Act or React? Rehab Industry Transformation

florida healthcare lawyerBy: Jeff Cohen

By now, it’s not news in Florida that drug and alcohol recovery providers are staring devastation in the face as payers continue to mount non-payment offensives.  As payers one by one march on the industry and starve providers of cash flow for operations, many providers can be expected to shut down.  To make matters worse, as the popular media continues to act as a conduit for gross misrepresentations of industry providers, the public’s affection for the industry can’t be expected to improve.  This makes the future look especially bleak for the industry, and yet the silence and stillness of providers is baffling.

Given the breadth of the payer problem (many simply aren’t paying providers), why are we not seeing a slew of lawsuits filed by providers?  In nearly 30 years as a Florida healthcare lawyer, I’ve never seen a healthcare sector so hammered by insurance companies.  And I’ve never seen it unanswered in court.Continue reading

Cigna Points to Tox Costs and Fraud in Quitting Florida Obamacare

gavelBy: Jeff Cohen 

Cigna just announced it is withdrawing from Florida’s Health Insurance Marketplace.  As reported by Carol Gentry in Health News Florida, Cigna blamed its decision to withdraw on fraud and abuse and on “out of network substance abuse clinics and labs.”  Interestingly, Cigna spokesman, Joseph Mondy, pointed to a recent article in the Palm Beach Post (“Addiction Treatment Bonanza:  How urine tests rake in millions”) in support of Cigna’s announcement.

Media reports regarding the treatment industry and Cigna’s announcement go unquestioned by reporters.  For instance, the Palm Beach Post article claims “the sky-high charges have exploited addicts and alcoholics seeking help, gouged insurers and spurred law enforcement interest….”  It pictures a young, tattooed man as a recovery business owner, but does not mention any wrongdoing or charges against him.  It restates claims in a lawsuit against a toxicology lab without any counterbalancing input from the lab that is the subject of the lawsuit.  It expresses certainty that insurers are being gouged, but does not mention that the rates actually paid by insurers for out of network services are determined entirely by the insurers, not the treatment providers.  It’s an article full of allegations and innuendos, but no meaningful coverage of any of the issues.     Continue reading

Addiction Treatment is a Story in Search of a Villain

Compliance With Laws & Regulations

healthcare business

Hastiness and superficiality are the psychic diseases of the twentieth century, and more than anywhere else this disease is reflected in the press— Alexander Solzhenitsyn

By: Jeff Cohen

I read an article in a local paper the other day.  It was about (a) a guy who owned a treatment center (who has not been charged with committing a crime), (b) a lawsuit filed by a large insurance company against a toxicology lab that the insurer owes millions, and (c) the fact that insurance companies pay a lot for toxicology lab testing.  I scratched my head, wondering how there was anything newsworthy there.  The “story” being sold by the paper, however, created a story with a villain (the providers of services to people in recovery from drug and alcohol addiction) and a “victim” (people receiving care for addiction).  I can’t resist responding.

There’s a difference between something that’s interesting and worthy of comment vs. a journalistic attempt to concoct controversy and intrigue that people might buy.  There’s not much of the former, but a lot of the latter.  People in recovery being victimized by horrible, greedy people is an interesting story.  Unfortunately, it’s off the mark and really not helpful to anyone.

There are three pretty safe assumptions we can almost all agree on:  first, there are a lot of people who want to live life without active addiction.  Second, many of them think they need help to create a better life.  Third, some providers of help to people in recovery make a bunch of money providing that service.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

Mergers & Acquisitions

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!

Tuomey Court Has A Lot to Say

bcbs lawsuit

 

By: Jeff Cohen

The Tuomey decision, U.S. Court of Appeals case out of South Carolina, contains important lessons for physicians, especially as it relates to (1) compensation arrangements with hospitals, (2) proper compensation arising in connection with the provision of designated health services (“DHS”), and (3) the advice of counsel defense.

