This Month In Healthcare Legal News--Part 2: October Review

As the month of October draws to a close, the news cycle has been dominated by Hurricane Sandy and the upcoming election. Healthcare law in the United States and its future have also seen some developments but the public has not been made aware of them to a great extent. One example is the OIG Work Plan discussed in the previous blog. Another is proposed legislation that could affect a serious component of healthcare law for many practitioners. 

Any director or officer of a hospital system or primary care doctor with his/her own practice will tell you--without Medicare reimbursements, your overall reimbursement will be low regardless of the diversity of your payer mix. It is a chance many won't take. One bad audit can set a company back for months despite the outcome of the appeals process.

PROPOSED MEDICARE AUDIT IMPROVEMENT ACT AUDITS THE AUDITORS.

The healthcare law section of our practice group area delves into Recovery Audit Contractors (RAC) and their impact on Medicare reimbursements to providers as well as the success they have had in bringing money back into the federal program. Recently, a bill was introduced to Congress which regulates RACs and forces them to operate with more regulation than when they were initially implemented. With the need before to recover overpayments of Medicare being so desperate, companies were allowed broad authority to collect while making the provider jump through many hoops and appeals to get it back. Furthermore, RACs were incentivized to do so by getting a percentage of what they retrieve.

Representatives Sam Graves (R-MO), Todd Akin (R-MO), Billy Long (R-MO), and Adam Schiff (D-CA) introduced a bill to Congress on October 16, 2012 which proposes to reduce the Medicare contractor audit burden on hospitals. The bill, called the Medicare Audit Improvement Act of 2012 (Act), proposes changes to the ways contractors may conduct audits and imposes additional requirements on contractors.

Among the requirements introduced in the Act are limits to the amount of additional documentation a Medicare contractor may request for complex pre-payment audits and complex post-payment audits. The Act also proposes penalties for contractors that fail to maintain compliance with Medicare program requirements. Specifically, the Act calls for financial penalties when a contractor fails to complete an audit determination within the applicable timeframes, and when a contractor fails to provide communication in a timely manner regarding claim denials and appeals. This is very important for providers who are constantly given the run around or left in limbo wondering about why they haven’t been reimbursed yet for services and when CMS plans to release their Medicare payments. Perhaps the biggest measure of reform in the Act includes provisions that propose to impose financial penalties for appeals that are overturned. When a party successfully appeals a claim denial, the Act would require the contractor to pay a monetary penalty to the party that prevailed in the appeal. This aspect of the Act is notable given the number of claim denials, particularly in the area of short-stay inpatient admissions, that are overturned at the ALJ level of appeal.

Contractors would also be required to publish performance data under the Act. Contractors would be required to publish data each year on:

• the aggregate number of audits conducted,

• the aggregate number of denials for each audit type,

• denial rates,

• the aggregate number of appeals filed by providers,

• the aggregate rate of appeals, and

• the appeal outcomes at each stage of appeal.

The proposed legislation could be read by clicking the following:

http://www.gpo.gov/fdsys/pkg/BILLS-112hr6575ih/pdf/BILLS-112hr6575ih.pdf

We do not want to speculate as to the likelihood that it will pass, especially with a pending election. However, we do have to note that this would greatly reform the current RAC system and would require broad bipartisan support before passing through both houses and being signed by the President. Opponents of the proposed legislation may argue that the bill, especially with provisions providing penalties for overturned appeals, may severely hinder or effectively do away with companies and their abilities to audit. Even if the bill passes, certain provisions such as those will likely be removed or modified before the bill becomes law. Midwest Legal Partners will continue to track this proposed legislation. 

Overall, the entire month of October has been an exciting time for Midwest Legal Partners, PLLC. Saif Kasmikha was a speaker with a comprehensive panel at a health law event in Michigan on the impact of the Affordable Care Act on all stakeholders. Scott Scarbrough was also a speaker at a CLE event in Milwaukee, Wisconsin on business and IP matters. We will continue to keep our clients and the public posted on the latest legal news affecting their practices. 

