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Posts Tagged ‘Medicare’

Medically Directed Anesthesia Conditions For Payment

Wednesday, May 8th, 2013

Conditions For Payment Of Medically Directed Anesthesia

 medically directed anesthesia coverageIn my previous article regarding anesthesia billing practices, I neglected to mention another risk associated with over billing for medically directed anesthesia.  Engaging in the described practices tends to raise issues beyond the “double billing” issue that is directly raised.  This type of issue can also raise further scrutiny of the source bills.  For example, an insurer may decide to perform an extended audit of billings as a result of the billing anomalies that I described in my previous article.  The review might disclose a systematic problem documenting all of the prerequisites that permit the billing for medically directed services.

 In order to bill medically directed anesthesia services, seven primary elements need to be clearly indicated in the medical record:

  1. The physician must perform a pre-anesthetic examination and evaluation;
  2. The physician must prescribe the anesthesia care;
  3. The physician must personally participate in the most demanding aspects of the anesthesia plan, including, if applicable, induction and emergence;
  4. The physician must assure that any procedures in the anesthesia plan, that he or she does not perform, are performed by a qualified individual as defined in the operating instructions;
  5. The physician must monitor the course of anesthesia administration at frequent intervals;
  6. The physician must remain physically present and available for immediate diagnosis and treatment of emergencies; and
  7. The physician must provide indicated post-anesthesia care.

If one or more of these elements is not indicated in the medical record, the claim may be denied altogether, sometimes for both the physician and the CRNA services.  The physician alone is responsible for documenting each of these activities in the chart.  Like everything else, if it is not in the chart, it did not take place.


You can see how the originally risky billing practice could trigger a further audit and in turn uncover deficiencies in documenting the conditions for medically directed reimbursement.  If a systematic error is made in documenting the seven elements, there can be significant additional financial exposure to the group.

OIG Issues 2013 Annual Work Plan, Outlines Areas of Focus for Fiscal Year Ahead

Wednesday, October 10th, 2012

OIG 2013 Annual Work Plan Summary 

            Medical Practice Compliance Programs  The Office of Inspector General of the Department of Health of Health and Human Services (“OIG”) has published their annual work plan for the 2013 fiscal year (“2013 Work Plan”).  The Work Plan focuses on areas where OIG plans to focus significant resources during the 2013 fiscal year.  The 2013 Work Plan creates opportunities for providers to get a glimpse of what the OIG feels is important and to integrate these areas into their ongoing compliance activities.

              This update will briefly summarize some of the new issues that were added this year.  It is not a comprehensive description of all items that are on the OIG’s radar.  Providers are advised to review the entire 2013 Work Plan plus the work plans from the past several years to get a more complete picture of issues that the OIG feels are important.

Hospital-Related Issues

1.           Expansion of DRG Payment Window.  OIG states its intent is to analyze claims data to determine whether any savings could be achieved by bundling outpatient services that are delivered up to 14 days before a hospital inpatient admission.  Current Medicare policy bundles outpatient services that are delivered three days prior to inpatient admission into the “DRG window.”

2.           Provider-Based Status of Hospital on Physician Practices.  There is currently an incentive for a physician group to bill as a provider-based physician practice where there are ties to a hospital.  The OIG will be reviewing the appropriateness of physician practices who are billing as “provider-based” groups without meeting all of the necessary criteria.

3.           Medicare Transfer Policy.  The OIG will review Medicare payments made to hospitals for beneficiary discharges that should more appropriately have been coded as transfers.  Hospitals that transfer beneficiaries to another facility are not entitled to the full DRG payment that is due when a patient is properly discharged.  This creates an incentive for hospitals to code for a discharge when the patient is actually being transferred to another facility.  The OIG will be reviewing hospital billings to look for inappropriate “discharge” classifications.  Hospitals should audit their discharge and transfer practices to be certain that they are properly coding transfers where applicable.

4.           Payment for Discharges to Swing Beds and Other Hospitals.  Currently, Medicare does not reduce the DRG amount that is paid when a patient transfer is made into a “swing bed,” even when the “swing bed” is located in a separate facility.  The OIG will be reviewing this practice to determine whether any savings can come from reducing DRG payments when the swing bed transfer is made to another facility.

5.           Hospital Payments for Canceled Surgical Procedures.  The OIG will be reviewing payments that are made for canceled surgical procedures which are then followed by a second payment for a rescheduled procedure.  Current Medicare policy does not preclude payments for claims when there is an inpatient stay followed by canceled surgical procedure.  CMS will be reviewing this policy to determine whether savings can be made in this area.

6.           Payments from the Mechanical Ventilation.  CMS will be reviewing Medicare payments for mechanical ventilation.  Patients are required to receive 96 hours of mechanical ventilation in order to be eligible for payments under the DRG system.

