Healthcare Law Blog : Medical Groups, Health Plans, Hospital & Facility Lawyers & Attorneys: Sheppard Mullin Law Firm

By Karie Rego

Since the 2006 payment year, CMS has conducted Risk Adjustment Data Validation (RADV) audits on Medicare Advantage (MA) plans’ risk adjustment payments. However, CMS has been hindered by the lack of a methodology to extrapolate audit results. On February 23, 2012, CMS posted its final error calculation methodology. This methodology, if implemented, has the potential to spawn large government recoveries against plans that ripple down to plan action against downstream providers.

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By Karie Rego

A compliance program sends an important message to employees that mistakes will occur and that employees have an affirmative duty to report those mistakes so that they may be corrected. A compliance plan discourages employees from turning to the government or a payer to resolve issues or, what is worse, to one of the many attorneys advertising on the internet that promise whistleblowers large recoveries.

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By Karie Rego
 

Private or government investigations usually start with a request for records. In more egregious situations, the FBI or other state or federal agency could show up and take records pursuant to a search warrant.
 

If state or federal agents arrive with a “search warrant” it will allow the agents the right to enter and seize documents identified in the warrant. It is crucial to contact your legal counsel immediately and have them come over. You can ask the agents to wait until your legal counsel arrives.
 

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By Bob Rose

Four ex-officers of a Pa.-based manufacturer of a bone cement product were sentenced to prison for an unapproved trial that led to three deaths. Each pled guilty to a single misdemeanor count of shipping adulterated and misbranded Norian XR in interstate commerce. The sentences, imposed in Philadelphia federal court, ranged from five to nine months in custody plus fines.

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By Karie Rego

Just as you hospitals have their clinicians understanding that they need to specifically order observation services, the MACs and RACs have a new way to deny observation claims. At a recent speech, the Medical Director of the Medicare Administrative Contractor Cahaba (which processes claims for many of the for-profit systems out of Nashville), said that observation orders stating "admit" instead of "referred" to observation would be invalid. The medical director reasoned that there was no such category as an observation patient so therefore a patient cannot be "admitted" to observation.

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The Department of Justice and Federal Trade Commission recently issued their final "Statement of Antitrust Enforcement Policy Regarding Accountable Care Organizations Participating in the Medicare Shared Savings Program" pursuant to the 2010 Patient Protection and Affordable Care Act. The final statement was issued in conjunction with the Department of Health and Human Services' Centers for Medicare and Medicaid Services' final regulations implementing the shared savings program as part of a coordinated interagency effort to facilitate health care provider participation in the shared savings program, so as to achieve the cost savings and improvement in quality of care Congress intended. Both the final statement and CMS' final regulations aim to further encourage and incentivize formation of Accountable Care Organizations and participation in the shared savings program. As such, the final statement includes significant, material changes from the proposed statement of antitrust enforcement policy with respect to ACOs issued earlier this year. (See the April 15 article on the proposed statement.)

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By Lynsey Mitchel

The Centers for Medicare and Medicaid Services (“CMS”) released a final rule on November 1, 2011, that will update Medicare policies and payment rates for dialysis facilities. According to CMS these provisions will strengthen “incentives for improved quality of care and better outcomes for beneficiaries diagnosed with End-stage Renal Disease (“ESRD”). The final rule will affect payments for dialysis treatments furnished on or after January 1, 2012 under the bundled ESRD Prospective Payment System that was implemented in calendar year 2011. CMS estimates that payments to ESRD facilities will total $8.3 billion next year.

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By Karie Rego

It is important for home health agencies and other providers that serve both Medicare and Medicaid populations to be aware of the differences in requirements. With the reductions in staffing, surveyors may be reviewing more than one program. We recommend a review of the different legal requirements and keeping information on hand to point these distinctions to the surveyors and avoid any confusion and resulting deficiencies.

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By Karie Rego

Private payers are becoming more aggressive with recoupments. When payers find a potential issue there are several strategies used to obtain recoupment quickly and easily from providers.
 

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By Karie Rego

The most difficult issue a hospital can face involves allegations of poor quality coupled with billing fraud. These allegations can be devastating to a hospital's operations and its reputation. It is essential that hospital administration, the medical staff, legal and compliance officers work together quickly and efficiently to verify and address allegations.  Hospitals should have at least an informal plan in place to address allegations. This prevents misunderstandings and potential duplication of roles that can result in further allegations that the hospital or medical staff isn't addressing the potential issue as happened in the notorious "Redding" case.
 

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By Eric Klein and Aytan Dahukey

WellPoint, one of the nation’s largest health insurers, has agreed to buy CareMore for approximately $800 million. WellPoint, which holds the license for Blue Cross in California and for Blue Cross Blue Shield in several other states, is the largest American health insurer in terms of patients covered, with one in nine Americans receiving coverage for their medical care through WellPoint’s affiliated plans. CareMore, based in Downey, California, is a physician owned medical group operating Medicare Advantage plans in California, Arizona and Nevada with the majority of its membership in California.
 

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By Eric Klein and Lynsey Mitchel

The CEO of Blue Shield of California, Bruce Bodaken, announced on June 7, 2011, that Blue Shield, a non-profit corporation, will cap its annual net income at 2% citing “a new commitment to help our customers get the health care they need at a price they can better afford.” The announcement was made in an opinion piece in the San Francisco Chronicle. The policy will be implemented for 2010, the year national health care reform was enacted. Blue Shield’s net income exceeded the 2% cap by $180 million last year. Policyholders will be credited $167 million, physicians and hospitals will receive $10 million to support new ways to coordinate care through accountable care organizations and $3 million will go to the Blue Shield of California Foundation.
 

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By Eric Klein, Kenneth Yood, Aytan Dahukey and Lynsey Mitchel

The Affordable Care Act (the “ACA”) establishes the general requirements for payments to participating Accountable Care Organizations (“ACOs”) pursuant to the Shared Savings Program, described in Section 3022 of the ACA.  The ACA provides that ACO participants will continue to receive payment under the original Medicare fee-for-service (“FFS”) program under Parts A and B. In addition, ACOs can receive payment for shared Medicare savings provided that they meet both quality performance standards and demonstrate achievement of savings against a benchmark of expected average per capita Medicare FFS expenditures. On March 31, 2011, the Centers for Medicare and Medicaid Services (“CMS”) released its proposed rule regarding ACOs (the “Proposed Rule”). This blog entry is an overview of the payment options for ACOs set forth in the Proposed Rule. (For a discussion of the legal structure and governance of ACOs, please see our April 11, 2011 entry.)
 

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By Karie Rego

Ever since the Redding Medical Center government investigation found inappropriate percutanteous coronary interventions (PCI), the medically necessity of PCI has been a highly debated topic. This past year, there have been two other similar cases involving providers in Maryland and Pennsylvania. In Maryland, the state even considered adopting it's own quality guidelines. This is a high risk area for providers an can impact both reputation and reimbursement.

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