in the direction of the Constitution, which was actually enacted in 1789. So is it apropos that 230 years later NM is forced to enact a law that upholds a legal right that was written and enacted into law 230 years ago?
Thank you, Gov. Michelle Lujan Grisham, Senator Papen, Patsy Romero, and Shawn Mathis for your amazing effort on getting this legislation passed.
And – look forward to my webcast on RACMonitor on Monday, April 8, 2019, detailing how courts across the country are revising their views and granting federal injunctions stopping premature recoupments when a Medicare/caid provider is accused of an overpayment. Due process is on a come-back.
There are a lot of concerns related to “incident-to“ billing. However, for physician practices, “incident-to” billing is a money maker, which, in the world, of sub-par Medicare reimbursement rates is a minute ray of sunshine in an otherwise eclipsed land. Auditors argue that there are fraud and abuse concerns because practices ignore or are confused about the rules and bill everything “incident-to“regardless of the conditions being met. This can result in a nasty audit, as well as substantial fines, penalties, and attorneys’ fees. If you bill “incident-to,” just follow the rules…unless those rules are eliminated. Until possible elimination, keep up with the rules, which can differ depending on the auditor in the region.
Recently, people have been pushing for Medicare reform to include disallowing nurse practitioners (NPs) and physician assistants (PAs) from billing “incident-to.” Proponents of the suggested amendment claims that the recommendation would save the Medicare program money — approximately $50 to $250 million annually and just under $1 billion over 5 years.
The number of NPs who bill Medicare has more than doubled, from 52,000 to 130,000 from 2010 to 2017
What is “incident-to” billing?
In colloquialism, “incident-to” billing allows non-physician providers (NPPs) to report services “as if” they were performed by a physician. The NPP stands in the shoes of the physician. The advantage is that, under Medicare rules, covered services provided by NPPs typically are reimbursed at 85% of the fee schedule amount; whereas, services properly reported “incident-to” are reimbursed at the full fee schedule value.
In legalize, “incident-to” services under §1861(s)(2)(A) of the Social Security Act are provided by NPPs as a part of the services provided directly by the physician, but billed as if they were in fact performed by the physician. Several, legal, threshold requirements must be satisfied before billing eligibility for these services is established.
Billing using “incident-to” can be a huge money-maker for providers. If billed incorrectly, it can also be a provider’s financial downfall.
“Incident-to” billing can only apply to established patients. Not new patients. Not consults. The other non-negotiable factor is that the physician who is supervising must be on-site. Not a phone call away. Not grabbing a burger at a local eatery. On-site. Although with hospitals, the cafeteria is a viable option. I foresee, in the future, telehealth and Skype may change this on-site requirement. The incident-to rules also require that the services be part of a patient’s normal course of treatment. The rules require that the physician remains actively involved in the patient’s course of treatment. There must be direct supervision. Direct supervision = on-site. The following services cannot be billed as “incident-to:”
- new patient visits
- visits in which an established patient is seen for a new problem
- visits in which the treatment provided or prescribed is not a part of the treatment plan established by a physician
- services provided in the hospital or ambulatory surgery center.
Do not confuse “incident-to” with Medicare patients versus Medicaid patients. MediCAID’s regulations for the coverage of MD services vary significantly than Medicare’s rules and requires direct contact with the patient with exceptions.
Here is a question that I often get: “When billing “incident-to,” do you bill “incident to” the physician who is physically on-site that day or the physician who is overseeing that patient’s care? Both physicians are in the same group and it is billed under the Group NPI, but not sure which physician to reference for “incident-to.”
Answer: Bill under the MD who is on-site. This was addressed by the Center for Medicare and Medicaid Services (CMS) in the 2016 Physician Fee Schedule Final Rule.
The Medicare Benefit Policy Manual addresses the “incident-to” rules for each provider type and in any scenario:
- Section 60 contains policies for services furnished incident to physicians’ services in the physician’s office.
- Chapter 6, section 20.5 enumerates the policies for therapeutic services furnished “incident-to” physicians’ services in the hospital outpatient setting.
- Section 80 states the policies for diagnostic tests in the physician’s office
- Chapter 6, section 20.4 lists the policies for diagnostic tests furnished in the hospital outpatient setting.
