Category Archives: Optical Services
Dueling Ophthalmologists: Accusations of Violations of the False Claims Act for Refusal to Hire?
Today I have a story about dueling ophthalmologists. And, yes, I wrote “dueling,” as in fighting. This is a true story that the 6th Circuit heard about the False Claims Act (“FCA”). With the Appellate Circuit Courts split regarding the issue I will be discussing in this blog, I foresee the U.S. Supreme Court taking an appeal of this case for a final review if the losing ophthalmologist appeals. So, be on the watch. Because this case is defining what the FCA statute does not….remuneration.
Issue: Does renumeration cover (1) just payments and transfers of value; or (2) any act that may be valuable to another?
The case was published March 28, 2023, from the 6th Circuit. United States ex rel. Martin v. Hathaway, No. 22-1463, 2023 WL 2661358 (6th Cir. Mar. 28, 2023). In a rural part of Michigan, there was an ophthalmology group consisting of two physicians, the owner of the practice, Dr. Hathaway, and one employee physician, Dr. Martin. Dr. Martin overheard Dr. Hathaway negotiating a sale to a larger practice, and began to question her employment path. The sale fell through, but she had begun negotiations with the local hospital to become the hospital’s sole ophthalmologist. Well, Drs. Hathaway and Martin were the only ophthalmologists in this area, and Dr. Hathaway knew that if Dr. Martin went in-house to the local hospital Oaklawn that his business would suffer because his now-employee would become a competitor.
The hospital gave her a pending offer. Dr. Hathaway was infuriated. He told the hospital that if it hired Dr. Martin that he would move all his surgeries to another hospital. He even told the local hospital’s CEO that if the Board approved the hiring of Dr. Martin, it would be the “death knell” of his practice because the hospital’s future patients referrals would go to Dr. Martin and not him.
Dr. Hathaway pled with the CEO. It would be a lose-lose if you hire Dr. Martin, he said. It will cost hundreds of thousands of dollars to set up an internal ophthalmology line, while it would force Dr. Hathaway to pull his cases and go elsewhere.
Perhaps due to Dr. Hathaway’s threats, the Board elected to not hire Dr. Martin.
Dr. Martin did not take the rejection well.
She sued Dr. Hathaway, South Michigan, and Oaklawn in a qui tam action under the False Claims Act and Michigan’s False Claims Act. She accused Dr. Hathaway and Oaklawn Hospital of engaging in an illegal fraudulent scheme under the Anti-kickback Statute (“AKS”) and that claims for Medicare and Medicaid reimbursement resulting from the kickbacks violated the False Claims Act.
The definition of remuneration was at stake. The statute does not define renumeration. Does renumeration cover just payments and transfers of value or any act that may be valuable to another. The 6th Circuit held that renumeration only cover payments and other transfers of value.
The Complaint’s main theory of remuneration turns on the Oaklawn Board’s refusal to hire Dr. Martin in return for Dr. Hathaways general commitment to continue sending surgery referrals for his patients to Oaklawn.
You may recall that the FCA uses the word “payment,” whereas the AKS uses the word “remuneration,” which prompts the question whether remuneration means something broader.
The Court held, “no” – money and value needs to be defined as just that…money and value.
Dr. Hathaway gave Oaklawn no payment, no value. Dr. Martin lost in this case, but if she appeals, like I said, I foresee the US Supreme Court to weigh in.
RAC Audits: “The Big Bad Wolf” Is Coming to Medicare Advantage…Soon! Beware!
Recovery Audit Contractors (RACs) have been prevalent in traditional Medicare and Medicaid for years now. However, RACs have not knocked on the doors of providers who accept Medicare Advantage yet, despite the Affordable Care Act (ACA) requiring them to do so by 2010. Are RACs going to target Medicare Advantage? Keep reading…
RACs are like the Big Bad Wolf in the “Three Little Pigs.” “Little pig, little pig, let me in!” “Not by the hair of my chinny chin chin!” “Then I’ll huff and puff and blow your house down!”
According to the Center for Medicare and Medicaid Services (CMS), “the Recovery Audit Program’s mission is to identify and correct Medicare improper payments through the efficient detection and collection of overpayments made on claims of health care services provided to Medicare beneficiaries, and the identification of underpayments to providers so that the CMS can implement actions that will prevent future improper payments in all 50 states.”
But the above explanation fails to paint the whole picture.
