AMERICAN HEALTH LAWYERS ASSOCIATION. Regulation, Accreditation and Payment Practice Group s 2013 Year In Review

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1 AMERICAN HEALTH LAWYERS ASSOCIATION Regulation, Accreditation and Payment Practice Group s 2013 Year In Review Jennifer L. Benedict, Esq. Partner Honigman Miller Schwartz and Cohn LLP 2290 First National Building, 660 Woodward Avenue Detroit, MI (313) jbenedict@honigman.com I. W64fqMrwEUpdated OIG Provider Self-Disclosure Protocol 1. Issued on April 17, 2013, by the U.S. Department of Health & Human Services Office of Inspector General; updates and supersedes the 1998 Provider Self-Disclosure Protocol (SDP) which established process for health care providers to voluntarily disclose potential fraud involving Federal health care programs. 2. Since 1998, the OIG has resolved over 800 disclosures, resulting in $280 million to the Federal health care programs. B. Benefits of Disclosure 1. Presumption against requiring integrity agreement obligations in exchange for a release of OIG s permissive exclusion authority. 2. Payment of a lower multiplier on single damages. OIG s general practice is to require a minimum of multiplier of 1.5 times the single damages. 3. Using the SDP may mitigate potential exposure under section 1128J(d) of the Social Security Act, 42 U.S.C. 1320a-7k(d) (regarding obligation to return Medicare and Medicaid overpayments) because CMS has proposed suspending the obligation to report overpayments when the OIG acknowledges receipt of a submission to the SDP, if the submission is timely made. 4. Streamlining of OIG s internal process to reduce the average time a case is pending with OIG to less than 12 months from acceptance into the SDP. Further, providers must now submit the findings of the completed internal investigation and damages calculation 90 days from the date of initial submission. C. Conduct Eligible for the SDP 1. Potential violations of Federal criminal, civil, or administrative laws for which civil monetary penalties are authorized.

2 2. Disclosing parties must explicitly identify laws that were potentially violated. D. Conduct Ineligible for the SDP 1. Matters not involving potential violations of Federal criminal, civil or administrative law for which CMPs are authorized (e.g., a matter exclusively involving overpayments or errors). 2. SDP may not be used to request an opinion from the OIG regarding whether an actual or potential violation has occurred. 3. SDP is not available for disclosure of an arrangement that involves only liability under the Stark Law without accompanying potential liability under the Federal anti-kickback statute. Stark-only conduct should be disclosed to CMS through its Self-Referral Disclosure Protocol. II. Updated Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs 1. Issued May 8, 2013, by the U.S. Department of Health & Human Services Office of Inspector General. 2. Replaces and supersedes the 1999 Special Advisory Bulletin on the effect of exclusion from participation in Federal health care programs. 3. Responds to questions and public comments received by the OIG since B. Exclusion from Federal Health Care Programs 1. The effect of an OIG Exclusion is that no Federal health care program payment may be made for any items or services furnished (i) by an excluded person or (ii) at the medical direction or on the prescription of an excluded person. 2. The payment prohibition applies to all methods of Federal health care program payment, whether from itemized claims, cost reports, fee schedules, capitated payments, a prospective payment system or other bundled payment, or other payment system and applies even if the payment is made to a State agency or a person that is not excluded. 3. Excluded persons are prohibited from furnishing administrative and management services that are payable by the Federal health care programs, even if the administrative and management services are not separately billable. 2

3 C. Civil Monetary Penalties (CMP) Liability for Employing or Contracting with an Excluded Person 1. If a health care provider arranges or contracts with a person that the provider knows or should know is excluded by OIG, the provider may be subject to CMP liability if the excluded person provides services payable, directly or indirectly, by a Federal health care program. 2. OIG may impose CMPs of up to $10,000 for each item or service furnished by the excluded person for which Federal program payment is sought, as well as an assessment of up to three times the amount claimed, and program exclusion. D. How to Determine Whether a Person is Excluded 1. OIG maintains the LEIE on the OIG Web site ( which contains OIG program exclusion information. 2. When checking the LEIE, providers should maintain documentation of the initial name search performed and any additional searches conducted, in order to verify results of potential name matches. 3. To avoid potential CMP liability, providers should check the LEIE prior to employing or contracting with persons and periodically check the LEIE to determine the exclusion status of current employees and contractors. 4. There is no statutory or regulatory requirement to check the LEIE, therefore, providers may decide how frequently to check the LEIE. OIG updates the LEIE monthly, so screening employees and contractors each month best minimizes potential overpayment and CMP liability. III. Updates to Chapter 15 of the Medicare Program Integrity Manual A. On May 16, 2013, the Centers for Medicare & Medicaid Services (CMS) issued Transmittal 462, Change Request 8155 updating certain provisions of Chapter 15 of the Medicare Program Integrity Manual (PIM). The key updates are: 1. Only partnership interests in the enrolling provider need be disclosed in Section 5 of the Form CMS-855A and B. Partnership interests in the provider s indirect owners need not be reported unless the partnership interest in the indirect owner results in a greater than 5% indirect ownership interest in the enrolling provider. 2. The Form CMS-855 may be rejected by the contractor if it was signed (as reflected by the date of signature) more than 120 days prior to the date on which the contractor received the application. 3

