Many physicians recently received a notice from the Centers for Medicare and Medicaid Services (CMS) notifying them of the opportunity to register with the CMS “Open Payments” system and review financial data reported about them by drug and device manufacturers under the federal Physician Payments Sunshine Act (“Sunshine Act”). This had led to some confusion among physicians as to what, if any, obligation they have under the Sunshine Act.
The Sunshine Act requires “applicable manufacturers” of drugs, medical devices and biologicals covered under Medicare, Medicaid and CHIP to report certain payments and items of value given to physicians. This information is collected by CMS and is to be made public on a searchable online database by September 30, 2014. Under the law, an “applicable manufacturer” is limited to an entity operating in the United States that is either: An entity engaged in the production, preparation, propagation, compounding, or conversion of a covered product; or An entity under common ownership with an “applicable manufacturer” that provides assistance or support with respect to the production, preparation, propagation, compounding, conversion, marketing, promotion, sale, or distribution of a covered product. The reporting requirement is the manufacturers’ obligation. Physicians who receive payments from applicable manufacturers have no reporting obligation.
Physicians do have a right, however, to dispute reported payments. Specifically, before CMS posts the collected information to the public website, physicians have 45 days to review and correct the information. The reporting manufacturers will have an additional 15 days to correct the erroneous information before submitting and attesting to the updated information to finalize the data submission. More information on the Sunshine Act can be found on the CMS website here: http://www.cms.gov/Regulations-and-Guidance/Legislation/National-Physician-Payment-Transparency-Program/index.html
The Centers for Medicare and Medicaid Services (CMS) has agreed to permit Pennsylvania to expand its Medicaid program under the federal Affordable Care Act to cover low income adults whose incomes exceed the federal poverty level. Pennsylvania will join 26 other states in expanding its Medicaid program under the statute. With the expansion, the Pennsylvania Medical Assistance Program benefits will cover an additional 500,000 people starting in 2015. Beginning in 2016, individuals whose incomes exceed the federal poverty level may be required to pay a modest premium for the coverage. More information on the program, which is call the Health PA Plan, can be found on the plan website at healthypa.com.
According to a final rule published by the Centers for Medicare and Medicaid Services on August 4, 2014, providers will be required to use the International Classification of Diseases, 10th Revision for diagnosis coding starting on October 1, 2015. Until then providers are to continue using the 9th Revision (ICD-9).
Given the winding path that ICD-10 has taken thus far, whether this new compliance date will stick remains to be seen. The Department of Health and Human Services (HHS) announced in 2009 that ICD-10 would be the standard code set (required by HIPAA) to replace ICD-9. The original implementation date was to be October 1, 2013. However, citing a lack of resources and readiness to implement ICD-10, in 2012, HHS extended the complianc deadline to October 1, 2014. But, the Protecting Access to Medicare Act of 2014 (PAMA), which was adopted on April 1, 2014, prohibited HHS from implementing ICD-10 before October 1, 2015 — hence the new “official” compliance date.
Physician ancillary service joint ventures continue to proliferate and not surprisingly, federal and state regulators are on the lookout for arrangements which may violate fraud and abuse laws . In its recent “Special Fraud Alert: Laboratory Payments to Referring Physicians”, the Office of Inspector General (OIG) has (once again) expressed concern over financial arrangement between physicians and clinical laboratories to which they may refer. In the alert, the OIG focus on two types of financial arrangements which they believe raise substantial risk under the anti-kickback statute:
1. Payments by clinical laboratories to physicians to collect, process, and package patients’ specimens; and
2. Payments by clinical laboratories to physicians to report patient data to “registries” established by the clinical laboratories.
With regard to specimen collection arrangements, the OIG cites the following characteristics as potentially problematic:
- Payments that exceed fair market value for services actually rendered by the physician;
- Payment for services for which payment is also made by a third party, such as Medicare;
- Payments made directly to the ordering physician rather than to the ordering physician’s group practice, which may bear the cost of collecting and processing the specimen;
- Payments made on a per-specimen basis for more than one specimen collected during a single patient encounter or on a per-test, per-patient, or other basis that takes into account the volume or value of referrals;
- Payments offered on the condition that the physician order either a specified volume or type of tests or test panel, especially if the panel includes duplicative tests;
- Payments made to the physician or the physician’s group practice, despite the fact that the specimen processing is actually being performed by a phlebotomist placed in the physician’s office by the laboratory or a third party.
With regard to registry arrangements, the OIG cites, among other things, the following characteristics of concern:
- The laboratory requires, encourages, or recommends that physicians who enter into Registry Arrangements perform the tests with a stated frequency (e.g., four times per year) to be eligible to receive, or to not receive a reduction in, compensation;
- The laboratory collects comparative data for the Registry from, and bills for, multiple tests that may be duplicative or that otherwise are not reasonable and necessary;
- Compensation paid to physicians on a per-patient or other basis that takes into account the value or volume of referrals;
- Compensation paid to physicians which is not fair market value for the physicians’ efforts in collecting and reporting patient data; and
- Compensation paid to physicians that is not supported by timely documentation memorializing the physicians’ efforts.
