Health Law Blog - Healthcare Legal Issues

False Claims Act Liability – Conditions of Participation and Conditions of Payment

June 24th, 2016

7th Circuit Law on False Certification Completely Changed Overnight

False claims act supreme courtUp until June 16, 2016, the law in the 7th Circuit was very clear; violations of conditions of participation did not support a potential False Claims Act claim.  Only violation of a specific condition of payment could support potential liability.

That all changed with a decision of the United States Supreme Court that was issued on June 16, 2016.  In a case arising out of the Massachusetts Medicaid program, the Supreme Court held that under the right circumstances, the violation of a condition of participation can give rise to False Claims Act liability.  Universal Health Services v. United States ex rel. Escobar, http://www.scotusblog.com/case-files/cases/universal-health-services-v-united-states-ex-rel-escobar/

In rejecting the distinction between conditions of payment and conditions of participation.  Instead, in the Court’s opinion “what matters is not the label that the Government attaches to a requirement, but whether the defendant knowingly violated a requirement that the defendant knows is material to the Government’s payment decision.”

When evaluating the FCA’s materiality requirement, the Government’s decision to expressly identify a provision as a condition of payment is relevant, but not automatically dispositive.  A misrepresentation cannot be deemed material merely because the Government designates compliance with a particular requirement as a condition of payment.  Nor is the government’s option to decline to pay if it knew of the defendant’s noncompliance sufficient for a finding of materiality.  Materiality also cannot be found where the noncompliance is minor or insubstantial.

The net effect of the decision is to case uncertainty over the false certification analysis.  At least in the 7th Circuit, prior to the Court’s decision, we at least knew that only failures in condition of payment could support potential False Claims Act liability.  Simple violation’s of conditions of participation could not support such a claim.  Now we are told that violation of a condition of participation can result in a False Claim if it is “material” to the Government’s payment decision.  The standard no requires analysis of each situation under the “materiality” requirement.

People in the health care industry know that violations of conditions of participation happen frequently.  Facilities often receive citations, and must correct deficiencies.  When those deficiencies can result in False Claims is now quite nebulous.

CMS Releases Final Rules Under Medicare Shared Savings Program

June 21st, 2016
  • final aco rule revision 2016 msspMSSP Final Rules Revision ACO Requirements Under Shared Savings Program – 2016 Revised MSSP Regulations Issues

On June 10, just in time for my birthday (thanks CMS), the Centers for Medicare & Medicaid Services (CMS) released final rules amending the regulatory requirement applicable to the Medicare Shared Savings Program (MSSP). The Final Rules that were published on June 10, 2016 state the intent to encourage additional participation in the program and to ease financial burdens on participating Accountable Care Organizations (ACOs). The regulations attempt to provide incentives for existing ACOS to renew their participation and elect to pursue higher levels of risk. The revised rules reflect an element of additional flexibility that ACOs may be able to take advantage of when transitioning between participation tracks.

There are a variety of changes in the new regulations. A few of these changes include:

  • Clarifications regarding times that shared savings and shared loss claims may be re-opened by CMS.
  • Changes in how benchmarks will be calculated beginning in 2017. (Increasing consideration of regional Medicare expenditures total population health of the population that is assigned to the ACO).
  • Adoption of adjustments based on average fee-for-service Medicare expenditures applicable to the relevant regional service area for purposes of calculating benchmark adjustments. County-by-county averages will be utilized for expenditures attributable to the total cost of services to beneficiaries within the applicable county.
  • Adoption of risk-adjustment factors when revising an ACO’s benchmarks. Risk adjustment is to be based on the relative health status of the ACO’s assigned population.
  • Revision of the manner in which CMS performs truncating and trending calculations.

The new rules clarify that CMS has the authority to reopen and make revisions to MSSP payments in cases of fraud and for other similar reasons. Even when fraud does not exist, CMS will have four years after providing notice of initial determination of shared savings or loss to reopen and revise for any good cause. Unfortunately, there is not definition of what constitutes “good cause” in the new rules. In comments, CMS indicates that it will excercise this authority where there evidence that was previously unavailable evidence that indicates error in the original determination or where previously available evidence is clearly determined to have been relied on erroneously. This rather broad “reopening” authority presents significant financial uncertainty for ACOs.

