In a June 23, 2020 decision, Judge Nichol of the United States District Court for the District of Columbia ruled in favor of the Center for Medicare and Medicaid Services (“CMS”) and against the plaintiff hospital associations challenging CMS’s transparency rule. As a result, hospitals will (pending any appeals) have to post private negotiated rates with payors effective January 1, 2021. We discussed the lawsuit brought by the American Hospital Association (“AHA”), the Federation of American Hospitals, the Children’s Hospital Association and the Association of American Medical Colleges against CMS in our previous article.
Continue Reading The Decision is in: Hospitals Will be Required to Disclose Rates in 2021
Steven Chananie
Steven Chananie is a special counsel n the Corporate Practice Group in the firm's New York office, focusing on healthcare issues.
Balancing Provider Pricing Transparency and Anti-Competitive Behavior
On November 15, 2019, CMS issued a final rule that requires hospitals to disclose to patients the hospital’s “standard charges,” which include the reimbursement rates the hospitals negotiate privately with insurers. This rule is in line with President Trump’s Executive Order, dated June 24, 2019, which focused on increasing price and quality transparency for American healthcare consumers. The Final Rule goes into effect as of January 1, 2021, at which time hospitals will have to post their standard charges online. Any hospital that refuses to do so will be subject to a fine of up to $300 per day. While CMS believes that the Final Rule will lower healthcare costs by allowing customers to compare prices and proactively shop for care, the Final Rule has been met with strong resistance from hospitals that claim that it is beyond the scope of CMS’ power to promulgate.
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CMS “Hospitals Without Walls” Waiver: Looking To ASCs to Provide Relief
On March 30, 2020, CMS through its blanket 1135 waiver authority[1] implemented a “Hospital without Walls” policy to allow hospitals to provide and bill for hospital services in other healthcare facilities and sites, such as ambulatory surgery centers (“ASCs”). The waiver is intended to ensure that local hospitals and health systems have the capacity to handle the anticipated surge of COVID-19 patients through the duration of the public health emergency (“PHE”). See, “CMS Issues Temporary Waivers in Broad Coronavirus Response,” as posted on April 2,2020 on this blog for general information regarding the March 30, 2020 1135 waiver.
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Proposed and Expanded Disclosure Obligations for Hospitals Regarding not Only Gross Charges, but Third Party Payor Pricing as Well
On July 29, 2019, CMS released its proposed outpatient prospective payment system (“OPPS”) rule outlining a variety of changes it may implement for calendar year 2020. One proposal that has inspired immediate reactions from industry members would require hospitals to disclose certain additional pricing information, including some prices negotiated with third party payors, to the public.
Continue Reading Proposed and Expanded Disclosure Obligations for Hospitals Regarding not Only Gross Charges, but Third Party Payor Pricing as Well
Reimbursement for and Documentation of Evaluation and Management Services: CMS Proposes Important Modifications
On July 12, 2018, the Centers for Medicare & Medicaid Services (“CMS”) issued a proposed rule (“Proposed Rule”) that would, among other changes: (1) reduce the documentation requirements with which physicians and other practitioners must comply in providing and billing for Evaluation and Management (E/M) services under the Medicare Physician Fee Schedule (“PFS”) on or after January 1, 2019; and (2) revise the current reimbursement methodology for E/M services under the PFS. CMS is seeking comment on the Proposed Rule through September 10, 2018.
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The Enforcement Risks for Medicare Advantage Plans Continue: A New False Claims Act Settlement in Florida
Recent activities of the Department of Justice (“DOJ”) and Qui Tam whistleblowers reveal that Medicare Advantage Plans remain at the forefront of investigations for violations of the federal False Claim Act (“FCA”) for allegedly engaging in improper risk adjustment practices and other improper or fraudulent practices. In addition to the pending FCA enforcement cases in the Swoben and Poehling cases, as well as reports of ongoing federal investigations, the recent federal settlement in May in Florida with Freedom Health, Inc., and Optimum HealthCare, Inc. – both Medicare Advantage-participating managed care plans that are subsidiaries of America’s 1st Choice Holdings of Florida, LLC – demonstrates that the DOJ, the Office of the Inspector General of the United States Department of Health and Human Services (“OIG”) and Qui Tam whistleblowers are not only interested in large players, such as UnitedHealth Group and others, but also in smaller and regional Medicare Advantage organizations.
