On April 27, 2021, the Centers for Medicare and Medicaid Services (“CMS”) released the Hospital Inpatient Prospective Payment System (“IPPS”) and Long-Term Care Hospital (“LTCH”) unpublished Proposed Rule for 2022 (“Proposed Rule”). The Proposed Rule, if enacted, would eliminate the requirement from the Hospital IPPS and LTCH Final Rule for 2021 (“IPPS Final Rule for 2021”), as discussed in our September 11, 2020 blog post, that hospitals report the median payer-specific negotiated charge with Medicare Advantage (“MA”) payers, by MS-DRG, on its Medicare cost reports for cost reporting periods ending on or after January 1, 2021. CMS estimates that this will reduce the administrative burden on hospitals by approximately 64,000 hours.
Continue Reading CMS Proposes Repeal of Certain Cost Reporting Requirements from the IPPS Final Rule for 2021

On December 2, 2020, the Centers for Medicare & Medicaid Services (“CMS”) finalized policies that “aim to increase choice, lower patients’ out-of-pocket costs, empower patients, and protect taxpayer dollars” with changes to the Medicare Hospital Outpatient Prospective Payment System (“OPPS”) and the Ambulatory Surgical Center (“ASC”) Payment System in the Medicare OPPS and ASC Final Rule (“Final Rule”). These changes include: elimination of the “Inpatient Only List” and additions and revisions to the “ASC Covered Procedures List” – two key areas of “site neutrality”. Site neutrality is a move to diminish or eliminate the reimbursement differences between different sites of service.
Continue Reading Forthcoming Medicare Rule Furthers Push for Site Neutrality

As part of the “CY 2021 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Final Rule” (the “Final Rule”) published on December 2, 2020, the Centers for Medicare and Medicaid Services (“CMS”) finalized policies designed to overhaul the methodology used to calculate the Overall Hospital Quality Star Rating effective 2021.
Continue Reading New Criteria Established for the Overall Hospital Quality Star Rating

On July 17, 2020, in a blow to health care providers, the U.S. Court of Appeals for the D.C. Circuit overturned a lower court’s more favorable ruling and held that the Department of Health and Human Services (“HHS”) “site-neutral payment” policy may stand.
Continue Reading Site-Neutral Payments Stand: D.C. Court of Appeals Overturns Ruling and Allows Lower Payments to Off-Campus Provider-Based Departments

On July 17, 2020, the Department of Health and Human Services (“HHS”) announced it will begin distributing $10 billion in a second round of funding to hospitals operating in high impact COVID-19 areas. The distribution is anticipated to begin as early as today, Monday, July 20, 2020. Hospitals with over 161 COVID-19 admissions between January 1 and June 10, 2020, or one admission per day, or that experienced a disproportionate intensity of COVID-19 admissions (exceeding the average ratio of COVID-19 admissions/bed) will receive funding in this distribution in the amount of $50,000 per eligible admission.
Continue Reading More Money On the Way in COVID-19 Fight: HHS Announces Additional $10B for Hospitals in High Impact COVID-19 Areas

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.
Continue Reading Balancing Provider Pricing Transparency and Anti-Competitive Behavior

On September 17, 2019, the U.S. District Court for the District of Columbia ruled against the Centers for Medicare and Medicaid Services (“CMS”), vacating CMS’ 2018 Final OPPS Rule, which cut Medicare reimbursement rates for certain outpatient hospital services provided at certain off-campus provider-based departments (“PBDs”).
Continue Reading D.C. District Court Vacates CMS Final Rule, Finds that CMS’ Lesser Reimbursement of Services Provided at Grandfathered Off-Campus Provider-Based Departments Was Improper

On July 31, 2019, the U.S. Court of Appeals for the Eleventh Circuit affirmed a lower court’s decision to grant summary judgment to hospital operator HCA and dismiss relator Thomas Bingham’s allegations. Bingham v. HCA (S.D. Fla. July 31, 2019) (“Op.”). In a well-reasoned opinion, the Court affirmed several key holdings:

  • There is no “remuneration”, for Federal health care program anti-kickback statute (“AKS”) purposes, unless a benefit is conferred for less than fair market value. In other words, as long as compensation to or from a referral source is consistent with fair market value, the AKS is not implicated.
  • With respect to the Stark Law, showing that a space lease arrangement effectuates an “indirect compensation arrangement” between a hospital and a referring physician requires a showing that the space, rental rates, or benefits under the lease correlate with the volume of the physician’s referrals to the hospital.
  • It may be appropriate for a court to strike allegations from an amended False Claims Act complaint if they are based on information uncovered by a relator during discovery.

These holdings should be welcomed by defendants of alleged AKS, Stark Law, and False Claims Act violations.
Continue Reading Eleventh Circuit Affirms Key Kickback Statute, Stark Law, and False Claims Act Principles in Dismissing Allegations Against HCA

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

San Francisco (Tuesday, January 9, 2018): Day 2 of the 2018 JP Morgan Healthcare Conference provided concrete examples of the trends that have been discussed in recent years – the impact of shifting healthcare delivery modalities on hospitals, the opportunity for retail medicine, the need for more effective management of chronic conditions and the increasing relevance of the Chinese markets. While some attendees complained about a lack of blockbuster announcements, today’s presentations were intriguing as an example of how the consulting and conference recommendations of the 2010 – 2014 period now are being played out in the real world of healthcare today. As the CEO of Advocate Health Care said, with tongue in cheek and quoting Game of Thrones, “Winter is coming….” and healthcare delivery will become even more difficult. There also was cause for optimism as well, as we saw multiple vibrant strategies for growth, including a continuing shift to value-based and risk-based reimbursement structures.
Continue Reading Notes on Day 2 of the JP Morgan Healthcare Conference