  

THIS MONTH IN HEALTHCARE LEGAL NEWS—Part 1

On October 2, 2012, the Department of Health and Human Services Office of Inspector General (OIG) published its comprehensive Work Plan for the 2013 fiscal year. The Work Plan identifies the specific areas on which the OIG will focus during the fiscal year beginning October 1, 2012 through September 30, 2013. Click Here to view the Work Plan. Below is a summary of OIG focus areas affecting hospitals and other health care providers in this 7 part Work Plan.

                  Acute Care Inpatient Transfers to Inpatient Hospice Care – The OIG will continue to review inpatient hospital claims where the beneficiary was transferred to a hospice and may also recommend CMS evaluate its policies for such transfers.

                   Acquisitions of Ambulatory Surgical Centers (ASC): Impact on Medicare Spending – The OIG will determine the extent to which hospitals acquire ASCs and convert them to hospital outpatient departments. The OIG will also determine the effect of such acquisitions on Medicare payments and beneficiary cost sharing. Medicare currently reimburses outpatient surgical services performed in hospital outpatient departments at a higher rate than similar services performed in ASCs. The OIG will continue to evaluate the methodology for setting ambulatory service center payment rates, and will assess whether a payment disparity exists between the ASC and hospital outpatient department payment rates for similar surgical procedures provided in both settings. The OIG will also review physician coding on Medicare Part B claims for services performed in ambulatory service centers and hospital outpatient departments to determine whether they properly coded the place of service.

                  Calculation of Inpatient Hospital Wage Indexes –Hospitals must accurately report data every 3 years on the occupational mix of their employees. CMS uses data from the occupational-mix survey to construct an occupational-mix adjustment to its hospital wage indexes. The OIG will assess whether this was accurately reported by hospitals. 

                  Comparable Payments on a National Scale– The OIG will continue to examine hospital inpatient outlier payments and evaluate national trends of such payments to identify the characteristics of hospitals with high or increasing rates of outlier payments. The OIG will also continue to review high-payment claims, payments for graduate medical education to determine whether duplicate or excess payments were made, and payments to acute care hospitals to determine compliance with selected billing requirements.

                  Compliance With Medicare’s Transfer Policy – The OIG will review Medicare payments made to hospitals for beneficiary discharges that should have been coded as transfers and determine whether such claims were appropriately processed and paid. The OIG will also review the effectiveness of the Medicare Administrative Contractor’s (MAC) claims processing edits used to identify claims subject to the transfer policy.

                  Diagnosis Related Group Window Extenstion –Medicare currently bundles all outpatient services delivered 3 days prior to an inpatient hospital admission. The OIG notes that its prior work “has also concluded that CMS could realize significant savings if the DRG window was expanded from 3 days to 14 days.”
 

                  Hospital Claims for the Replacement of Medical Devices – The OIG will determine whether hospitals submitted inpatient and outpatient claims that included procedures for the insertion of replacement medical devices in compliance with Medicare regulations. Medicare is not responsible for the full cost of a replaced medical device if the hospital receives a partial or full credit from the manufacturer either because the manufacturer recalled the device or because the device is covered under warranty. Medicare requires hospitals to use modifiers on their inpatient and outpatient claims when they receive credit from the manufacturer of 50 percent or more for a replacement device.

                  Incident-to-Services – The OIG will continue to evaluate physician billing for “incident-to” services to assess whether payments for such services had a higher error rate than that for non-incident-to services.
 

                  Inpatient Billing for Medicare Beneficiaries – The OIG will assess how hospital billing for inpatient stays changed from FY 2008 to FY 2012 for various hospitals and how those hospitals have ensured compliance with Medicare requirements.

                  Payments for Canceled Surgical Procedures – The OIG will determine costs incurred by Medicare related to inpatient hospital claims for canceled surgical procedures. The OIG notes that its preliminary analysis of Medicare claims data for inpatient stays demonstrated significant occurrences of an initial PPS payment to hospitals for a canceled surgical procedure followed by a second, higher PPS payment to the same hospitals for the rescheduled surgical procedure. This could be a cost-saving measure for Medicare in its Work Plan.

                  Quality Improvement Organizations’ Work With Hospitals – The OIG will determine the extent to which these organizations worked with hospitals either to conduct quality improvement projects or to provide technical assistance along with the barriers they experience in engaging hospitals.

                  Questionable Billing for Ambulance Services – The OIG will continue to examine Medicare claims data to identify questionable billings such as transports that were potentially not medically reasonable and necessary, and potentially unnecessary billing for Advanced Life Support Services and specialty care transport.
 