The concept of DHS arises largely in the context of the federal Stark Law, which in pertinent part (1) forbids physicians from owning and referring to providers of DHS (e.g. PT, rehab, diagnostic imaging, home health, DME, clinical laboratory, inpatient and outpatient hospital services), (2) describes how medical practices can provide DHS to their own patients, and (3) forbids even physicians within a practice from allocating DHS profits on the basis of who ordered or referred to them.

The Tuomey case involves a whistleblower action filed against a not for profit hospital system.  The original jury in that case decided that the system didn’t violate the False Claims Act, but the appellate court set aside the verdict using facts and testimony that had be excluded from the jury trial, Tuomey Healthcare System was found to have knowingly submitted over 21,000 false claims to Medicare and the government was awarded over $237 Million (most of it in the form of punitive damages).  The government (which often advances the plaintiff’s—“relator” case in whistleblower cases) filed a motion for a new trial, which the trial court granted and the appellate court affirmed.

The case involves the following:Continue reading

Houston Court Brings the Heat in Payer Provider Case

bcbs lawsuitBy: Jeff Cohen 

A recent Texas District Court case took the usually frustrating ERISA dynamics applicable in payer provider disputes and upended them in a way that helped the provider.  There (Cigna v. Humble Surgical Hospital, Civ. Action No. 4:13-CV-3291, U.S. Dist. Ct., S.D. Tex., Houston Division), the court was faced with an out of network hospital sued by CIGNA to recover payments made.  In particular, the case involved—

  • An out of network hospital (HSH);
  • HSH set its prices higher than neighboring in network hospitals;
  • HSH billed Cigna members for deductibles and coinsurance at in network rates, but billed Cigna on an out of network basis;
  • Cigna alleged that the billing practices of HSH caused Cigna to pay more than its required share under applicable plans, even though plan members paid little or nothing at all;
  • Cigna also alleged HSH paid owner physicians referral fees to induce patient referrals; and
  • Cigna sought to recover payments made to HSH.

The case is a departure from the usual scenario, which involves (a) providers suing payers for payment and relying on state laws to do so, and (b) provides side stepping those state laws by successfully arguing that the federal ERISA law applies (which usually offers provides less favorable remedies).Continue reading

Tough Trend for Payers = Fairness for Providers

payer fairness for providers

payer fairness for providersBy: Jeff Cohen

The past year has shown a trend towards empowering providers (and even patients) in their claims against payers.  And these developments should serve to bolster the position of many patients and providers, especially behavioral health providers as they raise claims against payers.

Spinedex Case

This 2014 Arizona case addressed the issue of whether a provider had the legal ability (“standing”) to sue United to receive payment for services provided to insureds.  United’s role was to process claims for certain plans.  Spinedex was a physical therapy provider whose patients signed a patient responsibility form and also assigned to Spindex the right to receive payment.  There were different levels of benefits based on whether the patient was insured by United.  Spinedex treated patients, then submitted claims to United.  When claims for payment were denied, Spindex sued.

At the heart of the case was the long-standing issue of whether a provider has standing to sue for services provided to insureds of so called ERISA plans.  “We are aware,” the court wrote, “of no circuit court that has accepted defendant’s argument” [that because Spinedex didn’t seek payment from a patient, the patients don’t have an “injury,” which is required for the providers to sue the payer].    Nevertheless, the court said “yes,” which opened the door to potentially a slew of such lawsuits.

Continue reading

No Medicare = No Feds… Not!

ACO-Payment-300x225

By: Jeff Cohen

In the “good old days” (in healthcare, that means more than a week ago), it was understood that if a client didn’t accept any state or federal healthcare program dollars (e.g. Medicare, Medicaid, CHAMPUS, TriCare, Supp Plans), they would not expect to get a “knock on the door” from any federal regulatory authority.  No federal or state healthcare program dollars used to mean the client would only tend to hear from state regulators or commercial payors.  Those days are done!

Federal law enforcement is increasingly pursuing alleged criminal wrongdoing in the “non-government” healthcare space.  One of their favorite weapons is 18 U.S.C. 1347, the Federal Healthcare Fraud Statute, which gives federal law enforcement broad enforcement authority with respect to suspected wrongdoing involving interactions between healthcare providers and commercial insurers.Continue reading