Physicians considering entering in to financial arrangements with clinical labs should review their arrangements carefully for compliance with not only the federal anti-kickback statute but other federal and state fraud and abuse laws.
On December 18, 2013, Pennsylvania Act 122 amended the Pennsylvania Clinical Laboratory Act to, among other things, impose licensure requirements on out of state clinical laboratories and to place certain prohibitions on physician financial arrangements with labs. Among other things, Act 122 prohibits the payment or receipt of commissions, bonuses, kickbacks or fee-splitting arrangements and prohibits laboratories from leasing office space, shelves or equipment within a physician’s office. The Department of Health has now issued two rounds of “Frequently Asked Questions” regarding clinical laboratories and Act 122. These FAQs can be found on the Department’s website here. Physicians in Pennsylvania who have financial/contractual arrangements with clinical laboratories, whether those labs are located in Pennsylvania or in another state, should carefully review Act 122 and the FAQs to ensure that their arrangements are in compliance with these new requirements.
Are you and your practice ready to be rated by Medicare? If not, you should probably get ready.
According to a CMS blog post by Dr. Patrick Conway, CMS Deputy Administrator for Innovation and Quality and Chief Medical Officer, the Medicare program is getting ready to role out a five-star rating system for three provider-types including hospitals, dialysis facilities and home health providers. These will be in addition to the five-star rating systems already being implemented for nursing homes and, to a limited extent, for physician practices.
According to Dr. Conway, the ratings will be based on “established scientific standards of rigor and accuracy” and are designed to help patients make informed decisions based on quality. These rating systems are (or will) be available on the Medicare.gov “compare” websites at the follwoing links: Hospital Compare, Dialysis Facility Compare, Home Health Compare, Nursing Home Compare, and Physician Compare.
According to the Physician Compare website, at the present time, the site can only be used to compare physician group practices but patients will be able to compare individual physicians in the future. The site also encourages physicians to keep their data up to date to be sure that patients are using current data when making comparisons. If you are not yet familiar with the Medicare Compare websites, it’s a good idea to review them, get an understanding of the rating data and see how you and your practice measure up.
The topic of telemedicine is becoming increasingly more common in the medical community. For certain, telemedicine can be a cost effective way of communicating with and monitoring patients, but it is not without its risks. For one thing, physicians need to be mindful of the potential for increased malpractice exposure which could come from not seeing a patient in person. For example, a telephone or video visit may fail to disclose tell-tale signs of a medical problem that would otherwise be evident from an in-person visit. For this reason, physicians intending to engage in telemedicine are well advised to consult with their malpractice carrier to be sure they have adequate coverage. Care should also be take to ensure that the technology used is effective and reliable. Finally, before engaging in telemedicine, physicians should carefully research applicable federal and state laws on the subject. State telemedicine laws can vary significantly from state to state. Some states require telemedicine technology to meet specific requirements and many states require physicians to be licensed in the state where the patient lives. In addition, the American Medical Association recently published recommendations regarding telemedicine, including that physicians be licensed in the state where the patient resides (See AMA: Doctors must be licensed in patient’s state to practice telemedicine on Washingtonpost.com).
One of the often overlooked requirements in the federal Affordable Care Act is that healthcare providers now have an obligation to refund overpayments to the Medicare within 60 days of discovery. Failing to do so may expose a provider to liability under the federal False Claims Act and possible exclusion from the Medicare program. Late last week, the Department of Justice elected to join a whistleblower lawsuit based on this very provision. According to an article on law360.com, this suit, which alleges that Mount Sinai Health System in New York failed to return Medicaid overpayments within 60 days of identifying them, is one of the first to apply this new provision. Stay tuned for more on this important case.
An article on Businessweek.com today suggests that healthcare companies rank worse than financial institutions, utility companies and even retailers when it comes to cybersecurity. This is particularly frightening news given the intense focus on healthcare data security under HIPAA for a number of years now. By now, healthcare companies and providers should be well aware of the requirements of HIPAA and should have appropriate safeguards in place that meet or exceed the HIPAA requirements. At its core, HIPAA requires that health information be protected with reasonable administrative, technical, and physical safeguards to ensure its confidentiality, integrity, and availability and to prevent unauthorized or inappropriate use or disclosure. What safeguards are reasonable will depend on the facts and circumstances. If you’re still not sure what you are supposed to be doing to protect your patients’ health care data, it’s probably a good time to conduct an audit of your policies, procedures and systems to be sure they are compliant.
The Office of Inspector General (OIG) today issued a proposed rule which would amend the federal civil monetary penalty (CMP) regulations addressing new CMP authorities created under the Affordable Care Act. The revised regulations would allow for civil penalties, assessments, and exclusion from Medicare for and of the following:
- Failure to grant OIG timely access to records;
- ordering or prescribing while excluded;
- making false statements, omissions, or misrepresentations in an enrollment application;
- failure to report and return an overpayment; and
- making or using a false record or statement that is material to a false or fraudulent claim.
Comments on the proposed regualtions can be submitted up until July 11, 2014. The proposed rule and instructions for submitting comments can be viewed here: http://oig.hhs.gov/authorities/docs/2014/fr-79-91.pdf