                  Readmission Patterns and Interrupted Stays– The OIG will determine the extent to which Medicare made improper payments for interrupted stays in long term health care centers last year. The OIG will also identify readmission patterns and determine the extent to which patients are directly readmitted following the interrupted stay periods. The OIG notes that its prior work has identified vulnerabilities in CMS’s ability to detect readmissions and appropriately pay for interrupted stays.

                   

                  Swing Bed Services– Swing beds are inpatient beds that can be used interchangeably for either acute care or skilled nursing services. The OIG will review Medicare payments made to hospitals for beneficiary discharges that were coded as discharges to a swing bed in another hospital. Currently, Medicare pays a hospital the full DRG amount when a beneficiary is discharged from the hospital; Medicare pays the hospital a reduced payment for a shorter length of stay when a beneficiary is transferred to another prospective payment system (PPS) hospital. However, Medicare currently does not pay the reduced graduated per diem rate if the beneficiary was discharged to a swing bed in another hospital. The OIG notes that it may recommend that CMS evaluate its policy related to payment for hospital discharges to swing beds in other hospitals. Furthermore, the OIG will compare reimbursement for swing-bed services at critical access hospitals to the same level of care obtained at traditional skilled nursing facilities to determine whether Medicare could achieve cost savings through a more cost effective payment methodology. 

                   

                  The Work Plan also discusses the OIG’s review of other types of health care providers such as Durable Medical Equipment (DME) suppliers, home health agencies and nursing homes. It will also continue to evaluate and bring more knowledge to the forefront regarding the structural framework of critical access hospitals, inpatient rehab facilities, and other institutions.

                  Click Here to view the Work Plan in its entirety.

Attorney J. Scott Scarbrough to speak at CLE Seminar in Wisconsin

Law Review CLE has combined its training seminar with a Wisconsin Bar Seminar on Trademarks on October 30th, 2012. For those who wish to attend, the following details can be found below:

Business Contracts A-Z: Reviews, Drafts and Negotiations from 9:00AM–12:15PM?

LOCATION

Location

Aloft Milwaukee Downtown Hotel
1230 Old World Third Street
Milwaukee, Wisconsin 53212

This introductory course provides attorneys with and overview on Business Contracts: Reviews, Drafts and Negotiations law. Most attending attorneys will be new to this area of law and many will be young attorneys under four years admittance to the bar.

Business Contracts A-Z: Reviews, Drafts and Negotiations Agenda

1. 09:00 AM – 09:10 AM – Client Relations
• Initial Interview
2. 09:10 AM – 10:00 AM – Contract Mechanics
• Preamble
• Recitals
• Definitions
• Covenants
• Conditions
• Representations/Warranties
• Remedies
• Boilerplate
• Signatures
3. 10:00 AM – 10:15 AM – Break
4. 10:15 AM – 11:15 AM – Key Considerations for Common Contracts
• Asset Purchase and Sale Agreement
• Employment Contract
• Independent Contractor Agreement
• NDA/Confidentiality
• Commercial Lease
5. 11:15 AM – 12:15 PM – Ethical Considerations
• Conflicts of Interest: ABA MRPC Rule 1.7, 1.8
• Duties to Former Clients: Rule 1.9
• Imputation of Conflicts: Rule 1.10
• Confidentiality of Information: Rule 1.6
• Communications: Rule 1.4
• Fees and Expenses: Rule 1.5
• Contingency Fee Agreements: Rule 1.5(c)
• Misconduct: Rule 8.4
• Reporting Professional Misconduct: Rule 8.3
• Candor Toward the Tribunal: Rule 3.3

LawReviewCLE is  a national CLE company based in Florida offering over 60 live classes in 10 different cities every month. 

Scott is an Of  Counsel attorney with Midwest Legal Partners and we look forward to him speaking at this seminar. For those seeking to attend or interested in seeking Scott's counsel on business and IP matters, visit his bio page on MLP's website. 

Attorney Saif Kasmikha among panelists to speak at health care law event.

