I have a guest blogger today – what an honor! Teresa Greenhill is the co-creator of MentalHealthforSeniors.com, which is dedicated to providing seniors with information on physical and mental fitness. Being a senior herself, Teresa, with some help from her granddaughter, manages the website as a way to keep her busy and help other seniors be active and happy in their golden years.
Teresa’s blog today is about Medicare consumers creating a “senior” business…make money as a senior! Think it can’t be done?? Read Teresa’s blog below.
Breaking Into the House-Flipping Business: A Guide for Seniors
House-flipping can be a lucrative and rewarding venture for seniors. Maybe you are a retiree looking for a second career. Maybe you’ve always wanted to get competitive in the world of real estate. Or maybe you’re just trying to stay occupied and active while bringing in a little extra cash. Whatever the case, if you’re considering trying your hand at house-flipping, here are some of the basics you should know.
Seniors tend to thrive in the field of real estate.
Success in real estate can hinge very much on how well you deal with people. And this is something that many seniors have become adept at, over the years. You’ve probably had your share of managing difficult personalities. You can often anticipate issues before they arise. And most importantly, your own life experience sets you up to empathize with what others may be going through. Individuals who are selling or buying a home will appreciate the chance to deal with someone who is competent and calm, and who understands their worries. The bonus for seniors is that the work is relatively undemanding and allows you to set your own schedule.
You don’t need to be a real estate agent.
You don’t need to train to be an agent, or be certified as an agent, in order to get into flipping houses. That doesn’t mean there aren’t benefits to getting your real estate agent’s license, however. As a licensed agent, you will save money on commissions. You will also have better and earlier access to real estate listings. And being educated in the ins and outs of home buying and selling will make the entire process run more smoothly for you.
You will need to start with a certain amount of funding.
House-flipping is not one of those fields you can leap into without preparation, and this includes financial preparation. Before you decide that house-flipping is right for you, check to see whether you are financially ready to make a good start. The biggest expense you will face is the acquisition cost, which will vary depending on location, the size of the property, and its condition. You will also have to deal with renovation expenses and property taxes. Other costs involved in house-flipping include utilities, inspections, permits, and closing costs. So yes, this is a field that is easier to break into if you have plenty of cash on hand. But seniors who don’t have much expendable income still may be able to get a bank or home equity loan to start off.
Should you buy fixer-uppers?
When going into house flipping, the idea is that you will sell a house for more than you spent on it – so, yes, some renovation is a given. But there’s a limit to how much renovation and repair is a good idea. Even a home that looks decent at first glance could have a host of problems including expensive issues pertaining to the foundation, the roof, or the structure itself. Look out for mold, asbestos, termite damage, and wiring problems. A good choice is a home that will benefit immensely from less expensive aesthetic updates such as a good paint job, new cabinets, or improved landscaping. Of course, much depends on how skilled you are at home renovations and repairs, yourself.
Will you have to hire employees?
If you plan on making this a business, you may want to bring on more permanent hires. Or you may prefer simply to deal with contractors. Either way, make sure you hire individuals or companies that have good reviews and are well regarded. Don’t forget that you will need to manage payroll, as soon as you start hiring others. So make sure anyone you bring on fills out the appropriate paperwork, and have an organized system for paying them promptly and correctly.
If you feel you have what it takes to succeed at – and enjoy – house-flipping, this may be the beginning of an exciting new phase in your life. Just be sure you are well informed, and sufficiently financially equipped to get your start safely. If you are a senior interested in real estate and also have legal questions pertaining to Medicaid or Medicare in the Raleigh area, contact Knicole C. Emanuel of Medicaid Law NC.
Today I pose a very important question for you. Do your participation contracts that you sign with Medicare/caid, MCOs, MACs – do they even matter? Are these boilerplate contracts worth the ink and the paper? The answer is yes and no. To the extent that the contracts are written aligned with the federal and State regulations, the contracts are enforceable. To the extent that the contracts violate the federal regulations, those clauses are unenforceable. The contract can even, at times, be more stringent or contain more limitations than the federal regulations. One thing is for sure, these contracts can be your worst enemy or your savior, depending on the clauses.