Under the new rules, ACOs will now be able to remain in Track 1 for a fourth year before transitioning into Tracks 2 and 3 which involve higher degrees of risk. Additionally, ACOs that choose to progress to higher risk tracks will be able to have their benchmark recalculation deferred for an additional year. These changes are being made to make it easier for ACOs to transition to higher risk tracks.

 

Population Health Management and Clinical Integration

June 13th, 2016

Population Health ManagementPopulation Health Management and Clinical Integration – The Center of the Reformed Health Care System

Population health management is bigger than ever now that health reform has become ingrained in our health care system.  The concept of population health management is not necessarily new.  Related concepts emerged in the 1990s when capitated reimbursement gained some converts.  It was known then that in order to succeed under fixed levels of total compensation required systems to be developed to make people healthier while at the same time managing cost and resource utilization.  When a network took on capitation, it knew that it had to look at its patients as a population.  This was a change from the fee-for- service mindset that was previously and subsequently predominant in the health care system.  I think it is fair to say that there were very few organizations that successfully applied population management standards under alternative payment systems in the 1990s.  We very quickly saw capitation fall into the background because, with a few exceptions, the system just did not have it figured out yet how to view and manage population health.

Population health management has come a long way since those early efforts in the 1990s.  The concept is again front stage, but this time organizations have a head start building on what was learned in the past.  Technology and data analysis has become much more sophisticated and commonplace.  Technology is a necessary component of managing a population health and quality.  Evidence based medicine supports population management by collecting and applying baseline data, comparing data to other baselines, helping to structure evidence based care protocols based on current medical outcomes studies, and the ability to measure the success of an applied process or protocol.  This move toward technological support of population management was behind the move to virtually mandate electronic health records through legislation and regulations.  This technological infrastructure now serves as the backbone to permit data to be extracted in support of evidence-based population health management.

Population management is being embraced by forward looking organizations that have a vision of the future.  It can be quite an adjustment to make the changes that are necessary to indicate success under a population management system.  The old system rewarded providing more services that were reimbursed on a fee for service basis.  The old fee-for-service model is changing rapidly.  Overall population quality, outcomes and cost efficiency are now taking front seat.  Some providers who did very well under the old system can have difficulty adjusting their practice patterns to adjust to the new regimen.  More service led to more revenues under the old system.  Under population management, more is not always better.  Concepts of “more” are being replaced by concepts of “appropriate.”  Appropriate levels of service performed in appropriate service locations, by appropriate providers.

Hospitals, health care system, physician groups and others are finding it necessary to adapt to a new world in which providers are rewarded for meeting quality objectives for their entire patient population.   Where volume used to be king, efficiency and quality have now taken over the health care kingdom.

Our health care practice is normally a great indicator of trends in the industry.  In the 90′s we did a lot of provider integration work.  This work has now come full circle and is again a major part of our health care practice.  Our health law practice is involved creating clinically integrated organizations that are equipped to manage population health on several fronts.  This is an exciting process for our health law team as we are on the cutting edge of the hottest issues in health care.  We are creating new health care systems that include new collaborative relationships between providers.  We are applying these concepts in unique and creative ways.  This creative process results in a very exciting legal practice.

We will be posting a series on clinical integration in which we share some f our experience applying population management and evidence-based evidence standards to a number of specific types of organizations.  We will touch on some of the legal, business and operational challenges that we have encountered.

Grab our rss feed and come along for the journey as we cover “clinical integration in the new millennium.”

About the Author

What Does the HIPPA Phase2 Audit Program Mean for Providers

April 19th, 2016

HIPAA Phase 2 Audit Program Announced by OCR

HIPAA Phase 2 Audit ProgramThe HHS Office for Civil Rights (“OCR”) has Officially announced The commencement of its 2016 Phase 2 HIPAA Audit. In Phase 2, OCR Will be reviewing the policies and procedures of covered entities and their business associates. This phase of audits is intended to determine whether providers have properly implemented and satisfy standards and implementation specifications of the privacy, security, and breach notification rules. For the most part, Phase 2 audits will  include only document review to determine compliance with policy and procedure requirements. In cases of noncompliance, the initial document review may turn into a formal site visit and more complete HIPAA audit.

