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Wednesday, April 20, 2010

CCH® Health Care Compliance Integrated Library
The Health Care Compliance Integrated Library delivers the latest information on health law. The Library includes seven invaluable titles:
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  • Clinical Research Compliance Manual: An Administrative Guide - Essential guidance on the laws and regulations affecting clinical research and trials.
  • Defending and Preventing Health Care Fraud and Abuse Cases: An Attorney's Guide - Clear, expert guidance on protecting against charges of health care fraud and abuse.
  • Health Care Fraud and Abuse Compliance Manual - Giving health care providers a clear perspective on fraud and abuse laws, written in plain-language.
  • Health Law and Compliance Update - Find the latest information on emerging issues. Each section is authored by an expert in the area and includes in-depth analysis of the latest health law and compliance issues.
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Journal of Health Care Compliance March/April Volume 12, Number 2

Reimbursement Advisor

    In addition to regularly featured columns such as HIPAA, auditing and monitoring, QIO, and physician compliance, the March/April 2010 issue of the Journal of Health Care Compliance includes the following articles:

  • Research Compliance-Is this the Missing Piece in My Compliance Program?, written by Leah Guidry, provides an outline of the various research models that can be used and key issues that should be addressed.
  • The HEAT Is On: Prepare Now for Enhanced Government Health Care Enforcement Effort, written by Judith A. Waltz, provides specfic steps health care providers and suppliers can take to prepare for increased DOJ and HHS enforcement.
  • Outsourcing: A Cost-Effective Way to Achieve Health Care Compliance, written by Michael A. Dowell, proposes outsourcing as a viable option for organizations that see the need for compliance but have limited resources.
  • Independent Review Organizations Must Meet GAO "Yellow book" Standards, written by Thomas E. Herrmann, emphasizes that the GAO "Yellow Book" standards, expressly adopted by the OIG as governing independent review organizations (IROs), must be carefully reviewed and followed by a health care entity in selecting an IRO.
  • The Evolution of HIPAA: The Only Constant Is Change, written by Kirsten Ruzic Wild, describes what covered entities need to do now to comply with HIPAA privacy and security rules and what the future holds.

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Receivables Report

Health Care Compliance Professional’s Manual Highlights

  • Endorsed by the Health Care Compliance Association, the Health Care Compliance Professional’s Manual, written by experienced compliance practitioners, provides insights on legislative and regulatory matters, offers guidance on applying the laws and regulations, and spells out practical compliance solutions that professionals can put to work right away. The March 2010 quarterly update 23 includes the following revised and new chapters:
  • • “Cost Report Compliance,” updated by Lance Loria, CPA, FACHE, FAAMA, offers guidance for effective cost report compliance. The chapter covers baseline evaluations, periodic assessment of controls, organized evidence-based approach, error response and prevention, checklists, and a cost report policy index.
  • • “The Federal Sentencing Guidelines: A Practical Overview of Their Background, Intent, and Implications,” revised by Gabriel Imperato, Esq., presents the current view of the application of the sentencing guidelines to the health care industry as they relate to the elements of an effective compliance and ethics program.
  • • “The Recovery Audit Contractor Program: What Compliance Officers Need to Know,” a new chapter written by Nancy Freeman, RHIA, MBA, MHA, provides a detailed description of the RAC demonstration project and permanent program, types of reviews; and challenges and strategies for providers preparing for an audit.

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DME and telemarketing: New OIG Fraud Alert