An Idaho client-provider of mine has been the victim of Optum-“black-hole-ism.” In this case, the “black-hole-ism” will save my client from paying $500k it does not owe. My client is the leading substance abuse (SA) provider in Idaho. Optum is managing Medicaid dollars, which makes it the Agent of the “single State agency,” the Department of Health of Idaho. 42 C.F.R. 431.10. See blog.
The Optum provider contract states that – “It is agreed that the parties knowingly and voluntarily waive any right to a Dispute if arbitration is not initiated within one year after the Dispute Date.” What a great clause. If only all contracts had this limiting clause.
In our dispute, Optum avers we owe $500k. The first demand we received was dated December 2018 for DOS 2016-2017. Notice Optum was timely back in 2018. That was when the client hired my team, and we submitted a rebuttal and initiated the informal appeal to Optum. Here’s where Optum gets sloppy. Months pass. A year passes. I hear crickets in the background. A year and a half passes. Who knows why Optum took a year and a half to respond? COVID happened. Black-hole-ism? Bureaucracy and red tape? Apathy? Ineptness?
Finally, we get a response in September 2020. We respond in October 2020. Our new response included a novel argument that was not included in the 2018 rebuttal. Our argument went something like: “Na Na Na Boo Boo, you’re too late per 7.1 Optum contract.” If we could have included a raspberry, we would done so.
Remember the clause? “It is agreed that the parties knowingly and voluntarily waive any right to a Dispute if arbitration is not initiated within one year after the Dispute Date.”
Well, 2020 is 3-4 years after the initial DOS at issue: 2016-2017. This time, the boilerplate contract is our friend.
Since there is also an arbitration clause, which is not your friend, we will be wholly dependent on an arbitrator to interpret the one-year, limiting clause as a logical, reasonable person. But I will be shocked if even an arbitrator doesn’t throw out this case with prejudice.
Today I am talking about a settlement agreement between CMS and the skilled nursing community, which, apparently, CMS conveniently forgot about – just recently. The Jimmo settlement agreement re-defines medical necessity for skilled nursing, especially for terminally, debilitating diseases, such as multiple sclerosis (“MS”). According to CMS/the MAC auditor, my client, who serves 100%, MS patients on Medicare owes over half a million dollars. The alleged overpayment and audit findings are in violation of the Jimmo Settlement and must cease.
My client received correspondence dated February 25, 2021, regarding CMS Inquiry #2349 that re-alleged an overpayment in the amount of $578,564.45, but the audit is in violation of the Jimmo Settlement with CMS. One basis for the claims denials is that “There is doc that the pt. has a dx of MS with no doc of recent exacerbation or change in function status.” After the first level of appeal, on June 8, 2021, the denial reason was as follows:
“The initial evaluation did not document there was an ACUTE exacerbation of this chronic condition that would support the need for skilled services.” This basis is in violation of the Jimmo Settlement. See below excerpt from the Jimmo Settlement.
In January 2013, the Centers for Medicare & Medicaid Services (“CMS”) settled a lawsuit, and the “Jimmo” Settlement Agreement was approved by the Court. Jimmo v. Sebelius, No. 5:11-CV17 (D. Vt., 1/24/2013). The Jimmo Settlement Agreement clarified that, provided all other coverage criteria are met, the Medicare program covers skilled nursing care and skilled therapy services under Medicare’s skilled nursing facility, home health, and outpatient therapy benefits when a beneficiary needs skilled care in order to maintain function or to prevent or slow decline or deterioration. Specifically, the Jimmo Settlement Agreement required Medicare Manual revisions to restate a “maintenance coverage standard” for both skilled nursing and therapy services under these benefits. The Jimmo Settlement Agreement 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.”