The OCR will be sending an email to covered entities and business associates requesting verification of an entity’s address and contact information. This will be followed by transmission of a pre-audit questionnaire asking for information about the size, type, and operations of covered entities and business associates. This information will be used in conjunction with other information to create potential audit subject pools. It is critical that providers respond to the request for information within the specified timeframes. Failure to respond may increase the chances of further audit and scrutiny. More details will be forthcoming from OCR regarding audit protocols in the near future.

A provider’s chance of audit are much greater under the phase 2 audit program than under the prior phase.  Not all providers will be subject to audit. OCR is using the increased risk of audit to assure that providers make preparations and enhance their policies, procedures, business associates agreements and other compliance documentation and practices.  Given the public nature and time that providers have been given to get their ship in order, audits are likely to be less forgiving that the previous phase.

What does this mean to providers? Now is the time to make certain that HIPAA practices, policies and procedures are in compliance with legal requirements. Providers may consider performing an effectiveness audit  of their HIPAA policies and process to identify any gaps in policy and practice that could lead to further investigation under the phase 2 program.  Providers assure that their information privacy program includes all necessary elements and would withstand and audit.  Even though no specific provider is certain to be audited, some certainly will be.  Every provider needs to be ready for this possibility.

Clinical Integration Readiness Analysis CINs

January 26th, 2016

 Are You Ready for Clinical Integration?

When we take on a nClinical Integration Attorneyew clinical integration project, one of the first activities we advise is the performance of a snapshot clinical integration readiness analysis.  The theory is that a future CIN needs to know where it is in the clinical integration process before it can plan where it needs to go and the steps that it needs to take.  The initial assessment gives indications of the existing lay of the land and helps the organization shape an integration business model with a more accurate context.

Through this initial assessment process, we can identify structural or governance issues that may hamper further integration.  The readiness assessment is only the beginning of a long road toward clinical integration.  However, time spent on this initial stage can save significant time and effort in the long term.

During early assessment and design stages, we attempt to encourage broad participation by providers.  We will normally recommend the creation of a governance and committee structure that is as inclusive as possible.  Clinical integration is primarily a process that physicians perform.  Mechanisms are created through which physicians collaborate across specialty, in an interdependent way toward the end goals of increasing quality and efficiencies.  Ideally, the process should be collaborative between physicians and institutional providers.  However, the dynamics between hospitals and physicians can sometimes adversely impact the working relationship.

Hospitals have been the center of the health care system through recent history.  Changes in the health care system are beginning to change that paradigm.  Health systems that recognize the realities of this shift will be at a competitive advantage in the future.  In order to meet the challenges of the changing health care system, physicians and facilities need to collaborate.  True change and collaboration cannot be forced on physicians.  Failure to recognize this will put some institutions behind in the creation of the collaborative organizations that are required to compete in the future.

This factor will often manifest itself in the form of governance and control issues.  A health care system may be reluctant to share governance and control with independent physicians.  Failing to create shared governance models will predictably make physicians reluctant to become adequately engaged in the creation or operation of the system.  Many projects shall cover governance and control issues and loose important momentum.

The degree of receptivity to joint governance and control is a significant indicator of potential success.  This is an important issue that must be considered early in the assessment process.  It is often difficult to “undo” the damage that can be inflicted over these issues early in the process.

John H. Fisher, CHC, CCEP is a health care attorney at the Ruder Ware law firm.  He has been involved in the creation and representation of provider networks since the early 1990s. John has followed legal issues impacting provider groups for over 25 years.  As such, he is knowledgeable on the current legal standards as well as the historic perspective that is often relevant to an appropriate analysis.  He is currently involved advising providers and their counsel on the development of clinically integrated provider groups in various locations around the country.

 

The Truth About Physician Liability Under the Stark Law

November 18th, 2015

When Is A Physician Liable for Stark Law Violations?

