Tag: healthcare

Budget Deal Alters Reimbursement to Off-Campus Hospital-Owned Facilities

detailed illustration of a compass with medicare text, eps10 vectorOn November 2, 2015, President Obama signed into law H.R. 1314, the Bipartisan Budget Act of 2015 (the “Act”), which significantly changes Medicare reimbursement for off-campus hospital services. The Act, which Congress passed late last week, will alter Medicare reimbursement for new off-campus hospital-owned facilities that have heretofore been treated as “hospital-based.” Off-campus facilities for which a hospital was not billing as “hospital-based” as of the date of the enactment of the Act will not be treated as “hospital-based,” and the physician or other provider’s fee schedule rate, instead of the hospital outpatient rate, will apply.

Prior to the Act, covered out-patient department (“OPD”) services included services provided by facilities meeting the complex hospital-based rules, even if the facility was not physically-located on the campus of the hospital. Subject to the grandfather provision discussed below, the Act adds a specific exclusion to the definition of covered OPD services, making services furnished by an off-campus outpatient department of a hospital ineligible. The Act provides that a facility is “off-campus” if it is not within 250 yards of the hospital’s main buildings (including for this purpose, a “remote location of a hospital,” meaning a separate in-patient campus of the hospital, which is a helpful clarification in an otherwise problematic law). Facilities deemed “off-campus” are ineligible for Medicare reimbursement at the hospital outpatient rate.

The inclusion of a grandfather provision will mitigate some of the Act’s impact, as facilities currently treated as “hospital-based” will not be impacted by the change in law. Only facilities that are not billing as “hospital-based” as of the date of enactment will be ineligible for reimbursement at the hospital outpatient rate. It is unclear whether a conveyance of an off-campus grandfathered facility would eliminate the grandfathered status and the ability of the buyer to bill for the services as “hospital-based.” The Congressional Budget Office (“CBO”) forecasts that the government will reap significant cost savings from the lower rates that will apply; an October 28, 2015 analysis from the CBO projects that the change in reimbursement policy will provide $9.3 billion in relief by 2025.

Article By Edward S. Kornreich, Roger A. Cohen & Julia B Bienstock of Proskauer Rose LLP

© 2015 Proskauer Rose LLP.

Bipartisan Budget Act of 2015 – Potential Impact on Hospitals

House Republican leaders introduced legislation on Monday, finalizing a two-year budget agreement between Congressional leaders and the White House. This legislation is currently being considered and may be up for a vote as early as Wednesday on the bipartisan budget deal.

Hospitals should note the language in Section 603 (which is on pages 35-39 of the draft bill) codifies the definition of a “provider-based off-campus hospital outpatient department” (PBD HOPD) as a location that is not on the main campus of a hospital and is located more 250 yards from the main campus.  The section defines a “new” PBD HOPD as an entity that executes a CMS provider agreement after the date of enactment of the Act and that any NEW PBD HOPD executing a provider agreement after the date of enactment would not be eligible for reimbursements from CMS’ Outpatient Prospective Payment System (PPS).

Bipartisan Budget Act of 2015

Section-by-Section Summary

Article By Kevin J, Ryan of Epstein Becker & Green, P.C.

©2015 Epstein Becker & Green, P.C. All rights reserved.

UK Government Launches Cybersecurity Service For Healthcare Organizations

The UK government has announced a new national service providing expert cybersecurity advice to entities within the National Health Service (NHS) and the UK’s broader healthcare system.  The project, called CareCERT (Care Computing Emergency Response Team), is aiming for a full go-live in January 2016.

Acording to recent press releases, CareCERT will:

  • “Provide incident response expertise for the management of cyber security incidents and threats across health and care system”;

  • “Broadcast potential cyber threats and necessary actions to take across the sector, to ensure cyber threats are safely dealt with”;

  • “Be a central source of security intelligence for health and care by working with cross government monitoring partners such as GovCertUK and CERT-UK”;

  • “Support the analysis of emerging and future threats through unique analysis tools and reporting”; and

  • “Be a trusted source of security best practice and guidance”.

CareCERT will be run by the Health and Social Care Information Centre (HSCIC).  The HSCIC is an important offshoot of the UK Department of Health, overseeing information assurance and patient privacy within the NHS as part of its broader role in setting health IT standards, assisting IT rollout throughout the NHS, and managing the release of healthcare statistics for the NHS.

