Delaware General Assembly Considers Expanding Immunity Connected to Mental Health Assessments

Pending in the Delaware Senate is a bill already passed unanimously in Delaware’s House of Representatives clarifying the law on immunity with regard to the process to detain or not detain a person for an involuntary mental health evaluation. House Bill #9 provides that immunity to civil damages and criminal penalties extends to peace officers, medical doctors, credentialed mental health screeners, and the facility in which the medical doctor or credentialed mental health screener practices, only for harm resulting from the mental health assessment, resulting clinical decision, and involuntary hold necessary until the person is presented to a designated psychiatric treatment facility, as required by the statute, and only if the peace officer, medical doctor, etc., did not intentionally inflict harm or engage in willful or wanton misconduct in connection with those activities. Once an individual is detained in a psychiatric facility for purposes of the statutorily required examination by a psychiatrist, neither the examining psychiatrist nor facility is immune from ordinary negligence claims. The proposed legislation is based on the recommendations of the HJR 17 Study Group created to review Delaware’s civil mental health laws. The text of the bill is available at http://legis.delaware.gov/LIS/LIS147.NSF/vwLegislation/HB+9?open.

American Hospital Association Strikes Back at the RACs

Many health care providers are familiar with the costly exercise of fighting a Recovery Audit Contractor’s (“RAC”) determination of an overpayment through the administrative appeal process. But where providers take on the expense, the statistics on appeal are largely favorable. For fiscal year 2011, 43.4% of RAC determinations were reversed in the providers’ favor. The problem is that of the 903,372 claims identified as overpayments by RACs, only 56,620 claims were appealed at any level. Of those 56,620 claims, the 24,458 claims overturned during the appeal process translate to $37.9 million, or $1,550 per case. The low appeal rate is likely due to frustration, costs of appeal, and other high-priority issues, such as patient care. For hospitals, the biggest fight has centered on the RACs’ intense focus on inpatient care. In the first quarter of 2012, the claims most frequently identified by RACs as overpaid related to the provision of service on an inpatient basis when, according to the RAC, only outpatient service was necessary, despite the fact that the services were largely conceded to be reasonable and medically necessary. Reports indicate that when hospitals pursue appeals of these RAC determinations, they are successful 75% of the time. But the biggest problem is that where the RAC correctly determines that an inpatient admission was not warranted, hospitals are not being paid under Part B for outpatient care. In other words, while the only problem cited by the RAC is the setting where services were provided, claims for the services are being denied in their entirety, and hospitals are receiving no reimbursement for the underlying reasonable and medically necessary services provided. This issue is now at the center of a lawsuit filed by the American Hospital Association (“AHA”) and several hospitals against the Secretary of Health and Human Services. The AHA argues that the Social Security Act requires CMS to reimburse hospitals for reasonable and medically necessary services, and that by allowing the RACs to claw back the entire payment for the inpatient services under Part A and then denying payment under Part B, CMS is running afoul of federal law. The AHA seeks an order declaring the practice to deny all payment invalid and an order that the hospitals be paid in full for the reasonable and medically necessary services that CMS concedes were provided to beneficiaries. The complaint can be viewed at the AHA’s website: www.aha.org.

Delaware Bar Association Health Law Section Seminar

Please plan to attend a very special CLE/CME Seminar, “Health Law 101: What Every Lawyer and Healthcare Provider Should Know,” on Friday, November 30th, 2012, at the Medical Society of Delaware’s Conference Center in Newark. During this all-day seminar leading Delaware health law practitioners will cover a range of health law topics, from recent HIPAA-related developments and federal fraud and abuse laws to state law topics such as prescription drug monitoring and medical malpractice litigation. You can view the full agenda on the attached registration form. A link to the form on the DSBA’s website is also below. The seminar is not only approved for 6 hours of CLE credit, including 1 hour of Ethics credit, it is also approved for AMA PRA Category 1 Credit.TM http://www.dsba.org/cle/pdfs/HealthLaw2012.pdf This promises to be an interesting and informative event!

