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HEADLINES
Wednesday,
August 26, 2009
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Health Care Compliance Professional’s Manual Highlights
Endorsed by the Health Care Compliance Association and written by expert compliance practitioners, the Health Care Compliance Professional’s Manual provides the information and tools needed to plan and execute a customized program that meets federal and state standards. Report 20 includes the following new and revised chapters:
- A new chapter written by Sara Kay Wheeler, JD, and Kim H. Roeder, JD provides a comprehensive analysis of the Stark law and its exceptions, including a history of the law, key terms, and pertinent final and proposed rules, CMS Advisory Opinions and case law.
- The “Medical Necessity and Quality of Care Issues for Compliance Officers chapter has been updated by D. Scott Jones and Maria S. Spencer, JD, to includes a discussion of Medicare value based purchasing, pay for performance, performance improvement continuing medical education, an OIG advisory opinion related to compensation of physicians for participation in quality initiatives, staffing ratios laws, and the development of electronic medical records..
- A new chapter written by Christopher Young, CHC presents a history of laboratory compliance programs; discusses risk areas such as medical necessity, billing and coding, and anti-kickback and physician self-referral; and provides practical tips for auditing and monitoring.
- A new chapter written by Kevin D. Lyles, JD explains the purpose of the Fair and Accurate Credit Transaction Act of 2003 and the implementing regulations and lays out the elements of an effective identity theft prevention program and the consequences of noncompliance with the Red Flag Rules.
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Journal of Health Care Compliance July/August 2009 Volume 11, Number 4
In addition to regularly featured columns such as HIPAA, auditing and monitoring, and the anti-kickback statute, the May-June 2009 issue of the Journal of Health Care Compliance includes the following articles:
- HHC and FTC Release Guidance on HITECH Act Requirements, written by Michael A. Dowell, discusses what entities must do to ensure they are in compliance with the HITECH Act requirements.
- The Evolving Role of Compliance Officers During These Difficult Economic Times, written by Paul Belton, examines the ever-increasing duties of health care compliance officers, with an emphasis on the current economic condition.
- Achieving Consistency in Your Compliance Program at a Large Multihospital System, written by Gene DeLaddy and Kathryn Dever, uses their entity as an example of how to successfully communicate the organization's compliance standards to all departments.
- Long-Term Care Hospitals - the Other Acute Care Setting, written by Kimberly Hrehor, Anita J. Bhatia, and Karen Sabharwal, focuses on how recent erroneous Medicare payments for long-term care hospitals have brought attention to the need for compliance officers to ensure that their programs are up-to-date.
- The Core of CLinical Documenation Improvement: Physician Documentation Education, written by Betty B. Bibbins, in the third and final article of the series, provides reasons for the importance of clinical documentation improvement and the reasons why such documentation is lacking.
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Headlines
OIG Chief Counsel testifies on ensuring CME integrity
The commercial sponsorship of continuing
medical education (CME) poses a potential conflict of interest between
patient welfare and the commercial interests of sponsors, according
to the testimony of the Office of Inspector General (OIG) Chief Counsel,
Lewis Morris. Commercially-sponsored CME programs consequently tend
to focus more on sponsors' products than do programs that are not
commercially-sponsored.
The Accreditation Council for Continuing Medical Education (ACCME)
is the principal CME accrediting authority in the U.S. Once a CME
provider is accredited by ACCME, the provider can offer accredited
CME programs without further review on the program's content. ACCME
has enacted measures to mitigate commercial bias, such as prohibiting
CME content from promoting a specific proprietary interest.
However, the impact of ACCME's measures is limited. ACCME neither
pre-approves content nor routinely monitors CME programs. Its oversight
is complaint-driven, and in practice, several years may lapse before
a noncompliant CME provider's accreditation is revoked. Under the
current system, CME providers can seek commercial financial support
by developing CME content to favor funders' economic interests. As
a result of these and other activities, industry-supported CME usually
covers topics related to commercial products, rather than patient
care.
Commercially-sponsored CME may implicate the Federal Food,
Drug, and Cosmetic Act (FDCA). On at least two occasions, a pharmaceutical
company was required to pay millions of dollars to resolve charges
arising out of CME programs that allegedly promoted the off-label
uses of its product in violation of the FDCA.