In the case of Jimmo v. Sebelius, which resulted in the Jimmo Settlement Agreement, the Center for Medicare Advocacy (“CMA”) alleged that Medicare claims involving skilled care were being inappropriately denied by contractors based on a rule-of-thumb-“Improvement Standard”— under which a claim would be summarily denied due to a beneficiary’s lack of restoration potential, even though the beneficiary did in fact require a covered level of skilled care in order to prevent or slow further deterioration in his or her clinical condition. In the Jimmo lawsuit, CMS denied establishing an improper rule-of-thumb “Improvement Standard.”
While an expectation of improvement would 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 federal 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 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.
A beneficiary’s lack of restoration potential cannot serve as the basis for denying coverage, without regard to an individualized assessment of the beneficiary’s medical condition and the reasonableness and necessity of the treatment, care, or services in question. Conversely, coverage in this context would not be available in a situation where the beneficiary’s care needs can be addressed safely and effectively through the use of nonskilled personnel. Thus, such coverage depends not on the beneficiary’s restoration potential, but on whether skilled care is required, along with the underlying reasonableness and necessity of the services themselves.
Any Medicare coverage or appeals decisions concerning skilled care coverage must reflect this basic principle. In this context, it is also essential and has always been required that claims for skilled care coverage include sufficient documentation to substantiate clearly that skilled care is required, that it is provided, and that the services themselves are reasonable and necessary, thereby facilitating accurate and appropriate claims adjudication.
The Jimmo Settlement Agreement includes language specifying that “Nothing in this Settlement Agreement modifies, contracts, or expands the existing eligibility requirements for receiving Medicare coverage. Id. The Jimmo Settlement Agreement clarifies that when skilled services are required in order to provide care that is reasonable and necessary to prevent or slow further deterioration, coverage cannot be denied based on the absence of potential for improvement or restoration.
100% of my client’s consumers suffer from MS. MS is a chronic condition that facilitates a consistent decline over a long period of time. 90% of those with MS do not suffer from acute exacerbations after approximately 5 years of their initial diagnosis. They move into a new phase of their disease called secondary progressive where there are no exacerbations but a slow, consistent decline is now the clinical presentation. According to the Jimmo Settlement, there is no requirement that a provider demonstrate recent exacerbation or change of function. This has been litigated and settled. My client’s Medicare audit is in violation of the Jimmo Settlement and must cease, yet the audit must still be defended.
My client’s documents clearly demonstrate that its consumers who all suffer from MS, qualify for skilled therapy based on the Jimmo Settlement Agreement and their physicians’ recommendations. The Jimmo Settlement clearly states that if the therapist determines that skilled nursing is necessary to stop further decline, then, under the Jimmo Settlement, skilled nursing is appropriate.
Now my client is having to defend itself against erroneous allegations that are clearly in violation of the Jimmo Settlement, which is adversely affecting the company financially. It’s amazing that in 2021, my client is defending a right given in a settlement agreement from 2013. Stay proactive!
The audits of telehealth during COVID. OIG is conducting, at least, seven (7) nationwide audits of providers specific to telemedicine. These audits will review remote patient monitoring, virtual check-ins, and e-visits. In 2018, OIG issued a report regarding a 31% error rate of claims for telehealth – and that report was prior to the explosion of telemedicine in 2020 due to COVID. All providers who have billed telehealth during the public health emergency (“PHE”) should be prepared to undergo audits of those claims.
The following audit projects are as follows:
- Audits of behavioral health care telehealth in Medicaid managed care;
- Audits of Medicare Part B telehealth services during PHE;
- Audits of home health services provided as telehealth during the PHE;
- Audits of home health agencies’ challenges and strategies in responding to the PHE;
- Medicare telehealth services during PHE: Program Integrity Risks;
- Audits of telehealth services in Medicare Parts B (non-institutional services) and C (managed care) during the COVID-19 pandemic;
- Medicaid: Telehealth expansion during PHE.