4 3. If the contractor rejects an application, absent a CMS instruction or directive to the contrary, a rejection letter must be sent to the provider or supplier (stating the reason for the rejection and how to reapply) no later than 5 business days after the contractor concludes that the provider or supplier s application should be rejected. B. On December 27, 2013, CMS issued Transmittal 499, Change Request 8544 updating certain provisions of Chapter 15 of the PIM. The key updates are: 1. If multiple contact persons are listed in Section 13 of the Form-CMS 855, the contractor has the discretion to select the individual to contact unless the provider indicates otherwise. 2. The contractor may use multiple contact persons throughout the enrollment process. It need not use the same individual, unless the provider indicates otherwise. 3. All contact persons shall be stored in PECOS and shall not be removed unless the provider requests the removal via letter, or fax. IV. Medicare, Medicaid and Children s Health Insurance Programs: Announcement of Temporary Moratoria on Enrollment of Ambulance Suppliers and Providers and Home Health Agencies in Designated Geographic Areas 1. Notice Published in Federal Register on July 31, 2013 (78 Fed. Reg ). 2. Section 6401(a) of the Patient Protection and Affordable Care Act added a new section 1866(j)(7) to the Social Security Act to provide the Secretary with authority to impose a temporary moratorium on the enrollment of new providers. This is the first time CMS has exercised this authority. 3. Temporary enrollment moratoria remain in effect for 6 months and may be extended by CMS in 6-month increments. 4. Effective July 30, Affects new providers only. B. Home Health Moratoria Florida and Illinois 1. Geographic Areas. a. Florida counties of Miami-Dade and Monroe. b. Illinois counties of Cook, DuPage, Kane, Lake, McHenry and Will. 4

5 2. Medicare Data Analysis a. High ratio of HHAs to Medicare beneficiaries. b. High annual growth rate of HHAs. c. Higher payments to HHAs per home health user. C. Ambulance Moratorium Texas 1. Geographic Areas. a. Harris County (which contains the City of Houston). b. Surrounding counties of Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery and Waller. 2. Medicare Data Analysis. a. High ratio of ambulance suppliers to Medicare beneficiaries. b. Large number of ambulance suppliers. V. Medicare, Medicaid, and Children s Health Insurance Programs: Announcement of New and Extended Temporary Moratoria on Enrollment of Ambulances and Home Health Agencies in Designated Geographic Locations 1. Announcement published in Federal Register on February 4, 2014 (79 Fed. Reg. 6475). 2. Effective January 30, B. Imposition of New Home Health Moratoria Florida, Texas, Michigan 1. Geographic Areas. a. Broward County (which contains the City of Fort Lauderdale). b. Dallas County (which contains the City of Dallas) and surrounding counties of Collin, Denton, Ellis, Kaufman, Rockwall, and Tarrant. c. Harris County (which contains the City of Houston) and surrounding counties of Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery and Waller. 5

6 d. Wayne County (which contains the City of Detroit) and surrounding counties of Macomb, Monroe, Oakland and Washtenaw. 2. Medicare Data Analysis. a. High ratio of HHAs to Medicare beneficiaries. b. Higher payments to HHAs per home health user. C. Imposition of New Ambulance Moratorium Pennsylvania and New Jersey 1. Geographic Areas. a. Philadelphia County (which contains the City of Philadelphia) and surrounding counties of Bucks, Delaware and Montgomery. b. New Jersey counties of Burlington, Camden and Gloucester. 2. Medicare Data Analysis. a. High ratio of ambulance suppliers to Medicare beneficiaries. b. Annual growth rate of ambulance suppliers. c. Higher payments to ambulance suppliers per ambulance user. D. 6-Month Extension of Existing Home Health Moratoria. These geographic areas are: 1. Florida Counties of Miami-Dade and Monroe. 2. Illinois Counties of Cook, DuPage, Kane, Lake, McHenry and Will. E. 6-Month Extension of Existing Ambulance Moratoria. These geographic areas include the Texas Counties of Harris, Brazoria, Chambers, Fort Bend, Galveston, Liberty, Montgomery and Waller. VI. Medicare Conditions of Participation (CoPs) for Community Mental Health Centers 1. Final Rule published in Federal Register on October 29, 2013 (78 Fed. Reg ). 2. Final rule establishes, for the first time, CoPs that community mental health centers (CMHCs) must meet in order to participate in the Medicare program. 6