RACs are compensated by contingency fees. In other words, the more claims they find noncompliant, the more money they are paid. Plus, RACs extrapolate their findings. If a RAC finds $6000 in noncompliant claims, then they extrapolate that number across a universe (usually three years) and come up with some exorbitant number. See blog and blog. The financial incentives create overzealous auditors.
What type of providers accept Medicare Advantage? Advantage providers include optical providers, some durable medical equipment (DME), dentists, nutritionists, and some providers of wellness programs. The Medicare Advantage recipients usually pay a premium. Approximately 15.8 million people rely on Medicare Advantage policies.
CMS has been looking to implement the RAC program on Medicare Advantage for months…if not years. Now, it appears, that the RAC program will be leashed on Medicare Advantage very soon.
“And I’ll blow your house down!!”
CMS released a request for information in December 2015 on how to incorporate RACs into Medicare Advantage, but made little progress until recently.
My “sources” (ha – like I am a journalist) have informed me that the RAC program will soon be released on the Medicare Advantage providers. So be forewarned!!
Don’t be:
Caught with your pants down!
The NC State Plan, Its Importance, and How Can We Keep Up With All the Changes??
I am constantly amazed at the amount of knowledge that I do not know. And how quickly the knowledge I have becomes obsolete due to changes. To quote Lewis Carroll’s “Alice and Wonderland,” “Why, sometimes I’ve believed as many as six impossible things before breakfast.” My other favorite quote series from Lewis Carroll is the following scene:
“But I don’t want to go among mad people,” Alice remarked.
“Oh, you can’t help that,” said the Cat: “we’re all mad here. I’m mad. You’re mad.”
“How do you know I’m mad?” said Alice.
“You must be,” said the Cat, or you wouldn’t have come here.”
So too, must I be mad, I think, at times, for dealing with Medicaid and Medicare law. The statutes and regulations are vast and ever-changing. You can easily miss a policy change that was disseminated by an update posted on the web. But, I am a lawyer…I read a lot. But providers are held accountable as well for every revision and every update.
Just when you think you understand the State Plan, the Department of Health and Human Service (DHHS) asks the Center for Medicare and Medicaid Services (CMS) for an amendment.
In this blog, I am going to discuss 2 issues. (1) What is the State Plan and why is it important; and (2) how can providers stay abreast of the ever-changing Medicare/caid world and policies.
(1) Our State Plan
What is our State Plan in Medicaid? Is it law? Guidance? Does NC have to follow the State Plan? Can NC amend the State Plan?
These are all good questions.
The State Plan is a contract between North Carolina and the federal government describing how NC will administer its State Plan, i.e., Medicaid program. The State Plan describes who can be covered by Medicaid, what services are available, and, basically, assures the federal government that we will abide by certain rules and regulations. NC must follow the State Plan or risk losing federal funding for Medicaid, which would be BAD.
Quite often, the Department of Health and Human Services (DHHS) will issue a State Plan Amendment (SPA) to the Centers for Medicare and Medicaid Services (CMS). DHHS has to post all proposed amendments on its website “10 Day Posting for Submission to CMS.” This internet site should be in your “favorites,” and you should check it regularly.
For example, February 27th, DHHS asked to reduce Medicaid reimbursements methodologies for Chiropractic Services, Podiatry Services and Optometry Services to 97% of the July 1, 2013, rate, effective January 1, 2014 (yes, retroactively).
Just in 2014, there have been approximately 10 SPA requests. So, these SPAs are relatively common.
So, question #2…how can you keep up?
(2) Keeping abreast of all changes
As much as I would love to throw my computer out the window (I am on the 16th floor) and watch it crash, computers and technology can be very helpful. And technology makes it easy for everyone, even busy health care providers, to stay current on changes, amendments, and revisions to Medicaid/care policies and law.
Here is the secret: (shhhhhhhhh!!)
Google Alerts.
If you want to keep current on NCTracks, all you have to do is set a Google alert with the search term “NCTracks,” and you will receive daily email alerts on all internet articles on NCTracks. It is that easy.
So how do you set up a Google Alert? I have drafted a set by step process, otherwise entitled “Google Alerts for Dummies.”
1. Go to Google.
2. At the top of the page you will see the words: “You,” “Search,” “Images,” “Maps,” “Play,” “Youtube,” “News,” “Gmail,” and “More.” Click on “More.”
