Category Archives: Medicare Appeal Process
Medicare Extrapolation Under 50% Error Rate? No Extrapolation ALLOWED!
Earlier this year, I reported on the new extrapolation rules for all audits, including RAC, UPIC, TPE, CERT, etc. You know, that alphabet soup. The biggest change was that no extrapolation may be run if the error rate is under 50%. This was an exciting and unexpected new protection for health care providers. Now I have seen it in action and want to tell you about it.
A client of mine, an internal medicine facility in Alabama, received a notice of overpayment for over $3 million. This is the first case in which I saw the 50% error rate rule in action. Normally, I always tell clients that the first two levels of appeals are rubber-stamps. In other words, don’t expect to win. The QIC and the entity that conducted the audit saying you owe money are not going to overturn themselves. However, in this case, we were “partially favorable” at the QIC level. “Partially favorable” normally means mostly unfavorable. However, the partially favorable decision took the error rate from over 50% to under 50%. We re-grouped. Obviously, we were going to appeal because the new extrapolation was still over $1 million. However, before our ALJ hearing, we received correspondence from Palmetto that said our overpayment was $0. Confused, we wrote to the ALJ pointing out that Palmetto said our balance was zero. The Judge wrote back saying that, certainly, the money has already been recouped and the practice would get a refund if he reversed the denials.” “Ok,” we said and attended a telephonic hearing. We were unsuccessful at the hearing, and the ALJ upheld an alleged overpayment of over $1 million. We argued that the extrapolation should be thrown out due to the error rate being under 50%. The Judge still ruled against us, saying that CMS has the right to extrapolate, and the courts have upheld CMS’ ability to extrapolate. Ok, but what about the NEW RULE?
Later, we contacted Palmetto to confirm what the zero-balance meant. The letter read as if we did not owe anything, yet we had an ALJ decision mandating us to pay over a $1million. There was serious juxtaposition. After many hours of chasing answers on hold with multiple telephone answerers of Palmetto, we learned that, apparently, because the error rate dropped below 50% after the QIC level, Palmetto “wrote off” the nominal balance. Since an extrapolation was no longer allowed, the miniscule amount that Palmetto thought we owed wasn’t enough to pursue. However, the letter sent to us from Palmetto did not explain, “hey, we are writing off your overpayment because the error rate fell below 50%.” No, it was vague. We didn’t even know if it were true.
It took us reaching out to Palmetto and getting an email confirmation that Palmetto had written off the alleged overpayment due to the error rate dropping. Even the ALJ misinterpreted the letter, which tells me that Palmetto should revise its notices of write offs.
If Palmetto unilaterally dismisses or writes off any balance that is allegedly owed, the letter should explicitly explain this. Because providers and attorneys are not accustomed to receiving correspondence from a MAC, CMS, Palmetto, or any other auditing entity with GOOD NEWS. If we get GOOD NEWS from an auditing entity, that correspondence should be explicit.
Regardless, this was a huge win for me and my client, who was positively ecstatic with the outcome. Tune in next week, during which I will tell a story of how we battled successfully a qui tam action against a facility of 9 specialists due to a disgruntled employee who tried to blow the whistle on my specialists and their facility…falsely!
Defending Medicare Providers Against FCA or Qui Tam Lawsuits
As a health care partner at Nelson Mullins, I’ve seen my fair share of False Claims Act (FCA) and Qui Tam actions against health care providers. It’s not uncommon for practices to receive unwarranted accusations of false claims, especially when it comes to billing Medicare. But fear not, my friends, for I’m here to provide some guidance on how to defend yourself. These cases are long and tedious, so it is important to maintain a bit of humor throughout the process – that and hire a really good attorney.
First things first, let’s talk about the False Claims Act. This federal law imposes liability on individuals and companies that defraud the government by submitting false claims for payment. Essentially, if you submit a claim for reimbursement from Medicare that you know is false, you could be on the hook for some serious penalties. However, the government has to prove that you had actual knowledge that the claim was false, which can be a tough burden to meet.
