Physician Law : Pennsylvania Health Law Lawyer & Attorney : Fox Rothschild LLP : serving Philadelphia, Pittsburgh, Allentown, Erie, Upper Darby Twp

Now that the new year is upon us, today’s post will look at the Department of Health and Human Services’ Office of Inspector General (OIG), in particular, OIG’s priorities for 2013.   According to OIG’s Fiscal Year 2013 Work Plan, it will be focusing upon a number of topics of interest – including some items not addressed last year.

OIG’s planned reviews of Medicare Part A and Part B will include:

● Billing patterns for nursing home stays.

● Accreditation of medical equipment suppliers, with a particular focus on quality standards.

● Claims submitted by medical equipment suppliers for lower limb prosthetics, power mobility devices and vacuum erection systems.

● Replacement of medical equipment, especially the frequency and necessity of that replacement.

● Independent physical therapists’ claims and whether the claims are reasonable, medically necessary and properly documented.

● Billing for electrodiagnostic testing.

● Ensuring that payments are not made for alien beneficiaries who were unlawfully present in the United States.

● Reviewing payments for Part A and Part B services to avoid claims starting after a beneficiary has died. 

 

Special attention should be paid to these areas in the coming year given OIG's additional scrutiny.

 

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The 7^th Circuit Court of Appeals recently issued a decision of interest to physicians and teaching hospitals. It concerns the method of rotating teaching physicians between multiple surgeries and billing Medicare for those services.  

The case involves so-called "qui tam" claims (essentially, a whistleblower case) against a teaching hospital, by which a successful claimant gets to keep a portion of the penalties recovered.  Basically, the Medicare program pays teaching hospitals for work by residents that is supervised by teaching physicians.  Here, however, a hospital was alleged to have made its teaching physicians simultaneously supervise multiple surgeries -- and then submit fee-for-service bills to the Medicare program for certain unsupervised work.  

 

After addressing legal issues concerning claimants' right to sue when the facts were generally in the public domain by way of government reports (those reports were not specific to this hospital), the suit was allowed to continue for now.  

Note to physicians: The Court emphasized that a teaching hospital does nothing wrong if the teaching physicians are "immediately available" during all parts of the surgeries even if making a circuit between multiple operating theaters.  The breadth of that holding, and whether it would apply to other circumstances, is not clear.  Nevertheless, hospitals who bill Medicare for activities supervised by teaching physicians, and the physicians themselves, must pay special attention to these activities to stay within the law.

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Physicians who reassign their right to bill the Medicare program can still be liable for false claims submitted by the entities who obtained that reassignment, as discussed in a recent "Alert" issued by the Office of Inspector General (OIG). [PDF].

OIG also referenced settlements it reached with eight physicians who had reassigned their payments to physical medicine companies in exchange for Medical Directorship positions -- when those companies subsequently billed Medicare for services that the physicians had not actually performed.

This OIG Alert highlights the ability of physicians to monitor all services billed using their reassigned provider numbers, and strongly urges physicians to do so. If not, physicians face liability for false claims asserted under their provider numbers.

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My physician clients often ask me for advice on how best to negotiate with managed care payers for improved reimbursement. My advice is typically the same: if you want them to pay you more than your competitors, you have to offer them something more than your competitors do. Simply being good at what you do is not enough. You have to be better than the competition because just like you, the competition is undoubtedly asking for more money too.

And, being better alone is also not enough. In order to get the payers to take notice, you must be able to demonstrate that you are better. This means that you need to be able to show them that your services are either of a higher quality, are more convenient or less expensive than the competition. Consider a recent article published by Amednews.com which cites a growing interest by third-party payors in driving down the “unit” cost of a health care visit. According to the article, payers are beginning to recognize that the number of patient visits is not the only driver of cost and that savings can be found in pushing down the cost of each one of those visits.

Unfortunately, many physicians have no idea of their "per unit" visit costs, and if you don't know what your costs are, it's pretty hard to try to manage them. The first step in negotiating managed care contracts, therefore, really should be to take a hard look at your practice, the services you offer, the cost of those services and what you do better (or should be doing better) than your competition. With that information in hand, you can develop a presentation for your important payers which demonstrates why your practice is deserving of special consideration.
 

