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CMS Releases 2018 OPPS/ASC Payment Systems Final Rule

The Centers for Medicare and Medicaid Services (CMS) issued the 2018 Medicare: Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems and Quality Reporting Programs Final Rule with comment period, scheduled to be published in the Federal Register on November 13, 2017. The Final Rule, effective January 1, 2018, includes the following changes to Medicare payment rates and policies, among others:

  • Increased Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment Rates. CMS is increasing the payment rates under the OPPS by 1.35 percent for CY 2018.

FDA Issues Guidance on Hurricane Readiness for Medical Devices

The U.S. Food & Drug Administration (FDA) has issued important guidance on how to prepare for hurricanes when dependent on medical devices.  FDA stresses that during hurricanes and other emergency situations, medical devices may be exposed to fluctuating power, contaminants, or unusual levels of heat or humidity. The guidance links to pages providing information on the use of medical devices during and during emergency situations and afterwards, including:

CMS Proposes to Cancel EPM and CR Bundled Payment Programs and to Reduce Mandatory Participation in CJR Model

The Centers for Medicare and Medicaid Services (CMS) recently published a proposed rule (Proposed Rule) to scale back its mandatory bundled payment programs. Under the Proposed Rule, CMS would cancel the episode payment models (EPMs) and cardiac rehabilitation incentive payment model (CR), and it would also reduce the mandatory participation in the comprehensive care for joint replacement model (CJR). CMS stated that it believed the proposed changes are necessary because the continued mandatory participation in bundled payment models may impede CMS’s ability to engage providers in future, voluntary initiatives. CMS …

No Right to Union Representation for Non-Mandatory Participation in Peer Review Proceedings – DC Circuit Court Overrules NLRB

Most states, including Connecticut and Massachusetts, have laws that allow hospitals and other health care institutions to establish confidential peer review programs to oversee the quality of care provided by their health care professionals without the threat those proceedings will be subject to discovery.  Menorah Medical Center (“Menorah”), in Kansas, had such a program for its nurses.  The Peer Review Committee (“Committee”) would investigate allegations of substandard care and, if substantiated, report the breach to the Kansas Board of Nursing.…

OIG Settles EMTALA Allegations Involving Psychiatric Care

On June 2, 2017, AnMed Health and the Office of Inspector General (OIG) for the United States Department of Health and Human Services agreed to a $1.295 million settlement of allegations that AnMed had violated the Emergency Medical Treatment & Labor Act (EMTALA) (Section 1867 of the Social Security Act). The OIG alleged that AnMed failed to provide appropriate medical screening and stabilizing treatment to individuals presenting to the ED with unstable psychiatric emergency medical conditions.…

FTC Intervenes in Physician Practice Acquisition in North Dakota

On June 22, 2017 the Federal Trade Commission (FTC) filed an administrative complaint and a request for a preliminary injunction in federal court to block a proposed physician practice acquisition in North Dakota (the Transaction), the agency’s latest intervention in opposition to consolidation at the physician practice level. In this case, the FTC (accompanied by the Attorney General of North Dakota) opposes a proposed acquisition of Mid Dakota Clinic, P.C. (MDC) by Sanford Bismarck (a subsidiary of multi-state health system Sanford Health, collectively Sanford) on the grounds that the Transaction, …

OIG Publishes Prioritized Recommendations for HHS

The OIG has released the 2017 Compendium of Unimplemented Recommendations, summarizing prioritized recommendations relating to HHS programs and operations.   Topping the list are recommendations relating to hospitals, including:

  • Reimbursement rates for critical access hospital swing beds should be adjusted to the lower rates for similar services provided in skilled nursing facilities.
  • Reimbursement rates for hospital outpatient department procedures should be adjusted to the lower rates for similar procedures conducted in ambulatory surgical centers.
  • Medicare should adopt a hospital transfer payment policy to lower hospital reimbursement for beneficiaries who are

Connecticut Enacts Legislation Updating HIV Testing Laws

Connecticut Governor Dannel Malloy recently signed into law Public Act 17-6 (PA 17-6), a bill that makes certain revisions to state laws concerning human immunodeficiency virus (HIV) testing and syringe services programs pursuant to recommendations of the Department of Public Health (DPH). The substantive provisions of this legislation take effect July 1, 2017.

