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Monday, November 16, 2009

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Reimbursement Integrated Library

Reimbursement Advisor

Dennis Barry’s Reimbursement Advisor

October 2009, vol. 25, no. 2

In the October 2009 issue of Dennis Barry’s Reimbursement Advisor, authors examine issues related to the issues of the Fraud Enforcement and the Recovery Act of 2009. In addition, authors take an in-depth look at the issue of Medicaid integrity in light of the newly implemented national Medicaid integrity program.
  • Medicaid Integrity: The Deficient Reduction Act of 2005 (DRA) introduced several initiatives that have or will have an impact of health care enforcement and compliance. Among the most significant DRA provisions: a national Medicaid integrity program.
    In this article, authors examine the newly established Medicaid integrity program expectations and the implications for health care provider organizations.
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Receivables Report

Receivables Report

November 2009, Volume 24, No. 11
  • A New Era of Outsourcing. It’s not the same old relationship between hospitals and collection agencies any more. This month, we talk to some vendors to get their ideas about how hospitals can make the best use of the services they offer. According to one vendor: “Hospitals should distinguish between a collection agency to work bad debt accounts and a receivables management firm to work or manage early out or day one accounts.” Find out more about what he means when you read the story in this issue of the Receivables Report.
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    HARA

    Hospital Accounts Receivable Analysis

    2nd Quarter 2009, vol. 23, no. 3
    • Uncollectible Write-Offs Up. Second quarter 2009 brought to an end the nation’s hospitals’ three-quarter run of achieving benchmark-level uncollectibles performance. Nationally, hospitals reported 5.16 percent of total gross revenue was written off as uncollectible in second quarter 2009, up from 4.71 percent of gross revenue written off as charity or bad debt during the first quarter of the year. Get more details about this key metric in the HARA Report on Second Quarter 2009.
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    Headlines
    from Medicare and Medicaid Guide

    Additional ASC surveys in 2010 to focus on infections

    Approximately 1,300 ambulatory surgical centers (ASCs) across the nation, or one-third of the more than 3,800 non-accredited ASCs will be surveyed during the next 12 months with 9 million in funding being made available from the American Recovery and Reinvestment Act (ARRA) (PubLNo 111-5), according to HHS Secretary Kathleen Sebelius.

    Healthcare-associated infections (HAIs) continue to occur, and in several ASC-related communicable disease outbreaks, failure to employ very basic infection control practices was implicated, leading CMS to identify this as an area for additional oversight. The intent of these surveys is to reduce the number of HAIs in stand-alone or same-day surgical centers. State surveyors will employ a new CMS survey process for ASCs that uses an infection control tool developed in conjunction with the Centers for Disease Control and Prevention (CDC).

    The number of ASCs participating in Medicare grew from about 3,600 in calendar year 2002 to 5,200 in early 2009, a 44 percent increase. ASCs account for more than 43 percent of all same-day (ambulatory) surgeries in the United States, amounting to about 15 million procedures every year. Typical surgical procedures conducted in ASCs include: endoscopies and colonoscopies, orthopedic procedures, plastic/reconstructive surgeries, and eye, foot, and ear/nose/throat surgeries. “Because of the Recovery Act, millions of patients who go to stand-alone surgical centers will have greater assurance that they won't come home with a new infection,” said HHS Secretary Sebelius. 

    CCH Chicago Bureau, Nov. 11, 2009.

    Medicaid, CHIP mental health parity requirements outlined

    Some state Medicaid and all Children's Health Insurance Programs (CHIP) must meet the mental health parity requirements imposed by section 502 of the Children's Health Insurance Program Reauthorization Act (CHIPRA) (PubLNo 111-3) and preparations should begin now, according to instructions issued by CMS. Section 502 amended Soc. Sec. Act §2103to incorporate by provisions of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) (PubLNo. 110-343).

    Medicaid programs must comply to the extent that the state agency contracts with a Medicaid managed care organization (MCO) or prepaid inpatient health plan (PIHP) to provide medical and surgical benefits as well as mental health and substance abuse benefits. States that do not contract with MCOs or PIHPs to provide these benefits are not subject to the parity requirement. CHIPRA specifies that CHIP plans that provide early and periodic screening, diagnosis and treatment (EPSDT) services are considered compliant.

    Prior law required health plans that cover medical, surgical and mental health benefits to apply annual or lifetime limits on mental health services that were no greater than those applied to medical and surgical services. MHPAEA extended the parity requirement to substance abuse treatment and imposed new obligations. Both financial requirements and treatment limitations on coverage of mental health and substance abuse treatment may be are no more restrictive than “predominantrequirements applicable to “substantially all” medical and surgical services.

