Archives: Reimbursement

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OIG Disapproves of Drug Company’s Plan to Provide Hospitals Free Medications in Advisory Opinion

On November 16, 2018, the Office of the Inspector General of the Department of Health and Human Services (OIG) posted an unfavorable Advisory Opinion No. 18-14 regarding an arrangement where a vendor (Requestor) of a commonly used drug would supply free doses of the drug to hospitals for treatment of inpatients with a rare and serious form of epilepsy (Proposed Arrangement). The drug is not separately reimbursable in the inpatient setting. As a result, and according to the Requestor, many hospitals do not stock sufficient quantities of the drug and …

2019 Physician Fee Schedule Rule Review: Supervision Requirements for Radiologist Assistants Reduced

In its 2019 Medicare Physician Fee Schedule Final Rule (PFS Rule), CMS finalized a regulatory change that updates supervision requirements for Registered Radiologist Assistants and Radiology Practitioner Assistants (collectively, RAs) to reduce the level of supervision necessary to perform diagnostic tests reimbursable by Medicare. Specifically, the PFS Rule revises 42 C.F.R. § 410.32(b) to provide that RAs may perform certain diagnostic tests that would otherwise require a personal level of supervision under direct supervision instead, to the extent permitted by state law and regulations.…

2019 Physician Fee Schedule Rule Review: Use of Telehealth Expanded

Telehealth for Treatment of Substance Use Disorders

As part of the CY 2019 Medicare Physician Fee Schedule (PFS), the Centers for Medicare and Medicaid Services (CMS) issued an interim final rule with comment period to expand the use of telehealth for the treatment of substance use disorders and co-occurring mental health disorders. Existing law provides for reimbursement of telehealth services only if the originating site is located in a rural health professional shortage area, is not in a metropolitan statistical area or is an entity that participates in a federal …

2019 Physician Fee Schedule Rule Review: Option to Extend MSSP Agreements for Currently-Expiring ACOs Finalized

On November 1, 2018, the Centers for Medicare & Medicaid Services (CMS) released its 2019 Physician Fee Schedule Final Rule (PFS Rule), which contains a number of significant substantive changes to Medicare payment practices and policies. The PFS Rule will be officially published in the Federal Register on November 23, 2018. The PFS Rule also includes an interim final rule implementing amendments to federal telehealth regulations to maintain consistency with recent changes to the Social Security Act to address the opioid crisis enacted in October 2018 through the …

OIG Issues Favorable Advisory Opinion Regarding Health Plan’s Incentive Payment Program

On October 18, 2018, the Office of Inspector General (OIG) of the Department of Health and Human Services published a favorable Advisory Opinion regarding a Medicaid managed care organization’s (Requestor) proposal to pay incentives to its network providers who meet benchmarks for increasing the amount of early and periodic screening, diagnostic, and treatment (EPSDT) services provided to Medicaid beneficiaries (Proposed Arrangement).…

Laws Affecting Health Care Entities in Connecticut Take Effect October 1, 2018

On October 1, 2018, a number of new laws affecting health care entities in Connecticut became effective. Below please find a brief description of some of the newly-effective provisions, as well as links to our analyses of the changes.…

Congress Considering Legislation Aimed at Curbing Surprise Medical Bills

The United States Senate is currently considering bipartisan legislation that would establish statutory limits on the financial exposure of certain patients to so-called “surprise” medical bills. The proposed legislation would amend the federal Public Health Service Act (at 42 U.S.C. § 300gg-19a) to prohibit surprise balance billing of patients receiving health care services in the following three situations: (1) Emergency services provided by a nonparticipating (i.e., out of network) provider in a nonparticipating facility; (2) Non-Emergency services following an emergency service at a nonparticipating facility; and (3) Non-Emergency services performed …

CMS Revises Hospital Inpatient Admission Order Documentation Requirements

On August 17, 2018, the Centers for Medicare & Medicaid Services (CMS) published its Hospital Inpatient Prospective Payment Systems final rule for Fiscal Year 2019 (Final Rule). The Final Rule contains a number of important updates to Medicare Part A that take effect October 1, 2018.

