Today, Congress passed the Middle Class Tax Relief and Job Creation Act of 2012. The legislation includes a ten-month extension to a Medicare physician pay freeze. Without the extension, the sustainable growth rate formula would have required a 27% cut to Medicare physician pay as of March 1.
The U.S. House of Representatives Ways and Means Committee released a summary of the legislation, noting that the ten-month doc fix will be paid for with a 65% decrease in Medicare bad debt reimbursements to hospitals and skilled nursing facilities beginning in FY 2013 for those providers currently reimbursed at 70% as well as a phase-in of the 65% reduction over the next three years for those providers who are currently reimbursed at 100% of their bad debt (e.g., FQHCs and dialysis centers). In addition to the reduction of bad debt reimbursement, the legislation also reduces clinical laboratory services payment rates by 2% in 2013 and cuts Medicaid disproportionate share hospital (DSH) allotments.
This ten-month extension follows a two-month extension approved by Congress in December 2011. The Medical Group Management Association reports that physicians now face the threat of a 35% Medicare payment reduction in 2013.
CMS recently issued a proposed rule outlining requirements for refunding overpayments under the 60-Day Rule. The 60-Day Rule, enacted under the Affordable Care Act, requires hospitals and physicians receiving funds under the Medicare program to report and refund overpayments within 60 days from the date the overpayment is identified or the date the corresponding cost report is due.
Identification of Overpayments – Under the proposed rule, a person has “identified” an overpayment if the person has actual knowledge of the existence of the overpayment or acts in reckless disregard or deliberate ignorance of the overpayment. Further, receipt of information concerning a potential overpayment creates an obligation to make a reasonable inquiry to determine whether an overpayment exists. Failure to make a reasonable inquiry, including failure to conduct the inquiry with all deliberate speed after obtaining the information, could result in knowingly retaining an overpayment.
The proposed rule contains the following non-exhaustive list of examples regarding when an overpayment has been identified:
- A provider/supplier reviews billing or payment records and learns that it incorrectly coded certain services, resulting in increased reimbursement.
- A provider/supplier learns that services were provided by an unlicensed or excluded individual on its behalf.
- A provider/supplier performs an internal audit and discovers that overpayments exist.
- A provider/supplier is informed by a government agency of an audit that discovered a potential overpayment and the provider or supplier fails to make a reasonable inquiry.
- A provider/supplier experiences a significant increase in Medicare revenue with no apparent reason for the increase, but the provider/supplier fails to make a reasonable inquiry into whether an overpayment exists.
Ten-Year Look-Back – The proposed rule includes a ten-year look-back period for overpayments, i.e., overpayments must be reported and returned only if a person identifies the overpayment with ten years of the date the overpayment was received. The ten-year look-back matches the outer limit of the statute of limitations for the False Claims Act. CMS also proposes to amend the reopening rules to be consistent with the ten-year look-back for the 60-Day Rule.
The proposed rule is scheduled for publication in today’s Federal Register. Stakeholders have sixty days to submit comments to CMS.
Yesterday the Departments of Health and Human Services (HHS) and Justice released the Health Care Fraud and Abuse Control Program Report for Fiscal Year 2011 (HCFAC Report). The HCFAC Report outlines monetary recoveries, program accomplishments, as well as enforcement and prevention activities of the Departments of HHS and Justice over the last year.
The government’s health care fraud prevention and enforcement in FY 2011 recovered nearly $4.1 billion in taxpayer dollars. HHS reports that this is the largest fraud and abuse amount recovered from individuals and companies in any single year. The Medicare Trust Funds received approximately $2.5 billion from the recovery, and the Department of the Treasury received more than $599.9 million in federal Medicaid money. Also included in the recovery was approximately $2.4 billion won or negotiated under the False Claims Act.
In addition to monetary results, the HCFAC Report summarizes the government’s enforcement actions during FY 2011, including 743 convictions for health care fraud-related crimes, 977 new civil health care fraud matters, and the exclusion of 2,662 individuals and entities by the Office of Inspector General.