Currently, Conn. Gen. Stat. §19a-90 states that physicians furnishing prenatal care to pregnant women shall take (or cause to be taken) a blood sample within 30 days of the woman’s first examination, and again during the final …

Connecticut Legislature Expands Universe of Available Disciplinary Actions Against Licensed Practitioners

The Connecticut Legislature recently approved Public Act 17-10, a bill that establishes a new disciplinary action that may be taken against certain licensed practitioners in Connecticut, including physicians, physician assistants, nurses, dentists, podiatrists, physical therapists, psychologists, and EMS personnel.…

DOJ Settles Allegations of Fraudulent Loan Program Between Hospital System and FQHC

The U.S. Department of Justice (DOJ) recently announced a settlement with a hospital operated by Indiana University Health, Inc. and a federally qualified health center operated by HealthNet, Inc. to resolve claims that the parties violated the Anti-Kickback Statute, the Federal Claims Act and Indiana law. Each of the parties will pay over $5 million to the United States and approximately $3.9 million to the State of Indiana. The lawsuit was originally brought by a qui tam relator, a physician and former employee of the hospital and HealthNet, and later …

Federal Court Holds Online Medical Products Auction Contract Violates the AKS

The U.S. District Court for the District of Connecticut granted a motion for summary judgment in favor of Becton, Dickinson & Co. (BDC), a medical products provider, on the grounds that its contracts with MedPricer.com, Inc. (MedPricer), a company operating an online auction platform, violated the federal Anti-Kickback Statute (AKS), and were therefore unenforceable under Connecticut state law. MedPricer.com, Inc. v. Becton, Dickinson & Co., 2017 U.S. Dist. LEXIS 30854 (Memorandum opinion).

As described in the opinion, MedPricer enters into service agreements with hospitals and other health care providers to …

CMS Issues Proposed IPPS Rule

On April 14, 2017, the Centers for Medicare & Medicaid Services (CMS) released the FY 2018 Medicare Hospital Inpatient Prospective Payment System (IPPS) and Long Term Care Hospital (LTCH) Prospective Payment System (PPS) Proposed Rule, and Request for Information (Proposed Rule). The Proposed Rule outlines proposed updates to Medicare payment rates under the Inpatient Prospective Payment System (IPPS) and policies for hospital admissions. The goals of the Proposed Rule include relieving regulatory burdens on providers, supporting the doctor-patient relationship, and promoting transparency, flexibility, and innovation in the delivery of care.…

Massachusetts’ Health Policy Commission Further Limits Health Care Cost Growth

On March 29, 2017, the Massachusetts Health Policy Commission voted to decrease its annual health care cost growth benchmark from 3.6 percent to a 3.1 percent, effective in 2018. The benchmark applies to hospitals, certain physician groups and individual health insurers. The Commission also voted to finalize regulations to require those entities that fail to comply with the benchmark to file and follow performance improvement plans. Non-compliant entities will be subject to oversight by the Commission, during which they will be required to file monthly progress reports and demonstrate that …

Court Rejects Health Care System’s Efforts to Dismiss Government’s Anti-Steering Managed Care Antitrust Case

On March 30, 2017, the U.S. District Court for the Western District of North Carolina rejected a motion for judgment on the pleadings (akin to a motion to dismiss) by Carolinas HealthCare System (CHS) in a novel health care antitrust suit brought by the Department of Justice (DOJ) and State of North Carolina (collectively, the Government).

The Government filed suit against CHS, a health system consisting of 10 hospitals in and around Charlotte, North Carolina, in June 2016, alleging that contractual provisions mandated by CHS in its contracts with health …

Third Circuit Holds that Medical Resident Can Bring Title IX Claim Against Private Teaching Hospital

In Doe v. Mercy Catholic Med. Ctr., No. 16-1247 (March 7, 2015), the U.S. Court of Appeals for the Third Circuit held that a private teaching hospital operating a residency program can be held liable under Title IX for sex discrimination.