7.           Improve An Organization Work With Hospital.  OIG will be reviewing the extent that Quality Improvement Organizations have worked with hospitals to conduct quality improvement projects and to provide technical assistance.

8.           Hospital Acquisition of Ambulatory Surgery Centers.  OIG will be reviewing hospital acquisitions of ambulatory surgery centers to determine whether these centers are being acquired as a method to increase reimbursement.  ASC services that are provided as in an outpatient department of the hospital are reimbursed at higher rates than independently owned an ambulatory surgery centers.

9.           Critical Access Hospital Payments for Swing Bed Services.  Critical access hospitals are able to designate a portion of the 25 bed allotment for use as acute care or swing bed services with CMS’s approval.  There is no limitation on the length of stay that is permitted for swing bed utilization.  The OIG will be reviewing this policy to determine whether reimbursement changes are required in this area.

Long Term Care Issues

1.           Long-Term Care Hospital Interrupted State Payments.  The OIG will be reviewing Medicare payments for interrupted stays in long-term care hospitals for the year 2011.  They will be identifying readmission patterns to determine whether the long-term care hospital’s re-admittance policies are in compliance with rules.

2.           Nursing Home Verification of State Agency Deficiency Corrections.  The OIG will be determining whether state survey agencies properly followed up and verified fulfillment of corrective action plans for deficiencies and identified during nursing home recertification surveys.  The OIG is concerned that state survey agencies may not always be verifying that identified deficiencies were properly corrected.

3.           Nursing Home Use of Atypical Antipsychotic Drugs.  The OIG will be reviewing administration of atypical antipsychotic drugs to nursing home residents.  The OIG will describe characteristics associated with nursing homes that frequently administer atypical antipsychotic drugs.

4.           Nursing Home Minimum Data Set Submissions.  OIG will determine whether CMS and state agencies oversee the accuracy and completion of minimum data sets that are submitted for nursing facilities.

Home Health Care

1.           Home Health Agency Face-To-Face Requirements.  OIG will be reviewing Medicare eligible home health services to be certain that face-to-face encounters are taking place as required under the Patient Protection and Affordable Care Act.  Previous studies indicated that only 30% of beneficiaries had at least one face-to-face visit with the physician who ordered the home health.

2.           Criminal Background Checks By Home Health Agencies.  The OIG will be reviewing home health agencies to determine whether they are complying with state requirements that require criminal background checks to be conducted on home health applicants and employees.  Federal law requires compliance with state and local laws regarding criminal background checks.  In previous OIG reviews, 92% of nursing homes employed at least one individual with criminal convictions.

Medical Equipment Suppliers

1.           Accreditation of Medical Equipment Suppliers.  OIG will be reviewing CMS procedures for conducting validation surveys of medical equipment suppliers.  CMS is required to conduct validation surveys regarding beneficiary safety and quality of care that may place Medicare beneficiaries at risk.

2.           Payments for Power Mobility Devices.  A series of reviews will be conducted relative to power mobility devices.  Reviews will focus on whether Medicare payments made to suppliers were made in accordance with federal regulations and were “reasonable and necessary.”  OIG will also be reviewing payment methods to determine whether savings can be achieved by eliminating the option of a lump sum purchase and requiring leasing of some power mobility devices.

3.           Continuous Positive Airway Pressure Supplies.  CMS will be reviewing whether scheduling of replacement supplies is appropriate and whether changing the scheduling could avoid possible wasteful spending.  There is currently no national requirement for CPAP replacement schedules.

4.           Diabetes Testing Supplies.  There are a number of new areas identified for examination relating to diabetes testing supplies.  Providers involved in these areas should carefully review the new items that relate to diabetes management and testing.

Program Integrity

1.           Onsite Visits for Medical Providers in Supplier Enrollment and Reenrollment.  CMS has the right as it deems necessary to perform onsite inspections of providers who are enrolling in the Medicare program.  CMS is authorized to expand the role of unannounced pre-enrollment visits.  Reviews found that some 33% of medical equipment suppliers in South Florida do not maintain physical facilities.  OIG will be examining these requirements to determine whether additional site visits are appropriate.

2.           Improper Use of Commercial Mailboxes.  Medicare providers are required to establish a physical business location with a permanent visible sign and a specific street addresses.  Mailboxes alone or not permitted.  Recent evidence suggests that individuals attempting to defraud Medicare may be using commercial mailbox addresses for this purpose.  OIG will be reviewing providers and suppliers to determine whether their listed addresses match commercial mailbox addresses.

3.           Provider Subject To Debt Collection.  CMS will be determining whether payment should be rechanneled relative to providers who have been reported to the Department of Treasury for collection of overpayment refunds.

