Health Care Reform “Tid Bits” You should be Aware of…

PPACA’s affect on the Anti-Kickback Statute and False Claims Act is considerable. Section 6402 of the PPACA changes the “knowledge” requirement for violations of the federal Anti-Kickback Statute (AKS). See Patient Protection and Affordable Care Act § 6402. The AKS provides criminal penalties for individuals and entities that knowingly offer, pay, solicit or receive bribes or kickbacks or other remuneration in order to induce referrals. 42 U.S.C. § 1320a-7b(b). Additional penalties include civil penalties, exclusion from participation in the federal health care programs liability under the FCA. Previously, the AKS required the government to provide that a defendant acted “knowingly” to rise to the level of a violation of the AKS; however  Section 6402 states that “a person need not have actual knowledge of this section or specific intent to commit a violation of this section.” Patient Protection and Affordable Care Act § 6402. This statement appears to significantly relax the “knowledge” requirement and weakens the defense for physicians charged with violating the AKS. Additionally, Section 6402 also declares that a claim filed which was found to be a violation of the AKS can automatically be deemed a “false claim” under the FCA and any other applicable statutes. See  Patient Protection and Affordable Care Act § 6402. See also 42 U.S.C. § 1320a-7b(b) and 31 U.S.C. § 3729. Chiropractors should be aware that a single violation punishable by one sentence may now become several violations

with several harsh penalties.

Suspension of Payments

Section 6402 of the PPACA allows the Secretary of HHS, in consultation with the OIG, to suspend payments to a provider or supplier pending the investigation of a “credible” fraud allegation. See Patient Protection and Affordable Care Act § 6402. The Secretary is instructed to develop regulations to execute this provision. The affect of this is uncertain because “credible” is not defined in the statute; however, the vagueness of this provision may allow HHS and the OIG wide authority in suspending payments to chiropractors. Lawmakers have given HHS and the OIG enormous power in which to attack “fraud.” Because of this provision, it is important for practices to develop an effective compliance plan and monitor it.

Program Exclusion Mandated:

Section 6402 of the PPACA mandates that state Medicaid agencies must exclude any individual or entity from participating in Medicaid if such individual or entity owns, controls or manages an entity that has not repaid an overpayment during a period set by HHS, is suspended, excluded or terminated from participation in Medicaid or is affiliated with an entity or individual that has been suspended, excluded or terminated from participation in Medicaid. Simply being “affiliated” with an entity or individual that has been excluded from participation in Medicaid can cause extensive problems for a physician practice.

We now recommend that Chiropractors make a habit of regularly checking the online database for the list of providers and employees excluded from participation in the federal health programs. This list is maintained at http://oig.hhs.gov/fraud/exclusions/listofexcluded.html and is updated regularly. If a provider or employee has been excluded, the database will list the reason for the exclusion and the state in which the provider or employee was practicing when he or she was excluded. If a provider or employee has not been excluded, the database will return a screen which read, “No results were found for [that provider or employee].” It is also vital to print out the “No results” screens and keep such print-outs on file as evidence of a good faith effort. Moreover, we are now recommending that all facilities have a representation and warranty signed by all of its employees that the employee has not been excluded from any federally funded health care programs.

This issue has hit home, as some Skilled Nursing Facilities have had reimbursement for entire stays wiped out because an excluded individual was involved in the patient’s treatment decisions.  The Chiropractic community needs to be aware that the President believes that the elimination of health care fraud and waste and in large part pay for the improvements and changes in the delivery system.  Those providers who opt to ignore these warnings do so at their own peril.

Enhanced Civil Monetary Penalties

Sections 6402 and 6408 of the PPACA expand the civil monetary penalty (CMP) liability to include the following additional offenses:

a. Ordering or prescribing an item or service during a period in which the individual or entity was excluded from participation in the federal health care programs if such individual or entity knows that a claim for the item or service will be filed;

b. Knowingly making or causing to be made any false statement, omission or misrepresentation of a material fact on any federal health care program application, agreement, bid or contract;

c. Knowingly retaining an overpayment and failing to report and return such overpayment;

d. Knowingly making, using or causing to be made or used, a false record or statement material to a false or fraudulent claim for payment for items and services rendered under a federal health care program; and

e. Failing to grant timely access, upon request, to the OIG for audits, investigations, evaluations or other statutory functions.38

The above changes suggest that there is a renewed emphasis on curbing fraud, waste and abuse in health care and enforcement of the applicable laws and regulations will increase. Chiropractors should familiarize themselves with all fraud and abuse laws, not just the ones discussed above, and conduct a review of their practices’ operations to ensure that they are in compliance.