Drug Administration under “incident-to”
“The Medicare program provides limited benefits for outpatient prescription drugs. The program covers drugs that are furnished “incident to” a physician’s service provided that the drugs are not usually self-administered by the patients who take them.” Medicare Benefit Policy Manual, 50.2. Injectable drugs, including intravenously administered drugs, are typically eligible for inclusion under the “incident-to” benefit.
The Medicare Administrative Contracts (MACs) (or – auditors) must fully explain the process they will use to determine whether a drug is usually self-administered and thus does not meet the “incident-to” benefit category. The MACs must publish a list of the injectable drugs that are subject to the self-administered exclusion. If there is discrepancy amongst the MACs, a lawsuit could help.
In order to meet all the general requirements for coverage under the “incident-to” provision, an FDA approved drug or biological must:
- Be of a form that is not usually self-administered;
- Must be furnished by a physician; and
- Must be administered by the physician, or by auxiliary personnel employed by the physician and under the physician’s personal supervision
The charge, if any, for the drug or biological must be included in the physician’s bill, and the cost of the drug or biological must represent an expense to the physician.
“Incident-to” billing is subject to elimination. The difference in billing “incident-to” is a 100% reimbursement rate versus an 85% reimbursement rate. That 15% difference cannot be passed onto the Medicare recipients.
While “incident-to” billing continues to be allowed, it is imperative to keep up with the ever changing rules.
We have had parity laws between mental and physical health care services on the books for years. Regardless of the black letter law, mental health health care services have been treated with stigma, embarrassment, and of lesser importance than physical health care services. A broken leg is easily proven by an X-Ray; whereas a broken mind is less obvious.
In an unprecedented Decision ripe with scathing remarks against Optum/United Behavioral Health’s (UBH) actions, a Court recently ruled that UBH improperly denied mental health services to insureds and that those improper denials were financially-driven. A slap-on-the-wrist, this Decision was not. More of a public whipping.
In a 106-page opinion, the US District Court, Northern District of California, slammed UBH in a blistering decision finding that UBH purposely and improperly denied behavioral health care benefits to thousands of mentally ill insureds by utilizing overly restrictive guidelines. This is a HUGE win for the mental health community, which often does not receive the parity of services (of physical health) that it is legally is entitled. U.S. Chief Magistrate Judge Joseph Spero spared no political correctness in his mordacious written opinion, which is rarity in today’s vitriolic world.
The Plaintiffs filed a lawsuit under the Employee Retirement Income Security Act of 1974 (ERISA), saying the insurer denied benefits in violation of the terms of their insurance plans and state law. The Plaintiffs consisted of participants in UBH health care plans and who were denied mental health care services.
Judge Spero found United Behavioral’s guidelines were influenced by financial incentives concerning fully-funded and self-funded ERISA plans:
“While the incentives related to fully insured and self-funded plans are not identical, with respect to both types of plan UBH has a financial interest in keeping benefit expense down … [A]ny resulting shortcomings in its Guideline development process taints its decision-making as to both categories of plan because UBH maintains a uniform set of Guidelines for fully insured and self-funded plans … Instead of insulating its Guideline developers from these financial pressures, UBH has placed representatives of its Finance and Affordability Departments in key roles in the Guidelines development process throughout the class period.”
Surprisingly, this decision came out of California, which is notoriously socially-driven. Attorneys generally avert their eyes when opinions come from the 9th District.
Judge Spero found that UBH violated “generally accepted standards of care” to administer requests for benefits.
The Court found that “many mental health and substance use disorders are long-term and chronic.” It also found that, in questionable instances, the insurance company should err on the caution of placing the patient in a higher level of care. The Court basically cited the old adage – “Better safe than sorry,” which seems a pretty darn good idea when you are talking about mental health. Just ask Ted Bundy.