Among other provisions  in the Final Rule, CMS finalized its proposed update of the regulations that govern hospital admissions under Medicare Part A (42 C.F.R. § 412.3). Specifically, the Final Rule revises language in 42 C.F.R. § 412.3(a) to remove the current requirement that …

Ninth Circuit Issues Long-Awaited Interpretation of Escobar Two-Part Test

In late August, the U.S. Court of Appeals for the Ninth Circuit issued a long-awaited decision in U.S. ex rel. Rose v. Stephens Institute that interprets key aspects of the implied false certification theory of False Claims Act (FCA) liability under the Supreme Court’s 2016 Escobar decision. As the Ninth Circuit explains in its decision, Escobar “unsettled” Ninth Circuit law related to the standard for proving falsity and materiality in an FCA case. The Ninth Circuit therefore sought to reconcile its precedents with Escobar in Rose, which was before …

OIG Advisory Opinion Approves Surgical Device Warranty Program Intended to Reduce Readmissions

On September 17, 2018, the Office of Inspector General (OIG) of the Department of Health and Human Services published a favorable Advisory Opinion allowing a manufacturer of surgical devices and wound care products to offer a warranty program to hospital customers covering three joint replacement products (“Proposed Arrangement”).

Under the Proposed Arrangement, the manufacturer would refund hospitals for the combined purchase price of three of its products if a patient who received them as part of a joint replacement surgery was readmitted to the hospital within 90 days following the …

Medicare Proposes Revised Telehealth Services and Payments

The Centers for Medicare & Medicaid Services (CMS) recently published a Proposed Rule, primarily intended to modify certain Medicare payment policies.  The Proposed Rule contains several provisions that address the growing use of telehealth. CMS noted that it had received many suggestions regarding the expansion of access to telehealth as well as appropriate pay for the same, in response to its call for comments in the CY 2018 Medicare physician fee schedule (PFS) proposed rule.…

CMS Identifies “Pathway to Success” for Accountable Care in Proposed Rule that Would Significantly Change Shared Savings Program

On August 17, 2018, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule (Proposed Rule) that proposes a comprehensive overhaul of the Medicare Shared Savings Program (MSSP).  Among other changes, CMS proposes to:

  • replace the current three-track program with two options (Basic and Enhanced),
  • establish a ‘glide path’ that propels accountable care organizations (ACOs) towards acceptance of performance-based down-side risk,
  • update the benchmarking methodology to incorporate regional trends from the start of an ACO’s participation in the MSSP,
  • expand the use of telehealth services by ACOs, and

One-Two Punch: On Consecutive Days, DOJ Announces High Dollar Fraud and Abuse Settlements with Hospitals

The Department of Justice (DOJ) announced two significant False Claims Act (FCA) settlements in recent days that signal continued close government scrutiny of billing, coding and referral practices at hospitals.

On August 2, DOJ announced an $84.5 million dollar settlement with Michigan-based health system William Beaumont Hospital. The settlement resolves allegations of non-compliance with the Anti-Kickback Statute (AKS) and Stark Law arising from “improper relationships with eight referring physicians” that led to the submission of false claims to government health care programs.

DOJ alleged that the defendant provided compensation substantially …

CMS issues Request for Information on the burdens the Stark Law may Impose on Care Coordination

The Centers for Medicare and Medicaid Services (CMS) issued a Request for Information (RFI) seeking input from the public on the burden the Stark Law may impose on patient care and recommendations on how to address any undue impact, specifically on care coordination.

The Stark Law, also known as the physician self-referral law, prohibits a physician from making referrals of a Medicare of Medicaid patient to an entity providing designated health services with which he or she (or an immediate family member) has a financial interest.

CMS Administrator Seema Verma …

Connecticut Enacts Law Revising Various Department of Public Health Statutes

On June 13, 2018, Connecticut Governor Dannel P. Malloy signed into law Public Act No. 18-168 “An Act Concerning the Department of Public Health’s Recommendations Regarding Various Revisions to the Public Health Statutes” (PA 18-168). This legislation makes a number of changes to state laws concerning public health and the responsibilities of the Department of Public Health (DPH), including laws affecting advanced practice registered nurses (APRNs), advance directives, the scope of practice for podiatry, respiratory care, reportable events at nursing homes, and the supervision of physician assistants. …

New Connecticut Legislation Updates Laws Concerning Urgent Care Centers, Hospital-Based Facility Fees and Freestanding Hospital Emergency Departments