Timely Submission of Claims Window Significantly Reduced.

Section 6402 of the PPACA obligates a provider to submit Medicare claims within one (1) year of the date of service. This provision is applicable to all claims for services rendered as of January 1, 2010. This is a change from the previous submission period of three (3) years. For services rendered prior to January 1, 2010, all claims must be filed by December 31, 2010.

WHY ALL THIS COMPLIANCE AND “FRAUD AND ABUSE STUFF” NOW?

As the economy continues to struggle, it is obvious that the Nation can no longer afford annual double-digit inflation in health care costs.  In fact, it has been reported that Medicare would go insolvent at its present rate by 2017.   In a report just put out today, “as a result of the myriad provider payment reforms, improvements to the quality of care and fraud-busting measures in the new reform law are expected to slow ever-rising healthcare costs and help Medicare stay in the black for another twelve years, that is to 2029.”  (quoting Kathleen Sebelius, HHS Secretary) See (Reform law will extend Medicare trust fund’s solvency to 2029, trustees say, Dobias, Matthew, Aug. 5, 2010, Healthcare Business News

Commentary:  On The Board’s Seeming Position on Electronic Records and Existing Compliance Programs

The electronic medical record is coming and the Feds are helping to pay for it!   Six states, including New Hampshire, Connecticut and Rhode Island are involved in the initial 5.75M in federal matching funds to implement the electronic medical records.  As an attorney representing chiropractors in Board disputes, I think it is time for the Board to reconsider its hard position on chiropractors who have already introduced early phase EHR.  Some of these systems are less than ideal. Some contain canned-text, but that is not necessarily a bad thing.  Back in the 1990’s, as the Director of Medical Records at St. Luke’s Hospital in New Bedford, I coordinated the implementation of that hospital’s digital dictation system.  Upon implementation, I was amazed at how many surgeons entered the department, based on the advice of ProMutual, (their Malpractice carrier) to dictate a canned format for their pre-op History and Physicals and Operative notes.   It seems like medicine embraced the concept and importance of ensuring that their notes contained necessary elements decades ago. 

With this knowledge, recently, I have represented four different defendants in front of the Board of Registration of Chiropractors.  I appreciate the Board’s role in protecting the public; however, President Obama and HHS is pushing the implementation of EHR in all practices.  I think it is important to understand that more uniform documentation is not a bad thing, but in fact, the wave of the future.   The Board has an opportunity to encourage its licensees to delve into the world of EHR.  Every time a chiropractor is disciplined for the quirks of the same, or anytime an insurer’s IME/Record Reviewer denies a claim based on “canned text” nature of the SOAP notes, your profession takes a step back. In my opinion, continued intense scrutiny of such systems by the Board, could have a chilling effect on the industry at large, and have an effect that no one ever intended.

Speaking of decisions that can have a chilling effect….  The Board recently required two chiropractors who were disciplined for documentation issues only (233 CMR 4.05), to go through their Clinical Audit and Monitoring process despite the fact that the chiropractors in question had a very active compliance program/plan in place for five years before the incident.  In my opinion, the Board needs to look at the OIG’s position on disciplining physicians who have demonstrated that they have implemented active Compliance plans, and actively perform ongoing audits.  In such circumstances involving False Claims Act cases, the OIG has published that the active and demonstrated use of a practice compliance plan can serve to mitigate penalties imposed.  In my opinion, this Board should adopt a similar position and consider the existence of a plan as a mitigating factor in disciplining chiropractors in order to encourage the implementation and use of such program, improve the reputation of the profession and to lessen the likelihood of fraud and abuse.

The Law Office of Frank E. Biedak, P.C.   Intelligent, Aggressive Representation of Massachusetts Chiropractors since 1999…..

SNF Leadership to “Bundle Up” with Acute Care Hospitals?