Now, let’s talk about Qui Tam actions. These are lawsuits brought by private individuals, also known as “whistleblowers,” on behalf of the government. The whistleblower stands to receive a percentage of any damages recovered by the government, so there’s a financial incentive for them to pursue these cases. Qui Tam actions can be especially tricky because the whistleblower doesn’t have to prove that you had actual knowledge that the claim was false – they just have to show that you submitted a false claim.
So, what can you do to defend yourself against these accusations? Well, for starters, make sure that you’re submitting accurate claims to Medicare. Seems obvious, right? But you’d be surprised at how many practices make mistakes when it comes to billing. Double-check your codes, make sure you’re only billing for services that were actually provided, and make sure your documentation supports the services you’re billing for.
If you do find yourself facing an FCA or Qui Tam action, don’t panic. You have the right to defend yourself, and there are plenty of strategies that can be employed to fight back. For example, you could argue that the government hasn’t met its burden of proof, or that the whistleblower doesn’t have enough evidence to support their claim. And don’t forget about the power of humor – a well-timed joke can go a long way in disarming your accusers. Obviously, I am kidding. The investigators have no humor.
In all seriousness, though, these cases can be incredibly complex and time-consuming, so it’s important to have experienced legal counsel on your side. At Nelson Mullins, we’ve represented numerous health care providers in FCA and Qui Tam actions, and we have the knowledge and expertise to help you navigate these challenges.
So, to sum it up: be accurate in your billing, be prepared to defend yourself, and don’t be afraid to use a little humor to lighten the mood. And if all else fails, just remember the wise words of Mark Twain: “Humor is the great thing, the saving thing after all. The minute it crops up, all our hardnesses yield, all our irritations and resentments flit away, and a sunny spirit takes their place.”
#FalseClaimsAct #Medicare #QuiTam #HealthcareLaw #NelsonMullins #DefendYourself #AccuracyIsKey #HumorIsTheBestMedicine #MarkTwainQuotes
Texas Medical Society Sues CMS Over 600% Spike in Administrative Fees
The Texas Medical Association (TMA) is challenging a 600% hike in administrative fees for seeking federal dispute resolution in the No Surprises Act (NSA) situations. The association seeks relief by filing a fourth lawsuit in the U.S. District Court for the Eastern District of Texas. The Texas Medical Society is the largest state medical society in the nation, even though it is the 2nd largest State followed by Alaska, representing more than 57,000 physicians and medical student members.
The hike only applies to out-of-network physicians or provider and a health plan payor. These situations occur when emergency services are provided by a doctor or health care provider outside of the patient’s insurance network or when out-of-network services are provided at an in-network facility.
The federal agencies set the initial administrative fee at $50 and announced in October 2022 it would remain at $50 for 2023. Two months later the agencies announced a 600% hike in the fee to $350 beginning in January 2023, “due to supplemental data analysis and increasing expenditures in carrying out the Federal IDR process since the development of the prior 2023 guidance.”
The steep jump in fees will dramatically curtail many physicians’ ability to seek arbitration when a health plan offers insufficient payment for care.
The reason that I know the TX Medical Society filed this lawsuit, because it just happened, is because I joined ASMAC, which is the American Society of Medical Association Counsel. It’s an amazing association comprised of Presidents of State medical associations all of whom are lawyers trying to protect physicians. Kelly Walla is the Vice President and General Counsel for the Texas Medical Association, and she circulated an email letting us know. She was a week late in circulating the email because, apparently, the power has been out in Austen.
The association claims that the new uptick in administrative fees violates the notice and comment requirements. I do have a personal question – if the association is successful and gets the fee requirement eradicated due to notice and comment violations, wouldn’t TX just reinstitute the hike in fees, but allow comments next time? If we really ask ourselves, do the comments matter? Who looks at them and do they carry any weight?
