Michigan Health Law Link : Michigan Health Care Lawyer & Attorney : Smith Haughey Rice & Roegge Law Firm : Ann Arbor, Grand Rapids, Traverse City

We have been waiting all summer for something to happen with the RAC audits.  Finally, as of August 4th, it looks like the action may beginning to break.  Connolly Consulting, the Recovery Audit Contractor for Region C, has just released a list of seven issues that have been approved by CMS for its initial automated reviews.  These seven "issues" are:

1. Blood Transfusions.
2. Untimed Codes.
3. IV Hydration Therapy.
4. Bronchoscopy Services.
5. Once in a lifetime procedures.
6. Pediatric codes exceeding age parameters.
7. J2505: Injection, Pegfilgrastim, 6 mg.
 

While is it not clear whether these issues are specific only to Connolly and Region C or whether the other RAC auditors will be using this same list to begin their automated reviews, health care providers would be wise to take this list and begin to run some internal data to assess accuracy in coding and billing as it relates to these topics.  Problems should be corrected immediately and over-payments refunded.

For those located in Region B (including Michigan), it is probably a good idea to get in the habit of checking the CGI website on a regular basis going forward to make sure that you have as much advance notice as possible, in the event CGI posts its own list of approved issues for automated review.

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In the face of Section 111 and the industry's effort to comply with same, some good news for a change!

On July 29, 2009, the Second Circuit ruled that the Medicare Secondary Payer Statue does not permit a private individual to file a qui tam action on behalf of the federal government.  In this case, the plaintiff tried to file suit against an insurance company alleging that the company had failed to meet its obligations to ensure that it, and not the Medicare program, paid for certain claims for medical care from its insureds or others it was obligated to cover.  See Woods v. Empire Health Choice, Inc.  No. 07-4208-cv (2d Cir. July 29, 2009).

While this is a great result for health care insurers and self-insured providers who have more than enough to worry about right now, it is also a good reminder of something to be mindful of as more and more individuals are becoming aware of the new lottery game that is the qui tam lawsuit.  For those outside the jurisdiction of the Second Circuit, remember that this decision is something to hope for but not binding on your federal courts.  Good faith efforts to comply with the MSP (and Section 111) reporting obligations is very important both in the context of your interaction with the Medicare program but also in your interaction with your employees and other individuals who may be watching and questioning your conduct and your commitment to do what is right. 

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I just spent three days at a national conference in Baltimore, MD where all things Medicare and Medicaid were discussed.  There is no way to give sufficient detail in a blog post to all that we discussed and all that there is to think about and attend to following this conference but, let me share just a few of the highlights...

The Anti-Markup rule continues to be on the minds of attorneys advising health care providers.  If you work with physicians who bill globally for diagnostic tests that they order, the time is now to make sure that those diagnostic services are being billed appropriately by the physician.  Particularly as it relates to the professional interpretations of those services, the options for physicians are very limited.  More importantly, what was okay last year may not be now so just because it was an arrangement previously blessed, doesn't me that it still is ... time to check.  On the technical component side, remember that the technical component of a diagnostic test is performed where the patient is AND where the supervising physician is while the test is being done.  And, remember that if you don't get this right, you can be left without the ability to bill anything.

Lots of people paying attention to "patient status"... i.e. inpatient, outpatient and observation status.   The coordination of medical staff and hospital bylaws, hospital policies, and physician documentation to get the patient slotted into the correct status seems to have many health care institutions and their attorneys on edge.  Certain the RACs don't help with the stress here.  Pay attention to Condition Code 44 for a patient that you are moving from inpatient to outpatient status.  Apparently, there are a lot of hospitals and providers that may not realize that this change needs to be made BEFORE the patient leaves the hospital if you are going to bill the maximum amount. 

