Category Archives: Medicaid

2016 Is Ramping Up For Telemedicine Developments

Two months in and this year has already seen significant movement in regulatory action across the country to expand the ability to provide telemedicine services. Below please find some of the more significant items that have already gone into effect in 2016 or are under consideration, including commercial payor and Medicaid reimbursement coverage for telemedicine services, reciprocal licenses for out-of-state providers and the ability to prescribe without an in-person evaluation.

Parity Laws in New York and Connecticut

Effective January 1, 2016, New York passed a Chapter Amendment clarifying last year’s telemedicine commercial coverage statute.  Under the 2016 Chapter Amendment, private insurers are required to cover services via telemedicine if provided by hospitals, home care and hospice agencies, licensed physicians, physician assistants, dentists, nurses, midwives, podiatrists, optometrists, ophthalmic dispensers, psychologists, social workers, speech language pathologists and audiologists.  The parity law prohibits an insurer from excluding from coverage a service provided via telehealth if that service is otherwise covered in-person.

The law also provides for Medicaid reimbursement to providers for telehealth services, which is defined broadly to include real-time two-way electronic audio visual communications, asynchronous store and forward technology and remote patient monitoring. However, with the exception of remote patient monitoring, telehealth will not be reimbursed by Medicaid when the patient is located in their home.  The New York Department of Health is expected to release telemedicine regulations later this year.

Similarly, Connecticut also recently passed a new telemedicine parity law that went into effect January 1, 2016. Under Connecticut’s parity law, commercial insurers must provide coverage for services rendered via telemedicine under the same terms and conditions as would apply if that service was provided in-person.  Connecticut broadly defines telehealth to include services performed by a telehealth provider at a distant site as well as synchronous interactions, asynchronous store and forward transfers and remote patient monitoring.

Notably, Connecticut went even farther than New York in its telehealth parity law by expressly preventing a health plan from excluding a service from coverage solely because the service is provided through telehealth and not in-person. In this way, a health plan cannot exclude a telehealth service, such as remote patient monitoring, simply because it does not lend itself to an in-person professional service.

Florida’s Controlled Substance Teleprescription Law

Florida recently implemented a new rule to permit physicians to prescribe controlled substances via telemedicine exclusively for the treatment of psychiatric disorders, effective March 4, 2016. Specifically, the amended regulation provides that controlled substances may not be prescribed through the use of telemedicine, “except for the treatment of psychiatric disorders.”

However, after passing this new rule, the Florida Board of Medicine recognized that it is still restricted by the Federal Ryan Haight Online Pharmacy Consumer Protection Act of 2008.  The Ryan Haight Act narrowly permits the remote prescription of controlled substances for patients without an in-person evaluation so long as the patient is: (1) physically located in a hospital or clinic with a valid DEA registration; and (2) treated by a DEA registered practitioner in the usual course of professional practice and in accordance with state law.  Accordingly, while Florida is expanding its telemedicine laws, the prescription of controlled substances via telemedicine will only be broadly permissible if the American Telemedicine Association, or other organizations, are successful in amending the Ryan Haight Act.

Newly Introduced Telemedicine Bills in New Jersey and Ohio

Various other states are also in the process of trying to pass telemedicine bills. For example, New Jersey recently introduced a bill on February 8, 2016, that would require private payors to provide coverage for telemedicine to the same extent that the services would be covered if they were provided through an in-person consultation.

Additionally, another NJ telemedicine bill was introduced on January 12, 2016, which would provide a mechanism for physicians and other health care providers to obtain reciprocal licenses to practice in New Jersey if the providers are licensed by another state in their particular specialty.  The bill would also provide a parity law for telemedicine services to be reimbursed under NJ Medicaid.  As a similar bill was proposed in 2015 and has now carried over into the 2016 session, the likelihood of its passing is even greater.

An Ohio legislative bill is also headed to the Senate that would allow patients to obtain prescriptions (for non-controlled substances) without an in-person exam or visit from a health care provider.

For more information on telehealth and telemedicine legal and regulatory considerations, continued legislative developments or related issues, please feel free to contact Daniel Meier or any member of our health care practice group for a further discussion.

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.