    HHS and the Departments of Labor and the Treasury will issue joint regulations in the future.

    CMS Letter to State Health Officials, No. SHO-09-014, Nov. 4, 2009, ¶53,194.

    Merger not bona fide sale, reimbursement denial upheld

    CMS properly denied reimbursement for losses from the disposal of depreciable assets incurred by several nonprofit hospitals after a 1997 merger. The hospitals claimed the losses in their cost reports for the fiscal year ending June 30, 1997. The regulations at 42 C.F.R. §413.134(f), allow providers to request reimbursement for the difference between the net book value and the compensation actually received in exchange for assets disposed of prior to December 1, 1997, depending on the method of disposition. Subsection (f)(2) permits the inclusion of gains and losses realized from the “bona fidesale” of depreciable assets in the determination of allowable cost.

    CMS issued Program Memorandum (PM) A-00-76 on October 19, 2000, to help clarify the “bona fidesale” standards under which mergers between nonprofit organizations should be analyzed. The CMS Administrator relied in part upon the PM's interpretation and found that the merger was not a “bona fide” transaction because of the great disparity between the consideration received in the merger and the fair market value of the hospital assets. The Administrator concluded that there had been no good faith bargaining between the parties to establish the fair market value of the assets because there was no appraisal prior to the merger nor did the hospitals place the assets for sale in the open market. Furthermore, contrary to the hospitals‘ arguments, the Administrator did not retroactively apply a new definition of “bona fide sale” by relying on PM A-00-76, because the PM was consistent with prior CMS policy.

    The regulatory interpretation relied upon by the Administrator was valid and the Administrator‘s finding that the merger was not a “bona fide” transaction was supported by substantial evidence.

    Forsyth Memorial Hospital, Inc. v. Sebelius, D. D.C., No. CCB-07-1828, Nov. 5, 2009, ¶303,156.

    Sebelius invokes waiver authority for H1N1 flu response

    HHS Secretary Kathleen Sebelius has exercised her waiver authority pursuant to Soc. Sec. Act §1135, effective October 23, 2009, allowing CMS and its agents to waive or modify certain requirements for healthcare facilities in performing required duties in response to the current H1N1 influenza pandemic. As of October 16, 2009, cases of H1N1 influenza were present in all 50 states, with widespread flu existing in 41 states.

    In order for a §1135 waiver to be granted, (1) the President must have declared an emergency or disaster and (2) the HHS Secretary must have declared a Public Health Emergency, both of which were declared on October 23, 2009, and October 1, 2009, respectively. On October 29, 2009, Sebelius notified Congress of her intention to invoke the waiver authority, effective retroactively on October 23, 2009. While patients otherwise are granted certain protections, those protections might hinder a facility's ability to provide appropriate care in an emergency, so the waiver allows facilities flexibility so that certain requirements may be waived in emergency situations.

    The waivers apply only to the extent that the facility is affected by the influenza. In addition, Section 1135requires that providers and suppliers must apply for a waiver via email, with a copy of the request submitted to their state survey agency (SA). A waiver validation team will review the request and with the assistance of the SA, will determine if the waiver is justified.

    CMS Memorandum to State Survey Directors, No. S&C-10-06-ALL, Nov. 6, 2009, ¶53,200.
    Decisions and Developments
    CMS Manuals

    Procedures for obtaining physician, practitioner and supplier 2010 participation agreements

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1832, Oct. 16, 2009, ¶158,522.

    Additional codes for coordination of benefits contractors to indicate non-compliance with Health Insurance Portability and Accountability Act requirements

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1844, Nov. 6, 2009, ¶158,524.

    Payment rate increases for Medicare rural health clinics and federally qualified health centers

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1845, Nov. 6, 2009, ¶158,525.

    Instructions to contractors regarding payments to physicians that participate in electronic health records demonstration

    Demonstrations Manual, Pub. 100-19, Transmittal No. 62, Nov. 6, 2009, ¶158,528.

    Instructions for continuing maintenance and servicing payments for certain oxygen equipment in calendar year 2010

    One-Time Notification Manual, Pub. 100-20, Transmittal No. 589, Nov. 2, 2009, ¶158,523.

    Implementation of common working file edits to prevent diabetes self-management training and medical nutrition therapy from being performed on the same date of service for a beneficiary

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1846, Nov. 6, 2009, ¶158,526.