CareCERT is expected to be a natural evolution of HSCIC’s existing function and expertise.  In particular, under the HSCIC/Department of Health’s data breach reporting policy (imposed on NHS bodies and their suppliers through contract), HSCIC is already one of the bodies notified and involved in the event of serious data breaches in the public healthcare sector.  The creation of CareCERT will enhance the HSCIC’s incident response capabilities, and will give NHS suppliers an increased opportunity to engage with HSCIC proactively (for guidance and threat alerts), rather than only after serious incidents take place.

Article by Mark Young & Philippe Bradley-Schmieg of Covington & Burling

© 2015 Covington & Burling LLP

Four Ways Medicare and Medicaid Have Changed the Health Care Industry

It’s a bizarre program that is absolutely essential to American healthcare.

That is the opinion of Theodore Marmor, professor of public policy at Yale and author of the book, The Politics of Medicare. Whether you agree with him or not, it is difficult to deny the influence of Medicare and Medicaid on the health care industry. To mark the 50th anniversary of Medicare and Medicaid, signed into law by President Lyndon Johnson on July 30, 1965, we have identified four ways these programs have shaped the health care industry.

  1. There is no stopping the health care juggernaut. In a March 2014 presentation during the conference of National Health Care Journalists, Rosemary Gibson (senior advisor with The Hastings Center) brought the point home with this statistic: In 1965, there were no health care companies listed in the Fortune 100. By 2013, there were 15. 

  2. The federal government is now the largest purchaser of health care in the United States. In its Primer on Medicare, The Kaiser Family Foundation estimates that 14% of the $3.5 trillion spent by the federal government in 2014 was spent on Medicare (approximately $505 billion total), making it the largest purchaser of health care in the United States. Its spending power means CMS and Medicare will continue to hold sway in the industry.

  3. Medicare and Medicaid is driving innovation, but have they run out of gas? US News & World Report estimates that today, one in three Americans is covered by Medicare or Medicaid, and it is that extension of coverage to a larger population that is driving innovation. In the article, “America’s Health Care Elixir,” Kimberly Leonard states, “Because the government covered more people, and eventually extended that coverage to include drugs and medical devices, industries knew they could invest in research because they would eventually recoup the costs of their work through sales of new products.” However, innovation is beginning to outstrip the programs’ ability to keep pace. For example, Leonard states, “Pharmaceuticals also are moving toward developing more expensive biologic drugs, which could be a challenge for Medicare and Medicaid to afford.” More important, the programs’ outdated structure, developed during a different business environment, serving a different population, is making it difficult for them to keep pace with technology.

  4. Medicare and Medicaid helped end segregation in health care facilities. One lesser-known positive effect on the industry is that these programs helped end segregation, at least at health care facilities. The programs required that health care facilities could not be racially segregated if they wanted to receive Medicare and Medicaid payments, which meant facilities had to start accepting African-American patients.

With the changes introduced with the Affordable Care Act, it is clear that the government is keen on keeping these programs going for another 50 years or more, and their legacy of influence in the health care industry continues to evolve. Where they will be in 50 years remains to be seen.

ARTICLE BY Health Care Practice Group of Foley & Lardner LLP

© 2015 Foley & Lardner LLP

How Does the King v. Burwell Decision Affect the Affordable Care Act?

The Supreme Court handed the Obama administration a key victory, upholding the tax credits that allow many low-income Americans to purchase health care insurance in states where the federal government is running the insurance marketplace. These tax credits, available to Americans with household incomes between 100% and 400% of the federal poverty line, operate as a form of premium assistance that subsidizes the purchase of health insurance.

The petitioners in King v. Burwell, No. 14-114 (U.S. June 25, 2015), challenged a ruling from the Internal Revenue Service (IRS) and claimed that a phrase in the Affordable Care Act (ACA) indicating that the subsidies are only available to consumers buying insurance in a state-run exchange prohibited the federal government from providing tax credits where states have not established their own exchanges. Arguing that the text of the law should be read literally, they challenged an IRS regulation that makes these tax credits available regardless of whether the exchange is run by a state or the federal government.

But the Supreme Court sided with the Obama administration in its 6-3 decision, emphasizing that language allowing tax credits for health insurance purchased on “an Exchange established by the State” must be interpreted in context and within the larger statutory scheme. Chief Justice Roberts, who authored the majority opinion, wrote that the phrase “an Exchange established by the State” was ambiguous, and therefore required the Court to look to the broader structure of the law. He wrote that the larger statutory scheme required the Court to reject the petitioners’ interpretation, which would have destabilized the individual insurance market and would create the exact same “death spirals” of rising premiums and declining availability of insurance that the law was crafted to avoid. In passing the law, he added, Congress sought “to improve health insurance markets, not to destroy them.”

