Category Archives: Regulatory Compliance

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.

Guidance Released for Health Care Governing Boards

On April 20, 2015, the Office of Inspector General (the “OIG”) of the U.S. Department of Health and Human Services, the Association of Healthcare Internal Auditors, the American Health Lawyers Association, and the Health Care Compliance Association published a first-of-its-kind guide entitled “Practical Guidance for Health Care Governing Boards on Compliance Oversight.”

The guide is intended to assist governing boards of health care organizations (“Boards”) to create and carry out compliance programs. The guide addresses issues relating to a Board’s oversight and review of compliance program functions, including: (1) the roles of, and relationships between, the organization’s audit, compliance, and legal functions; (2) the mechanism and process for issue-reporting within an organization; (3) the approach to identifying regulatory risks; and (4) methods of encouraging organization-wide accountability for achievement of compliance goals and objectives.

The guide encourages Boards to create benchmarks using publicly available resources, such as the Federal Sentencing Guidelines, the OIG’s voluntary compliance program guidance, and OIG Corporate Integrity Agreements.  Although there is no such thing as a “one size fits all” compliance program, these resources can be helpful in creating a program tailored to each organization’s needs.

While recognizing that not all organizations will possess the resources to support the structure in its entirety, the guide recommends creating corporate charters that address the following functions: (1) compliance; (2) legal; (3) internal audit; (4) human resources; and (5) quality improvement. Boards should continuously evaluate the effectiveness of these charters.

The guide also encourages Boards to ensure proper reporting mechanisms are in place within the organization. If managers or other individuals within the organization are not held responsible for reporting compliance concerns to the Board, the Board will not have a complete picture of the adequacy and effectiveness of the organization’s compliance atmosphere. Therefore, Boards should consider scheduling regular sessions to hear from the organization’s management about the organization’s utilization of compliance, legal, internal audit, and quality functions.

Identifying risk areas is an integral part of any organization’s compliance program. Boards can identify high risk areas from internal and external sources. The guide recommends tracking industry trends to identify risk areas, as new payment models can lead to new incentives and new compliance concerns.

Finally, the guide recommends encouraging accountability within an organization along with compliance. Many organizations have tied an employee’s performance assessment and other incentives to adherence to the organization’s compliance program to emphasize and encourage individual accountability.

The entire guide is available on the OIG’s website. For more information on health care compliance programs, please contact any member of Benesch’s health care practice group.

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.

New Ohio Sex Offender Requirements for Long Term Care Facilities

Nursing homes, residential care facilities and county homes (“Homes”) in Ohio will soon have additional requirements related to the admission of a registered sex offender. House Bill 483, the Mid-Biennium Budget Review bill was signed by Governor Kasich on June 16, 2014 with an effective date in September 15, 2014. Rules are required to be written by the Ohio Department of Health (“ODH”) in the future for further guidance. Requirements for the Homes include checking the Ohio sex offender registry before admission of a registered sex offender. Facilities can include questions about a registered sex offender status on their admission applications. The Homes must check the potential resident’s name in the required database to determine if the potential resident is an Ohio registered sex offender. If a registerd sex offender is admitted, a care plan must be devleoped to protect other residents and provide a safe environment free of abuse. Also, the Homes must notify residents and their sponsors of the sex offender’s admission and provide a description of the plan of care for safety. Sex offender registry link: http://www.icrimewatch.net/index.php?AgencyID=55149

The Halifax $85 Million Lesson: Compensation Arrangements Between Hospitals and Physicians Must Be Reviewed

The Department of Justice (“DOJ”) announced another multi-million dollar settlement of alleged False Claims Act violations on March 11, 2014. Specifically, Halifax Hospital Medical Center and Halifax Staffing, Inc. agreed to settle various issues with the DOJ for $85 million in order to resolve allegations that they violated the False Claims Act (“FCA”) by submitting claims to Medicare that violated the federal prohibition on physician self-referrals, 42 USC §1395nn (the “Stark Law”). United States ex rel. Baklid-Kunz v. Halifax Hospital Medical Center, et al., No. 09-cv-1002 (M.D. Fla.).

The Stark Law and the Bona Fide Employment Exception

The Stark Law prohibits a physician from referring a patient for certain designated health services (“DHS”) to an entity in which the physician, or an immediate family member, has a financial interest, such as an ownership or investment interest in the entity or a compensation arrangement with the entity. Certain exceptions for arrangements are permitted under Stark. However, because the Stark Law is a strict liability statute, the arrangement must fit completely within the criteria of the exception in order not to violate the statute. At issue in Halifax, as explained below, is the bona fide employment exception, Continue reading

Supplemental Special Advisory Bulletin Clarifies OIG Positions on Independent Charity Patient Assistance Programs

Introduction

The OIG has released a Supplemental Special Advisory Bulletin that “reiterates and amplifies” previous OIG Special Advisory Bulletin guidance from 2005. Pharmaceutical manufacturers and Patient Assistance Programs that provide independent, charitable support for patients’ drug expenses (PAPs) should be aware of this supplemental guidance, as the OIG notes that it may modify some previously-issued favorable advisory opinions. Specifically, in this bulletin the OIG expands on its previous guidance regarding disease funds, eligible recipients, and the conduct of donors.

Background

PAPs provide cost-sharing assistance for patients who cannot afford their prescription medications. Continue reading

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.