Health Law Blog - Healthcare Legal Issues

Major Revamp of Nursing Home Regulations Proposed By CMS

July 17th, 2015

Nursing Home Regulations Proposed Revision CMSThe Centers for Medicare & Medicaid Services (CMS) has release new proposed regulations that would implement the first major rewrite of the long-term care Conditions of Participation in over 25 years. The proposed regulations were published on On July 13, 2015 in proposed form and are subject to a 60 day comment period before CMS issues them in final form. It is possible that CMS would revise the proposed rules based on input from the public duringthe comment period.

By changing nursing home regulations, CMS intends to improve the quality of care and safety affecting long-term care residents. The proposed changes would implement a number of safeguards including some protections that were required under the Affordable Care Act.

Providers involved in the nursing home industry should study the proposed regulations and may wish to provide comments to CMS to be addressed prior to finalization of the proposed regulations. Some of the items addressed in the proposed regulations include:

- Regulations regarding reduction of unnecessary hospital readmissions and infections

-increased quality of resident care

- New requirements to assure training of nursing home staff

- increased focus on patients with dementia and prevention of elder abuse.

- New rules regarding staffing decisions.

- Rules that help assure that staff members have the right skill sets and competencies to provide person-centered care to residents.

- Increased emphasis on resident preferences when developing care plans.

- Improvements to the process of care planning and discharge planning

- Increased authority of dietitians and therapy providers to write orders in their areas of expertise subject to physician delegatino and state law compliance.

- Requiring greater food choice for residents.

- Updating of infection prevention and control programs and establishment of new requirements for infection prevention and control.

- Enhancement of nursing home resident rights

More details can be obtained by reviewing the proposed regulations. We will be issuing additional updates regarding topics that are covered in the proposed regulations as we review the proposal in greated depth.

Medicare Shared Savings Program Changes Under 2016 Physician Fee Schedule Regulations

July 17th, 2015

Physician Fee Schedule Regulations Propose Changes to the Medicare Shared Savings Program

physician fee schedule mssp changesThe 2016 Physician Fee Schedule proposed rule that was published on July 8, 2015 includes proposals specific to certain sections of the Shared Savings Program regulations and solicits feedback from stakeholders. Following are a few of the proposed revisions to the Shared Savings Program that were contained in the PFS Regulations.

 

  • Proposed addition of a measure of Statin Therapy for the Prevention and Treatment of Cardiovascular Disease in the Preventive Health domain of the Shared Savings Program quality measure set to align with PQRS;
  •  Preservation of flexibility to maintain or revert measures to pay for reporting if a measure owner determines the measure no longer aligns with updated clinical practice or causes patient harm;
  • Clarification of how PQRS-eligible professionals participating within an ACO meet their PQRS reporting requirements when their ACO satisfactorily reports quality measures; and
  • Proposed amendment to the definition of primary care services to include claims submitted by Electing Teaching Amendment hospitals and exclude claims submitted by Skilled Nursing Facilities.

HCQIA and Clinically Integrated Provider Networks

July 7th, 2015

Health Care Quality Improvement Act and Clinically Integrated Provider Networks 

Clinical Integration HCQIAClinically integrated networks present unique credentialing issues that are normally not present in hospital or facility credentialing.  These unique issues stem from the very nature of integrated networks which require providers to comply with evidence-based protocols, individualized care plans, quality metrics, efficiency standards, and other system standards.

In order to assure compliance with these standards, integrated networks need to assert much more control over the clinical practices of its provider members than has historically been exercised in the hospital setting.  Credentialing and recredentialing processes need to be put in place to assure that providers practice in conformance with evidence-based practice protocols, coordinate care with other network providers, and otherwise work well within the system.

Integrated networks face a number of choices when determining how to structure their credentialing and recredentialing processes.  A threshold decision is whether the credentialing process should be structured to take advantage of the immunities that are available under the Health Care Quality Improvement Act (“HCQIA”).

