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A New Perspective from CMS? Medicare, Stark Law and Whistleblower Changes on Deck

medicare stark lawBy: Dave Davidson

Over the past several months, the Centers for Medicare & Medicaid Services (CMS) has taken a number of steps that show an awareness of the regulatory burden placed upon participants in the government’s health care programs, and even some willingness to consider reducing those burdens.  While it remains to be seen whether the recent proposals will have measurable results, the following actions can still be viewed with guarded optimism.

Proposed Changes to Medicare

In July, 2018, CMS proposed significant changes to Medicare, to be included in rules that take effect in 2019.  These changes cover physician fee schedules, streamlining Evaluation & Management (E&M) billing, advancing “virtual care,” decreasing drug costs, revising the MIPS program and establishing the MAQI demonstration project.  The agency also asked for comments on price transparency issues.

The overriding theme to the changes is to allow providers to put “patients over paperwork” and to “restore the “doctor-patient relationship.”  To accomplish these goals, the proposed rule streamlines the documentation requirements for E&M office visits.  Certain physician supervision requirements for diagnostic testing will be reduced, and some reporting requirements for outpatient therapy will be removed.  CMS estimates that with these changes, a single physician with a 40% Medicare patient base will be able to recover multiple hours of time currently spent on administrative matters each year.  If that estimate is correct, these changes could prove to be significant.

CMS has also proposed expanding the services covered by Medicare.  Under the new proposal, Medicare will pay for brief, non-face-to-face appointments conducted by “communication technology;” evaluations of patient-submitted photographs; and expanded telehealth services, including prolonged preventative health services.  This change could benefit both providers and patients, by opening up the ways that healthcare can be provided and received.

Finally, CMS has proposed removing certain elements of the Merit-based Incentive Payment System (MIPS).  Under the proposal, several procedure-based quality measures that were identified as being low volume or low priority will be removed.  CMS will also restructure the entire “Promoting Interoperability” performance category (which was formally known as the “Advancing Care Information”).  These changes are designed to support greater EHR functions and allow increased patient access to their personal health information.  CMS has also proposed allowing MIPS waivers for providers participating in Medicare Advantage plans in which the providers share risk.

Requested Stark Law Input

Within the past few months, CMS issued a request for public comment regarding the physician self-referral prohibitions found in the Stark Law.  Specifically, the request sought input on how to address the “undue regulatory impact and burden of the law.”  CMS posed numerous questions about the law, all of which were drafted to prompt detailed responses.

Obviously no changes have been proposed, and there are other parties suggesting expansion of the law (for example, see the June 2018 report to Congress from MedPAC that suggested expanding the Stark Law‘s Designated Health Services to include Physician-Owned Distributorships).  However, the fact that CMS even asked for input can be seen as a step in the right direction.  Hopefully CMS will begin to realize the real-life implications of the Stark Law, and take steps to alleviate those burdens without compromising its fraud prohibitions.

Dismissal of Whistleblower Claims

                It is no secret that the government has created an attractive environment for qui tam (whistleblower) claims.  These cases allow civilians to bring lawsuits on behalf of the government, seeking damages owed to the government.  Once filed, the government can intervene and take over the case, or it an allow the civilian whistleblower to continue to press the claim.  Either way, if successful, the whistleblower is entitled to a portion of the proceeds recovered by the government, along with an award of their attorneys fees and costs.  With the application of fines and the trebling of damages for False Claims Act violations, the damages received can be a windfall for the government, the whistleblower and the whistleblower’s attorneys (according to the Department of Justice, $3.4 billion was recovered in whistleblower cases in 2017, with $392 million of that given to whistleblowers).

It is therefore not surprising that the number of whistleblower claims filed each year continues to increase.  Some estimates pose that up to 600 new whistleblower cases are filed each year.  However, the number of cases in which the government elects to intervene has remained close to the same.  And even though the government is not increasing its intervention proportionately, it must still be deeply involved in all claims brought on its behalf.

Although it pales in comparison to the financial impact a whistleblower claim can have on a provider defendant, this litigation role has caused the government to experience a drain on its own resources, as it participates in these increasing whistleblower claims.  The government must continue to monitor, participate in, and be involved with discovery in all the claims brought on its behalf, regardless of whether it intervenes.  This includes claims that have no merit.  This financial drain has caused the government to re-think its position with these claims.

Earlier this year, the Department of Justice issued a memorandum that encouraged government lawyers to consider dismissing meritless claims.  Therefore, once the government’s attorneys have decided to not intervene in a whistleblower lawsuit, the lawyers must also whether or not the claim should be dismissed.  There are specific factors that must be considered before a dismissal, such as whether: the allegations are frivolous or based upon unsound legal theory; the claim is duplicative; the claim interferes with government policies or programs; the claim goes against government litigation priorities; classified information needs to be safeguarded; the opportunity cost is too high; or the whistleblower’s actions hinder the government’s investigation.  Although there is not a lot of data on how the recommendations of the memo have been implemented, the hope is that this action will provide some measure of relief to providers forced to defend meritless claims.

Changes to Medicare Website

The government has not forgotten about its constituents in its proposed reforms.  This week, CMS made new online tools available for Medicare beneficiaries.  These are part of a revision to the website and includes a feature that allows seniors to speak with CMS staff members as they compare coverage options between traditional Medicare and Medicare Advantage plans.  There are also automated features that will help consumers identify the best coverage for them.  The features are even available on iPhones and iPads.

While health care providers have yet to see significant benefits from these proposals, one can hope that 2019 will indeed bring steps to restoring both the doctor-patient and the doctor-government relationships.