von Briesen Health Law Blog

July 26, 2011

American Academy of Pediatrics Releases New Emergency Pediatric Consent Guidelines

Filed under: Patient Care Issues — Meghan O'Connor @ 3:00 pm

Recommendations from the American Academy of Pediatrics (AAP) provide new guidelines for those situations when parental consent is not readily available, unnecessary, or when a parental refusal of consent could harm the child. The recommendations, entitled “Consent for Emergency Medical Services for Children and Adolescents,” provide an update to previous statements published by the AAP in 1993 and 2003.

The AAP provides recommendations for a number of contexts including: unaccompanied minors, emancipated minors, minors who present with someone who is not authorized to provide consent, refusals of consent, language barriers, confidentiality, prehospital consent, consent during a disaster, and consent for research in the emergency setting.

The AAP outlines EMTALA obligations, parental duties, and exceptions that allow parties other than legal guardians to provide consent. The AAP recommends that all minors who present to an emergency services provider should receive an initial medical screening examination regardless of presence of a legally authorize decision-maker who can provide consent.

The AAP’s full policy statement is available here or in the August issue of Pediatrics.

July 25, 2011

ALJ Upholds OIG’s Eight-Year Exclusion of Company Owner

Filed under: Fraud and Abuse — Meghan O'Connor @ 1:03 pm

In yet another example of the OIG’s use of its exclusionary authority against individuals, an Administrative Law Judge (ALJ) upheld the OIG’s exclusion of Michael D. Dinkel, the owner and President of a diagnostic imaging company. Dinkel has been excluded from participation in all Federal health care programs for a period of eight years.

The OIG has the authority to exclude individuals and entities from Federal health care programs for presenting or causing to be presented claims for items or services that the individual or entity knows or should know where not provided as claimed, or are otherwise false or fraudulent.

According to the OIG’s press release, Dinkel and his company, Drew Medical, Inc., submitted approximately 9,500 false claims worth $1.6 million to the Medicare and Medicaid programs for services related to venography, a radiology procedure. The OIG found that no venography services had actually been performed. Instead, claims were submitted to Medicare and Medicaid for a corresponding procedural code for MRI and CT procedures with contrast. Prior to Dinkel’s exclusion, a $1,147,564 civil False Claims Act settlement had been entered into with Dinkel and his company.

The ALJ found that Dinkel had a duty “to understand Medicare and Medicaid billing requirements and apply them scrupulously to the claims that he caused to be presented.” Furthermore, Dinkel’s failure to ensure his company properly claimed reimbursement “constituted reckless indifference to the propriety of the claims he cause to be presented.”

The ALJ’s full decision is available by request from the OIG.

OIG Advisory Opinion Allows Proposed “Preferred Hospital” Network Arrangement for Medigap Insurance Policies

Filed under: Medicare/Medicaid Compliance — Meghan O'Connor @ 10:23 am

On July 21, 2011, the Office of Inspector General (OIG) posted Advisory Opinion 11-09, a favorable opinion regarding a Proposed Arrangement to utilize a “preferred hospital” network as part of Medicare Supplemental Health Insurance (“Medigap”) policies. Providers would indirectly contract with hospitals for discounts on otherwise applicable Medicare inpatient deductibles for their policyholders, in turn providing a $100 premium credit to policyholders who used a network hospital for an inpatient stay.

The OIG concluded that even though the Proposed Arrangement would not qualify under statutory safe harbors, based on the totality of facts and circumstances, including a low risk of fraud or abuse and a potential for significant savings for beneficiaries, sanctions under the Anti-Kickback law would not be warranted.

In particular, the OIG pointed out that the discounts offered on inpatient deductibles by the network hospitals would present a low risk of fraud or abuse because:

(1) per service Medicare payments would not be increased or affected,

(2) the discounts should not increase utilization,

(3) because membership would be open to any accredited, Medicare-certified hospital meeting applicable state laws, competition among hospitals should not be unfairly affected, and

(4) professional medical judgment would not likely be affected because the physician or surgeon receives no remuneration.

Further, the OIG recognized that the premium credit to patients would have substantially the same purpose and effect as a differential in coinsurance or deductible amounts. These are allowed under a statutory exception as part of a benefit plan design if the differential has been properly disclosed and otherwise meets the requirements of any corresponding regulations. In addition, the OIG noted that the Proposed Arrangement not only has the potential to lower Medigap costs for policyholders who utilize the network, but may also potentially lower costs for all policyholders.

