10 Lesser Known Effects of Healthcare Reform Law

This is a great article published by CNN this morning.

View it in it’s entirety Here

(CNN) — On Monday, the U.S. Supreme Court takes on a political, social, economic and medical hot potato: the health care reform law that was signed into law two years ago.

For six hours during each of the next three days, attorneys will argue and justices will consider legal questions about the constitutionality of the Affordable Care Act’s individual mandate and issues surrounding federal versus state powers.

Read a transcript of Monday’s Supreme Court arguments

Many of the law’s major aspects have been the topic of much discussion. But are you aware that deep within the sweeping law’s 2,700 pages are many lesser known changes that could affect your life in unexpected ways?

CNN Explains: Health care reform

1. How many goodies your doctors get

Is your doctor prescribing you certain drugs because those are the best for your condition or because of a pharmaceutical company’s influence? Here’s one way you can find out.

The Physician Payment Sunshine Act under health care reform requires drug, device or medical supply companies to report annually certain payments or things of value that they’ve given physicians and teaching hospitals. This could be speaking fees, consulting fees, meals and travel. So, you can find out which and how much companies pay doctors or health care workers. The companies are obligated to report annually about physician ownership and their financial investments.

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Supreme Court Weighing Healthcare Reform Law

So many questions, so few answers. But the answers are coming! Here are some of our favorite stories out right now:

Via Yahoo News, Liz Goodwin, The Lookout

Could President Obama’s sweeping health care reform law survive if the court strikes down the requirement that all Americans buy insurance?

The short answer is yes — but insurance companies certainly won’t be happy about it.

Both Justice Department lawyers and their challengers agree that the individual mandate is not “separable” from the rest of the law, which means the rest of the law can’t survive if the individual mandate is surgically removed by the court.

The lower courts have been split on the question, but one of them, the 11th Circuit Court of Appeals, ruled in August that only the mandate should be struck down, leaving the rest of the law’s provisions — including an expansion of Medicaid to cover all low-income people and federal subsidies for lower-income and middle-class people to buy insurance — in place.

That decision no doubt sent shivers down the spines of some insurance executives. Striking down the mandate could be a nightmare scenario for the health insurance industry, since the rest of the law compels them to accept sick customers and to not charge higher premiums based on a customer’s health, age or gender. Sick customers would flood the insurance market and drive up costs, while young, healthy uninsured people would take their chances and not buy coverage, in what insurers worry would be a “death spiral” of rising costs.

Via The Associated Press, Boston Herald 

DONALD B. VERRILLI JR.

Verrilli is solicitor general of the United States, the government’s official representative in front of the Supreme Court. He was confirmed to his position last June as the replacement for Justice Elena Kagan after serving as associate deputy attorney general and an associate White House counsel in the Obama administration. A graduate Columbia Law School, where he served as editor-in-chief of the Columbia Law Review, he was a law clerk for Justice William J. Brennan, Jr. and a partner at Jenner & Block, where he co-chaired the firm’s Supreme Court practice. He has argued more than a dozen times before the Supreme Court, and worked as an adjunct professor at Georgetown University Law School from 1992 through 2008. In 1994, as special counsel to President Bill Clinton, he assisted in the confirmation process for Justice Stephen Breyer.

Official biography: http://www.justice.gov/osg/meet-osg.html

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PAUL CLEMENT

Clement is a former solicitor general, having served in that position for President George W. Bush. When confirmed, he was the youngest solicitor general in 115 years at age 38. Clement graduated magna cum laude from Harvard Law School one year behind Obama, and clerked for Justice Antonin Scalia. He has argued more than 55 cases at the Supreme Court, and served as the chief counsel of the U.S. Senate Subcommittee on the Constitution, Federalism and Property Rights. A partner at Bancroft PLLC, he is a Georgetown University law professor and a former partner at King & Spalding. He resigned from there after the firm decided not to continue its representation of the U.S. House of Representatives in its attempt to defend the Defense of Marriage Act. Clement was one of the lawyers who made the successful argument in front of the 11th U.S. Circuit Court of Appeals in Atlanta that would strike down the law’s core requirement that individuals carry health insurance or pay a penalty

