House Calls

Between 2000 and 2006, the number of physician housecalls to Medicare beneficiaries more than doubled, however, the number of physicians making housecalls declined.  Estimates show that by 2030, 70 million U.S. citizens will be older than 65 years.  A substantial number of persons will live at home with disabilities that prevent them from traveling to medical facilities. 

Home visits made by a physician to a private residence are covered by Medicare, just like regular office visits, when medically reasonable and necessary and not for the convenience of the provider or the member.  While the patient does not have to be homebound, the medical record must document the medical necessity of the home visit made in lieu of an office or outpatient visit.  Follow-up visits may be made by the physician’s nurse practitioner or physician assistant.  Trip fees or travel charges are not compensated by Medicare and other insurance plans, and many physicians charge a separate and additional fee for travel.

Pre-Claim Review by CMS and its contractors is intended to change the face of Home Health

CMS has announced changes to its claim processing for Illinois, Florida, Texas, Michigan and Massachusetts.  The Demonstration is called Pre-Claim Review.  It will change your world.  Pre-Claim Review (PCR) is scheduled to begin in Texas on or around December 1, 2016.  It is slated to last 3 years.

The Texas Association for Home Health and Hospice has called for its members (and anyone else who will) to call your congress person and insist that he/she stop the pre-claim review process because it will slow or cease home health patient access to care.

For those of you who have been subject to the recent ADR project, this is the ADR project on a long term extended release steroid.

CMS cites the increase in home health billing errors from the 17% percent in 2014 go over 51% in 2015.  Pre-Claim Review is not prior authorization, nor is it ADR or prepayment review.  The review of the paperwork comes before the HHA can submit the final claim and receive payment, and the review can come anytime after the client has been placed on service, even after the end of the episode.  Therefore, like an ADR for a final claim, you will have provided the services prior to getting approval for the submission of the final claim.  It is more a prior authorization for billing.  The permission given by CMS is to allow the HHA to submit its final claim.  Therefore it is not a pre-payment review, but a pre-submission review for permission to submit the final claim.  The claims will be paid as usual, but you can’t submit the final claim without the approval.

While the documentation requirements are not being changed for home health, you should be aware from your experience with the ADR project that claims are being denied for not having the appropriate paperwork anyway.  Home Health has always been highly regulated, and will now  be highly technical regarding the paperwork you must present.

If your agency submits paperwork that is not approved, your agency will have a couple of options, either correct and resubmit the paperwork (up to an unlimited number of times), or appeal the denial and go through the administrative process of Medicare.  Those of you who have been through the Medicare appeals process know how very long that can take.

CMS maintains that the no beneficiary will have his or her access to home health restricted in any way.  I expect that is correct at first.  If CMS and its contractors stall out of the gates as sometimes occurs when demonstration projects are kicked off, if provider’s submission permission for final claims are delayed very long (remember, this is not a delay in payment, but a permission vehicle for the HHA to submit its final claim) beneficiaries may have to change providers often, even though their access to care is not restricted.

There is still time for getting your agency shaped up prior to the beginning of the demonstration.

Face-to-Face documentation from the Physician is a good idea to have in Home Health Charts

When CMS requests an ADR from your home health agency, the contractor may deny the documentation supports the services due to its failing to contain the proper Face-to-Face documentation. 

We have seen the contractor deny claims based on a failure to locate the F2F documentation.  However, the contractor is probably able to find your physician’s attestation, which is a typical part of your home health chart notes.  More likely is that the denial is based on the lack of the physician’s own notes from the Face-to-Face encounter made by the physician within the time frame set forth by CMS, whether for certification or recertification.

CMS contractors make it the Home Health Agency’s responsibility to offer proof that the certifying physician’s medical record for the patient contains the actual clinical note for the Face-to-Face encounter visit.  This doctor’s office note will be the only proof that the encounter occurred in the required time frame, and was related to the primary reason the patient requires home health service.  And the information in the doctor’s clinical note is the basis for the certification for the home health services.   Therefore, without the notes, the services are not properly certified.

While 42 C.F.R. §424.22(c) requires the certifying physicians to provide, upon request, the medical records documentation that supports the certification of patient eligibility for home health, the contractor is not requesting the documentation from the physician.  Because that documentation is the only documentation that will show the encounter was made in the required time frame and was related to the primary reason the patient requires home health services, it is a good idea for the Home Health Agency to make those records available in their own charts when that chart is reviewed in an ADR or prepayment review situation.

CMS issued a hint that the documentation is essential in MLN Matters number 1436 Special Edition.  After going over home bound status and general home health requirements, the Supporting Documentation on page 5 includes the information that must be contained in the physician’s records.  However, the ADR process seems to hold the liability for the physician’s records on the home health agency submitting additional documentation.

Therefore, to prove the beneficiary is eligible, the physician’s notes must meet the requirements of the regulation.  But if the contractor isn’t going to request the notes of the physicians, payment won’t be made without them it seems. 

Sending your Home Health notes to the physician’s office is not enough either.  The physician must review and sign the note in order for it to bolster the certification made by the physician.   See MLN Matters 1436 Special Edition.  CMS includes examples at the end of the article that will give you a template for your documentation.

Record Retention

Often, we receive a call from a provider who asks, “how long do I need to keep my records?”

As you can guess, it would be a management nightmare to keep only the Medicare claims for one period of time and Medicaid records for another, commercial insurance for another length of time, HMO and MCO for other lengths of time, and then private pay records for yet a different length of time.

Therefore, to avoid errors, you keep your records and patient charts for the longest period required of your payer mix, right?

Right.
 
And that time period gets longer and longer.  Our firm recently reviewed a contract for a Home Health and DME provider that required records to be kept 10 years. Therefore, make certain you check all your payer sources for the time period records must be kept.  This was a Medicare MCO plan, but the plan administrator wrote into the contract a time period much longer than Medicare records are typically kept by providers. If record destruction is part of your regular business process, do not push the “shred” button too soon.

You are shredding them, aren’t you?  The PHI (protected health information) contained in those records is HIPAA protected and the destruction process must ensure that information is not disclosed.  There are many shredding companies that will shred on site rather than taking the documents back to their warehouse for storage and shredding. 

Limitation on Physician Signatures who have a financial relationship with the HHA

If a physician has a financial relationship with a HHA, that physician is limited , and may not sign plans of care, certifications, or recertifications unless the financial relationship meets certain exceptions.

The exceptions are found in 42 C.F.R. §411.355-§411.357.  These exceptions are very similar to the Anti-kickback exceptions and will allow a medical director to furnish medical director (personal services) services to the HHA.  However, the exception has several prongs, and if you fail to meet them all, any signature your medical director puts on a plan of care, certification, or recertification, may be void, and ultimately, the payment for the home health services provided under that void certification or void plan of care will also be void, and CMS will request the repayment of it.
Before you accept your medical director’s signature on a Plan of Care, a certification or recertification, make certain your medical director’s signature will not be void due to the financial relationship he/she has with your agency. 

In MLN Matters 1436 Special Edition, CMS plainly states that the face-to-face encounter cannot be performed by any physician or allowed Nurse practitioner who has a financial relationship with the HHA.  CMS mentions no caveats or exceptions in this part (page 4), and references section 424.22(d)(2) which is the regulation prohibiting a nurse practitioner from completing any form a physician would not be allowed to complete.  While it might be a stretch to go from disallowing a nurse practitioner’s signature to disallowing the physician for the same (d)(2) section, CMS does not equivocate when prohibiting the physician’s signature on the face-to-face form if the physician has a financial relationship with the HHA.