    January 2010 changes to the laboratory national coverage determination edit software

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1847, Nov. 6, 2009, ¶158,527.

    Instructions for contractors to allow suppliers with a valid Medicare billing number to bill for repair services for durable medical equipment and enteral nutrition equipment owned in a competitive bidding area

    One-Time Notification Manual, Pub. 100-20, Transmittal No. 592, Nov. 6, 2009, ¶158,530.

    Instructions for processing competitive bid claims for stationary and portable oxygen equipment

    One-Time Notification Manual, Pub. 100-20, Transmittal No. 593, Nov. 6, 2009, ¶158,531.

    Incorporation of the National Provider Identifier (NPI) into the National Supplier Clearinghouse (NSC) enrollment system and related instructions

    One-Time Notification Manual, Pub. 100-20, Transmittal No. 591, Nov. 6, 2009, ¶158,529.

    Ensuring the denial of claims for ambulance services rendered to beneficiaries in Part A skilled nursing facility stays

    One-Time Notification Manual, Pub. 100-20, Transmittal No. 595, Nov. 6, 2009, ¶158,532.

    Corrected implementation of administrative simplification software

    One-Time Notification Manual , Pub. 100-20, Transmittal No. 596, Nov. 6, 2009, ¶158,533.

    2010 regional Medicare swing-bed rates

    Medicare Provider Reimbursement Manual, Pub. 15-1, Transmittal No. 441, Nov. 1, 2009, ¶158,534.
    DAB Decisions

    Accident hazards

    A skilled nursing facility (SNF) was properly fined $2500 per instance civil money penalty (PICMP) for failing to buckle a resident into a wheelchair that was riding in a van, subsequently causing the resident to fall and break a bone. The SNF argued that the resident was buckled into the van according to instructions given to the facility by the automobile dealership. The DAB found that the PICMP was reasonable based on affidavit testimony that residents were routinely buckled by only a shoulder harness and not the lap belt while riding in the van, and regulations do not recognize lack of culpability as a mitigating circumstance with which to reduce the penalty.

    Harlingen Nursing and Rehabilitation Center v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-09-441, Dec. No. CR2017, October 13, 2009, ¶121,948.

    Civil money penalties

    Per-instance civil money penalties (CMPs) of $3,500 for an immediate jeopardy deficiency and $1,500 for another deficiency not rising to the immediate jeopardy level against a long-term care facility were reasonable where the facility failed to implement adequate smoking regulations and was not in substantial compliance with quality of care requirements. Although the facility argued that the LSC deficiency did not amount to immediate jeopardy, a per instance CMP was imposed and the administrative law judge (ALJ) may not review the severity finding where a successful challenge would not affect the range of the CMP. Further, and although the facility argued that the quality of care-related deficiencies were isolated incidents unlikely to result in actual harm, because the incidents where the physicians' orders were not followed related to the administration of medication and the monitoring of vital statistics, there is a potential for more than minimal harm. CMS correctly found that the facility was not in substantial compliance with the LSC and quality of care requirements.

    King City Rehab, LLC d/b/a Avamere Rehabilitation of King City v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. Nos. C-09-50 and C-09-170, Dec. No. CR2020, Oct. 19, 2009, ¶121,950.

    Creative arts therapist

    A state licensed creative arts therapist is not authorized to enroll in the Medicare Part B program as a supplier of services nor may CMS or an administrative law judge accord the therapist supplier status by granting “special permission.” A therapist providing therapeutic services for Holocaust survivors and their descendents claims that without her services their care might be more costly with “the emotional and psychological manifesting itself into physical problems.” A licensed creative arts therapist is not included among the types of nonphysician practitioners authorized to receive payment for services as a supplier under the Medicare program. In recognition of this fact, the therapist sought “special permission” to provide her services and that she be granted supplier status. Neither CMS or the administrative law judge has this authority. Only Congress can amend the Social Security Act to allow reimbursement for the services of a licensed creative arts therapist.

    Saltzman v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-09-629, Dec. No. CR2022, Oct. 22, 2009, ¶121,952.