The Supreme Court’s analysis went a step beyond the traditional framework used by courts to review agency actions. This two-step analysis, first announced in Chevron U.S.A. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) and widely known as the Chevrontwo-step, first considers whether the statutory language is clear—and if it is, the inquiry ends there. But if the language of the law is silent or ambiguous, a court next considers whether the agency’s interpretation of the statute is reasonable, granting considerable deference to the agency’s interpretation. Because the tax credits under the ACA are central to the reforms created by the law, Chief Justice Roberts explained, Congress would not have delegated such an important question to any agency, and especially not to the IRS, which lacks expertise in crafting health insurance policy. He wrote that in this case, the task of determining the correct reading of the statute belonged to the Court.

For most providers and companies involved in the health care system, the result of this decision means business as usual. But the decisive victory for the law today means that the ACA is here to stay, and will have a permanent effect on how patients access care. Insurers and providers still must overcome hurdles to achieve affordable premiums and provide improved care for patients across the country. And as more laws are sorted out in the courts, the Supreme Court’s reliance on context in interpreting the statute today could set an important precedent of emphasizing the purpose of major legislation when analyzing its trickier provisions.

ARTICLE BY Anna S. Ross of Foley & Lardner LLP

© 2015 Foley & Lardner LLP

June 24th – Healthcare Quarterly Update: Cybersecurity and Health Data Privacy by Bloomberg BNA

Washington, DC

Join Bloomberg BNA for this essential event that explores concerns relating to cyber-security and health data privacy. Healthcare industry experts Kirk Nahra and David Holtzman will join HHS’s Iliana Peters for a comprehensive examination of:
• Big data in the healthcare sector and how to protect information
• Protecting patient and organization information
• Federal enforcement of HIPAA Privacy, Security, Data Breach rules
• Practical up to date information on current issues
• And so much more.

Click here to register today!

Identify actionable issues, secure your organization, and earn CLE credits.

A breakfast panel with accomplished scholars and an HHS representative. This conversation will address practical considerations for ensuring that patient’s data is being properly handled in full compliance with all regulations and ethical responsibilities. Healthcare practitioners are increasingly required to address concerns of Data privacy and Cyber-security; attending this panel will assist you in identifying actionable points in the law common to many legal practices.

Healthcare Quarterly Update: Cybersecurity and Health Data Privacy by Bloomberg BNA

Washington, DC

Join Bloomberg BNA for this essential event that explores concerns relating to cyber-security and health data privacy. Healthcare industry experts Kirk Nahra and David Holtzman will join HHS’s Iliana Peters for a comprehensive examination of:
• Big data in the healthcare sector and how to protect information
• Protecting patient and organization information
• Federal enforcement of HIPAA Privacy, Security, Data Breach rules
• Practical up to date information on current issues
• And so much more.

Click here to register today!

Identify actionable issues, secure your organization, and earn CLE credits.

A breakfast panel with accomplished scholars and an HHS representative. This conversation will address practical considerations for ensuring that patient’s data is being properly handled in full compliance with all regulations and ethical responsibilities. Healthcare practitioners are increasingly required to address concerns of Data privacy and Cyber-security; attending this panel will assist you in identifying actionable points in the law common to many legal practices.

Over a Decade in the Making: CMS Releases Long-Awaited Medicaid Managed Care Rule

On May 27, 2015, the Centers for Medicare and Medicaid Services (“CMS”) published a 653-page proposed rule affecting the thirty-nine states (plus the District of Columbia) that use managed care organizations (“MCOs”) to administer their Medicaid benefits. This represents the first major overhaul of the Medicaid managed care system since the rules were established in 2002, now covering approximately seventy percent of all Medicaid enrollees.

Centers for Medicare & Medicaid Services, CMSPublic comments are due July 27, 2015, which gives health plans, providers, consumer groups, and even state Medicaid directors a narrow window to identify potential areas of concern and to propose solutions for formal CMS consideration. While some issues will align important stakeholder groups, others are likely to remain contested during the comment period and up to publication of the final rule.

As a backdrop leading to the publication of the proposed rules, the managed care landscape has become much more complex and variable among the states that have adopted this approach in their Medicaid programs. Because of this, CMS has been contemplating ways to ensure more consistent rules that promote adequate access to health services while also creating more synergy between Medicaid, Medicare, and even the commercial sector via delivery system reforms that improve quality and lower costs.