by Corrine Parver, JD, LLM, and Walakelon Blegay

In January 2010, the Department of Health and Human Services, Office of Inspector General (OIG), issued an updated guidance for telemarketing by durable medical equipment (DME) suppliers. This initiative grew out of receipts of credible information that DME suppliers were using independent marketing firms to make unsolicited phone calls to Medicare beneficiaries. In its Fraud Alert, the OIG states that Section 1834(a)(17)(A) of the Social Security Act prohibits DME suppliers from making unsolicited calls to Medicare beneficiaries regarding the furnishing of a covered item, except under these three circumstances: (1) the beneficiary gave written permission to the suppliers to contact them by telephone; (2) the supplier is calling the beneficiary about a covered item that has already been received by the beneficiary; or (3) the beneficiary has received a covered item from the supplier in the last 15 months. The OIG now clarifies that telephone solicitation solely based on treating physicians’ preliminary written or verbal orders prescribing DME for beneficiaries is prohibited. However, a supplier may contact a Medicare beneficiary to confirm or gather information needed to provide the prescribed covered item to the beneficiary after a physician contacts a supplier on the behalf of the beneficiary, with the beneficiary’s knowledge. When contacting the beneficiary about the prescribed covered item, the supplier is prohibited from soliciting the purchase of additional covered items. The beneficiary only needs to be aware that the supplier will be contacting him/her about the prescribed covered item. The supplier does not have to maintain documentation from the physician reflecting that the physician has contacted the supplier with the beneficiary’s knowledge. In addition, a supplier returning a beneficiary’s phone call is not considered “unsolicited,” because the beneficiary initiated the contact. The OIG confirms that, according to Section 1834(a)(17)(B) of the Social Security Act, a claim from a supplier for a prohibited telephone solicitation is considered a violation. Further, the OIG asserts that DME suppliers will not be allowed to do indirectly what they are prohibited from doing directly. Any unsolicited telemarketing done through an independent marketing firm or any other party for a supplier is prohibited. A supplier is responsible for verifying the marketing activities of third party contractors, to ensure that it does not involve prohibited activities and that any information purchased from third parties was neither obtained nor derived from a prohibited activity. Suppliers and telemarketers are liable for any claim that is submitted for items and services generated through prohibited solicitation.

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Fifth Circuit upholds psychiatrist's Medicare fraud conviction

A psychiatrist convicted by a jury on numerous counts of Medicare fraud failed to convince the Court of Appeals for the Fifth Circuit to grant her a new trial. She maintained that: (1) the evidence supporting the jury conviction was insufficient, (2) the indictment was duplicitous, and (3) the loss and forfeiture amounts included in the charges were erroneously calculated. Sufficiency of evidence. The psychiatrist was charged with 40 counts of Medicare fraud stemming from her work at a psychiatric unit and was convicted by jury. Based upon the testimonies of multiple witnesses stating that the psychiatrist had never met with patients individually and that she was rarely present when the patients were, a clear inference could be drawn that she did not meet with the specific patients individually, as was required to bill for an evaluation and management service under Medicare.Based on the fact that the psychiatrist was employed to do high-level administrative work and had a master's degree in medical management, it could be inferred that she knew she was billing fraudulently for services that either were not performed or did not qualify for Medicare reimbursement under the codes she was using.Duplicitous indictment. Her claim that the indictment was duplicitous failed because it alleged multiple means to accomplish a single execution of a scheme. Although each invoice the psychiatrist submitted for reimbursement contained several line items, each invoice constituted a separate execution of her scheme to defraud Medicare, and the line items were merely means by which she executed that scheme. Admissible evidence. The psychiatrist next argued that a chart showing the amount of hours per day she claimed to have provided billable services was improperly admitted and prejudicial. The Fifth Circuit disagreed, stating that the chart was properly admitted, the jury was properly instructed, and the evidence against the psychiatrist was otherwise so overwhelming that no prejudice could have resulted.Loss and forfeiture amounts. Finally, the psychiatrist’s argument that the loss and forfeiture amount assessed against her was erroneous also failed. It was alleged and proven that the services were not reimbursable at all, were never performed, or no authority existed to show that she may have actually provided the service.In sum, because the psychiatrist failed to show that the lower court committed error, her conviction was affirmed. U.S. v. Palazzo, 5th Cir., March 23, 2010, Health Care Compliance Reporter, ¶800,870

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Sebelius takes steps to establish temporary high risk pool

