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

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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