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)