Since I mentioned them, on the subject of RACs, it appears that the "good news" may be that providers will likely see coding audits start before the medical necessity audits.  In addition, it appears that health care providers will get some notice as the RACs expand their medical necessity scope.  CMS has indicated that before RACs can expand the scope of their medical necessity audits to review new "issues", they must get approval from CMS and CMS intends to post those new issues on its Web site if the RACs are granted authority to audit those issues.  On the less good news side of things, physicians should expect to get a fair amount of attention in this round of RAC audits.  CMS has indicated that the RACs will be doing crossover audits of physicians when they find hospital admissions that seem to raise concern.   Condition Code 44 came up in this discussion as well.  Clearly there is a sense that hospitals have not been handling the use of this code correctly.  Finally, CMS has indicated that RACs will have authority to review the use of "present on admission" codes as part of their coding reviews.

But, as usually, the most interesting discussions, at least for me, focused on Stark and the latest word on the DFRR.  The conference began with the buzz about the OIG Open Letter indicating that the voluntary disclosure protocol is no longer available for the disclosure of violations that involve only the Stark law and not the Anti-Kickback statute.   There was much debate about whether this new OIG position suggest that the OIG is overwhelmed by disclosures of potential Stark violations (suggesting that perhaps its too easy for a health care provider to find itself cross ways with Stark) or whether it suggests that OIG intends to more aggressively go after Stark violations and no longer wants providers to seek the safe haven of the voluntary disclosure protocol to take away their opportunity.   I will admit that I tend to be more of a skeptic as to OIG's intentions the more that I think about the DFRR.

The latest word on the DFRR is still that no one knows for sure if or when hospitals that are going to get the DFRR questionnaire will get it.  The expectation is that of the 400 that may go out, approximately 290 of those will go to all of the hospitals that got the original voluntary survey request in 2006 and failed to respond.  That means that if you were not one of those hospitals, your chances are slim that you will get a questionnaire ... at least in this first round.  Still, if you don't feel particularly lucky or just want to continue to move forward in getting a handle on some of your Stark compliance stuff, here are some good suggestions that came out of these discussions: 

• query your accounts payable, check ledgers, and accounts receivable department for a list of ALL financial arrangements involving a physician;
• look for all leases for equipment and space that involve physicians;
• get a complete handle on your non-monetary compensation tracking and your medical staff incidental benefits;
• gather all of the documentation you can find for all of these;
• check them all for compliance with at least one Stark exception;
• for any possible non-compliance, determine whether you are in a "period of disallowance"; and
• before you even think of responding to a DFRR request, if you get one, check with legal counsel.  Because of the details of the questionnaire, how you respond is very important.

Obviously, this is just a small window into what was three solid days of all that is Medicare.  There is certainly more to come on this topic, particularly given that the season of CMS proposed payment rule is just about to begin.

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On November 18, 2008, as part of the 2009 OPPS Final Rule, CMS provided a "clarification" of its position regarding what level of physician supervision is required for the provision of on-campus outpatient therapeutic services.  

Prior to November 2008, the provider community understood that CMS' position was that the direct supervision requirements for services provided incident to a physicin's services in an on-campus outpatient department was properly presumed to be met because staff physicians are always around in a hospital.   CMS has indicated that it is concerned that hospitals have taken its prior expression of presumptive compliance to mean that no supervision was actually required at all. 

While the OPPS Final Rule does not go further to state specifically that a physician must be physically present in an outpatient department of a hospital at all times, this "clarification" does seem to at least open the door for hospitals to be questioned about how, specifically, they meet the direct supervision requirements applicable in their various outpatient departments, where therapeutic services are provided. 

In support of the sense that CMS is moving in this direction, it is also worth noting that in December of 2008, CMS revised language in its Medicare Benefit Policy Manual regarding provider-based services to indicate that "direct supervision" means that a physician must be present and on the premises of the provider-based department and immediately available to furnish assistance and direction.

Hospitals would, in light of these developments, be advised to evaluate all outpatient department and provider-based locations to evaluate the extent to which the services provided at those locations require direct physician supervision and then make sure they have a plan in place to meet that requirement. 

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Health care providers may no longer seek payment directly from sexual assault survivors for any portion of the costs of a sexual assault medical forensic examination, including any insurance deductible, co-pay, denial of claim or other out-of-pocket expenses, if the survivors do not have insurance, or if they refuse to have the claim submitted to their insurance carrier. Instead, effective December 29, 2008, health care providers are eligible to seek reimbursement for these costs directly from the state Crime Victims Services Commission (formerly the Crime Victims Compensation Board).

