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.

Texas Law Blogs

We are now included on Texas Bar Today's list of law blogs.

Have You Updated Your Surveyor Access Designated Person?

Pursuant to 40 TAC §97.253(e) every Texas Home Health Agency must have the Administrator designate IN WRITING the person who must provide DADS entry to the agency if the Administrator and Alternate Administrator are not available.

We assume most home health providers have probably done this, but it does not hurt to check to make certain that the person is (1) available and/or (2) employed by the agency.

This is a management responsibility of the Administrator, and should be checked regularly.  I suggest you check it at the same time you run the background checks for employees per 40 TAC §97.243(b)(1)(F) (every 12 months) or as often as your compliance program or policies require.

This is a survey requirement, and DADS surveyors will fail you if (1) no one allows the surveyors entrance when they arrive to conduct a survey and/or (2) if you don’t have the designation in writing.  

Judgment Proofing Assets

The time to take care of the business of making yourself and your company judgment proof is not after the judgment has been issued.  Due to the prohibition against fraudulent transfers (typically determined by the timing of the transfer in relation to a judgment) one cannot simply move assets once a judgment has been issued.  Texas, and 43 other states have adopted the Uniform Fraudulent Transfer Act of 1984 (11 USCA sec. 548 et seq.) which prohibits transfers of assets in order to defraud creditors.   If the intent to defraud is proved, a court can set aside the transfers, even though consideration has been paid by a third party for the asset. 

Generally, if the (1) item has value out of which the creditor could have realized a portion of its claim from; (2) the item was actually transferred or disposed of by the debtor; and (3) the transfer was done with actual intent to defraud the creditor, the transfer or sale can be set aside by the court. 

Therefore, one should not wait until a judgment is obtained before making plans to protect assets, whether personal or corporate.  Depending on your individual situation, the protection may take on several forms. Some protections are as simple as obtaining an umbrella insurance policy to expand your coverage such that your personal or company assets are not at risk.  Other protections involve trusts and conveyances that would require an attorney.

Reminder: CMS Extended the Home Health Moratorium Yet Again

At the end of January 2016, CMS extended the moratorium on its enrollment of home health agencies in Ft. Lauderdale, Miami, Dallas, Houston, Chicago, and Detroit.  The newly renewed moratorium will extend over the next 6 months unless it is renewed once again.

The moratorium has been in effect since the summer of 2013 and extends from one to a handful of counties surrounding each city listed.

• Fort Lauderdale, FL:   Broward County
• Miami, FL:  Miami-Dade and Monroe Counties
• Chicago, IL:  Cook, DuPage, Kane, Lake, McHenry, and Will Counties
• Detroit, MI:  Macomb, Monroe, Oakland, Washtenaw, and Wayne Counties
• Dallas, TX:  Collin, Dallas, Denton, Ellis, Kaufman, Rockwall and Tarrant Counties
• Houston, TX:  Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery and Waller Counties

The formal announcement was published in the February 2, 2016 Federal Register.  If you already have a Home Health License and Medicare Certification and are operating in one of the above named counties, you can continue doing business in these areas.  Otherwise, you must be in a County not named on this list to obtain a new Medicare Enrollment for home health services. 

New Website!

Please check out our new website. It can be found at www.markkennedylawfirm.com.

Assisted Living Facilities are being asked to give Survey Feedback to DADS (as are HCSSA, DAHS, NF, and ICF/IIDs)

In Provider Letter No. 16-10, Assisted Living Facilities (ALF) are being requested to provide feedback to DADS concerning survey inconsistencies related to the interpretation and application of ALF regulations and rules in order to attempt to enhance surveyor training and improve policies and procedures.

The letter includes the website for the feedback.  You will need to provide all your provider information, including information about the survey visits in order for a provider to report inconsistencies. 

DADS intent is not to modify survey protocol or the change the tags you receive in a survey.  The information will be used to improve survey consistency.  Therefore, an ALF that receives a deficiency in a survey must avail itself of the standard informal and formal appeal processes that are currently in place for such disputed survey results.

DADS intends to use the information provided by ALFs to improve the survey process, and will compile a statistical report to inform providers of consistency analysis and actions related to the findings.  DADS will not report back to each ALF that provides an inconsistency report. 

DADS also issued Provider Letters No. 16-11 for DAHS, 16-12 for HCSSA, and 16-13 for NF and ICF/IID for this program.   

(DADS is the Texas Department of Aging and Disability Services)