Official biography: http://www.bancroftpllc.com/professionals/paul-d-clement/

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MICHAEL A. CARVIN

Another former Justice Department official, Carvin’s most famous argument was delivered to the Florida Supreme Court on behalf of soon-to-be President George W. Bush in the Florida recount controversy during the 2000 presidential election. A graduate of George Washington University’s law school in 1982, Carvin has worked as deputy assistant attorney general in the Justice Department’s Office of Legal Counsel, which is responsible for legal opinions that are binding on the Executive Branch, deputy assistant attorney general and special assistant to the assistant attorney general in the department’s civil rights division. He will be representing the National Federation of Independent Businesses, which was a party to the lawsuit in the 11th U.S. Circuit Court of Appeals in Atlanta that struck down the law’s core requirement that individuals buy health insurance or pay a penalty.

Official biography: http://www.jonesday.com/macarvin

Richard Wolf, USA Today, via the Pensacola News Journal

WASHINGTON — Health coverage for more than 30 million people. The power of Congress to regulate interstate commerce. President Obama’s re-election chances. The reputation of the Supreme Court and the legacy of its chief justice.

And to hear some tell it: liberty.

All that and more could be at stake today when the Supreme Court begins a historic three days of oral arguments on the 2010 health care law that has become a symbol of the nation’s deep political divide.

All that and more could be at stake today when the Supreme Court begins a historic three days of oral arguments on the 2010 health care law that has become a symbol of the nation’s deep political divide.

Not since the court confirmed George W. Bush’s election in December 2000 — before 9/11, Afghanistan and Iraq, Wall Street’s dive and Obama’s rise — has one case carried such sweeping implications for nearly every American.

STAY TUNED!

OIG SLAMS TRUSTING DOCTORS WHO LET OTHERS BILL FOR THEIR SERVICES

Physicians who allow other people or entities to bill for their services are taking a risk. Settlements with eight physicians whose provider numbers were used unlawfully by entities they worked for prompted the OIG to issue an Alert on February 8th. The Alert basically says that physicians who assign to others (e.g. 855R) the right to bill for the services of the physicians will be responsible for the wrongful actions of those using the doctors’ provider numbers. Ignorance will likely not be a good excuse any longer.

What does all this mean to doctors? Simple: VERIFY REGULARLY. If you assign to any person or entity the right to bill for your services, you MUST routinely check to see if they are billing correctly. The fact that some person or entity may bill wrongfully, even fraudulently, without your direct knowledge, will not protect you from liability. Make sure (1) you have written agreements for all arrangements that involve any person or entity billing for your services, and (2) those contracts contain indemnification provisions in case you have to hire a lawyer or pay anything to the government for their wrongdoing.


The 2012 OIG Work Plan – The Government is Still at Work During the Holidays

On November 10, 2011, the Office of the Inspector General of the Department of Health and Humans Services (the “OIG”) issued their 2012 Work Plan. The annual Work Plan is designed to give Medicare providers and supplier notice and information on areas of potential abuse that the OIG to address with particular attention. As we approach a new year, here are some areas that our clients and friends may wish to examine to avoid scrutiny by the OIG

Medical Equipment Companies

Enrollment Abuses

The OIG has discovered a pattern of improper enrollment among supplier of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS). The OIG is looking to Medicare contractors (carriers and intermediaries) to be more scrutinizing in the enrollment of DMEPOS suppliers. The contractors will be assessed on their use of enrollment screening mechanisms and post enrollment monitoring activities to find companies that may pose fraud risks. It is, therefore, important for DMEPOS suppliers to make sure all applications for enrollment and even those for change of ownership are completed accurately and thoroughly.

