An Introduction to Health Care Fraud and Abuse0

In health care, the primary body of law under which liability may arise is generally the Federal False Claims Act (“FCA”).[1]

Dating back to the American Civil War, the FCA has over time become the “primary litigative tool for combating fraud” for both federal and state governments. At its core, the FCA imposes liability on anyone who “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval.” (See 31 U.S.C. § 3729(a)(1)(A).)

In 1965, the United States unveiled its Medicare system, and only seven years later Congress passed the first of many laws focusing on Medicare reform, including:

  • The Social Security Amendments of 1972Pub. L. No. 92-603: These laws tried to gently regulate Medicare provider fraud and abuse, as well as over utilization and unnecessary referrals.Read more →

Making Sense of Medicare’s Observation Regulations, One Hospital Bed at a Time0

On August 1, 2012, the Centers for Medicare & Medicaid Services (CMS) published the Final Rule for Medicare’s Hospital Inpatient Prospective Payment Systems (IPPS) (the Final Rule).

Effective Fiscal Year (FY) 2013 (October 1, 2012), the Final Rule covers the entire scope of the IPPS for acute care hospitals, long-term care hospitals, resident caps for graduate medical education (GME) payment, hospital readmission reduction program, the value based purchasing program, as well as other parts of Medicare.

The Final Rule specifically modified the way CMS approaches labor and delivery beds in the calculation of Medicare disproportionate share (DSH) payment adjustments and indirect medical education (IME).Read more →

Medicare’s Hospital Readmissions Reduction Program1

Starting October 1, 2012, the Hospital Readmissions Reduction Program (HRRP) reduces a hospital’s base operating Medicare diagnosis-related group (DRG) payments with respect to readmissions for three conditions, including: (1) acute myocardial infarction (ACI); (2) heart failure (HF); and (3) pneumonia (PN).

Section 1886(q) of the Social Security Act (the Act) and section 3025 of the Affordable Care Act (ACA) provide the statutory authority for this non-budget neutral program. The Centers for Medicare & Medicaid Services (CMS) predict that the HRRP will decrease payments to hospitals by as much as 0.3 percent (approximately $280 million) in FY 2013.Read more →

The Modern Day Compliance Program

On September 27, 2012, Craig Garner and Andrew Woodward will be leading HCCA’s Web Conference entitled The Modern Day Compliance Program: Bridging the Gap Between Integrity and Performance.

Information for participants will include how to:

  • Identify the impending changes to the core of our nation’s health care structure as a result of the shift toward performance-based initiatives.
  • Become familiar with both safe harbors and potentially costly provisions monitoring fraud and waste, including Stark laws, anti-kickback statutes, RACS, MACs, MICs and ZPICS.
  • Demonstrate the positive effect on your bottom line through understanding the benefits of a well-executed compliance program.

Additional information, including how to register, can be found here.


Final Rules for Hospital Inpatient Prospective Payment Systems

The Centers for Medicare & Medicaid Services released the final rule for the Medicare inpatient prospective payment systems (IPPS) for the 2013 fiscal year (effective for discharges occurring on or after October 1, 2012).  The final rule revises the IPPS for operating and capital-related costs of acute care hospitals and incorporates certain statutory provisions contained in the 2010 Patient Protection and Affordable Care Act, as amended in part by the  Health Care and Education Reconciliation Act of 2010.

Additionally, the final rule updates the rate-of-increase limits for certain hospitals excluded from the IPPS, as well as the payment policies and annual payment rates for the Medicare prospective payment system (PPS) relating to long-term care hospitals. The final rule changes the ways in which a hospital determines its full-time equivalent (FTE) resident cap for graduate medical education (GME) and indirect medical education (IME) payments.

The final rule also establishes requirements for the Hospital Value-Based Purchasing (VBP) Program and the Hospital Readmissions Reduction Program.

The entire final rule, which will be codified in 42 CFR Parts 412, 413, 424 and 476 can be seen here.

Time to Focus on Compliance0

When it comes to the Affordable Care Act, there is no shortage of topics upon which the nation can disagree.  As patients lobby to make the provision of medical services a constitutional right, providers share a much different perspective on modern American health care.  To practitioners and non-clinical professionals alike, participation in government sponsored health care programs is in many ways akin to joining the freemasons or pledging a fraternity, the exclusion from which is nothing less than a modern day blackballing by the not-so-secret society known as the Office of the Inspector General (“OIG”).

While Medicare regulations are no picnic,[1] there is no shortage of hospitals participating therein.[2] The exclusion of a hospital from federally funded programs such as Medicare and Medicaid can mean the end for that facility, while for hospital executives, directors, officers, managers, and in-house counsel the repercussions from such an act can amount to the end of a career in health care altogether. … Read more →

An Overview of the Hospital Value-Based Purchasing Program0

Section 3001(a) of the Affordable Care Act (ACA) includes a new section 1886(o) to the Social Security Act and amended 42 U.S.C. § 1395ww to establish the hospital value-based purchasing (VBP) Program.

Under the VBP Program, beginning October 2012 hospitals will face a 1% reduction overall on Medicare payments under the Inpatient Prospective Payment System (IPPS), as these funds will be used to pay for the performance bonuses under VBP Program. By 2015, hospitals that continue to show poor performance ratings will not only be excluded from the bonus pool, they will also face additional cuts in reimbursement. … Read more →

Understanding the Minimum Medical Loss Ratio0

Under the Affordable Care Act (ACA), in 2012 consumers anticipate the return of an estimated $1 billion in rebates from health insurance issuers (issuers).