Recently added to the “chopping block” of audits via OIG include Medicare payments for clinical diagnostic laboratory tests in 2020. OIG will also audit for accuracy of place-of-service codes on claims for Medicare Part B physician services when beneficiaries are inpatients under Part A. As it always seems is the case, home health and behavioral health care are big, red targets for all audits. Over the pandemic, telehealth became the “new norm.” Audits on telehealth will be forthcoming. Specifically in behavioral health, OIG announced that it will audit Medicaid applied behavior analysis for children diagnosed with autism.
On another note, I recently had a client undergo a meaningful use audit. Everyone knows the government provides incentives for using electronic records. In order to qualify for a meaningful use incentive you must meet 9 criteria. If you fail one criterion, you owe the money back. One of the biggest issue physicians have faced in an audit is demonstrating the “yes/no” requirements that call for attestation proving the security risk analysis was successfully met. In this particular case, opposing counsel was a GA state AG. The attorney told me that he had zero authority to negotiate the penalty amount. It was the first time another lawyer told me that the penalty was basically a “strict liability” issue, and since the funds were federal, the State of GA had no authority to reduce or remove the penalty. But there is an appeal process. It made no sense. In this case, the doctor didn’t want to pursue litigation. So, reluctantly, we paid. I am wondering if any of my readers have encountered this issue of no negotiations for meaningful use penalties.
First and foremost, important, health care news:
The Medicare Administrative Contractors (MACs) have full authority to renew post-payments reviews of dates of service (DOS) during the COVID pandemic. The COVID pause is entirely off. It is going to be a mess to wade through the thousands of exceptions. RAC audits of COVID DOS will be, at best, placing a finger on a piece of mercury. I hope that the auditors remember that everyone was scrambling to do their best during the past year and a half. In the upcoming weeks, I will keep you posted.
I am especially excited today. Last week, I won a permanent injunction for a health care facility that but for this injunction, the facility would be closed, its 300 staff unemployed, and its 600 Medicare and Medicaid consumers without access to their mental health and substance abuse providers, their primary care physicians, and the Suboxone clinic. The Judge’s clerk emailed us on Friday. The email was terse although the clerk signified that the email was important by clicking the little, red, exclamation point. It simply stated: After speaking with Judge X, she is dismissing the government’s MTD and granting Petitioner’s permanent injunction. Petitioner’s counsel can send a proposed decision within 10 days. Such a simple email affected so many lives!
We hear Ellen Fink-Samnick MSW, ACSW, LCSW, CCM, CRP, speak about social determinants of health (SDoH) on RACMonitor. Well, this company is minority-owned and the mass percentage of staff and consumers are minorities.
Why was this company on the brink of closing down? The managed care organization (MCO) terminated the company’s Medicaid contract. Medicaid comprised the majority of its revenue. The MCO’s reason was that the company violated 42 CFR §455.106, which states:
“Information that must be disclosed. Before the Medicaid agency enters into or renews a provider agreement, or at any time upon written request by the Medicaid agency, the provider must disclose to the Medicaid agency the identity of any person who:
The former CEO – for years – he relied on professional tax accountants for the company’s taxes and his own personal family’s taxes. His wife, who is a physician, relied on her husband to do their personal taxes as one of his “honey-do” tasks. CEO relied on a sub-par accountant for a couple years and pled guilty to failing to pay personal taxes for two years. The plea ended up in the newspaper and the MCO terminated the facility.
We argued that the company, as an entity, was bigger than just the CEO. Quickly, we filed for a TRO to keep the company open. Concurrently, we transitioned the company from the CEO to Dr. wife. Dr became CEO in a seamless transition. A long-time executive stepped up as HR management.
Yet, according to testimony, the MCO terminated the company’s contract when the newspaper published the article about CEO’s guilty plea. The article was published in a local paper on April 9 and the termination notice was sent out April 19th. It was a quick decision.