This MLN Matters 1436 does not except when the physician with the financial relationship is performing the F2F for his/her own patients. This prohibition would curtail any physician, PA, or NPP from performing the F2F if the physician has a financial relationship with the HHA.

Understanding Litigation

LITIGATION INVOLVES A SERIES OF STEPS THAT MAY LEAD TO TRIAL

LITIGATION: An action brought in court to enforce a particular right.  The act or process of bringing a lawsuit in and of itself; a judicial contest.

THE PROCESS
A lawsuit, whether filed in civil court or criminal court, is ultimately a process.  Typically, the process is called litigation, and it allows those involved to establish facts and determine whether certain claims can be supported or not before moving to a settlement, or if no agreement can be had between the parties to the lawsuit, taking the case to trial.

BEGINNING THE PROCESS:
In both criminal and civil litigation, the process begins by one side (there can be several “sides” to a lawsuit, and each is called a “party” to the suit, but it will usually be the Plaintiff in civil lawsuits and typically the State in criminal lawsuits) filing paper complaining of the actions or inactions of the Defendant (or Defendants, those defending against the claims).  Once the filing is made, and the filing fee paid (or fees waived due to the indigence of the Plaintiff) the Plaintiff or the State must deliver to each Defendant a copy of the complaint documentation, and the Defendant must answer to the Court.  In the criminal context, a Defendant is typically served the complaint paperwork by local law enforcement agents, who bring the Defendant (often under arrest) to the court to answer to the Court.  In civil litigation, the Defendant merely files paperwork with the court to answer the lawsuit.

DISCOVERY 
Surprise is frowned upon in litigation, so there is a process that allows the parties to “discover” things about each other’s assertions.  This Discovery process, as it is known, allows each side to discover, and consider the strength of their evidence, and of the other side’s evidence, determine whether there is enough evidence to support the claims that have been made, and whether either side should continue with the lawsuit to the presentment of the case to a Judge or Jury at trial. 
Discovery encompasses the taking of statements of certain individuals, the exchange of documentary evidence, and the presentment of questions in writing to be answered by the other side.  Anything any party wants to use before in Court must be exchanged with the other parties ahead of time, or it may be barred.  

EXPERT WITNESSES
If additional support is needed by either side to explain a highly technical or unusual process, event or result, litigation allows for an expert witness to explain to the judge or jury something that might be well outside the knowledge base for the person (judge) or persons (jury) deciding the case.  It is unlikely that a veterinarian would be needed as an expert witness to explain how we get eggs, but a physics expert may be required to explain how the force exerted by a certain piece of equipment caused the property damage complained of when that equipment failed. 

MOTIONS
Motions are written or oral requests made to ask the judge make a ruling.  Some motions request the judge make a ruling that ends the lawsuit.  These are known as Motions to Dismiss, or Motions for Summary Judgment.  If the judge grants the Motion to Dismiss, or the Motion for Summary Judgment, the case is completed for that issue.  Other motions deal with only a narrow issue, such as the production of certain documentation requested in Discovery.  The judge’s decision doesn’t necessary alter the course of the lawsuit, however such a ruling may very well cause one side or the other to pause and reconsider the position taken. 
 
ALTERNATIVE DISPUTE RESOLUTION
Alternative Dispute Resolution (often referred to as ADR) is an out of Court option for parties to a dispute.  ADR can occur before a lawsuit is filed, while a lawsuit is in process, or after a judgment is rendered.  There are two common types of ADR.

ARBITRATION:  In many instances, especially when relationships are made through contract, the contract will require that the parties to the contract waive the right to a trial in Court, and disputes related to the contract can only be heard in Arbitration.  The Arbitration process differs from Litigation because Arbitration is not generally a public forum.  What goes on in the Arbitration is not available to the public without further agreements between the parties.  Arbitration is favored by companies, often, for that reason.  The Arbitration process is similar to that of Litigation, and the processes can be foreshortened or altered by agreement of the parties.  Ultimately, the Arbitrator, who holds the position of judge in arbitration, makes the ultimate decision about the dispute.  Sometimes there is a single Arbitrator, and sometimes a panel of three that decide the issues in dispute. 

MEDIATION:  Mediation or Settlement Conferences allow the parties to meet with a neutral “mediator” and work out the disputed issues with solutions agreed upon by the parties, and not imposed by a “trier of fact” like in Court (judge or jury) or in Arbitration (single or panel of arbitrators).   Often the parties to a dispute meet together and explain the case from their perspective.  Sometimes the parties remain together to try to reach a settlement.  Other times, the parties separate at some point and the mediator will visit with each to see whether creative solutions might be reached.  The mediator can attempt to persuade, but has no authority to impose any solution that might be available.  Often, each sides gives up something to achieve settlement.  Yet, in settling, the parties choose to give that up, rather than have the judge or jury decide that for them.  

TRIAL
Each party has the opportunity to question potential jurors, if a jury trial is held, and after the jury is selected, may put on evidence, examine witnesses, cross examine witnesses of the other parties, use demonstrative devices to help explain the issues, and make argument to the judge and/or jury.  The Plaintiff or State goes first, and once they have rested, or finished with their case, the Defendant or Defendants get to put on their case.  Once all parties have finished presenting their cases, the jury begins deliberations.  The jury and judge are given a series of questions to answer (the charge) in order to formulate the end result (verdict).  The verdict becomes the judgment once the judge approves it, and this begins the “post trial” activities.

POST TRIAL
After trial, the parties have rights to file certain requests of the trial court, to reconsider the verdict, point out errors that would negate the verdict, and the like.  The Trial Court has a certain amount of time to receive such requests or motions.   Once the request or motions are ruled on by the Trial Judge, the parties must act accordingly.  If errors are pointed out that reverse the verdict, the judge may grant the loser a new trial.  If so, another trial will be held.  If the judge does not grant any motion that results in a new trial, the matter may be Appealed to the appellate court in that jurisdiction.  The appellate court process is primarily a motion process where the parties draft written briefs to explain the errors, or correctness, of the decision from the court below.  Sometimes the appellate court will order the parties to argue their briefs if the appellate court requires more information or needs to ask questions of the parties to clarify positions taken.  There is second level of appellate court in some jurisdictions, but review may be discretionary, or limited for certain parties.     

U.S. Supreme Court Declines Review: Minimum Wage & Overtime Rule Upheld

The Department of Labor’s (DOL) final rule on the Home Health Aide/Companionship Services minimum wage and overtime exemption became effective January 1, 2015.   The final rule revised 1975 Fair Labor Standards Act (FLSA) regulations in response to changes to the home care industry and workforce.  The major effect of the final rule was to include domestic service workers under the FLSA’s minimum wage, overtime, and record-keeping provisions.  No longer would third-party employers of home health workers, such as home healthcare agencies, be able to claim the exemption. 

The rule was challenged in federal court by associations of home care companies, and orders were issued to vacate the rule’s third-party provisions and revised definition of companionship services.  The DOL then appealed the orders to the D.C. Circuit, and it prevailed.  On June 27, 2016, the U.S. Supreme Court denied the associations of home care companies’ request for certiorari.  As things currently stand, the DOL is now poised to enforce compliance of the final rule which is affirmed based on the D.C. Court’s decision.

