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Reimbursement Integrated Library

Reimbursement Advisor

Dennis Barry’s Reimbursement Advisor

June 2010, Vol. 25, No. 10

In the June 2010 issue of Dennis Barry’s Reimbursement Advisor, authors examine an aspect of health care reform that has significant implications due to revisions to the law regarding Medicare and Medicaid overpayments, Medicare signature guidelines, and a recent Medicare Appeals Council decision with Condition Code 44 implications.
  • Medicare signature guidelines:
    Provider submissions of signature logs and attestation statements. The Centers for Medicare and Medicaid Services (CMS) in March revised its policy regarding documentation and authentication of physician orders. In this article, the author examines this revised policy, its instructions and its application as outlined in Change Request 6698.

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    • July 2010 highlights --- Among the articles coming in the July 2010 issue:

    • disproportionate share hospital (DSH) controversies continue to swirl as CMS issues new ruling that offsets gains realized through the Baystate Medical Center v. Leavitt court decision;
    • results and recommendations in the final wage index report , and
    • a closer look at the interim rule on ordering physician enrollment requirements.

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Receivables Report

Receivables Report

July 2010, Volume 25, No. 7

  • Auditing the Results of Change
    Hospitals need to be very concerned about compliance. That involves a significant number of internal operations—and making sure those operations are running smoothly. In this month’s Receivables Report, guest columnist Rob Borchert provides some insights about how to audit those internal operations. We believe you will find some valuable information from this industry insider that will help you use your resources to the fullest.

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    HARA

    Hospital Accounts Receivable Analysis

    3rd Quarter 2009, vol. 23, no. 4
    • 2009 Salary Survey.
      Hospital directors of patient accounts earned a midpoint average salary of $91,347 in 2009, according to the annual salary survey figures in the HARA Report on Fourth Quarter 2009. That figure was up from about $85,000 in 2008, according to the survey. For more details about salaries and incentives for 11 business office positions, take a look at the most recent issue of HARA.
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    Headlines
    from Medicare and Medicaid Guide

    Physician fee schedule will implement many PPACA changes

    A Proposed rule would implement key provisions of the Patient Protection and Affordable Care Act (PPACA) (PubLNo 111-148) affecting Medicare physician services in 2011. The Proposed rule projects a 6.1 percent reduction to physician payment rates in 2011 under the sustainable growth rate (SGR) formula. The SGR has been the subject of recent actions in Congress which would reverse negative updates to the fee schedule rates. To date, Congress has given temporary relief from application of the SGR formula, but that relief currently extends only to the end of November 2010. The Proposed rule would implement provisions in PPACA to eliminate out-of-pocket costs for beneficiaries for most preventive services, including the new annual wellness visit. This visit would augment the benefits of the Initial Preventive Physical Examination with an annual wellness visit that would allow the physician and patient to develop a personalized prevention plan that includes not only the preventive services generally available to the Medicare population, but additional services that may be appropriate because of the patient’s individual risk factors. As a result of PPACA, the physician quality reporting initiative (PQRI) incentive payments are authorized through calendar year 2014, with a penalty thereafter for eligible professionals (EPs) who do not satisfactorily report. For 2011, PPACA states that EPs may earn an incentive payment of 1.0 percent of their estimated total allowed charges for covered professional services under Medicare Part B provided during the reporting period. Numerous new reporting measures are added as well. New provisions in the Proposed rule would also require physicians referring CT, MRI and positron emission tomography (PET) services under the in-office ancillary services exception to the physician self-referral prohibition, to notify patients that they may receive the same services from other suppliers in the area, and the physician would also be required to provide a list of alternate suppliers. Fact Sheets on the Proposed rule are posted at: www.cms.gov/apps/media/fact_sheets.asp. The Proposed rule will be published in the Federal Register on July 13, 2010, and a pamphlet with the text of the Proposed rule will be included in a future Report. The text of the advance release is at ¶220,761.

    CMS Fact Sheets, June 25, 2010.

