Bill Authorizing Medical Practice Inspections Up for Consideration by Delaware’s General Assembly

The 146th General Assembly reconvened this week and one of the bills it may consider is SB51, which authorizes the Division of Professional Regulation to investigate complaints of unsafe or unsanitary conditions at any location where “medical or health-related treatment” is rendered, excluding hospitals, freestanding birthing centers, freestanding surgical centers or freestanding emergency centers. The bill also provides that a Delaware-licensed physician may be disciplined for maintaining an unsanitary or unsafe condition in his/her office. Complaints must be in writing, may not be anonymous, must be filed within 5 days of observing the complained-of condition, and can only be filed by a person over the age of 18 who has observed the condition and reported it to the staff at the location where the condition was observed. So while the proposed legislation does not give the Division free reign to conduct inspections of physicians’ offices, it authorizes discipline against Delaware physicians who operate their practices in an “unsafe” or “unsanitary” manner, leaving open to interpretation just what constitutes an “unsafe” or “unsanitary” condition.

Health Care Fraud: Newest Numbers and Enforcement Actions

The U.S. Justice Department recently announced that it recovered more than $3 billion in settlements and judgments in civil health care and war-related fraud cases in the last fiscal year. The vast majority of the $3 billion—$2.8 billion—was recovered under the whistleblower provisions of the False Claims Act (FCA). Additionally, of the $3 billion, $2.4 billion involved health care fraud, most of which was attributed to the Medicare and Medicaid programs. Since January 2009, the Department has recovered $8.7 billion ($6.6 billion attributable to federal health care dollars), which is the largest three year total in the Department’s history.

The record setting recoveries under the whistleblower provisions of the FCA paralleled a sharp increase in the number of whistleblower lawsuits filed, which, after staying in the 300s to low 400s range for last decade, hit an all-time high at 638 in the last fiscal year. The Patient Protection and Affordable Care (PPACA) has added additional incentives for whistleblowers to report fraud in this manner.

But the federal government has not lost focus on private health insurance fraud, and the goverment recently reached a plea agreement with a Texas doctor who pleaded guilty to defrauding private insurers. The government pursued the case under federal mail fraud and conspiracy laws, and the doctor was sentenced to seventy months and sixty months of incarceration, respectively, and ordered to pay $3,821,082in restitution.

This case serves as a reminder that even though the primary focus has been recovering federal health care dollars—which has been viewed by many as a great success—private health insurance fraud is not beyond the scrutiny of federal prosecutors.

Delaware Focused on Cutting Medicaid Costs

In these tough economic times, courts across the country have been addressing challenges to State action aimed at reducing Medicaid costs. In October, the US Supreme Court heard argument (but has not yet issued a decision) in Douglas v. Independent Living Center to answer the question of whether or not Medicaid recipients and providers are able to sue States that attempt to reduce reimbursement rates required by the Medicaid Act. The case arose when California, in an attempt to save money, reduced rates that it would pay doctors and hospitals participating in Medicaid. The federal requirement for Medicaid reimbursement rates is that payments must at least be high enough to entice healthcare providers to take Medicaid patients. More recently, Washington state doctors were victorious in a challenge to a state rule limiting Medicaid enrollees to three emergency room visits a year for conditions that the state labeled “non-emergent.” However, the judge’s order in that case was procedural in nature, and the Washington State Health Care Authority, the state’s Medicaid agency, is likely to initiate another rulemaking procedure in an attempt to reduce what the state deems unnecessary emergency room care for Medicaid enrollees by $70 million in two years.

State efforts to cut Medicaid costs are not new. While the federal government contributes half the cost of the program, Medicaid consumes 22% of the average state’s annual budget; this is more than states pay for education, transportation, and prisons. As we see downturns in the national economy, more individuals lose their jobs and become eligible for the program; and in times where the state sees less revenue from tax dollars, it is charged with paying more into their respective programs. These effects are far reaching and are impacting states all over the country. Reportedly, Massachusetts no longer covers restorative dental care and dentures and Washington no longer covers eyeglasses or hearing aids. Delaware is no different.

