Coronavirus shuts down Courts across North Carolina. As of now, Superior and District Courts remain open…for now.
*My next blog will explore the new budget and emergency measures implemented for Medicare and Medicaid. More money will be funded to both during this crisis…TBD. How is the Coronavirus impacting health care?
The following emergency directive was initiated, effective TODAY.
On 10 March 2020, Governor Roy Cooper declared a state of emergency in North Carolina in response to the emerging public health threat posed by COVID-19. Since that time, the World Health Organization has designated the COVID-19 outbreak as a global pandemic, and the North Carolina Department of Health and Human Services has urged all North Carolinians to take steps to reduce the spread of infection. Accordingly, I hereby determine and declare under N.C.G.S. § 7A-39(b)(2) that catastrophic conditions resulting from the public health threat posed by COVID-19 exist in all counties of this state. Although the superior courts and district courts remain open, two emergency directives are necessary to reduce the spread of infection.
Emergency Directive 1
I order that all superior court and district court proceedings be scheduled or rescheduled for a date no sooner than 30 days from the issuance of this order, unless: 1. the proceeding will be conducted remotely; 2. the proceeding is necessary to preserve the right to due process of law (e.g., a first appearance or bond hearing, the appointment of counsel for an indigent defendant, a probation hearing, a probable cause hearing, etc.); 3. the proceeding is for the purpose of obtaining emergency relief (e.g., a domestic violence protection order, temporary restraining order, juvenile custody order, judicial consent to juvenile medical treatment order, civil commitment order, etc.); or 4. the senior resident superior court judge, chief business court judge, or chief district court judge determines that the proceeding can be conducted under conditions that protect the health and safety of all participants. This emergency directive does not apply to any proceeding in which a jury has already been empaneled. This emergency directive does not apply to grand juries which have already been empaneled. This emergency directive does not prohibit a judge or other judicial officer from exercising any in chambers or ex parte jurisdiction conferred by law upon that judge or judicial officer, as provided by law. Additionally, I encourage the superior courts and district courts to liberally grant additional accommodations to parties, witnesses, attorneys, and others with business before the courts who are at a high risk of severe illness from COVID-19.
Emergency Directive 2
I further order that the clerks of superior court shall post a notice at the entrance to every court facility in their county directing that any person who has likely been exposed to COVID-19 should not enter the courthouse. A person who has likely been exposed to COVID-19 who has business before the courts shall contact the clerk of superior court’s office by telephone or other remote means, inform court personnel of the nature of his or her business before the court, and receive further instruction. For purposes of this order, a person who has likely been exposed to COVID-19 is defined as any person who: 1. has traveled to China, South Korea, Japan, Italy, or Iran within the previous 14 days; 2. has been directed to quarantine, isolate, or self-monitor; 3. has been diagnosed with COVID-19; or 4. resides with or has been in close contact with any person in the above mentioned categories.
* * * The directives contained in this order will take effect Monday, 16 March 2020.
This order may be extended in whole or in part for additional 30-day periods if necessary.
Issued this the 13th day of March, 2020. Cheri Beasley, Chief Justice Supreme Court of North Carolina
Effective Jan. 2, 2019, the Centers for Medicare & 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 a veritable tsunami in Medicare/Medicaid audits. The auditor collects a small sample of claims to review for compliance, then determines the “error rate” of the sample. For example, if 500 claims are reviewed and one is found to be noncompliant for a total of $100, then the error rate is set at 20 percent. 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 or maybe hired a different biller. In order to extrapolate an error rate, contractors must use a “statistically valid random sample” and then apply that error rate on a broader universe of claims, using “statistically valid methods.”
With extrapolated results, auditors allege millions of dollars of overpayments against healthcare providers – sometimes a sum of more than the provider even made during the relevant time period. It is an overwhelming impact that can put a provider and its company out of business.
Prior to this recent change to extrapolation procedure, the Program Integrity Manual (PIM) offered little guidance regarding the proper method for extrapolation.
Prior to 2019, CMS offered broad strokes with few details. Its guidance was limited to generally identifying the steps contractors should take: “a) selecting the provider or supplier; b) selecting the period to be reviewed; c) defining the universe, the sampling unit, and the sampling frame; d) designing the sampling plan and selecting the sample; e) reviewing each of the sampling units and determining if there was an overpayment or an underpayment; and, as applicable, f) estimating the overpayment.”
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.
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 a 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 percent 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 critical 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 paid the alleged amounts will be held against you.
Another monumental modification to RAC audits is that the RAC auditor now 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 percent of the provider’s Medicare revenue received within the previous 12 months.