7 3. Focus of CoPs is on the care provided to the client, requirements for staff and provider operations, and client participation in their care plan and treatment. 4. The new CoPs enable CMS to survey CMHCs for compliance with health and safety requirements. 5. Effective October 29, B. Principles Applied in Developing the CMHC CoPs 1. A focus on the continuous, integrated, mental health care process that a client experiences across all CMHC services. 2. Activities that center around client assessment, the active treatment plan, and service delivery. 3. Use of a person-centered, interdisciplinary approach that recognizes the contributions of various skilled professionals and other support personnel and their interaction with each other to meet the client s needs. 4. Promotion and protection of client rights. C. The CoPs 1. Personnel qualifications. The Personnel qualifications CoP establishes staff qualifications for the CMHC. 2. Client rights. The Client rights CoP emphasizes a CMHC s responsibility to respect and promote the rights of each CMHC client. 3. Admission, initial evaluation, comprehensive assessment, and discharge or transfer of the client. The Admission, initial evaluation, comprehensive assessment, and discharge or transfer of the client CoP reflects the critical nature of a comprehensive assessment in determining appropriate treatments and accomplishing desired health outcomes. 4. Treatment team, active treatment plan, and coordination of services. The Treatment team, active treatment plan, and coordination of services CoP incorporates a person centered interdisciplinary team approach, in consultation with the client s primary health care provider (if any). 5. Quality assessment and performance improvement. The Quality assessment and performance improvement CoP challenges each CMHC to build and monitor its own quality management system to monitor and improve client care performance. 7

8 6. Organization, governance, administration of services, and partial hospitalization services. The Organization, governance, administration of services, and partial hospitalization services CoP charges each CMHC with the responsibility for creating and implementing a governance structure that focuses on and enhances its coordination of services to better serve its clients. VII. Inter-Jurisdictional Reassignments 1. CMS issued Change Request 8545 (Transmittal 503) on January 24, 2014, to address situations where a physician or non-physician practitioner (NPP) reassigns his or her Medicare benefits to an entity located in another contractor jurisdiction. 2. Effective February 25, B. Principles 1. The physician/npp reassignor must be properly licensed or otherwise authorized to perform services in the state in which he or she has his or her practice location. The practice location can be an office or the individual s home. 2. The physician/npp reassignor need not enroll in the reassignee s contractor jurisdiction nor be licensed/authorized to practice in the reassignee s state. If the reassignor will be performing services within the reassignee s state, the reassignor must enroll with the Medicare contractor, and be licensed/authorized to practice in, that state. 3. The reassignee must enroll in the contractor jurisdictions in which (i) it has its own practice location(s), and (ii) the reassignor has his or her practice locations. Under situation (ii), the reassignee identifies the reassignor s practice location as its practice location on its Form CMS- 855B, selects the practice location type as Other health care facility and specifies Telemedicine location in Section 4A of its Form CMS-855B, and need not be licensed/authorized to perform services in the reassignor s state. C. Illustration from the Transmittal: If Dr. Smith is located in Contractor Jurisdiction X and is reassigning his benefits to Jones Medical Group in Contractor Jurisdiction Y, Jones Medical Group must enroll with X and with Y. Jones Medical Group need not be licensed/authorized to perform services in Dr. Smith s state. However, in Section 4 of the Form CMS-855B it submits to X, Jones Medical Group must list Dr. Smith s location as its practice location. 8

9 VIII. CMS Policy Memorandum Dated September 6, 2013 Acquisitions of Providers/Suppliers with Rejection of Automatic Assignment of the Medicare Provider Agreement: Implications for Timing of Surveys and Participation Effective Date Key Points: A. CMS encourages new owners of a provider/supplier to accept automatic assignment of the seller s Medicare agreement. 42 CFR (c) provides for automatic assignment of the current Medicare agreement to a new owner. But new owners have the option to reject automatic assignment. If the new owner rejects assignment, the facility must be treated as an initial applicant. Like all initial applicants, the facility will experience a period with no Medicare payments. This policy also applies in the case of hospitals that acquire another hospital, reject assignment, and make the hospital a provider-based campus. B. State survey agency (SA) and accreditation organization (AO) surveys must be unannounced. If an initial survey of an applicant that acquired a provider/supplier but rejected assignment is conducted shortly after the acquisition date, it raises significant doubts that the survey was unannounced and, at a minimum, creates an appearance that the SA or AO collaborated with the new owner on the timing of the survey. CMS may refuse to accept a survey for certification purposes if the survey timing creates reasonable doubt that the survey was unannounced. C. SAs must prioritize initial surveys in accordance with CMS workload priorities. Unless the CMS regional office (RO) directs the SA to conduct an initial certification survey as soon as possible, SAs must not conduct initial surveys unless they are able to complete their higher priority workload. For initial applicants that have an accreditation option, initial certification surveys are the lowest SA priority. D. The effective date for Medicare participation of the facility under its new owner is established in the same as for any initial applicant; that is, after a prospective provider/supplier demonstrates it meets all Federal requirements per 42 CFR and The effective date is not the date of acquisition; rather, the effective date of the Medicare agreement is the date when the last applicable Federal requirement has been met. The finding of substantial compliance via an onsite survey is typically the final Federal requirement completed before a prospective provider or supplier is issued a Medicare agreement; however, this is not always the case. 9