The Patient Protection and Affordable Care Act of 2010 includes a set of sweeping changes applicable to charitable hospitals exempt under Section 503(c)(3) of the Internal Revenue Code. The Act (a) imposes new eligibility requirements for 501(c)(3) hospitals, coupled with an excise tax for failures to meet certain of those requirements; (b) requires mandatory IRS review of the hospitals’ entitlement to exemption; (c) sets forth new reporting requirements on the hospitals involving community health needs assessments and audited financial statements; and (d) imposes further reporting requirements on the Secretary of the Treasury regarding charity care levels. Most of the changes in the Act are scheduled to go into effect for tax years beginning after March 23, 2010, the date of enactment. Read more…
von Briesen Health Law Blog
March 31, 2010
March 29, 2010
CMS Has Instructed Contractors to Hold Claims Paid Under the MPFS for Ten Business Days in April
Although Congress has not yet delayed the 21% reimbursement cut set to take effect April 1, 2010 for services paid under the Medicare Physician Fee Schedule, CMS believes Congress will take action. Accordingly, CMS has instructed its contractors to hold claims for services paid under the MPFS for the first ten business days of April. The hold will apply to claims with April 1 or later dates of service. The hold will give Congress some time to act on the payment cut after it returns April 12 from a recess. You may view an email from CMS announcing the ten business day hold here.
March 24, 2010
New Law Requires Insurers to Pay Hospitals for EMTALA Care
As part of the Patient Protection and Affordable Care Act signed into law on March 23, 2010, insurance companies will now be barred from imposing pre-authorization requirements on EMTALA care. The Act also requires insurers to pay hospitals not under contract with them for EMTALA services on the same basis as they pay their own in-network hospitals.
Under the new law, insurance plans cannot (1) require a prior authorization for screening and stabilization services as defined under EMTALA; (2) impose any requirement or condition on a non-contracted hospital that is more restrictive than those it imposes on hospitals with contracts; (3) impose different coinsurance or copayment requirements on non-network hospitals than they impose on in-network hospitals; or (4) apply any other coverage restriction (other than otherwise permissible cost-sharing and pre-existing condition exclusions).
The new provision does not apply to services provided in an emergency department if those services are not required to determine whether an “emergency medical condition” exists and to stabilize such a condition.
The new requirements for insurance payment for EMTALA services become effective on or after September 23, 2010.
Obama Signs Healthcare Reform Bill
On March 23, 2010, the President signed the Patient Protection and Affordable Care Act into law. The law expands health care coverage to 31 million currently uninsured Americans through a combination of cost controls, subsidies and mandates.
March 23, 2010
CMS Grants CAHs Temporary Relief From Physician Supervision Requirements
CMS has announced that it will delay enforcement or evaluation of the physician supervision requirements for therapeutic services provided to outpatients of Critical Access Hospitals for the duration of the 2010 calendar year. These requirements, initially set forth in its 2010 OPPS Final Rule, involve “direct supervision” over therapeutic services furnished in hospital outpatient departments and are difficult for many CAHs to meet. CMS plans to revisit the issue of supervision of therapeutic services provided to hospital outpatients in CAHs through the annual rulemaking cycle for CY 2011.
DOJ Announces New Target – Medically Unnecessary Admissions for Chest Pain
The U.S. Department of Justice’s office in the Western District of New York is reviewing potentially medically unnecessary inpatient admissions for chest pain. The issue initially was identified by the ZPIC for New York state and referred to the MAC. The DOJ is basing its investigation on results of the MAC audits, including unnecessary admissions identified by the MAC for which hospitals have returned overpayments. It also is investigating errors identified by the Recovery Audit Contractor to determine if specific claims rise to the level of fraud.
For now, this investigation is limited to chest pain admissions in 2008 at 24 New York hospitals, although it could become a more in-depth collaboration between the DOJ and program-integrity contractors. Remember – this is the same DOJ office that coordinated the national kyphoplasty investigation.
March 18, 2010
OCR Releases Update on HITECH Security and Privacy Provisions
OCR recently issued a “HITECH Act Rulemaking and Implementation Update” on its website, confirming it expects to release proposed rules regarding privacy and security provisions of HITECH. OCR did not say when it will release the rules, but did say it will release the provisions through notice and comment rulemaking.