According to the OIG, the surest way to eliminate commercial
bias in CME is to eliminate industry sponsorship by funders who have
a significant financial interest in physicians' clinical decisions.
CME providers should accept funds only from sources that have no
commercial interest in the CME. A consequence, however, is that CME
providers would have to find alternative funding. Toward that end,
companies should take the following interim measures to permit industry
funding but limit commercial bias in CME: (1) grant-making functions
should be separated from sales and marketing to ensure that grant
funding is not influenced by marketing motivations; (2) objective
criteria for making educational grants should be established to ensure
that funded activities are for legitimate educational purposes; and
(3) company control over speakers or content of CME should be eliminated
to reduce the risk that payments are for speaker's referrals or promotion
of off-label uses.
Testimony before the Senate Special Committee
on Aging, July 29, 2009
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OIG: proposed physician, hospital joint venture permissible
A proposed joint venture involving
ownership of an ambulatory surgery center (ASC) by a hospital and
a physician group could constitute unlawful remuneration; however,
the safeguards put in place would lower the risk sufficiently and
the joint venture would not be subject to administrative sanctions
in connection with the anti-kickback statute.
Joint venture. Under the proposed arrangement,
the hospital and physician group would enter into a joint venture
to own and operate an ASC with two operating rooms in a medical office
building owned by the hospital and located on its campus. The hospital
would initially develop a single hospital operating room in a space
within the building. Upon receipt of necessary regulatory approvals,
the hospital would then contribute the assets used to operate the
operating room to a separate corporate entity after which the operating
room would be operated as a Medicare-certified ASC. The physician
group would then purchase a 50 percent share in the corporate entity.
At the conclusion of this transaction, the hospital and the physician
group would jointly own the corporate entity, which in turn would
own and operate the two-operating room ASC.
Proportional investment. Physician investors' ownership
in the physician group would be proportional to his or her capital
investment. Additionally, each physician received at least one-third
of his or her medical practice income for the previous fiscal year
or previous 12-month period from the performance of procedures payable
by Medicare when performed in an ASC.
Referral limitations. Physicians employed by the
hospital or its affiliates would not make referrals to the joint venture
ASC; nor would the hospital undertake any actions requiring or encouraging
its medical staff to refer patients to the ASC. In addition, the hospital
will continue to operate its own facilities for outpatient surgery.
Minimal risk. Under the proposed arrangement: (1)
certain commitments would limit the ability of the hospital to direct
or influence physician referrals; (2) each of the physician investors
is qualified to invest in the ASC directly without destroying its
eligibility for safe harbor protection; and (3) the amount of payment
to a physician in return for the investment would be directly proportional
to the amount of capital invested by that physician. For these reasons,
while the proposed arrangement would result in income to investors
that would not be protected by any safe harbor, it involved minimal
risk of fraud or abuse.
OIG Advisory Opinion, No. 09-09, July
22, 2009, Health Care Compliance Reporter, ¶500,214
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Reduced Medicare inpatient deductibles acceptable, OIG
A proposed arrangement between an
insurer's Medicare Supplemental Health Insurance (Medigap) policyholders
and in-network hospitals, offered in almost every state in the country,
which would provide policy holders discounts of up to 100 percent
on Medicare inpatient deductibles incurred at the "preferred"
in-network hospitals, had sufficient safeguards that it presented
a low risk of fraud and abuse. The arrangement also had the potential
to lower costs for Medigap policyholders who select network hospitals,
and because savings realized from the arrangement would be reported
to state insurance rate setting regulators, it also would have the
potential to lower costs for all policyholders.
Proposed arrangement. Although the deductibles
would be covered under the insurers' Medigap plans, the discounts
applied only to Part A inpatient hospital deductibles and not other
coinsurance or cost-sharing amounts. No other benefits would be offered
by the hospitals to the insurers or their policyholders. When policyholders
utilized non-network hospitals, the insurers would have to pay the
full Part A hospital deductible. As part of the agreement, the insurers
would return a portion of the savings from the arrangement to any
policyholder who had an inpatient stay at one of the in-network hospitals.