Payments for High Priced Equipment

Additionally, the OIG will be undertaking a heightened review of the appropriateness of payments to DMEPOS suppliers for “high ticket” items such power mobility devices, oxygen and hospital beds. The medical equipment industry has always been the target of potential abuse. The OIG confirms this stating that there continues to be wide spread abuse of DME not ordered by physicians, not delivered or not needed. The OIG will focus on geographic areas with high volumes of “high ticket” reimbursements and review for compete records demonstrating that the services are “reasonable and necessary for the diagnosis and treatment of the illness or injury.” For frequently replaced supplies such as CPAP and respiratory supplies, the OIG will review compliance with the requirements that a Certificate of Medical Necessity must specify the type of supplies needed and the frequency with which they must be replaced used or consumed.

Diabetic Testing Supplies

The OIG will also review Medicare claims for diabetic testing strips and lancets (diabetic testing supplies) to identify questionable billing. Medicare has utilization guidelines for the amount of diabetic testing supplies (DTS) that beneficiaries may receive. To receive reimbursement from Medicare, suppliers must maintain documentation demonstrating that their DTS claims meet all Medicare coverage, coding, and medical necessity requirements. DTS claims with certain characteristics (e.g., DTS provided to a beneficiary at irregular intervals) may indicate improper supplier billing.

Physicians

Some highlights of physician’s services that are going to be under review include the following:

Place-of-Service Errors

The OIG will be reviewing physicians’ coding practices on Medicare Part B claims for services performed in ambulatory surgical centers and hospital outpatient departments to determine whether they properly coded the places of service. The OIG will particularly pay attention to this as there is evidence of physicians coding for services at the higher non-facility rate when the services were actually performed in an ASC or outpatient setting. Medicare pays a physician higher amounts for serviced performed in a non-facility setting such as the physician’s office.

Incident-To Services

“Incident-to” services will also be reviewed. This is a new initiative on the part of the OIG and therefore, should garner lots of attention. The OIG will try to determine whether payment for such services had a higher error rate than that for non-incident-to services. We will also assess CMS’s ability to monitor services billed as “incident-to.” One of the main focuses of this review is to cut down the amount of billings for incident to services performed by non-physicians without the required direct physician supervision. The OIG has found that unqualified non-physicians performed 21 percent of the services that physicians did not perform personally. Incident-to services represent a potential abuse for the Medicare program in that they do not appear in claims data and can be identified only by reviewing the medical record.

Evaluation and Management Services (“E/M Services”)

In 2009, Medicare paid $32 billion for E/M services. This represented nearly 20% of all Medicare Part B payments. With those dollars at stake, the OIG will be reviewing E/M claims to assure there is appropriate documentation to justify payment for the more intensive E/M codes. It is important to thoroughly document records to demonstrate the type, setting, and complexity of services provided and the patient status, such as new or established. Also under review will cases of multiple E/M services for the same providers and beneficiaries to identify electronic health records (EHR) documentation practices associated with potentially improper payments. Medicare contractors have noted an increased frequency of medical records with identical documentation across services.

Payments for Services Ordered or Referred by Excluded Providers

Medicare does not allow payment to a physician or supplier for services and items provided that were prescribed or ordered by individuals or entities excluded from the Medicare program. To combat that practice, the OIG will undertake a review of the nature and extent of Medicare payments for services ordered or referred by excluded providers (those who have been barred from billing Federal health care programs) and examine CMS’s oversight mechanisms to identify and prevent payments for such services.

There are numerous other areas of concern that will be reviewed by the OIG during 2012. To assure compliance with the items describes as well as other health care laws, the Florida Healthcare Law Firm offers a comprehensive compliance audit of your organization. For more information please contact us  at 561-455-7700


Physician Owned Distributorships (PODS) Make Waves

doctor

Physician owned distributorships (PODs) have been the source of considerable controversy for years, but now they’ve caught the attention of Congress!