February 25, 2010

As health care reform continues to capture the attention of the public, the Long Term Care industry has to begin to ponder life under a “bundled care” mandate.   A “bundled” payment refers to a single payment that covers services performed by numerous, possibly, unrelated caregivers. Currently, most of these services are paid independent of each other.

Under the most  recent post-acute hospital bundling proposals, CMS would

make a single payment to cover the acute care stay and additional services required following that stay.  The bundled payment is made even for services not provided by the acute care hospital. (See Medical Payment Advisory Commission, Report to the Congress: Improving Incentives in the Medicare Program (2009), at 129, http://medpac.gov/documents/Jun09  As the LTC industry is aware, this concept is not new; however, it has gained considerable bipartisan support and would seem likely to be part of any overhaul, or “piecemeal” approach to reform. Those favoring the approach believe that bundled payments to providers across the continuum of care, would provide an incentive for such providers to collaborate in the provision of care in a manner that would increase efficiency, reduce costs, and result in better coordination of care. ( See Congressional Budget Office, Budget Options Volume I: Health Care 62 (2008);Medical Payment Advisory Commission, Report to the Congress: Reforming the Delivery System 97 (2008). See also Medical Payment Advisory Commission, Report to the Congress: Improving Incentives in the Medicare Program (2009).

While there are different models being discussed, it would seem the most likely approach would be one that has CMS remit payment to the acute care hospital, for all treatment from entrance to the hospital, upwards until thirty (30) days post-acute discharge.  Congressional Budget Office, Budget Options Volume I: Health Care 62 (2008); Medical Payment Advisory Commission, Report to the Congress: Reforming the Delivery System 97 (2008).  The Congressional Budget office’s view is that bundled payments could reduce costs of post acuter services through improved coordination of care which it believes could reduce the volume and/or intensity of post-acute care. (Congressional Budget Office, Budget Options Volume I: Health Care 62-63 (2008))

The CBO,is not the only agency behind this push. In its 2008 Report to Congress, MedPAC argued that Congress should require DHHS to create a voluntary pilot program to test the feasibility of bundled payments for services around acute care stays for selected conditions. MedPAC would have providers receive bundled payments for all covered services under Medicare Part A and Part B associated with a hospitalization episode, including services provided within thirty days following the hospital stay.

MedPAC seeks to show “whether bundled payment across an episode of care can improve coordination of care, reduce the incentive for providers to furnish services of low value, improve providers’ efficiency, and reduce Medicare spending while not otherwise adversely affecting the quality of care.” 8 Medical Payment Advisory Commission, Report to the Congress: Reforming theDelivery System 97 (2008).

Of concern, MedPAC states that hospitals would have to negotiate contracts with a wide range of post-acute care providers, specifying how they would share the bundled payment.   Additionally, MedPAC would have the hospitals develop an administrative infrastructure for receiving and paying  bills both for contracted providers and also for others who might see a patient during an episode of care.(thirty days post-acute) MedPAC admits that these would add an additional level of costs onto hospitals.

Lawmakers also seem hell-bent on bundled payments. The Affordable Health Care for America Act (H.R. 3962) calls for the DHHS to devise a detailed plan to reform payment for post-acute care services under the Medicare program. The goals would be to improve coordination of care, improve quality, and efficiency of such services, and to improve outcomes.  (including the need to reduce hospital readmissions.)  See 10 Affordable Health Care for America Act, H.R. 3962, Section 1152.  The Act would bundle payment for post acute care services, such as:  “SNFs, inpatient rehabilitation facilities, long term care hospitals, hospital-based outpatient and rehabilitation facilities, and home health agencies to an individual after discharge from a hospital.” See Id.

Additionally, the plan would seemingly need to factor in:

1. Whom should receive bundled payments for post acute care, and what services are included; 2) whether the bundle should be inclusive with the hospital payment, and if yes, to whom does payment go; 3) the relationships that will occur as a result of such changes and whether the same might run afoul of numerous Federal law such as anti-trust, anti-kickback, and 4) other operational concerns, most notably the ridiculously outdated, three-day acute stay to qualify for SNF services.

Not to be outdone, the Senate, produced The Patient Protection and Affordable Care Act (the Senate Amendment of H.R. 3590).

This proposal would mandate that DHHS establish a pilot program tor integration of acute care, and post acute care services. The Senate’s stated goal was to improve coordination of care, improve the quality of care and the efficiency of healthcare services. (Senate Amendment of H.R. 3590, Section 2704.)