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Under the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), all Medicare suppliers of the technical component of advanced imaging services have until by January 1, 2012 to become accredited by an accreditation organization designated by the Secretary of Health and Human Services . This includes physicians, non-physician practitioners, and physician and non-physician organizations paid for the technical component of advanced imaging services under the Medicare Physician Fee Schedule. 

Advanced diagnostic imaging procedures include diagnostic magnetic resonance imaging (MRI), computed tomography (CT), and nuclear medicine imaging such as positron emission tomography (PET).

CMS has named the American College of Radiology (ACR), the Intersocietal Accreditation Commission (IAC), and The Joint Commission (TJC) as the accrediting organizations.

 

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In case you missed it, the Centers for Medicare and Medicaid Services (CMS) eliminated use of the evaluation and management Consultation Codes.  Consultations are now to be billed using the standard E/M visit codes.  According to CMS Transmittal 1875:

"Effective January 1, 2010, the consultation codes are no longer recognized for Medicare Part B payment. Physicians shall code patient evaluation and management visit with E/M codes that represent where the visit occurs and that identify the complexity of the visit performed. In the inpatient hospital setting and the nursing facility setting all physicians (and qualified nonphysicians where permitted) who perform an initial evaluation and management may bill the initial hospital care codes (99221 – 99223) or nursing facility care codes (99304-99306). As a result of this change, multiple billings of initial hospital and nursing home visit codes could occur even in a single day."

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According to a recent Transmittal from the Centers for Medicare and Medicaid Services, physicians and others are using modifier -PC to designate the "professional component" of diagnostic tests.  However, the -PC modifier is actually to be used to designate "Wrong Surgical or Other Invasive Procedure Performed on a Patient." 

Apparently many providers assume that because the modifier for technical component services is -TC, the corresponding modifier for professional components is -PC.  In fact, the correct modifier for professional component services is -26.

Note that Claims submitted with the wrong modifier will be denied.

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It is apparent that preventive care will take on greater importance in the "reformed " health care system and while Medicare historically did not cover routine or preventive screening services, the list of preventive services now covered by Medicare has grown in recent years.  Physicians should familiarize themselves with the applicable coverage and billing rules so as not to miss an opportunity to capture revenue for these services where appropriate.  To help physicians in this regard, CMS has published a guide to preventive and screening services for physicians and other providers.  Also, for a good overview on the OIG's current thinking on offering free screening services, physicians and other providers should have a look at the recent OIG Advisory Opinion 09-11 addressing free blood pressure screenings to walk-in visitors at a hospital.

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Physicians enrolling in the Medicare program should be aware that Medicare recently changed the rules applicable to when a physician's enrollment is deemed to take effect. Specifically, the FY 2009 Medicare Physician Fee Schedule establishes that the effective date of billing for physicians and non-physician practitioners is the later of: (1) the date of filing of a Medicare enrollment application that was subsequently approved by a Medicare contractor; or (2) the date an enrolled physician or non-physician practitioner first started furnishing services at a new practice location.

The rule also provides that physicians and non-physician practitioners who meet all program requirements may bill retrospectively for services furnished up to 30 days prior to the billing effective date (as opposed to the 23 months allowed under current regulations).  Note also that physicians and non-physician practitioners have 30 days to notify their Medicare carrier of a change of ownership, final adverse action (e.g., exclusion, debarment, felony conviction, license suspension or revocation), or a change of location.  Failure to notify the carrier within 30 days can result in an overpayment from the date of the reportable event. 

The 2009 Medicare Fee Schedule can be viewed here.
 

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Does your practice bill Medicare for diagnostic tests?

If so, you have until January 1, 2009 to make sure your arrangements comply with the now very complicated anti-markup rule. The Centers for Medicare and Medicaid Services (CMS) published the Final Medicare Physician Fee Schedule for 2009 in the Federal register on November 19, 2009. Among other things addressed in the Fee Schedule regulations are clarifications of the diagnostic testing anti-markup rule.

