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.

As another concession to the overwhelming burden of keeping up with federal oversight, recent regulations now state that providers who inadvertently fail to re-enroll in the Medicare program will no longer face draconian punishment as a result. The previous re-enrollment bar between one and three years may not apply in the event of an untimely response to a re-enrollment request under certain circumstances if the delay was not intentional. 42 C.F.R. Section 424.535.

The Bad

While the above-referenced concessions serve to move things forward, the health care industry continues to reel from February’s clarification by the Centers for Medicare & Medicaid Services (CMS) of an oft quoted existing rule: Providers must return overpayments to Medicare within 60 days “after the date on which the overpayment was identified,” or in the alternative, “the date any corresponding cost report is due, if applicable.” 42 U.S.C. Section 1320a-7k(d)(2). For providers of any size, failure to report and return Medicare overpayments pursuant to these temporal requirements may result in potential liability under the Federal False Claims Act, resulting in substantial monetary penalties and the risk of being denied future claims for reimbursement.

The federal government’s need to curtail fraud and abuse is a critical element in the protection of the future of Medicare. Indeed, earlier this month federal authorities charged 107 individuals nationwide for approximately $452 million in false claims — the highest amount of false Medicare billings ever in a single investigatory action. Even so, critics of the new “60 days” requirement argue that its demands are somewhat excessive.

The February regulations left nothing to chance, imposing upon the health care industry detailed definitions with numerous examples to assist providers in determining exactly when the 60-day clock begins. 77 Fed. Reg. 9179, 9181-82 (Feb. 16, 2012). To ensure that the seriousness of its resolve is understood, the federal government plans to enforce this 60-day requirement for overpayments that have occurred up to 10 years in the past:

“[W]e are proposing that overpayments must be reported and returned only if a person identifies the overpayment within 10 years of the date the overpayment was received. We selected 10 years because this is the outer limit of the False Claims Act statute of limitations. We believe that the proposed 10-year lookback period is appropriate for several reasons. First, we believe that providers and suppliers should have certainty after a reasonable period that they can close their books and not have ongoing liability associated with an overpayment. We also believe that the length of the lookback period is long enough to sufficiently further our interest in ensuring that overpayments are timely returned to the Medicare Trust Funds.” 77 Fed. Reg. at 9184.

The Obscure

As the countdown continues toward the much-anticipated Supreme Court decision on the constitutionality of the Affordable Care Act, the federal government’s attention to detail has not waivered in the least. Recent modifications have replaced the term “recipient” with “beneficiary” throughout the Code of Federal Regulations to describe those who receive assistance from Medicaid, because the old term was considered “unflattering.” 42 C.F.R. Chapter IV; 42 C.F.R. Sections 400.200 through 400.203.

New federal regulations also finalize the definition of “donor document” as it relates to organ procurement: “[D]onor document means any documented indication of an individual’s choice that was executed by the patient, in accordance with any applicable State law, before his or her death, and that states his or her wishes, regarding organ and/or tissue donation.” One example offered by the federal government applies to individuals who wish to be organ donors but not tissue donors, though organ procurement in California remains governed by the California Uniform Anatomical Gift Act, Cal. Health and Safety Code Sections 7150-7156.5, and the regulatory clarification above will most likely have little impact statewide.

To further emphasize the complexities to be found in the government’s increased regulatory role, new federal regulations have eliminated certain life and safety renovation/construction requirements, especially as they relate to fire safety, even as the tangential battle against End Stage Renal Disease (ESRD) fraud and abuse rages on. This is largely due to the fact that certain studies have concluded there exist no recorded patient injuries or death due to fire in the last 40 years of the Medicare ESRD program. 42 C.F.R. Section 494.60.

Last week the federal government also published a final semantic change moving away from the phrase “mentally retarded,” to be replaced by “individuals with intellectual disabilities.” The initial proposed amendment to “intellectually disabled” was ultimately rejected due to its “person first” language. Once decided, the regulation noted that Congress must officially make the change in Section 1919(e)(7)(G)(ii) of the Social Security Act.

When assessing the challenges facing health care today, those in the field must be aware that the lines defining compliance are sometimes blurry, the government’s objectives often complicated, and the program’s future unknowable. Amid the upheaval as the nation waits for word from the Supreme Court, the federal government moves forward with its array of structural changes. Only one thing is certain — the shades of gray painted by reform will affect our nation’s regulatory processes for years to come, regardless of the high court’s decision.

1 Comment

  1. Reshat

    I have had Medicare since about 1999/2000. Medicare pays 80% of what they consider is reanosable cost. Believe me that isn’t much. For example: Suppose I have a bill of $1000. Medicare determines that reanosable cost is $400; they pay 80% of that. And even though I have a private insurance which supplements Medicare, Medicare still sets the reanosable cost which means in my example that my private insurance will pay 20% of $400. Whoever performed the service (doctor, hospital, whoever) is out $600. When my doctor retired about five years ago I called four places which wouldn’t take me on as a patient because I have Medicare.Even though private insurance companies are in it for profit, because they charge much higher premiums than the government does for Medicare, they can afford to pay more out because of those higher premiums. It’s truly a case of you getting what you pay for.Because I don’t work, Medicare is primary and my Blue Cross/Blue Shield is secondary so Medicare sets the reimbursement rate. Secondary insurers REQUIRE that a person be entitled to Medicare if they are eligible to cut down on the costs of the secondary insurance.If I didn’t have Medicare and I wasn’t eligible for it, my Blue Cross/Blue Shield would be reimbursing my doctors and hospitals at a much higher rate than what Medicare does.Now why doesn’t everyone in the United States have Medicare? The insurance companies wouldn’t stand for it and the medical community would be backing them up. Our representatives and senators wouldn’t dare extend Medicare to all Americans!Frankly I think Medicare should be extended to everyone with increased premium rates and higher payments to providers of services and it could be administered through the private companies. But who am I?

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