The Senate’s version would have the DHHS pick 8 surgical and medical conditions around which the pilot would follow.  The Pilot would assess the entire continuum of care for an entire “episode of care.”  With respect to one of the 8 piloted conditions, an episode of care is defined as, the period from three days prior to acute admission to  thirty days post discharge from the acute care hospital.

The Senate proposal requires a bundled payment under the pilot program be paid to the entity that is participating in the pilot program and that the payment be comprehensive, covering the costs of applicable services and other appropriate services furnished to an individual during an episode of care. The version would also require DHHS to establish procedures by which payment for services would be made when an applicable patient/

beneficiary needs continued post-acute care services after the last day of the episode of care.

Considerations:

When and if a bundling approach is implemented unique challenges, and opportunities will exist for all providers involved.  Opportunities would seemingly exist for providers able to identify and contract with services designed to prevent hospital readmissions and improve care to SNF (post discharge patients).  The challenges for all are obvious, that is payment, contracting and ensuring the same is completed in a fair, and legally permissible manner.

Areas where providers are integrated will have some advantages.  Certainly, larger organizations that are fully integrated under common-ownership will have an even greater opportunity, because they are likely to have administration already linked to the concept and providers in a fully integrated, common ownership network are less likely than independent providers to run afoul of complicated anti-kickback, Stark, and even price-fixing problems.   Antitrust assessments under such federal mandates would also be highly complex; unfortunately, that analysis might be equally complicated for all.

Bundling would likely require SNFs and the area acute care hospitals to at least contractually bond. Larger chains or even smaller chains in a condensed geographic region might appear most attractive to hospitals seeking to optimize their slice of the “bundled pie.”  Challenges for independent SNFs, in a bundled environment would most certainly be realized. Some might argue, that hospitals might present “take it or leave it” agreements to smaller SNFs, hoping to again maximize their bundled fees.  SNFs, may be left to forage for the remnants under the larger, and often more financially solvent acute care hospitals.  This reality might put small SNFs in a position to accept deals that are not profitable just to fill beds.

Again, any SNF, or provider that might consider “courting” area acute care hospital leadership must be very cognizant of the tough Stark and Anti-Kickback penalties.  See Section 1128B(b) of the Social Security Act, which in part prohibits the

knowing and willful offer, payment, solicitation, or receipt of any remuneration

to induce or in return for the referral of a person for the furnishing of any

item or service for which payment may be made in whole or in part under

Medicare. The statute and underlying regulations contain a safe harbor for

discounts, which could apply to a properly structured arrangement between a

post-acute care provider and the recipient of a bundled payment.

Health care reform is clearly in flux.  SNF leadership must be very cognizant of the strong consensus and appeal of the bundling concept.   While it is not likely to impact anyone in Calendar year 2010; it is almost certain to affect all, in the years to come.

Administrator’s Update as to Key Changes in the Federal False Claims Act Usage.

February 25, 2010 

The Federal False Claims Act dates back to Civil War times. 31 U.S.C. ss. 3729-3733 (2006 & Supp. III 2009), Massachusetts has its own version, which is most similar to its Federal counterpart. MGL ch 12 ss. 5A-5O. 

The Federal False Claims Act (hereinafter FCA) has treble-damages, per claim penalties, and program exclusion penalties has rapidly become the Government’s most favored tool for combating “fraud and abuse.”

Generally, a person or facility may violate the FCA is he/it  1) knowingly presents, or causes to be presented, to an officer or employee of the United States Government… a false or fraudulent claim for payment or approval; 2) knowingly makes, uses or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government, or 3) conspires to defraud the Government by getting a false or fraudulent claim allowed or paid.

As you are equally aware, 42 U.S.C. s. 1320a-7b prohibits knowingly and willfully making or causing to be made any false statement or representation of material fact in any claim or application for benefits under Medicare or Medicaid.   This criminal statute is most often applied when one bills for services not rendered misrepresents services actually rendered or falsely certifies that certain services were medically necessary.

However, the Fraud Enforcement and Recovery Act of 2009 (FERA), has drastically altered what SNF administrators need to monitor.  FERA changes the language of the FCA subtly, but most importantly.