Even though the Wit Decision involved private pay insurance, the Court repeatedly cited to the Center for Medicare and Medicaid Services’ (CMS) Manual. For example, the Court stated that “the CMS Manual explains, [f]or many . . . psychiatric patients, particularly those with long-term, chronic conditions, control of symptoms and maintenance of a functional level to avoid further deterioration or hospitalization is an acceptable expectation of improvement.” It also quoted ASAM criteria as generally accepted standards, as well as LOCUS, which tells me that the law interprets the CMS Manual, ASAM criteria, and LOCUS as “generally accepted standards,” and not UBH’s or any other private pay insurance’s arbitrary standards. In fact, the Court actually stated that its decision was influenced by the fact that UBH’s adopted many portions of CMS’ Manual, but drafted the language in a more narrow way to ensure more denials of mental health benefits.
The Court emphasized the importance of ongoing care instead of acute care that ceases upon the end of the acute crisis. The denial of ongoing care was categorized as a financial decision. The Court found that UBH’s health care policy “drove members to lower levels of care even when treatment of the member’s overall and/or co-occurring conditions would have been more effective at the higher level of care.”
The Wit decision will impact us in so many ways. For one, if a State Medicaid program limits mental health services beyond what the CMS Manual, ASAM criteria, or LOCUS determines, then providers (and beneficiaries) have a strong legal argument that the State Medicaid criteria do not meet generally accepted standards. Even more importantly, if the State Medicaid policies do NOT limit mental health care services beyond what the CMS Manual, ASAM criteria, and LOCUS defines, but an agent of the State Medicaid Division; i.e, a managed care organization (MCO) deny mental health care services that would be considered appropriate under the generally accepted standards, then, again, both providers and beneficiaries would have strong legal arguments overturning those denials.
I, for one, hope this is a slippery slope…in the right direction.
The ADR rule went into effect Jan. 1, 2019. Original blog post published March 6, 2019, on RACMonitor.
The Centers for Medicare & Medicaid Services (CMS) has updated its criteria for additional document requests (ADRs). If your ADR “cycle” is less than 1, CMS will round it up to 1.
What is an ADR cycle?
When a claim is selected for medical review, an ADR is generated requesting medical documentation be submitted to ensure payment is appropriate. Documentation must be received by CGS (A Celerian Group Company) within 45 calendar days for review and payment determination. Any selected and submitted claim can create an ADR. In other words, a provider is asked to prove that the service was rendered and that the billing was compliant.
It is imperative to understand that you, as the provider, check the Fiscal Intermediary Standard System (FISS) status/location S B6001. Providers are encouraged to use FISS Option 12 (Claim Inquiry) to check for ADRs at least once per week. You will not receive any other form of notification for an ADR.
To make matters even more confusing, there are two different types of ADRs: medical review (reason code 39700) and non-medical review (reason code 39701).
An ADR may be sent by CGS, Zone Program Integrity Contractors (ZPICs), Recovery Audit Contractors (RACs), Supplemental Medical Review Contractors (SMRCs), the Comprehensive Error Rate Testing (CERT) contractor, etc. When a claim is selected for review or when additional documentation is needed to complete the claim, an ADR letter is generated requesting that documentation and/or medical records be submitted.
The ADR process is essentially a type of prepayment review.
A baseline annual ADR limit is established for each provider based on the number of Medicare claims paid in the previous 12-month period that are associated with the provider’s six-digit CMS Certification Number (CCN) and the provider’s National Provider Identifier (NPI) number. Using the baseline annual ADR limit, an ADR cycle limit is also established.
After three 45-day ADR cycles, CMS will calculate (or recalculate) a provider’s denial rate, which will then be used to identify a provider’s corresponding “adjusted” ADR limit. Auditors may choose to either conduct reviews of a provider based on their adjusted ADR limit (with a shorter lookback period) or their baseline annual ADR limit (with a longer lookback period).
The baseline, annual ADR limit is one-half of one percent of the provider’s total number of paid Medicare service types for which the provider had reimbursed Medicare claims.
Effective Jan. 1, 2019, providers whose ADR cycle limit is less than 1, even though their annual ADR limit is greater than 1, will have their ADR cycle limit round up to 1 additional documentation request per 45 days, until their annual ADR limit has been reached.