Since this hike only applies to out-of-network providers, I wonder if, in TX, the networks are closed. Closed networks means that, supposedly, the network has enough providers and it’s not accepting more providers. What network has “enough providers?” If the law states that everyone has the freedom to pick their provider of choice or “access to care,” then a closed network would fly in the face of that prospect. I have been successful in fighting “closed networks” in the past and gaining access to that “closed network.”
Going back to Texas, the rules include establishing the nonrefundable administrative fee all parties must pay to enter the federal independent dispute resolution (IDR) process in the event of a payment disagreement between an out-of-network physician or provider and a health plan in circumstances covered by the law. The suit lists two radiology groups as plaintiffs: the Texas Radiological Society and Houston Radiology Associated. These groups bill small value claims, so they will be particularly hurt because most claims billed are less than $350, according to the suit. Apparently, the Emergency Department Practice Management Association supports the association’s lawsuit. CMS’ reasoning for the hike is the backlog. But, making independent dispute resolution more expensive, when doctors have a right to IDR, in my opinion, is counterintuitive. Get more arbitrators. Don’t heighten your fences.
340B Drug Pricing Program: Drug Companies Are Concerned!
The federal 340B Drug Pricing Program allows qualifying hospitals and clinics that treat low-income and uninsured patients to buy outpatient prescription drugs at a discount of 25 percent to 50 percent. The program is intended to help safety-net health care providers stretch their financial resources to reach more financially vulnerable patients and deliver comprehensive services.
The 340B Drug Pricing Program has spiked in use. It has become more and more popular over the years.
In 2020, there were 8,100 provider sites (including both hospitals and pharmacies), but that number rose to 50,000 by 2020. New data released in August 2022 by the Health Resources and Services Administration suggest discounted purchases under the 340B program reached $44 billion in 2021, about 16% more than in 2020. Drug companies are concerned.
On November 30, 2022, the 340B Drug Pricing Program; Administrative Dispute Resolution Notice of Proposed Rulemaking (NPRM) was published in the Federal Register. Section 340B(d)(3) of the Public Health Service Act requires the establishment of an Administrative Dispute Resolution (ADR) process for certain disputes under the 340B Program. Under the statute, the ADR process is designed to resolve:
- Claims by covered entities that they have been overcharged for covered outpatient drugs by manufacturers; and
- Claims by manufacturers, after the manufacturer has conducted an audit of a covered entity, that a covered entity has violated the prohibition on diversion or duplicate discounts.
This NPRM proposes new requirements and more efficient procedures to make the 340B Program’s ADR process more accessible and efficient, including ensuring that ADR panels hearing disputes are comprised of subject matter experts on the 340B Program, and establishing an independent HRSA reconsideration process. The NPRM will be open for public comment through January 30, 2023. Please refer to the Federal Register (PDF – 315 KB) publication for instructions about how to submit comments.
The question is how does the new proposed rule mesh with the Inflation Reduction Act of 2022? If you recall, the Inflation Reduction Act of 2022 (IRA) allows Medicare to negotiate drug rates. It has been suggested that the following 10 medications will be the first 10 negotiated:
Does the IRA and 340B conflict? How can you negotiate prices of a drug if the drug is already discounted?
Medicare Advantage: “Termination At Will” Clauses Legal?
Providers who contract with Medicare Advantage Organizations (“MAO”) need to know that even though the MAO is a private company, because it manages federal Medicare money, the Medicare regulations are applicable – and, possibly, not the contract that you were forced to sign. When any entity accepts the responsibility of getting tax dollars – a firehose of tax dollars, no less – prepaid – then that entity answers to all tax payers for their actions and that entity must follow the Medicare regulations.
Medicare Advantage Plans, sometimes called “Part C” or “MA Plans,” are offered by MAOs that must follow rules set by Medicare. Most Medicare Advantage Plans include drug coverage (Part D). Health care providers can contract to be in the plan’s network. MAOs include BCBS, Humana, Anthem, UnitedHealthcare, Cigna, and Aetna.
