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HEADLINES
from Medicare and Medicaid Guide Monday, April 20, 2009
Click on a headline below for the full story.
Decisions and Developments
CCH® Reimbursement Integrated Library
The Reimbursement Integrated Library delivers the key performance indicators for maximizing reimbursement. The Library includes three invaluable titles:
- Dennis Barry's Reimbursement Advisor - This monthly newsletter provides all the facts about reimbursement strategies to minimize the adverse effects of DRGs, RBRVs, APCs and capitation to optimize hospital reimbursement.
- Receivables Report - This monthly newsletter includes actual profit-improvement examples from facilities nationwide, secrets for successfully challenging denials, tips for using automation to increase cash flow, and strategies your colleagues are using now to prepare for health care reform.
- Hospital Accounts Receivable Analysis - This quarterly journal is a synopsis of statistical data related to hospital receivables.
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Reimbursement Integrated Library
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
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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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.
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Billing routine cost of clinical trials
Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1710, April 10, 2009, ¶158,016.
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Survey protocol for long term care facilities
State Operations Provider Certification Manual, Pub. 100-07, Transmittal No. 41, April 10, 2009, ¶158,107.
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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.
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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.
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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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