For example, say Provider ABC billed and was paid for 400 Medicare claims in a previous 12-month period. The provider’s baseline annual ADR limit would be 400 multiplied by 0.005, which is two. The ADR cycle limit would be 2/8, which is less than one. Therefore, Provider ABC’s ADR cycle limit will be set at one additional documentation request per 45 days, until their annual ADR limit, which in this example is two, has been reached. In other words, Provider ABC can receive one additional documentation request for two of the eight ADR cycles, per year.
ADR letters are sent on a 45-day cycle. The baseline annual ADR limit is divided by eight to establish the ADR cycle limit, which is the maximum number of claims that can be included in a single 45-day period. Although auditors may go more than 45 days between record requests, in no case shall they make requests more frequently than every 45 days.
And that is the update on ADRs. Remember, the rule changed Jan. 1, 2019.
So many memos, so little time. Federal prosecutors receive guidance on how to prosecute. Maybe “guidance” is too loose a term. There is a manual to follow, and memos are just guidance until the memos are incorporated into what is known as the Justice Manual. Memos are not as binding as the Justice Manual, but memos are persuasive. For the last 22 years, the Justice Manual has not been revised to reflect the many, many memos that have been drafted to direct prosecutors on how to proceed. Until recently…
Justice Manual Revised
The Justice Manual, which is the manual that instructs federal prosecutors how to proceed in cases of Medicare and Medicaid fraud, has been revised for the first time since 1997. The Justice Manual provides internal Department of Justice (DOJ) rules.
The DOJ has new policies for detecting Medicare and Medicaid fraud and abuse. Some of these policies are just addendums to old policies. Or formal acceptance to old memos. Remember the Yates Memo? The Yates Memo directed prosecutors to indict executives, individually, of fraudulent companies instead of just going after the company.
The Yates Memo has now been codified into the Justice Manual.
Then came the Granston Memo – In a January 10, 2018, memo (the “Granston Memo”), the DOJ directed its prosecutors to more seriously consider dismissing meritless False Claims Act (“FCA”) cases brought by whistleblowers. It lists 7 (non-exhaustive) criteria for determining whether the DOJ should dismiss a qui tam lawsuit. The reasoning behind the Granston Memo is that whistleblower lawsuits have risen over 600 cases per year, but the government’s involvement has not mirrored the raise. This may indicate that many of the whistleblower lawsuits are frivolous and filed for the purpose of financial gain, even if the money is not warranted. Remember qui tam relators (people who bring lawsuits against those who mishandle tax dollars, are rewarded monetarily for their efforts…and, usually, the reward is not a de minimus amount. In turn, people are incentivized to identify fraud and abuse against the government. At least, according to the Granston Memo, the financial incentive works too well and frivolous lawsuits are too prevalent.
The Granston Memo has also been codified into the Justice Manual.
Talk about an oxymoron…the Yates Memo instructs prosecutors to pursue claims against more people, especially those in the executive positions for acts of the company. The Granston Memo instructs prosecutors to more readily dismiss frivolous FCA allegations. “You’re a wigwam. You’re a teepee. Calm down, you’re just two tents (too tense).” – a horrible joke that my husband often quips. But this horrible quote is apropos to describe the mixed messages from DOJ regarding Medicare and Medicaid fraud and abuse.
The Brand Memo, yet another memo that we saw come out of CMS, instructs prosecutors not to use noncompliance as subject to future DOJ enforcement actions. In other words, agency guidance does not cannot create binding legal requirements. Going forward, the DOJ will not enforce recommendations found in agency guidance documents in civil actions. Relatedly, DOJ will not use noncompliance with agency guidance to “presumptively or conclusively” establish violations of applicable law or regulations in affirmative civil enforcement cases.
The Brand Memo was not incorporated into the Justice Manual. It also was not repudiated.
Medicare/caid Audit Targets Broadened
Going forward, traditional health care providers will not be the only targets – Medicare Advantage plan, EHR companies, and private equity owners – will all be audited and reviewed for fraud and abuse. Expect more audits with wider nets to catch non-provider targets to increase now that the Yates Memo was codified into the Justice Manual.