The identification of the claims universe was also redefined. 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: a) some claims/claim lines are discovered to have been subject to a prior review; b) the definitions of the sample unit necessitate eliminating some claims/claim lines; or c) some claims/claim lines are attributed to sample units for which there was no payment.”
How many of you have been involved in an alleged overpayment in which the auditor misplaced or lost documents? I know I have. The new rule also states that the auditors must be able to recreate the sample and maintain all documentation pertinent to the calculation of an alleged overpayment.
High-volume providers should face a lower risk of extrapolation if their audited error rate is less than 50 percent and they do not have a history of noncompliance for the same or similar billing issues, or a historical pattern of noncompliant billing practice.
“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.
HIPAA mandates the privacy of private health care records. HIPAA is a serious issue, both financially and in the risk-management aspect, for health care providers. Providers need to delegate annual funds to the defense of regulatory audits proactively – before the actual adverse action occurs. Because it’s not an “if;” it’s a “when,” when you accept Medicare/caid. In the Medicare/caid world, HIPAA violations can catastrophically render a company dead for an infraction. In the current days of technical, daily advances and allegations of cybersecurity breaches, health care providers must be cognizant of cyber criminals, their intent, their modus operandi, and what personal/company information is valuable to such criminals. The HIPAA statutes are vague and lack detailed explanations as to penalties.
In 2018, the Office for Civil Rights (OCR) issued a record-breaking $28 million in fines for HIPAA violations. The number of health care providers currently under investigation by HHS, in 2019, will be another record-breaking number.
As more and more data is maintained on computer systems, the more and more accessible the information becomes to potential scammers. In 2017, the number of cyber attacks increased exponentially to 5,207. There is actually an itemization as to how many of the attacks were germane to health care; health care breaches accounted for 8.5% of all breaches. 2.3 billion health care records have been exposed. This isn’t new. In 2015, the most healthcare records ever were breached. 113 million healthcare records were exposed that year. Now, in 2019, we may witness an all-time-high.
Human error is the number 1 reason for HIPAA violations. Employees gossiping and disclosing private health care information among each other is another culprit, along with social media and lack of training.
The largest individual HIPAA settlement was reached in October 2018, when OCR fined health insurer Anthem $16 million.
The oxymoron is that the government (Medicare/caid) and private payors are pushing for collaborative health care and the sharing of health care records amongst varying providers. Yet the possible HIPAA breaches increase with collaboration.
In April 2019, HHS randomly selected 9 HIPAA-covered entities—a mix of health plans and clearinghouses—for Compliance Reviews. The CMS Division of National Standards, on behalf of HHS, has launched a volunteer Provider Pilot Program to test the compliance review process.
The Trump administration has interpreted HIPAA penalties differently than the Obama administration did. Now HHS will apply a different cumulative annual CMP limit for the four penalties tiers in the Health Information Technology for Economic and Clinical Health (HITECH) Act.
There are four tiers of HIPAA violation severity outlined in the HITECH Act, based on the violator’s level of culpability:
Under the Obama administration, the annual limit for each tier was $1.5 million.
HIPAA penalties are appealable and with the disparate amount of penalties, it is well worth the time and expense to appeal.
No, this is not a Shakespearean blog post. The Hamlet in this case is not the Prince of Denmark; it is a hospital system who hired a doctor, Dr. Hernandez as an independent contractor and whose private practice flopped. When the hospital at which he had privileges refused to hire him as an employee, Hernandez sued Hamlet under the False Claims Act (FCA) and Unfair Trade Practices- AND WON!!
Relationships between hospitals and physicians may forever be changed.
In an October 2018 decision, Hamlet H.M.A., LLC V. Hernandez, the NC Court of Appeals ruled that a hospital can be liable to a physician for Unfair and Deceptive Trade Practices (UDTP) – causing a new level of care to be needed in negotiations between hospitals and physicians.
Dr. Hernandez accepted a position with Sandhills Regional Medical Center. The original offer was for Dr. Hernandez to set up his own independent practice and to be an independent contractor for the hospital. The offer guaranteed a minimum collection amount for the first 18 months of the 36-month contract. The base salary was $325,000, with a bonus based on worked RVUs. Dr. Hernandez countered and asked to be considered as an employee instead of as an independent contractor. Sandhills sent an email offering a base salary of $275,000 as an employee. As any reasonable, logical person would do, Dr. Hernandez responded with an email stating that it would be irrational to accept a base salary so much lower in order to obtain employee status. The hospital offered an “employee status option” at the end of 18 months.