Just for an example, I pulled up the provider agreement for BCBS. Section 6.2 allows termination by either party with 60 days notice; this is the “termination at will” clause. Theoretically, BCBS or any MAO could terminate contracts with small providers and decide to contract only with larger providers. Or contract with only African-American providers. Or contract with only female-owned companies. Or contract with the providers that the CEO likes. I disagree with a termination at will clause that allows a company with so much Medicare money at its fingertips the authority to only contract with whom it wants or likes. In fact, I believe a termination at will clause violates the law.
The Courts are split on this issue. See blog.
42 CFR Section 422, et al, outlines the regulations for Medicare Advantage.
According to CMS, in order for a MAO to “Suspend, Terminate, or Not-renew Physician Contracts” specific requirements for an MA organization that operates a coordinated care plan or network MSA plan providing benefits through contracting physicians and that suspends, terminates, or non-renews a physician’s contract are as follows:
- The MA organization must give the affected physician written notice of the reasons for the action, including, if relevant, the standards and profiling data used to evaluate the physician and the numbers and mix of physicians needed by the MA organization.
- The MA organization must allow the physician to appeal the action, and give the physician written notice of his/her right to a hearing and the process and timing for requesting a hearing.
- The MA organization must ensure that the majority of the hearing panel members are peers of the affected physician.
42 CFR 422.202(c) and (d) and preamble of February 17, 1999, rule.
In sum, MAOs are required to provide appeal rights for any Medicare contract that is terminated. But, doesn’t that contradict with a “termination at will” clause?
Medicare Auditors Fail to Follow the Jimmo Settlement
Auditors are not lawyers. Some auditors do not even possess the clinical background of the services they are auditing. In this blog, I am concentrating on the lack of legal licenses. Because the standards to which auditors need to hold providers to are not only found in the Medicare Provider Manuals, regulations, NCDs and LCDs. Oh, no… To add even more spice to the spice cabinet, common law court cases also create and amend Medicare and Medicaid policies.
For example, the Jimmo v. Selebius settlement agreement dictates the standards for skilled nursing and skilled therapy in skilled nursing facilities, home health, and outpatient therapy settings and importantly holds that coverage does not turn on the presence or absence of a beneficiary’s potential for improvement.
The Jimmo settlement dictates that:
“Specifically, in accordance with the settlement agreement, the manual revisions clarify that coverage of skilled nursing and skilled therapy services in the skilled nursing facility (SNF), home health (HH), and outpatient therapy (OPT) settings “…does not turn on the presence or absence of a beneficiary’s potential for improvement, but rather on the beneficiary’s need for skilled care.” Skilled care may be necessary to improve a patient’s current condition, to maintain the patient’s current condition, or to prevent or slow further deterioration of the patient’s condition.”
This Jimmo standard – not requiring a potential for improvement – is essential for diseases that are lifelong and debilitating, like Multiple Sclerosis (“MS”). For beneficiaries suffering from MS, skilled therapy is essential to prevent regression.
I have reviewed numerous audits by UPICs, in particular, which have failed to follow the Jimmo settlement standard and denied 100% of my provider-client’s claims. 100%. All for failure to demonstrate potential for improvement for MS patients. It’s ludicrous until you stop and remember that auditors are not lawyers. This Jimmo standard is found in a settlement agreement from January 2013. While we will win on appeal, it costs providers money valuable money when auditors apply the wrong standards.
The amounts in controversy are generally high due to extrapolations, which is when the UPIC samples a low number of claims, determines an error rate and extrapolates that error rate across the universe. When the error rate is falsely 100%, the extrapolation tends to be high.