Regardless of the FLSA’s final rule, LVNs and most other hourly employees must get time-and-a-half pay for work over 40 hours over seven consecutive days.  A “per visit” home health rate must translate into hourly pay and comply with the overtime law; time for notating medical records and driving to patient's homes must also be compensated.

Overpayment Recovery Across Shared Tax ID Numbers Put Into Action

Section 1866j(6) of the Social Security Act gives the Secretary the authority to make “any necessary adjustments” to the payments of a healthcare provider who shares a tax identification number (TIN) with a provider that has an outstanding Medicare overpayment.  Regardless of a provider’s NPI or PTAN billing identifier, if provider “A” shares a TIN with provider “B” the law allows the Secretary to offset “A’s” overpayment against “B’s” payments.

While the statute is nothing new, because of a new and improved capability to track and capture Medicare payment analytics, CMS has made it clear that it will begin using Section 1866j(6) authority to increase the recovery of overpayments.  See MLN Matters Article, SE1612, issued in June 2016.  CMS has enhanced its financial accounting system and it will recover payments made to any provider that shares the same TIN with a provider that has an outstanding Medicare overpayment across multiple states within a Medicare Administrative Contractor (MAC) jurisdiction.

Handguns and Healthcare

As you most likely are aware, Texas is now an open carry state. That means that anyone that possesses a handgun license can legally carry the gun openly. Openly here means that it is not concealed. It does not mean that someone can start waving the gun around saying, "look at me I am carrying a gun." Doing that will most likely invite a conversation with police officers.

Handgun owners can be prevented from entering your private place of business so long as proper notice is given. You have seen signs posted in various businesses prohibiting the carrying of concealed handguns in certain establishments. If the sign meets the Texas requirements for such notice, you have done what you need to do in order to prohibit the concealed handgun from being carried on your agency’s premises. The sign applies to all who might bring a handgun onto the premises. Not just guests, but employees as well.

Please review Texas Penal Code sec. 30.06 which gives the specific requirements for the Signs. The type must be a certain height and be a certain type style and be displayed in a certain manner and in a particularly conspicuous way.

Dallas

We will not be posting a full article today due to the tragic events that have occurred in our hometown of Dallas. If you would like to read an article, please review the wonderful posts that have been written previously. Thank you for reading.

What Can Medicare Providers Expect from CMS's Recovery Audit Contractor Programs

The Centers for Medicare and Medicaid Services (CMS) created the Recovery Audit Contractor (RAC) program to identify potential Medicare overpayment and allegedly, underpayments.  The types of claims that will be selected for review are unpredictable, but claims for inpatient hospital services have been known to receive more auditing than other types of claims.  However, the potential for RACs to expand into different areas is more than likely due to the government's recent initiative to step up enforcement. 

Providers and attorneys representing providers and suppliers in RAC appeals should keep in mind that RACs are compensated by a contingency fee based basis, and therefore a bias automatically exists in the system.  Providers and their attorneys should address this bias by going through the formal administrative appeals process that involves five levels, i.e., redetermination, reconsideration, a hearing before an administrative law judge, a review by the Medicare Appeals Council if necessary, and finally, judicial review in a federal district court.

The RAC program has been hitting providers in Texas so concern over potential RAC auditing activity should be considered.  In anticipation of a RAC audit, providers and suppliers can begin efforts to understand audit defenses and setting aside resources to defend against these audits.

The Importance of Notification

When a physician or other licensed practitioner leaves a state in which he/she is licensed and plans to move the practice to another state, often, the state license no longer used by the practitioner is merely allowed to expire.

When that occurs, the licensing Board does not know whether you simply forgot to renew your license, or whether you have discontinued your practice. Some states licensing boards think the practice of merely allowing your license to expire is a sanctionable offense and require either an agreed/consent order and/or a report in the NPDB, sometimes years after the fact. 

Therefore, if you plan to leave a state to practice in another state, before you allow your license to merely expire because you have no plans in the future to return to your former practice,  please talk your licensing Board first. While that practice may be fine in some states, it is frowned upon and sanctionable conduct in others. 

And for you overachievers who have more than a single license in any particular state, you should speak to all your licensing boards before allowing any of your licenses to expire. Many Licensing Boards regard sanctions from other boards as grounds for their own sanctions, and the snow-ball effect may adversely affect your ability to practice in any state in which you are licensed.

Practical Steps To Keep The Money Flowing

          As health care fraud and the Medicare Trust Fund have become a growing national concern, the Centers for Medicare and Medicaid Services (“CMS”) has aggressively carried out its mission to ensure Medicare payments to medical providers and suppliers are proper.  Consequently, in today’s health care arena, it is essential for all medical providers to understand the importance of maintaining complete and accurate medical record documentation to support its claims for proper Medicare reimbursement.  Equally important is knowing how to effectively work with CMS and its fiscal intermediaries in avoiding payment interruption. 

            This article discusses tactics durable medical equipment suppliers can use to keep the money flowing when faced with Medicare payment interruption.  They include negotiating adjustments to the percentage withheld, “fixing” the problem that resulted in overpayments, negotiating extended repayment plans, and negotiating a compromise or waiver of overpayment claims.

Adjusting the Percentage Withheld

            Notwithstanding a provider’s right to appeal an overpayment determination, CMS may recover the amount owed by interrupting Medicare payments to the provider before the appeal is adjudicated.  Indeed, CMS and its fiscal contractors have the authority to “stop” Medicare payments with little or no notice to a provider because of an overpayment or the suspicion of fraudulent billing.  Although the authority for interrupting payments has proven very effective for “protecting” the Medicare program, it can have devastating financial consequences for a provider. 

            Recoupment, suspension and offset are tools used by CMS to collect overpayments from providers.  CMS can “recoup” an overpayment by reducing present or future Medicare payments and applying the amount withheld to the indebtedness.  When it believes there may be an overpayment or suspects fraud, CMS can “suspend” payments to the provider while it conducts its investigation into the propriety of the payments.  A non-Medicare debt, for example a Medicaid overpayment, may be recovered by “offset” through reducing present or future Medicare payments and applying the amount withheld to the indebtedness.  Distinctions between the type of recovery techniques are important, especially when the provider files bankruptcy.

           

            CMS is aware that payment interruption can result in hardship, possibly even causing bankruptcy.  Fiscal contractors are instructed by CMS to take into consideration its impact on the provider’s continued ability to deliver care to Medicare beneficiaries when imposed to collect an overpayment.  Depending on the basis for its imposition, CMS or its fiscal contractors may be willing to adjust the percentage of suspended Medicare payments. 

             Most healthcare providers simply cannot survive the interruption of all Medicare payments for an extended period of time.  CMS authorizes fiscal contractors to adjust the amount withheld from the provider’s payments when the suspension will cause “irreparable harm.”  Medicare guidelines indicate that contractors may withhold as little as 20% of Medicare payments.

            Negotiating an adjustment to suspension is not easy because such arrangements are at the discretion of the government.  CMS considers a variety of factors in making the adjustment.   The most important are the provider’s financial status, willingness to cooperate, past record in repayment of overpayments and percentage of Medicare beneficiaries in the provider’s patient population.  Of course, CMS may not be willing to adjust recoupment or suspension when fraud or misrepresentation is suspected.