Dr. Hernandez then sent Sandhills an email asking to extend the time period of guaranteed income to 24 months, rather than 18 months. Plaintiff replied that it could not extend the period of guaranteed income, but raised the monthly salary from $47,616.82 to $49,500.00 and also added a signing bonus of $30,000.00. After further negotiations, the parties entered into a Physician Recruitment Agreement on March 9, 2011.
Dr. Hernandez’s private practice flopped, and at the end of the first 18-month period, he requested to exercise the employment option in his contract and to become an employee of Sandhills. But Sandhills did not give Dr. Hernandez an employment contract.
On August 29, 2014, Sandhills filed a complaint against Dr. Hernandez alleging breach of contract and demanding repayment of the entire amount paid to Dr. Hernandez, a total of 21 payments amounting to $902,259.66. Dr. Hernandez filed an answer with counterclaims for breach of contract, fraud, unfair or deceptive trade practices, and unjust enrichment. A jury trial was held in Superior Court in Richmond County at the end of August and the beginning of September 2016. The jury returned a verdict for Sandhills for $334,341.14 (a random number).
Dr. Hernandez countered sued the hospital for Unfair and Deceptive Trade Practices (UDTP) alleging that the hospital fraudulently induced him to enter into the contract with the hospital as an independent contractor. His allegations that the hospital violated UDTP because the hospital offered a lower salary to be considered an employee was shocking and unprecedented. Most likely, Sandhills never even contemplated that it could be held liable under UDTP because of a disparity in salary offered to Dr. Hernandez depending on his employment status. Most likely, the man or woman who sent the email to Dr. Hernandez with the disparate salaries never asked its general counsel whether the action could penalize the hospital. Who would have thought to?
One exception to UDTP is the “learned profession” exception. Basically, the courts have held that if the two parties to an agreement are learned professionals and the topic of the contract has to do with the parties’ speciality; i.e, medicine, in this case, then the parties cannot allege UDTP because both parties were knowledgeable. The issue of first impression presented by Hamlet is whether the “learned profession” exception set forth in N.C. Gen. Stat. § 75-1.1(b) applies to a dispute between a physician and a hospital relating to alleged false claims made by the hospital to induce the physician to enter into an employment contract. If the learned profession exception were to apply, then Dr. Hernandez’s UDTP claim against Sandhill would be dismissed.
Dr. Hernandez alleged that the hospital made false representations to induce him to enter into a contract. The Court held that the fact that he is a physician does not change the nature of the negotiation of a business contract. The Court found that the “learned profession” exception does not apply to any negotiation just because the two parties are physicians. For example, if a physician and a hospital were to contract to buy a beach house, then the exception would not apply because the nature of the contract (were something go awry and cause an UDTP lawsuit) because buying a beach house has nothing to do with being a physician or hospital. Similarly, here, the Court held that an employment contract had nothing to do with rendering medicine. Therefore, the exception did not apply. The Court of Appeals reversed the trial court’s directed verdict against Dr. Hernandez.
This decision definitely creates more tension between hospitals and physicians. Now, in negotiations with employees and independent contractors, hospitals need to be mindful that UDTP claims can be alleged against them. This case is recent precedent for an unfamiliar modern world of health care negotiations.
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.
The answer resides in the injury, not the quality of the care.
A consumer trips and falls at your long term care facility. It is during her personal care services (PCS). Dorothy, a longtime LPN and one of your most trusted employees, is on duty. According to Dorothy, she was aiding Ms. Brown (the consumer who fell) from the restroom when Ms. Brown sneezed multiple times resulting in a need for a tissue. Dorothy goes to the restroom (only a few feet away) when Ms. Brown’s fourth sneeze sends her reeling backward and falling on her hip.
To report or not to report? That is the question.
What is your answer?
Is Ms. Brown’s fall a Level I, Level II, or a Level III incident? What are your reporting duties?
- If you answered Level II and no requirement to report – you would be correct.
- If you answered Level III and that you must report the incident within 24 hours, you would be correct.
Wait, what? How could both answers be correct? Which is it? A Level II and no reporting it or a Level III and a report due within 24 hours?
It depends on Ms. Brown’s injuries, which is what I find fascinating and a little… how should I put it… wrong?! Think about it…the level of incident and the reporting requirement is not based on whether Dorothy properly provided services to Ms.Brown. No…the answer resides in Ms. Brown’s injuries. Whether Dorothy acted appropriately or not appropriately or rendered sub-par services has no bearing on the level of incident or reporting standards.
According to the Department of Health and Human Services’ (DHHS) Incident Response and Reporting Manual, Ms. Brown’s fall would fall (no pun intended) within a Level II of response if Ms. Brown’s injuries were not a permanent or psychological impairment. She bruised her hip, but there was no major injury.