Prior to the 2009 Fee Schedule changes, the anti-markup rule provided that if a physician or other supplier bills for the technical component (TC) or professional component (PC) of a diagnostic test that was ordered by the physician or other supplier and the diagnostic test was either purchased from an outside supplier or performed at a site other than the office of the billing physician or other supplier, the payment to the billing physician or other supplier (less the applicable deductibles and coinsurance paid by the beneficiary or on behalf of the beneficiary) for the TC or PC of the diagnostic test may not exceed the lowest of the following amounts:

• The performing supplier's net charge to the billing physician or other supplier;

• The billing physician or other supplier's actual charge; or

• The fee schedule amount for the test that would be allowed if the performing supplier billed directly.

In the 2009 Fee Schedule, CMS has now clarified that the anti-markup provisions will not apply to the TC or PC of a diagnostic test where the performing physician shares a practice with the billing physician or other supplier. With respect to a TC or PC of a diagnostic testing service, the performing physician is considered to share a practice with the billing physician or other supplier if either of the following is met:

(Alternative 1) He or she furnishes substantially all (at least 75 percent) of his or her professional services through the billing physician or other supplier; or

(Alternative 2) The TC is conducted and supervised, or the PC is performed, in the office of the billing physician or other supplier. For purposes of Alternative 2, the “office of the billing physician or other supplier” is defined as the same building where the ordering physician performs substantially the full range of patient care services that the ordering physician generally provides.
 

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The Office of Inspector General (OIG) of the Dept of Health and Human Services released its FY2009 Workplan yesterday. The Workplan outlines the initiatives and audits that the OIG expects to undertake in the coming fiscal year.  Below are some of the key initiatives that the OIG expects to undertake with regard to physicians.  If you or your practice is engaged in any of these activities, now would be a great time to review whether you are complying with applicable Medicare rules.  If you need assistance reviewing any of your services for compliance with Medicare rules, please contact Todd Rodriguez.

Place of Service Errors
The OIG will review physician coding of place of service on Medicare Part B claims for services performed in ambulatory surgical centers (ASC) and hospital outpatient departments. The OIG will be looking to determine whether physicians properly coded the places of service on claims for services provided in ASCs and hospital outpatient departments.

Evaluation and Management Services During Global Surgery Periods
The OIG will review industry practices related to the number of evaluation and management (E&M) services provided by physicians and reimbursed as part of the global surgery fee. It will be looking determine whether industry practices related to the number of E&M services provided during the global surgery period have changed since the global surgery fee concept was developed in 1992.
 

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Under a recent decision by the U.S. Court of Appeals for the 11th Circuit, a case brought by a group of physicians against a PPO discount card company and a managed care company for appropriation of the doctors’ names and identities in connection with a plan to market and sell medical discount cards will be permitted to proceed in court. Specifically, the plaintiff physicians have alleged that Private Health Care Systems allowed the Capella Group, Inc. to access the PHCS network including the discounts negotiated with the physicians in the network, as well as their names, professional identities and practice information in order to sell Capella’s medical discount cards.

The physicians allege that PHCS gave Capella access to their information without the physicians’ consent. Originally the federal district court dismissed the complaint, holding that the doctors’ sole remedy was on the contract they entered into with PHCS. However, the Court of Appeals found the district court’s decision to be contrary to Georgia law and reversed the decision, clearing the way for the case to proceed to court on its merits.

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According to an article in the New York Times, Aetna will soon begin offering a new service to help enable patients to research their own specific medical conditions. Specifically, Aetna’s SmartSource Service will allow patients to link online research with their own medical records and claims data.  While a better patient educated patient population holds hope for cutting down on unnecessary medical expenses, there is also the possibility that patients will use this kind of service to exercise self-help rather than seeking professional care. Nevertheless, Aetna’s move is a sign of the times and Aetna is not the only one delving into this arena. According to the Times article, other companies like Google and Microsoft have similar plans. Physicians should begin preparing to deal with patients who are better educated about their own health care conditions than ever before.

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(By William H. Maruca, Esq. - Posted with permission of the Allegheny County Medical Society ) 

A tentative settlement has been reached in a class action brought on behalf of a group of affected physicians against Blue Cross and Blue Shield plans which alleged that the plans engaged in certain misconduct that resulted in the denial or downcoding of physician claims. By now, you may have received a notice from the U.S. District Court for the Southern District of Florida about the proposed settlement of the case, known as Rick Love M.D., et al. v. Blue Cross and Blue Shield Association, et al. The Notice can be found at http://www.highmarkphysiciansettlement.com/documents/I003%20(Notice).pdf and contains detailed information about the suit and settlement.