“Fixing” the Billing Problem

            Payments are frequently suspended when the provider is overpaid, even though the actual amount of the overpayment has not been determined.  An effective strategy for addressing payment interruption in this context is to attempt to persuade CMS that whatever caused the overpayment has been “fixed.”  By eliminating the billing problem resulting in the overpayment and making arrangements for its repayment, CMS may be willing to “lift” the suspension.

            The provider must identify and correct the billing mistakes causing  the overpayment.  CMS and its contractors unfortunately do not explain in any meaningful detail what kind of billing errors actually may have caused the overpayment.  The problem lies with CMS’s assumption when “policing” the Medicare program that the provider is guilty until proven innocent.  Indeed, many times the government has concluded based upon some indication of billing error that the provider intended to defraud the Medicare program. 

            If CMS is convinced that the provider is fraudulently billing the Medicare program, it is unlikely to believe that the provider can “fix” the billing problem.  The provider should offer to conduct an internal audit of its Medicare claims and billing practices to identify mistakes or other irregularities that may have caused the overpayment that resulted in suspension of payments.  Again, CMS is not always receptive to such offers.  But if the provider has credibly investigated the matter, identified the problem CMS was concerned about, and taken appropriate remedial or corrective action to eliminate future mistakes, a lengthy government investigation may be shortened because of the provider’s proactive efforts.  More importantly, the matter may be resolved as an overpayment, not a fraud investigation.

            In cases of suspected fraud or willful misrepresentation, CMS generally makes the determination whether to suspend after consultation with the Inspector General, the fiscal contractor, and interested law enforcement agencies.  Negotiations can be difficult in this context because CMS or its fiscal contractors are acting as a quasi-prosecutor to protect the Medicare program and will treat the provider as a criminal being investigated.  In such circumstances, CMS may be unwilling to discuss the nature of the billing problem causing the overpayment to avoid tipping its hand by identifying the “fraudulent conduct” thus jeopardizing any chance of prosecution.  Consequently, a problem frequently encountered by providers is a failure to receive adequate notice of the basis for suspension. The notice is supposed to give the “reasons for making the suspension.”  Often it merely recites the grounds for invoking suspension under the regulations, but it does not explain the reasons for imposing suspension in a particular case.  Thus, the provider may be faced with the impossible task of rebutting general conclusory allegations when CMS has given absolutely no factual basis for their support.

Extended Repayment Plans

            Once an overpayment has been determined by CMS or its fiscal contractors, the amount is a debt owed by the provider to the United States.  The Federal Claims Collection Act requires timely and aggressive efforts to recover overpayments.  CMS is responsible for collecting Medicare overpayments.  Fiscal contractors, as agents of CMS, are also responsible for recovery of overpayments.  A provider is expected to repay an overpayment as quickly as possible.  Unless immediate arrangements to repay the overpayment are made, the government will initiate recoupment to recover the debt.

            When a fiscal contractor notifies the provider of an overpayment, it typically gives three repayment options.  The provider may remit a check for the full amount of the overpayment.  It may dispute the overpayment by submitting documentation that demonstrates an error in its determination.  Or, it can request an extended repayment plan.  Recoupment will automatically begin fifteen (15) days after the determination and result in withholding 100% of Medicare payments to recover the debt.  If the provider submits a fully documented repayment request and begins making payments, recoupment will ordinarily not be initiated unless the proposal is rejected.  The repayment request must be in writing and include specified times and amounts of repayment.     

            Medicare guidelines state that if a provider cannot repay an overpayment within 30 days after receiving demand for payment, it may request a repayment schedule.  Generally, no extended period of recovery will exceed 12 months from the date of the first demand letter requesting payment.  Thus, overpayments typically  must be repaid by the provider within 12 months of the initial demand for payment.  However, if a provider demonstrates that repayment within a 12 month period would create “extraordinary financial hardship,” it may request a longer period for repayment.  Approval of an extended repayment is at the discretion of the government.  And, such requests are only approved when CMS determines that it would “benefit the program.”

Compromise or Waiver of Overpayment Claims

            Forcing a provider out of business and into bankruptcy under the guise of collecting an overpayment is an unconscionable abuse of power.  Often the cessation of Medicare payments only ensures failure of the provider’s business and guarantees that CMS will recover only a fraction of the overpayment.  Yet, it is within the discretion of CMS to reject other repayment alternatives and recoup or suspend payments to ensure recovery of a Medicare debt, even when the payment interruption may prevent the provider from repaying the full overpayment.

             CMS may reduce the debt or suspend or terminate collection action on its recovery.  In situations where CMS concludes that an overpayment cannot be repaid in a reasonable period of time, it can reduce the liability so that the provider can pay at least a substantial part of the debt.  A basic condition for use of the compromise authority is that there is no indication of fraud or misrepresentation.

            Negotiating a compromise of the debt can be difficult.  Despite the authority to reduce a debt, it is an unwritten CMS policy that no repayment plan can be authorized that will not result in full recovery, including principal and interest, of the debt due the Medicare program.  The provider must be persistent and persuade the government it is better to recover something than to collect but a small fraction of the debt by stopping payments to the provider.  However, if CMS believes that the provider has no present or prospective ability to pay an existing overpayment in a reasonable time, it may be willing to compromise the amount of its overpayment claim.

Conclusion

            As healthcare fraud continues to be big news, and the public fears collapse of the Medicare Trust Fund, the government will continue to take full advantage of the overpayment recovery tools at its disposal.  Aggressive use of recoupment and suspension has proven effective for “protecting” the Medicare program.  But it can have devastating financial consequences for the provider as well.  Payment interruption can often be avoided or at least effectively managed if the provider is aware of the formal remedies available for challenging such actions and the practical steps to take to keep the money flowing.

Nobody Can Give You Wiser Advice Than Yourself (Except for the OIG)

Often we have clients who have been approached by persons or entities that request they participate in an “arrangement” in order to maximize business. Sometimes this comes in the form of marketing services, medical services, sales of a service, or equipment for testing, but it can include any business model. When any part of the transaction includes the arrangement of health care, the anti-kickback statute is implicated.

If you are contemplating such an arrangement, the Health and Human Services Department Office of Inspector General will accept a written description of the arrangement. As well, they will provide a review to the proposed plan as it relates to the anti-kickback statute. The OIG will explain whether or not the arrangement will be seen as a violation by the OIG, or whether it will be considered compliant.  A letter from OIG advising of a compliant arrangement is security that it does not violate the anti-kickback statute.

If the arrangement is changed or altered any from the description given to the OIG, the letter of protection will not cover such an alteration, and a new request for review must be made. Our firm has submitted arrangements to the OIG for such an opinion, known as an advisory opinion. The opinion covers only the requestor, but the opinions are redacted and published as guidance to others.

The Good, the Bad, and the Dirty

On its 2016 album "Death Of A Bachelor," Panic! At the Disco has a song entitled, The Good, the Bad, and the Dirty. In the song, vocalist Brendon Urie proclaims,

"If you wanna start a fight
You better throw the first punch
Make it a good one."

The proclamation, to me (but I could be wrong as only the writer of the song knows the meaning behind the lyrics), sounds like he is challenging his doubters (other verses reference doubters and former friends) which is normal. Successful people normally do not get to where they are in life without some driving force, and that driving force can be proving people wrong. But when this proclamation is applied to healthcare providers, it takes a different tone.