While an expectation of improvement could be a reasonable criterion to consider when evaluating, for example, a claim in which the goal of treatment is restoring a prior capability, Medicare policy has long recognized that there may also be specific instances where no improvement is expected but skilled care is, nevertheless, required in order to prevent or slow deterioration and maintain a beneficiary at the maximum practicable level of function. For example, in the regulations at 42 CFR 409.32(c), the level of care criteria for SNF coverage specify that the “. . . restoration potential of a patient is not the deciding factor in determining whether skilled services are needed. Even if full recovery or medical improvement is not possible, a patient may need skilled services to prevent further deterioration or preserve current capabilities.” The auditors should understand this and be trained on the proper standards. The Medicare statute and regulations have never supported the imposition of an “Improvement Standard” rule-of-thumb in determining whether skilled care is required to prevent or slow deterioration in a patient’s condition.
When you are audited by an auditor whether it be a RAC, MAC or UPIC, make sure the auditors are applying the correct standards. Remember, the auditors aren’t attorneys or doctors.
Celebrating Christmas With an Audit, I mean, a Root Canal
Merry Christmas and Happy Hanukkah! I wanted to thank all my readers for TEN YEARS of this blog! Can you believe it has been 10 years? I started this blog in 2012, and the year is about to turn to 2023!! I going into my 11th year of blogging about Medicare and Medicaid regulatory compliance litigation. Whew! I tell you what: being a full-time attorney, a part-time blogger, mom, and wife is tiring! Try it. You’ll see. Try it for 10 years!
I am so proud to have created a career out of defending health care providers across the country, from HI to AL to NY to FL and everywhere in between.
My birthday is January 7th, right after Christmas and New Year’s Day. I am one year closer to getting Medicare (I cannot wait), but since I rely on private pay health insurance, I am giving myself a special Christmas present to end the year and “wind-down” the health spending plan. I will be undergoing a root canal tomorrow, the 21st of December.
Root canals are not fun. In fact, they remind me of undergoing a Medicare and/or Medicaid audit. No one wants them done, but you got to do it.
I suggest conducting self audits regularly, especially now with the Public Health Emergency (PHE) ending at some point.
Self Audits
The first step for a medical practice or organization is to select the timeframe that will be reviewed during the audit. The timeframe should be large enough to produce meaningful results. For example, in its OIG Data Brief, the OIG looked at a year’s worth of data, from March 1, 2020, through February 28, 2021. There are some key dates and regulations that practices or organizations need to consider when selecting the timeframe. These include:
- January 31, 2020: HHS announced the COVID-19 PHE, which was determined to have existed since January 27, 2020.
- March 27, 2020: The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law.
- March 31, 2020: CMS’ “Policy and Regulatory Revisions in Response to the COVID-19 Public Health Emergency” became effective.
So many changes to Medicare and Medicaid rules and regulations were implemented during COVID. Some changes will continue after PHE ends and some will not.
Now more so than ever, putting your own facility through a thorough self-audit is imperative. You need to understand the policy changes pertinent to your health care service type and dates the changes occurred and when applicable. Before the “REAL” auditors come knocking on your facility’s door, prepare yourself. Consider hiring an attorney or medical compliance expert to conduct the self audit.
The next step in performing a self-audit is for the practice or organization to select a category of service to review. If the practice or organization provides multiple types of services, the focus should be on one category, such as office visits, for review. When reviewing office visit services, the Current Procedural Terminology (CPT) codes applicable to telehealth visits include, but are not limited to, Office or Other Outpatient Services (99201-99205 [new patient] and 99211-99215 [established patient]) and Non-Face-to-Face Telephone Services (99441-99443 [practitioners who may report E/M services] and 98966-98968 [practitioners who cannot bill independently]). Practitioners who cannot bill independently are qualified non-physician health care professionals, such as social workers, clinical psychologists, and certain therapists. Please note, CPT code 99201 was deleted effective January 1, 2021.
Looking forward to 2023 after my root canal…Cheers!
Medicare and Medicaid Reimbursement Rates Suck: Is Litigation the Answer?