Secretary of Health and Human Services (HHS), Kathleen Sebelius, has sent a letter to governors and independent insurance commissioners asking each state to express their interest in participating in the temporary high risk pool program established by the Patient Protection and Affordable Care Act (PubLNo 111-148). The temporary high risk pool program is designed to help provide coverage to people who are uninsured because of pre-existing conditions.Section 1101 of the Affordable Care Act directs HHS to carry out the program directly or through contracts with states or private, non-profit entities. The new law establishes some specific requirements surrounding the eligibility, benefits, premiums, and funding for the new high risk pool program.Eligible individuals must: be a citizen or national of the United States or lawfully present in the country; not have been covered under creditable coverage (as defined in Section 2701(c)(1) of the Public Health Service Act) for the previous six months before applying for coverage; and have a pre-existing condition, as determined in a manner consistent with guidance issued by the Secretary. Benefits must have: an actuarial value of at least equal 65 percent of total allowed costs; an out-of-pocket limit no greater than the applicable amount for high-deductible health plans linked to health savings accounts, described in section 223(c)(2) of the Internal Revenue Code of 1986 (that is, $5,950 for an individual); and no pre-existing condition exclusions. Premiums must: (1) be established at a standard rate for a standard population (that is, not exceed 100 percent of the standard non-group rate); and (2) not have an age rating greater than 4 to 1.The Secretary also requested an advance indication of which of the potential implementation options appears to be most likely for states to use to carry out their program, including outlines of programs, or other ideas about potential mechanisms of providing coverage under the new law.The Secretary requests receipt of the states’ indication of intent to participate and preliminary information by April 30, 2010. HHS Letter to Governors, Insurance Administrators, April 2, 2010

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TRICARE availability and VA services for women assessed

The Government Accountability Office (GAO) was asked to examine the adequacy of the Department of Defense (DOD) survey of TRICARE beneficiaries and providers and the availability of health care services for women veterans through the Department of Veterans Affairs (VA). TRICARE programs. Under the DOD's TRICARE program, beneficiaries may obtain health care (including mental health) through TRICARE Prime, an option that requires enrollment and includes the use of civilian provider networks. TRICARE beneficiaries that do not enroll in TRICARE Prime may obtain care from non-network providers through TRICARE Standard, or from network providers through TRICARE Extra. In addition, qualified National Guard and Reserve service members may purchase TRICARE Reserve Select, a plan whose care options are similar to those of TRICARE Standard and TRICARE Extra.GAO study of VA services. Due to Congressional concerns about physical and mental health care of this growing subgroup of veterans, the GAO was asked to examine: (1) the on-site availability of health care services for women veterans at VA facilities, (2) the extent to which VA facilities are following VA policies for the delivery of health care to women veterans, and (3) key challenges that VA facilities face in providing health care to women veterans and how the VA is addressing these challenges.Availability of services for women. Seventeen of the 19 medical facilities the GAO visited offered basic gender-specific services, including pelvic examinations and cervical cancer screening on site, and 15 offered access to one or more female providers for gender-specific care. The availability of specialized gender-specific services, such as treatment of reproductive cancers and mental health services for women, varied by service and facility. While some VA medical centers (MCs) offered a broad array of specialized gender-specific care on site, smaller community-based outpatient clinics referred women to other VA or non-VA facilities for many or most of these services. Nationally, nine VAMCs have residential mental health programs that are for women only or have dedicated cohorts for women.VA primary care implementation. The facilities the GAO visited were in various stages of implementing a new VA initiative to provide comprehensive primary care (defined as complete primary care, including basic gender-specific services and mental health care) to women veterans at all facilities. Officials at VA headquarters are working with Women Veterans Program Managers (WVPM) and facility leadership to help facilities implement this initiative. GAO Reports, GAO-10-402 and GAO-10-287, March 2010

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Grants for HIV/AIDS care and medications awarded