The entire Advisory Opinion is here.

Thank you to Julie Bernard, Summer Associate, for her help in preparing this blog post.

July 20, 2011

Covenant v. Wauwatosa: Wisconsin Supreme Court Addresses the Nonprofit Hospital Exemption

Filed under: Governance and Tax Exemption — David Edquist @ 1:52 pm

The Wisconsin Supreme Court yesterday released a landmark decision involving the availability of a property tax exemption for freestanding outpatient facilities. In the case, Covenant Healthcare System, Inc. v. City of Wauwatosa, the Supreme Court determined that the exemption under section 70.11(4m) of the Wisconsin Statutes applied to the St. Joseph Outpatient Center in the City of Wauwatosa (the “SJOC”). In reaching this decision, the Supreme Court rejected the Court of Appeals’ characterization of the SJOC as a non-exempt “doctor’s office” and also determined that the SJOC met other legal requirements for the exemption.

The Non-Profit Hospital Exemption
Section 70.11(4m) of the Wisconsin Statutes provides an exemption from property taxes for nonprofit hospitals. There are a number of restrictions on this exemption, however, both as to the nature of the hospital and as to how the property is used. As to the former, the exemption is available to a “hospital of ten beds or more devoted primarily to the diagnosis, treatment or care of the sick, injured or disabled, … no part of the earnings of which inures to the benefit of any … member.” The property must be “used exclusively” for the purposes of the nonprofit hospital, but the property may not be used as a “doctor’s office” or for “commercial purposes.” Each of these restrictions was in play in the Covenant case, but the most significant debate centered on whether the SJOC was a “doctor’s office” within the meaning of the statute.

With the increase in freestanding outpatient departments, the line between a traditional doctor’s office and traditional hospital operations has become increasingly difficult to define. Two Wisconsin appellate decisions have provided conflicting guidance on this grey line. See St. Elizabeth Hospital, Inc. v. City of Appleton (1987), and St. Clare Hosp. of Monroe, Wis., Inc. v. City of Monroe (1997). In the wake of this uncertainty, municipal assessors have increased their scrutiny of outpatient departments as potential “doctors’ offices.” Until yesterday’s decision, the Wisconsin Supreme Court had yet to address the “doctor’s office” language in the nonprofit hospital exemption.

Background
SJOC is an off-campus hospital-based outpatient department of St. Joseph Regional Medical Center, Inc., a Wisconsin nonprofit corporation. Covenant Healthcare System, Inc. is the sole member of St. Joseph. Covenant requested a property tax exemption for the SJOC from the City of Wauwatosa each year from 2003 to 2006 (the tax years in dispute). The city assessor denied the property tax exemption for each of those years; Covenant paid the assessed tax and brought an action to recover the assessments.

In March 2009, a Milwaukee County trial court judge found that the SJOC was exempt from property taxes under the nonprofit hospital exemption. In August 2010, the Court of Appeals reversed the trial court’s decision, holding that the SJOC was a doctor’s office and therefore not eligible for the property tax exemption. The Court of Appeals ultimately focused on a simple distinction:

A doctor’s office is a place where doctors see patients, mostly by appointment, during scheduled business hours, and have their offices.
A hospital is a place that offers inpatient, overnight care.

The Court of Appeals held that the SJOC was a “doctor’s office.” As a result of this decision, many assessors assumed that freestanding hospital outpatient departments would be treated as the functional equivalent of a doctor’s office for property tax exemption purposes.

Covenant sought review by the Supreme Court. von Briesen & Roper filed two briefs on behalf of the Wisconsin Hospital Association (WHA), and the Supreme Court heard oral arguments in April of this year.