An intentionally "defiant" healthcare provider is not something you see. Healthcare is extremely regulated, even if there is room for improvement. However, a provider screams Urie's proclamation when they do not follow those regulations. By failing to do simple things required in the regulations, a provider is screaming for a fight, and the Government normally lands a good punch. For example, Raleigh Orthopedic Clinic was recently hit with a $750,000 fine for failing to execute a business associate agreement. Details can be found here. Other "punches" that the government can land include False Claims Act allegations, ZPIC overpayments, etc.

Being defiant is a good thing in most cases. Civil rights would not have advanced to the point they have without defiance. We would never have gone into outer space without defiance. Artist, athletes, professionals, workers. Most would not be where they are without defying doubters. But, in healthcare, defiance is costly and the "punches" are good.

When Checking Employee’s Licenses, Do Not Assume

When a company initially hires, it is usually pretty good about verifying license information and making the background check –including the exclusion list check. 

However, as employees stay with a company, names change, records change, and sometimes licenses change. Therefore, ALWAYS make certain the person who runs the employee’s names through the various databases knows which name(s) to search.

It is better to search additional names than to miss a record.  If your company has employed a person whose license renewal lapsed without renewal, or whose exclusion has finally been posted, any work that person performs for which you receive payment creates an overpayment.  Resultant overpayments would probably require OIG self-disclosures, and the fall-out from that (the least of which is a penalty).
 
THEREFORE, make certain you check for a variety of names for any employee who has been married, divorced, etc. FURTHER, do not take for granted renewal dates. Some licenses renewal period for the initial license is shorter than the subsequent renewal periods. 

When any employee’s license changes designation, make certain the renewal period is known not only to the licensed provider, but to the agency. Belts and Suspenders is a good idea.

When Buying a Healthcare Agency, One Must Perform an Adequate Due Diligence: CAVEAT EMPTOR

Many times when the sale of an agency is contemplated, the buyer will give a cursory look at the clinical records, and then look over only the balance sheets, or the last few months of the company checking account. That is not adequate in order to get a good idea of what has gone on with the agency.

It is a good idea to have an accountant look over the company books AND the company cost reports for the last few years for Medicare, and Medicaid if the agency participates in Medicaid and has to submit cost reports. Remember, last year’s cost report isn’t typically completed until half way through the next year. It is also a good idea to have a clinical consultant look over the clinical records to see that they are proper and completed to regulatory specifications, as a future audit might assess overpayments.

Further, the company should keep corporate books with annual meeting minutes and resolutions. If the agency is accredited, call and check on the accreditation of the agency to make certain the accreditation is accurately reflected in the certificate on the wall. 

A written agreement for confidentiality will usually give the Seller enough protection that they will open their books to the buyer. If the Seller doesn’t want to allow the buyer to look over the books and clinical records, beware. If the seller will not turn over the books or records because of a concern about confidentiality, you can enlist an attorney to attempt to convince the seller to loosen its grip on the books by providing adequate protections as agreed by the parties.

In a stock sale, the purchaser typically purchases stock with assets and liabilities intact without other agreements and other assurances. LLC membership purchases are similar to stock purchases.
If one purchases just the “operation” as an asset, for Medicare (whatever kind of sale it is), the enrollment number is actually transferred to the new owner (unless specified the enrollment does not transfer), and any liability that Medicare imposes on the agency will be the responsibility of the current ownership, whether there is an indemnity agreement or not. Medicare will look to the current operators to handle the issue, as will the state in the contracts it assigns and Medicaid when it assigns contracts.  If you assume the operations, you may very well assume future liability.

True Benefit in Self-Disclosure of a Potential False Claims Act Liability

If a private relator initiates a False Claims Act (“FCA”) suit, the complaint is initially filed under seal and served only on the United States, accompanied by a “written disclosure of substantially all material evidence and information the [relator] possesses.”  31 U.S.C. §3730(b)(2).  Prior to the expiration of the sealing period, the United States reviews the disclosed materials and elects whether to intervene and prosecute the action or to decline and allow the relator to proceed with the suit.  31 U.S.C. §3730(b)(4).  The sole function of a disclosure statement under the False Claims Act is to provide the Government with a basis for commencing an investigation of Relator’s allegations. 

The public disclosure bar prevents federal court jurisdiction over qui tam suits if the basis of the suit is known by the government.  It is well settled that the Federal government’s knowledge of an alleged ‘false’ claim contradicts a defendant’s intent to knowingly submit[] a false claim.”  Englund, 2006 WL 3097941, at 12; U.S. ex rel. Butler v. Hughes Helicopters, Inc., 71 F.3d 321, 327 (9th Cir. 1995) (“the extent and the nature of government knowledge may show that the defendant did not ‘knowingly’ submit a false claim and so did not have the intent required by the . . . FCA”); United States v. Southland Mgmt. Corp., 326 F.3d 669, 682 n.8 (5th Cir. 2003) (Jones, J., concurring) (the so-called “government knowledge defense” is a means by which defendant can rebut an assertion of falsity and knowledge). 

This defense, loosely known as the “‘government knowledge defense,’” “holds that the ‘knowing’ submission of a false claim is logically impossible when responsible government officials have been fully apprised of all relevant information.”  Englund, 2006 WL 3097941, at 12; Southland Mgmt. Corp., 326 F.3d at 682 (Jones, J., concurring) (this doctrine “captures the understanding that the FCA reaches only the ‘knowing presentation of what is known to be false’”) (citations omitted). “Since the crux of an FCA violation is intentionally deceiving the government, no violation exists where the government has not been deceived.”  Englund, 2006 WL 3097941, at 12. 

To further indicate the prohibitive affect self-disclosure has on qui tam lawsuits, even after a Relator makes the requisite disclosure and files suit, the court may reduce the amount of damages.  The statue provides that if the person committing the alleged fraud furnishes government officials responsible for investigating the allegations with all information known about them within 30 days after the date on which the person first obtained the information, and the person fully cooperates with any Government investigation; and at the time such person furnished the government with the information, no criminal prosecution, civil action, or administrative action had commenced with respect to the allegations, and the person did not have actual knowledge of the existence of an investigation into such violation, the court may assess not less than 2 times the amount of damages which the Government sustains because of the act of that person.

Consequences Of An Arrest Or Conviction Involving Drugs Or Alcohol

A case involving an individual provider’s arrest or a conviction involving alcohol abuse (DWI/public intoxication) or drugs (possession, diversion, theft, trafficking) will likely result in a number of negative, possibly detrimental, career consequences because of the repercussive effect on the provider’s professional license and employability. 

First, the provider may be required to enroll in the Impaired Nurses Program (IPN) (for nurses only) or the Professionals Resource Network (PRN) (for all other licensed health professionals).  The provider may face an action to revoke, suspend, or take other action against the clinical privileges and medical staff membership of those licensed providers who have such in a hospital, ambulatory surgical center, skilled nursing facility, or staff model HMO or clinic.