More than $1.84 billion has been released by the Department of Health and Human Services (HHS) for health care and medications for people living with HIV/AIDS. The grants are funded by the Ryan White HIV/AIDS Program. Primary care and support. A total of $652 million will pay for primary care and support services for individuals living with HIV/AIDS under Part A of the program. Part A awards are distributed to eligible metropolitan areas with the highest number of people living with HIV/AIDS and to transitional grant areas experiencing increases in seventy-cases and emerging care needs.States and territories. Approximately $1.145 billion will be sent to states and territories under Part B of the program, with $800 million of that total designated for the AIDS Drug Assistance Program (ADAP). Part B awards also include formula base grants that can be used for home and community-based services, insurance continuation, ADAP assistance, and other direct services.Early intervention. More than $48.1 million will fund early intervention services that support medical, nutritional, psychosocial and other treatments for HIV-positive individuals. These grants, awarded under Part C of the program, go to community-based organizations such as health centers and nonprofit providers of primary health care for people living with HIV. HHS News Release, April 5, 2010

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Antitrust suit dismissed, concerted action not alleged

Physicians could not sustain their claim that a hospital engaged in antitrust activities in violation of the Sherman Act when the hospital revoked or restricted their privileges allowing physicians employed by a wholly-owned subsidiary of the hospital to take over the physicians' obstetrical patient base because the physicians' complaint failed to allege concerted action between two distinct persons that imposed an unreasonable restraint on trade.Insufficient antitrust allegations. Although the physicians contended that the individual physicians employed by the hospital's wholly-owned subsidiary had an independent financial stake in depriving the physicians of their hospital privileges, the physicians did not allege that those physicians had any control over the hospital's decisions concerning privileges.A magistrate judge recommended that the hospital's motion to dismiss the physicians' antitrust claims be granted. Because the physicians' failed to raise any objection to the recommended dismissal of the Sherman Act claims, the hospital's motion to dismiss was granted.Other federal and state claims. In addition, to the antitrust claim, the physicians' claims against the hospital brought under 42 U.S.C. §§1981 and 1985 for violation and conspiracy to violate federal equal protection and civil rights (gender-based disparate treatment), as well as state law claims for tortious interference with present and future contract advantages and relationships and a common law claim for conversion were dismissed for failure to state a claim upon which relief may be granted.The remaining state claims were dismissed but may be refiled in state courtGrant v. Adventist Health System, W.D. N. Car., March 25, 2010, Health Care Compliance Reporter, ¶800,878

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On The Front Lines

HRSA Issues New Section 340B Guidance for Contract Pharmacy Services

by Michael A. Dowell, JD

Under the Section 340B drug pricing program (“340B Program”), pharmaceutical manufacturers and wholesalers that participate in the federal Medicaid program and sell covered outpatient drugs to federally funded clinics and other safety net providers, which include federally qualified health centers, federally-qualified health center look-alikes, and qualified disproportionate share hospitals (“covered entities”), must sell outpatient drugs to covered entities at a discounted price determined using a statutory formula.Covered outpatient drugs include prescription drugs, and over-the-counter drugs that are prescribed, but excludes vaccines and inpatient drugs. Covered entities generally dispense the 340B drugs to their patients through pharmacies that are owned and operated by the covered entities. For those covered entities that lack resources or sufficient patient volume to operate an in-house pharmacy, contracting with an outside pharmacy is an alternative option. When a contract pharmacy arrangement is used, the covered entity purchases and pays for its 340B drugs, and the manufacturer or wholesaler ships the drugs directly to the contract pharmacy for distribution to patients of the covered entity. Historically, the Health Resources and Services Administration (“HRSA”) has permitted only one contracted pharmacy for each covered entity; however, new guidelines, effective April 5, 2010, give 340B covered entities new flexibility to offer patients access to pharmaceuticals. The guidelines clarify the requirements that must be met when utilizing contract pharmacy arrangements, and provide covered entities with the option of utilizing more than one contract pharmacy per health care delivery site.The new Section 340 guidance for contract pharmacy services provide covered entities with greater flexibility in structuring contractual arrangements for pharmacy services, and is likely to increase patient accessibility to Section 340B pharmacy services. For example, in the past, transportation and other difficulties have limited eligible patient access to a single contracted pharmacy. Now, by contracting with multiple pharmacies, covered entities will be able to expand access through multiple pharmacies conveniently located in their service areas, and also utilize mail order pharmacies as an option. Covered entities should carefully review the new guidance and consider restructuring or replacing current arrangements for Section 340B pharmacy services.

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