CMS Releases the Civil Money Penalty Analytic Tool

The Centers for Medicare and Medicaid Services (“CMS”) recently released the civil money penalty (“CMP”) analytic tool used by CMS Regional Offices (“RO”) to review, approve or modify the proposed fines for nursing facilities (“NF”) and skilled nursing facilities (“SNF”)(collectively “NF”) (Link). Regulatory guidance CMS S&C 15-16-NH was released on December 19, 2014 and includes a description and the components of the analytic tool used by CMS since April, 2013 to determine the adequacy of the proposed CMPs for survey violations for NFs. The RO is required to review and either approve or modify the proposed CMPs issued by each State Agency based upon NF Medicare and Medicaid certification citations. Providers have often wondered about the actual calculation method being utilized by CMS and this analytic tool lays out the interpretation factors being used by CMS when applying the factors in the required by 42 CFR 488.404 for consideration when imposing a CMP on a facility as result of a single survey or for multiple surveys in a survey cycle.

CMPs and other enforcement remedies are required to be imposed based upon the scope and severity of the regulatory citations either for health deficiencies or life safety code deficiencies. CMS indicates that the analytic tool does not replace professional judgment but it to be used as a guideline in the CMP calculation process. The guidance states that the tool is “provide logic, structure, and defined factors for mandatory consideration in the determination of CMPs.” The analytic tool distinguishes between the use of Per Instance penalty use and a Per Day penalty use. A Per Instance penalty is a single defined fine amount between $1,000 and $10,000 for the survey cycle. The analytic tool indicates that a Per Day penalty is to be used unless the specific requirements are met for the Per Day penalty. A Per Instance penalty is often less costly to a provider than a Per Day penalty and is typically preferred by providers due to the certainty of the actual amount being imposed.

Per Instance penalties can only be applied if:
1. The facility is not a special focus facility;
2. Findings are no more than a G level (actual harm, isolated) or an F level (no actual harm, widespread with substandard care) and the facility has a good compliance history for the past 3 standard surveys; and
3. Findings of past noncompliance are not cited at a G level or an F level substandard care.

In addressing the discretion and professional judgment to be used by the RO personnel the guidance provides for a 35% increase or decrease in the CMP amount without CMS Central Office approval. If the RO proposes to increase or decrease the CMP amount by more than 35%, Central Office must provide approval of those changes. The stated purpose of the utilization of the analytic tool is to provide a more consistent application of enforcement remedies. The guidance also states that a Per Day CMP is to begin on the first day of noncompliance which may or may not be during the on-site survey. Also, the Per Day CMP is to start on the first day of identified noncompliance even if that date is prior to the survey. However, the CMP start date cannot be prior to the date of the last standard survey. This guidance reaffirms the imposition of CMPs that are applied retrospectively with a possibility that CMPs may be imposed as far back as 15 months. A retrospective CMP imposition can be in the hundreds of thousands of dollars for providers for an immediate jeopardy citation and can result in significant ramifications for providers.

A few of the factors that change the proposed amount of CMPs and are calculated with the tool include:
1. Scope and severity of the citations;
2. Number of citations;
3. Repeated citations;
4. Facility culpability; and
5. Facility financial condition.

The guidance provides some examples related to application of criteria for facility culpability based upon Departmental Appeals Board (“DAB”) cases. Those examples include repeated failure to follow or clarify doctor’s treatment orders; repeated failure to notify doctor of significant changes; repeated failure to supervise resident with a known history of elopement; staff failure to report physical, verbal or sexual abuse and egregious dignity issues.

Providers should carefully review this recently issued S&C guidance to have a clear understanding of how the CMPs are calculated by CMS and what factors can affect the increase or decrease of those CMPs. Understanding the factors related to fines and sanctions imposed by CMS and the amount of discretion that is allowed in the imposition of fines are important in the operation of NFs on an ongoing basis.