Illinois Supreme Court Affirms Provena Loss of Tax Exemption
The Illinois Supreme Court today decided that Provena Covenant Medical Center was not eligible for a property tax exemption under Illinois state law due to an insufficient showing of charity care. The decision marks the end of the road for a back-and-forth battle dating back to 2002, when Champaign County tax officials concluded that Provena did not qualify as a charitable institution under Illinois property tax exemption statutes due to an insufficient level of charity care. That decision was affirmed by the Illinois Department of Revenue, but then overturned by an Illinois district court in 2007. An Illinois appellate court reinstated the denial of the exemption in 2008, and that decision was affirmed by the Illinois Supreme Court today.
While the Provena decision has been closely watched around the country, it is important to note that the case involves an Illinois statute that differs significantly from the exemption for nonprofit hospitals in Wisconsin. Section 70.11(4m) of the Wisconsin statutes does not refer to “charitable institutions” nor does it require any specific amount of charity care. Charity care and other benevolent activities may be relevant under another exemption relating to benevolent associations, but these activities do not provide the standard by which hospital eligibility is determined under section 70.11(4m).
Nevertheless, the Provena case must still be considered against the backdrop of a larger movement for quantifiable benchmarks and greater accountability as to charity care by nonprofit hospitals. This movement is most visible at the federal level in connection with the community benefit standard applicable to exemption from federal income tax, as evidenced by the newly revised IRS Form 990 and increasing aggressiveness by key congressional leaders in Washington. The battle lines have also been drawn at the state and local level, though, as budgetary constraints trigger renewed scrutiny of the benefits provided by nonprofit hospitals in exchange for their tax exemptions.
March 16, 2010
The OIG Has Published Its Compendium of Unimplemented Recommendations for 2010
The OIG’s Compendium lists the ”significant,” but not yet implemented, recommendations that the OIG has provided to the Department of Health & Human Services (”DHHS”). The OIG believes these recommendations have the potential for cost savings and greater program efficiency. A number of the recommendations are aimed at the Medicare and Medicaid programs. Among its “priority” recommendations, the OIG includes:
- Modifying policies to eliminate Medicare payments for hospital bad debts.
- Ensuring the processing of Medicare denial of payment remedies for noncompliant nursing homes.
- Ensuring that hospice claims for beneficiaries in nursing facilities comply with Medicare coverage requirements.
- Adjusting the eye global surger fees to reflect the number of E&M services actually being provided.
- Ensuring that medical equipment suppliers comply with Medicare enrollment standards.
- Modifying payments to Medicare Advantage organizations.
- Placing a ceiling on adminsitrative costs included in the bid proposals of Medicare Advantage organizations.
You may view the entire 194-page Compendium for 2010 here.
Governor Signs Health Care Pricing Transparency Law
Governor Doyle has signed new legislation mandating health care providers to disclose to consumers, upon request, the median charge billed for health care services, diagnostic tests and procedures. This new legislation, originally introduced as 2009 Assembly Bill 164, also requires a health care provider to provide a summary of charges for the provider’s most common services.
Under this bill, the Department of Health Services will be required to identify, on an annual basis, the 25 presenting conditions for which each provider most frequently provides health care services. DHS will prepare these lists in consultation with the Wisconsin Collaborative for Healthcare Quality and using various other claims data. Health care providers will be required to create a single document listing the following charge information for diagnosing and treating each of those 25 presenting conditions: (1) median billed charges; (2) reimbursement amount under Medical Assistance (for participating providers); (3) reimbursement amount under Medicare (again, for participating providers); and (4) the average allowable payment from private third-party payers. The provider must make that list available to consumers upon request, although the list will not constitute a legally binding estimate of the cost to any individual consumer.
The term “health care providers” has the meaning given in Chapter 146 of the Wisconsin Statutes, including hospitals, ambulatory surgery centers, and nursing homes, but does not include providers who practice individually or in an association of less than four individual practitioners.
The bill also contains various disclosure requirements applicable to certain self-insured health plans and insurers, requiring good faith estimates of the median reimbursement that the insurer or self-insured health plan would expect to pay for a specified health care service in the geographic region and of the insured’s total out-of-pocket costs for the specified health care service.
Finally, health care providers must post prominent notices advising consumers of their right to receive charge information from the providers and from their insurers.
This new law will go into effect in early 2011.