On June 12, 2018, Connecticut Governor Dannel P. Malloy signed into law Public Act No. 18-149 “An Act Concerning Outpatient Clinics, Urgent Care Centers and Freestanding Emergency Departments” (PA 18-149). This legislation makes several changes to Connecticut laws concerning urgent care centers, facility fees charged at off-site hospital-based facilities, and freestanding emergency departments. PA 18-149 is effective as of October 1, 2018.…

Connecticut Enacts Legislation to Address Hospital-Insurer Network Conflicts

On June 6, 2018, Connecticut Governor Dannel P. Malloy signed into law Public Act No. 18-115 “An Act Concerning Disputes Between Health Carriers and Participating Providers That Are Hospitals” (PA 18-115). This legislation updates state laws concerning the departure or removal of a hospital from an insurance carrier’s provider network. PA 18-115 takes effect July 1, 2018.…

Connecticut Legislature Revises DSS Provider Audit Processes

On June 1, 2018, Connecticut Governor Dannel P. Malloy signed into law Public Act No. 18-76 “An Act Concerning Audits of Medical Assistance Providers” (PA 18-76), which makes several changes to the Medicaid provider audit process conducted by or on behalf of the Connecticut Department of Social Services (DSS). PA 18-76 is effective July 1, 2018.…

Medicare Appeals Settlement Program Expanded

The Office of Medicare Hearings and Appeals (OMHA) has announced the expansion of their Settlement Conference Facilitation (SCF) program.  SCF is a dispute resolution process for Medicare appeals that provides for payments as percentage of the Medicare approved amount.  The percentage is negotiated during a telephone settlement conference utilizing a mediation facilitator.  Utilizing dispute resolution processes such as SCF will be very important in helping to reduce a very significant backlog of Medicare appeals, which the government estimates would take OMHA at least eleven years to process.…

OIG Reports That CMS Paid Practitioners For Telehealth Services That Failed To Meet Medicare Requirements

On April 5, 2018, the Office of the Inspector General (OIG) announced its findings that the Centers for Medicare and Medicaid Services (CMS) paid practitioners for telehealth services that did not meet Medicare requirements. Certain telehealth services are reimbursable by Medicare as Part B services. According to the OIG, it engaged in a review of telehealth services after finding that Medicare paid a total of $17.6 million in telehealth payments in 2015, compared to just $61,302 in 2001.…

Supreme Court Order Indicates Interest in Reviewing Campie, the False Claims Act Outlier of the Ninth Circuit

In an order issued on April 16, 2018, the U.S. Supreme Court invited the Solicitor General to file a brief “expressing the views of the United States” concerning the 2017 decision of the U.S. Court of Appeals for the Ninth Circuit in the False Claims Act (FCA) case U.S. ex rel. Campie v. Gilead Sciences, Inc. (see our previous analysis of the case here). The Campie case is noteworthy because it created a split among the circuit courts as to the scope of the “government knowledge” defense to materiality …

Fifth Circuit Reinstates Provider’s Collateral Challenge to the Medicare Appeal Process

On March 27, 2018, the United States Court of Appeals for the Fifth Circuit held that a health care provider can seek an injunction in federal court against recoupment by Medicare of alleged overpayments despite not exhausting its administrative appeal remedies, in part because the current delay in scheduling of hearings before an Administrative Law Judge could cause the provider to go out of business before it has an opportunity to exhaust its administrative challenge of the recoupment. This decision could provide a template for other providers facing significant …

CMS Updates Medicare Advantage and Part D (Prescription Drug Benefit)

On April 2, 2018, the Centers for Medicare & Medicaid Services (CMS) issued a Final Rule, updating Medicare Advantage (MA) and the prescription drug benefit program (Part D).  The Final Rule includes, among other provisions:

  • Preclusion List Requirements for Prescribers in Part D and Individuals and Entities in Medicare Advantage, Cost Plans, and PACE: The Final Rule eliminates the MA and Part D prescriber and provider enrollment requirement.  Instead, CMS is compiling a “Preclusion List” of prescribers, individuals, and entities that: (1) are currently revoked from Medicare, under

State Enforcement Actions Demonstrate Continued Scrutiny of Health Care Fraud

A series of criminal and civil enforcement actions announced in recent weeks demonstrate the continued attention that state regulators throughout the Northeast are placing on health care fraud. These actions, and the significant sanctions imposed by courts and the government, can serve as a reminder that violators of health care fraud laws are subject to scrutiny at both the federal and state levels (often simultaneously), and that such violations can create exposure to significant civil and criminal penalties.…

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