Tag Archives: ACA

Compliance: Reporting Overpayments and the 60-day Clock

On August 3, 2015, a federal judge in New York issued an important opinion regarding the False Claims Act and what it means to “identify” an overpayment for purposes of starting the 60-day clock in which Medicare and Medicaid overpayments must be returned. The decision underscores the importance of taking overpayment allegations seriously, and makes clear that deliberate ignorance is not a viable defense. Providers should take note of this decision, and update their compliance plans accordingly.

The case, Kane v. Healthfirst, et. al., arose out of a software glitch in a managed care company’s billing system. The glitch caused providers to submit additional bills to secondary payors, above and beyond what is permitted under the New York Medicaid program. Eventually, the managed care company identified the glitch, and alerted its contracted providers, including the hospital, of the problem. The hospital tasked an employee, Mr. Kane (who eventually became the relator), with investigating the issue. Mr. Kane identified approximately 900 claims that could be affected by the software glitch, and stated that “further analysis would be needed to confirm his findings.” Shortly thereafter, Mr. Kane was terminated.

Subsequently, the hospital reimbursed the State of New York for five improperly submitted claims, but did nothing with Mr. Kane’s analysis or the rest of claims for two years. The DOJ alleged that this delay violated the Affordable Care Act requirements that Medicare/Medicaid overpayments must be reported and returned within 60 days of the date “on which the overpayment was identified.” Failure to comply with such a requirement constitutes a violation of the False Claims Act.

The instant action centers upon what it means to “identify” an overpayment. The term “identify” was not defined by Congress in the Affordable Act. The DOJ argued that the hospital acted intentionally or recklessly and “fraudulently delay[ed] its repayments for up to two years after [the hospital] knew of the extent of the overpayments.” The hospital, on the other hand, argued that Kane’s email only provided notice of potential overpayments, and did not identify actual overpayments so as to trigger the 60-day clock.

Ultimately, the district court rejected the hospital’s position, and concluded that identification occurs when health care providers are “put on notice” of potential overpayments. For providers, this means that when you receive information which suggests that an overpayment(s) may exist, you need to take action. Further, this action should be documented in an organized manner specifying the actions being taken to track down the overpayment. While it is yet to be seen whether such efforts could serve as a defense, the decision of the district suggests that good intentions could be a viable defense.

For more information regarding the False Claims Act or related compliance issues, please contact Dan O’Brien or any member of our health care practice group.

What Makes A Five Star Hospital?

The Affordable Care Act includes many provisions aimed at improving the quality of care provided by different types of health care professionals and providers. Along these lines, the ACA expands the types of facilities and providers for which quality data will be publically available.  The Secretary of the United States Department of Health and Human Services was therefore directed to develop a Hospital Compare website (amongst other similar sites such as Physician Compare and Nursing Home Compare) that would allow Medicare enrollees to compare scientifically sound measures of physician quality and patient experience.

In accordance with these directives, on April 16, 2015 the Centers for Medicare and Medicaid Services (“CMS”) released the first ever Hospital Compare Star Ratings on its public information website.  The site is intended to make it easier for consumers to choose a hospital and understand the quality of care they deliver.  The data set from the website contains hospital-specific quality data for over 4,500 hospitals nationwide.  The ratings are based on the 11 publicly reported measures in the Hospital Consumer Assessment of Healthcare Providers and Systems (“HCAHPS”) survey, which assesses patient experiences.

The star ratings allow for an easy comparison using a five-star scale, with more stars indicating better quality care.  The quality data on Hospital Compare includes clinical process of care, patient outcomes and patient experience of care measures.  The national rankings are based on hospitals’ performance on the clinical process of care measures and a national survey of patients’ experience of care.  The hospitals’ ranks are combined into an overall, composite performance ranking, with process of care measures contributing 70% and patient experience of care measuring 30%.

However, just 251 out of 3,553 hospitals received the highest score in the rating system based on the experiences of patients who were admitted between July 2013 and June 2014.  Hospitals had an opportunity to preview the ratings in the fall and many have already expressed concern.  Hospitals question the methodology and whether the ratings reflect meaningful reflections of performance.  They also assert that the ratings are oversimplifying the hospital’s performance to a single score.

Notably, the patient experience star ratings are only based on the information on quality of care that is reported by patients.  The surveys are provided to a random sampling of patients within two days after discharge from a hospital and must be completed within 42 days.  Further, positive results may mean that the hospital is delivering good care.  However, these results are not taking into account other factors such as timely and efficient care and results or outcomes of care measures.  Moreover, the results places substantial reliance on patient review, which is just one measurement of hospital quality.  Lastly, if one does not review Hospital Compare extensively, information aside from the star ratings may easily be overlooked.  For example, the complete results for each HCAHPS measure can be found in the “Survey of Patients’ experiences” section.

On the other hand, supporters of Hospital Compare argue that while it’s not a perfect measurement system, it creates a healthy competition among hospitals.

For more information on Hospital Compare, other CMS initiatives or related issues, please feel free to contact Daniel Meier or any member of our health care practice group for a further discussion.