    Data sharing on terminated providers

    A new process to provide states with information on providers and suppliers that have been terminated from Medicare, Medicaid programs, and the Children’s Health Insurance Programs, (CHIP) in accordance with §6401(b)(2) of the Patient Protection and Affordable Care Act of 2010(PPACA) (PubLNo 111-148) is being implemented. Beginning January 1, 2011, PPACA §6501 requires states to terminate from participation in their Medicaid or CHIP program providers that have been terminated by another state’s Medicaid or CHIP program or from Medicare. CMS is making available to states a list of providers terminated from the Medicare program since 1985 and will disseminate updates of this information to states via email and on a secure website sponsored by the Medicaid Integrity Institute. Currently each state only has one user license for the website, and during the initial process no new licenses will be awarded. States are strongly encouraged to evaluate providers that have been terminated by other states prior to the 2011 deadline.

    CMS Memorandum, No. CPI-B 10-01 , June 21, 2010, ¶53,562.

    Mental health parity regulations lawfully enacted

    A coalition of three independent managed behavioral healthcare organizations unsuccessfully sought to prohibit the implementation of regulations promulgated by HHS to enforce the provisions of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) (PubLNo. 110-343). The coalition argued that the process used to promulgate the regulations inappropriately used the “good cause” provision to forego notice and comment periods when issuing the Interim final rule (see ¶180,028). The Secretaries of HHS, Labor and the Treasury jointly issued a Notice (see ¶220,727) requesting information which was followed by the Interim final rule, as opposed to notice, and a proposed final rule with comment period. Congress authorized the use of interim final rules to amend these sections of the statutes in the Health Insurance Portability and Accountability Act of 1996 (HIPPA)(PubLNo 104-191). The agencies appropriately used the “good cause” exception to the standard rule making process authorized by the Administrative Procedures Act , because Congress expressly stated in MHPAEA that the Secretaries of HHS, Labor and Treasury who are implementing the legislation “may exercise their judgment in deciding whether an interim final rule would be appropriate to implement MHPAEA.” The Secretaries were correct in using the “good cause ” exemption because the serious risk that the legislation would go into effect without regulatory guidance for the industry would occur if they used the more timely proposed rule procedure.

    Coalition for Parity, Inc. v. Sebelius, U.S. District Court, District of Columbia, June 21, 2010, ¶303,476.

    "Money follows the person" expansion

    Section 2403 of the Patient Protection and Affordable Care Act (PPACA) (PubLNo 111-148) extended the Money-Follows the Person (MFP) demonstration project for five years, through 2016. States currently operating MFP demonstrations that wish to continue the same program will receive funding for the additional five years by submitting a written request; they need not compete for funding. However, states are encouraged to begin or expand MFP demonstrations under the increased flexibility of PPACA. Individuals in institutions may qualify for assistance with their return to the community after 90 days of continuous residence. Days spent at a facility for the purpose of receiving short-term rehabilitation services do not count toward the residence requirement. Assistance under the MFP demonstration is available to the beneficiary for one year. States are reimbursed at an enhanced FMAP rate for qualifying services and administrative expenses. Free technical assistance is available from contracted experts in long-term care as well as from CMS.

    CMS Letter to State Medicaid Directors, No. SMDL-1-012, June 22, 2010, ¶53,561.

    Data sharing requirements

    Effective October 1, 2009, State Medicaid agencies must amend their Medicaid plans to add a provision for participation in the Public Assistance Reporting Information System (PARIS), a program in which state and federal agencies share their eligibility data about applicants for and recipients of benefits to verify eligibility. The Qualifying Individual (QI) Program Supplemental Funding Act of 2008 (PubLNo 110-379) amended Soc. Sec. Act §1903(r)to make participation in PARIS a requirement for states to receive federal funds for their data systems, including the Medicaid Management Information System (MMIS). A template containing appropriate language is attached.

    CMS Letter to State Medicaid Directors, No. SMDL-10-09, June 21, 2010, ¶53,558.