OIG RELEASES 2013 WORK PLAN

Yesterday the OIG issued its Work Plan describing the activities the OIG plans to initiate or continue with respect to HHS programs and operations in fiscal year 2013. The Plan identifies areas of government focus for each type of healthcare provider, as well as the OIG’s planned activities related to its oversight of Medicare Part A and B contractors, Medicare Part C and D programs, state Medicaid plans, and public health and human services agencies within the U.S. Department of Health and Human Services. With respect to particular healthcare providers, the Plan identifies 11 new initiatives related to hospitals, 3 related to nursing homes, 2 related to home health agencies, 8 related to medical equipment suppliers, and 8 related to all other providers and suppliers. The new hospital initiatives include a review of Medicare payments made to hospitals for beneficiary discharges that should have been coded as transfers, a review of Medicare payments made to hospitals for beneficiary discharges that were coded as discharges to a swing bed in another hospital, and an analysis of costs incurred by Medicare related to inpatient hospital claims for canceled surgical procedures. For nursing homes, two of the new initiatives relate to evaluating whether states are properly performing oversight functions mandated by federal regulations, specifically whether State survey agencies verified correction plans for deficiencies identified during nursing home recertification surveys, and the extent to which CMS and the States oversee the accuracy and completeness of Minimum Data Set (MDS) data submitted by nursing facilities. The OIG plans to determine the extent to which home health agencies are complying with the statutory requirement that physicians who certify beneficiaries as eligible for Medicare home health services have face-to-face encounters with the beneficiaries. The OIG will also review which home health agencies are complying with State requirements for conducting criminal background checks of applicants and employees. With respect to medical equipment and supplies, the OIG plans to audit payments for lower limb prosthetics, power mobility devices and blood glucose test strips and lancets. As to all other providers, the OIG’s new initiatives include reviews of Medicare Part B claims for personally performed anesthesia services to determine whether they were supported in accordance with Medicare requirements, an examination of questionable billing practices for ophthalmological services during 2011, and a review of questionable billing for electrodiagnostic testing, which is used in the diagnosis and treatment of nerve or muscle damage and includes the needle electromyogram and the nerve conduction test. These efforts described in these new initiatives, as well as the others identified in the OIG Work Plan, are in addition to the OIG’s ongoing audits and analyses of numerous other provider-specific issues, all of which are outlined in the Work Plan, which is available at http://go.usa.gov/Y2Cx. The OIG is also planning a webcast on October 24, 2012, during which top OIG personnel will describe the OIG’s priorities for combating fraud, waste and abuse in federal health care programs for 2013. More information about the webcast is available at the above link.

CMS Proposes Raising Medicaid Payments to Primary Care Physicians

In a proposed rule announced on Wednesday, CMS seeks to provide states more than $11 billion in new funds to improve Medicaid primary care from 2013 through 2014. The proposal, if finalized, would implement requirements of the Patient Protection and Affordable Care Act designed to help primary care physicians and networks prepare for the increased enrollment following implementation of healthcare reform. Assuming the Affordable Care Act is not declared unconstitutional by the Supreme Court this summer, CMS will likely finalize the rule later in the year. The Affordable Care Act requires that Medicaid reimburse certain primary care specialties, including family medicine, general internal medicine, and pediatric medicine, at the levels of Medicare reimbursement for calendar years 2013 and 2014. This increase in payment is entirely funded by the federal government and States will not need to provide matching payments. Currently, the national average Medicaid payment rate is only two-thirds of what Medicare pays. In Delaware, the payment rate is 54% and below, according to data published by American Medical News. Some physicians are expressing concern about what will happen after 2014 to practices that accept more patients during the pay increase. Once the payment rates return to current numbers after 2014, will primary care practices suffer the consequences of taking in a larger patient population with lower paying insurance? The rule can be read here. (http://www.ofr.gov/OFRUpload/OFRData/2012-11421_PI.pdf)Comments are due June 11th.

Board of Medical Licensure and Discipline Proposes New Licensure Requirements

The United States Supreme Court’s review of the Affordable Care Act dominates the news and is on the minds of health care attorneys across the country. The constitutional fate of the Act will be decided when the Supreme Court releases its opinion in June, an event all health care providers will anticipate as the landscape of American health care awaits its fate.

Yet, there are still local developments to report that affect Delaware practitioners. In recent months the Delaware Board of Medical Licensure and Discipline has grappled with the degree to which a practitioner must demonstrate clinical competency in order to obtain a license, particularly when the applicant has been away from clinical practice for an extended period of time. The Board’s focus on this issue has been reflected in two recent written decisions.

So it was no surprise that earlier this month, the Board published notice of a proposed rule that amends “outdated” requirements for license renewal and for examination of practitioners out of clinical practice for three or more years seeking initial licensure in the State. Under the proposed rule, practitioners seeking initial licensure, but who have been out of clinical practice for three or more years, must demonstrate clinical competency. The proposed rule will require such practitioners to complete an approved “clinical and didactic” practice assessment program and demonstrate that the applicant has kept current with BMLD CME requirements.

The proposed rule indicates that a list of approved practice assessment programs will be posted on its website. Nothing has been posted yet and it will be interesting to see the list. From our experience, the availability of clinical and didactic practice assessment programs is somewhat limited, with the most prominent programs located in Colorado and California. We are also aware that a similar program is underway in Pennsylvania.

The proposed rule also seeks to make important procedural changes to the license renewal process. For any provider who fails to renew a license within one year after it expires, the renewal process will not be available. Instead, the practitioner will be required to seek licensure under the same conditions that govern applicants for new licensure and the requirements that govern reentry to practice.

Additionally, all applicants seeking renewal of a license after it has expired must certify that he or she has not practiced in Delaware while the license has expired.

A public hearing on the proposed rule will be held on April 3, 2012. More information on the hearing and the text of the proposed rule can be found at http://regulations.delaware.gov/register/march2012/proposed/15%20DE%20Reg%201293%2003-01-12.htm.

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