    Implementation of care plan

    A skilled nursing facility (SNF) was not in substantial compliance with 42 C.F.R. §§483.25(c)and (h), concerning provision of services needed to treat pressure sores and prevent the development of new pressure sores and of supervision and devices to prevent reasonably foreseeable accidents, respectively. Civil money penalties (CMP) above $50 per day that were assessed were reasonable. Although the SNF's initial care plan called for a low bed and surrounding mats for a resident known to be at risk for falls, the SNF did not order the items until after she had sustained two falls. It also failed to install sensor alarms ordered in an amended plan of care until after the second fall, which resulted in a fracture. A revisit survey revealed that staff had failed to install a chair alarm ordered in another resident's plan of care and to provide supervision necessary to prevent falls. The SNF also failed to furnish the pressure-relieving devices called for in a plan of care, or to address the additional risk of pressure sores resulting from the resident's consistent placement of her elbow on the armrest of her wheelchair despite the development of pressure sores there. Neither lack of culpability nor an intervening change of ownership was a mitigating factor. New owners assume all obligations of the previous owners concerning correction of deficiencies.

    Shorepointe Nursing Center v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-08-690, Dec. No. CR2011, Sept. 30, 2009, ¶121,945.

    Investigation of allegations of abuse

    A skilled nursing facility (SNF) was in substantial compliance with the requirement of 42 C.F.R. §483.13(c) to have a policy prohibiting abuse or neglect of residents or misappropriation of property, to investigate allegations, and to prevent further abuse while an allegation is being investigated. It was reasonable for the Director of Nursing to believe that two certified nurse aides (CNAs) had not “fussed” at or “talked ugly.” to a resident who they tried to move without a mechanical lift, and who fell to the floor. When the administrator understood that the complaint was intended to allege verbal abuse of the resident, she investigated the allegations and determined there had not been any abuse. The evidence at the hearing did not establish that the resident had been verbally or physically abused because there was neither testimony of the use of belittling words, curse words, or profanity, nor evidence of intimidation, unreasonable confinement, willful inflection of injury, or punishment with resulting pain. Because state law did not require SNFs to report allegations of a missing medication patch to the state Board of Nursing, the SNF's reports to the state survey agency and the police were sufficient to comply with its reporting obligations under 42 C.F.R. §483.13(c).

    Golden Living Center–Riverchase v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-07-448, Dec. No. CR2012, Sept. 30, 2009, ¶121,946.

    Medical records

    CMS properly imposed a one-day civil money penalty (CMP) against a skilled nursing facility (SNF) that was found to have deficiencies regarding the assessment of an abusive resident, and that it failed to replace essential missing documents from a physically restrained resident's medical records following the actions of a disgruntled employee. The SNF had argued that the initial restraint assessment forms, which had been completed, had been taken by a disgruntled employee. The DAB, however, found that this deficiency should have been immediately remedied. The SNF argued that alternatively, the Functional Assessment Reassessment Form (FARF), which was updated periodically should meet the requirement of the initial restraint assessment form. The DAB stated that the requirements are clear; restraints must be used after proper assessment, continued ongoing assessment, and documentation and that the FARF and a physician's order alone are not sufficient to meet these requirements. In addition, the DAB found that CMS properly concluded that the medical charts was lacking both a properly dated consent form from the family, as well as a review of alternatives to physical restraints or medical symptoms warranting the use of the restraint.

    Glenburn Home v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-07-321, Dec. No. CR2014, October 5, 2009, ¶121,947.

    Nutritional requirements

    CMS properly denied payment and imposed civil money penalties against a skilled nursing facility (SNF) that failed to comply with participation requirements regarding residents nutritional status, and food storage and serving conditions. The SNF appealed the decision, alleging that the residents in question, who lost a substantial amount of weight, lost weight due to underlying medical conditions or were admitted to the facility overweight, but this was unsupported by the evidence. The DAB found that the SNF did not take measures to prevent the weight loss, including communicating with the treating physicians and dieticians or assertively assisting the residents with eating and encouraging them to eat. CMS also found spoiled and expired food at the facility, as well unsanitary eating utensils. The SNF also contended that one resident lost weight by refusing care, but the DAB found that the SNF had a responsibility to document the refusal and efforts made to induce the resident to accept care.

    Carrington Place at Muscatine v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-08-750, Dec. No. CR2019, October 21, 2009, ¶121,949.

    Pressure sores

    CMS properly imposed per instance civil money penalties (CMP) of $10,000 for each violation of 42 C.F.R. §483.25(c), which requires skilled nursing facilities (SNF) to provide necessary care and services to promote healing of existing pressure sores and prevent new ones from developing. Two residents developed pressure sores at the facility. The SNF's documentation indicated that it found a stage III pressure sore just a few days after it had found none in the same place and did not discover a pressure sore on another resident until it reached stage IV. Because pressure sores do not progress that quickly, the SNF could not have been performing the necessary skin assessments timely. One resident's pressure sore developed an infection serious enough to require hospitalization. The finding of immediate jeopardy was supported by the evidence; however, it was not necessary to justify per-instance CMP at the maximum level. The previous survey showed dozens of deficiencies that were uncontested, and the facility presented no evidence of inability to pay.

