Author Archives: Kelly J. Skeat

CMS Proposed Stark Law Revisions

On July 15, 2015, the Centers for Medicare and Medicaid Services (“CMS”) published proposed revisions to the regulations implementing the physician self-referral law, or Stark Law.

The Stark Law is a key regulatory scheme in the healthcare industry that governs relationships between physicians and the providers to whom they refer certain designated health services. In order to receive Medicare reimbursement for these services, all financial relationships between providers and the referring physician must satisfy a statutory or regulatory exception to the Stark Law. These exceptions are complex and very technical, and providers who fail to fully comply with the Stark Law’s many requirements can be subjected to significant penalties and other sanctions.

Many of CMS’ proposed revisions appear designed to reduce the burden of some of these technical requirements. In addition, CMS is proposing several new exceptions. If enacted, these will be some of the most significant changes to the Stark Law in years.

Highlights of the proposed revisions include the following:

  • Contractual requirements. Many of the Stark Law exceptions require the relationship between the parties to be “set out in writing” or be pursuant to a “written agreement.” CMS is proposing to revise all exceptions to contain the same language, using the phrase “arrangement.” CMS has further clarified that the “arrangement” does not have to be a formal, written contract, and the exceptions can potentially be satisfied by multiple documents evidencing the course of conduct between the parties.
  • Recruitment of Nonphysician Practitioners (NPPs).   CMS is proposing a new exception that would allow hospitals and other providers to provide recruitment support for nurse practitioners and other NPPs. Previously, this support had only been allowed for physicians.
  • Timeshare Arrangements. CMS is proposing a new exception that would allow providers to enter into timeshare arrangements with physicians for the use of office space, equipment, personnel, supply and other services.
  • Standardized language. CMS is proposing to standardize the use of certain phrases throughout the regulations. As described above, various references to “contracts” or “writings” will now be uniformly replaced with the term “arrangement.” In addition, all references to the volume or value of referrals between parties will use the phrase “takes into account.”
  • Holdovers. Under the proposed regulations, parties may continue to provide services under leases and personal service agreements that have technically expired for an indefinite period without violating the Stark Law. Previously, providers could only do so for six months.
  • Signature Requirements. Under the proposed regulations, contracts could be signed up to 90 days after services started and be considered compliant with the Stark Law. Previously, the period was only 30 days in most circumstances.
  • Term Requirements. Many of the exceptions to the Stark Law require the parties to have an agreement for at least one year. CMS is clarifying that the contract or agreement between the parties does not have to have an explicit one-year term, so long as the relationship does in fact last one year.  CMS is continuing the requirement that if an agreement is terminated prior to the one year term, the parties cannot enter into a similar agreement until that one-year period is up.

Providers who may be impacted by these proposed changes are encouraged to submit comments to CMS. Comments may be submitted electronically here and should be received by September 8, 2015.

Benesch is preparing an in-depth client alert analyzing the potential impact of these regulations. If you have questions regarding the scope and impact of these proposed regulations in the mean time, please contact any member of the Benesch Health Law team.

HHS Revises, Delays Medicare Enrollment Requirements for Part D Prescriptions

The Affordable Care Act authorized the Department of Health and Human Services (HHS) to require a physician, dentist or other healthcare provider to be enrolled in the Medicare program before they can issue a prescription covered by Medicare Part D.

Regulations implementing this requirement were first issued by HHS in 2014 and scheduled to go into effect June 1, 2015, with an enforcement delay until December 1, 2015.  Under the regulations, HHS required all providers to either formally enroll in, or officially opt out of, the Medicare program in order to issue a covered prescription to a Medicare Part D beneficiary.

These regulations will have the greatest impact on healthcare providers, such as dentists, whose services are generally not covered under Medicare but who may still issue prescriptions to Medicare beneficiaries.  These providers have historically neither formally enrolled in nor opted out of the Medicare program, because they never provided services which were eligible for Medicare reimbursement.

The provider community objected that these regulations would create an undue burden on providers who had never been subject to Medicare enrollment requirements and would limit beneficiaries’ access to needed pharmaceuticals. For example, a prescription for a painkiller or antibiotic issued to a patient by a dentist would no longer be covered if the dentist had not met these new enrollment requirements.  The patient would have to pay for the full cost of the drug and, if they could not afford to so, might not receive needed pharmaceutical care.

In response, HHS released revised regulations on May 6, 2015.  These revisions include a delayed effective date of January 1, 2016.  In addition, Medicare Part D plans must now provide provisional coverage of the a drug prescribed by a provider who does not meet the enrollment/opt out requirements.  The provider will then have up to 3 months to either enroll or formally opt out of Medicare, allowing the prescription to be covered back to the original date.