July 19, 2011

Supreme Court Reverses Covenant

Filed under: Governance and Tax Exemption, Legislation Watch — David Edquist @ 7:16 am

The Wisconsin Supreme Court has just issued its decision in Covenant Healthcare v. City of Wauwatosa, a key decision involving the availability of a property tax exemption for freestanding outpatient facilities. The Supreme Court has ruled in favor of Covenant and the exemption, rejecting every argument raised by the City of Wauwatosa and reversing the Court of Appeals. The Court concluded that the St. Joseph’s Outpatient Center involved in the case met the criteria for exemption under section 70.11(4m) of the Wisconsin Statutes insofar as it was (a) used for the primary purposes of a nonprofit hospital, (b) not a doctor’s office, and (c) not used for a commercial purpose. The Court also concluded that although earnings of St. Joseph’s might inure to the benefit of Covenant, this did not violate the prohibition in section 70.11(4m) against earnings inuring to the benefit of a “member” — the Court concluded that the term “member” was not intended to apply to a not-for-profit entity such as Covenant.

Chief Justice Shirley Abrahamson dissented. Justice Abrahamson concluded that the outpatient center was tantamount to a “doctor’s office” and therefore ineligible for exemption since the center was substantially similar to independent physician-owned outpatient clinics that would not meet exemption criteria under the statute. While acknowledging that loss of an exemption might have a significant impact on rural hospitals and other providers, Justice Abrahamson stated that it was the legislature, not the courts, that would need to address those concerns.

To access this opinion, click here.

July 18, 2011

Congressmen Introduce Bill to Repeal HSA Provision of ACA

Filed under: Legislation Watch — Meghan O'Connor @ 9:58 am

Lawmakers in both the House and Senate introduced bipartisan legislation last week to repeal a provision of the Affordable Care Act (ACA). The ACA provision, effective since January 1, 2011, requires a prescription for buying over-the-counter (OTC) medications with medical savings accounts (e.g., health savings accounts and flexible spending accounts).

The proposed legislation, titled the Restoring Access to Medication Act (S.1368/H.R.2529), was introduced by Sens. Ben Nelson (D-NE) and Pat Roberts (R-KS) in the Senate and Reps. Lynn Jenkins (R-KS) and Shelley Berkley (D-NV) in the House. If passed, the bill would allow consumers participating in a medical savings account to use funds from their account to purchase over-the-counter medications without first getting a prescription.

The proposed legislation has support from physicians and consumer advocacy groups. The Consumer Healthcare Products Association (CHPA), which represents manufacturers and distributers of OTC medicines, has released a statement of support for the legislation. The CHPA also cited a recent survey that found 90% of consumers prefer to use OTC medications for treatment before seeing a healthcare provider. Physicians have reported an increase in medical appointments for the sole purpose of writing prescriptions for OTC medications.

The proposed legislation has been referred to the Senate Finance Committee and the House Ways and Means and Appropriations Committees.

July 15, 2011

Statutory Increase in Medical Records Fees

Filed under: Legislation Watch, Records and Technology — Lisa Gingerich @ 1:40 pm

Gov. Scott Walker signed the budget act, 2011 Wisconsin Act 32, at a ceremony in Green Bay on Sunday, June 26, 2011. The new state budget act increases the statutory fees that medical record custodians can charge for copies of patient health care records. The new fee rates took effect July 1, 2011.

Medical record custodian advocates sought repeal of the statutory fee schedule, but the State Bar of Wisconsin’s litigation section and other organizations opposed repealing the statutory fee schedule. Without a statutory limit or administrative rule, higher fees were expected. A compromise was reached which preserved the fee limits, but raised some of the fees.

Effective July 1, 2011, a health care provider may charge no more than the total of all the following fees (subject to the exceptions below):

(a) for paper copies, $1 per page for the first 25 pages, 75 cents per page for pages 26 to 50, 50 cents per page for pages 51 to 100, and 30 cents per page for pages 101 and above;

(b) for microfiche or microfilm copies, $1.50 per page;

(d) if the requester is not the patient or a person authorized by the patient, a single $8 charge for certification of copies and a single retrieval fee of $20 for all copies requested;

(e) actual shipping costs and any applicable taxes.

Health care providers continue to be prohibited from charging DHS more than the Social Security Administration reimburses for copies of patient health care records, if DHS requests copies of a patient’s health care records for use in determining eligibility for social security disability insurance or supplemental security income. The budget act also prohibits a health care provider from charging more than 25% of the applicable fees for providing one set of copies of a patient’s health care records if the patient is eligible for medical assistance.

Beginning on July 1, 2012, the budget act requires the state Department of Health Services (DHS) to annually adjust the dollar amounts by the percentage difference between the consumer price index for the preceding year and the consumer price index for the year before the preceding year.

