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.
Two healthcare reform proposals have been introduced that create a separate self-disclosure process for federal Stark law violations, both intentional and unintentional. The proposals follow the OIG’s recent announcement, through a March 24, 2009 Open Letter, that it no longer will accept voluntary self-disclosures through its protocol if such disclosures do not involve a minimum $50,000 settlement amount and a colorable anti-kickback violation. The proposals also call for the relaxation of the automatic forfeiture liability approach currently taken with under Stark, which totally denies reimbursement in the event of a Stark violation, regardless of the facts and circumstances. The two different proposals are sponsored by Rep. Jim McDermott (D-WA) and Sen. Max Baucus (D-MT). Rep. McDermott hopes to include his proposal (H.R. 3556) as an amendment to the House’s health care reform bill. Sen. Baucus has included his proposal as part of the Senate Finance Committee’s health care reform bill. If you have any questions regarding this proposal, please contact our Health Law Practice Group.
A New Jersey hospital has agreed to pay the government $8.3 million to settle allegations that it illegally paid kickbacks to cardiologists and caused the submission of false claims to Medicare. The government alleged that the hospital provided several area cardiologists with sham employment positions that included little or no actual employment responsibilities. The government alleged that the employment agreements served as vehicles to pay illegal kickbacks to the cardiologists in return for their referrals.
Marc Larkins, 1st Assistant U.S. Attorney for the District of New Jersey, noted that “The Department of Justice continues to pursue those who make referrals based on financial, rather than patient health, considerations.”
Click here to read more on this settlement.
On September 4, 2009, the Department of Justice announced that it will not challenge a proposal between two hospitals to enter into an exclusive joint purchasing agreement with respect to the purchase of certain medical and surgical supplies. Under the agreement the hospitals will jointly evaluate medical and surgical products, designate suppliers and negotiate prices and other terms.
The Department said that the joint purchasing agreement may yield volume discounts and reduced transaction costs for the hospitals and ultimately could result in lower costs and increased hospital services for consumers.
Click here to read more.
On September 1, 2009, CMS delayed the implementation date of a new Medicare Program Integrity Manual provision that restricts the use of consignment closets or stock and bill arrangements in physician offices by suppliers of durable medical equipment, orthotics and supplies (DMEPOS). The new implementation date is March 1, 2010.
The new requirements affect the enrollment standards for enrolled physicians or non-physician practitioners as well as enrolled suppliers of DMEPOS. Consignment closets or stock and bill arrangements with hospitals and other facilities are not impacted by these changes at this time.
Under the new requirements, Medicare will only allow DMEPOS suppliers to maintain inventory at a practice location owned by a physician or non-physician practitioner for the purpose of DMEPOS distribution when the following conditions are met by the DMEPOS supplier:
- The title to the DMEPOS shall be transferred to the enrolled physician or non-physician practitioner’s practice at the time the DMEPOS is furnished to the beneficiary.
- The physician or non-physician practitioner’s practice shall bill for the DMEPOS supplies and services using their own enrolled DMEPOS billing number.
- All services provided to a Medicare beneficiary concerning fitting or use of the DMEPOS shall be performed by individuals being paid by the physician or non-physician practitioner’s practice, not by any other DMEPOS supplier.
- The beneficiary shall be advised that, if they have a problem or questions with the DMEPOS, they should contact the physician or non-physician practitioner’s practice, not the DMEPOS supplier who placed the DMEPOS at the physician or non-physician practitioner’s practice.
Click here to read the new compliance standards.
Rep. Jackie Speier (D-CA) introduced HR 2962, or the Integrity in Medicare Advanced Diagnostic Imaging Act of 2009 that would amend Title XVIII of the Social Security Act. The bill would exclude diagnostic MRIs, CT, and PET from the exception to the Stark Law for in-office ancillary services. Group practices typically rely on this exception to provide patients with access to imaging services in their offices rather than sending patients to third party providers.
