Provider Credit Balances Result in $6.8 Million Overpayment Settlement

bonus calculationBy: Karina Gonzalez

USA v. Pediatric Services of America –  settlement under the False Claims Act involving a health provider’s failure to investigate credit balances on its books to determine whether they resulted from overpayment by a federal health care program.

The U.S. Attorney for the Northern District of Georgia  announced that Pediatric Services of America Healthcare, Pediatric Services of America, Inc., Pediatric Healthcare, Inc., Pediatric Home Nursing Services (collectively, “PSA”), and Portfolio Logic, LLC agreed to pay $6.88 million ($6,882,387) to resolve allegations that PSA, a provider of home nursing services to medically fragile children, knowingly (1) failed to disclose and return overpayments that it received from federal health care programs such as Medicare and Medicaid, (2) submitted claims under the Georgia Pediatric Program for home nursing care without documenting the requisite monthly supervisory visits by a registered nurse, and (3) submitted claims to federal health care programs that overstated the length of time their staff had provided services, which resulted in PSA being overpaid.

“Participants in federal health care programs are required to actively investigate whether they have received overpayments and, if so, promptly return the overpayments,” said United States Attorney, John Horn. “This settlement is the first of its kind and reflects the serious obligations of health care providers to be responsible stewards of public health funds.”Continue reading

Big Changes to Federal DHS Supervision Rules

By: Jeff Cohen

Proposed changes to the “incident to services” rule in the 2016 Medicare Physician Fee Schedule are set to seriously impact how medical practices provide certain services, bill for them and share income from those services.

Incident to services are services or items that are furnished as an integral part of the professional services of a physicians or other practitioner in the course of diagnosis or treatment.  80 Fed. Reg. at 41785.  They are billed to CMS as though the physician actually provided the service.  One of the rule’s key requirements is that a physician directly supervise the performance of the services, which has meant that a physician who is part of the practice has to be physically present in the office when the services are provided.  If, for instance, a physician in the practice was present when physical therapy or diagnostic imaging was provided to a patient, the services could be billed to CMS as though the physician actually provided the services, even though the service was provided by, for instance, a licensed physical therapist or imaging technician.      Continue reading

Medicare Physician Fee Schedule Full of Surprises

Bill Tracking SpyglassBy: Jeff Cohen

When new healthcare regs come out, we all get excited.  “What sort of nuggets will I find that could be useful?”  Sometimes the regs have useful things and sometimes, they’re just disappointing and frustrating.  The proposed changes to the 2016 Medicare Physician Fee Schedule are a mixed bag.  Allow me to illustrate:

The incident to rules may be changed to require only the ordering physician to supervise the performance of the service.  Currently, any physician in a group practice could supervise the performance of an incident to service (which allows the practice to bill for the service as though it had been performed by the ordering physician);

Qualified telemedicine services that are furnished via an interactive telecom system can be furnished by a physician or authorized practitioner for an additional list of services, including CRNAs.  This is a big change that expands the list of authorized providers;

The feds propose to characterize certain Stark Law violations as “technical,” which means they pose no financial risk to the Medicare program.  Examples include unsigned or expired agreements;Continue reading

2015 Healthcare M&A Turnaround Study

2015-ma-turnaround-coverThe Healthcare Transaction Advisors 2015 M&A Turnaround Study analyzes trends in patient volumes, payor mix, staffing, and costs before and after business ownership changes for over 2,500 healthcare transactions. The study subjects include 539 hospitals, 1,644 skilled nursing facilities, and 350 home health agencies that were unprofitable during the year before they filed for a change of ownership with Medicare.

Healthcare Transaction Advisors solicited a expert panel of seven healthcare transaction professionals to review the findings, including the Founder and President of Florida Healthcare Law Firm, Jeffrey L. Cohen. Click here to download a free copy of the study!