One Of The Country’s Largest Hospital Organizations to Pay $98.15 Million Settlement on False Claims Act Allegations

On Monday, August 4, 2014, The Department of Justice announced that Community Health Systems (“CHS”), the nation’s largest operator of acute care hospitals, agreed to pay $98.15 million to settle nine whistleblower lawsuits alleging that the company violated the False Claims Act between January 2005 and December 2010. The whistleblowers alleged that CHS knowingly billed Medicare, Medicaid, and TRICARE for medically unnecessary inpatient admissions rather than the lower outpatient or observation rates at 119 hospitals. Additionally, allegations were made that services were rendered to patients at one of CHS’s hospitals in Laredo, Texas by a physician who was offered a medical directorship in violation of the physician self-referral law, known as the Stark Law.

Under the settlement, CHS entered into a five-year Corporate Integrity Agreement requiring it to retain independent review organizations to review the accuracy of the claims for inpatient services under federal health care programs, and to engage in significant compliance efforts over the next five years.

The allegations against CHS are particularly notable in light of new regulations such as the two-midnight rule, which took effect October 1, 2013. The two-midnight rule requires that physicians deem a patient’s condition as serious enough to require at least two overnight stays in order to qualify for Medicare reimbursement under inpatient rates. Patients who aren’t formally admitted may remain under outpatient or observation status. Emergency and internal medicine physicians often struggle to get the right designation and status for the patient. The federal government has delayed enforcement of the rule until March 31, 2015 at which time hospitals may face financial penalties if auditors determine the hospital could have met the patient’s needs in an outpatient setting.

For more information on the CHS settlement, the two-midnight rule, the Stark Law, the Anti-Kickback Statute, or related fraud and abuse issues, please feel free to contact Daniel Meier or any member of our health care practice group for a further discussion.

You can find a more extensive discussion about the CHS settlement, the impact of observation status on patients and the two-midnight rule in the following Client Bulletin.

MyCare Ohio Transition Continues

Ohio’s transition to Medicaid managed care continues. The Ohio Department of Medicaid, the contracting agency with the 5 managed care companies now providing services to Ohio’s dual eligible population is [providing more information to Ohio providers during this transition period. Those dual eligible (eligible individuals for both Medicare and Medicaid) are being transitioned into these managed care private sector insurance programs. Some providers have been experiencing technical difficulties in submitting claims under the new managed care systems and providers are frustrated with slow payments. An updated released by the Ohio Department of Medicaid provides some statistics by region on the number of submitted claims and percentages of paid claims within 30 days of submission. The information provides a link to the Provider Payment Technical Assistance program to work with providers on a case-by-case basis to assist in resolution of issues and to resolve payment concerns. The Ohio Department of Medicaid issuance that includes the Provider Payment Technical Assistance link can be found at http://healthtransformation.ohio.gov/LinkClick.aspx?fileticket=V9a0WTwYchs%3d&tabid=105

OIG Proposes New Revisions to Civil Monetary Penalty Regulations

On May 12th, the Office of the Inspector General of the Department of Health and Human Services (OIG) issued a proposed rule which would amend the federal civil monetary penalty (CMP) regulations addressing new CMP authorities created under the Affordable Care Act.  The revised regulations would allow for civil penalties, assessments, and exclusion from Medicare for :

  • Failure to grant OIG timely access to records;
  • ordering or prescribing while excluded;
  • making false statements, omissions, or misrepresentations in an enrollment application;
  • failure to report and return an overpayment; and
  • making or using a false record or statement that is material to a false or fraudulent claim.

Comments on the proposed regulations can be submitted up until July 11, 2014.  The proposed rule and instructions for submitting comments can be viewed here—> Proposed CMP Regulatory Revisions

For more information on the revisions to the CMP regulations, Fraud and Abuse, Compliance, Medicare Program Integrity initiatives or related issues, please feel free to contact Ari Markenson or any member of our health care practice group for a further discussion.

OIG 2014 Work Plan – Skilled Nursing Facilities

Recently, the Department of Health and Human Services Office of the Inspector General (the “OIG”) released its work plan for 2014. The work plan provides stakeholders in the health care industry with a broad overview of the OIG’s activities in the coming year as they relate to its enforcement priorities and issues it will review and evaluate during the year. This article is one in a series of articles that will outline the OIG’s activities, as discussed in the 2014 work plan, for a specific industry sector – skilled nursing facilities.

For 2014, the OIG’s activities relating to skilled nursing facilities are focused on billing and payments and quality of care. Continue reading