We argued that 42 CFR §455.106 didn’t apply because CEO’s guilty plea was:
- Personal and not related to Medicare or Medicaid; and
- Not a conviction but a voluntary plea agreement.
The Judge agreed. We won the TRO for immediate relief. After a four-day hearing and 22 witnesses for Petitioner, we won the preliminary injunction. At this point, the MCO hired outside counsel with our tax dollars, which I did bring up in the final hearing on the merits.
New outside counsel was super excited to be involved. He immediately propounded a ton of discovery asking for things that he already had and for criminal documents that we had no access to because, by law, the government has possession of and CEO never had. Well, new lawyer was really excited, so he filed motions to compel us to produce these unobtainable documents. He filed for sanctions. We filed for sanctions back.
It grew more litigious as the final hearing on the merits approached.
Finally, we presented our case for a permanent injunction, emphasizing the importance of the company and the smooth transition to the new, Dr. CEO. We won! Because we won, the company is open and providing medically necessary services to our most needy population.
And…I get to draft the proposed decision.
I had the pleasure of being interviewed a second time on Legal Buzz. Thanks, Alex!!
This segment is rated ‘F’ for fraud. It is not for the meek of heart. How many of you have read a newspaper or seen the news about Medicare and Medicaid provider fraudsters? There is a grey area between civil and criminal prosecutions of fraud. Some innocent providers get caught in the wide, fraud net because counsel doesn’t understand the idiosyncrasies of Medicare regulations.
Health care fraud GENERALLY exists as one of the following:
- Billing for services not rendered;
- Billing for a non-covered service as a covered service;
- Misrepresenting the DOS
- Misrepresenting location of service;
- Misrepresenting provider of service
- Waiving deductibles and/or co-payments
- Incorrect reporting of diagnoses or procedures;
- Overutilization of services;
- Kickbacks/referrals for money
- False or unnecessary issuance of prescription drugs
To err is human. Or so Alexander Pope says. I am here to attest that many of those accused providers are innocent and victims of unspecialized criminal attorneys.
One plastic surgeon knows this only too well. Quick anecdote:
Doctor was audited for removing lesions from the eye area and accused of billing for removing cancerous lesions even when the biopsies came back benign. Yet Medicare instructs physicians to NOT go back and change a CPT code after the fact. The physician is supposed to make an educated guess as to whether the lesion removed is benign or malignant. There are no crystal balls so he makes an educated determination.
Since plastic surgery is highly specialized and the physician is highly educated. Deference should be given to the physician regardless.
This plastic surgeon was accused of upcoding and billing for services not rendered. He performed biopsies around the eye of possible, cancerous lesions. Once removed, he would send the samples to lab. Meanwhile, before knowing whether the samples were cancerous, because he believed them to be cancerous, billed for removal of cancerous lesion to Medicare. Correct coding for skin procedures is not impossible.
In a Local Coverage Determination (“LCD”), beginning 2008, Medicare instructed physicians to not go back and change codes depending on the pathology. “If a benign skin lesion excision was performed, report the applicable CPT code, even if final pathology demonstrates a malignant or carcinoma diagnosis for the lesion removed. The final pathology does not change the CPT code of the procedure performed.” See LCD: Removal of Benign Skin Lesions, 2008. This plastic surgeon relied on CMS’ Medicare regulations and policies, including the Medicare Provider Manual and LCD 2008, which are published by the government and on which Dr. relied.
Doctor hired two criminal attorneys who did not specialize in Medicare. Doctor gets charged, and attorneys convince him to plead guilty claiming that he cannot fight the government. And that the government will seize his property if he doesn’t settle.
He pled guilty to a crime that he did not do. He paid millions in restitution, was under house arrest for 15 months, the Medical Board revoked his medical license, and he lost his career.
The lesson here is always fight the government. But choose wisely with whom you fight.
