As employers anxiously await the Supreme Court’s decision on health care reform (expected by late June), there are many things employers should be thinking about now. The Supreme Court will most likely make one of four decisions on health care reform. Below, we describe how each of those possible decisions may affect employers.
Constitutionality Not Ripe or Law Upheld as Constitutional
First, although unlikely, the Supreme Court may decide that a decision on the constitutionality of health care reform is not ripe for review. Second, the Supreme Court may decide to uphold the entire law as constitutional. Under either of these scenarios, employers need to be ready for… Read Full Article
Today’s post was contributed by Maureen Maly
On May 3, 2012, the Centers for Medicare & Medicaid Services (“CMS”) announced that manufacturers will not be required to collect data under the physician payment sunshine provisions of the Patient Protection and Affordable Care Act before January 1, 2013. The announcement closed by stating that CMS intends to publish a final rule “later this year.”
On December 19, 2011, CMS issued a proposed rule implementing the Physician Payments Sunshine Act (the “Act”) with the goal of providing transparency and accountability with respect to certain financial relationships between healthcare providers and the drug, device and group purchasing industries. During the 60 day comment period, CMS received… Read Full Article
Today’s post was contributed by Abhishek Dubé and Lee M. Tumminello
Last month, HHS released final regulations regarding the transitional reinsurance program that the Affordable Care Act requires each state to establish beginning in 2014. The purpose of the transitional reinsurance program is to help stabilize premiums in the individual market during the first three years that the state-based Exchanges are in effect (2014 – 2016).
The Affordable Care Act requires all health insurance issuers and third-party administrators on behalf of self-insured group health plans to make contributions to the program, which will provide reinsurance payments to health insurance issuers that cover high-risk individuals in the individual market. As set by statute, the total contributions to be collected by all states must equal $10 billion in 2014, $6 billion in 2015, and $4 billion in 2016. On a national basis, an additional $2 billion in 2014, $2 billion in 2015, and $1 billion in 2016 will be collected for the U.S. Treasury.
As clarified in the final regulations, HHS will set a national contribution rate each calendar year in an annual notice of benefit and payment parameters. The amount that each contributing entity must pay will be determined based on all covered enrollees of that entity. If a state does not establish a reinsurance program, HHS will collect contributions for entities in that state. In all cases, HHS will collect reinsurance contributions from self-insured plans and third-party administrators on their behalf. The first reinsurance contributions will be collected beginning January 15, 2014 on a quarterly basis. Plans that only cover HIPAA-excepted benefits are exempt from the reinsurance contributions.
For employer sponsors of self-insured plans, these rules could mean increased costs in two forms. First, while it appears that third-party administrators on behalf of self-insured group health plans will be responsible for paying the required contributions, the third-party administrators could pass these costs on to plan sponsors in the form of higher fees. Second, it appears that self-insured group health plans that are self-administered (i.e., do not have a third-party administrator) would be responsible for remitting the reinsurance contributions. The exact amount of these costs will not be known until the contribution levels are set by HHS.
Today’s post was contributed by Jessica Faith
Effective April 24th, 2012, Cahaba Safeguard Administrators, LLC, the Zone Program Integrity Contractor (ZPIC) for Zone 3, is fully operational. Zone 3 includes the following states: Minnesota, Indiana, Michigan, Illinois, Ohio, Wisconsin and Kentucky. Implementation of a ZPIC contractor in Zone 3 was delayed by a bid protest which was resolved in January. Since then, the benefit integrity work, formerly performed by Program Safeguard Contractors in this area, has gradually been transitioned to Cahaba.
A ZPIC contractor has jurisdiction to perform program integrity functions for Medicare Parts A, B, C, and D; Durable Medical Equipment, Prosthetics, and Orthotics Supplier (DMEPOS); Home Health and Hospice; and the Medicare-Medicaid Data Matching Program. Previously these functions had been performed by Program Safeguard Contractors. The ZPIC can review claims submitted pursuant to any of these programs in a jurisdiction meant to coincide with the jurisdiction of a Medicare Administrative Contractor (MAC).
There are several significant differences between record requests that a provider receives from a ZPIC contractor as opposed to a CERT contractor, RAC, MAC, FI, or Carrier.
Method of Investigation. Although the issues that a ZPIC will investigate may not seem that different from other contractors, the method of investigation is different and much more dangerous to a provider. For example, when investigating hospitals for potential errors associated with short stays, a RAC contractor, MAC or FI will simply send the hospital a request for records. In contrast, a ZPIC contractor may arrive unannounced at your hospital, ask to see copies of policies related to utilization management, and seek interviews with your Compliance Officer and Director of Utilization Management. The clear impression that the ZPIC leaves is that it is not merely looking for potential overpayments, but developing a potential fraud case. This makes it important for a provider to educate its staff on what to do when a ZPIC investigator comes knocking at your door. Your employees should know to treat an inquiry from a ZPIC in the same manner as they would treat a federal agent. These investigations deserve significant oversight by a provider’s compliance and legal departments.
Measure of Success. The ZPIC’s method of investigation is informed by the criteria by which they will be measured. Although ZPICs will be measured by the amount of money recovered, perhaps a more important measure of success will be in the number of cases investigated and referred to law enforcement. Last year, in the Senate Finance Committee’s annual Report to Congress, the Committee described the role of the ZPIC contractors as “conducting fraud investigations, referring suspected fraud to law enforcement, and performing data analysis to identify trends and billing patterns that indicate fraudulent billing.” It also cited an OIG report which criticized Program Safeguard Contractors (the predecessors of the ZPICs) for failing to adequately open new investigations or refer cases to law enforcement. This continued focus by Congress on the number of cases referred to law enforcement makes it clear that overpayments recovered will not be the only goal of the ZPIC contractor. Referrals to law enforcement will be a significant measure of the success of the program. Again, oversight by the provider’s legal and compliance departments is key.