Physician Billing

1.           Payment for Personally Performed Anesthesia Services.  OIG will be reviewing anesthesia claims to determine whether they are supported in accordance with Medicare requirements.  In order for a provider to be reimbursed as a personally performed anesthesia service, proper information must be included on the claim and in the medical chart to verify the claim.  Service modifier “AA” is used in connection with anesthesia services that are personally perform.  QK modifiers are used for medical direction of two, three, four concurrent anesthesia services.  Providers using “AA” modifiers must be able to support the requirement for receiving 100% of the personally performed services.

2.           Questionable Ophthalmological Service Billings for 2011.  OIG will be reviewing claims data to identify questionable billings for ophthalmologic services during 2011.  They will review geographic locations and provider patterns where questionable billings are located.  The types of billing that will be examined were not identified.

3.           Electrodiagnostic Testing.  OIG will be reviewing questionable billing for electrodiagnostic testing and will be attempting to identify Medicare utilization rates and get different rates by provider specialty, diagnosis, and geographic areas.  OIG identifies electrodiagnostic testing as an area of potential inappropriate financial gain posing significant vulnerabilities to the Medicare program.


1.           Location Requirements for Rural Health Clinics.  Rural health clinics are required to meet basic location requirements.  CMS has not promulgated final regulations allowing removal of rural health clinics that did not meet location requirements.  OIG will be reviewing this procedure.

2.           Claims Processing Areas “G” Modifiers.  The OIG will determine the extent to which Medicare improperly paid claims from 2002 to 2011 where certain “G” modifiers were used.  “G” modifiers are used to indicate that Medicare denial is expected by the provider.  It has been identified that some payments were made to providers in spite of the use of these modifier codes.

3.           Analysis of Drug Shortage in Patient Safety Concerns.  The OIG will be examining the recent trend of drug shortages to determine whether there has been an effect on pricing of pharmaceuticals.  Suspicion of industry price manipulation appears to be the motivation behind this system.


              This is a brief summary of some of the areas that were described in the recent 2013 Work Plan.  For a more comprehensive discussion of these items, visit the website for the Office of Inspector General and download the complete fiscal year 2013 annual work plan.  It is highly advisable for compliance officers to examine the document in its entirety to determine what impact, if any, it will have on their compliance efforts for fiscal year 2013.  It is also good practice to review annual work plans for several previous years as part of the risk identification process.

              If there are any questions regarding these requirements or how they impact compliance programs and detailed requirements that are generally described in this document, please do not hesitate to contact John H. Fisher, II, Esq., CCEP, CHC.

Protecting Your Practice From Fraud – Seminar Announcement

Monday, October 1st, 2012

Protecting your practice:  Deterring fraud in your organization

The best way to stop fraud at your practice? Keep it from starting in the first place. Fraud is more common than you might think, so taking preventive measures is key.

Addressing Employee Fraud Issues

Mark DeBroux, practice management consultant with Schenck, will discuss how employee fraud can impact a health care organization, identify common areas where fraud can occur, and suggest methods to prevent and detect fraud. Mark will provide you with practical information on:

  • How fraud schemes are commonly perpetrated
  • How to identify “red flags” of fraudulent behavior
  • How to put proper procedures in place to deter fraud, including segregating job duties
  • How employee fraud in the health care area can impact your organization
  • How to detect risk areas where fraud may occur
  • How to address fraud when it occurs

How To Develop A Compliance Program

Health care attorney John Fisher of Ruder Ware will discuss government fraud enforcement and how to develop a systematic program to deter health care fraud in your organization. John is certified in health care compliance and in corporate compliance and ethics and will provide valuable insights into:

  • What is involved in creating a compliance program
  • How smaller providers can meet their mandatory compliance obligations
  • What policies are normally included within a compliance program
  • Setting up a compliance structure that works for your organization
  • How to budget for your compliance efforts

Visit the following link for further information and to register.  Health Care Practice Management Seminar Series

Accreditation Requirements – Advanced Diagnostic Imaging Services

Wednesday, August 17th, 2011

Advanced Diagnostic Imaging Service Accreditation Requirement

Providers of the technical component of advanced diagnostic imaging procedures will be subject to new accreditation requirements starting January 1, 2012.  Advanced diagnostic imaging procedures include diagnostic magnetic resonance imaging (MRI), computed tomography (CT), and nuclear medicine imaging such as positron emission tomography (PET).  X-ray, ultrasound, fluoroscopy procedures, and diagnostic and screening mammography are excluded from the accreditation requirement.

The 2008 law that created the accreditation requirement also required CMS to designate accrediting organizations.  CMS has approved three national accreditation organizations – the American College of Radiology, the Intersocietal Accreditation Commission, and The Joint Commission – to provide accreditation services for suppliers of the technical component of advanced diagnostic imaging procedures.

