CMS Issues Proposed Rule on Reporting and Returning Overpayments

One of the provisions of the Affordable Care Act (“ACA”) that has gotten a great deal of attention is Section 6402(a), which requires a person who receives an overpayment to report and return the funds within 60 days after the overpayment is identified (or the date any corresponding cost report is due, if applicable.) The provision is significant because the failure to report and return overpayments creates False Claims Act liability, exposure to Civil Monetary Penalties, and potentially exclusion from participation in the federal programs.

On February 16, 2012, CMS released a proposed rule (77 Federal Register 9179) to implement the requirements of Section 6402(a), and if finalized in its current form it will guide providers on what is required when information indicating a potential overpayment comes to light. While the ACA already creates the obligation to report and return overpayments, the proposed rule imposes additional burdens in an attempt to clarify and define key terms of the statute.

The most significant burden in the proposed rule is a new ten-year look-back period, which would require providers to report and return any overpayment that is identified within ten years from when it was received. CMS stated in the preamble to the rule that the ten-year period was chosen to “further our interest in ensuring that overpayments are timely returned to the Medicare Trust Fund.”

The proposed rule defines an “overpayment” just as the ACA: any funds received or retained under the Medicare program to which the person, after applicable reconciliation, is not entitled. This includes, but is not limited to, payments for non-covered services. An overpayment will be considered “identified” if the provider has actual knowledge of the existence of the overpayment or acts in “reckless disregard” or “deliberate ignorance” of the overpayment. “Reckless disregard” and “deliberate indifference” essentially mean that a provider cannot ignore information brought to his/her attention that a potential overpayment exists. The provider is thus required to make a “reasonable inquiry” to confirm whether or not an overpayment exists.

The definition of “identified” and the lack of guidance regarding “reasonable inquiry” introduce significant uncertainty. What is a “reasonable inquiry”? The preamble to the proposed rule seems to state that this means self-audits, compliance checks, or other research and suggests that such inquiry must be taken with “all deliberate speed.” When considered alongside the proposed ten-year look-back period, it is unclear whether CMS intends to obligate providers who recognize a problem to consider whether this same problem has occurred over the course of the last ten years with regard to similar claims. Is that enough information to trigger the obligation to investigate with all deliberate speed? If it is, this rule places a significant burden on providers to engage in extensive retrospective audits and generates substantial difficulties where information regarding ten-year-old claims may not be readily available.

The proposed rule contains other provisions, such as an explanation of the impact of the Anti-Kickback Statute and how the sixty-day reporting period is tolled when a provider submits a self-disclosure to either the OIG (Self-Disclosure Protocol) or to CMS (Self-Referral Disclosure Protocol).

Again, this rule is not final. The health care industry has an opportunity to comment and potentially impact the final rule’s requirements. Comments are due on April 16, 2012.

The proposed rule can be found at: http://www.regulations.gov/#!documentDetail;D=CMS_FRDOC_0001-0905

New Regulation Imposes Strict Requirements on Medical Practitioners who Prescribe Controlled Substances for Treatment of Chronic Pain

On October 14th, we posted on the Delaware Health Law Blog that the Board of Medical Licensure and Discipline had proposed a rule regarding the use of controlled substances for the treatment of pain. A public hearing was held on November 1, 2011 without comment in opposition to the rule. On February 1st, Rule 32 was adopted as proposed and will go into effect on February 11, 2012. The Rule is designed to assist practitioners by providing them with the minimum requirements for meeting the necessary standard of care in prescribing controlled substances for the treatment of pain. In order to demonstrate that your practice has met the standard of care, you must be vigilant in documenting specific aspects of care and medical decision-making.

This new regulation is likely to change the way most medical practitioners treat chronic pain patients and it imposes significant documentation requirements.

What is Required

The Board will consider prescribing, ordering, dispensing or administering controlled substances for pain to be for a legitimate medical purpose if based on sound clinical judgment. The key to the standard of care is to document a diagnosis with unrelieved pain and the sound clinical judgment to prescribe controlled substances. Additional specific requirements are listed below.