Providers who have not yet enrolled in or opted out of Medicare have four options to consider:

  1. Take no action.  The provider can still issue prescriptions – but Medicare Part D beneficiaries will be required to pay the full cost of the prescription or find an alternate provider.
  2. Enroll as a Medicare provider.  Dentists and other healthcare professionals are eligible for Medicare enrollment, even if they never provide Medicare-covered services.
  3. Enroll in Medicare as an ordering/referring provider (ORP).  This is a limited enrollment category.  An ORP is allowed to order Medicare-reimbursable services, including prescriptions, but is not eligible for Medicare reimbursement for any services they provide directly.
  4. Opt out of Medicare.  Providers can formally opt out of Medicare by filing an affidavit with the appropriate Medicare contractor.

Each option has pros and cons that should be weighed carefully before a decision is made.  If you have any questions regarding Medicare provider enrollment or opting out of the Medicare program, please contact the Benesch Health Care group.

Supreme Court Blocks Provider Challenges to Medicaid Program

On March 31, 2015, the Supreme Court issued the first of several expected decisions that will impact the healthcare industry this year, ruling that Medicaid providers have no constitutional or statutory right to challenge a state’s Medicaid reimbursement rates. In Armstrong v. Exceptional Child Center, Inc., a group of Idaho Medicaid providers had challenged the states’ reimbursement rates as violating the federal laws that govern the program, commonly known as the Medicaid Act.

Under the Medicaid Act, both the federal government and the individual states fund and administer the Medicaid program. Each state establishes the rates and other parameters within its Medicaid program, subject to overall federal approval. Each state must submit a plan outlining its Medicaid program to the Department of Health and Human Services (HHS). The Plan, among other things, is supposed to meet the Medicaid Act’s requirements that payments are sufficient to enlist enough providers so that covered care and services are available to Medicaid beneficiaries.

A group of Idaho Medicaid providers challenged Idaho’s Medicaid rates as violating this provision of the Medicaid Act. The Idaho Department of Health and Welfare had proposed rate increases which had been approved by HHS as part of the state’s overall Medicaid plan. However, the increases were never funded by the Idaho state legislature and thus never implemented. The providers filed a lawsuit seeking to impose higher Medicaid reimbursement rates on the grounds that Idaho had failed to follow its approved plan and had set reimbursement rates so low that providers were unwilling to enroll in the Medicaid program, denying Medicaid beneficiaries access to effective care.

Two lower courts had ruled in favor of the providers. However, the Supreme Court ruled that only HHS is entitled to enforce the requirements of the Medicaid Act. It is important to note that the case was purely procedural. While the Supreme Court held that Medicaid providers did not have a constitutional or statutory right to challenge a state’s Medicaid reimbursement rates, it did not rule on whether or not Idaho’s Medicaid reimbursement actually complies with the Medicaid Act requirements.

The increasing downward pressure on Medicaid reimbursement shows no signs of stopping, even as the Affordable Care Act expands Medicaid enrollment in many states. This case is a reminder that providers seeking to increase Medicaid reimbursement will need to also focus on obtaining federal and state legislative, not just judicial, solutions.

HRSA Announces Merger of NPDB and HIPDB

The Health Resources and Services Administration (HRSA) has announced that the Healthcare Integrity and Protection Data Bank (HIPDB) and the National Practitioner Data Bank (NPDB) will merge on May 6, 2013.  On that date, the HIPDB will close down, and all future reporting must be done through the NPDB.

While the databases are merging, there has been no change in the reporting requirements.  Any user who was previously required to report information to the HIPDB must now do so through the NPDB. All information currently in the HIPDB will now be available through the NPDB. Continue reading

OIG Issues Report Critical of SNF Care and Discharge Planning

On February 27, 2013, the Office of the Inspector General of the Department of Health and Human Services (OIG) released the results of a study of care and discharge planning by Skilled Nursing Facilities (SNFs).  The report found that over one-third of patient stays in 2009 failed to meet Medicare requirements in these areas.

SNFs are required to develop and provide services in accordance with a plan of care for each Medicare patient.  This must be a customized plan describing how the SNF will meet each patient’s medical, nursing and psychosocial needs, including measurable objectives and time tables for care.  However, the OIG survey found that SNFs either did not develop an adequate care plan or did not provide care in accordance with the plan 37% of the time.  Continue reading

New Proposed Rule Allows VA to Enter into Provider Agreements Exempt from FAR Requirements

On February 13, 2013, the Department of Veteran Affairs issued a proposed rule authorizing VA centers to enter into agreements for extended care services under existing Medicare and Medicaid provider agreements, thus exempting such providers from onerous federal contracting requirements. Extended care services include geriatric evaluation, nursing home care, domiciliary services, adult day health care, non-institutional palliative care, non-institutional hospice care, certain home health care services and respite care. Continue reading