Medicaid Fraud Control Units Performed Poorly During the Pandemic: Expect MFCU Oversight to Increase
OIG just published its annual survey of how well or poor MFCUs across the country performed in 2020, during the ongoing COVID pandemic. Each State has its own Medicaid Fraud Control Unit (“MFCU”) to prosecute criminal and civil fraud in its respective State. I promise you, you do not want MFCU to be calling or subpoena-ing you unexpectedly. The MFCUs reported that the pandemic created significant challenges for staff, operations, and court proceedings, which led to lower case outcomes in FY 2020. But during this past “lower than expected” recovery year, the MFCUs still recovered over $1 billion from health care providers. It was a 48% drop.
As MFCUs initially moved to a telework environment, some staff reported experiencing challenges conducting work because of limitations with computer equipment and network infrastructure. Field work was also limited. To help protect staff and members of the public from the pandemic, MFCUs reported curtailing some in-person field work, such as interviews of witnesses and suspects. These activities were further limited because of an initial lack of personal protective equipment that was needed in order to conduct similar activities in nursing homes and other facilities. Basically, COVID made for a bad recovery year by the MFCUs. Courts were closed for a while as well, slowing the prosecutorial process.
The report further demonstrated how lucrative the MFCU agencies are, despite the pandemic. For every $1 dollar spent on the administration of a MFCU, the MFCUs rake in $3.36. In 2020, the MFCUs excluded 928 individuals or entities. There were 786 civil settlements and judgments; the vast majority of judgments were pharmaceutical manufacturers. Convictions decreased drastically from 1,564 in 2019 to 1,017 convictions in 2020. Interestingly, looking at the types of providers convicted or penalized, the vast majority were personal care services attendants and agencies. Five times higher than the next highest provider type – nurses: LPN, RNs, NPs, and PAs.
And the award goes to Maine’s MFCU – The Maine MFCU received the Inspector General’s Award for Excellence in Fighting Fraud, Waste, and Abuse for its high number of case outcomes across a mix of case types.
OIG also established the desired performance indicators for 2021. OIG expects the MFCUs to maintain an indictment rate of 19% and a conviction rate of 89.1%.
The OIG Report Foreshadows 2021 MFCU Actions:
- Hospice: Expect audits. $0 was recovered in 2020.
- Fraud convictions increased for cardiologists and emergency medicine. Expect these areas to be more highly scrutinized, especially given all the COVID exceptions and rule amendments last year.
- Expect a MFCU rally. The pandemic may not be over, but with increased vaccines and after a down year, MFCUs will be bulls in the upcoming year as opposed to last year’s forced, lamb-like actions due to the pandemic.
While Medicare is strictly a federal program, Medicaid is funded with federal and State tax dollars. Therefore, each State’s regulations germane to Medicaid can vary. Medicaid fraud can be prosecuted as a federal or a State crime.
Happy 55th Medicare! Pres. Biden’s health care policies differ starkly from former Pres. Trump’s. I will discuss some of the key differences. The newest $1.9 trillion COVID bill passed February 27th. President Biden is sending a clear message for health care providers: His agenda includes expanding government-run, health insurance and increase oversight on it. In 2021, Medicare is celebrating its 55th year of providing health insurance. The program was first signed into law in 1965 and began offering coverage in 1966. That first year, 19 million Americans enrolled in Medicare for their health care coverage. As of 2019, more than 61 million Americans were enrolled in the program.
Along with multiple Executive Orders, Pres. Biden is clearly broadening the Affordable Care Act (“ACA”), Medicaid and Medicare programs. Indicating an emphasis on oversight, President Biden chose former California Attorney General Xavier Becerra to lead HHS. Becerra was a prosecutor and plans to bring his prosecutorial efforts to the nation’s health care. President Biden used executive action to reopen enrollment in ACA marketplaces, a step in his broader agenda to bolster the Act with a new optional government health plan.
For example, one of my personal, favorite issues that Pres. Biden will address is parity for Medicare coverage for medically necessary, oral health care. In fact, Medicare coverage extends to the treatment of all microbial infections except for those originating from the teeth or periodontium. There is simply no medical justification for this exclusion, especially in light of the broad agreement among health care providers that such care is integral to the medical management of numerous diseases and medical conditions.