    Transmission formats for sharing eligibility and benefit information

    There are two transmission formats which will allow a State, its agents, and private health insurance plans, including self-funded plans, to share eligibility and benefit information. These formats are: (1) the Payer Initiated Eligibility/Benefit (PIE) Transaction; and (2) the Accredited Standards Committee (ASC) X12 270/271 Health Care Eligibility/Benefit Inquiry and Response Standard Transactions (270/271 Transactions). Section 6035 of the Deficit Reduction Act (DRA)(PubLNo 109-171) requires that the HHS Secretary specify a manner in which State Medicaid agencies and health plans may exchange eligibility and coverage data. Third party administrators (TPAs) and pharmacy benefit managers (PBMs) are included in the definition of a health insurer for purposes of complying with the DRA. Use of these formats will standardize this process so there are not different forms from the different states all for the same purpose. These formats will enable State compliance, standardization among plans, and reduction of administrative cost and burden. CMS is currently seeking formal approval of their use, but strongly recommends that states begin using the formats at this time. Questions and answers on this issue were supplied in Letter #06-026 (see ¶51,751and http://www.cms.hhs.gov/SMDL/SMD/) which gives a more detailed explanation of specific DRA changes to the Medicaid statute governing third party liability.

    CMS Letter to State Medicaid Directors, SMDL-10-11, June 21, 2010, ¶53,559.

    Temporary increase in FMAP

    The provision known as the “political subdivision” requirement of section 5001(g)(2) of the American Recovery and Reinvestment Act (ARRA) (PubLNo 111-5)provides a temporary increase of the Medicaid Federal Medical Assistance Percentage (FMAP). States are prohibited from shifting Medicaid costs to political subdivisions and states must share the increased FMAP federal matching dollars. CMS wants to ensure that political subdivisions are not responsible for a greater percentage of funding of the Medicaid program while also making sure CMS is not stifling the states’ ability to manage or modify their Medicaid programs. States may demonstrate compliance with Section 5001 of the ARRA by documenting that contributions are either voluntary or non-voluntary. Under non-voluntary funding there are two methodologies to demonstrate compliance: (1) aggregate analysis of non-federal share funding or (2) payment specific analysis of non-federal share funding. Under either methodology it is important that states include only expenditures and funding for services that existed under the state plans as of the baseline date; new services that were added after the baseline date should be excluded. States should also include new payments for services or administrative activities that existed under the state plan during the baseline period. If a state performs one of the two demonstrations described and the demonstration shows that the percentage increased above the baseline percentage on September 30, 2008, the state would lose all of its ARRA-increased FMAP funding beginning with the date it implemented the increased percentage of political subdivision funding. However, a state could correct the problematic funding by adjusting the funding to the political subdivision to reflect the correct percentages as of September 30, 2008, and the ARRA-increased FMAP funding would be restored for the entire period the state was in compliance with section 5001(g)(2).

    CMS Letter to State Medicaid Directors, No. SMDL-10-010, June 21, 2010, ¶53,560.

    Expedited Part D contract termination

    A Part D prescription drug plan (PDP) provider must exhaust its challenge to an expedited termination of its contract through the CMS administrative review process before seeking judicial review. CMS terminated a provider’s PDP contract for delaying or denying access to drugs, resulting in a failure to make medically necessary services available to beneficiaries to the extent that there was an imminent and serious risk to the health and safety of enrollees. After the provider challenged the termination in district court, its complaint was dismissed for lack of subject matter jurisdiction, with the court stating that the provider had the ability to challenge the termination administratively, and by failing to do so, did not satisfy the jurisdictional element. The provider argued that the court should have exercised jurisdiction of the matter because it challenged CMS’ interpretation and implementation of its regulations as violating both the authorizing statute and the plain text of the regulations. The district court was convinced, and the appeals court agreed, that the provider’s claims were merely policy challenges to the agency’s interpretation and application of valid rules and regulations. The dismissal of the complaint for lack of subject matter jurisdiction was affirmed.

    Fox Insurance Company v. Sebelius, 2nd Cir., June 22, 2010, ¶303,475.

    Temporary certification program for HIT

    Part 2 of this print Report contains a reproduction of Federal Register pages for a final rule issued by the HHS Office of the National Coordinator for Health Information Technology to establish a temporary certification program for the purposes of testing and certifying health information technology (HIT). The National Coordinator will utilize the temporary certification program to authorize organizations to test and certify complete Electronic Health Records (EHRs) and/or EHR Modules, thereby making Certified EHR Technology available prior to the date on which health care providers seeking incentive payments available under the Medicare and Medicaid EHR Incentive Programs may begin demonstrating meaningful use of Certified EHR Technology. These regulations are effective June 24, 2010.