Qualifying under the HCQIA has some benefits but also carries some burdens.  In order to qualify for HCQIA immunities, the organization must implement a formal credentialing, hearing, and appeal process in order to qualify for immunities.

A CIN must also register with the HRSA and is required to make reports to the Practitioner Databank if adverse peer review determinations are made.  The CIN receives a Data Bank Identification Number and can be penalized for not reporting adverse determinations.  The reporting requirement is an issue that provider networks may wish to avoid.  The obligation to report has the practical effect of making peer review actions much more controversial and prone to litigation because a database report is a serious negative mark on a physician’s record.

On the other hand, the immunities offered by the HCQIA can be extremely valuable to a clinically integrated network.  One of the immunities that is available under the HCQIA is from the treble damage provisions under federal antitrust laws.  This immunity cannot be discounted; particularly with provider networks that make more aggressive credentialing decisions based on achievement of quality and cost issues and infirmity with system protocols.

If a choice is made to secure the HCQIA immunities, a comprehensive credentialing, peer review and fair hearing process is required as is use of the Practitioner Databank.  Furthermore, in order to qualify, adverse actions only be taken in furtherance of quality healthcare, after a reasonable effort to develop the facts, with adequate notice and hearing to the affected practitioner.  The Act and interpreting case law have created rather detailed requirements for notice and hearing.  The end result is that extensive procedural processes must be in place and consistently followed by the organization.  This of course adds another layer of complexity and cost to the organization.  At the same time, it greatly decreases the organization’s potential liability exposure which under certain circumstances could greatly exceed the cost of complying with HCQIA requirements.

Medigap PHO Discount Program Receives OIG Approval

June 23rd, 2015

OIG Releases Yet Another Advisory Opinion 15-08

Medigap Arrangment Involving PHO Discounts

Medigap PHO Discount ProgramSomeone must be busy at the Office of Inspector General’s Office. Last week they released two new advisory opinions and a Special Fraud Alert. This week they released another Advisory Opinion, this time addressing sharing savings from a preferred hospital network between a Medigap insurer and its policy beneficiaries. The program at issue provided a premium credit of $100 toward the policyholder’s next renewal premium for participating in a discount program involving price reductions from a physician-hospital organization.

The second part of the program involved negotiated service rates with a physician-hospital organization (PHO). The PHO agreed to discounts of up to 100% of the Medicare Part A inpatient deductibles which would normally be paid by the Medigap plan. The PHO received an administrative fee from the Medigap plan for each discount that was provided by the PHO.

The OIG analysed the program under the civil monetary penalty (CMP) provisions and the Anti-Kickback Statute (AKS) and concluded that the arrangement would not constitute grounds for civil monetary penalties or administrative sanctions.

The OIG found that discounting of the inpatient deductible created a low risk of fraud or abuse because the Medicare Part A payments are fixed and the discount would not impact reimbursement amounts. Additionally, the OIG observed that patients would not generally haveknowledge of the discount and would not be encouraged to seek additional care. The program did not offerfinancial rewards to the physicians involved in the patient’s care and the program was open to all providers who agreed to the discount program through participation in the PHO.
The OIG also found that the premium credits that were provided to beneficiaries created minimal risk of program abuse.

The OIG also noted that the proposed arrangement has the potential of lowering costs for policyholder under the Medigap plan and that the savings would be reported to the state regulatory agency.

OIG Fraud Alert – Medical Director Compensation Arrangements

June 23rd, 2015

medical director compsnation

Medical Director – Fraud Alert – Physician Compensation

The Office of Inspector General of the Department of Health and Human Services release a new Fraud Alert on June 9, 2015.  The Fraud Alert relates to physician compensation for medical directorships and other services and warns that the compensation arrangements under these arrangements must be at fair market value and must require legitimate services to be performed in return for that compensation.  This is nothing new for those involved in physician compliance issues. However, the fact that the OIG chose this issue for a special Fraud Alert is significant in itself.