The plaintiff was a resident in Mercy’s accredited diagnostic radiology residency program, which is affiliated with Drexel University’s College of Medicine.  She claimed that the director of Mercy’s residency program sexually harassed her, and that the harassment interfered with her medical training.  The plaintiff also claimed that after …

CMS Revises Process for Reporting Stark Law Violations and Posts New SRDP Forms

On March 28, the Centers for Medicare & Medicaid Services (CMS) revised the procedures and posted new forms for its Voluntary Self-Referral Disclosure Protocol (SRDP).  The SRDP is a mechanism established pursuant to the Affordable Care Act for health care providers and suppliers to facilitate settlement of violations of the physician self-referral law (Stark Law).

Under the Stark Law, physicians (or their immediate family members) who have a financial relationship with an entity are prohibited from making referrals to that entity for certain designated health services (DHS) that are payable …

DOJ Increases Range of Per-Claim Penalties under False Claims Act for 2017

In a little-noticed development, on February 3, 2017, the Department of Justice (DOJ) increased the per-claim range of penalties under the federal False Claims Act (FCA) (31 U.S.C. § 3729 et seq.) for the second successive year, in accordance with a statutory requirement issued under the Bipartisan Budget Act of 2015. As a result, FCA defendants are now subject to monetary penalties ranging from $10,957 to $21,916 per claim submitted in violation of the FCA.

Section 701 of the Bipartisan Budget Act of 2015 revised federal requirements for determination …

OIG Applies The Access To Care Exception In Favorable Advisory Opinion For Hospital Meal And Lodging Assistance Program

The Office of the Inspector General (OIG) recently issued Advisory Opinion 17-01 to a health system (Requestor) for an arrangement to provide free and reduced-cost lodging and meals to financially disadvantaged patients (Proposed Arrangement). In issuing this positive opinion, the OIG applied the Access to Care exception to the prohibition on beneficiary inducements under the Civil Monetary Penalties (Beneficiary Inducement CMP).

One of the hospitals operated by the Requestor provides services to a rural and medically underserved patient population. Under the Proposed Arrangement, the Requestor would offer financially needy patients …

Massachusetts Issues Mass HIway Regulations

Massachusetts recently released a final regulation concerning its health information exchange, which became effective February 10, 2017. Under this regulation, Provider Organizations are required to connect to Massachusetts’ statewide health information exchange known as the Mass HIway. Provider Organizations include Massachusetts acute care hospitals, community health centers, and medical ambulatory practices. These regulations continue the push toward increased interoperability of patient medical records across health care providers, in an effort to improve the ability of a provider to see the full medical picture of a patient.

Provider Organizations must connect …

HHS Delays Effective Date of Key Provisions in CMS Final Rule “Advancing Care Coordination through Episode Payment Models”

On February 17, 2017, the U.S. Department of Health & Human Services (HHS) announced that it had delayed the effective date of provisions of a Centers for Medicare & Medicaid Services (CMS) Final Rule that were scheduled to take effect February 18, 2017.  The Final Rule – titled “Advancing Care Coordination through Episode Payment Models” – was issued January 3, 2017 (see our previous analysis here) and in pertinent part implements:

  • Three new Medicare episode payment models (EPMs) surrounding 90-day episodes of care arising from (a) an acute myocardial

Joint Commission Bans Secure Text Messaging for Patient Care Orders

The Joint Commission recently clarified that patient care orders may not be transmitted by secure text message.  The Joint Commission initially prohibited the practice in 2011 but subsequently allowed practitioners to send orders through a secure text messaging system if certain conditions were met.   In this most recent clarification, The Joint Commission states that concerns remain even when using secure messaging platforms.

The clarification includes several recommendations developed by The Joint Commission in cooperation with the Centers for Medicare & Medicaid Services (CMS).  In addition to the ban on secure …

W2 Phishing Scam Hits Citizens Memorial Hospital

We continue to see all industries hit with W2 phishing scams, including the health care industry.

Citizens Memorial Hospital, located in Bolivar, Missouri, was hit with the scam when one of its employees believed that an email received from another employee was legitimate, and sent the W2s of its employees from 2016 to a hacker. Usually, the W2s are used by the hackers to then file false tax returns seeking a quick tax refund before the taxpayer files his or her return.

Employees continue to fall victim to the scheme …

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