Evaluation of Patient

A medical history and physical examination must be obtained, evaluated, and documented in the medical record. The following must be documented in the evaluation:

• One or more recognized medical indications for the use of a controlled substance
• Etiology, the nature, and intensity of pain
• Current and past treatments for pain
• Underlying or coexisting diseases or conditions
• The effect of the pain on physical and psychological function
• History of substance abuse

Treatment Plan

A written treatment plan is required, and must outline the goals and objectives that will be used to determine treatment success. The plan should note all diagnostic evaluations and any planned alternative treatments. Importantly, the plan must note whether other treatment modalities or rehabilitation programs are necessary.

Informed Consent

You must discuss the risks and benefits of treatment with controlled substances with the patient and document that discussion, including the patient’s informed consent.

Pain Treatment Agreement

You must use a written treatment agreement only if the patient is at “high risk” for medication abuse or has a history of substance abuse. The agreement must include required medication level screenings upon request, the number and frequency of prescription refills, the reasons drug therapy will be discontinued, and the requirement that the patient receive prescriptions from one physician and one pharmacy, where possible.

Periodic Review

The course of drug therapy must be periodically reviewed and documented, including any new information about the etiology of the pain and the patient’s state of health. A periodic review must include whether the treatment should be continued or modified, whether the patient’s pain has improved, and whether the patient has an increased level of function or improved quality of life. If not, it should be noted that the practice has considered the appropriateness of continued drug therapy or alternative modalities. A periodic review must also consider all objective evidence of improved or diminished function, including information from family members or other caretakers.

Consultation

During the course of treatment, the practitioner must refer the patient as necessary for additional evaluation and treatment in order to meet the goals and objectives of treatment. “The management of pain in patients with a history of substance abuse or with a co-morbid psychiatric disorder requires extra care, monitoring, documentation and may require consultation with or referral to an expert in the management of such patients.” Importantly, the rule states that “practitioners who regularly treat patients for chronic pain must educate themselves about the current standards of care applicable to those patients.”


Records must be maintained in an accessible manner. The record should also include documentation appropriate for each visit’s level of care, including interim history, vital signs, an assessment of progress, and the continued medication plan.

With the final rule becoming effective in ten days, it is important make sure that new documentation meet these standards. Notes used for initial and follow-up visits should be scrutinized to ensure that each of these new requirements is achieved in order to meet the these regulatory requirements.

Physicians Opting Out of Medicare?

Last week the OIG released its long-awaited report evaluating the extent to which doctors are opting out of Medicare and the reasons why they are opting out. Spoiler alert: The report was inconclusive. The OIG reported that CMS and its contractors “do not maintain sufficient data regarding physicians who opt out of Medicare. As a result, we are unable to conduct the proposed evaluation at this time.”

For those of us who are frequently asked by the OIG to review and analyze historical Medicare claims, the temptation to ask why that excuse does not work for us is hard to suppress. However, the OIG’s desire for accuracy and its unwillingness to provide a report based on conjecture is admirable. It is important to understand the factors that will impact access to care for our aging population. A less than thorough analysis would have been a mistake.

The OIG notes in its report that the number of opted-out physicians appears to have increased in each year from 2006 to 2010. The report goes on to predict that more physicians may opt out in the near future due to potential legislated decreases in Medicare reimbursements. A Medical Society of Delaware survey for 2012 validated the OIG’s intuition. More than 50% of the physicians polled said that they were considering changing their Medicare participation status due to the proposed 27.4% proposed reduction to the fee schedule.

This is an issue worth monitoring. A recent Texas study reported that 37% of its primary care practices limit the number of new Medicare patients in the practice and another 13% do not accept any Medicare patients. If the OIG is correct and the national trend is that more physicians are opting out of Medicare each year, we may be closer to a crisis of access of care for seniors than anyone realizes.

The OIG has pledged to conduct a full evaluation when CMS and its contractors are in a position to provide more accurate information.

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?