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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If you’re not sure what your managed care payers want from you, maybe you need to tell them. Many physicians are (understandably) complacent about taking an active role in defining in their payer relationships. Not surprisingly, managed care payers have had very little incentive or ability to negotiate special arrangements with a diverse and disintegrated physician practice marketplace. However, as the marketplace consolidates, larger independent physician practices may have an opportunity to begin to define in their payer relationships.

Many physicians believe that insurance companies have exclusive access to the data necessary to define the specific cost controls and quality measures they will demand from the physician marketplace. In fact, while payers have historically had access to more utilization and quality data than the physician practices, with the implementation of electronic medical records and sophisticated IT systems, larger practices now have access to key data with which to define their quality, cost and utilization data. Very often when I talk to physicians about negotiating their managed care arrangements, they say that they don't know what their payers are looking for. Consider, however, that this may be because the payers themselves don’t know what they are looking for.
 

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According to a a major study published in the Archives of Internal Medicine this week, almost half of physicians surveyed (over 7,000 physicians were surveyed), reported at least one symptom of burnout.  As a recent article in the Atlantic points out, although physician burnout may not be news to most physicians who are living with the realities of shrinking reimbursements, growing costs and increasing administrative burdens, the general public may not have a real understanding of what this means for them.  Given the financial and time investment required to become a physician, the health care reform debate likely scared a lot of folks away from attending medical school already. 

For the public, fewer physicians surely means less access to care.  More people may have insurance coverage under the Affordable Care Act but insurance coverage will do little to address the impending access problem.  Interestingly enough, however, this shortage is likely to have a silver lining for physicians who choose to stay in practice:  short supply means higher demand and higher demand is likely to mean increased reimbursement.  In other words, those hearty souls who elect to continue to brave the storm of medical practice over the next couple of years will likely be able to demand higher reimbursement rates for their services.  In fact, some doctors may find that patients are willing to pay cash to avoid waiting for care.  Stay tuned - the pendulum may be swinging back before you know it.

 

 

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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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According to a recent study published in the September issue of Health Affairs, one of the key drivers behind the skyrocketing healthcare costs in the United States is the amount of fees payable to the physicians. According to an article published on MedPage Today, the study found that the United States spends in excess of $7500 per person on health care and more than 21% of that is for ambulatory care services performed in physician offices. The next closest country in spending to the United States is a Canada which spends roughly $4000 per person on health care services.

According to the study, reimbursement to physicians in the United States far outpaces that paid to physicians in other countries. For example, Medicare pays physicians approximately $60 for a primary care visit while public insurance reimbursement for a primary care visit in France is approximately $32 and in the United Kingdom is $66. The largest discrepancy in the physician reimbursement and between the United States and other countries is in the specialty of orthopedic surgery. According to the study, orthopedic surgeons in the United States are paid 70% more by Medicare than orthopedic surgeons are paid for the same service on average by public insurance plans in other countries.

Although the authors of the study pointed out that whether or not higher reimbursement rates it to US physicians is warranted was beyond the scope of the study, surely the last thing the practicing physicians in this country need is more evidence suggesting that they're overpaid.
 

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Hospital-owned practices may take an unexpected hit in revenue under a new Medicare rule that bundles certain physician service fees into hospital payments. The so-called “payment window” rule (sometimes referred to as 3-day/1-day window rule) requires a hospital (or an entity that is wholly owned or wholly operated by the hospital) to include on the claim for a beneficiary's inpatient stay, the diagnoses, procedures, and charges for all outpatient diagnostic services and admission-related outpatient nondiagnostic services that are furnished to the beneficiary during the three days before admission to a hospital, or one day preceding admission to a “non-subsection (d) hospital,” (a hospital not paid under the IPPS: psychiatric hospitals and units, inpatient rehabilitation hospitals and units, long-term care hospitals, children's hospitals, and cancer hospitals). Historically, this has only involved technical fees, not professional services.   

In a notice to Medicare providers, CMS has clarified that the payment window, as modified by the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 enacted in June, includes outpatient services that are otherwise billable under Part B, such as physician services, if they are related to the admission.  An outpatient service is related to the admission if it is clinically associated with the reason for a patient’s inpatient admission, and is no longer limited to diagnostic services. The rule took effect on June 25, 2010.