Prior to seeking reimbursement from the Crime Victims Services Commission, health care providers must advise the patient, either orally or in writing, that a claim will not be submitted to their insurance carrier without their express written consent and that they may decline to consent if they believe that submitting the claim would substantially interfere with their personal privacy or safety. If the patient declines to have the claim submitted to his or her insurance carrier or if the patient is uninsured, the provider may then seek reimbursement from the Crime Victims Services Commission. The provider may not bill the patient directly.

If the patient consents to have the claim submitted to his or her insurance carrier, the health care provider must submit the claim to the patient’s insurance carrier, including Medicare or Medicaid. If reimbursement cannot be obtained from the patient’s insurance carrier, the health care provider may then submit the claim for reimbursement to the Crime Victims Services Commission. If reimbursed by the patient’s insurance carrier for any portion of the claim, the health care provider may not also seek reimbursement from the Crime Victims Services Commission or the patient for the balance of the claim.

In order to be eligible for reimbursement, the examination must include all of the following: collection of a medical history, a general medical examination, a detailed oral, anal, or genital examination, and administration of a sexual assault evidence kit and related medical procedures and laboratory and pharmacological services.

The Crime Victims Services Commission will not pay more than $600 for the cost of performing a sexual assault medical forensic examination. This includes payments up to $400 for the use of an emergency room, clinic, or examination room and the sexual assault medical forensic examination, up to $125 for laboratory services, and up to $75 for dispensing pharmaceutical items related to the sexual assault.

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CMS has submitted its 2009 Physician Fee Schedule Final Rule to the Officer of the Federal Register for publication and the document should be published some time in November.  As is usually the case, CMS has loaded the Physician Fee Schedule Final Rule with lots of interesting information.  In addition to an updated list of the CPT codes that constitute "designated health services" under the Stark Law, and a re-opening of the comment period for the proposed Stark exceptions on gain sharing arrangements, this Final Rule contains a set of newly revised Anti-Markup Rules relative to the reassignment of billing for diagnostic testing services.

Originally, 42 CFR 414.50 contained a rule that prohibited a physician, who intended to bill for the technical component (TC) of a diagnostic test that was performed by someone other than the physician,  from "marking up" the charge for the TC component of the diagnostic test above the actual cost of the test.  In other words, if a physician wanted to purchase certain TCs of diagnostic tests from a hospital and then bill globally for the test (billing the hospital's TC and his own professional interpretation (PC) of the same test) the physician was prohibited from billing more for the TC of the test than what the hospital charged the physician to perform the test.  This rule was generally known as the "Anti-Markup Rule."

In 2008, CMS revised the Anti-Markup Rule so that if a physician or other supplier bills for the TC or PC of a diagnostic test that was ordered by the physician or other supplier (or ordered by someone related to that physician or supplier through common ownership or control) and if the diagnostic test is either purchased from an outside supplier (such as a hospital) or performed at a site other than the office of the billing physician or supplier, the payment to the billing physician or supplier for the TC or PC of that diagnostic test cannot exceed the lowest of : 

1. the performing supplier's net charge to the physician;
2. the billing physician or supplier's actual charge; or 
3. the fee schedule amount for the test that would be allowed if billed by the performing supplier directly.

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On August 15, 2008, HHS released a proposed rule calling for replacement of the ICD-9 diagnosis coding system, used by health care providers to code and bill for medical services, to be replaced by a newer, more detailed system known as ICD-10.   HHS proposes that this change would take affect October 1, 2011 and, while 25 months of notice may be a good thing, it also may not be enough time for many providers and, more importantly, many payers, including Medicare and BCBS to effectuate a shift to the new coding system.  Where the ICD-9 sytem contains approximately 17,000 codes for the identification of various diagnosis that relate to patient care services, the new ICD-10 system contains over 155,000. 

This anticipated ship presents huge opportunites for consultants and coding and billing software vendors and, likely, further financial resources drains for health care providers. 

Read more from the copy of the HHS press release concerning this proposed rule.

A copy of the regulations themselves are located here.

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