The accreditation requirement applies to all providers of advanced diagnostic imaging services, including physician offices that provide these services.  However, the accreditation applies only to the provision of the technical component and not the physician interpretation component of the procedures.

 There is also a potential billing implication to the new accreditation requirement.  It appears that the end result of requiring accreditation may be that the technical and professional component will not be able to be billed globally following the effective date of the accreditation requirement.  It appears that separate billing would be required due to the fact that the technical component will need to be billed with a “code 95” indicator while the professional component will not.  This billing issues has not been clarified by CMS.  Providers should seek guidance prior to the January 1, 2012 effective date.

The takeaway is that providers should not only deal with the accreditation requirement but must also re-examine how the services are billed.  This is particularly true in a physician practice that provides both the technical and professional component of advanced diagnostic imaging tests.

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.

OIG Upholds Patient Financial Assistance Program

Tuesday, May 26th, 2009

Patient Financial Assistance Program OIG Advisory Opinion

On May 18, 2009, the Office of Inspector General issued an advisory opinion in which it found that a tax-exempt hospital’s financial assistance program for patients requiring certain therapy management services and advanced diagnostic testing.  The primary focus of the program was to assist HIV-positive patients who require phenotype and tropism testing and colorectal cancer patients who require KRAS and Epidermal Growth Factor Receptor testing.

Funding for the program is obtained from private individual donors, corporations and foundation.  Donors include drug manufacturers, pharmacies, dispensers and suppliers ot the types of products and services received by patients who arre beneficiaries of the program.  Donations are placed in a various funds that is administered by the tax-exempt hospital.  Donors may provide unrestricted donations or may earmark contributions to one of the funds.  However, donations may not be designated for patients using a specific test or testing provider.  Donors are not permitted to exert direct or indirect influence over the program and the hospital maintain absolute discretion over the use of contributions to the funds.

Additionally, the hospital does not provide individual patient information to the donors but does provide information concerning the aggregate number of donors that qualify for assistance from each fund.  Additionally, the patients are not provided information concerning the donors except for general information that is required to be publicly provided in connection with Internal Revenue filings in support of the hospital’s tax-exempt status.

Patients that require care that is funded by the program must apply for coverage.  Requests are taken on a first-come, first-serve basis and patients receive available funding upon meeting objective eligibility standards involving financial necessity and diagnosis with HIV or colorectal cancer, among other factors.  Decisions on coverage are not based on the identity of the provider, ordering physician, supplier, service or product being used in connection with the treatment.

Other details of the program are laid out in the advisory opinion.

Based on the program details provided by the hospital, the OIG concluded that it would not pursue the arrangement under the Anti-kickback Statute.  The OIG addressed two potential areas of the program that could be considered to be remuneration intended to induce referrals; (1) the donations made by the donors, and (2) the benefit provided to the patient through participation in the program.

The OIG stated that long-standing guidance makes it permissible for industry stakeholders to contributed to the “health care safety net” for financially needy patients if the contribution is to an independent, bona fide charitable assistance program, as long as the program is properly structured to avoid inducement issues.  The OIG goes on to describe several elements that constitute a proper contribution program including:

– Independent decisions are made by the charitable organization without influence by the industry donors.
– The operator of the program is an independent charitable organization with autonomous decision-making power over the use of the funds.
– Donors interests are not taken into account when making decisions regarding use of the donated funds.
– Neither the applicants choice of provider, practitioner, supplier, service or product nor the identity of the referring party is taken into account when making program determinations.
– Tests and services provided with program funds are consistent with widely recognized clinical standards.

In short, the OIG concluded that the program provided sufficient objective insulation between the donor, patients, and determinations as to the use of the funds so that the donations would not be considered to be referral inducements.

The OIG also analyzed whether benefits provided to patients could be considered as inducement referral because of the chance that the benefits would induce patients to use the services of the hospital.  The OIG concluded that the program was a legitimate use of the hospital’s tax-exempt resources to fulfill its charitable mission.  The OIG also pointed to the objective standards that were developed to guide program administration.

Tax-exempt hospitals are often looking for means to provide beneficial assistance to needy patients in fulfillment of their tax-exempt and charitable purposes.  At the same time, charitable hospitals are under increased financial pressures due to economic conditions, increased regulation and decreased reimbursement.  The OIG decision is noteworthy because it provides a roadmap for tax-exempt providers who may be looking for ways to fulfill their charitable purposes in a manner that does not place additional financial burdens on their operating revenues.  Hospitals are encouraged to look at the details of this recent advisory opinion if they are considering commencing a similar program.

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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