Commonly referred to as the “80/20 provision” of the ACA, the regulations governing Medical Loss Ratio (MLR) rebates appear in Title 45 of the Code of Federal Regulations, Part 158. The minimum MLR (45 C.F.R. § 158.210) applies as follows:

  • Large group market:  For all policies issued in this market during the MLR reporting year, an issuer must provide a rebate to enrollees if the issuer has an MLR of less than 85% (subject to adjustments as discussed below).
  • Small group market and individual market:  For all policies issued in these markets during the MLR reporting year, an issuer must provide a rebate to enrollees if the issuer has an MLR of less than 80% (also subject to certain adjustments).

States, however, retain the option to set a higher MLR, provided the State ensures adequate participation by health insurance issuers, competition in that State’s health insurance market, and value for consumers to ensure that premiums are used for clinical services and quality improvements.  (45 C.F.R. § 158.211.)

While there are specific requirements relating to the aggregation of data in calculating an issuer’s MLR (45 C.F.R. § 158.220), generally an issuer’s MLR is: The ratio of the issuer’s incurred claims plus the issuer’s expenditures for activities that improve health care quality (the numerator) to the issuer’s premium revenue, less any Federal and State taxes as well as licensing and regulatory fees (the denominator).Read more →

The War on Health Care0

This article first appeared in the Daily Journal on June 15, 2012.

Throughout history, America’s methods of providing health care have always had an understated yet powerful impact on the way she chooses to wage war.  And yet, this may be the first time that health care is itself under siege. Indeed, the specter of war has provided countless opportunities to test society’s mettle in battle, while forcing those in power to prioritize in terms of their country’s health care. As sides are drawn and campaigns evolve, the strategies of combat take shape in ways previously unforeseen. This is certainly true in contemporary America, though in our modern age of reform it is health care itself that has come under attack.

Medically speaking, advances in science, technology and the provision of health care have commandeered the new millennium, both in practice and politics. And yet, medicine’s inestimable progress since the Civil War is often largely taken for granted by both the decision makers and the recipients of a country that has come to expect state-of-the-art facilities and easy access to providers. A century and a half ago, the delivery of medicine was grossly misunderstood, frequently useless and often barbaric. “Civil War surgeons cleaned their instruments by periodically rinsing them with water, usually at the end of the day. . . . Typically, the operator wiped the blood and other material from his knife with a quick swipe across the front of his large apron, which was usually stained with blood and pus from prior sessions.”[1]

Such an abysmal depiction of health care in the middle of the nineteenth century serves to underscore the catastrophic losses endured by both North and South in the deadliest conflict on American soil, while highlighting the need for a potent, reliable and inclusive health care structure on which to rely.. Dr. Jonathan Letterman, Civil War medical director of the Army of the Potomac, offered a wise analogy describing the relationship between the science of medicine and our ability to deliver it:  “Without proper means, the Medical Department can no more take care of the wounded than the army can fight a battle without ammunition.”[2] … Read more →

Health Care Reform this Spring: The Good, the Bad and the Obscure1

This article first appeared in the Daily Journal on May 18, 2012.

iStock_000018849339XSmall-250x1651The lack of growth in health care spending over recent years stands in stark contrast to the onslaught of health care regulations released by the federal government this spring. Due to the volume of such changes, pouring through this new iteration of codified health care reform can seem as Sisyphean as achieving actual compliance. The vigor and enthusiasm with which the federal government continues to add dimension to the 2010 Affordable Care Act leads many to believe that health care reform is here to stay, regardless of the U.S. Supreme Court decision due in June. With this in mind, all health care professionals would do well to familiarize themselves with the new structure imposed upon our system by the effects of reform. Rather than fret about its future, health care counselors are better served by understanding the bare bones at the foundation of this new structure.

The Good

Earlier this month the federal government released final regulations easing hospital conditions of participation (CoPs) in an attempt to decrease the burdens faced by providers and suppliers participating in federal health care programs (Medicare and Medicaid (Medi-Cal for California) in particular). These modifications, set forth in 42 CFR Parts 482 and 485, seek to simplify and even eliminate certain CoPs consistent with President Barack Obama’s January 2011 Executive Order directing federal agencies to employ the least burdensome approach that minimizes costs, simplifies duplicative regulations, and yet is still mindful of the American public and the need to preserve its freedom of choice.

Hospitals must be in compliance with federal CoPs in order to receive Medicare and Medicaid payments, a determination usually made by one of three national accreditation programs, which include the Joint Commission, Healthcare Facilities Accreditation Program (HFAP) and, most recently, Det Norske Veritas Healthcare (DNV Healthcare). Through observations, interviews and document and record reviews that take place during accreditation surveys, hospitals must satisfy all appropriate standards to ensure that Medicare and Medicaid beneficiaries receive treatment that is both safe and superior.

Recent regulations have further revised and clarified the requirements for hospital governance, confirming that multi-hospital systems can maintain a central governing body where appropriate, provided that it includes one or more members of the hospital medical staff. The federal government commented: “[T]here is an important and essential symbiotic relationship that should exist between a hospital’s governing body and its medical staff.” The new regulations also permit a hospital’s medical staff to expand its membership to include non-physician practitioners (such as physician assistants, pharmacists and advanced practice registered nurses), provided such inclusions are consistent with hospital bylaws and state law (including scope of practice laws), and further allow podiatrists to take new leadership roles at a hospital. It should be noted, however, that registered dieticians might not be included in this pool of non-physician practitioners. … Read more →