Medical director compensation has gained the attention of governmental enforcers over the years with some high profile cases that have focused on fraudulent medical director arrangements.  The compliance industry has tightened its belt on these issues; requiring strict adherence to policies and guidelines for medical director compensation. Clearly there is a legitimate need for health care providers to retain physicians to provide medical direction of various service lines.  In fact, regulations require medical director oversight in many areas.  Even where there is a legitimate need, it is necessary to carefully structure the medical director arrangement to be legally compliant.

You may find your compliance officer of health lawyer advising even more restrictive structuring of medical director arrangements as a result of this Fraud Alert.  The OIG uses Fraud Alerts to place emphasis on areas of concern.  These issuance must be taken seriously and should cause providers to review their policies, procedures and contracts to assure that they are legally compliant and could withstand scrutiny by external government investigators.

A few things to consider include:

  • Specifically defining the precise services that are required of the medical director.
  • Assuring that contracts are current, validly executed, and have not expired.
  • Require regular logs to be provided by the medical director which detail the services that are actually performed.
  • Require the service logs to correspond to specific duties that are described in the director agreement.
  • Support compensation with external fair market value opinions.
  • Cap compensation to assure that fair market value is never exceeded.

These are just a handful of issues providers need to consider when entering these arrangements with physicians.  For further details, contact your health care attorney or compliance officer.  By all means, pull your medical director agreements off the shelf and make certain that they are legally compliant.  You cannot assume that those arrangements will not be scrutinized by government enforces.

See – Fraud Alert: Physician Compensation Arrangements May Result in Significant Liability June 9, 2015.

Final Rule Under the Medicare Shared Savings Program Released

June 11th, 2015

CMS Releases Final Revised Shared Savings Program Regulations

Shared Savings Program regulationsThe Center for Medicare and Medicaid Services (CMS) has issued final regulations revising requirement applicable to Accountable Care Organizations (ACOs) under the Medicare Shared Savings Program (MSSP).  CMS previously issued proposed rules and a notice of rulemaking in December of 2014 which were finalized on June 9, 2015 after consideration of comments received during the comment period.  The new rules are effective in August with just a few exceptions and contain some fairly significant changes in the rules that govern ACOs and applications under the MSSP.

We will be reviewing the regulations in detail and providing a comprehensive summary, so check back or grab our RSS feed.

A bullet form listing of some of the key changes in the final regulations include:

  • New requirements for ACO specific contracts or contract amendments.
  • Additional details on the ACO requirement to establish mechanisms for shared governance among ACO participants.
  • New standards for submitting a list of ACO participants/supplier.
  • Expansion of program integrity and provisions to protect beneficiaries.
  • Rules regarding adjustment to benchmarks resulting from mergers or acquisitions.
  • ACOs are required to maintain a dedicated webpage and are required to post certain information using CMS templates on that web page.  Information that must be posted included:
    • identification key clinical and administrative leaders
    • identification of the types of ACO participants involved in the ACO
    • quality measurement performance information
    • information regarding shared savings payments and losses
  • Specific requirements for ACOs to submit executed provider agreements along with their initial application and upon renewal.
  • CMS authority to take action against or terminate and ACO that does not continue to meet the minimum assigned beneficiary standards.
  • Rules regarding modification to benchmarks during a pending performance year.
  • A prohibition on an ACO provider filling the “beneficiary representative” slot on the ACO’s governing body.
  • Additional flexibility regarding the qualifications of the ACO’s medical director.
  • A transitional process from the Pioneer program to the MSSP.
  • Revised process for beneficiaries to elect to opt out of data sharing.  Beneficiaries will only be permitted to opt out directly through CMS.
  • Expansion of beneficiaries that are included in aggregate reports.
  • Removal of the requirement for ACOs to provide opt-out information to beneficiaries before requesting claims data.
  • Waiver of the three-day inpatient stay rule for certain nursing home admissions during Track 3.
  • Several revisions to the beneficiary assignment process.
  • Changes to the annual shared savings repayment mechanisms.
  • Permitting a second year of Track 1 participation for certain ACOs.
  • Revisions to the manner in which ACOs may select their MSR/MLR under Track 2.
  • Provision for prospective assignment of beneficiaries to Track 3.
  • Sharing of up to 75% of savings in Track 3.
  • First year benchmarking remains unchanged.
  • Revision of  benchmarking methods applicable to ACOs entering their second and subsequent contract periods.   Benchmarking years will be equally weighed to reflect the average per capita shared savings.