It appears likely that the bill will be incorporated into the Healthcare Reform Package that is currently being debated in the Energy and Commerce Committee. Supporters of the bill contend that the over utilization of imaging services through the practice of self-referral places a burden on an already cash strapped Medicare system. Opponents of the bill contend that the existing exception recognizes that referrals within a group practice promote quality, efficiency, and advance the continuity of care offering substantial benefit to patients. Read the bill here.
On April 20, 2009, a federal judge from the District of Columbia dismissed a lawsuit brought by several cardiac catheterization facilities and their physician-owners challenging CMS’s expanded definition of “entity” under Stark Law. The new definition, set to become effective October 1, 2009, effectively eliminates the use of “under arrangements” by prohibiting physicians from referring Medicare patients to entities that perform DHS, in addition to entities that bill for DHS. According to the plaintiffs, the new definition is contrary to congressional intent, based on an impermissible construction of the Stark Law and exceeds the agency’s authority. Ultimately, the suit was dismissed without discussion as to the legality of the new definition. Rather, the judge dismissed the suit on jurisdictional grounds, relying on the general rule that the Medicare Statute precludes federal question jurisdiction to hear pre-enforcement challenges to Medicare regulations before a claimant exhausts its administrative remedies prior to filing suit.
To see the opinion, click here.
New restrictions on per-click and percentage-based leasing arrangements and “under arrangements” provider agreements become effective October 1, 2009. These limitations will significantly diminish the ongoing utility of these models as a vehicle for hospital/physician collaboration. Hospitals and physicians now have four months to restructure or abandon non-compliant arrangements, as existing arrangements will not be grandfathered under the new rules. Read more…
In a formal statement before the U.S. Senate Committee on Finance’s April 21, 2009 Roundtable Discussion on Health Care Reform, Chief Counsel to the Inspector General, Lewis Morris, discussed why combating waste, fraud, and abuse must be an essential component of any strategy to reform the health care system. Morris emphasized OIG’s impressive return on investment when it comes to fraud and abuse enforcement. Morris noted that from FY 2006 through FY 2008, OIG’s investigative receivables averaged $2.04 billion and its audit disallowances resulting from Medicare and Medicaid oversight averaged $1.22 billion per year. The result was a Medicare and Medicaid specific return on investment for OIG oversight of $17:$1. In addition, in FY 2008, implemented OIG recommendations resulted in $16.72 billion in savings and funds put to better use. OIG opened 1,750 new health care fraud investigations and had over 2,500 health care investigations open at the end of FY 2008.
Morris detailed the following five principles for combating health care fraud, waste, and abuse:
1. Scrutinize individuals and entities that want to participate as providers and suppliers, prior to their enrollment in health care programs.
2. Establish payment methodologies that are reasonable and responsive to changes in the marketplace.
3. Assist health care providers and suppliers in adopting practices that promote compliance with program requirements, including quality and safety standards.
4. Vigilantly monitor the programs for evidence of fraud, waste, and abuse.
5. Respond swiftly to detected frauds, impose sufficient punishment to deter others, and promptly remedy program vulnerabilities.
To be sure, health care reform will include comprehensive fraud and abuse enforcement as a critical cost saving component. You can view the complete statement here.
The Office of Inspector General (OIG) for the Department of Health and Human Services has entered into a Civil Monetary Penalty (CMP) settlement agreement with West Valley Imaging Limited Partnership. The defendants will pay $2 million to resolve allegations that they submitted false or fraudulent claims to Medicare. OIG alleged that the defendants intentionally defrauded Medicare by improperly providing diagnostic tests to Medicare beneficiaries without the required treating physicians’ orders, billing for certain tests under CPT codes not supported by the medical records, and failing to satisfy certain other Medicare billing and coverage requirements. The $2 million settlement is one of the largest ever negotiated under OIG’s CMP authority. A link to the full civil monetary penalty settlement release is here.