One way to raise Medicaid reimbursement rates would be to bring litigation against the State Medicaid agency in charge of managing Medicaid under §30(A) of the Social Security Act (“SSA”).
That’s what the pharmacy associations in the State of Washington did in April 2021. The associations alleged that, per a 2016 CMS Rule, State Medicaid agencies must consider two types of costs when it comes to reimbursement rates; i.e., (1) the ingredient costs; and (2) the professional dispensing fee, when creating a Medicaid reimbursement rate. They argued that Washington’s Medicaid reimbursement rates were less than half of the surrounding States.
The case never went to trial. In July 2021, the parties filed a Joint Motion for Voluntary Remand and Dismissal Without Prejudice. It was so ordered that this matter was remanded back to the Centers for Medicare & Medicaid Services (“CMS”). It was further ordered that this matter was dismissed without prejudice with the parties to bear their own costs and fees. The Order was signed by Judge Ricardo S. Martinez. National Association of Chain Drug Stores et al v. Becerra et al, 2:21CV00576. I have no idea what has happened since leaving the court system. If anyone knows, I would love to know. Has Washington’s Medicaid reimbursement rates increased for pharmacies?
Section 30(A) of the Social Security Act (“SSA”) describes reimbursement rates as being high enough “to assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.” Yet, statistics show that only 70% of health care providers accept Medicaid or Medicare. In mental health, in particular, there is a shortage of providers, especially minority providers. In other words, government health is failing its providers and consumers. See blog.
Exactly what Section 30(A) requires of States in terms of payments to Medicaid providers has been the subject of considerable litigation. There is little consistency in the Courts’ interpretation of §30(A). While some Courts have held that provider costs should be considered, other Courts disagree.
Providers have reasonable complaints about the Medicare and Medicaid reimbursement rates. The reimbursement rates are wholly inadequate; in fact, the reimbursement rates, in some cases, do not even cover the cost of rendering the services. Yet “quality of care” and “equality of access” are promised in Section 1902(a)(30)(A) of the SSA. For example, in 2020 hospitals received only 88 cents for every dollar spent caring for Medicaid patients. This amounted to a $24.8 billion underpayment. Low reimbursement rates limit access to quality care and contribute to poor health outcomes for Medicaid beneficiaries, who are disproportionately minority. Research suggests that increasing Medicaid primary care rates by $45 per service would reduce access-to-care inequities by at least 70%.
Medicaid reimbursement rates suck. Medicare reimbursement rates suck. Plus, providers must succumb to tedious audits. There is little upside to accepting Medicare and Medicaid, except charity.
I do not believe that the reason “why” matters when it comes to reimbursement rates. If the government chooses to regulate health care, the health care the government regulates should be adequate.
Other service types should choose to litigate over the low reimbursement rates.
The State of Florida recently looked into its Medicaid reimbursement rates. “According to the latest Physician Workforce Annual Report published by the Florida Department of Health, the most common reason that physicians do not accept Medicaid is low reimbursement.” In total, the report found that 44% of physicians who do not accept Medicaid patients do so due to the unacceptably low reimbursement offered by the program.
Other associations have likewise filed litigation in hopes of increasing Medicaid reimbursement rates. I highly encourage providers to discuss bringing litigation to increase Medicaid and Medicare reimbursement rates to their respective associations Litigation, unlike lobbying, is swifter to change. Public opinion has weight.
Nursing Homes Face Higher Scrutiny and Increased Penalties
Some nursing homes are facing tougher penalties, including the loss of federal funding. In an effort to increase quality of care in nursing homes, the Biden administration implemented revisions to the Special Focus Facility (“SFF”) program, which targets the “worst” nursing homes in each State. Nursing homes are selected for the program by the “single State agency” using a point system based on the number and severity of deficiencies cited during their past 3 inspections.