More information on the HCFAC Report and fraud prevention accomplishments is available via the HHS press release. We can anticipate seeing continued emphasis on fraud and abuse in federal health care programs. The Affordable Care Act allows for increased funding and coordination of fraud and abuse control efforts with HEAT teams, enhanced screening requirements, expanded overpayment recovery efforts, and greater oversight of private insurers. Additional information on fraud prevention activities under the Affordable Care Act is available here.
Yesterday, the Departments of Health and Human Services, Labor, and Treasury (the “Departments”) jointly released a final rule requiring health plans to provide consumers with clear, consistent and comparable summary information about benefits and coverage. The Departments developed such standards due to requirements in the Affordable Care Act.
Specifically, the new disclosure requirement sets forth standards for which insurers must provide a short, easy-to-understand Summary of Benefits and Coverage (the “SBC”), including a tool for comparing standardized plans and a uniform glossary of terms commonly used in health insurance coverage. The SBC must be provided in three scenarios:
- By a group health insurance issuer to a group health plan;
- By a group health insurance issuer and a group health plan to participants and beneficiaries; and
- By a health insurance issuer to individuals and dependents in the individual market.
The SBC must include 12 content elements outlined in the final rule, including a description of coverage and cost sharing requirements such as deductibles, coinsurance, and co-payments as well as information regarding any exceptions, reductions, or limitations under the coverage. The SBC must also provide coverage examples for common benefits scenarios like childbirth and treatment for diabetes. In addition, insurers must present the SBC in a uniform format (i.e., a maximum of four pages with no print smaller than 12-point font).
The final rule requires plans issued after September 22, 2012 to provide consumers (including new, late, special and re-enrollees) with the SBC, glossary, and a notice of modification. More information on the final rule is available via HHS’ press release and fact sheet. Templates for the SBC and glossary are available here.
The Centers for Medicare & Medicaid Services’ (CMS) Hospital Compare Website now includes data on healthcare-associated infections. According to CMS, the publication of this data will help hold hospitals accountable for bringing down the rates of infections.
The current infection data published on the website includes facility-specific data on central-line associated blood stream infections (CLABSIs). In its press release, CMS reports that CLABSIs result in thousands of deaths each year and approximately $700 million in additional health care costs. The CDC estimates that 41,000 CLABSIs occurred in U.S. hospitals in 2009, and up to 25% of patients with CLABSIs die from the infection.
CMS’ Hospital Compare website compares each hospital facility with the U.S. National benchmark and state standards. Hospitals were required to report data on central line infections to the Centers for Disease Control (CDC) as of January 2011 as a condition of receiving the 2013 payment update. The Hospital Compare website provides data on over 4,700 U.S. hospitals, including data on process of care, outcome of care, medical imaging, patient experiences, and patient safety. The new infection data is located under the patient safety measures tab of each hospital.
Yesterday the Office of Inspector General (OIG) added a video to its HEAT training website. The newest video outlines the OIG’s tips for implementing an effective compliance program. The six tips include:
- Foster a culture of compliance: Support your compliance program with sufficient resources. A financial commitment to compliance will show the OIG that your organization values integrity.
- Functional policies and procedures: Create policies and procedures that are up-to-date, user friendly, and specific to each job function. Include real-life compliance issues faced by your organization.
- Training: Offer compliance training often, and make it creative and current.
- Promote communication: Make your compliance department visible and approachable, talk about your organization’s non-retaliation policy in staff meetings, and solicit feedback with anonymous online surveys.
- Take appropriate corrective action: Develop a system to track and respond quickly and thoroughly, act promptly when potential issues are identified, and document corrective action. Be mindful to avoid conflicts of interest with staff involved in investigations. Track resolution of compliance issues, and familiarize yourself with the OIG self-disclosure protocol.
- Audits: Conduct regular audits in risk areas (e.g., coding, contracts, and quality of care) and investigate root causes. Review your compliance plan including whether you are meeting benchmarks and whether corrective action plans are sufficient.
The OIG video is available here.
The U.S. Department of Health and Human Services (HHS) announced yesterday that premium increases proposed by an insurer in five states were “unreasonable” and “excessive.” HHS has authority under the Affordable Care Act to review premium increases over 10% to determine if such increases are reasonable. If HHS determines that a premium increase is unreasonable, the insurance company must post a justification on its website within 10 days.
