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Archive for the ‘Reimbursement’ Category

“Incident to” Billing Rules Clarified by CMS for 2016

Thursday, September 1st, 2016

Recent Changes to Medicare “Incident To” Billing Rules

incident to billing rules supervision requirementMedicare permits a physician to bill for certain services that are furnished by a nurse practitioner or other auxiliary personnel under what is referred to as the “incident to” billing rules.  The “incident to” rules permit services or supplies furnished as an integral, although incidental, part of the physician’s personal professional services in the course of diagnosis or treatment of an injury or illness to be reimbursed at 100% of the physician fee schedule, even if the service is not directly furnished by the billing physician.

A significant requirement to permit the services of physician extenders to be billed as “incident to” services requires direct personal supervision by the physician. The supervising physician does not necessarily need to be present in the same room where the procedure is being performed.  The “direct supervision” standard requires the supervising physician to be “physically present in the office suite and immediately available to furnish assistance and direction” during the time when the  auxiliary personnel is providing the service.

The 2016 Medicare physician payment rule provided some clarification on how the direct  supervision requirement under the “incident to” billing rules operates.  The new rule clarifies that the physician who directly supervises the applicable auxiliary personnel is the only party that can bill the service of the auxiliary personnel as “incident to” his or her service.  CMS considers this to be a clarification of its longstanding policy, but many providers will see this as a new restriction on the application of the “incident to” rules.

To understand the significance of this “clarification,” it is useful to note that more than one physician is often involved in the care of a patient.  It is not uncommon for one physician to visit the patient and order a test or procedure that is supervised by another physician.  Prior to this “clarification,” the physician that originally ordered the service might have billed the service as “incident to” even though another physician actually supervised the performance of the service.  The revised regulatory language clarified that this is not permitted and that only the physician that is actually present in the office suite and supervises the service can bill for the service as “incident to” their service.  When making a claim for services billed “incident to” a physician’s services, the billing number of the physician that actually supervises the performance of the service must be used rather than that of the ordering physician.

CMS clarifies the reasoning behind this rule as follows: “[B]illing practitioners should have a personal role in, and responsibility for, furnishing services for which they are billing and receiving payment as an incident to their own professional service.”

In view of this regulatory clarification, providers may wish to reexamine their billing process and procedures to clarify the correct billing for “incident to” services.  Staff should also be trained on the proper supervision of services that are billed under the “incident to” rules.

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

Friday, 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.

Population Health Management and Clinical Integration

Monday, 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.”

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Medicare Shared Savings Program Changes Under 2016 Physician Fee Schedule Regulations

Friday, 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.

Telemedicine Private Reimbursement State Laws Mandate

Tuesday, April 22nd, 2014

Telemedicine Private Reimbursement – More States Look at Private Payment Mandates 

Much of the discussion surrounding telemedicine relates to factors that slow the implementation of its use.  One factor contributing to this is the lack of consistent and comprehensive reimbursement.  There is no systematic private payment across the country.  Many private payors refuse to cover telemedicine services.  Others do so on a limited basis.  The inconsistency makes the burden and costs high for providers who use telemedicine.

Some states have responded to this inconsistency by enacting laws.  As of the current date, 16 states have enacted some type of law mandating payment for health care services that are provided through use of telemedicine technologies.  Three states, Michigan, Maryland, and Vermont, added new laws to their books during 2012 that mandate some level of telemedicine reimbursement.

The American Telemedicine Association has reported that 8 additional states have introduced telemedicine reimbursement laws already in 2013.  Those states include Florida, District of Columbia, Connecticut, Mississippi, Nebraska, Indiana, South Carolina, and New Mexico.  Some of the listed states have introduced general requirements that telehealth be reimbursed without discrimination.  Others have addressed more limited coverage scope such as Indiana, which is considering coverage to home health agencies, federally qualified health centers and rural clinics.

It is uncertain what the final outcome of the recently introduced legislation will be.  It is also probable that more states will consider various forms of private payment requirements for telemedicine services.  We are likely to see more states address this issue over upcoming years as telemedicine gains more traction.

Statistical Sampling in False Claims Act Cases

Monday, March 31st, 2014

A case currently pending in the federal courts may have a significant impact on the federal government’s ability to use the False Claims Act as an enforcement tool.  One of the central issues in the case of U.S. ex rel. Martin v. Life Care Centers of America, Inc. involves the ability of the government to use statistical sampling to estimate damages in False Claims Act cases.

The case against Life Care Centers of America, Inc. (“Life Care”) alleges that Life Care routinely provided a generic care program rather than tailoring individualized programs to the specific needs of patients.  Allegedly, this resulted in Life Care billing for more days of rehabilitation than were necessary for patients receiving its care.  The government claims that overbillings resulted in False Claims to federal health care programs.

The government’s case alleged that Life Care utilized higher levels of Resource Utilization Groups (“RUG”) than were appropriate across its patient population.  The government alleged that Life Care utilized a number of practices to pressure providers to increase the level of service and corresponding RUG classification in order to increase the reimbursement that it claimed under government health programs.

The central issue now pending in the case involves the extent to which the government can use statistical sampling techniques to determine liability in False Claim Act cases.  The government’s case involves a systematic practice by Life Care with a potential impact on a very large population of claims.  Obviously, this would make it very difficult for the government to prove damages if each claim had to be individually addressed.  Use of statistical sampling in a case of this magnitude is crucial to the government’s case.

Statistical sampling involves analysis of a statistically valid random sample of cases.  Chosen cases are audited to determine the rate and amount of overpayment or damages.  The results from the audit of the sample are then extrapolated to the entire population of potential claims to estimate the total obligation.  The use of statistical sampling is common in the health care industry.  However, the courts have not provided a conclusive decision on the extent of its use for estimating damages in the context of fraud prosecutions.

The issue of statistical sampling in this case is currently before the U.S. Supreme Court who is determining whether it will hear argument on the case.

We will keep our readers posted on the outcome of this important case.

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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