 

A hospital is considered the sole (whole) operator of an entity if the hospital has exclusive responsibility for conducting or overseeing the entity’s routine operations, regardless of whether the hospital also has policymaking authority over the entity.   This means practices managed by a hospital may be affected even if they are not technically “owned” by the hospital.

If you believe your services are unrelated to the admission, the hospital can submit an attestation. The general rule is that services rendered during the window period preceding the date of a beneficiary’s inpatient admission are presumed to be related to the admission, and thus, must be billed with the inpatient stay, unless the hospital attests to specific nondiagnostic services as being unrelated to the hospital claim. Such services are covered by Part B, and may be separately billed to Part B.

 

IMPORTANT: If your practice is hospital-owned or managed and your compensation formula is based on collections, you could lose credit for services that would previously have been separately billable under Part B, such as professional interpretation of diagnostic testing preceding hospitalization.  Keep this in mind when renegotiating your contract, and check to see if your contract includes a reopener triggered by changes in reimbursement methods. 

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On November 24, 2009, the U.S. House of Representatives passed the Medicare Physician Payment Reform Act" (H.R. 3961) which would repeal the scheduled 21% fee reduction scheduled for January 2010.  The legislation would also permanently replace the existing Sustainable Growth Rate (SGR) formula with a new formula that, according to the House summary:

• Removes items such as drugs and laboratory services not paid directly to practitioners from spending targets;
• Allows spending on most services to grow at the rate of GDP plus 1 percentage point per year (compared to GDP without any adjustment today);
• Allows spending on primary and preventive care services to grow at GDP plus 2 percent per year; and
• Encourages coordinated, innovative care by allowing Accountable Care Organizations to be responsible for their own growth paths, irrespective of reductions or increases that apply elsewhere in the system.
   

The bill is now on the Senate calendar for consideration.

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Despite efforts by Senator Harry Reid to pass legislation which would have effectively frozen Medicare payment rates for physicians, it looks like Congress will once again look to freeze physician payment rates with a one-year patch. According to an article published by the Wall Street Journal, Senator Reid’s proposed bill would have permanently prevented Medicare payment cuts to doctors. However, the bill was estimated to cost $247 billion over ten years and Senator Reid was unable to secure the votes necessary to get the bill out of the Senate. The bad news for physicians is that there’s no permanent fix for the sustainable growth rate formula in the Medicare Physician Fee Schedule. The good news however is that Senator Reid has indicated an intention to pass a measure which would forestall the projected 21% decease in physician payments expected for 2010.

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According to a recent article published on AIS Health.com, Blues plans are increasingly turning to radiology management firms to help manage costly imaging services.  This is a new twist on the old "managed care" concept and, once adopted by the Blues, other major payors can be expected to follow.   Physicians who provide imaging services are well advised to monitor this trend closely.

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Under what it is calling its Provencare program, Geisinger Health System is now offering patients what amounts to a ninety warranty on surgical care.  Under the program - something like capitation and use of clinical protocols - insurers are charged a flat fee for which patients receive unlimited follow up care after surgery.  Geisinger intends to control costs by developing and applying specific clinical protocols depending on the patient's condition.  So far Geisinger has only actually contracted with its own insurance unit but hopes the concept will gain in popularity. 

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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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Both the House and the Senate have now passed the Tax Relief and Health Care Act of 2006 which, among other things, would eliminate the 5% cut in Medicare physician reimbursement that was to take effect in January 2006.  The Bill is on its way to the President for signature. The text of the Bill can be viewed by clicking here.

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Pending PA legislation would limit most insurance refund demands and retroactive payment denials by third party payors to a one-year lookback period except where fraud or miscoding occurs. The full text of the bill can be viewed here:physicianlaw.foxrothschild.com/HB2178P4462(1).pdf . The bill was passed by the House by a vote of 195 to 2 on June 30. It's still pending before the Senate and was referred to the Senate Banking Committee on July 5. For more information on this possible development, contact Bill Maruca at Fox Rothschild LLP.

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