Attorney Saif Kasmikha of Midwest Legal Partners to speak at an event hosted by Cooley Law School's Auburn Hills campus. He will be a panelist on the Affordable Care Act Panel on Wednesday, Oct. 17, 2012. The event, titled "The Affordable Care Act ('Obamacare') and You: How the Supreme Court's ruling affects law students" will include a comprehensive discussion on a variety of healthcare topics ranging from compliance to malpractice. 

According to a statement by Detroit Legal News:

“We have a great line-up of experts on the topic representing all stakeholder categories..." listing Mr. Kasmikha as one of those experts. It should be a great event. 

http://www.legalnews.com/detroit/1368156/

While the event is open to the public, an RSVP is appreciated. The Legal News link above has the RSVP information.

Posted by Attorney Saif R. Kasmikha

Midwest Legal Partners, LLC

Chaldean American Bar Association hosts Speed Networking Event

The Chaldean American Bar Association (CABA) and Bank of Michigan proudly present CABA's SPEED NETWORKING event Wednesday, September 26th from 6pm-8pm at Shenandoah in West Bloomfield!

Sponsored by Running Man Courier & Process Services, Steward Media, Bienenstock Court Rep

orting & Video, Heritage Private Wealth, Courvoisier C and Lisa S. Lane, PLLC.

RSVP via phone 248.521.2900 or email info@chaldeanbar.com

Supreme Court Healthcare Ruling: A Victory for the White House

After months of speculation, the United States Supreme Court has upheld the individual mandate requirement of the Patient Protection and Affordable Care Act of 2010, also known as "Obamacare." Opponents of the bill speculated the Supreme Court would strike down the individual mandate due to potential violations of the Commerce Clause, and that would set the tone for questioning the constitutionality of the rest of the bill.

However, on Thursday, June 28, 2012, the Court issued a 193 page opinion, by Chief Justice Roberts, stating that although it violates the Commerce Clause, Congress did not act unconstitutionally in its power to tax Americans who choose not to buy health insurance and it was not the court's "role to forbid it, or pass upon its wisdom or fairness." The "mandate" is in fact a tax that would be imposed on those who choose not to purchase health insurance. While the broad, 900+ bill encompasses far more than just the individual mandate, including free mammograms for Medicare recipients, eligibility requirements, coverage for Americans until 26 years of age, and more, the individual mandate was the center of attention in this long anticipated opinion.

Read the full opinion here.

The court upheld the mandate in a split 5-4 opinion in favor of the provision. Many analysts, political commentators, and lawmakers anticipate this will not be the last legal battle involving President Obama's health care reform bill, and this will not be the only provision in question.
 

Posted by Attorney Saif R. Kasmikha

Midwest Legal Partners, LLC

After massive uproar, Obama administration gives in on requiring religious institutions to provide coverage for contraception.

With a divided White House staff having weighed in publicly on the issue, President Obama announced today in a press conference a compromise that both Planned Parenthood and the Catholic Health Association approved of regarding employee coverage for contraception.

The compromise would allow for women to obtain birth control directly from their insurance companies rather than requiring religious institutions like Catholic hospitals and universities to provide free contraception.

CLICK HERE FOR MORE DETAILS

Vice President Joe Biden and Defense Secretary Leon Panetta, both Catholics, were very opposed to the initial proposal of requiring Catholic institutions to provide free contraception. At issue was whether employers should be required to broaden the scope of their coverage to include medication or procedures that violate some of their core tenants. While proponents of such a measure argue that Catholic hospitals and universities employ many non-Catholics, opponents argue that the employees are aware they are working for a Catholic institution with a Catholic mission. Also, many of the hospitals and universities in the United States are private or religiously affiliated, and would not want such mandates as part of their health coverage for their employees. Such a requirement may significantly change the dynamic of health care employers.

While their has been a massive backlash by various organizations against this law and the administration for its support of it, the Obama administration has recently voiced its confidence that the issue would be resolved. Other lawmakers, such as Senator John Kerry, also a Catholic and opposed to the mandate, believed it would be resolved. Today, President Obama announced that a compromise had been reached, but time will tell whether the debate will continue and whether all parties will be satisfied. While proponents of the language believe that President Obama has once again caved to the right, and in this case the religious right, Catholic Bishops and other organizations may decide that the compromise does not go far enough.

Posted by Attorney Saif R. Kasmikha

Midwest Legal Partners, LLC