Physician Liability Stark LawI frequently hear attorneys claim that the Stark law applies equally to hospitals and physicians. This position is sometimes taken in the process of negotiating a transaction between a hospital and a physician or physician group. In this context it is limited to simple posturing to attempt to get a better financial deal in the negotiated arrangement. This position takes on a different and much more serious repercussions when this position is taken in the context of a potential compliance violation that is being addressed.

Let me make it clear that the Stark law applies to physicians. It applies when physicians are the provider of designated health services. It also potentially applies to physicians when they make referrals to hospitals or other providers of designated health services. However, in referrals to other providers of designated health services, such as hospitals, the potential liability to the physician under the Stark Law is much different and more remote than the liability of the hospital.

The Stark Law applies in a much different way for the referring physician than it does for the provider of designated health services such as the hospital. The bottom line is that the physicians are subject to much less risk and are much less likely to be subject to penalties or sanctions for violating the Stark law.

Statements that physicians and hospitals are both potentially “on the hook” under the Stark law are incomplete and often disingenuous. Statements that physicians and hospitals are “in the same boat” or are “equally at risk” under the Stark are simply untrue in most common cases that are not intentional attempts to circumvent the Stark Law in some way.

To illustrate,  it is important to look at what the Stark law prohibits and what sanctions are provided for the violation. The primary sanctions for violating the Stark law is denial of payment of any designated health services that flow from referrals that are made in violation. The Stark law is primarily a payment ban that is effective regardless of intent. If there is a financial relationship with the physician and no exception exists to permit the referral, there is a violation and the provider of the designated health service is denied the right to seek payment for the prohibited services.

The Affordable Care Act attaches additional penalties under the Federal False Claims Act if repayment is not made within 60 days after the designated health service provider discovers that an over-payment occurred as a result of the Stark law infraction. Penalties for failing to make timely repayment include triple the amount of the improper payment plus an additional $11,000 per claim. In many cases the potential exposure to the designated health service provider can be astronomical and can be large enough to threaten the potential viability of their business. However, it is significant to note that none of this exposure falls on the referring physician if the referring physician does not bill for the designated health service. In the typical case involving a hospital/physician relationship, the liability exposure only falls on the hospital for the payment denial and false claims act liabilities.

This is the source of a common misconception among physicians and even some hospital attorneys. The physician is not subject to the primary sanction for violating the Stark law which is repayment of amounts received for tainted services.  This has been confirmed multiple times by the Center for Medicare and Medicaid Services.  In comments to the Stark law regulations, CMS stated that the Stark statutory scheme already protects physicians from any liability in the absence of actual knowledge, reckless disregard, or deliberate ignorance (in connection with circumvention schemes). The basic statutory sanction is this loss of claims or bills which affects the DHS entity, not the referring physician.  69 fed. Reg. 16062

Physicians are not totally off the hook from any implications of the Stark Law though. The Stark law provides that physicians can be subject to substantial civil monetary penalties and exclusion from the Medicare program if the physician participates in a circumvention scheme that the physician knows or should know has a principal purpose of assuring referrals by the physician to a particular entity to which the physician could not refer to directly without complying with the Stark Law.  In other-words, physicians are only directly liable if they participate in schemes to work around the Stark Law.

So the next time you hear someone say that the Stark Law applies just as much to physicians as it does to hospitals, you will know whether or not the statement is correct.

 

 

 

 

 

 

300 Pages of New Regulations Ruining Health Care Attorney Lives Across the Country

November 18th, 2015

 

Mountain of New Regulations Issued By CMS

Health Care Regulations 2016Just a tip to my colleagues in health care law.  Do not send these new regulations to printer before giving them an eyeball.  They are long and if you share a printer you will be buying coffee for your colleagues for at least a week.

True to their nature, there are a number of things that are unrelated to physician payment scattered throughout this poorly indexed document.  We have new Stark Law exceptions, changes to “incident to” billing rules, telemedicine reimbursement standards, and a whole host of additional little morsels that we health care attorneys need to locate, study, and update our clients on; all before the next guy down the street beats us to the rap.On November 16, 2015, the Department of Health and Human Services officially published their final rules Revising Payment Policies Under the Physician fee Schedule and Other Revisions to Part B for CY 2016.