The Love case started as a national class action which named all of the Blues plans and the national Blue Cross Blue Shield Association, and most of them reached a separate settlement earlier this year. Highmark and its affiliates Keystone Health Plan West, Highmark West Virginia (d/b/a/ Mountain State Blue Cross Blue Shield), and Parker Benefits, Inc. (d/b/a/ Super Blue HMO), have now agreed to similar terms, which are pending final court approval. You may be eligible to participate in both settlements. The settlement establishes a fund of nearly $10 Million and requires the plans to adopt certain business practice reforms to benefit the class of physicians covered in the suit.

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The much awaited 2008 Medicare Physician Fee Schedule has finally been formally published in the Federal Register (click here to read it).  The proposed Fee Schedule published in June of 2007, included a number of proposed changes to the Stark regulations as well as certain regulatory changes to the diagnostic testing rules and IDTF conditions of participation.  As is usually the case with CMS regulations, the final Fee Schedule includes some good news and some bad news.

With respect to the proposed revisions to the Stark regulations, the good news is that CMS elected not to finalize the proposed regulations in the Fee Schedule. The bad news is that CMS intends to issue additional Stark regulations pursuant to a separate rulemaking. So, be on the lookout more Stark regs (perhaps we should call them Phase IV).  Among other things, however, the final Fee Schedule:

• Imposes an anti-markup restriction on the technical components (TCs) and professional components (PCs) of diagnostic tests (other than clinical lab tests) that are ordered by the billing supplier, if the TC or PC is purchased by the billing supplier, or the TC or PC is performed outside of the office of the billing supplier;
• Imposes additional requirements on independent diagnostic testing facilities; and
• Requires that persons furnishing physical and occupational therapy services to people with Medicare meet licensing, registration, or certification requirements in the state in which they practice, and that they complete an approved educational program for the discipline in which they practice.

The implications of these changes, particularly the anti-markup provisions, are expected to be far reaching.  Check back in the coming days for more discussion of how these changes are likely affect your practice.

 

 

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According to a recent article in the Seattle Times, the Medicare contractor audit program which was launched in three states on a trial basis in 2005 and is expected to expand to all 50 states by 2010 could end up costing the public dearly, with potentially very little to show for the efforts.  According to the article, the audit contractor has been denying millions of dollars worth of rehab hospital claims on medical necessity grounds.  The contractor stands to earn a commission of 25-30% on unnecessary or incorrect payments they are able to identify.  As of September 30, 2006, the company had earned commissions of up to $29M.  While many of the denied claims are reportedly being overturned on appeal, the auditor gets to keep their commissions if the denials are sustained through the first 2 (of 6) levels of appeal.  Sounds like a pretty sweet deal.

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The New Jersey Department of Banking & Insurance has issued an order stopping Aetna's practice of limiting non-participating physician reimbursement to 125% of Medicare.  The Department has also fined Aetna almost $10,000 for violations of state insurance laws.  Non-participating physicians in other states may find this development helpful in discussions with Aetna (or their insurance department, if necessary).   

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The Medicare incident-to rules permit a physician to bill for the services of auxiliary personnel as if the physician performed those services himself.  You may already know that the incident-to rules require a physician to be present in the office suite and immediately available to assist while auxiliary personnel are performing incident-to services in the office.  But, did you know that you could be supervising incident-to services without even knowing it? 

In a recent federal District Court whistleblower case out of Hawaii, a court rejected a whistleblower physician's claim that he could not have been the supervising physician for incident-to services since he was not made aware by his group practice that the services would be billed to Medicare under his provider number.   Under the incident -to rules, any physician in a "physician directed clinic" may supervise incident-to services and the court agreed with the defense that a physician in a "physician directed clinic" need not have specific knowledge that he will be the supervising physician for billing purposes.  The court's opinion can be found here.