Clinically Integrated Networks – Fee Sharing Procedures

March 25th, 2015

Jointly Providing Health Care Fee Information to Payers 

As health care provider networks move down the path toward clinical integration, we are often asked to provide guidance on how information can be jointly provided to payors.  The antitrust laws recognize that collective sharing of some pricing information, even by otherwise competing providers, can be beneficial and does not necessarily violate antitrust laws.  However, there are significant limitations on what can be jointly provided and how the information can be shared.

At the outset, it should be clarified that collective negotiations by competing providers who are not financially or clinically integrated should never take place and constitutes a per se violation of federal antitrust laws.  Prohibited activities include any action in contemplation of or in furtherance of an agreement on fees or other aspects of reimbursement.  It is unlawful for a non-integrated group of competing providers to agree on or suggest a central fee schedule.  Any activity relating to prospective fees should be avoided.

Competing providers can jointly provide information on fees currently being charged or that have been charged in the past as long as certain safeguards are implemented and strictly followed.  The FTC and DOJ have stated that the joint provision of historic fee information to payors raise little anticompetitive concerns as long as the following conditions are met:

1.         Collection of fee information is managed by a third part;

2.         Any information that is made available to competing providers must be at least three (3) months old;

3.         Data provided to participating providers must meet further requirements, including:

a.         It must be aggregated so recipients cannot identify the prices charged by individual providers;

b.         There must be at least five (5) providers reporting data that goes into an integrated statistic; and

c.         No provider can represent more than twenty-five percent (25%) on a weighted basis for any statistical item.

I normally recommend that provider groups create antitrust policies that address the provision of fee information to payors and other sensitive antitrust issues.  Even an organization that is significantly clinically integrated should be concerned with the method used to convey fee information to payers.

Adopting and applying specific antitrust policies is a step toward assuring antitrust compliance.  Antitrust policies should include detailed processes for conveying fee information that incorporate the parameters applicable to the organization.

Bundled Payment Arrangements for Clinically Integrated Networks

February 27th, 2015

Bundled Payment and ACO Arrangements – Clinically Integrated Payment Methodologies

Bundled Payment Arrangements CINsBundled payment involves an agreement between a provider group and a payor for the management of a defined segment of care for an agreed price. A bundled payment would include one payment for all providers involved in the episode of care that is within the bundled area. All providers providing care within the episode of care are entitled to be covered under the bundled payment.

The idea behind bundled payment is to place providers across the spectrum of the applicable care continuum at financial risk and to provide shared financial incentives. In theory, this forces otherwise disjointed providers to cooperate to better coordinate care and to coordinate at a higher level with other elements of the continuum of care.

Bundled payment is one of the primary reasons why providers are mobbing toward clinically integrated health care systems. CINs provide a mechanism for providers across the continuum of care to agree upon protocols and other mechanisms to help them be more cost efficient in the management of bundled areas of care while maximizing the quality of care and outcomes provided to patients.

The Center for Medicare and Medicaid Services has developed a Bundled Payment Program through its Innovation Center. (76 Fed Reg. 53, 137, August 25, 2011). The BPCI (Bundled Payment Initiative) creates four models for bundled payment under the Medicare program and provides some guidance regarding the models that may be offered in the private pay area. However, there is no guarantee the private models will follow the CMS model.

Bundled payments can be either prospective or retrospective in nature. Where the payment is retrospective, Medicare pays in a fee-for-service basis subject to later reconciliation if the episode of care is classified under a bundled payment category. Retrospective bundled payment is contrasted with prospective bundling where the bundling classification is defined in advance and one single, predetermined amount is paid based on the predetermined amount.