    Final rule, 75 FR 36158, June 24, 2010, ¶181,040.
    Decisions and Developments
    CMS Manuals

    Additional Healthcare Common Procedure Coding System codes related to surgical pathology, gross and microscopic examination for prostate needle saturation biopsy sampling are subject to clinical laboratory improvement amendments edits

    One-Time Notification Manual, Pub. 100-20, Transmittal No. 720, June 18, 2010, ¶159,154.

    Changes to and billing instructions for payment policies implemented in the July 2010 Ambulatory Surgical Centers payment system update to now include policy section changes regarding payment indicator adjustment for healthcare common procedure coding system codes

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1991, June 25, 2010, ¶159,155.

    Amendment of payment files based on 2010 Medicare Physician Fee Schedule (MPFS) Final Rule, including reduction in the Technical Component payment for imaging services paid under the MPFS to outpatient department, payment for bone density tests, and miscellaneous coding changes

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1992, June 25, 2010, ¶159,156.

    Pharmacies are not required to have submitted evidence of accreditation prior to January 1, 2011

    Medicare Program Integrity Manual, Pub. 100-08, Transmittal No. 346, June 25, 2010, ¶159,157.
    DAB Decisions

    Enrollment date

    A physician successfully argued he had a right to a hearing regarding the effective date of his Medicare participation, but was unsuccessful in changing the date upon which the approval was effective. After the physician’s billing number was mysteriously rendered inactive, the physician applied for and was enrolled, effective July 8, 2009, with 30 days of retroactive billing privileges. Arguing that his previous billing number that he had since 2005 was inadvertently deactivated by his contractor, the physician requested a hearing, which was denied, because the contractor ruled that seeking to have his effective date set at the 2005 date was not an initial determination of an effective date. However, appeal rights and procedures are granted for entities dissatisfied with effective date determinations, regardless of whether framework exists for appeals of decativations, and the physician has the right to appeal the effective date. The physician’s effective date based on the 2008 application was properly applied despite any previous improper deactivation. The physician sought to appeal that date to the 2005 date in an attempt to have CMS pay claims that were denied. That argument is beyond the scope of this decision, although the physician is entitled to appeal any claims that were denied during the deactivated time period.

    Peters v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-10-511, Dec. No. CR2148, June 9, 2010, ¶122,223.

    Disenrollment

    Two physicians who had their medical licenses suspended, unsuccessfully appealed CMS’ revocation of their Medicare enrollment and billing privileges. The physicians, argued that because the license suspensions were lifted 20 days later, they were not required to report the adverse legal action because their licenses were reinstated before the 30 day reporting deadline. The statute, however, plainly states that any final adverse action must be reported, which includes a suspension of a medical license, no matter the period of time.

    The physicians offer of testimony that they 1) never billed CMS for services during the 20 days, and 2) that their lack of reporting was in good faith is insufficient as a defense. The physician’s also argued that because no meaningful opportunity exists to correct their failure and because they filed a corrective action plan that was disregarded, the revocation was inappropriate.

    However, no regulation guarantees suppliers that noncompliance will be correctable or ensures an absolute right to correct a deficiency. Acceptance of a corrective action plan is not mandatory. The regulations only require the opportunity to submit a corrective action plan. The revocation of enrollment for one year was appropriate and there is no right to appeal the duration of their revocation.

    Brown and Obeng v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. Nos. C-10-443, C-10-481, Dec. No. CR2145, June 9, 2010, ¶122,221.

    Mobile IDTF

    CMS improperly revoked the billing privileges of an Independent Diagnostic Testing Facility (IDTF) for sharing a practice location with a Medicare-enrolled supplier because, as a mobile IDTF, it was permitted to share a location with another Medicare-enrolled individual or organization. While 42 C.F.R. §410.33(g)prohibits a fixed-base IDTF from sharing a practice location and from leasing or subleasing its practice location or operations to another Medicare-enrolled organization or individual, the regulation creates a specific exception for mobile IDTFs. CMS argued that the IDTF did not include the necessary information in section 4 of its most recent enrollment application to effectively resubmit and certify as a mobile IDTF. However, the enrollment application only requires the inclusion of this information if it has changed, is being added, or is being deleted since the IDTF’s prior enrollment application. The IDTF correctly omitted this information from the enrollment application since it had correctly reported it on its prior application, and there was no evidence that any of the information had changed since that time.