PODs distribute various things, most commonly surgical implants and devices, that are reimbursed by insurers. A patient needs a spinal rod, a surgical implant/device company makes it and a distributor rep distributed it. Device/implant companies usually contract with distributorships to sell their products. Distributorships contract with reps who are paid commissions for sales. Surgeons who actually order the devices sometimes think “Since I’m the one doing the surgery and ordering all this stuff, why don’t I make something from the selling it?” PODs are one way for physicians to financially benefit from the sales of devices and items their patients need, but they have never been more controversial than now.

Conceptually speaking, PODs are controversial because government regulators think physicians who have an economic stake in health care items or services will tend to over utilize them. Moreover, there is a specific concern that allowing physicians to profit from the devices their patients need violates federal anti kickback laws or the Stark prohibition on compensation arrangements.

In 2006, the Office of the Inspector General of HHS and CMS expressed major concerns about PODs, and cited concerns about “improper inducements.” At that time, the OIG stopped short of prohibiting them, but called for heightened scrutiny. CMS itself has stated that PODs “serve little purpose other than providing physicians the opportunity to earn economic benefits in exchange for nothing more than ordering medical devices or other products that the physician-investors use on their own patients.”

Implantable medical devices are unusual in the way they come into use. Unlike DMEPOS, for instance, medical devices are not sold to distributors. They’re sold from the manufacture to the medical facility where the surgery will take place. So, the argument goes, physicians are not actually in a position to drive the sales volume of the implants. The counter: physicians invested in a POD can leverage their hospital admissions to influence the device choice of hospitals and surgery centers.

The biggest legal hurdle for PODs is the federal Anti Kickback Statute, which carries both criminal and civil penalties. Simply put, if even one purpose of an arrangement is to pay for patient referrals, the law is violated. So, the law is arguably violated if one purpose of the POD is to induce physicians to order implants for their patients. Looked at another way, the law is violated if one purpose of a hospital doing business with a POD is to ensure patient referrals by the physician POD investors.

A 1989 OIG Special Fraud Alert on fraudulent physician joint ventures is especially interesting on the fraud and abuse issues in pointing out that the following would indicate unlawful intent to induce patient referrals—

Investor choice. If the only investors chosen are surgeons with an opportunity to refer and if they lack any business or management expertise, the arrangement appears to be a cloaked way to incentivize unlawful referrals (i.e. ordering implants). The key question is whether the business, in selecting investors, is looking to raise capital or to lock in referral sources.

Risk. If the POD investment involves little or no financial risk, the OIG would likely take issue with it.

The bottom line seems to be that if there isn’t a real business, with real financial risk and qualified investors, a POD will likely be viewed as a suspicious arrangement based on locking in patient referrals or physician admitting pressure by physician investors.

In its June, 2011 Inquiry “Physician Owned Distributors (PODs): Overview of Key Issues and Potential Areas for Congressional Oversight,” the U.S. Senate Finance Committee Minority Staff, the Committee reports “A number of legal and ethical concerns have been identified as a result of this initial inquiry into the POD Models.” The Committee reviewed over 1,000 pages of documents and spoke with over 50 people in preparing its report. The Committee cited long-held concerns regarding PODs, and leaned heavily on the 2006 Hogan Lovells (previously Hogan & Hartson) law firm’s anti-POD analysis.

With the Committee’s call for greater OIG and CMS involvement, one thing seems clear: the future of PODs is uncertain. In this era of cost-cutting, it seems clear that PODs are gonna get a haircut and may even lose their head.


Path Lab Proposal Shot Down by OIG

The Office of Inspector General of the Department of Health and Human Services recently (October 11, 2011) shook its head at a proposal involving a pathology lab management services business that was to be owned by physicians. The proposed arrangement had the following features:

1.A path lab management business (“Manager”) would be formed and the business would be owned by doctors;
2.The Manager would provide a list of management services to a path lab;
3.The path lab (“Lab”) would not be owned by the doctors that own the Manager;
4.The Manager would provide a fixed amount of hours of services each year and would receive a percentage of the Lab’s income (fixed percentage in advance) and that fee would approximate the Lab’s use of the Manager’s services for the year;
5.The physician Manager investors would be in a position to refer to the Lab;
6.The ownership interests of the physician investors in the Manager would exceed forty percent (40%);
7.More than forty percent (40%) of the Lab’s revenues would come from the physician investors.