Currently, Medicaid covers almost 25% of Delaware’s population and some opine that our system is broken, with a $600 million bill this year alone and an expectation that more than 35,000 Delawareans will be newly eligible in fiscal year 2013. As reported by the Wilmington News Journal, the Delaware Commission on Medicaid Cost/Health Care Containment, a 22-member commission, recently met to vote on more than two dozen ideas meant to control the rising costs of the program. But after five months of debate, some are disappointed with how little was accomplished. To read the full article, visit http://www.delawareonline.com/article/20111215/BUSINESS13/112150326/Short-list-fixes-left-Medicaid.

Some of the Commission’s recommendations include:

• Taxing sugary drinks to raise money for Medicaid and discourage the consumption of such products
• Support for “medical homes” that enable better management of patient care
• Adopting a waiver plan for retired state employees
• Increasing the use of electronic prescriptions and medical records
• Adopting a reciprocity agreement with other states to attract more dentists to Delaware

Some of the ideas the Commission rejected include:

• Reducing reimbursement rates for lab fees
• Reducing reimbursement rates for non-urgent visits to the emergency room or limiting non-urgent visits to three per year
• Imposing standards on Medicaid recipients to reduce lifestyle choices such as smoking and setting standards for nutrition and exercise (Federal regulations forbid imposing higher costs for these reasons)

It is important for Delaware physicians to be on notice of legislation, rulemaking or any policy changes affecting Medicaid reimbursement. Additionally, in such cash-strapped times, it is more likely for the State to increase efforts to recover overpayments. Healthcare providers should be ready to respond to investigations and audits aimed at recovering Medicaid payments throughout the State. As more Delawareans become eligible for Medicaid, the State will continue to focus on how to cut costs and providers should be keenly aware of how such changes will affect their practice and patient care.

Medicare Stops Paying for Most Urine Drug Screens

Highmark Medicare Services has issued a Local Coverage Determination (“LCD”) applicable to services performed on or after November 11, 2011, that eliminates coverage for urine drug screens (“UDS”) used by physicians to monitor whether patients are adhering to their medication regimens. The LCD limits coverage of UDS to circumstances where patients present with a suspected drug overdose, with known substance abuse or dependence, or for chronic pain patients suspected of illicit drug use ONLY if there has been an acute change in the patient’s physical or mental status, which the LCD equates with unexplained coma, unexplained altered mental status, severe cardiovascular instability, unexplained metabolic or respiratory acidosis, or unexplained seizures. The LCD expressly provides that drug screening for compliance purposes, diversion, or in asymptomatic patients is not covered.

Many of the leading experts in pain management, as well as the Federal Drug Enforcement Administration, support the use of random UDS to detect drug diversion and thwart drug-seeking behavior. In fact, as recently as last year Michele M. Leonhart, the Administrator of the Drug Enforcement Administration, wrote that pain management specialists who fail to use random urine drug screens to detect misuse of prescription pain medication breach the standard of care in prescribing controlled.

Two factors have led to the broad agreement that urine drug screens are essential for weeding our patients who are misusing prescription pain medication. First, urine drug screens are effective in identifying what is known as “aberrant drug behavior,” which includes misusing illicit drugs and diverting prescription pain medication for sale. One relatively recent study identified a 45% rate of unexpected test results in a pain management practice, including 20% of patients who tested positive for illicit substances in their urine. Second, there are few, if any, reliable ways of predicting aberrant drug behavior. Authors on this subject agree that there is simply no way to obtain information from and about a patient that will meaningfully predict whether that patient will engage in aberrant drug behavior. So periodic urine drug screens act as a deterrent against such behavior and as a tool for identifying it.

Supporters of the LCD will argue that there is less risk of aberrant drug behavior among Medicare beneficiaries than in other segments of the population. Perhaps. But when you talk to pain management practitioners, what you hear is that abuse and misuse is rampant everywhere, even among those covered by Medicare. Many of the leading clinical experts in the field of pain management recommend random urine drug screens for all patients.

Another concern is how other health insurance carriers will respond to this determination. Carriers closely watch Medicare coverage determinations. Will other carriers implement similar coverage determinations?