    Proactive Medical LLC v. CMS, HHS Departmental Appeals Board, Doc. No. C-10-218, Dec. No. CR2150, June 9, 2010, ¶122,225.

    Reinstatement surveys

    A terminated provider had no right to a hearing on CMS’ denial of reinstatement because the denial was not an initial determination for which review is available. Under 42 C.F.R. §498.3(d)(4), findings that the provider has not removed the deficiencies that were the basis for its termination or that there are insufficient assurances that the reasons for termination will not recur are specifically excluded from the list of initial determinations for which review is available. The termination was based on noncompliance with the regulation setting standards for medical records. The reassurance survey found violations of the same regulation, including a violation of the same subsection and paragraph as the previous violations. The deficiencies need not be factually identical. The request for a hearing was dismissed.

    Tinley Park Mental Health Center v. CMS, HHS Departmental Appeals Board, Doc. No. C-10-557, Dec. No. CR2149, June 9, 2010, ¶122,224.

    Effective date of provider enrollment

    CMS properly determined that the effective date of a provider’s enrollment in Medicare was the date that the CMS contractor received a complete application. The practitioner’s first application was returned because he did not submit the proper form. The practitioner submitted a second application on May 19, 2009, that was received by the contractor on May 22, 2009. On June 19, 2009, the practitioner submitted Form 588 as requested by the contractor and was assigned an effective date of May 24, 2009. After the practitioner requested reconsideration, the contractor acknowledged that it had received the application on May 22, 2009, and granted Petitioner a 30-day retrospective billing period. Under 42 C.F.R. §498.3(b)(15)the provider has a right to a hearing to challenge the effective date of his enrollment because that was an initial determination subject to appeal, however, the provider’s effective date for participation in Medicare was properly determined.

    Majette (Integrated Health Solutions) v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-10-365, Dec. No. CR2142, June 4, 2010, ¶122,220.

    Part B supplier enrollment

    A supplier did not misrepresent or omit data concerning an individual who had ownership, financial, or control interest in the entity in its Medicare Part B supplier enrollment application to become an independent diagnostic testing facility; therefore, CMS’ Medicare contractors incorrectly denied its application. CMS claimed that it denied the supplier’s application because it failed to disclose that an individual had an equitable interest in the supplier, which CMS claimed violated two standards governing applications for participation: (1) inclusion of complete and accurate information on the enrollment application; and (2) disclosure of any person having a legal interest in the supplier at the time of application. The undisputed evidence, including a purchase agreement, an e-mail, and a letter, illustrated that the individual had, at the time of application, severed all ownership ties with the supplier, and was an unsecured creditor without an equitable interest.

    East Tennessee Community Open MRI, LLC v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-10-497, Dec. No. CR2141, May 28, 2010, ¶122,219.

    SNF sanctions for noncompliance

    A civil money penalty was properly imposed against a long term care facility because of its noncompliance with six Medicare conditions of participation (COPs). The facility conceded that it failed to be in substantial compliance with the following COPs: (1) 42 C.F.R. §483.15(h)(2)a systematic failure of housekeeping and maintenance to properly maintain the facility; (2) and (3) 42 C.F.R. §483.20(d)and §483.20(k)(1)failure to follow a comprehensive care plan that caused more than minimal harm; (4) 42 C.F.R. §483.10(k)(2)failure to conduct a comprehensive and accurate assessment of a resident that was being restrained for six days without the restraint being incorporated into her care plan; (5) 42 C.F.R. §483.25(m)(1)a medication error that resulted in a resident receiving a dosage that was three times more that it should have been; and (6) 42 C.F.R. §483.75(j)(1)failure of the staff for two months to obtain a complete follow-up on laboratory results for a patient with abnormally low hemoglobin and hemocrit levels. CMS has the authority to impose an enforcement remedy during the period of noncompliance and even one finding of noncompliance is sufficient to impose an enforcement remedy. Accordingly, the imposition of a CMP of $500 per day for the period of March 13, 2009 to April 18, 2009, was reasonable and summary judgment was granted in favor of CMS.

    Woodland Oaks HealthCare Facility v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. Doc. No. C-09-533, Dec. No. CR2147, June 9, 2010, ¶122,222.
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