Low risk. The arrangement was found to represent
a low risk of fraud or abuse because: (1) the waivers would not increase
or affect per service Medicare payments and payments to hospitals
under Part A for inpatient services that were fixed and unaffected
by beneficiary cost-sharing; (2) the discounts would not increase
utilization of the hospitals; (3) the arrangement did not unfairly
affect competition because membership in the network would be open
to any accredited hospital; and (4) professional medical judgment
would not be affected because a patient's physician or surgeon would
not be a recipient of remuneration.
OIG Advisory Opinion, No. 09-10, July
24, 2009, Health Care Compliance Reporter, ¶500,215
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Free blood pressure screenings OK'd by OIG
Civil monetary penalties would not
be imposed by the Office of Inspector General (OIG) in connection
with a small county-owned critical access hospital’s provision
of free blood pressure screenings to walk-in visitors during daylight
hours, some of whom may be Medicare and Medicaid beneficiaries.
Facts presented. Under the proposed arrangement,
the free blood pressure checks offered by the hospital are not conditioned
on the use of any other goods or services from the hospital or any
other particular practitioner or provider. The hospital does not advertise
the service to the public. The service is provided in accordance with
the hospital's own specific guidelines and procedural checklists by
an on-duty staff nurse. The visitor receiving the blood pressure check
is not directed to any particular health care practitioner or provider.
Nor does the hospital offer the visitor any special discounts on follow-up
services. Staff responds to an abnormal blood pressure reading by
advising the visitor to see his or her own health care professional.
The hospital does not bill the blood pressure check service to any
federal health care program or any other third-party payors.
Law. The hospital did not indicate the fair market
value of the blood pressure screenings, but the OIG has previously
taken the position that “incentives that are only nominal in
value are not prohibited by the anti-kickback statute,” and
has interpreted “nominal value to be no more than $10 per item,
or $50 in the aggregate on an annual basis.” The statute also
contains an exception for incentives given to individuals to promote
the delivery of preventive care.
Analysis. The free blood pressure checks offered
by the hospital will meet the definition of preventive care services
if the free care does not promote the provision of other, nonpreventive
care reimbursed by Medicare or Medicaid. In sum, the OIG found that
the arrangement is crafted to avoid improper ties to the provision
of other services. The free screenings, therefore, would not violate
the prohibition on beneficiary inducements resulting in administrative
sanctions or the imposition of civil money penalties.
OIG Advisory Opinion, No. 09-11, Aug.
3, 2009, Health Care Compliance Reporter, ¶500,216
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CMS needs agency-wide policy for translating written documents
To improve the consistency and transparency of translation decisions
by the Centers for Medicare and Medicaid Services (CMS), the Government
Accountability Office (GAO) recommends that CMS develop a written,
agency-wide policy that includes criteria for the translation of written
documents as part of its limited English proficiency (LEP) plan.
This matter was addressed in depth in the article "Title
VI of the Civil Rights Act of 1964: A Compliance Primer for Health
Care Providers" by Bruce L. Adelson, Esq., which appeared in
the May 19, 2009 issue of the Health Care Compliance Letter.
Legal authority. Pursuant to the 2000 Executive
Order 13166, federal agencies were required to develop a plan for
how LEP individuals would be provided with meaningful access to their
programs, and the Department of Health and Human Services (HHS) in
turn developed an LEP strategic plan that spelled out how its agencies
would ensure that LEP beneficiaries were provided with language assistance
services. Providers have noted that the cost of translating documents
for themselves and of providing interpreters has increased as the
number of languages spoken in the United States has increased.
GAO findings. Specifically, the GAO examined a
sample of 134 Medicare documents and found that 87 percent were translated
into Spanish, but only some were translated into other languages such
as Chinese, Korean, and Vietnamese. While HHS officials noted that
its LEP plan provides a "road map" for addressing HHS'
goal of ensuring that LEP beneficiaries were provided with translations,
CMS officials were not aware of an agency-wide translation policy
for Medicare documents. CMS has taken the step to appoint an individual
to create just such an agency-wide policy so that vital information
is consistently translated to LEP beneficiaries in the future. Furthermore,
such a policy would be a cost-effective measure for providers who
would not have to translate documents themselves and would reduce
the need for bilingual staff and interpreters for oral translations.
GAO Letter to the House of Representatives Committee
on Small Business, GAO-09-752R, July 30, 2009
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Breach notification rule issued for e-health information
On August 17th, the Federal Trade
Commission (FTC) issued a final rule requiring certain web-based businesses
to notify consumers when the security of their electronic health information
is breached. The rule applies to both vendors of personal health records,
which provide online repositories that people can use to keep track
of their health information, and entities that offer third-party applications
for personal health records.