The OIG decided that the proposed arrangement posed more than a minimal risk of violating the Anti Kickback statute. The OIG also said the manager cannot refer its own patients or generate business in connection with the proposed arrangement. The OIG focused on the following points in its advisory opinion:

1.The Manager’s “usage fees” to the Lab are percentage based and not flat and set in advance;
2.The ownership interests of the doctor investors in the Manager would exceed what is specified in the so called “small entity” Safe Harbor;
3.The physician owners of the Manager have no experience in managing a lab, but are in a position to generate referrals to it.

Though the regulatory Safe Harbors (to the Anti Kickback Statute) are illustrative of permissible arrangements, the OIG is clearly sticking very close to them. where federal or state healthcare program dollars are involved, physician investors would do well to make sure they are Safe Harbor compliant.


OIG Views Favorably Ophthalmologist-Optometrist Co-Management Arrangement Relative to Cataract Surgery

Via:  The Health Law Partners | Permalink

In the Office of Inspector General (“OIG”) Advisory Opinion 11-14, dated October 7, 2011, the OIG analyzes an arrangement in which Requestor is an opthalmic physician group practice that provides cataract surgeries and also employs optometrists. By way of brief background, generally, patients receiving cataract surgery may elect to have either a conventional intraocular lens (“Conventional IOL”) or a premium intraocular lens (“Premium IOL”) (Premium IOLs have the ability to correct preexisting refractive problems whereas Conventional IOLs do not). Medicare covers Conventional IOLs when reasonable and necessary, but only partially covers the professional and facility fees associated with Premium IOLs as Premium IOLs are significantly more expensive. When billing Medicare, cataract surgery is a global surgical procedure in which the physician is reimbursed one global fee covering the pre-operative care, the surgery and the post-operative care for the ninety (90) days following the surgery. If a physician transfers the patient to another healthcare professional during the “global surgical period,” the healthcare provider must use either modifier -54 (surgical care only) or -55 (post-operative management only).

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The Government Is No Friend to Investigated Physicians

Healthcare reform aside, physicians are increasingly buried under the weight of nonstop regulatory scrutiny and compliance requirements.  Even the most compliant physician will find, however, that the government is no gentleman when it comes to efforts to ferret out wrongdoing.

Physicians are most commonly confronted with the regulatory process by a phone call from an investigator or perhaps a written request for information.  Board of Medicine issues usually begin with the so called “45 day letter,” which invites a physician suspected of wrongdoing to submit a written response to an allegation of wrongdoing.  EMTALA violations are reported to the Department of Health and the Office of Inspector General, both of which will initiate contact with the physician in writing.

Though physicians may think a simple explanation will convince an investigator or attorney to back off, that is seldom the case.  Physicians wrongly think that the point of such investigations is to determine the truth.  They must instead accept that, once investigators and prosecuting lawyers have contacted them, there is already a belief that wrong doing has occurred.  Physicians would do well to understand that the job of the investigator and prosecutor involves just two things:  (1)  Seeing if the physician’s response is so convincing as to cause them to reevaluate their suspicion (it seldom is); and (2) to see if they think they have enough to justify a prosecution.  The investigator and prosecutor have a job, to find wrongdoing and to punish it!  They are not philosophers or social workers.  They are not counselors to have a really nice conversation with.  They are not to be trusted because their job is at odds with physicians who are the targets (or even witnesses) of their investigations.  If physicians can remember one thing, it is that they need the support of lawyers and others who know their way over this unfriendly terrain.

Innocent physicians caught in the investigative/prosecutorial process may feel impatient and frustrated.  “I’ve done nothing wrong, so surely if I just tell the truth everything will be ok.”  It’s just not that way; and it’s just not that simple!  Discussions with the government will take time and will require patience.  What physicians have to keep in mind is that, though they are innocent until proven guilty, if they are targets of an investigation, the investigator and prosecutor already suspect them of wrongdoing.  It’s a bit of an uphill climb!

