Fraud and abuse after the 2010 Health Care Reform Bill

Presenters:
John Meyers and Gary Michel, Ervin Cohen & Jessup LLP

The Health Care Reform Bill as signed by President Obama in March of 2010 affects fraud and abuse in the areas of the physician referral statute, the Federal anti-kickback statute, and the False Claim Act. In this podcast John Meyers and Gary Michel, both partners of Ervin Cohen & Jessup LLP, Beverly Hills, CA, discuss the major changes in these areas.

This podcast is part of the Law Firm Alliance – 2010 Health Care Reform podcast series, which can be accessed in its entirety by clicking here.

State demonstration projects rather than tort reform under the 2010 health care bill

Presenters:
Mark Marquardt, Nancy Paikoff and David Phillips of MacFarlane Ferguson & McMullen, P.A.

In 2010, Congress enacted a health care bill which made no changes to the current method of tort litigation. The language in the bill provides for demonstration grants to states over a five year period for the states to propose alternatives to current medical tort litigation. In this podcast, the presenting attorneys discuss how states may apply for grants, elements to be considered in the grants and how grants are to be reviewed.

This podcast is part of the Law Firm Alliance – 2010 Health Care Reform podcast series, which can be accessed in its entirety by clicking here.

Health industry specific tax provisions in health care reform

Presenters:
Mark Gilgus, Seigfreid, Bingham, Levy, Selzer & Gee, P.C.
Mark Thompson, Seigfreid, Bingham, Levy, Selzer & Gee, P.C.

The Patient Protection and Affordable Care Act included a number of health industry specific tax provisions. These are primarily designed to raise revenue from health insurers, pharmaceutical companies, and medical device manufacturers to help pay for the costs of increased access to health insurance and will be phased in over the next few years. Gilgus and Thompson highlight these revenue raisers, which will require significant regulations to implement.

This podcast is part of the Law Firm Alliance – 2010 Health Care Reform podcast series, which can be accessed in its entirety by clicking here.

CMS adopts more strict regulations for DMEPOS suppliers

On Aug. 26, the Centers for Medicare and Medicaid Services (CMS) issued new rules for suppliers of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS). The new rules consist of additions and revisions to the supplier standards in 42 C.F.R. §424.57. The rules take effect Sept. 27. and enhance Medicare enrollment standards and strengthen existing standards that suppliers must meet before being able to furnish equipment and supplies to Medicare beneficiaries. Among other things, the rules require the following:

  • Suppliers must be licensed to provide licensed services and cannot contract with an individual or an entity to provide the services.
  • Suppliers must permit CMS and the National Supplier Clearinghouse (NSC) to conduct onsite inspections to ascertain supplier compliance.
  • Suppliers are prohibited from using cell phones, beepers or pagers as the primary method of receiving calls or exclusively using call forwarding to forward a call to a cell phone, beeper or pager from the public or beneficiaries during posted hours of operation.
  • Suppliers cannot directly solicit patients, which includes, but is not limited to, a prohibition on telephone, computer, e-mail, instant messaging and internet coercive advertising.
  • Suppliers must obtain oxygen from a state licensed oxygen supplier (applies only in states that require oxygen licensure).
  • Suppliers are required to maintain ordering and referring documentation for a period of seven years from the date of service.  
  • Suppliers are prohibited from sharing a practice location with another Medicare supplier or provider (subject to certain exceptions).
  • Subject to certain exceptions, suppliers must be open to the public a minimum of 30 hours per week.
  • Suppliers must maintain a physical facility that measures at least 200 square feet (except for orthotic and prosthetic personnel providing custom fabricated orthotics and prosthetics in private practice). The location must be accessible during posted business hours to beneficiaries and to CMS, and must include a visible sign and posted hours of operation.

A supplier who does not meet the requirements of the new rules may lose its billing privileges in the Medicare program. In addition, failure to comply with the rules could result in an overpayment finding.

64 percent of appealed RAC claims decided for providers

According to a recently released report from Centers for Medicare & Medicaid Services (CMS), providers won 64.4 percent of appealed claims during the three-year Recovery Audit Contractors (RAC) demonstration project. Providers appealed 76,000 claims and received favorable decisions on 49,000.

Providers can win a RAC appeal. Preparedness is the first step to surviving a RAC audit. Providers must be prepared to respond to RAC demand letters and requests for medical records. Because RAC audits are generally unannounced, the appropriate time to prepare for an audit is now. Providers should consider the following to prepare for an audit:

  • Not responding is not an option. Providers have a narrow window in which to respond to an audit. Providers have 45 days to respond to a RAC request for medical records. If a provider fails to respond, RACs are authorized to render an overpayment determination on the underlying claims. Failure to timely respond could also result in the loss of valuable appeal rights.
  • Designate someone as the contact person for all audits. Providers should designate appropriate personnel to respond to all audit requests. RACs are required to communicate with providers by email, telephone, letters and in-person. Accordingly, administrative personnel must be available to process correspondence and respond to the RAC's various requests. Training personnel and cultivating a working relationship with the regional RAC may mollify interactions and aid in the timeliness of communications.
  • Collect relevant documents and records. Providers should ensure that the records they produce to the auditor are complete. This will help show the appropriateness of the treatment, billing and reimbursement. The relevant records include not only medical records, but billing information as well.
  • Contact legal counsel. Providers are well served to engage legal counsel to help navigate RAC audits and appeals. Lawyers can help train employees on the details of RACs, including an overview of the regulatory history, "hot button" issues RACs are likely to focus upon, and how to respond appropriately.
  • Investigate the claims at issue. Providers should undertake a careful review of the materials investigated during an audit. RACs are sometimes perceived as overly aggressive in identifying overpayments largely because they are paid on a contingency fee basis. Staying abreast of the scope of the audit may reveal issues that are ripe for appeal.
  • Keep a written record of all contact with auditors and a set of all documents sent to auditors. Because the audit findings can be appealed, providers should retain a copy of all documents provided to the RAC. Providers should also memorialize the date, time and a brief description of all communications during the audit. Keeping accurate records will protect providers if a problem arises regarding the conduct of the audit. It will also help the provider appeal an adverse audit finding.
  • Become familiar with the appeals process. RAC denials are subject to the Medicare Part A and Part B appeals process with two differences. First, providers are given 15 days from the date they receive an improper payment letter from a RAC to rebut the RAC's findings, although providers are not required to go through this rebuttal process before filing an appeal. Second, a provider appealing a RAC determination must file an appeal to its fiscal intermediary within 30 days of the date that the provider receives the fiscal intermediary's notice indicating the amount of overpayment identified by the RAC. Given the number of appeals decided in the provider’s favor, the importance of audit preparation and understanding your appellate rights cannot be understated.

New requirements tax-exempt hospitals face under health care reform

Presenters:
Mark Gilgus, Seigfreid, Bingham, Levy, Selzer & Gee, P.C.
Mark Thompson, Seigfreid, Bingham, Levy, Selzer & Gee, P.C.

Tax-exempt hospitals face a number of new requirements under the Patient Protection and Affordable Care Act. These include greater accountability for community benefits provided by them, requirements regarding patient access to available charity care, requirements for less aggressive billing and collection of patient pay amounts, and adverse tax consequences for those that do not comply. Gilgus and Thompson review these provisions for tax exempt hospitals.

This podcast is part of the Law Firm Alliance – 2010 Health Care Reform podcast series, which can be accessed in its entirety by clicking here.