In its semi-annual regulatory agenda in the Federal Register Monday, the Department of Health & Human Services (HHS) announced that modifications to the HIPAA privacy, security and enforcement rules will be coming in May.
HHS did not detail exactly which proposed rules would be released, but regulations expected to be issued include the following:
- Business associate (BA) liability
- New limitations on the sale of personal health information, marketing, and fundraising communications
- Stronger individual rights to access electronic medical records and restricting the disclosure of certain information
Watch the von Briesen Health Law Blog for further updates.
Wisconsin Governor Jim Doyle signed a bill on April 19, 2010 to establish an assessment on the gross patient revenues of critical access hospitals (“CAHs”). A portion of the revenue collected under the assessment will be used to increase payments to CAHs under the Medical Assistance Programs, including Medicaid, largely by producing additional federal matching funds. Consequently, the assessment will help offset a 10% cut in Medicaid payments implemented earlier this year, with payment increases beginning July 1, 2010. The assessment will also help fund a rural physician residency assistance program and a loan assistance program for physicians who agree to practice in a rural area. The specific amount of the assessment (a percentage of the gross patient revenues) is not set forth in the bill. A similar assessment was implemented in Wisconsin last year for non-CAHs. You can review the act establishing the assessment here.
The IRS has released Form W-11 to help employers, including tax-exempt organizations, claim the special payroll tax exemption that applies to many newly-hired workers during 2010. The payroll tax exemption was created under the provisions of the Hiring Incentives to Restore Employment (”HIRE”) Act signed by President Obama on March 18, 2010. The HIRE Act created two new tax benefits to encourage employers to hire and retain new employees. Employers who hire previously unemployed workers this year (between February 3, 2010 and January 1, 2011) may qualify for a 6.2% payroll tax incentive, in effect exempting the employer from the employer’s share of social security tax on wages paid to these workers after March 18, 2010. However, employers would still need to withhold the employee’s 6.2% share of social security taxes, as well as income taxes. In addition, for each formerly unemployed worker retained at least one year, employers may claim a new hire retention credit of up to $1,000 per worker when filing annual income tax returns.
The HIRE Act requires that employers get a statement from each eligible new hire certifying under penalties of perjury that he or she was unemployed during the 60 days before beginning work or, alternatively, worked fewer than a total of 40 hours for anyone during the 60-day period. Employers can use Form W-11 to meet this statement requirement.
A list of frequently asked employer questions on the HIRE Act is available here.
Two recent cases demonstrate the consequences of hospital-physician financial relationships that do not comply with Stark.
The first involved a qui tam case against Rush University Medical Center in Chicago. A former Rush employee and a member of Rush’s medical staff blew the whistle on certain medical office leases, calling into question various rent concessions, lack of documentation, and the failure to collect rent from the physician-tenants in a timely and consistent manner, all in violation of Stark. The United States Department of Justice intervened, and contended that these failures tainted Rush’s resulting claims to the Medicare and Medicaid programs, and that Rush improperly certified in its cost reports that the services were provided consistent with applicable law, all in violation of the federal False Claims Act. Rush ultimately settled with DOJ for over $1.5 million.
The second case, also a qui tam action, alleged that Tuomey Hospital in Sumter, South Carolina, violated Stark and the False Claims Act when it paid compensation to various physicians that was in excess of fair market value, not commercially reasonable, and tied to the volume or value of referrals. The whistleblower in the Tuomey action was an orthopedic surgeon whom Tuomey tried, unsuccessfully, to hire. Unlike Rush, Tuomey took the case to trial and convinced the jury that it did not submit false claims to the government. Nevertheless, the jury still concluded that Tuomey had violated the Stark statute, which may result in potential liability of up to $45 million. In so doing, the jury apparently rejected a fair market value opinion that Tuomey had obtained in support of the compensation paid to the physicians.
CMS has issued a display copy of its 2011 Inpatient Prospective Payment System Proposed Rule. CMS proposes to update payment rates to general acute care hospital by 2.4% to adjust for inflation, but apply a -2.9% Documentation and Coding Adjustment (DCA). The DCA would continue CMS’s efforts to adjust payments to account for changes in documentation and coding practices after the adoption of the MS-DRG system. Such changes in coding practices resulted in higher aggregate payments that did not reflect an actual increase in patient severity of illness. CMS is phasing in the DCA adjustments over time. Overall, CMS estimates that after these proposed changes to the payment rates and other factors, the Proposed Rule would cause a 0.1% drop in total payments made to general acute care hospitals for operating expenses. A few other highlights from the Proposed Rule include:
- Proposed additional quality measures for hospitals to report under the Reporting Hospital Quality Data for Annual Payment Update program.
- Proposed changes to Medicare’s hospital conditions of participation regarding the types of practitioners who may provide rehabilitation services and respiratory care services.
- Proposed changes concerning effective dates for provider agreements and supplier approvals.
- Proposed clarifications concerning whether certain taxes are considered allowable costs.
CMS also proposes to update long-term care hospital (LTCH) rates by 2.4% for inflation, but apply a -2.5% DCA. Overall, CMS expects that after these proposed changes and others, total payments to LTCHs to increase by 0.8%.
CMS notes that it did not have time to address provisions in the Patient Protection and Affordable Care Act enacted on March 23, 2010. CMS, however, will issue separate proposed rules relating to provisions of the Act. Comments to the Proposed Rule are due by June 18, 2010. You can review CMS’s display copy here and summaries from CMS here and here.
On April 15, 2010, the President signed the Continuing Extension Act of 2010 (H.R. 4851). The Act, among other actions, delays the 21% cut in Medicare physician reimbursement through May 31, 2010. The cut was originally set to take effect on January 1, 2010, but Congress already delayed the cut several times this year. The latest delay expired April 1, 2010, but CMS instructed contractors to withhold processing claims for ten business days in April in anticipation that Congress would take further action to prevent the cut. The delay once again buys Congress time to fix the sustainable growth rate formula that is responsible for the reimbursement cut. You may access the Act here.
The Department of Health Services’ Division of Quality Assurance released guidance today for health care providers. Specifically, the DQA issued a Quarterly Information Update which, among other things, noted that the Division is not considered a business associate of any health care provider licensed, surveyed or otherwise regulated by DQA. Click here to access this update. The DQA also released frequently asked questions for health care providers. These FAQ’s include helpful interpretation of rules and regulations governing orders, H&Ps, mid-level supervision, etc. These FAQ’s can be found here.
On April 7, 2010 Governor Doyle signed an order creating the Office of Health Care Reform to oversee implementation of national health care reform in Wisconsin. The office will be co-chaired by Wisconsin Secretary of Health Services Karen Timberlake and Wisconsin Insurance Commissioner Sean Dilweg. The office will develop a plan that uses national health care reform to build on Wisconsin’s successful efforts and existing programs and ensures that Wisconsin’s residents and businesses realize the benefits of national health care reform. The state also created a new website, www.healthcarereform.wisconsin.gov , to give residents information on how the changes in health care will affect them.
View the Executive Order.
The mammoth healthcare reform legislation enacted by Congress on March 23, 2010, included a number of provisions aimed at improving the quality and efficiency of healthcare through a transformation of the healthcare delivery system. This article explains exactly what the Act has to say about accountable care organizations (ACOs) and other patient care and reimbursement models and identifies implications for hospitals and physicians who wish to implement these models. Read more…