A report of the arrest or conviction to the National Practitioner Data Base (NPDB) (formerly the Healthcare Integrity and Protection Data Bank or HIPDB) will be made and remain there for 50 years. A report will also be made to and included in the Department of Health (DOH) profile that is available to the public online, to remain for at least 10 years. Any other states or jurisdictions in which the provider has a license will also initiate action against him or her in that jurisdiction. The Office of Inspector General (OIG) of Department of Health and Human Services (HHS) will take action to exclude the provider from the Medicare Program.

The provider will consequently be placed on the List of Excluded Individuals and Entities (LEIE) maintained by the HHS OIG.  The provider will also be automatically debarred and prohibited from participating in any capacity in any federal contracting and placed on the U.S. General Services Administration’s (GSA’s) debarment list.  If the provider is certified by a professional health organization, an action will likely be initiated to revoke that certification by the organization.  Third party payors, including private health insurance companies, will terminate the professional’s contract. 

Regardless of any of the above, any licensed facility licensed (hospitals, skilled nursing facilities (SNFs), public health clinics, public health clinics, group homes for the developmentally disabled, etc.) that are required to perform background screenings on their employees will learn that the professional is disqualified from employment.

Physician-Hospital Relationships’ Adherence to Stark

The federal Stark Law creates a general prohibition against certain physician referrals. The Law’s intention is to prevent the overutilization of services, as well as to eliminate financial conflicts of interest which may affect referral decisions.  In the hospital context, Medicare and Medicaid will not reimburse healthcare services referred by physicians that have a financial relationship with the hospital. The general prohibition is subject to a wide range of exceptions, some of which contain additional specific requirements. It is the various exceptions and the specific requirements of each exception which entangle providers with the Law. The State of Texas, as well as other States, have enacted parallel legislation limiting referrals from physicians to entities with which the referring physician has a financial relationship. A concrete result of the Stark Law and similar state statutes has been a chilling effect on physician-owned ancillary healthcare businesses and business ventures and certain beneficial relationships between physicians and hospitals. 

Many hospitals around the country legitimately contract with physicians for services that will enhance patient care options and better establish ties to the community. The physician and patient is also benefitted by the streaming support a hospital provides. One way in which a hospital may come under scrutiny under the Stark Law is by paying physicians more than fair market value for their work or other contributions to the hospital. Other areas of noncompliance arise when the contract is considered not commercially reasonable, or when the hospital-physician relationship takes into consideration the volume or value of the physician’s referrals and potential referrals.  The key to compliance with the Stark Law, similar states’ laws, and Medicaid and Medicare regulations is to have in place a contract outlining the details of a proper financial relationship between a physician and a hospital and to establish an ongoing system to monitor compliance with the contract.

Hospitals Acquisitions of Physician Practices

Traditionally, physicians in the United States have owned and managed their medical practices.   Hospitals are finding it more and more difficult to employ physicians to take care of hospital patients.  Hospitals attempted to solve this problem by pursuing collaborations with physicians through collaborations with physician practice management companies.  Now, facing financial pressures, hospitals and physicians are looking to go back to a direct employment business model. 

Hospitals can benefit from industry and regulatory changes and address immediate operational needs, such as staffing shortages, incentive compensations options, increasing market share, increasing Medicare reimbursement and reducing the threat of competition.  Physicians would no longer have to struggle with quality of life issues, shrinking reimbursements, increased capital costs, and expanded regulations.  Physicians are frustrated with the burdens private practice brings, i.e., investments in new technologies such as electronic health records, and growing criticism of physicians using tangential financial opportunities to supplement their income. 

Before acquiring a physician practice, hospitals must purchase the practice for a price that does not exceed fair market value.  Since acquisitions of physician practices are usually structured as asset acquisitions, the hospital may acquire the practice through a subsidiary to assure a level of autonomy to the practice and to insulate the hospital from liabilities.  The due diligence process is necessary to determine how to settle the purchase agreement, in particular the seller's representations and warranties to the buyer about its business.  Representations and warranties covering the absence of conflicting agreements, licenses and medical staff privileges, professional services and patient charts should be negotiated. 

When acquiring a physician practice, the Anti-kickback Statute and Stark law must be reviewed.  The hospital needs to ensure that the valuation method did not take into account the volume or value of referrals the selling physician made to the hospital, where the purchase price could be perceived as a kickback or inducement.  The hospital must also consider the pros and cons of qualifying as a "group practice" under the Stark Law.

National Health Care Fraud Takedown 2016

Today, the OIG and DOJ announced a national strike against 301 individuals for approximately $900 million in fraudulent billing. The press release and other information can be found here and here and here. The allegations against most of the defendants is regarding home health services that were not provided or medically unnecessary.

Use Common Sense and a Calm Temperament When Responding to a Board of Nurses Complaint

It can happen to any nurse at any time for any reason. Whether you are practicing nursing in direct patient care, or in administration, a complaint can be made to the Texas Board of Nursing (the Board) by any person. Due to the requirements on the Board from the state, each and every complaint is investigated. Patients will complain, family members will complain, your competitors will complain, and other nurses are charged with the duty to turn in another nurse if a question arises regarding the nurses abilities. If you work in the home health field, the state surveyors are typically nurses and they account for many complaints each year about nurses in the home health field (those who see patients and those in the office).   

Typically, the Texas Board of Nurses will issue a notice of possible violations of the Texas Nursing Practice Act. The nurse has 30 days to respond. The response is your road map to what occurred and shows the reasons for your actions as a nurse. 

Take care when drafting your response to the Board. A complaint against your nursing license is a very personal assault and that makes it more difficult for the nurse to make a fact based response. The investigators at the Board have subpoena power to gather records, question witnesses, and pull criminal records. They will do all of this during their investigation and scrutinize any records obtained.

The complaint can change after the investigation. Our firm assisted one nurse with a complaint for failure to render the appropriate care that contributed to the death of a patient. What resulted after the statement and the production of additional documents was a failure to fill out a form completely (2 forms had a blank each in the medical records). While it still resulted in continuing education and a fine, there was no action taken against the license and supervision was not required. A clear win to what appeared at first to be a license revocation matter.   

Remember to make sure the response is complete and addresses the complaints, and that your defense isn’t to call the complainant the “devil.” (Don’t laugh, we have seen it done, with very poor results). The Board is tough on nurses, but the right response can go a long way.

Complaints Against Employees and Contractors

When a complaint comes in from a client or customer or employee, you should investigate immediately. Typically when a client complains about one of your employees, management understands that an investigation should be made and possible notifications to various state agencies should be made (Family Protective Services, licensing agencies, DADS, DHS, etc.). 

The same is true when a client complains about one of your contractors, vendors, or other service agents. Say you get a complaint about a home health therapist. Management should investigate and report to the appropriate agency, whether that be FPS for possible neglect or abuse or exploitation allegations, DADS, and/or to the Therapists licensing board. 

Each licensing board in Texas (and other states as well) is charged with the investigation and prosecution of any available sanction when a license violation is determined. In the case of the therapist, the therapy licensing board will allow the Therapist explain the conduct that has been alleged, and the board will do its own investigation. The Board will then make its determination of whether a violation of the licensing rules occurred, and if so, what sanction to impose. The therapist can either agree to the sanction, or proceed to an administrative hearing. Other oversight agencies do the same.   

Further, if an employee complains about another employee, the employer has a duty to investigate and correct if a finding was made. “Correction” may come in the form of reasonable accommodation, termination depending on the conduct, counseling the employee, or even moving one employee to another part of the company building. Remember to have a good employee handbook which outlines violations and sanctions. For more information, see our previous post on employee handbooks here.