No Rules! Well, OK, that may be a bit of an overstatement. But it is worthwhile to note that CMS carefully specified rules regulating the process to be followed by RACs. The lack of similar procedural safeguards for ZPICs stands in stark contrast. For example, once a RAC, MAC, FI or Carrier receives records, it has 60 days to make a decision on whether the claim should be denied. In contrast, there is no time period for issuing a decision by a ZPIC. It can take as long as it wants to issue its decision. This is particularly problematic given the ZPIC’s ability to do prepayment reviews. Providers in other jurisdictions have complained about being in Prepayment Purgatory, with thousands of dollars of claims being held for months at a time without a pulse from the ZPIC.
Likewise, the ZPIC is not subject to record request limits like a RAC contractor. This may not be a significant issue, since the ZPICs commonly use statistically valid samples and extrapolate to a universe of claims. Perhaps because of its unique status as an investigator of potential fraud, some of the rules applicable to other contractors just don’t apply to ZPICs. This makes it important to identify a specific contact within the ZPIC and have regular communications with that contact in hopes of establishing mutual expectations throughout the course of the investigation.
You’re an Outlier. Finally, it should be clear to providers who receive requests from ZPICs that you have been identified as an outlier. Frequently RAC contractors, as well as MACs and FIs, are investigating issues. If your company has submitted claims that implicate that issue, you will get a record request. The request doesn’t mean that you have a problem with that issue, only that the contractor has received authorization from CMS to investigate an issue and you submitted some claims that deserve additional review.
In contrast, a ZPIC contractor may have a laundry list of potentially problematic issues, but the ZPIC will focus on specific providers who have submitted an unusually high volume of the potentially problematic claims. Again, this means that your compliance department should immediately review any claims that have been requested by a ZPIC contractor and ensure that processes are in place to correctly bill for such claims. Frequently, a review of such claims under attorney-client privilege will assist in a full and frank discussion of the potential issues.
To conclude, providers should consider responding to an audit (investigation) by a ZPIC contractor as if the investigation were conducted by the FBI, OIG, DOJ, or some other law enforcement agency. The ZPIC could be developing a fraud case against your organization, and they should be taken extremely seriously.
Today’s post was contributed by Steve Lokensgard, Tom Schroeder, Thomas Beimers, and Erin Reilly Lewis.
CMS has released four new FAQs regarding the applicable reopening period and “look back” period for potential Stark violations disclosed through the voluntary Self-Referral Disclosure Protocol (SRDP). The new FAQs clarify that a disclosing party may limit both (i) its disclosure of the total amount of remuneration a physician received as a result of a potential violation, and (ii) its financial analysis of the total amount potentially due and owing as a result of a potential violation to the time frame established in 42 C.F.R. § 405.980(b). Specifically, with one key exception, § 405.980(b)(2) establishes a four-year reopening period for good cause. The FAQs also explain that the February 16, 2012 Proposed Rule relating to the 60-day repayment requirement, which purports to establish a 10-year look back period, does not, in its proposed form, extend the look back period applicable to analyses of SRDP disclosures.
Although the disclosure of remuneration and the financial analysis under the SRDP may be limited to the four-year period prior to the date of disclosure, one of the new FAQs makes clear that a “disclosing party must specify the [full] duration of any period of noncompliance,” even if the period of noncompliance exceeds the applicable reopening period in § 405.980(b).
The FAQs represent a significant reversal of CMS’ previous position, articulated at legal conferences and other forums held since the issuance of the SRDP in September of 2010, that disclosing parties should submit financial data beyond the previous four years—and potentially beyond the statute of limitations—if the period of non-compliance extends that far. CMS’ position in the FAQs represents a more pragmatic approach to this issue, and amounts to a tacit recognition that very few self-disclosures under the SRDP will involve a degree of culpability justifying reliance on longer limitation periods set forth in, for example, the civil False Claims Act (6 to 10 years, depending on discovery).
CMS might well have reasoned that it could grant this concession in the context of the SRDP without in fact limiting the government’s recovery potential in other contexts. Releases resolving SRDP submissions are limited to Stark liabilities, and no-doubt now will be limited in timeframe to the period covered by the submitting party’s financial analysis. Moreover, the Agency reserves the right to refer more egregious matters involving violations of the FCA, Anti-Kickback Act, CMP Statute, and other laws to OIG, DOJ, and/or state authorities for further investigation and/or prosecution. It can also simply reject a self-disclosure from acceptance into the SRDP if it feels that a four-year look back is inadequate under the circumstances. Finally, it should not be overlooked that while the four-year period in § 405.980(b)(2) is the most frequently cited aspect of the reopening regulations, the subsection that follows (§ 405.980(b)(3)) expressly places no limitation whatsoever on the reopening of payments “procured by fraud or similar fault.” That could serve as CMS’ safety valve. Notably, none of the new FAQs specify the four-year provision per se.
The new FAQs are available at https://questions.cms.gov/ under the topic “Fraud and Abuse,” subtopic “Physician Self Referral.”
Today’s post was contributed by Tom Schroeder and Eric Marshall.