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HEADLINES
Wednesday,
April 20, 2010
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Journal of Health Care Compliance March/April Volume 12, Number 2
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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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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Headlines
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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IRN»
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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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