Have a pleasant rest of your week gang.  Anyone who does not want to wade through all of these regulations can come on back to this blog as we post articles on various pieces of the new rules.

And remember; here at Ruder Ware, Health Care Never Sleeps!

Incident To Billing Rules Changed In New CMS Regulations

November 18th, 2015

New regulations issued by the Center for Medicare and Medicaid services on November 16, 2015 change the way that services that are furnished “incident to” the service of a physician must billed. The new regulations provide clarification that the billing provider must be the provider that actually supervises the incident to service.

Previously, regulations stated that the physician supervising the auxiliary personnel need not be the same physician upon whose professional service the “incident to”services base. The provisions in previous regulations that permitted another physician to supervise the incident to service have been removed. Now, the physician who is actually available and actually supervises must be the party whose billing number is connected with the incident to service.

The service that is performed “incident to” the services of a physician can generally be billed at 100% of the physician’s rate under the Medicare fee schedule.  However, supervision and billing standards must be complied with to avoid creating a compliance issue and potential overpayment.

All providers must look at their billing policies and procedures to be certain that they integrate the new “incident to” billing standards into their compliance policies and procedures and appropriately implement the new standard through proper training of their billing staff, physicians and support staff.  This is also a good time to refresh provider training on the extent of supervision that is required in various care settings.

ACO Primary Care Exclusivity Requirement – Not As Broad As Some Believe

September 1st, 2015

Exclusivity of Primary Care Physicians Under MSSP Rules

MSSP Primary Care ExclusivityThere has been a lot of confusion across the country about the primary care exclusivity requirement that applies to Accountable Care Organizations under the Medicare Shared Savings Program.  Some providers are under the mistaken belief that primary care doctors must be exclusive with the ACO under all payment types, including private commercial contracts.  This extent of exclusivity is not required under the MSSP rules.  In fact, exclusivity is a huge factor that is indicative of antitrust violation except where required under the MSSP regulations.

The exclusivity requirement for primary care physicians is limited to participation in the MSSP program.  Primary care physician are not required to be exclusive to an ACO for commercial contracts.  Below are some quotes that were made by the Center for Medicare and Medicaid Services in the recently released revised MSSP regulations.  This information clearly indicates the scope and purposes of the exclusivity requirement for primary care physicians.

CMS Statement On Exclusivity of Primary Care Providers

Response: We regret that some of the language in the preamble about  the exclusivity of ACO participants (defined by the Medicare-enrolled  billing TIN) created unnecessary confusion about the proposal. The  point of our proposal was that, for us to appropriately evaluate ACO performance, we must evaluate performance based on a patient population  unique to the ACO. Therefore, some ACO participants, specifically those  that bill for the primary care services on which we proposed to base  assignment, would have to be exclusive to an ACO, for the purpose of Medicare beneficiary assignment, for the duration of an agreement  period. In the absence of such exclusivity and in a situation where an ACO participant is associated with two or more ACOs, it would be  unclear which ACO would receive an incentive payment for the  participant’s efforts on behalf of its assigned patient population.

Exclusivity of the assignment-based ACO participant TIN ensures unique  beneficiary assignment to a single ACO.  However, exclusivity of an ACO  participant TIN to one ACO is not necessarily the same as exclusivity  of individual practitioners (ACO providers/suppliers) to one ACO. We did state somewhat imprecisely in the preamble to the proposed rule that “ACO professionals within the respective TIN on which beneficiary  assignment is based, will be exclusive to one ACO agreement in the  Shared Savings Program.  This exclusivity will only apply to the primary care physicians.” This statement appears to be the basis of the  concerns expressed by many commenters, and we understand the reasons  for those concerns. However, we stated the policy (76 FR 19563) we  intended to propose more precisely elsewhere in the preamble, when we  stated that “[t]his exclusivity will only apply to primary care physicians (defined as physicians with a designation of internal medicine, geriatric medicine, family practice and general practice, as discussed later in this final rule) by whom beneficiary assignment is established when billing under ACO participant TINs. (Emphasis added).