CMS released a revised SFF Program policy memo QS0-23-01-NH and these revisions are meant to increase: (A) the requirements for “graduation” of the SFF program; and (B) the enforcement for facilities that do not demonstrate improvement. A high-level overview of key changes made in the revised memo are as follows:
- Staffing levels is a consideration for SFF selection: CMS has directed states to consider a facility’s staffing level when selecting facilities for the SFF program. CMS recommends if a State is considering two candidates with a similar compliance history, it should select the facility with lower staffing ratios/rating as the SFF.
- Criteria for Graduation of the Program Escalated: CMS has added a threshold that prevents a facility from exiting based on the total number of deficiencies cited. To graduate from the program, facilities must complete two consecutive standard health surveys, with no intervening complaint, LSC, or EP surveys with 13 or more total deficiencies, or any deficiencies cited at scope and severity of “F” or higher.
- Involuntary Termination Enforced: SFFs with deficiencies cited at immediate Jeopardy (“IJ”) on any two surveys (standard health, complaint, LSC, or EP) while in the SFF program, will now be considered for discretionary termination.
- Enforcement Actions Increased: CMS will impose immediate sanctions on an SFF that fails to achieve and maintain significant improvement in correcting deficiencies on the first and each subsequent standard health, complaint and LSC/EP survey after a facility becomes an SFF. Enforcement sanctions will be of increasing severity for SFFs demonstrating continued noncompliance and failure to demonstrate good faith efforts to improve performance.
- Sustainable Improvements Incentivized: CMS will closely monitor graduates from the SFF program for a period of three years to ensure improvements are sustained. For SFFs that graduate but continue to demonstrate poor compliance identified on any survey (e.g., actual harm, substandard quality of care, or IJ deficiencies), CMS may use its authority to impose enhanced enforcement options, up to, and including discretionary termination from the Medicare and/or Medicaid programs.
It is imperative to note that your past alleged violations will work against you. This means that if you are cited with a deficiency, it is of the utmost importance, if you disagree with the assessment, to appeal the alleged deficiency. If you merely pay the penalty and roll over like an old dog, your lack of appealing can aid toward your demise. You are basically being held to a giant, bell curve against the other nursing homes in your State.
Once in the SFF program, nursing homes are inspected at least every six months rather than annually. State inspectors apply progressive enforcement—penalties, fines, withholding of payments—until the facilities significantly improve or are terminated from Medicaid and/or Medicare.
Nationally, 88 nursing homes participate in the SFF program, about 0.5% of all nursing homes. It is mandatory if chosen.
The facilities with the most points in a state then become candidates for the SFF program. The number of nursing homes on the candidate list is based on five candidates for each SFF slot, with a minimum candidate pool of five nursing homes and a maximum of 30 per State. State Agencies (“SAs”) use this list to select nursing homes to fill the SFF slot(s) in their State. Additionally, since a facility’s staffing (staffing levels and turnover) is very important to residents’ care, CMS recommends that SAs consider a facility’s staffing information when selecting SFFs from the SFF candidate list. See the list of current candidates in Table D, current as of December 7, 2022. For example, NC has 10 facilities on the proposed list for participation in the SFF program. Each State is allotted a number of SFFs the State may allot. See below.
Once a State selects a facility as an SFF, the SA, on CMS’s behalf, conducts a full, onsite inspection of all Medicare health and safety requirements every six months, and recommends progressive enforcement (e.g., civil money penalty, denial of Medicare payment, etc.) until the nursing home either: (1) graduates from the SFF program; or (2) is terminated from the Medicare and/or Medicaid program(s). While in the SFF program, CMS expects facilities to take meaningful actions to address the underlying and systemic issues leading to poor quality.