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According to a March 28, 2006 Press Release, the boards of directors of Highmark Inc. and Independence Blue Cross (IBC) have agreed to merge. The new company will continue to have dual headquarters in Pittsburgh and Philadelphia and is expected to generate more than $1 billion in savings over a six year period, but whether providers or benficiaries will see any part of those savings is unknown.  Of course, if the merger goes through, the administrative difficulties that physicians now face in dealing with either Highmark or IBC are likely to get considerably worse before they get better.    

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On February 19, 2007 (but effective retroactively to January 26, 2007), the Centers for Medicare and Medicaid Services (CMS) rescinded the controversial IDTF transmittal referrenced in the February 18, 2007 entry on this Blog.  A copy of the notice can be found here: Transmittal 187.  Those guidelines would have imposed major new conditions on independent diagnostic testing facilities (IDTFs), and would have invalidated many leasing arrangements. No word yet as to whether CMS is planning to re-publish the guidelines any time soon.  Stay tuned!

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Think hanging on to insurance overpayments is no big deal?  Think again.  According to a press release by the U.S. Attorney for the Eastern District of Tennessee, one cardiology practice that neglected to refund overpayments to federal and private insurers and patients has learned a valuable ... and expensive lesson: if you have money you're not entitled to, give it back!  East Tennessee Heart Consultants has reportedly entered into a settlement with the US Attorney for $2.9 Million in connection with the alleged failure to refund overpayments.  For tips on investigating and refunding overpayments, click here.

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According to a December 22, 2006 press release by the Pennsylvania Orthopaedic Society, 25,000 Philadelphia area doctors, chiropractors, therapists and others who provide care for patients insured by Independence Blue Cross (IBC) were notified by e-mail that they will now be able to view IBC's fee schedule online.  Disclosure of its standard fee schedule is one of the terms IBC agreed to in settlement of a 2001 class action settlement. 

For many physicians and other providers in the Philadelphia region who are paid on the standard fee schedule, this information should serve as a useful tool to ensure that they are receiving full reimbursement.  However, although IBC is required to disclose its standard fee schedule, they are still free to negotiate special fee schedules on a case by case basis and they have no obligation to disclose these special arrangements.  Nevertheless, when it comes to third party payor arrangements, the more transparency  the better.

 

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According to an audit report published by the Office of Inspector, doctors are not reporting the correct "Place of Service" codes when submitting claims.  Medicare payments for the same services may vary depending on the location where the services were rendered.  This is because Medicare has determined, among other things, that the cost to produce a service may be more or less in certain settings.  In addition, payment for a professional service which is rendered in a facility (where a facility fee applies) will typically be lower than if the same services is rendered in the office setting, since the facility expense in the office setting (known as the practice expense) is rolled into the professional fee and not paid separately.  Failing to correctly code the POS can result in a physician receiving an overpayment and could even result in false claims liability.

 

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According to a press release by the U.S. Attorney for the Eastern District of Pennsylvania, Keystone Mercy Health Plan has agreed to pay $5 million to resolve civil liabilities under the federal False Claims Act and other federal and state statutes and common law principles.  According to the complaint filed by the U.S. Attorney, KMHP allegedly violated the federal False Claims Act by failing to remit to the Pennsylvania Department of Public Welfare overpayments recouped by KMHP from providers.  Of note is the fact that the case was initiated by a former employee of KMHP under the whistleblower provisions of the False Claims Act.  According to the complaint, the whistleblower stands to receive $780,000 from the settlement proceeds.

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According to a recent press release by the U.S. Attorney for the District of Colorado, Pediatrix Medical Group, Inc. has agreed to pay the government $25,078,918 to settle government claims of upcoding under the False Claims Act.  Specifically, the government alleged that Peiatrix billed for critical care services when patients were not critically ill.   This should serve as a strong reminder to physician groups of the importance of maintaining an effective compliance program.

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If the Proposed 2007 Medicare Physician Fee Schedule is adopted in final, Physicians can expect a 5.1% decrease in Medicare reimbursement which CMS claims is in response to the fact that spending on physicians’ services and other Part B services has been growing at a much faster rate than target spending.  The 2007 Fee Schedule as proposed would also continue to impose the 25% reduction in payment for the technical component of multiple imaging procedures on contiguous body parts which was first imposed in 2006.

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