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from Medicare and Medicaid Guide Monday, April 20, 2009

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Reimbursement Integrated Library

Reimbursement Advisor

Dennis Barry’s Reimbursement Advisor

April 2009, Volume 24, No. 8

In the April 2009 issue of Dennis Barry’s Reimbursement Advisor, authors examine a new issue that further delays the effective date for newly certified providers. Other issues examined in the April issue include promised change in how Freedom of Information Act requests are handled, sole community hospital 2006 rebasing, and the Centers for Medicare and Medicaid Services restrictive interpretation of resident cap adjustments when programs close.
  • Change promised for handling of Freedom of Information Act requests: Memorandum requires prompt FOIA response. Over the years, the Freedom of Information Act has been useful in obtaining Medicare documents that elucidate what Medicare policy is, how it has changed, and how current policy may be inconsistent with prior CMS policy. CMS, however, responds to FOIA requests with the same level of eagerness and attention that a parole board gives to Charles Manson, with FOIA response delays of up to six years. Change, however, may be on the horizon, as a recent White House memorandum directs the heads of all executive departments and agencies to handle FOIA requests promptly and to administer the law with a “clear presumption” in favor of disclosure.
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Receivables Report

Receivables Report

April 2009, Volume 24, Issue 4
  • Communicating Patient Financial Responsibility. The second part of this two-part article continues the vital issue of communicating patient responsibility for their bill. Details cover real life experiences from three health care providers with different interests and financial means regarding point-of-service collection efforts and processes. For more about what each of these health systems has done, read their stories inside the May issue.
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    HARA

    Hospital Accounts Receivable Analysis

    3rd Quarter 2008, Volume 22, No. 4
    • Bill Time on the Rise. US hospitals took nearly a day longer to bill claims to payers, according to the third quarter HARA survey report. The 0.82-day increase in discharge-to-bill time average resulted in an increase to 10.81 days, pushing this key financial indicator past the benchmark, which is to submit claims within ten business days. Find out what’s behind the increase in this quarter’s report.
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    Headlines
    from Medicare and Medicaid Guide

    Ninth Circuit halts California Medicaid rate cuts

    A challenge by California Medicaid providers to a rate reduction required by legislation will be allowed to proceed, and the state may not implement the cuts while the case is pending, according to a federal appeals court ruling. The Ninth Circuit Court of Appeals, in an unusual ruling, overturned the district court's denial of the providers' request for a preliminary injunction.

    The rate cuts in the district court

    The state legislature enacted six percent rate cuts for all Medicaid providers across the board. A group of pharmacists, hospitals and other providers asked the district court for an injunction against the state's implementation of the law. They argued that the rate reduction violated Soc. Sec. Act §1902(a)(30)(A), which requires state Medicaid programs to have procedures and methods in place to assure that payment rates are consistent with efficiency, economy and quality of care and meet other requirements. The violation of the statute was the failure to consider, or allow the agency to consider, those factors when the state cut Medicaid rates. Under the Supremacy Clause of the United States constitution, the federal law preempted the state law.

    The district court ruled that the statute had been violated. The court of appeals noted that the violation was established in earlier decisions challenging the same law (see ¶302,624).

    The district court found that the providers had not established the immediate threat of irreparable harm required for a preliminary injunction. The court of appeals ruled that it was sufficient for the hospitals to show that they were threatened with economic harm ,i.e. lost revenue. Because the hospitals' claim was based on the Supremacy Clause rather than a violation of civil rights, the hospitals were not required to show that the statute was enacted for their benefit. Although financial losses ordinarily can be remedied through an award of damages, that remedy was not available to the hospitals because of the Eleventh Amendment ban on money judgments against states.

    Equitable requirements

    Before granting an injunction, the court must find that the equities, the balance of hardships and the public interest, require it. Because the remedy of a money judgment was unavailable, the hospitals had no adequate remedy at law. The increased strain on the state's budget was outweighed by the public interest in ending the state's violation of federal law.

    California Pharmacists Association v. Maxwell-Jolly, 9th Cir., April 6, 2009, ¶302,863.

    Office of Health Reform established at White House and HHS

    President Barack Obama has signed an executive order establishing an Office of Health Reform in both the White House and at HHS. The Health Reform Office, established within the Executive Office of the President, will establish policies, priorities, and objectives for the comprehensive effort to improve access to health care, the quality of health care, and the sustainability of the health care system. The HHS Office of Health Reform is tasked with coordinating closely with its White House counterpart.