Examples. These applications could include, for
example, devices such as blood pressure cuffs or pedometers whose
readings consumers can upload into their personal health records.
Many entities offering these types of services are not subject to
the privacy and security requirements of the Health Insurance Portability
and Accountability Act (HIPAA), which applies to health care service
providers such as doctors’ offices, hospitals, and insurance
companies.
Recovery Act provisions. The American Recovery
and Reinvestment Act of 2009 (ARRA) required the FTC to issue a rule
requiring these entities to notify consumers if the security of their
health information is breached. The FTC issued a proposed rule in
April 2009, and collected public comments until June 1, 2009.
Requirements. The rule requires vendors of personal
health records and related entities to notify consumers following
a breach involving unsecured information. If a service provider to
one of these entities has a breach, it must notify the entity, which
in turn must notify consumers. The rule also specifies the timing,
method, and content of notification, and in the case of certain breaches
involving 500 or more people, requires notice to the media. Entities
covered by the rule must notify the FTC, and they may use a standard
form, which can be found along with additional information about the
rule on the FTC web site at www.ftc.gov/healthbreach.
Effective date. The rule will take effect 30 days
after publication in the Federal Register. The FTC
will begin enforcement 180 days after publication.
FTC Press Release, August 17, 2009
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Sex toy scandal did not affect doctor's application for privileges
Insufficient evidence existed to conclude
that a doctor's professional references resulted in negative evaluations
and interfered with his application for privileges with an association
of doctors at a university hospital.
Facts. The case involved a scandal at the university's
hospital where a female doctor received a sex toy from an adult store
and the invoice clearly named the doctor as the purchaser. Although
the doctor claimed his identity was stolen and that he was framed,
and he remained under a cloud of suspicion, the university never took
any formal disciplinary action against him.
Claims. The doctor argued that the university and
the negative references interfered with his expectation of employment
and induced the doctors' association to deny his application.
Findings. The U.S. Court of Appeals for the Seventh
Circuit found no evidence that the defendants “prevented”
him from obtaining clinical privileges at the association, in fact,
four of the five references swore they never provided evaluations
to the credential committee. The court also found no evidence that
the association relied on a conversation with the fifth reference
because the doctor never took discovery from the association. The
court stated that “only when the actions of a third party cause
an employer to fire an ... employee, the third party is liable in
tort.” In addition, the information about the scandal was not
privileged under the Illinois Medical Studies Act because it did not
relate to the doctor's “professional competence.” Finally,
the doctor voluntarily signed a “Release and Immunity”
by which he “extend[ed] absolute immunity to, release[d]
from any and all liability, and agree[d] not to sue”
any party for any matter relating to the application for privileges.
Botvinick v. Rush University Medical Center,
7th Cir., July 24, 2009, Health Care Compliance Reporter, ¶800,698
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Billing manager's whistleblower, retaliatory discharge actions fail
A former employee who brought suit
against the radiology practice that terminated his employment failed
to carry his burden of proof as to his state whistleblower and common
law retaliatory discharge claims, according to the U.S. District Court
for the Western District of Tennessee.
Facts. The employee was contracted to manage the
business operations of the practice, including billing practices,
which were handled by an outside billing service. He alleged that
he repeatedly urged the board of directors to address the possibly
illegal billing activities of the outside billing service, but that
he was instead discharged in retaliation for raising these billing
issues.
Whistleblower claim. The state whistleblower claim
failed because the employee did not actually discover the alleged
illegal billing activities, but rather, when he was asked to bring
some structure and organization to the practice and to the outside
billing company, the activities were pointed out to him, according
to the testimony of one of the physicians. He was also unable to show
that the billing issues were the sole reason for his termination.
Furthermore, the court noted evidence that clearly indicated he was
terminated due to his verbal abuse of another employee.
Retaliatory discharge claim. The employee's retaliatory
discharge claim was also dismissed by the court because he was not
an at-will employee as required for the Tennessee law to apply, but
instead was employed pursuant to an employment contract.