For now, the focus will be on how to deal with Medicare beneficiaries. As a result of the LCD, Delaware physicians, particularly pain management physicians, who prescribe narcotics for the treatment of chronic pain and follow random UDS procedures to monitor compliance with medication regimens are now faced with a quandary with respect to their Medicare patients—forego random UDS or require those patients to pay for UDS themselves. The first option is hardly viable in our current environment.

Delaware physicians will need to advise their Medicare patients that random UDS are not covered services and, accordingly, the patients will be expected to pay for them. Given that much of the Medicare-covered population is of limited means, it seems that the recent LCD will create an interesting tension between patients and their doctors. Now that Medicare is refusing to pay for these tests, who will?

Governor Markell urges Delaware lawmakers to do more to address prescription drug abuse

The focus on prescribing narcotics and other controlled substances for the management of pain is nothing new, but Delaware has recently taken initiatives to bring that focus into perspective. In a post on October 14, I wrote about the recently proposed rule on the use of controlled substances in the treatment of pain. That rule establishes the Board of Medical Licensure and Discipline’s (“Board”) formal recognition of use of controlled substances in the treatment of pain. After a recent series of articles in the News Journal about the abuse of prescription pain killers in Delaware, pain management physicians should be alerted to all of the changes coming to state and participate in the processes to fight this epidemic.

In a November 10th article, the News Journal reported that. Governor Markell indicated that he would either propose specific legislation or ask the Board to pass a regulation. Once Delaware establishes its electronic prescription systems next year, Governor Markell pledges to work with the governors of the surrounding states to share data in Delaware’s new prescription monitoring program. Delaware is currently one of fifteen states without such a system already in place. The Governor also indicated that a public awareness campaign may strengthen the requirements of this new program.

Investigations into the practice of prescribing controlled substances are on the rise, and since January of 2010, the Board has suspended or reprimanded nine doctors for violations. In what has become a prescription drug abuse epidemic, such prescription habits will also draw attention from state and federal authorities fighting against health care fraud.

Developing new prescription monitoring systems will provide doctors who prescribe controlled substances with a valuable tool for identifying drug-seeking patients, which in the end should serve to reduce some of the abuse that has plagued Delaware and other states.

DMMA Issues Regulations Regarding Non-Payment for Provider Preventable Conditions

As required by the federal health care reform law passed in March 2010, Delaware’s Division of Medicaid and Medical Assistance issued final regulations on November 1, 2011, that provide, as of July 1, 2011, that DMMA will not reimburse hospitals for provider preventable conditions (PPCs), which include foreign objects retained after surgery, blood transfusions with incompatible blood, falls and trauma occurring in the hospital, and the like. A full list of PPCs can be found at http://www.dmap.state.de.us/downloads/bulletins/federal.prohibition.payment.provider.pdf. The payment bar does not apply to services related to pre-existing conditions, i.e., those “present on admission” (“POA”).

The final regulations also require Delaware hospitals that are Medicaid providers to report the occurrence of a PPC “through the appropriate claim(s) type submission process.” The regulation does not elaborate on the mechanics of reporting but DMMA has promised that more information on the reporting requirement will follow.

The OIG Issues its 2012 Work Plan

Each October marks the height of playoff baseball, the changing of the leaves, and the beginning of a new fiscal year for the Federal government. With the beginning of each new fiscal year, health care providers of all sizes and types are informed of the audit and enforcement plans of the Federal regulators charged with overseeing the federal health care programs. The Office of Inspector General (“OIG”) at the Department of Health and Human Services (“HHS”), the entity tasked with protecting HHS programs by detecting and preventing health care fraud and abuse, released its 2012 Work Plan this month, providing insight on the reviews and activities that the OIG will pursue during the next twelve months and beyond.

The Work Plan offers health care providers a glimpse into the future and an opportunity to see the issues that the OIG plans to focus its investigative resources on. Knowing what to expect in the coming year regarding enforcement and audits can be a useful tool in providers’ own internal compliance efforts. Providers may take a look at their own practices in these related areas in order to assess compliance with the applicable federal laws. Some of the key areas affecting Delaware health care providers are listed below, and the entire plan can be viewed at the OIG website. ( http://oig.hhs.gov/reports-and-publications/workplan/index.asp#current)

HOSPITALS

Medicare Inpatient and Outpatient Payments to Acute Care Hospitals
OIG will review Medicare payments to hospitals to determine compliance with selected billing requirements. OIG will utilize data mining techniques to select hospitals for focused reviews and will then recommend recovery of overpayments and identify those providers deemed high-risk, who routinely submit improper claims.