Anti-Kickback Statute, Stark Law, and HIPAA Narrowed
The Stark Law (42 U.S.C. 1395nn) and the Anti-Kickback Statute (42 U.S.C. §1320a‑7b(b)) exist to minimize unneeded or over-utilization of health-care services payable by the federal government. Stark Law and the Anti-Kickback regulations criminalize, impose civil monetary penalties, or impose other legal sanctions (such as termination from Medicare) against health care providers and other individuals who violate these laws. These laws are esoteric (which is one reason that I have a job) and require careful navigation by specialized legal counsel. Accidental missteps, even minute documentation errors, can lead to harsh and expensive results.
In a health care world in which collaboration among providers is being pushed and recommended, the Anti-Kickback, Stark, and HIPAA laws are antiquated and fail to recognize the current world. Existing federal health-care fraud and abuse laws create a “silo effect” that requires mapping and separating financial interests of health-care providers in order to ensure that patient referrals cannot be tainted by self-interest. Under Stark, a strict liability law, physicians cannot make a referral for the provision of “designated health services” to an entity with which they have a financial relationship (unless one of approximately 30 exceptions applies). In other words, for example, a hospital cannot refer patients to the home health care company that the hospital owns.
Going forward – and this has not happened yet – regulators and the Department will begin to claw back some of the more strict requirements of the Stark, Anti-Kickback, and HIPAA regulations to decrease the “silo effect” and allow providers to collaborate more on an individual’s whole health method. I had an example of this changing of the tide recently with my broken leg debacle. See blog. After an emergency surgery on my leg by an orthopedic surgeon because of a contracted infection in my wound, my primary care physician (PCP) called to check on me. My PCP had nothing to do with my leg surgery, or, to my knowledge, was never informed of it. But because of new technology that allows patient’s records to be accessed by multiple providers in various health care systems or practices, my PCP was informed of my surgery and added it to my chart. This never could have happened 20 years ago. But this sharing of medical records with other providers could have serious HIPAA implications if some restrictions of HIPAA are not removed.
In sum, if you haven’t had the pleasure of reading the Justice Manual in a while, now would be an appropriate time to do so since it has been revised for the first time in 22 years. This blog does not enumerate all the revisions to the Justice Manual. So it is important that you are familiar with the changes…or know someone who is.
What in the health care is going on in Detroit??
Hospitals in Detroit, MI may lose Medicare funding, which would be financially devastating to the hospitals. Is hospital care in Detroit at risk of going defunct? Sometimes, I think, we lose sight of how important our local hospitals are to our communities.
The Center for Medicare and Medicaid Services (CMS) notified DMC Harper University Hospital and Detroit Receiving Hospital that they may lose Medicare funding because they are allegedly not in compliance with “physical environment regulations.”
42 C.F.R. § 483.90 “Physical environment” states “The facility must be designed, constructed, equipped, and maintained to protect the health and safety of residents, personnel and the public.”
CMS will give the hospitals time to submit corrective action plan, but if the plans of correction are not accepted by CMS, Medicare will terminate the hospitals’ participation by April 15, 2019 (tax day – a bad omen?).
The two hospitals failed fire safety and infection control. Section 483.90 instructs providers to ensure fire safety by installing appropriate and required alarm systems. Providers are forbidden to have certain flammable goods in the hallways. It requires sprinkler systems to be installed. It requires emergency generators to be installed on the premises. Could you imagine the liability if Hurricane ABC destroys the area and Provider XYZ loses power, which causes Grandma Moses to stop breathing because her oxygen tube no longer disseminate oxygen? Think of the artwork we would have lost! Ok, that was a bad example because there are no hurricanes in Detroit.
Another important criterion of the physical environment regulations is infection control, which, according to the letters from CMS, is the criterion that the two hospitals allegedly have failed. Each hospital underwent a survey on Oct. 18th when the alleged deficiencies were discovered.
“We have determined that the deficiencies are significant and limit your hospital’s capacity to render adequate care and ensure the health and safety of your patients,” stated the Jan. 15 letters to the hospitals from CMS. CMS informed the hospitals they had until Jan. 25 to submit a plan of correction. It is unclear whether the hospitals submitted these plans. Hopefully, both hospitals have a legal team that did draft and submit the plans of correction.