As mentioned above, clinically integrated organizations provide a useful mechanism to facilitate bundled payment mechanisms. Under the Medicare program, there are two potential roles that a CIN can be either an Awardee or a facilitator. An Awardee  agrees to assume payment risk under bundled payment initiatives. It is their responsibility to enter contractual arrangements with the full continuum of care that is required to service the bundled episode. Awardees must contract with “episode initiators: which can include physician groups, hospitals, and potentially other providers depending on the model of bundled care that is involved.

For more information on bundled payment mechanisms and structuring clinically integrated organizations, feel free to contact John Fisher in our health care practice group.

Ambulatory Surgery Centers – Federal Settlement Highlights Safe Harbor Requirements

September 29th, 2014

ASC Investments Safe HarborsA Tennessee based ambulatory surgery center company has agreed to pay damages to a former employee who filed a suit alleging that physician investments in local surgery center entities violated the Anti-kickback Statute.  The case highlights some of the unique kickback issues that are present in ambulatory surgery center structure.  Specifically, the case demonstrates how investment terms that are intended to assure compliance with the safe harbor regulations under the Medicare Anti‑Kickback Statute (42 U.S.C. § 1320a-7b(a)-(b)) can create evidence of non-compliance if the initial terms of the offering relate, in whole or in part, to the volume or value of expected referrals from the investor in the ASC venture.

In order to comply with safe harbor requirements, ASCs must generally require investing physicians to use the facility as an extension of their medical practices.  However, if the terms of the investment are based on the volume or value of referrals, those same requirements become evidence that referrals are being required in exchange for remuneration.  In the Tennessee case, the ASC management company purchased controlling interests in local surgery center entities at a high multiple of earnings.  Physicians who were referral sources were offered investments at less than 1/3 of the value that was applicable to the non-referring management company.  That differential in value was evidence of “remuneration” under the Anti-kickback Statute and also indicated that investment terms were more advantageous based on expected referrals.

Structuring ambulatory surgery center investments to comply with Anti-kickback requirements is an extremely complex task.  Indications of compliance can become evidence of non-compliance depending on initial investment terms.  Cases such as the Tennessee case illustrate the problems that can occur when safe harbor requirements are not complied with and when decisions on investment or exclusion are made based on past or anticipated referrals.  The Tennessee case also illustrates how these issues come to light.  The Tennessee case was filed as a whistleblower case by a former administrator of one of the local surgery centers who walked away with a settlement in the millions of dollars.

We have published a more complete analysis of the Tennessee case which you can access through the following link   ASC-Investment-Federal-Case

Is your EHR Donation Agreement in Compliance?

May 23rd, 2014

The EHR donation regulations allow certain qualified entities to provide nonmonetary remuneration to physicians and other health care providers to obtain electronic health information systems without violating the Anti-Kickback Statute or the physician self referral laws.  Hospitals and other organizations have structured EHR donation programs around the existing exception.  The regulations that permitted hospitals to make payments on behalf of physicians for EHR technology was set to expire on December 31, 2013.

The Center for Medicare and Medicaid Services released final regulations on December 27, 2013, which extended the protections of the EHR donation regulations through December 31, 2021.  However, it is important that providers examine their EHR donation agreements to determine whether continued payments under the agreement comply with federal law.  Many EHR donation contracts contain automatic expiration clauses that terminated the agreement on December 31, 2013.  If those agreements have not been properly extended, payments that may have occurred under those agreements following expiration may raise compliance issues.

Providers should not assume the continued payments are protected under the extended EHR donation expiration date.  In many instances, entering a new agreement or amendment of existing agreements will be required in order to continue to qualify donation amounts under the application exceptions.

John H. Fisher

Health Care Counsel
Ruder Ware, L.L.S.C.
500 First Street, Suite 8000
P.O. Box 8050
Wausau, WI 54402-8050

Tel 715.845.4336
Fax 715.845.2718

Ruder Ware is a member of Meritas Law Firms Worldwide

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