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HEADLINES
from Medicare and Medicaid Guide
Monday, November 16, 2009
Click on a headline below for the full story.
Decisions and Developments
CCH® Reimbursement Integrated Library
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Reimbursement Integrated Library
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
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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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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