Michigan is a state in which if Medicare funds are terminated, then Michigan will terminate Medicaid funds automatically. So termination of Medicare funding can be catastrophic. Concurrently, Scott Steiner, chief of Detroit Receiving Hospital, is resigning (shocker).
Detroit must have something in the water when it comes to health care issues in the news because, also in Detroit, a police task force Monday removed 26 fetuses from a Detroit Medical Center (DMC) morgue, all of which were allegedly mishandled by Perry Funeral Home. Twenty of the bodies taken from the DMC cooler had dates-of-birth listed from 1998 and earlier, with six dating to the 1970s. The earliest date of birth of a discovered fetus was Aug. 11, 1971.
State authorities are looking into another case of dozens of infant remains allegedly hidden for years in a DMC hospital. News articles do not mention the DMC hospital’s name, but one cannot help but wonder whether the two incidents – (1) Detroit hospitals failing infection control specifications; and (2) decomposing bodies found in a hospital – are intertwined.
Detroit has to be winning a record here with health care issues – Medicare audit failures in hospitals, possible loss of Medicare contracts, possible suspension of Medicaid reimbursements, and, apparently decomposing fetuses in funeral homes and hospitals.
Effective January 2, 2019, the Center for Medicare and Medicaid Services (CMS) radically changed its guidance on the use of extrapolation in audits by recovery audit contractors (RACs), Medicare administrative contractors (MACs), Unified Program Integrity Contractors (UPICs), and the Supplemental Medical Review Contractor (SMRC).
Extrapolation is the tsunami in Medicare/caid audits. The auditor collects a small sample of claims to review for compliance. She then determines the “error rate” of the sample. For example, if 50 claims are reviewed and 10 are found to be noncompliant, then the error rate is set at 20%. That error rate is applied to the universe, which is generally a three-year time period. It is assumed that the random sample is indicative of all your billings regardless of whether you changed your billing system during that time period of the universe or maybe hired a different biller.
With extrapolated results, auditors allege millions of dollars of overpayments against health care providers…sometimes more than the provider even made during that time period. It is an overwhelming wave that many times drowns the provider and the company.
Prior to this recent change to extrapolation procedure, the Program Integrity Manual (PIM) offered little guidance to the proper method for extrapolation.
Well, Change Request 10067 – overhauled extrapolation in a HUGE way.
The first modification to the extrapolation rules is that the PIM now dictates when extrapolation should be used.
Determining When a Statistical Sampling May Be Used. Under the new guidance, a contractor “shall use statistical sampling when it has been determined that a sustained or high level of payment error exists. The use of statistical sampling may be used after documented educational intervention has failed to correct the payment error.” This guidance now creates a three-tier structure:
- Extrapolation shall be used when a sustained or high level of payment error exists.
- Extrapolation may be used after documented educational intervention (such as in the Targeted Probe and Educate (TPE) program).
- It follows that extrapolation should not be used if there is not a sustained or high level of payment error or evidence that documented educational intervention has failed.
“High level of payment error” is defined as 50% or greater. The PIM also states that the contractor may review the provider’s past noncompliance for the same or similar billing issues, or a historical pattern of noncompliant billing practice. This is HUGE because so many times providers simply pay the alleged overpayment amount if the amount is low or moderate in order to avoid costly litigation. Now those past times that you simply pay the alleged amounts will be held against you.
Another monumental modification to RAC audits is that the RAC auditor must receive authorization from CMS to go forward in recovering from the provider if the alleged overpayment exceeds $500,000 or is an amount that is greater than 25% of the provider’s Medicare revenue received within the previous 12 months.
The identification of the claims universe was also re-defined. Even CMS admitted in the change request that, on occasion, “the universe may include items that are not utilized in the construction of the sample frame. This can happen for a number of reasons, including, but not limited to: (1) Some claims/claim lines are discovered to have been subject to a prior review, (2) The definitions of the sample unit necessitate eliminating some claims/claim lines, or (3) Some claims/claim lines are attributed to sample units for which there was no payment.”
There are many more changes to discuss, but I have been asked to appear on RACMonitor to present the details on February 19, 2019. So sign up to listen!!!
New Hampshire hospitals have joined the American Civil Liberties Union (ACLU) in a lawsuit against the State of New Hampshire over the boarding of mental health patients in hospital emergency rooms.