FERA now adds liability for “knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay or transmit money or property to the Government.”   See 31 USC s. 3729(a)(1)(G)   This change in law now clearly makes it unlawful for any SNF to retain any funds that are improperly received from the Government. In short, overpayments must be returned promptly.  (You will also note that with the increasing pressure of the RACs – Recovery Auditing Contractors, that repayment of any alleged overpayments are also due promptly and within 30 days, even if challenged.) 

A quick review of an excerpt from the 111th Congress’ Committee Report accompanying FERA provides the reader with a foreshadowing of what is likely ahead:

The new definition (materiality and retention of overpayment) will be useful to prevent Government contractors and others who receive money from the Government incrementally based upon cost estimates from retaining Government money that is overpaid during the estimate process. A violation of the FCA for receiving an overpayment may occur once an overpayment is knowingly and improperly retained without notice to the Government about the overpayment.

This language should disturb the well-intended SNF administrator because it would seemingly suggest that retroactive chart review, and quality assurance reviews, so important to the delivery of care and the improvement of care, could conclude with a finding that funds need to be returned to the Government.  The “new FCA” would certainly suggest the same.   SNFs may want to consider contacting informed counsel before engaging in any retroactive review to ascertain whether the same should be done under the auspices of attorney-client umbrella in an effort to avoid unnecessary litigation.

Another very disturbing trend in LTC, is the use by the Government of the FCA, to challenge quality of care.  In a  “Failure of Care” or “Worthless Service” claim, the Government Prosecutor alleges that the FCA has been violated because the care billed for in the claim was so substandard as to be worthless, and therefore, billing and retaining funds for said services is a violation of the FCA.   (Please remember, this currently does not include negligence, or an innocent mistake) 

The use of the FCA in quality of care matters is not universally accepted. Case law provides the reader with somewhat of a mixed message.  In United States vs. NHC Healthcare Corp., 115 F.Supp.2d 1149, the Court ruled that at some point during the treatment of the patient, the care rendered was so lacking that the provider simply failed to adhere to standards it had agreed to  (evidently in the Conditions of Participation) and therefore submitting a claim for the same was fraudulent.

However, in United States ex. Rel . Sweeney v. ManorCare Health Services, Inc., No. C03-5320, 2005 WL 4030950, the Court stated that it would be impossible to determine whether particular services provided, and the United States paid for were worthless without finding that the care as a whole was worthless.  The Court noted that Congress gave the DHHS extensive authority to deal with SNFs that are failing to comply with certain regulations regarding patient care.   However, even this Court stated that “each case should be decided on a case by case basis.”  Since the Sweeney case, at least one other district court has denied a SNFs motion to dismiss a quality of care FCA case based on the “worthless service theory.”  See United States v. Cathedral Rock Corp., No. 403CV1090HEA, 2007 WL4270784.

Over the past 15 years, at least 30 cases surrounding the “quality of care” disputes under the FCA have settled.   These settlements tend to all have both a significant civil monetary penalty and an ongoing monitoring component evidenced through the execution of a Corporate Integrity Agreement (CIA) with the OIG.

Updates on Health Care Reform:

President Releases his 2011 Budget Requests, Increases Funds to CMS and Fraud Prevention.

President Obama unveiled his administration’s fiscal year (FY)2011 budget request, which includes $81 billion in discretionary budget authority for the Department of Health and Human Services (HHS), a $2.3 billion increase over FY 2010.

The budget blueprint seeks funding increases for, among other things, the Food and Drug Administration (FDA), the National Institutes of Health (NIH), the Centers for Medicare and Medicaid Services (CMS), health information technology, and efforts to reduce fraud, waste, and abuse in federal healthcare programs.

Efforts to Reduce Fraud, Waste, and Abuse

The President’s budget seeks a $250 million increase in discretionary resources, for a total of $561 million, to strengthen Medicare and Medicaid program integrity efforts for fighting fraud, increasing Medicaid audits, and improving oversight.

According to administration estimates, the additional investment in antifraud and abuse measures will save $9.9 billion over 10 years.

Sebelius said the budget also includes new program integrity proposals that will save an additional $14.7 billion over the next decade by ramping up scrutiny of provider enrollment, increasing claims oversight, improving data analysis, and reducing over utilization of Medicaid prescription drugs

Summary of Recent Articles on Health Care Reform:

Obama Publicly invites Republicans to televised health reform meeting.