McDonough v. Memphis Radiological Professional
Corporation, W.D. Tenn., July 22, 2009, Health Care Compliance
Reporter, ¶800,695
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Consolidation of nonprofit hospitals not bona fide sale
There was no bona fide
sale of assets between two nonprofit hospitals that consolidated
and therefore no recognizable loss on disposition of assets that would
trigger a reimbursement adjustment, according to the U.S. Court of
Appeals for the Third Circuit.
Reimbursement adjustment. The hospitals argued
they were entitled to an adjustment because CMS had improperly denied
their claim based on Program Memorandum (PM) A-00-76,
which the hospital argued was inconsistent with previous regulations.
The memorandum said that the "unrelated parties" and "bona fide sale"
provisions in Medicare regulations apply with equal force to both
statutory mergers and to consolidations. However, the Third Circuit
in Albert Einstein Medical Center v. Sebelius, recently
held that PM A-00-76 "offered a clarification of the Bona Fide
Sale Provision that was not inconsistent with previous agency policy."
Arms length negotiations. The hospitals' second
argument was that they fulfilled the "bona fide sale" requirement,
even if it applies to both mergers and consolidations. Under the provision,
however, a bona fide sale requires arms length negotiation
and reasonable consideration. Here, there was no evidence to support
a finding of arms length negotiation and reasonable consideration
(i.e., a bona fide sale) because the hospitals' assets
were not on the open market, there was no pre-consolidation appraisal,
and there were no negotiations over price, assets, or debts.
Sewickley Valley Hospital v. Sebelius,
3rd Cir., July 24, 2009, Health Care Compliance Reporter,
¶800,697
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On The Front Lines
Has the IRS Met Its Goals with the New Form 990?
by Lisa A. Stegink, J.D.
More than a year ago, tax-exempt organizations and their
advisors started preparing for the new Form 990 – the IRS’s
long overdue redesign of the annual information reporting form filed
by tax-exempt organizations. The new 11-page “core” section
for all tax-exempt organizations and 16 potential schedules incorporate
major changes and significant additions. Organizations that have not
yet been required to file the new Form 990 are holding their collective
breath to see how the experience goes for the first round of filers.
The IRS articulated essentially three
main goals with the overhaul of the Form 990: promoting tax compliance;
enhancing transparency to provide the IRS and the public with a realistic
picture of the organization; and minimizing the administrative burden
on filing organizations. Organizations that have spent any time with
the new Form 990 may wonder whether they are looking at the same form
as the IRS, particularly when it comes to minimizing the burden on
filing organizations.
“Invasive,” “traps for the unwary,” “data
mining,” and “does little to increase compliance”
are phrases that have been variously used by exempt organizations’
financial staff, chief staff officers, and attorneys to describe the
newly revised Form 990. This article considers whether the IRS really
is meeting its goals, based on input from individuals responsible
for completing, reviewing, and advising various size organizations
on how to complete the Form 990.
To many, the redesigned Form 990 does not meet the IRS’s
goals to increase compliance and transparency and minimize the administrative
filing burden. Improvements to the Form 990 are needed to meet those
goals. One approach the IRS could take is to apply the “80/20
rule.” Under the 80/20 rule, the IRS could obtain 80 percent
of the information it needs and achieve 80 percent of its goals with
only 20 percent of the questions it asks on the Form 990. For example,
by focusing on the top five problem situations from the IRS perspective,
such as business transactions with interested persons, the IRS could
craft detailed, audit-like questions that would give the IRS the critical
information it needs to address major concerns.
Organizations that have not yet filed should continue to learn
as much as they can about the new form and ask questions of their
legal and tax advisors. They should ensure that governance policies
are in place, and they should answer questions and describe activities
with care and attention. If possible, they should do a “dry
run” well in advance of the tax deadline to give the organization
and its leadership time to work through the form and ask additional
questions of attorneys and accountants. By identifying potential issues
now, there is time to take thoughtful action, as necessary or appropriate,
to minimize scrutiny and avoid leaving misimpressions with the IRS,
members, donors, or the public.
If an organization already has filed the new Form 990, now is
the time to provide feedback to the IRS. The IRS has specifically
asked for comments on the redesigned Form 990 and the experience of
filers with the new form. By providing feedback, the collective experiences
and learning of numerous organizations could potentially contribute
to improvements in the form and to the IRS’s approach to tax-exempt
organization information reporting.
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