Acute-Care Hospital Inpatient Transfers to Inpatient Hospice Care
OIG will review Medicare claims for inpatient stays where the beneficiary was transferred to hospice care. The relationship (financial or common ownership) between the entities will be examined, as well as how Medicare treats reimbursement for similar transfers to other settings.

Medicare Outpatient Dental Claims
Medicare hospital outpatient payments for dental services will be reviewed to determine if payment was proper under Medicare requirements. Dental services are only covered under a few exceptions, but based on OIG audits, providers received significant overpayments.

Hospital Claims with High or Excessive Payments
OIG will review high payments to determine whether they were appropriate. Specifically, OIG’s work will include outpatient claims in which payments exceeded charges.

Inpatient Prospective Payment System: Hospital Payments for Nonphysician Outpatient Services
OIG will review the appropriateness of these payments for services that were provided to beneficiaries shortly before or during covered stays at acute care hospitals. Prior reviews have revealed a significant number of improper claims.

Medicare Inpatient and Outpatient Hospital Claims for the Replacement of Medical Devices
Medicare is not responsible for the full cost of a replaced medical device if the hospital receives a partial or full credit from the manufacturer. As such, OIG will review whether claims for the insertion of replacement devices utilized the proper modifier when a credit is received.

Observation Services During Outpatient Visits
Improper use of observation services may result in high cost sharing for beneficiaries, so OIG will review Medicare payments for observation services provided by outpatient departments.

Hospital Admissions With Conditions Coded Present on Admission
OIG will review Medicare claims to determine which facilities (e.g., SNF or rehabilitation facilities) most frequently transfer patients with certain diagnoses that were coded as being present on admission.

Accuracy of Present-on-Admission Indicators Submitted on Medicare Claims
Beginning in 2008, CMS required hospitals to submit present-on-admissions indicators with each diagnosis code on inpatient claims. The Affordable Care Act provides that hospitals with high rates of hospital-acquired conditions will receive reduced payments, and as such, accurate present-on-admission indicators are necessary for CMS to carry out this new law. OIG will review the accuracy of the present-on-admission indicators that were submitted by hospitals in 2008.

NURSING HOMES

Nursing Home Compliance Plans
OIG will begin to review nursing homes’ compliance plans after Section 6102 of the Affordable Care Act mandated compliance and ethics programs to detect and prevent criminal, civil, and administrative violations. CMS must issue regulatory requirements for the programs by 2012, but OIG will begin to review those programs already in place.


OTHER PROVIDERS

Physicians: Incident-To Services
OIG will review physician billing for “incident-to” services to assess whether payment had a higher error rate than the rate for non-incident-to services. OIG believes such services may be vulnerable to overutilization, and as such, the services will be subject to closer scrutiny.

Physicians: Place-of-Service Errors
OIG will review physicians’ coding on Medicare Part B claims for services performed in ambulatory surgical centers and hospital outpatient departments to determine whether they properly coded the places of service. Federal regulations provide for different levels of payments to physicians depending on where services are performed.

Evaluation and Management Services: Use of Modifiers During the Global Surgery Period
OIG will review the use of certain claims modifier codes during the global surgery period to determine whether the use was appropriate and in accordance with Medicare requirements.

Diagnostic Radiology: Excessive Payments
OIG will review payments for high-cost diagnostic radiology tests to determine whether they were medically necessary. Additionally, the review will target whether, and to what extent, the same diagnostic tests are ordered both by the primary care physician and specialists for the same treatment.

Medicare Payments for Part B Claims with G Modifiers
OIG will review payments from 2002 to 2010 for claims where certain modifier codes were used to indicate that Medicare denial was expected. The review will identify the extent to which Medicare paid those claims and the providers with atypically high billing related to the modifiers.