The investigation may not substantiate the complaint. Even so, it may still need to be reported to an oversight agency. Make certain you do a good investigation. Take notes of interviews, photos of surroundings if needed, talk to enough people, take the complaint seriously. That way, you can support the fact that you did investigate, and whether you could substantiate the complaint is not due to your not attempting to discover the truth.   

Physician Practices and Electronic Health Records Software

The goal of electronic health records (“EHR”) is to cut medical costs, increase efficiency and improve the quality of care provided to each patient. However, transitioning from paper to electronic records can be daunting and expensive, particularly worse for small practices who have little expertise in software and computer networks.  The high cost of an EHR system, the often challenging process of implementing new technology into a physician practice, and the difficulty in deciding which system best meets a practice’s needs have deterred many physicians from embracing EHRs. However, many practices and facilities have moved towards EHRs in the last few years with incentives from Medicare to encourage that push and there are now many companies offering a multitude of EHR programs.

When consulting with EHR vendors and/or consultants, the following must be considered before purchasing: overall design of the EHR, which includes the ability to handle multiple business entities; whether the system has enough security levels to satisfy the needs of the practice; if you are happy with your current practice management system can it be integrated with an EHR system; the ability of the EHR system to integrate well with portable devices (laptop, tablet PC, PDA) and provide security measures to guard the data on portable devices; ease of use of the EHR system, i.e., easy to read, data entry; whether the EHR system being considered supports PQ00RI (Physician Quality Reporting Initiative) and make it easy to fulfill their reporting requirements; whether the system has an ePrescription module so you can receive bonus payments for its use; the adequacy of the scheduling system to meet not only the current needs of the practice but if the practice expands to more providers and/or offices; and finally the report writing ease and flexibility, which includes reporting capabilities.

Also, if the practice works with managed care contracts then it is important to pay particular attention to the managed care features of the system. On a final note, it is extremely important that the EHR vendor supplies adequate training and support to new installations and new users because without that it will be impossible to achieve the system’s full benefits.

You Said What About Us Online???

Social media is a part of our daily lives. Most people have at least a Facebook or Twitter account. Many have both. In addition, there are many popular blogging sites like Blogger, Word Press, Tumblr, etc. There are also discussion sites like Reddit where you can find a forum for just about anything imaginable. A health care provider/company may also have its own company social media pages.  For example, while we are not a provider, our law firm has a Google+ Page, a Facebook account, a Twitter account, a daily e-paper, two blogs, and a website.

With all the different outlets of expression on the Internet, your employees may be writing or blogging about your company.  Management may have even fostered such efforts, either directly or indirectly.  Whether use of social media by the employee is proscribed by the company or not, it is a good idea to have policies and procedures in place for your employee’s use of social media when saying anything about the workplace or a related matter using electronic means.

In several instances around the country, employees have been terminated for writing/texting about work related situations.  Of course, the comments placed the subject company or its management in an unfavorable light; however, your employee and possibly your company may be liable for slander or defamation if the comments were untrue.  Any author of such comments holding a license may suffer repercussions with licensing boards for unprofessional conduct or unethical practices if the comments rise to a level that makes the governing board takes interest. The company may also face an investigation from the Office of Civil Rights if protected health information of a patient or patients is disclosed online. For reference, a disclosure of phi would be deemed a breach.

Having policies and procedures to guide your employees will give the employees parameters to work within when using their ever-present electronic gadgets. 

As with all policies and procedures, they should be well thought out such that the company does not impose unreasonable limitations on the employee’s first amendment rights, while at the same time protecting the interests of the company and its reputation. 

It's All In The Form

Some governmental agencies have their own forms that must be completed at some point in  time. Other forms are left to the provider. Each provider type typically has leeway in some of their forms, whether the provider chooses to use a nationally recognized form, or to make one up to fit the need.

If the form is not relegated by an agency, you should make certain the form you use adequately  applies to your situation. Within the past 8 months or so, we have experienced state licensing boards (three different ones) lambasting the practitioner for not properly completing a form. Even if not all of the blanks are necessary all of the time or if your staff leaves a blank empty, it may be determined the blank was skipped rather than not applicable. That omission may result in a sanction.

If the form is relegated by an agency, you should make certain the form is correctly filled out.  For any sections that do not apply, the staff member should mark them as such. This way, the reviewer, whether with a Medicare, Medicaid, or insurance contractor or a licensing board, will know the section did not apply to the beneficiary/recipient and a full picture of the state of the patient can be known from the form itself. Further, if the form is mainly boxes to be checked, make certain there is room for comment, and then make certain the comments are made as needed.

If your records are electronic (which most providers’ records are), does a blank form come up for each client to be noted?  If not, how can you be certain that each blank that needed changing from the last note was changed? You can’t. A recent Board of Nurses review of home health records found the nurse had been in 2 places at the same time on a variety of days. What occurred was the prior home health visit note had been used as a template and sometimes the nurse forgot to change the time of the visit. When viewed as a group, the notes indicated the nurse had been in 2 different places at the same time on the same day. Of course he wasn’t, but the records showed that he was. While the nurse was a talented man, the Board of Nursing sanctioned him for making incorrect records.
  
In summary, licensing boards and Medicare and Medicaid Contractors all perform a record and document review prior to determining sanctions or overpayments. Make sure your forms give enough information for the reviewer to know what is going on with the patient. The time you take to properly complete a form is time well spent.

Put It In a Book

While it is not mandatory that an employer provide an employee handbook, it is recommended in order to maintain uniform procedures for all employees.  Employee handbooks help provide cohesive environments, fair treatment and they work to reduce the likelihood of a discrimination claim. Human nature lends itself to approaching individuals with individual treatment. In terms of employment there are numerous factors that can affect such treatment, for instance: effectiveness, work ethic, personality. However, a system such as this which maintains great disparities between the treatment of each individual can prove more liable towards claims of discrimination.

In order to avoid such dilemmas, the company should have an employee handbook that delineates the employees’ responsibilities and the general requirements for the workers there.  It is important that once an employee handbook is put in place it is followed.  Not following the handbook begs the same type of claim for discrimination as not following any prescription for employees at all. 

In the employee handbook, please include the company’s non-discrimination policies and complaint investigation procedures.  Following these steps ensures that all employees are made aware of the conduct expected from them. If the employer does receive a complaint, following standard investigation procedures will ensure that all claims are investigated equally and will help to avoid further complaints. 

Compliance by Contract

MCOs and other health insurance management companies have begun adding a “Compliance Program” to their service contracts.  The program manager establishes its own compliance program, and forces its compliance program upon its independent contractors and health care service providers by contract. 

The management company sets up its own reporting system or 1-800 hotline number and demands in the contract for services with your agency that the contractor explain and advertise to its employees the hotline and instructs them to use it if needed to report unethical activities, abuse, fraud, or other illegal acts. 

Your employees only have to pick up the telephone and call the program manager to report your agency’s alleged wrongdoings.  Then the program manager will investigate, and probably terminate the contract with you or impose some other sanctions on you in order to correct the issue.   

If the program involves a Medicare or Medicaid program, you will have a duty to investigate and may be required to report your findings to Medicare or Medicaid formally either through a report and refund process or through the self-disclosure protocol, just as if the compliance program was installed directly at your agency.