    Holmesdale Healthcare and Rehabilitation Center v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-08-523, Dec. No. CR2010, Sept. 24, 2009, ¶121,944.

    Right to a hearing

    A group of 10 physicians, all newly enrolled or re-enrolled in Medicare, do not have the right to challenge the regulations governing the time frame for which Medicare will retrospectively reimburse items or services provided prior to the effective dates of their enrollment or re-enrollment. The regulations at 42 C.F.R. §424.520(d) provide that the effective date for Medicare billing privileges for physicians is the later of the date of filing of a Medicare enrollment application that was subsequently approved by a Medicare contractor or the date that an enrolled physician or other practitioner first began furnishing services at a new practice location. In addition, under 42 C.F.R. §424.521(a)(1) Medicare will reimburse retrospectively a claim for services by an enrolled physician for up to 30 days prior to the effective date of enrollment “if circumstances precluded enrollment in advance of providing services to Medicare beneficiaries.” Finally, under 42 C.F.R. §424.521(a)(2) Medicare will reimburse retrospectively for up to 90 days prior to the effective date of enrollment in the event that a Presidentially-declared disaster precluded enrollment in advance of providing services. There are no other circumstances under which retrospective reimbursement is permitted. The physicians’ challenge of the regulations and the policies that they embody is not something that an administrative law judge (ALJ) has the authority to hear and decide. Consequently, the ALJ may not hear Petitioners’ challenge to the regulations nor may he grant exceptions to this policy.

    Anawalt et. al. v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. Nos. C-09-546-556, Dec. No. CR2021, Oct. 21, 2009, ¶121,951.


    Medicare

    Fraudulent billing

    An owner of a chiropractic business was properly convicted of scheming to defraud a health care benefit program on the grounds that he regularly billed an insurance company for services never rendered and for procedures that were more expensive than the procedures rendered. The jury was correctly instructed that it must find that the owner “completely withdrew from the scheme,” and that the owner only had to offer evidence of his complete withdrawal, not actually prove that he withdrew. The evidence revealed that he did not completely withdraw from the fraud scheme.

    While did he did move out of state and implemented operational reforms such as ethics training for employees, the owner nonetheless permitted the fraudulent billing to continue, and continued to profit from the scheme. The owner's contention that his indictment was duplicitous was also rejected, because he failed to show that he was prejudiced by any alleged error. Finally, the owner asserted that a recorded conversation between himself and one of his employees who had since passed away should be excluded because the admission of her statement violated his confrontation rights. Yet the statements were not introduced for the truth of the statements, but rather to place the owner's statements into context. The Confrontation Clause did not bar the introduction of statements that were required to place a conspirator's statements into context.

    U.S. v. Detelich, 3rd Cir., Nov. 5, 2009, ¶303,155.

    Home health 2010 update

    The Final rule announcing a (1) 2.0 percent market basket increase for the home health prospective payment system (HH PPS); (2) a 2.75 percent reduction to the national standardized 60-day episode payment rates and non-routine medical supply factor to offset an increase in the home health case-mix that is not associated with any underlying change in the actual clinical condition of home health patients; (3) modifications to the outlier policy as part of an ongoing effort to address potential fraud and abuse with regards to outlier payments under the HH PPS; and (4) a new version of OASIS called OASIS-C, reported on in an earlier edition is being published with this report.

    Final rule, 74 FR 58078, Nov. 10, 2009, ¶180,899.

    Proposed ESRD PPS

    CMS has extended the comment period on the Proposed rule, published September 29, 2009, that would establish a prospective payment system (PPS) for facilities that provide dialysis services to Medicare beneficiaries who have end-stage renal disease (74 FR 49922, ¶220,737). The proposed PPS would replace the current basic case-mix adjusted composite payment system and methodologies for the reimbursement of separately billable outpatient services, and would combine payments for composite rate and separately billable services into a single base rate. The closing of the comment period has been extended from November 16, 2009, at 5 p.m. to December 16, 2009, at 5 p.m.

    Proposed rule, 74 FR 57127, Nov. 4, 2009, ¶220,756.

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