How’s this for a Super Bowl surprise?  Just before the game, President Obama invited GOP leaders to participate in a televised healthcare reform meeting.  This could certainly be viewed as a political maneuver; however, given the pressing national need for health care reform, one can only hope that both sides approach such a discussion with the Country, and not their own best interests at heart.

The AP (2/8, Babington) reports that the "meeting's prospects for success are far from clear," as "GOP leaders demanded Sunday that Democrats start from scratch, and White House aides said Obama had no plans to do so." Meanwhile, "many liberal groups and lawmakers want congressional Democrats to use all the parliamentary muscle they have to enact" the healthcare reform measures passed by Congress, and the White House "has not ruled out such a strategy."

In a front-page story, the Washington Post (2/8, A1, Shear) reports that "it remains unclear whether a single discussion can begin to bridge the political and substantive policy divide with Republicans, who view their united front against the Democratic bills as a key to their political recovery. Obama also gave little indication during the interview that he is ready to abandon the basic direction his party took on healthcare." The Post adds that "officials said the president will come to the healthcare summit armed with a merged version of the two bills that Democrats strong-armed through the two chambers with almost no GOP backing," and "one White House official" told reporters, "This is not starting over.... We are coming with our plan. They can bring their plan."

Also on its front page, the New York Times (2/8, A1, Zeleny) reports that "the meeting would mark the first time in the long healthcare debate that leaders from both sides would be allowed to air their ideas publicly and see if they can find agreement." The President "did not say what he was willing to give up in the negotiations or chart a specific legislative strategy for moving a bill through Congress." The Times describes the offer as "the latest example of how the White House is attempting to draw in the opposition party and highlight their ideas in the midterm election year, hoping that the Democratic proposals look better when compared to the Republican ideas."

The Washington Times (2/8, Rowland) sees the invitation as "an effort to put Republicans on the spot on healthcare," adding that "the decision to broadcast the half-day bipartisan meeting...comes after Mr. Obama has faced criticism for not living up to his promise of transparency by holding all healthcare meetings, including House-Senate conference meetings, in the open, as he had pledged on the campaign trail."

Massachusetts regulator considers easing health insurance mandate.

 The Boston Globe (2/11) Reports that  the Massachusetts Connector Authority board is now "considering proposed changes to health insurance rules that could result in fewer residents facing a tax penalty for not having health insurance." The Globe states that the board "weighed several potential changes to the complex standard it uses to determine whether health insurance is affordable for individuals, couples and families, a standard that is also used to decide who will face a tax penalty for not having coverage." Some regulators hope to ease the standards, pointing to rising healthcare costs, while others argue that "loosening the rules too much would undermine the state's health law, because it will result in fewer people being required to purchase health insurance."   As National Health Care Reform hangs in the balance,  Massachusetts decisions will be closely scrutinized.

 The Cost and Benefits of the “Assumption of the Risk.”

The staggering costs of health care is well publicized, but only recently is the public’s attention being turned to who is actually making money in this cycle.

Hospitals, SNFs, providers all complain that Medicare, Medicaid, and managed care agreements are adversely impacting their ability to care for their patients.   In a February 12, 2010, article in the New York Times,  it was reported that Health Care for America Now [HCAN] issued a report yesterday saying that "the five biggest insurance companies," WellPoint, Cigna, UnitedHealth Group Inc., Aetna Inc. and Humana Inc., "had an average profit last year of 5.2 percent -- for a combined total of $12.2 billion." In response, America's Health Insurance Plans spokesman Robert Zirkelbach said that "historically...the average profit margin for the industry has been relatively low, three to five percent." HCAN's Richard Kirsch said that "although the insurance companies lost 2.7 million customers last year during the recession...they raised their premiums so much that they still made substantial profits."

Insurance is nothing more than a third party assuming the risk of some potential futuristic event.  Health care insurers add absolutely nothing to the patient care needs of the nation. As leaders grapple over how to reform health care and payment for the same, let’s hope that the Government has the intestinal fortitude to ask the insurers the hard questions.   After all, insurer’s can only “deny” their profits for so long…. or can they??

Compliance and Fraud Update

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