Health Law Blog - Healthcare Legal Issues

Archive for January, 2011

Hospital Inpatient Value-Based Purchasing Program Rules

Saturday, January 22nd, 2011

Hospital Inpatient Value-based Purchasing Program:New Rules Proposed By CMS

CMS has  issued a notice of proposed rule-making to the Federal Register on January 13, 2011 concerning the hospital value-based purchasing program.  The new program has become known as the VBP Program.  CMS was required to develop this program under the Accountable Care Act.

The hospital value-based purchasing program, which would apply beginning in FY 2013 to payments for discharges occurring on or after October 1, 2012, would make value-based incentive payments to acute care hospitals, based either on how well the hospitals perform on certain quality measures or how much the hospitals’ performance improves on certain quality measures from their performance during a baseline period. The higher a hospital’s performance or improvement during the performance period for a fiscal year, the higher the hospital’s value-based incentive payment for the fiscal year would be.

CMS is accepting public comments on the proposed rule through March 8, 2011.

The proposed regulations can be found at this link.

Stark Law Self Disclosure Protocols | Do They Create More Ambiguity?

Friday, January 14th, 2011

Self Disclosure Protocols May Actually Muddy The Waters For Many Providers
Stark Law Self Disclosure Considerations Become More Confusing

Self Disclosure Stark Law ViolationsThe Affordable Care Act of 2010 required CMS to publish protocols to assist providers in self disclosing actual or potential violations of the Ethics in Patient Referrals Act, known as the Stark Law.  The self disclosure protocols permit a provider or supplier to voluntarily come forward with Stark Law violations in the hope of minimizing and potential penalties for the violation.

CMS recently published Voluntary Self-Referral Disclosure Protocol on its web site.  The protocols were issued without going through the regulatory process and as such, there was no opportunity for providers to comment on the proposals before they were issued.

The protocols contain useful information regarding the procedures to be followed when making a self-disclosure.  However, in their totality, the protocols were extremely disappointing because they did nothing to assist providers in making decisions whether to voluntarily disclose questionable violations.  At the same time, the protocols raise the stakes to providers of using the self disclosure protocols because they “tip the scale” more in favor of the government when the process is used.

The Stark Law contains numerous areas of uncertainty.  There are legitimate questions whether many activities violate the Stark Law.  The protocols do nothing to help providers assess these ambiguous areas of interpretation.  Rather, once a provider submits a matter to the self disclosure protocols, it is evident that the government will treat the disclosed arrangement as violating the law; even in cases where the provider is acting in good faith by submitting an ambiguous arrangement through the self disclosure protocols.

The protocols also raise the stakes and create ancillary risk. For example, in-artful wording
in the protocols raise questions whether using the procedures could subject the organization to reopening of claims and cost reports that could not be reopened under existing procedures.  This may not have been the intent of CMS, however a close reading of the protocols raise potential issues that need to be considered by providers when determining whether to submit “close call” cases to the self disclosure process.

Another significant development is that the provider will now be asked to waive attorney-client privilege, apparently as a condition of submitting the arrangement to the self disclosure protocols.

Another ambiguous issue created by the protocols surrounds the 60 day overpayment return requirement that was created under the Affordable Care Act.  Once a violation of Stark is identified, a provider is statutorily obligated to reimburse the government for over-payments within 60 days.  This is a statutory requirement.  The protocols confuse matters by stating that the 60 day requirement will be tolled pending review of the self disclosure.  CMS states that a provider should withhold payment during the review.  But what of cases where the review takes longer than 60 days?  Does CMS have the ability to over-ride a statutory obligation by creating a “protocol?”

In its present form, it is difficult to envision a situation where a provider would use the self-disclosure protocol for Stark Law violations in situations that do not involve clear violations.  Each provider will need to make this determination given the fact of each case and after a close reading of the protocols and consideration of their implications.  However, it does not appear that the recently released protocols are of any assistance to provider who may be assessing whether to submit anything but clear Stark Law violations through the self-disclosure protocols.

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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