In November 2018, the ACLU filed a class action lawsuit in NH federal court asking the court to order the cease of the practice of “psychiatric boarding,” in which mental health patients are held sometimes against their will and without due process in hospital emergency rooms throughout New Hampshire as they await admission to the state psychiatric hospital, often for weeks at a time. This is not only a New Hampshire problem. This is a problem in every state. The hospitals want the practice abolished because, in most cases of severe mental illness, the patient is unemployed and uninsured. There are not enough psychiatric beds to hold the amount of mentally ill consumers.
Many psychiatric patients rely on Medicaid, but due to the Institution for Mental Disease (IMD) exclusion, Medicaid does not cover the cost of care for patients 21 to 64 years of age (when Medicare kicks in) at inpatient psychiatric or addiction treatment facilities with a capacity greater than 16 beds. This rule makes it difficult for states to fund larger inpatient psychiatric hospitals, which further exacerbates the psychiatric boarding crisis.
The emergency rooms (ER) have become the safety net for mental health. The two most common diagnoses at an ER is alcohol abuse and suicidal tendencies. There has been a sharp increase in ER visits for the people suffering from mental health issues in the recent years. Are we as a population growing more depressed?
It is very frustrating to be in a hospital without the allowance to leave. But that is what psychiatric boarding is – patients present to an ER in crisis and because there is no bed for them at a psychiatric hospital, the patient is held at the hospital against their will until a bed opens up. No psychiatric care is rendered at the ER. It is just a waiting game, which is not fun for the people enduring it.
I recently encountered a glimpse into how it feels to be stuck at a hospital without the ability to leave. On a personal level, although not dealing with mental health but with hospitals in general, I recently broke my leg. I underwent surgery and received 6 screws and a plate in my leg. Around Christmas I became extremely ill from an infection in my leg. After I passed out at my home due to an allergic reaction to my medication which caused an epileptic seizure, my husband called EMS and I was transported to the hospital. Because it was the day after Christmas, the staff was light. I was transported to a hospital that had no orthopedic surgeon on call. (Akin to a mental health patient presenting at an ER – there are no psychiatric residents at most hospitals). Because no orthopedic surgeon was on call, I was transported to a larger hospital and underwent emergency surgery for the infection. I stayed at the hospital for 5 of the longest days of my life. Not because I still needed medical treatment, but because the orthopedic surgeon had taken off for vacation between Christmas and New Year’s. Without the orthopedic’s authorization that I could leave the hospital I was stuck there unless I left against medical advice. Finally, at what seemed to be at his leisurely time, the orthopedic surgeon came back to work the afternoon of January 1, 2019, and I was able to leave the hospital… but not without a few choice words from yours truly. I can tell you without any reservation that I was not a stellar patient those last couple days when I felt well enough to leave but there was no doctor present to allow it.
I imagine how I felt those last couple days in the hospital is how mentally ill patients feel while they are being held until a bed at a psychiatric unit opens up. It must be so frustrating. It certainly cannot be ameliorating any presenting mental health condition. In my case, I had no mental health issues but once I felt like I was being held against my will, mental health issues started to arise from my anger.
A shortage of psychiatric inpatient beds is a key contributing factor to overcrowded ERs across the nation. Between 1970 and 2006, state and county psychiatric inpatient facilities in the country cut capacity from about 400,000 beds to fewer than 50,000.
A study conducted by Wake Forest University found that ER stays for mental health issues are approximately 3.2 times longer stays than for physical reasons.
ER visits rose by nearly 15% between 2006 and 2014, according to the Healthcare Cost and Utilization Project. Over the same time period, ER visits associated with mental health and substance abuse shot up by nearly 44%.
Hopefully if the NH Hospital Association is successful in its lawsuit, other states will follow suit and file a lawsuit. I am not sure where the mentally ill will go if they do not remain at the ER. Perhaps this lawsuit and others that follow will force states to change the current Medicaid laws that do not allow mental health coverage for those over 21 years old. With the mental health and physical health Americans with Disabilities’ parity laws, I do not know why someone hasn’t challenged the constitutionality of the IMD exclusion.