Seven of Nine Circuits Now Recognize Implied False Certification Liability Under the False Claims Act

Filed under: Fraud and Abuse — Meghan O'Connor @ 1:07 pm

The Third Circuit Court of Appeals recently joined the Second, Sixth, Ninth, Tenth, Eleventh, and District of Columbia Circuits in adopting the implied false certification theory of liability under the False Claims Act (FCA). Implied false certification liability attaches to a party when it makes a claim for payment from the Government without disclosing that it violated regulations affecting its eligibility for payment. Rodriguez v. Our Lady of Lourdes Med. Ctr., 552 F.3d 297, 303 (3d Cir. 2008). The Third Circuit case, U.S. ex. rel. Willis v. United Health Group, Inc., partially reversed the dismissal of qui tam claims against United Health Group and its subsidiaries (United) offering Medicare Advantage (MA) plans.

District Court

The relators alleged that United sales representatives violated the FCA by offering kickbacks to physicians in violation of the Anti-Kickback Statute (AKS), and failing to comply with MA marketing rules. The district court dismissed the complaint because the relators did not identify a single claim for payment to the government, allege that United specifically certified compliance with the AKS, or demonstrate that the government issued payments based on a certification of compliance.

Third Circuit Court of Appeals

The Third Circuit held that FCA liability may exist even though a complaint does not identify a particular false claim if the defendant submitted a claim for payment while knowingly being out of compliance with a statute/regulation to which it had certified compliance. Yet, the court limited application of the implied theory; liability for implied certification will attach only if compliance with the particular statute/regulation is a condition for government payment (rather than merely a condition for participation in federal health care programs).

Consequently, the court held that United was liable for the AKS claims under the implied false certification theory. United was required to certify monthly as to its continued compliance with Medicare guidelines in order to be eligible for participation under the federal health care program. The AKS was part of those Medicare guidelines, and compliance with them was an express condition of payment. However, the court affirmed the dismissal of the marketing claims because compliance with the marketing rules was only a requirement for Medicare participation, not payment.

July 11, 2011

HHS Releases Proposed Rule on Health Exchanges

Filed under: Legislation Watch — Meghan O'Connor @ 10:47 am

Today, the U.S. Department of Health and Human Services (HHS) issued a proposed rule that governs how states will build and run Affordable Insurance Exchanges (Exchanges). Established under the Affordable Care Act, Exchanges are state-based marketplaces where individuals and small business can purchase health insurance. If finalized, the rule sets minimum standards for Exchanges, which are set to become operational by January 1, 2014.

In a news release, HHS highlighted two key areas of guidance to states on how to structure their Exchanges:
• Setting standards for establishing Exchanges, setting up a Small Business Health Options Program, performing the basic functions of an Exchange, and certifying health plans for participation.
• Ensuring premium stability for plans and enrollees in the Exchange.

The rule proposes an Exchange approval process, including submission of an Exchange Plan and an operational readiness assessment by HHS. The rule also outlines an Exchange Plan review process similar to Medicaid and CHIP (i.e., a 90-day review period).

More information about Exchanges is available here.

July 8, 2011

CMS Releases 2012 Physician Fee Schedule Proposed Rule

Filed under: Billing and Payment — Meghan O'Connor @ 10:21 am

CMS issued a proposed rule (CMS-1524-P) with updates to the payment policies and rates for the Medicare Physician Fee Schedule (MPFS).

In a press release, CMS highlighted the following changes in the proposed rule:

Expansion of the multiple procedure payment reduction to the professional component of advance imaging services; specifically, CT, MRI, and ultrasound.
Proposed criteria for a health risk assessment for use in conjunction with annual wellness visits.
Addition of smoking cessation services to the list of telehealth services.
Proposed quality and cost measures for establishing a new value-based modifier to reward physicians for higher quality and more efficient care.
Implementation of the third year of a four-year transition to new practice expense RVUs.
Continued efforts to identify potentially misvalued codes.

CMS noted its projected conversion factor of 29.5% for 2012 based on the application of the sustainable growth rate formula. CMS does not address this in the proposed rule because a reduction in the 2012 factor can only be addressed with a change in law.

CMS is accepting comments on the proposed rule until August 30, 2011.

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