3. When the box drops, at the very bottom, you will see “even more.” Click on “even more.”
4. Scroll down to specialized search and click on “Alerts.”
5. Type in whatever search term you like, such as “Medicaid,” or “Knicole Emanuel.”
6. Decide how often you want to be alerted and your email address.
You will now be alerted about your topic. See? Easy!!
Now, because of this blog, you have learned two or more impossible things before lunch.
Hello, 2014! And Hello 3% Decrease in Medicaid Reimbursements (But Call the Decrease “Shared Savings”)
Tomorrow is the first Medicaid checkwrite for 2014 (and its my birthday too). Happy New Year! Happy birthday!! (I’m turning 29 for the 10th year). For New Years, my husband and I had a very quiet evening eating crab legs at home. Yum! I am sure many of you made New Years resolutions…work harder…lose weight…get paid 3% less….WHAT?
With the first Medicaid checkwrite tomorrow, due to Session Law 2013-360, many health care providers will receive 3% less in Medicaid reimbursements. You will receive a 3% cut if you are the following types of providers:
- Inpatient hospital.
- Physician, excluding primary care until January 1, 2015.
- Dental.
- Optical services and supplies.
- Podiatry.
- Chiropractors.
- Hearing aids.
- Personal care services.
- Nursing homes.
- Adult care homes.
- Dispensing drugs.
(This is the exact list as found in Session Law 2013-360. I am well aware that the list is grammatically-challenged, but I did not write it). Both the federal government and NC are calling this 3% withholding “Shared Savings Plan with Provider.”
How is this “shared savings with providers” when the government is withholding money from providers??? Sure, supposedly, there will be a “pay for performance payment” to some providers, but most providers will just be reimbursed 3% less.
How is this fair? How is this “shared savings?”
Here’s an example:
Say I work at Harris Teeter and my manager comes up to me and says, “Hey, Knicole, Harris Teeter is really concerned with our overhead costs. Salaries seem to be a big cost, and we want to “share the savings” with you. So we are going to cut your pay by 3%. If we, subjectively, determine, at the end of the year, that you are working hard and saving us money, then we will give you a performance reward. It will not be all the money we retained, but it will be some amount. This way Harris Teeter profits off the interest of the 3% we retain all year, plus the amount we never give you.”
Folks, the above example is called a decrease in pay and a swift kick in the bottom. It is not “shared savings.”
In DHHS’ shared savings scheme, the money will go to:
“The Department of Health and Human Services shall use funds withheld from payments for drugs to develop with Community Care of North Carolina (CCNC) a program for Medicaid and Health Choice recipients based on the ChecKmeds NC program. The program shall include the following:
- At least 50 community pharmacies by June 30, 2015.
- At least 500 community pharmacies in at least 70 counties by June 30, 2016.
- A per member per month (PMPM) payment for care coordination and population health services provided in conjunction with CCNC.
- A pay for performance payment.”
According to the Centers for Medicare and Medicaid Services (CMS), “[a] shared savings methodology typically comprises four important concepts: a total cost of care benchmark, provider payment incentives to improve care quality and lower total cost of care, a performance period that tests the changes, and an evaluation to determine the program cost savings during the performance period compared to the benchmark cost of care and to identify the improvements in care quality.”
Employers chop salaries all the time in order to maximize profit. Back in 2011, Sony proposed 11% salary cuts for executives due to such a terrible fiscal year. But guess what is different between Sony’s 11% cut and Medicaid’s 3%? I know…I know…a lot….but what difference am I thinking about?
Sony sought shareholder approval.
I guess you can make the argument that the General Assembly sought voter approval because our citizens voted for all the legislators in the General Assembly. But I think that argument is weak. No legislator ran his or her campaign on: “Vote for Me! If you are a Medicaid provider, I plan to decrease your salary by 3%!”
Better yet, with the Sony salary cut, executives had the option to seek employment elsewhere. What is a Medicaid provider’s option? Move? Not take Medicaid? (Sadly, I see this as a more viable option).
On a legal note, I question the constitutionality of our new shared savings plan. Wouldn’t the decrease of 3% in Medicaid reimbursements be considered an unlawful taking without due process. In essence, could one argue that the decrease of 3% in Medicaid reimbursements is just a way for the State to decrease Medicaid reimbursements without going through the proper lawful process?
Then again, maybe we won’t need to worry about the 3% decrease at all…given NCTracks’ track record, it is plausible that NCTracks will not be able to adjust the Medicaid reimbursements by 3%.