    Principle functions

    The principal functions of the Health Reform Office, are to:

    provide leadership for and to coordinate the development of the Administration's health care policy agenda;

    work to ensure that policy decisions and programs are consistent with the President's stated goals;

    integrate the President's policy agenda across the federal government;

    coordinate public outreach activities designed to gather input from the public, from demonstration and pilot projects, and from public-private partnerships;

    bring to the President's attention concerns, ideas, and policy options for strengthening, increasing the efficiency, and improving the quality of the health care system;

    work with State, local, and community policy makers and public officials to expand coverage, improve quality and efficiency, and slow the growth of health costs;

    develop and implement strategic initiatives to strengthen the public agencies and private organizations that can improve the performance of the health care system;

    work to eliminate unnecessary legislative, regulatory, and other bureaucratic barriers that impede effective delivery of efficient and high-quality health care;

    monitor implementation of the President's agenda on health reform; and

    help ensure that policy makers across the executive branch work toward the President's health care agenda.

    The Health Reform Office will be headed by a Director of the Health Reform Office (Director) and have staff and other assistance as necessary to carry out the executive order. If requested by the Director, each executive department and agency will designate a liaison to work with the Health Reform Office and will cooperate with the Health Reform Office by providing information, support, and assistance to the Health Reform Office as it may request.

    Executive Order, April 8, 2009, ¶52,811.

    Six plead guilty to HIV treatment fraud

    Six south Florida health care providers have pleaded guilty in connection with their roles in a $10 million Medicare scheme involving HIV infusion clinics. Three doctors, a chemist and two medical assistants admitted to working at Midway Medical Center Inc., a Miami clinic that purported to specialize in the treatment of HIV patients.

    According to court documents, the health care providers billed the Medicare program for services that were medically unnecessary or never provided. Two of the clinic's co-owners, Dr. Roberto Rodriguez and Dr. Carmen Del Cueto, admitted that they purchased only a small fraction of the medication that they claimed to administer to patients.

    Most of the services provided to patients at Midway were billed to Medicare as treatments for a diagnosis involving a low count of platelets in the blood. Prosecutors alleged that none of the clinic's patients actually had low blood platelet counts, rather, the doctors used chemists to manipulate the blood samples drawn from patients before the samples were sent to a laboratory for analysis.

    Alexis Dagnesses, a chemist, admitted that he used a blood centrifuge to separate blood samples into their component parts and extract platelets. He would then return the samples to Midway, where the doctors would send them to a lab for testing. Dagnesses usually was paid $1,800 for every vial of blood he manipulated.

    Dr. Carlos Garrido also admitted to ordering patients be treated with medications he knew they did not need and that often the clinic did not have available to provide to patients. Medical assistants Gonzalo Nodarse and Alexis Carrazana admitted to conspiring with the others by making false entries in medical records indicating that they had administered such medications to patients on particular dates and in particular dosages.

    Department of Justice News Releases, March 23, 2009, and March 26, 2009.

    Cash incentives tested to improve nursing home quality of care

    Nursing homes in Arizona, Mississippi, New York and Wisconsin will be asked by CMS to participate the Nursing Home Value-Based Purchasing demonstration to determine if cash incentives will improve the quality of care and efficiency of operations. Participating facilities will be awarded points for performance on quality measures in: (1) nurse staffing, (2) avoidable hospitalizations, (3) resident outcomes, and (4) the scope and severity of deficiency citations received during inspections.

    Nursing homes with the highest scores or the greatest improvement in their score will be eligible for a performance payment. Savings generated by improved performance will fund state pools from which payments will be made to qualified nursing homes.

    CMS officials anticipate that at least 100 nursing facilities in each state will apply for this demonstration, which is expected to run from July 2009 through June 2012. An application kit will be mailed by CMS to each Medicare-certified nursing home in the demonstration states.

    CMS Press Release, March 27, 2009.
    Decisions and Developments
    CMS Manuals

    New interest rate for Medicare overpayments and underpayments

    Medicare Financial Management Manual, Pub. 100-06, Transmittal No. 151, April 9, 2009, ¶158,105.
    Premium content

    Billing routine cost of clinical trials

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1710, April 10, 2009, ¶158,016.
    Premium content

    Survey protocol for long term care facilities

    State Operations Provider Certification Manual, Pub. 100-07, Transmittal No. 41, April 10, 2009, ¶158,107.
    Premium content
    Decisions and Developments
    DAB Decisions

    Civil money penalty

    The administrative law judge (ALJ) incorrectly concluded that a skilled nursing facility (SNF) was in substantial compliance with the Medicare conditions of participation (CoPs) when evidence presented clearly showed that the SNF failed to: (1) consult the resident's physician as required by 42 C.F.R. §483.10(b)(11); (2) meet the quality of care requirement at 42 C.F.R. §483.25; and (3) meet the facility administration requirement at 42 C.F.R. §483.75.