The Anti Kickback Statute: What Constitutes a “Referral”?

healthcare fraud

anti kickbackBy: Jackie Bain

Providers of healthcare items or services are well-served to take note: a Federal Court of Appeals has recently held that “the Anti Kickback Statute prohibits a doctor from receiving kickbacks that are made in return for a referral. It does not require that the referral be made in return for a kickback.”  Thus, receiving any unauthorized payment from a health care provider to whom you send patients is a very bad idea.

The Federal Anti-Kickback Statute, 42 USCS § 1320a-7b(b) states, in pertinent part, that a person may not knowingly or willfully solicit or receive any remuneration directly or indirectly, overtly or covertly, in cash or in kind, in return for referring an individual for the furnishing of a healthcare item or service that is payable in whole or in part by a Federal healthcare program. In laymen’s terms, a person cannot pay or receive anything of value in return for furnishing a Medicare patient to receive a healthcare item or service. (Note, however, that the law does set forth examples of permissible payments, or “safe harbors,” but we won’t address those in this article.)Continue reading

The Reality of the “Economic Realities Test”

contractBy: Valerie Shahriari & Jacqueline Bain

Across the healthcare industry, providers and healthcare businesses are consistently faced with the decision of whether to employ or contract with their workers.  Whether it’s a physician working with a group practice, or a marketer on behalf of a healthcare service, correctly structuring relationships between healthcare businesses and their workers is important.  For tax reasons, many workers strongly prefer to enter into independent contractor relationships.  However, simply calling oneself an independent contractor is not enough to solidify the relationship.  Many times, workers who call themselves independent contractors are actually employees in the minds of the government.  And sometimes, so-called “employees” with several part-time positions are actually viewed as independent contractors.

On July 15, 2015 the Administrator of the Department of Labor’s Wage and Hour Division (WHD) provided additional guidance regarding the application of the standards for determining who is an employee under the Fair Labor Standards Act (FLSA).  The goal of the guidance is to help the regulated community in classifying workers and decreasing misclassification.  The Administrator’s Interpretation reviews the pertinent FLSA definitions and the breadth of employment relationships covered by the FLSA.  The Administrator’s Interpretation then addresses each of the factors of the “economic realities test”.

According to the Administrator, when determining whether a worker is an employee or independent contractor, the application of the economic realities factors should be guided by the FLSA’s statutory directive that the scope of the employment is very broad.  The FLSA’s definitions establish the scope of the employment relationship under the Act and provide the basis for distinguishing between employees and independent contractor.

The Supreme Court and Circuit Court of Appeals have developed a multi-factorial “economic realities” test to make the determination whether a worker is an employee or an independent contractor under the FLSA.  The test focuses on whether the worker is economically dependent on the employer or in business for him or herself.  The factors include:Continue reading

Managing Managed Care

managed care moneyBy: Valerie Shahriari

While your healthcare business may be compliant with billing regulations and coding, this does not mean that your payer is compliant and has paid you correctly per your contract.  Providers know that Fraud and Abuse has been one of the largest areas of focus for payers and the government over the past 20 years.  Due to this attention, many healthcare businesses engage auditors to audit their compliance of claims quarterly or annually.  However, in addition to compliance audits, a provider should be auditing their payer interaction to create a dynamic blueprint of denial management and payment recovery.   The AMA states that a 5% denial rate for an average family practice equates to about $30,000 walking of the door.  A good benchmark for payer compliance would be a denial rate of 5-10%.  Often times, practices and healthcare businesses operate with a much higher rate, and even in the 20-30% range without even knowing it.

When auditing the payer interaction, several components should be included in the review including:

  • Denial rate percentage
  • Aging of claims paid for 30 day, 60 day, 90 day, over 120 day period as an Aggregate
  • Aging of claims paid for 30 day, 60 day, 90 day, over 120 day period by each Payer
  • Claims denied categorized by denial reason as an Aggregate for previous 12 months
  • Claims denied categorized by denial reason by each Payer for previous 12 months
  • Claims that have been appealed, the date submitted, the date of the outcome, the outcome by each Payer
  • Claims not paid according to fee schedule as an Aggregate for previous 12 months
  • Claims not paid according to fee schedule by each Payer for previous 12 months

Continue reading