Once an SFF graduates or is terminated, each SA then selects a new SFF from a monthly list of candidates. CMS also informs candidate nursing homes of their inclusion on the SFF candidate list in the monthly preview of the Five-Star Quality Rating System. The facility will graduate from the SFF program once it has had two consecutive standard health surveys with 12 or fewer deficiencies cited at S/S of “E” or less on each survey (these surveys must have occurred after the facility has been selected as an SFF). To avoid situations where a facility remains an SFF for a prolonged period of time, CMS is establishing criteria that could result in the facility’s termination from the Medicare and/or Medicaid programs. SFFs with deficiencies cited at Immediate Jeopardy on any two surveys while in the SFF program, will be considered for discretionary termination.
While the initial SFF designation is not appealable, the facility does have some appeal rights. Federal regulations allow for dispute resolution and to appeal a finding of noncompliance determined under an SFF survey that results in an enforcement remedy.
If you find yourself on the SFF list, you must hire a lawyer with expertise. Your lawyer should be able to help you “graduate” from the SFF list without termination or closure. Your lawyer can help negotiate Systems Improvement Agreements (“SIAs”) with SAs and CMS to provide additional time for nursing homes to improve their internal systems and the quality of care they provide.
Are UTIs Preventable? OIG Says Yes and CMS Will Audit!
I hope everyone had a fantastic Thanksgiving and are now moving toward the Christmas or Hanukkah holiday. As I discussed last week, CMS and its contracted auditors are turning their watchdog eyes toward nursing homes, critical access hospitals (“CAHs”), and acute care hospitals (“ACHs”). You can hear more on this topic on Thursday, December 8th at 1:30 when I present the RACMonitor webinar, “Warning for Acute Care Hospitals: You Are a Target for Overpayment Audits.”
October 2022, OIG published a new audit project entitled, “Potentially Preventable Hospitalizations of Medicare-Eligible Skilled Nursing Facility Residents.”
Residents of nursing homes and long-term care facilities are frequently transferred to an Emergency Department as an inpatient when they need acute medical care. A proportion of these transfers may be considered inappropriate and may be avoidable, says OIG.
OIG identified nursing facilities with high rates of Medicaid resident transfers to hospitals for urinary tract infections (“UTIs”). OIG describes UTIs as being “often preventable and treatable in the nursing facility setting without requiring hospitalization.” A 2019 OIG audit found that nursing facilities often did not provide UTI detection and prevention services in accordance with resident’s individualized plan of care, which increases the chances for infection and hospitalization. Each resident should have their own prevention policy for whatever they are prone to get. My Grandma, for example, is prone to UTIs, so her personal POC should have prevention measures for trying to avoid contracting a UTI, such as drinking cranberry juice and routine cleansing. In addition to UTIs, OIG noted that previous CMS studies found that five conditions were related to 78% of the resident transfers to hospitals: pneumonia, congestive heart failure, UTIs, dehydration, and chronic obstructive pulmonary disease/asthma. OIG added a sixth condition citing that sepsis is considered a preventable condition when the underlying cause of sepsis is preventable. In my humble opinion, the only condition listed as preventable that is actually preventable is dehydration.
OIG’s new audit project involved a review of Medicare and Medicaid claims related to inpatient hospitalizations of nursing home residents with any of the six conditions noted previously. The audit will focus on whether the nursing homes being audited provided services to residents in accordance with the residents’ care plans and related professional standards (or whether the nursing homes caused preventable inpatient admissions due to non-compliance with care plans and professional standards).
What can you do to prepare for these upcoming audits? Review your facilities’ policies, procedures, and practices germane to the identification of the 6 conditions OIG flagged as preventable. Ensure that your policies and procedures lay out definitive steps to prevent or try to prevent these afflictions. Educate and train your staff of detection, prevention, treatment, and care planning related to the six conditions. Collect and analyze data of trends of frequency and cause of inpatient hospitalizations and determine whether these inpatient hospitalizations could have been prevented and how.
In summary, be prepared for audits of inpatient hospitalizations with explanations of attempted prevention. You cannot prevent all afflictions, but you can have policies in place to try. As always, it’s the thought that counts, as long as, it’s written down.