Continue Reading The Enforcement Risks for Medicare Advantage Plans Continue: A New False Claims Act Settlement in Florida
Medicare Advantage Plans Under Fire: The Department of Justice Files Complaints-in-Intervention
As reported in earlier blogs, the federal Department of Justice (DOJ) has been actively looking into potential abuses by Medicare Advantage (MA) Organizations as to allegedly improper risk adjustment claims submissions and practices. Earlier this month, and as had been anticipated, the DOJ filed complaints-in-intervention against UnitedHealth Group, Inc., and related Medicare Advantage entities, in two False Claims Act qui tam lawsuits in United States ex rel. James Swoben v. Secure Horizons, et. al., and United States ex rel. Benjamin Poehling v. UnitedHealth Group, Inc., et. al. Previously, the DOJ had announced its intent to intervene in both cases, as well as its intent to conduct “on-going investigations” of other potential defendants, including Health Net, Inc., Aetna, Inc., Bravo Health, Inc. (which is part of Cigna), and Humana, Inc.
Continue Reading Medicare Advantage Plans Under Fire: The Department of Justice Files Complaints-in-Intervention
The Financial Impact of MACRA – Uncertainty Reigns in a Recent RAND Corporation Study
With all the talk of the Affordable Care Act’s uncertain future, it is easy to forget about the Medicare Access and CHIP Reauthorization Act (“MACRA”), a bipartisan law passed by Congress in 2015 to change the way physicians will be reimbursed by Medicare. MACRA is a complex and confusing law. A new study published by Health Affairs in April 2017, which used the RAND Corporation’s Health Care Payment and Delivery Simulation Model (the “Study”), has estimated the potential effects of MACRA payment models on physician and hospital Medicare reimbursement revenue. The results: uncertain.
Continue Reading The Financial Impact of MACRA – Uncertainty Reigns in a Recent RAND Corporation Study
Merger and Acquisition Activity in the Rehabilitation, Home Health and Hospice Sectors Increased in 2016, But Will this Trend Continue?
Since 2014, there has been a steady increase in mergers and acquisitions in the Rehabilitation sector, with a total of 40 deals announced in 2016. This is almost double the number of deals in 2014 (a total of 21), and includes deals with both publicly traded corporations as well as privately held acquirers. Similarly, after seeing a sharp decline in M&A activity in 2015, the home health and hospice sectors saw an increase of 12% in M&A activity in 2016 with a total of 57 deals announced, including several deals involving private equity investors.
Continue Reading Merger and Acquisition Activity in the Rehabilitation, Home Health and Hospice Sectors Increased in 2016, But Will this Trend Continue?
The Siege Continues: The Justice Department is Investigating Four Additional Medicare Advantage Plans
In our prior blog post, we reported that, at the request of the federal Department of Justice, the FCA qui tam whistleblower lawsuit in the case of United States ex rel Benjamin Poehling v. United HealthGroup, Inc., et. al. was unsealed on February 15, 2017. The complaint alleges that United HealthGroup, as well as a number of other defendants, had fraudulently collected “hundreds of millions—and likely billions—of dollars” in Medicare Advantage risk payments by claiming patients were sicker than they really were. At the time of the unsealing, the Department of Justice partially intervened in the lawsuit against only two of the defendants – UnitedHealth Group and WellMed Medical Management, Inc. – and declined to intervene against the other defendants.
Continue Reading The Siege Continues: The Justice Department is Investigating Four Additional Medicare Advantage Plans
Medicaid Demonstration Waivers: A Shorter Path to Increasing State Control Over Healthcare Policy?
Seema Verma’s nomination to head the Centers for Medicare and Medicaid Services (CMS) places Section 1115 Medicaid demonstration waivers into increasing spotlight. This article explores some of the current applications of waiver authority and the role it may play in the new administration.
Continue Reading Medicaid Demonstration Waivers: A Shorter Path to Increasing State Control Over Healthcare Policy?