However, if Ms. Brown’s fall led to a broken hip, surgery, and a replacement of her hip, then her fall would fall within a Level III response that needs to be reported within 24 hours. Furthermore, even at a Level III response, no reporting would be required except that, in my hypothetical, the fall occurred while Dorothy was rendering PCS, which is a billable Medicaid service. Assuming that Ms. Brown is on Medicaid and Medicare (and qualifies for PCS), Dorothy’s employer can be reimbursed for PCS; therefore, the reporting requirement within 24 hours is activated.
In each scenario, Dorothy’s actions remain the same. It is the extent of Ms. Brown’s injury that changes.
See the below tables for further explanation:
These tables are not exhaustive, so please click on the link above to review the entire Incident Response and Reporting Manual.
Other important points:
- Use the federal Occupational Safety and Health Administration’s (OSHA) guidelines to distinguish between injuries requiring first aid and those requiring treatment by a health professional.
- A visit to an emergency room (in and of itself) is not considered an incident.
- Level I incidents of suspected or alleged cases of abuse, neglect or
exploitation of a child (age 17 or under) or disabled adult must still be reported
pursuant to G.S. 108A Article 6, G.S. 7B Article 3 and 10A NCAC 27G .0610.
Providing residential services to anyone is, inevitably, more highly regulated than providing outpatient services. The chance of injury, no matter the cause, is exponentially greater if the consumer is in your care 24-hours a day. That’s life. But if you do provide residential services, know your reporting mandates or you could suffer penalties, fines, and possible closure.
Lastly, understand that these penalties for not reporting can be subjective, not objective. If Ms. Brown’s fall led to a broken hip that repaired without surgery or without replacement of the hip, is that hip injury considered “permanent?”
In cases of reporting guidelines, it is prudent to keep your attorney on speed dial.
As seen on RACMonitor.
More than a third of ACOs might leave if the proposed rule takes effect.
The comment period closed for the Centers for Medicare and Medicaid Services (CMS) Medicare Shared Savings Program (MSSP) proposed rule on Oct. 16. The MSSP has been a controversial program since its inception. The chief concern is that the financial “dis-incentives” will decrease the number of Accountable Care Organizations (ACOs). The proposed rule for MSSP intensifies the financial “dis-incentives,” causing even more concern about the number of ACOs.
What is the Medicare Shared Savings Program? It is a voluntary program that is supposed to encourage groups of doctors, hospitals, and other healthcare providers to come together as ACOs to give coordinated, high-quality care to their Medicare patients. Providers can choose among three distinctive tracks, depending on the amount of risk the providers want to bear. The purpose of the MSSP is to diversify risk – of both loss and gain – between the government and the ACOs. For example, Track 1 ACOs do not assume downside risk (shared losses) if they do not lower growth in Medicare expenditures.
CMS created the MSSP in hopes that doctors, hospitals, and other healthcare providers would want to participate, with the incentive of the chance to make more money, rather than remaining in the traditional Medicare relationship. The program turned out to be more successful than anticipated, with the majority of ACOs opting to become Track 1, or the least risky model (one-sided risk).
CMS’s new proposed rule, however, increases the risk placed on the ACOs. Needless to say, providers aren’t happy, and many ACOs in the program warn that they’ll drop out if CMS finalizes its proposal as is.
What are these proposed changes to the MSSP?
Restricting Track 1 Enrollment
ACOs currently have six years to shift to a risk-bearing model from a shared savings-only model (Track 1). The proposed rule would give existing ACOs one year and new ACOs two years to transfer to a risk-bearing model. This one change could cause mass exodus from the MSSP, as many providers are, by nature, risk-averse.
Morphing to Five-Year Agreement Periods
The proposed rule requires CMS and the ACOs to morph into using five-year agreement periods. I am on the fence regarding this change. It could strengthen ACOs’ incentives to reduce spending by breaking the link between ACOs’ performance in the first two years of each agreement period and their future benchmarks. However, this modification could worsen incentives during the first two years of each agreement period. I would love to hear your opinions.
Slashing Shared Savings Rates
The proposed rule purports to slash shared savings rates for upside-risk models from 50 percent to as low as 25 percent. Under the one-sided model years of the glide path, an ACO’s maximum shared savings rate would be 25 percent, based on quality performance, applicable to first-dollar shared savings after the ACO meets the minimum savings rate. The glide path concludes with a maximum 50 percent sharing rate, based on quality performance, and a maximum level of risk, which qualifies a provider as an Advanced APM for purposes of the Quality Payment Program.