The proposed rule also addresses some areas of perceived inequity in the Medicaid program that range from behavioral and substance-abuse treatment to long-term care and insurance reforms akin to those in the Affordable Care Act (“ACA”), which was mostly targeted at commercial health plans.

But CMS’s ambitions in proposing the rules need to be tempered by the reality that state Medicaid programs are administered by the individual states: through federal regulations CMS can establish minimal standards for the state Medicaid managed care systems but states may enact state regulations or impose managed care contract terms that go farther than the federal requirements. The managed care community must view federal regulations as a starting, not an end, point.

CMS categorizes the massive Medicaid managed care proposed rule into several issue areas in its Fact Sheet:

Beneficiary Experience

  • Requires states to improve access to care through regular assessment and certification of a health plan’s provider network and time/distance standards to providers including behavioral health, pediatric dental, and pharmacy.

  • Updates communication rules directed towards Medicaid/CHIP beneficiaries to include electronic methods, non-English language options, and additional information in provider/drug formulary directories,

  • Sets standards for care coordination, assessments and treatment plans that include care transition services, initial health risk assessments within 90 days of enrollment, and regularly updated assessments and treatment plans for beneficiaries with special health care needs or long-term services and supports.

  • Creates a new enrollment selection period of 14 days to allow beneficiaries to research and select managed care plan options.

State Delivery System Reform

  • Encourages participation in Medicare-led alternative payment models and initiatives.

  • Establishes minimum reimbursement standards or fee schedules for providers that deliver a particular covered service.

  • Clarifies “short-term stay” rule that managed care plans are able to receive capitated payments for beneficiaries who are admitted to an institution for mental disease (“IMD”) for no more than 15 days so long as the facility is an inpatient hospital or sub-acute short-term crises residential service.

Quality Improvement

  • Creates a public notice and comment period to determine a core set of performance measures and improvement projects for states related to managed care plans.

  • Establishes a Medicaid managed care quality rating system in each state that would report performance information on all health plans, akin to the Medicare Advantage (“MA”) and marketplace ratings.

Program and Fiscal Integrity

  • Requires certain types of data to be used for rate setting purposes and the level of documentation and detail about the development of the capitation rates such as trend factors, adjustments and the development of non-benefit costs.

  • Establishes a medical loss ratio (“MLR”) for both Medicaid and CHIP plans using standards similar to Medicare Advantage and the commercial market.

  • Adds several components to fraud prevention efforts by implementing procedures for internal monitoring, auditing, and prompt referral of potential compliance issues, etc.

Managed Long-Term Services and Supports (“MLTSS”) Programs

  • Affirms recent updates such as Olmstead, stakeholder engagement requirements, and provider credentialing in the development and implementation of MLTSS programs.

  • Requires MLTSS-specific elements to be included in a state’s quality improvement strategy and reporting systems to protect MLTSS enrollees.

Children’s Health Insurance Program (“CHIP”)

  • CMS proposes to align the CHIP managed care regulations, where appropriate.

Alignment with Medicare Advantage and Private Coverage Plans

  • Importantly, CMS proposed where appropriate and possible, to align the Medicaid managed care regulations with those governing MA and private health insurance plans including the MLR, appeals and grievances, and marketing rules.

Finally, other highlights from the proposed rule include a requirement that Medicaid managed care entities offering outpatient drug coverage must now collect the necessary information for the states to include those managed care drugs in rebate invoices to drug manufacturers pursuant to the Medicaid Drug Rebate Program (“MDRP”) as well as modifications to the rules governing plan appeals and grievance procedures to increase uniformity with the procedures that apply to MA and commercial plans.

Discussion

Alignment with Medicare Advantage and Private Coverage Plans

CMS proposes numerous changes aimed at aligning Medicaid managed care with other health care programs… click here to continue reading…

ARTICLE BY Susan W. Berson, Andrew J. Shin, Ellyn L. Sternfield, Pamela Kramer, Lauren M. Moldawer & Bridgette A. Wiley of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Time to Exclude the IMD Exclusion – Institutions for Mental Disease

Some rules are borne out of the best of intentions, and the Institutions for Mental Disease Exclusion (“IMD exclusion”) bears the hallmarks of such a beginning. The IMD exclusion bars federal funding for care of patients between the ages of 21 and 65 who receive inpatient treatment in an IMD, a hospital, nursing facility or other institution with more than 16 beds that primarily treats those with mental illness. This provision came into being in 1965, primarily as a way to prevent dubious institutions from stocking up on mentally ill patients for the purposes of collecting federal funds en masse, but also to put the onus on states, rather than the federal government, to care for the mentally ill.

