CMS released its CY 2011 proposed rules for hospital outpatient departments and ambulatory surgery centers on July 2, 2010. The proposed rules update payment policies and rates for hospital outpatient departments and ambulatory surgery centers. Some of the proposed provisions implement portions of the health reform legislation signed into law in March. As described by CMS, notable provisions of the proposed rule include:
Hospital Outpatient Departments
- Waiver of the deductible and copayment for certain preventive services.
- Additional quality measures to report in CY 2011 (six additional measures, including a health information technology measure), CY 2012 (seven additional measures) and CY 2013 (six additional measures).
- Validation of quality reporting, including review of randomly selected cases from each hospital.
- Changes to the supervision requirements for certain non-surgical extended duration services to require direct supervision for the initiation period of such services, followed by general supervision.
- Payment for the acquisition and pharmacy overhead costs of separately payable drugs and biologicals at an amount equal to the average sales price plus six percent.
- Removal of CPT codes 21193, 21395 and 25909 from the inpatient-only list.
Ambulatory Surgical Centers
- Waiver of the deductible and coinsurance for certain preventive services.
- The addition of five surgical procedures to the list of Medicare-covered ASC procedures.
Other Proposed Rules
- Reduced availability of the physician self-referral exceptions for ownership or investment interests in a “whole hospital” or “rural provider” for new physician-owned hospitals and those looking to expand capacity.
- Changes relating to graduate medical education payment.
You can review a summary of most of these provisions on CMS’s website here. A display copy of the proposed rule is available here. CMS will accept comment until August 31, 2010.
CMS recently released its CY 2011 Medicare Physician Fee Schedule Proposed Rule. Among updated payment policies and rates for services paid under the Medicare Physician Fee Schedule, the proposed rule includes provisions to implement portions of the health reform legislation signed into law in March. As described by CMS, the proposed rule includes provisions, among others, relating to the following:
- Elimination of the deductible and coinsurance that would otherwise apply for most preventive services.
- Coverage of annual wellness visits in which the beneficiary receives personalized prevention plan services.
- Quarterly incentive payments for primary care services furnished by primary care practitioners.
- Quarterly incentive payments for major surgical procedures provided by general surgeons in health professional shortage areas.
- Permission for physician assistants to order post-hospital extended care services.
- An increase in the Medicare payment for certified nurse-midwife services so that it equals 100% of the MPFS.
- Extension of Medicare reasonable cost payments for certain clinical diagnostic laboratory tests performed by hospitals with fewer than 50 beds that are located in certain rural areas as part of their outpatient services.
- An amendment to the in-office ancillary services exception for self-referrals.
- Adjustments to the DMEPOS competitive bidding program (to add 21 metropolitan statistical areas to round 2).
- Modification to the equipment utilization rate assumption for expensive diagnostic imaging equipment used in diagnostic computed tomography and magnetic resonance imaging services.
- Payment revisions for power-driven wheelchairs.
- Reduction of the maximum period for submission of Medicare fee-for-service claims to not more than 12 months.
You can review a summary of each of these provisions on CMS’s website here. A display copy of the proposed rule is available here. CMS will accept comments until August 24, 2010.
The OIG recently published an advisory opinion relating to a proposal for several diagnostic imaging service providers (a clinic and a medical center) to provide free pre-authorization services to physicians and patients. Many insurers require pre-authorization for imaging services. This is a measure intended to prevent over utilization. In the proposed arrangement, the imaging providers would operate a call center that patients and physicians could contact to obtain pre-authorization services. The center would in turn submit necessary information to the insurers.
Before ultimately approving the arrangement, the OIG acknowledged that free pre-authorization services could implicate the federal anti-kickback statute if the intent to induce referrals was present. The OIG noted that free pre-authorization services could constitute prohibited “remuneration” if the physician’s contract with the insurance company required the referring physician to obtain the pre-authorizations. The imaging provider’s provision of the free pre-authorization services would relieve the physician of the burden and expense of obtaining pre-authorizations directly. Additionally, the OIG noted that free pre-authorization services could constitute prohibited “remuneration” even if the insurance contract placed the burden on the imaging provider or did not allocate the responsibility at all. The OIG provided an example in which the physician’s staff is devoting considerable time to obtaining the pre-authorizations and might realize significant savings. Nevertheless, the OIG determined that it would not impose sanctions for the arrangement at issue based on the following factors:
1. Low risk of fraud and Abuse. The arrangement would not target particular referring physicians, but would be available to all patients and physicians regardless of the volume or value of referrals.
2. Additional Safeguards to Reduce Risk of Fraud and Abuse. The imaging providers would not make any payments to the physicians or otherwise have any ancillary agreements with the physicians. Further, the imaging providers would not make assurances to the physicians that the pre-authorization requests would be approved. The imaging providers would only collect and provide documentation of medical necessity as received from the patients or physicians. The arrangement would also comply with all state and federal privacy laws.
3. Transparency. The call center’s staff would identify themselves as representatives of the imaging providers and would disclose the nature of the pre-authorization program. The call center would also provide the referring physicians with a copy of information provided to insurers.
4. Legitimate Business Purpose. The imaging providers have a legitimate business purpose that is wholly distinct from gaining favor with referral sources—that is, it is the imaging providers who have a financial interest at stake and desire to ensure that pre-authorizations are pursued.
The OIG’s advisory opinion only protects the actual requestors of the opinion and cannot be relied on by other entities. That said, it provides helpful guidance because it suggests factors to consider when constructing similar arrangement to reduce anti-kickback risk. You may review the OIG’s Advisory Opinion 10-04 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.
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.
The Federal Trade Commission (FTC) and the Department of Justice (DOJ) announced they will consider updates to the Horizontal Merger Guidelines. Intended to reduce the uncertainty associated with enforcement of the antitrust laws in the merger area, the Guidelines outline the merger enforcement policies of the FTC and the DOJ, including describing the analytical framework and specific standards normally used by the agencies in analyzing mergers. They have not undergone significant revision since 1992. Given legal and economic developments since that time, the FTC and the DOJ believe the time is ripe to solicit public comment and hold joint public workshops to determine whether the Guidelines take into account these developments and to determine whether the Guidelines accurately reflect the current practice of merger review at the FTC and the DOJ.
The agencies will issue a set of questions about the current Guidelines and possible revisions, allowing public comment and agency original research. Afterwards, the agencies will host a series of five workshops, open to the public and the press. The workshops are scheduled to occur in Washington, D.C. on December 3, 2009, and then Chicago, New York City, San Francisco, and a final workshop again in Washington, D.C., throughout the remainder of December and in January 2010. Additional information about the date, time, and exact location of the workshops will be provided at a later date.
The FTC will post a set of questions on its web site. The agencies are particularly looking for comments from attorneys, economists, academics, consumer groups, and the business community. Given the increase in hospital mergers and medical practice acquisitions, members of the health care community should be interested in the agencies’ updates to the Guidelines.
A new study conducted by Health Research Group, a branch of the consumer advocacy organization Public Citizen, revealed that almost half of U.S. hospitals have never reported a privilege sanction to the National Practitioner Data Bank (NPDB). Hospitals are required to report incidents in which a practitioner’s hospital admitting privileges were revoked or restricted for more than 30 days for any issue involving medical competency or conduct. “Underreporting to the NPDB suggests that hospital peer review is not fulfilling the public trust,” the report stated.
However, some have suggested that the decline in reports may actually be attributed to earlier identification and resolution of competency or conduct problems within the 30-day period, thereby eliminating the need to report the incident to the NPDB.
The complete report can be accessed here.