Other proposed changes include the following:
- A bifurcated system for high- and low-revenue ACOs, which functionally would penalize certain ACOs for the size of their patient populations and volume of services.
- A differential system for experienced versus inexperienced ACOs, which would allow experienced ACOs to choose from a more robust menu of participation options.
- Dis-incentives to lower spending: ACOs have had little incentive to lower spending because of the link between the spending reductions they achieve and subsequent benchmarks. One could argue that it is astonishing that the MSSP has produced any savings at all. CMS proposes that the MSSP needs to be re-vamped.
- A modified and more rigorous application review process to screen for good standing among ACOs seeking to renew or re-enter MSSP after termination or expiration of their previous agreement. ACOs in two-sided models would be held accountable for partial-year losses if either the ACO or CMS terminates the agreement during a performance year.
Will there be too much risk too quickly placed on the ACOs? Stay tuned for whether this proposed rule becomes finalized.
With so much news about Medicare and Medicaid, I decided to do a general update of Medicare and Medicaid in the news. To the best of my ability, I am trying not to put my own “spin” on the stories, but just relay what is happening. Besides, Hurricane Florence is coming, and we have to hunker down. FYI: There is no more water at Costco.
Here is an overview of current “hot topics” for Medicare and Medicaid:
Affordable Care Act
On September 5, 2018, attorneys argued in TX district court whether the Affordable Care Act should be repealed. The Republican attorneys, who want the ACA repealed will argue that the elimination of the tax penalty for failure to have health insurance rendered the entire law unconstitutional because the Supreme Court upheld the ACA in 2012 by saying its requirement to carry insurance was a legitimate use of Congress’ taxing power. We await the Court’s decision.
In Maine, two hospitals illegally turned away emergency room patients in mental health crises and sometimes had them arrested for trespassing. The hospitals are Central Maine Medical Center and St. Mary’s Regional Medical Center, and they have promised to address and change these policies. It is likely that the hospitals will be facing penalties. Generally, turning away a patient from an ER is over $100,000 per violation.
Six San Francisco Bay Area medical professionals have been indicted for an alleged kickback scheme in which three paid and three received kickbacks for healthcare referrals in home health.
Medicaid Work Requirements
In June, Arkansas became the first state to implement a work requirement into its Medicaid program. The guinea pig subjects for the work requirement were Medicaid expansion recipients aged 30-49, without children under the age of 18 in the home, did not have a disability, and who did not meet other exemption criteria. On a monthly basis, recipients must work, volunteer, go to school, search for work, or attend health education classes for a combined total of 80 hours and report the hours to the Arkansas Department of Human Services (DHS) through an online portal. Recipients who do not report hours any three months out of the year lose Medicaid health coverage until the following calendar year. September 5th was the reporting deadline for the third month of the policy, making today the first time that recipients can lose Medicaid coverage as a result of the work requirement. There are 5,426 people who missed the first two reporting deadlines, which is over half of the group of 30-49 year olds subject to the policy beginning in June. If these enrollees do not do not log August hours or an exemption into the portal by September 5th, they will lose Medicaid coverage until January 2019.
Accountable Care Organizations
According to a report in late August, accountable care organizations (ACOs) that requires physicians to take on substantial financial risk saved Medicare just over $100 million in the model’s first year, the CMS said in a report released Monday.
Lower Medicare Drug Costs
Back in May, the Trump administration published a “blueprint” for lowering drug costs. Advocacy groups are pushing back, saying that his plan will decrease access to drugs.
Balance billing is when a patient presents at an emergency room and needs emergency medical services before the patient is able to determine whether the surgeon at the hospital is “in-network” with his insurance…most likely, because the patient is unconscious and no one has time to check for insurance networks. More and more states are passing laws to protect consumers from balance billing. An example of balance billing was Drew Calver, whose health plan paid $56,000 for his 4-day emergency stay at St. David’s Medical Center. Once he was discharged, he received a bill from the hospital for $109,000. The Employee Retirement Income Security Act (ERISA) regulates company plans that practice this. The hospital eventually reduced the bill to $332.
During a fire, staff at two Santa Rosa, California-based nursing homes “abandoned their residents, many of them unable to walk and suffering from memory problems, according to a legal complaint filed by the California Department of Social Services.” The Department of Social Services accused the staff members of being unprepared for the emergency fire.
Makes you wonder what could possibly happen in the fast-approaching hurricane. At least with a hurricane, we have days advance notice. Granted there is no more water in the stores or gasoline at the pumps, but Amazon Prime, one-day service still works…for now.