IMD Exclusion, Institutions for Mental Disease

In modern times, however, the IMD exclusion is arguably one of the larger impediments to expansion of mental and behavioral health treatment, particularly in the area of substance abuse disorders, where a brewing epidemic of opioid addiction demands a proportional institutional response. Not only does this exclusion apply to standard mental health institutions, a Center for Medicare & Medicaid Services (“CMS”) interpretation applies the exclusion to other facilities such as substance abuse treatment center. The irony is that states which have accepted the Medicaid expansion to cover a wide range of newly-eligible patients for mental and behavioral health disorders such as substance abuse find themselves stymied by a lack of appropriate facilities in which to treat them. The Mental Health Parity and Addiction Equity Act of 2008 (“MHPAEA”) provides that covered individuals receive the same coverage for mental and behavioral health as for other medical and surgical benefits, yet medical and surgical facilities are not limited to a maximum of 16 beds, rendering much of the benefit of this law illusory.

The Medicaid expansion provides mental and behavioral health providers with a steady new flow of patients in dire need of assistance – so long as that inpatient treatment is provided in increments of 16. Substance abuse victims now have the coverage to receive the services they desperately need, and behavioral health providers now have more tools than ever to combat the problem. The obstacle in care comes in the limitation of the facilities.

Even an exception for behavioral health provider facilities for substance abuse treatment would provide significant relief, and CMS went so far as to allow eight states to include IMD benefits under Medicaid managed care programs for a period of ten years. Although this exception hasn’t been allowed recently, it at least provides a ray of hope that CMS can adapt regulatory policies to reflect a growing problem, understanding that it may be standing in the way of progress with draconian measures.

True parity can only be attained when mental and behavioral health facilities are free from the limitations imposed by the IMD exclusion. Until then, rather than protecting patients from unscrupulous institutions, this policy will only continue to hurt those who need real care.

ARTICLE BY Molly Nicol Lewis of McBrayer, McGinnis, Leslie and Kirkland, PLLC

© 2015 by McBrayer, McGinnis, Leslie & Kirkland, PLLC. All rights reserved.

DaVita Agree to $495 Million Settlement in Alleged Medicare Fraud Lawsuit Filed by Qui Tam Whistleblowers

On Monday, May 4, 2015, DaVita Kidney Care, a division of DaVita Healthcare Partners, Inc. (DaVita), and one of the leading dialysis services providers in the United States, agreed to pay the U.S. Government $450 million for allegedly violating the False Claims Act (FCA) when it continuously discarded good medicine and then billed Medicare and Medicaid for it. DaVita also agreed to pay $45 million for legal fees.

According to the lawsuit filed in 2011 by two former employees of DaVita, between 2003 and 2010, when DaVita administered iron and vitamin supplements such as Zemplar, Vitamin D, and Venofer, vials containing more than what the patients needed were used and the rest was thrown away. For example, if a patient only needed 25 milligrams of medicine, DaVita allegedly used a 100 milligram vial, administered only 25 mg, and tossed the rest in the trash. Although before 2001, this practice was condoned by the National Centers for Disease Control and Prevention (CDC) in order to prevent infectious outbreaks caused by the re-entry of the same vial of medicine, the CDC subsequently changed it policies to outlaw this practice.

This FCA lawsuit alleging that DaVita misused and mishandled of medicine, and overbilled Medicare and Medicaid is not the first such allegation against DaVita, which is not a stranger to FCA lawsuits. In fact, DaVita previously settled two other lawsuits in which it allegedly violated the FCA. In October 2014, DaVita agreed to pay the U.S. Government $350 million for allegedly persuading physicians or physician groups to refer their dialysis patients to DaVita by offering kickbacks for each patient referred. And in 2012, DaVita agreed to pay $55 million to the federal government for overbilling the government for Epogen, an anemia drug. These lawsuits were filed by former employees who decided to come forward as whistleblowers and to help to uncover what they considered to be illegal practices by DaVita. Under the FCA, such whistleblowers can bring what is known as a “qui tam” lawsuit, which is brought by a private citizen to recover money obtained by fraud on the government. As an incentive to bring qui tam lawsuits, the FCA provides that qui whistleblowers receive between 15 and 30 percent of the amount of funds recovered for the government.

Provisions of the FCA make it unlawful for a person or company to defraud governmental programs, such as Medicare or Medicaid.

Posted by the Whistleblower Practice Group at Tycko & Zavareei LLP

© 2015 by Tycko & Zavareei LLP