The Biden administration has taken steps to roll back a controversial Trump-era rule that requires Medicaid beneficiaries to work in order to receive coverage. Two weeks ago, CMS sent letters to several states that received approval for a Section 1115 waiver – for Medicaid. CMS said it was beginning a process to determine whether to withdraw the approval. States that received a letter include Arizona, Arkansas, Georgia, Indiana, Nebraska, Ohio, South Carolina, Utah, and Wisconsin. The work requirement waivers that HHS approved at the end of the previous administration’s term may not survive the new presidency.
Post Payment Reviews—Recovery Audit Contractor (“RAC”) audits will increase during the Biden administration. The RAC program was created by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. As we all know, the RACs are responsible for identifying Medicare overpayments and underpayments and for highlighting common billing errors, trends, and other Medicare payment issues. In addition to collecting overpayments, the data generated from RAC audits allows CMS to make changes to prevent improper payments in the future. The RACs are paid on a contingency fee basis and, therefore, only receive payment when recovery is made. This creates overzealous auditors and, many times, inaccurate findings. In 2010, the Obama administration directed federal agencies to increase the use of auditing programs such as the RACs to help protect the integrity of the Medicare program. The RAC program is relatively low cost and high value for CMS. It is likely that the health care industry will see growth in this area under the Biden administration. To that end, the expansion of audits will not only be RAC auditors, but will include increased oversight by MACs, CERTs, UPICs, etc.
Telehealth audits will be a focus for Pres. Biden. With increased use of telehealth due to COVID, comes increased telehealth fraud, allegedly. On September 30, 2020, the inter-agency National Health Care Take Down Initiative announced that it charged hundreds of defendants ostensibly responsible for—among other things—$4.5 billion in false and fraudulent claims relating to telehealth advertisements and services. Unfortunately for telehealth, bad actors are prevalent and will spur on more and more oversight.
Both government-initiated litigation and qui tam suits appear set for continued growth in 2021. Health care fraud and abuse dominated 2020 federal False Claims Act (“FCA”) recoveries, with almost 85 percent of FCA proceeds derived from HHS. The increase of health care enforcement payouts reflects how important government paid health insurance is in America. Becerra’s incoming team is, in any case, expected to generally ramp up law enforcement activities—both to punish health care fraud and abuse and as an exercise of HHS’s policy-making authorities.
With more than $1 billion of FCA payouts in 2020 derived from federal Anti-Kickback Statute (“AKS”) settlements alone, HHS’s heavy reliance on the FCA because it is a strong statute with “big teeth,” i.e., penalties are harsh. For these same reasons, prosecutors and qui tam relators will likely continue to focus their efforts on AKS enforcement in the Biden administration, despite the recent regulatory carveouts from the AKS and an emerging legal challenge from drug manufacturers.
The individual mandate is back in. The last administration got rid of the individual mandate when former Pres. Trump signed the GOP tax bill into law in 2017. Pres. Biden will bring back the penalty for not being covered under health insurance under his plan. Since the individual mandate currently is not federal law, a Biden campaign official said that he would use a combination of Executive Orders to undo the changes.
In an effort to lower the skyrocketing costs of prescription drugs, Pres. Biden’s plan would repeal existing law that currently bans Medicare from negotiating lower prices with drug manufacturers. He would also limit price increases for all brand, biotech and generic drugs and launch prices for drugs that do not have competition.
Consumers would also be able to buy cheaper priced prescription drugs from other countries, which could help mobilize competition. And Biden would terminate their advertising tax break in an effort to also help lower costs.
In all, the Biden administration is expected to expand health care, medical, oral, and telehealth, while simultaneously policing health care providers for aberrant billing practices. My advice for providers: Be cognizant of your billing practices. You have an opportunity with this administration to increase revenue from government-paid services but do so compliantly.