Thus, the exclusivity necessary for the assignment process to work  accurately requires a commitment of each assignment-based ACO participant to a single ACO for purposes of serving Medicare  beneficiaries. It does not necessarily require exclusivity of each primary care physician (ACO provider/supplier) whose services are the  basis for such assignment.   For example, exclusivity of an ACO  participant leaves individual NPIs free to participate in multiple ACOs  if they bill under several different TINs. Similarly, an individual NPI  can move from one ACO to another during the agreement period, provided  that he or she has not been billing under an individual TIN. A member of a group practice that is an ACO participant, where billing is  conducted on the basis of the group’s TIN, may move during the  performance year from one group practice into another, or into solo practice, even if doing so involves moving from one ACO to another.

This degree of flexibility is, in fact, one reason for our preference  to use TINs to identify ACO participants over NPIs: adopting NPIs in  place of TINs would result in the much stricter exclusivity rules for  individual practitioners to which so many commenters objected, than the  use of TINs to identify ACOs. This flexibility is limited, once again,  only in cases where the ACO participant billing TIN and individual TIN  are identical, as in the case of solo practitioners. Even in those  cases, moreover, it was not our intent (and it is no part of the policy that we are adopting in this final rule) that an individual  practitioner may not move from one practice to another. But while solo  practitioners who have joined an ACO as an ACO participant and upon  whom assignment is based may move during the agreement period, they may  not participate in another ACO for purposes of the Shared Savings  Program unless they will be billing under a different TIN in that ACO.

We are therefore finalizing our proposal that each ACO participant  TIN is required to commit to an agreement with us.  In addition, each  ACO participant TIN upon which beneficiary assignment is dependent must  be exclusive to one ACO for purposes of the Shared Savings Program. ACO  participant TINs upon which beneficiary assignment is not dependent are  not required to be exclusive to a single ACO for purposes for the  Shared Savings Program.  As we discuss in section E found later in this  final rule we are also providing for consideration of the primary care  services provided by specialist physicians, PAs, and NPs in the assignment process subsequent to the identification of the  “triggering” physician primary care services. We are therefore also   extending our exclusivity policy to these ACO participants. That is,  the TINs under which the services of specialists, PAs, and NPs are  included in the assignment process would have to be exclusive to one  ACO for purposes of the Shared Savings Program. (We emphasize that we  are establishing this policy for purposes of Shared Savings Program  ACOs only: Commercial ACOs may or may not wish to adopt a similar  policy for their purposes.

Medicaid Reimbursement for Telehealth In Wisconsin Mental Health Programs

August 11th, 2015

Wisconsin Medicaid Reimbursement for Telehealth In Mental Health Programs

A Medicaid enrolled certified mental health or substance abuse treatment program may be eligible for Medicaid reimbursement for telehealth services if it is also certified to provide treatment via telehealth.  Medicaid-covered services provided via telehealth are reimbursed in the same way Medicaid reimburses for face-to-face contacts between providers and consumers.  The Medicaid Handbook Update #2004-88 at  https://www.forwardhealth.wi.gov/kw/pdf/2004-88.pdf, described coverage requirements.

1.            The agency must be a certified program under one of the specified program standards: Wis. Admin. Code DHS34, 35, 36, 40, 61, 63, or 75 (except for the provision of opioid treatment under DHS 75.15).

2.            Persons providing mental health or substance abuse treatment services via telehealth must be a rostered staff member of one of these certified programs.

3.            Medicaid will not accept claims from individual professional staff.

4.            The certified program also is certified for telehealth by the Division of Quality Assurance.

5.            The treatment service must be a covered service under one of the Medicaid mental health or substance abuse benefits.

6.            The treatment service may not be group therapy.

7.            The provider must indicate the “GT” modifier on the claim detail for the specific procedure code. The “GT” modifier definition is “Via interactive audio and video telecommunication systems.”

8.            Providers must continue to follow all Medicaid coverage policies and all other requirements for each underlying service in the same manner as if the service was provided on  face-to-face basis.

For more information concerning telehealth program issues for mental health care or other provider types, contact John Fisher at through the contact information on this site.

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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