    A resident died after an undetermined number of vomiting or emesis “episodes.” The ALJ had incorrectly relied on a nurse's testimony and his own understanding of what constituted a “episode” to conclude that only one episode occurred. Evidence was presented that more than one episode of vomiting occurred which would have required notification of the resident's physician.

    The ALJ also failed to take into account other conflicting testimony and evidence regarding the type of care and treatment the resident received and whether the resident's vital signs were monitored according to her physician's care plan. The civil money penalties of $4050 and $100 per day were reasonable. Life Care Center of Bardstown v. CMS, HHS Departmental Appeals Board, Appellate Division, Doc. No. A-08-133, Dec. No. 2233, March 19, 2009, ¶121,751.
    Premium content

    Compliance by SNF

    Because an administrative law judge (ALJ) improperly treated the observations of a surveyor as more credible than the skilled nursing facility's (SNF) documentation of the repositioning of residents to prevent bed sores, a genuine dispute of material fact existed, and the granting of summary judgment to CMS was improper.

    Certain residents of the SNF were required to be repositioned periodically to prevent the occurrence of pressure sores, as mandated by the 42 C.F.R. §483.25(c) quality of care requirements. In a survey by a state agency, it was determined that the SNF was not in substantial compliance with the requirement to prevent pressure sores because residents were allegedly not repositioned as often as necessary. When a hearing before the ALJ was conducted, the ALJ did not consider the flow sheets the SNF kept to keep track of the repositioning of residents, but rather relied solely on the surveyor's observations that residents were not properly repositioned. Because the documentation provided by the SNF raised a genuine dispute of material fact, the granting of summary judgment was vacated.

    Further, regarding the ALJ's finding that the SNF was noncompliant with the requirements in 42 C.F.R. §483.75to effectively manage a facility and the finding that the amounts of the civil money penalties were reasonable, these determinations were also vacated. The case was remanded to the ALJ. Kingsville Nursing and Rehabilitiation Center, HHS Departmental Appeals Board, Appellate Division, Doc. No. A-09-05, Dec. No. 2234, March 19, 2009, ¶121,752.
    Premium content

    FFP for school-based services

    CMS properly disallowed Texas' claims for federal financial participation (FFP) in counseling, assessment, nursing, and transportation services provided to children in schools on the ground that the counseling, assessment, and nursing services were provided by individuals who lacked the licensing required to qualify as Medicaid providers.

    A practitioner's certification as an educational counselor under the state administrative code is not equivalent to the licensing required of counselors because the requirements for course work, degrees and supervised practice for counselors are more stringent, and the work of counselors includes diagnosis and assessment of medical conditions and required health services, while the work of educational counselors addresses only educational needs and educational goals.

    There was no documentation to corroborate the state's claim that the individuals used the same diagnostic criteria and coding with the same meanings or for the same purposes as licensed counselors. The costs of speech pathology services performed by an individual as part of the supervised practice requirement for licensing were not allowable because the student did not have the intern's license required by state regulations. Expenditures for the services of a nurse rendered before she received her Texas license were allowable after the state established through Social Security records that she was the same individual that already was licensed under Florida law. Texas Health and Human Services Commission, HHS Departmental Appeals Board, Appellate Division, Doc. No. A-08-87, Dec. No. 2235, March 19, 2009, ¶121,753.
    Premium content

    Anesthesia administered by dentist

    An administrative law judge (ALJ) did not err in concluding that a dentist is authorized to administer anesthesia in non-dental cases and that he is therefore, eligible to bill Medicare for his hospital-based anesthesia services.

    The dentist is seeking a Medicare enrollment status that will permit him to bill his anesthesia services as “physicians' services.” Under the Medicare statute, the term “physician” can refer to “a doctor of dental surgery or dental medicine who is legally authorized to practice dentistry by the State in which he performs such function and who is acting within the scope of his license when he performs such functions.”

    Vermont law does not expressly prohibit a dentist from administering anesthesia in non-dental cases. The law recognizes that certain dentists may be credentialed to provide general anesthesia services in a hospital setting. In doing so, they may still be acting within the scope of their dental licenses. Vermont regulatory bodies with authority to oversee the practice of medicine and dentistry have also determined that the dentist is qualified by education, training and experience to administer anesthesia in his hospital-based practice and that he is doing so legally under state law.

    The ALJ did not err in relying on the interpretation of Vermont law by the state's regulatory bodies to support the conclusion that the dentist was acting within the scope of his license and is eligible to bill Medicare. Elliott v. CMS, HHS Departmental Appeals Board, Appellate Division, Doc. No. A-09-25, Dec. No. 2236, March 23, 2009, ¶121,754.
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