Remarkably, even the best legal representation will not necessarily resolve matters quickly.  By the time physicians are aware they are being investigated, in many instances months have been spent working that case, and prosecutors are simply not inclined to immediately walk away from all that hard work.

Surprising still is that prosecutors will try to get a settlement, even when your lawyer tells you there is no wrongdoing.   Recall that the prosecutor has a job—find the bad guy and win the case.  If the prosecutor can get you to settle, particularly by paying money, they will call it a “win” and move on to the next case.  It is nauseating but true that sometimes it makes sense to settle, even when there is no wrongdoing, given the legal and related expenses.  But when settling is not an option because it causes a cascade of unacceptable consequences (e.g. a Board of Medicine investigation, a medical malpractice suit, becoming sanctioned by Medicare and perhaps even losing medical staff membership and managed care contracts), physicians have no option but to fight.

Probably most surprising, physicians who vigorously defend themselves may find that they never “win.”  That is, they are never told by a prosecuting lawyer that the government is giving up.  Physicians who have been the targets of government investigations will find that the sound of victory is often silence.  Government prosecutors simply get quiet!  You just stop hearing from them.

The best physician defendant is one well armed with guidance to traverse an inherently adversarial environment.


Are Recovery Audit Contractors Going to Put You on the RAC?

Recovery Audit Contractors are here to stay and they are affecting the way medicine is practiced across the nation.  If they have not already, they will influence your office and facility practice, and likely hit you in the pocket book.

Recovery Audit Contractors, or ‘RACs’, were designed through a federal demonstration project from 2005 until 2008.  The purpose of RACS is twofold:

  • Ensure Medicare providers deliver more nationally consistent, evidence based health care
  • Reduce noncompliance with Medicare coverage, coding and billing rules.

The goal is to reduce Medicare spending, plain and simple.

RACs are structured by region and our southeast region RAC is Connolly Consulting Associates, Inc of Wilton CN.  RACs work on a 9 to 12% contingent fee basis, but must return any fees if a RAC finding is overturned.  Each RAC must post on its website the types of issues under review.  This is a good place to start if you would like to know what Connolly is auditing.  Each RAC must employ a full time medical director, nurses, therapists and certified coders.

RACS perform two types of reviews, automated and Complex.  Automated reviews review claims data derived from the CMS database without a review of the records supporting the claim.  Complex reviews are performed when there is a high likelihood of overpayment.

For the most part, RACs have focused on inpatient hospitals, but that is changing.  Five categories of improper payments are generally being identified:

  • Not Medically Necessary- The record does not support the need for the procedure or stay.  Short stays are often deemed not medically necessary, as is duplicate billing for the same procedure.  This category often is found when a provider either fails to submit documentation or fails to submit sufficient documentation to support a claim.
  • Incorrectly Coded-A claim is submitted for a certain procedure, but the medical record indicates Performance of a different procedure
  • Incorrect Payment Amounts
  • Non covered, or duplicative services
  • Other errors- For example, a provider uses an outdated fee schedule or is paid twice for the same claim.

Likely, physicians are affected because inpatient facilities are working hard to assure records substantiate the billed for admission or procedures.  You may be called upon by your inpatient facility to improve and/or supplement your medical record keeping to avoid RAC recoveries.  In addition, remember, the RAC only looks at the inpatient medical record.  If justification for the hospitalization or procedure is in your office records, but not in the inpatient record, it does not count.

There is a lot more to say about RACs, but we will conclude this article with a look into the future.  HHS Office of the Inspector General has recommended CMS focus RAC activity on nursing homes; highly utilized outpatient therapies; and maximized use of generics.  With the amount of fraud in home care services and DME’s, you can bet they will go there, too.  Medicare Part D RACS are just rolling out, and Medicare Quality Reviews are on the horizon.  In addition, Medicaid RACs are coming next.

RACs are here to stay, so stay tuned for more on RACs.