Will You Pass the PEPPER?

If you haven't noticed, CMS has a "new" measuring stick called PEPPER.  PEPPER stands for the Program for Evaluating Payment Patterns Electronic Report (yes, somebody really reached for that acronym). New is somewhat of a relative term as PEPPER reports have been available to short term acute care hospitals (since 2002), long term acute care hospitals (since 2005), all short and long term care hospitals (2009-2010) and more recently, hospices, skilled nursing facilities, and most recently, home health agencies. 

Nonetheless, PEPPER is a report the compares three years of data statistics for CMS targeted areas, comparing your agency’s performance to that of others in the nation. The advertising is that upper management of the healthcare agency can look to compare their agency to those in the nation to see where they compare, and where they don’t. 

Additionally, CMS and its contractors have access to the PEPPER reports. This means that CMS will be watching for billing patterns and error rates. Also, Medicare will also be comparing your performance to that of others in the nation. 

You can review the PEPPER website by going here.

EHR Alert

Providers that receive Electronic Health Record (EHR) incentive payments for participation in the Medicare or Medicaid EHR Incentive Programs may be subject to audits. CMS wants to make sure that the information providers provide and attested to is accurate and meets the thresholds established in the programs guidelines.  The audit can take place either before or after providers receive an incentive payment. Preparing in advance for these potential audits by saving the required documentation will make the process easier. The auditors will want to see ALL relevant detailed supporting documentation (in either paper or electronic format) that was used in completion of the Attestation Module responses. Providers must make sure the information is dated, the time period covered is documented, and that there is evidence to show that the report belongs to the provider for the providers EHR location.

According to CMS, it is the provider’s responsibility to save documentation that fully supports all data submitted during attestation. The reason is that an audit can include a review of any documentation needed to support the information in the attestation including documentation that demonstrates how data was accumulated and calculated, and to support each measure attested to, and any exclusions claimed by the provider.  This could even include a review of medical records and patient records.

Upon completion of an audit, an audit determination letter will be issued informing the provider whether or not they were successful in meeting meaningful use of electronic health records. If a provider is found not eligible, based on the audit, the payment will be recouped. Besides recouping payments, CMS may pursue additional measures against providers who attested fraudulently to receive an EHR incentive payment.

Revalidation: Cycle 2 has Sharper Teeth

Recently on a CMS conference call, the parameters of the Cycle 2 Revalidation were made known to providers who attended the telephone conference call. Revalidation is required for all providers enrolled in Medicare. DMEPOS providers revalidate every 3 years.  All other providers revalidate every 5 years.

CMS is compiling a table of revalidation filing due dates. CMS has a data look up for revalidation, and a sample PECOS revalidation form for your review on its website. Go to cms.gov and input “validation list” in the search box. The first result (currently Revalidations - Centers for Medicare & Medicaid Services) will take you to an article that gives you links to both the due date list and the PECOS revalidation sample form.

Things to know: 

Cycle 2 Late Filing Revalidations.   If you late file your revalidation in Cycle 2, your enrollment will be deactivated.  Whereas in Cycle 1, your payments were merely suspended until you filed the revalidation forms, in this instance, your enrollment is deactivated.  Once you file your revalidation form late, you will get to keep your NPI number, but your enrollment will be brand new.  CMS and the contractors will not reactivate your prior enrollment, but will re-enroll you or your entity.  You will not get to bill for any services provided during the deactivation period. 

Notice Letters. Each provider is scheduled to receive a notice letter for the revalidation.  If you do not receive a letter for some reason, you need to timely file your revalidation anyway.  Therefore, CMS recommended you check the Due Date List every month.   If your entity currently has TBD (to be determined) as the due date, your revalidation is not yet due, but keep checking.  The list is intended to give you approximately 6 months lead time.  

Group Enrollments that also have Individual Enrollments. Your groups and individuals may not have the same revalidation due dates.  Therefore, you must be diligent about keeping the Due Date List checked regularly.

855O enrollees. Those practitioners who has enrolled for ordering Medicare services only may be treated slightly differently, so please check the Due Date List, and call your enrollment contractor to make certain you understand the procedure you must go through for this process.

Change of Address, Ownership, Management, Adverse Legal Actions, etc. If you change addresses, ownership, managers, adverse legal action changes, or any other change that would necessitate filing an 855 form with your CMS contractor - go ahead and timely file the reported change on the appropriate 855 form as you normally would.  The Revalidation is not to take the place of reporting changes. 

Caring Hearts v. Burwell

On June 3rd, the Washington Post ran an article regarding a recent court opinion in the 10th Circuit that criticized CMS for not knowing its own regulations. The opinion can be found here. After a reading of the opinion, one thing is certain, it is good news for providers. The Washington Post does a great job picking out the main points of the opinion, but I am going to provide some background on what type of matter caused Caring Hearts to file suit.

Caring Hearts was issued a records request (audit) for a certain number of records/claims from a Zone Program Integrity Contractor (ZPIC). Caring Hearts then provided the records to the ZPIC. The records were from 2008. The ZPIC then reviewed the records/claims and determined that the claims did not meet certain criteria for home health services. (The discussion of "Homebound status" in the case). The claims that did not meet the criteria were denied and based on the percentage of denials in the number of claims reviewed (normally, in a ZPIC audit, denial rates are between 50%-100%).

After the denial rate is determined, it is extrapolated over the number of claims submitted for a certain time period. So, say a provider submits 2,837 claims over a period of two year (the time period the ZPIC is reviewing). The ZPIC finds an 87% error rate based on the claims submitted in the audit. That means that of the 2,837 claims, 2,468 of them were extrapolated to be faulty, and are therefore denied. (Simple math used here for demonstrative purposes as the ZPIC uses statistical methods to determine the amount). Since the 2,468 claims were denied, all money paid by CMS to the provider for those claims must be sent back to CMS (an "overpayment").

If a provider does not agree with the overpayment determination, it can appeal. There are 5 stages of appeal, each with a different timeline:

1.      Redetermination by an Fiscal Intermediary, carrier, or Medicare Administrative Contractor. (Must be filed within 120 days after notice of overpayment).
2.      Reconsideration by a Qualified Independent Contractor (“QIC”). (Must be filed 180 days after the decision on redetermination).
3.      Hearing by an Office of Medicare Hearings and Appeals (“OMHA”) Administrative Law Judge (“ALJ”). (Must be filed 60 days after the decision on reconsideration).
4.      Review by the Medicare Appeals Council within the Departmental Appeals Board, (hereinafter "MAC"). (Must be filed within 60 days of the ALJ’s decision).
5.      Judicial review in a U.S. District Court. (Must be filed within 60 days after the MAC’s decision).

In Caring Hearts, they most likely burned through all of the five stages above and then submitted an appeal to the 10th Circuit Court of Appeals. The 10th Circuit remanded the case back to the District Court because, as the Washington Post article points out, the agency (CMS) did not follow its own rules.

As I stated above, this is good news for providers as it gives them hope that an overpayment can be overturned. Normally, when a provider receives a ZPIC overpayment notice, it is very difficult to get overturned. However, the Caring Hearts case changes that. One concern though is that right now, it is only persuasive authority for every circuit outside of the 10th. Providers will have to wait until the Supreme Court decides to take a case regarding ZPICs.