The rate increase at issue in yesterday’s announcement is a 13% increase by Trustmark Life Insurance Company which would affect approximately 10,000 residents in Alabama, Arizona, Pennsylvania, Virginia, and Wyoming. In addition, small businesses in Alabama and Arizona experienced rate increases of 27.2% and 18.1%, respectively, when combined with other rate increases over the last year. After a review by independent experts, HHS concluded that Trustmark’s rate increases were unreasonable because (1) the insurer would be spending a low percent of premium dollars on actual medical care and quality improvement and (2) Trustmark’s justifications were based on unreasonable assumptions.
This is not the first rate increase that HHS has found “excessive” under HHS’ rate review authority. HHS determined that a November 2011 12% rate increase for small businesses in Pennsylvania was excessive. A majority of states also have the authority to review rate increases to determine if they are unreasonable.
Additional information regarding HHS’ rate review authority and process is available here.
The U.S. Department of Justice (DOJ) recently filed a brief to the U.S. Supreme Court defending the constitutionality of the individual mandate provision of the Affordable Care Act (ACA).
The DOJ’s brief delineates the administration’s main legal arguments:
- The minimum coverage provision of the ACA falls “well within” Congress’ commerce power. In making this argument, the DOJ contends that Congress has broad power under the Commerce Clause and the Necessary and Proper Clause to enact economic regulation. Further, the DOJ contends that the minimum coverage provision is an integral part of a comprehensive scheme of economic regulation, and the provision itself regulates the economic conduct with a substantial effect on interstate commerce.
- The minimum coverage provision is independently authorized by Congress’ taxing power. The DOJ argues that the provision operates as a tax law, and the validity of an assessment under Congress’ taxing power does not depend on whether it is denominated a tax.
Briefs due later in January and February address other issues involved. The Health Law team at von Briesen will continue to monitor and report on the progress of the ACA challenge, including additional briefs by the parties.
The Centers for Medicare & Medicaid Services (CMS) announced yesterday an interim final rule that adopts standards for electronic funds transfers (EFT) under HIPAA. According to CMS, the standards could reduce administrative costs for physicians, hospitals, and private and government health plans by up to $4.5 billion over the next ten years.
The final rule outlines two standards that health plans must comply with in order to use EFT to transmit health care claim payments to providers. First, health plans must use a standard format when ordering, authorizing, or initiating an EFT with their financial institutions. Second, the rule outlines the data content to be contained within the EFT.
The interim final rule is the second in a series of regulations mandated by the Affordable Care Act (ACA). Under the ACA, CMS is required to issue regulations designed to streamline health care administrative transactions, encourage greater use of standards among providers, and increase the efficiency of standards. Yesterday’s rule follows a July 2011 interim final rule (76 FR 40458) establishing operating rules for patient eligibility for coverage and health care claim status.
According to CMS, future rules will address the following: (1) a standard unique identifier for health plans; (2) a standard for claims attachments; and (3) requirements that health plans certify compliance with all HIPAA standards and operating rules.
Covered entities must use the health care EFT standards by January 1, 2014. A fact sheet on the interim final rule is available here. CMS is accepting comments on the rule via mail, hand delivery, or electronic submission.
The U.S. Department of Justice (DOJ) announced yesterday that GE Healthcare Inc. will pay $30 million plus interest in order to settle allegations that its subsidiary, Amersham Health Inc., violated the False Claims Act (FCA). According to the DOJ, Amersham Health violated the FCA by causing Medicare to overpay for a radiopharmaceutical used in cardiac diagnostic imaging procedures.
The radiopharmaceutical, Myoview, is used to detect heart disease and see blood flow in images of hearts. The drug is distributed in multi-dose vials, and the number of doses available from the vials is part of the formula used to determine Medicare payment rates for the drug. The DOJ claims that Amersham Health provided false or misleading information regarding the number of doses available from vials, which, in turn, caused the federal government to pay artificially inflated Medicare rates for the drug.
The settlement arises from a 2006 qui tam whistleblower lawsuit filed under the FCA. The whistleblower sold a drug called Cardiolite, a competitor of Myoview. The whistleblower will recover $5.1 million from the DOJ’s $30 million recovery.
