OIG Updates its Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs

June 3, 2013 By Leave a Comment

On May 8, 2013, the OIG issued an updated Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs (the “Updated Special Advisory Bulletin”).  The Updated Special Advisory Bulletin replaces and supersedes the OIG’s 1999 Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs.

The Updated Special Advisory Bulletin advises that the effect of an OIG exclusion is that the provider will receive no Federal Health care program payment for any items or services furnished by an excluded person or at the medical direction or on the prescription of an excluded person.  The prohibition on payment applies to all methods of Federal health care program payment.  It also extends to items or services beyond direct patient care.  Accordingly, OIG says that an excluded person is prohibited from serving in an executive or leadership role (i.e., as the CEO or CFO, general counsel, director of health information management or director of human resources) for a provider that furnishes items or services payable by Federal health care programs and is prohibited from providing other types of administrative and management services (i.e., health IT services and support, strategic planning, billing/accounting, staff training and human resources).

OIG urges providers to review each job category and contractual relationship to determine whether the item or service being provided is directly or indirectly, in whole or in part, payable by a Federal health care program.  If it is, OIG advises the provider to screen everyone that performs under that contract or category.  This would include, for example, screening nurses provided by staffing agencies or physician groups that contract with hospitals to provide ER coverage, and billing or coding contractors.  OIG warns that relying on the screening conducted by the contractor may not always be sufficient to protect the provider from CMP liability.

The Updated Special Advisory Bulletin warns that providers who arrange or contract with an excluded person face potential civil monetary penalties (“CMPs”) of up to $10,000 for each item or service furnished by the excluded person for which payment is sought, in addition to an assessment of up to three times the amount claimed and program exclusion.  OIG states that CMP liability would apply to the furnishing of all of the categories of items or services that are violations of an OIG exclusion, including direct patient care, indirect patient care, administrative and management services, and items or services furnished at the direction or on the prescription of an excluded person when the person furnishing the services either knows or should know of the exclusion.  Exclusion violations may also lead to criminal prosecutions or civil actions (i.e., claims under the False Claims Act).  OIG urges providers to use OIG’s self-disclosure protocol to self-disclose the employment of or contracting with an excluded person.

To best minimize risk of overpayment and CMP liability, OIG suggests that providers check the OIG’s List of Excluded Individuals and Entities (the “LEIE”) monthly.  OIG also recommends that providers use the LEIE as the primary source of information on exclusion.

To access the Updated Special Advisory Bulletin, click here.

If you have questions regarding exclusions from federal health care programs or provider contracting generally please contact Carrie Soli.

Filed Under: Compliance, Hospitals, Medicaid, Medicare, OIG

HIPAA Final Rules Eliminates Covered Entities’ Discretion to Comply with Individuals’ Requests for Restriction of PHI Disclosure in Certain Cases

March 21, 2013 By Leave a Comment

This article marks our first in a series of articles pertaining to the new HIPAA Final Rules implementing the HITECH Act.

Before the Final Rule, covered entities  were required under HIPAA to permit individuals to request that covered entities restrict the use or disclosure of protected health information (PHI) for treatment, payment and health care operations purposes.  Covered entities were not, however, required to agree to any such requests.  The Final Rule, which was released by HHS on January 17, 2013, eliminated covered entities’ discretion as to whether to comply with an individual’s request for restriction on disclosure of PHI to a health plan provided certain requirements are met.  Under the Final Rule, a covered entity must agree to an individual’s request to restrict disclosure of PHI if:  (a) the disclosure is for payment or health care operations and is not otherwise required by law, and (b) the PHI pertains solely to a health care item or service for which the individual or other person on behalf of the patient (other than a health plan) has paid the covered entity in full.

To ward off concern that providers would need to create separate medical records to segregate PHI subject to a restricted item or service, HHS commented that covered entities only need to employ some method to flag the restricted PHI or to make a notation in the record regarding the PHI that is restricted.

In cases where an individual requests a restriction with respect to only one of several health care items or services in a single patient encounter, HHS imposed upon providers the expectation that they counsel the patient on their ability to unbundle the items or services and the impact of doing so.  For example, even if an item or service is unbundled, providers should warn the patient that it is possible that the context may allow the health plan to determine the service performed and that unbundling the service may cost the patient more.

HHS fell short of requiring providers to notify downstream providers of the fact that an individual has requested a restriction to a health plan, however it encouraged providers to counsel patients that it is the patient’s obligation to request a restriction and to pay out of pocket with other providers in order for the restriction to apply to the disclosures by such providers.

In addition, HHS encourages covered entities to engage in an “open dialogue” with patients to ensure they are aware that any previously restricted PHI may be disclosed to the patient’s health plan for follow-up care unless the patient requests an additional restriction and pays out of pocket for the follow-up care.

Please contact Carrie Soli if you have any questions about HIPAA’s requirements regarding individuals’ requests for restrictions on disclosure of PHI.

Filed Under: HIPAA, HITECH

The Nuts and Bolts of Determining Shared Savings and Losses for ACOs.

November 28, 2011 By

Under the final rules released by CMS on Accountable Care Organizations (“ACOs”), CMS offers ACOs the opportunity to participate in one of two models — a shared savings only model during the duration of the ACO’s first agreement period (Track 1), or a two-sided model in which there is a sharing of both savings and losses (Track 2).

Track 1 – Shared Savings Only Model

Citing the importance of attracting broad participation in the ACO program, including from small, rural, safety net and small and medium-sized physician groups, CMS created a shared savings only model for the duration of the ACO’s first three-year agreement period.  Under Track 1, which CMS deems a “gentler on ramp” into the ACO world, the ACO shares in the savings without the financial risk of sharing in the losses.  After the initial agreement period, the ACO must move to the two-sided model under Track 2.  Unlike in the Proposed Rule, ACOs who experience net losses under Track 1 in their first agreement period may renew their participation under Track 2.

Track 2 – Shared Savings/Losses Model

Track 2 is known as a two-sided model in which the ACO shares in both the savings and losses, with the opportunity for higher reward in exchange for performance-based risk.  Track 2 is available for ACOs during their first agreement period, and is the only option available for ACOs who have exhausted their first agreement period under Track 1.

Determining Shared Savings

In order to determine shared savings, CMS must take the following steps for each ACO:

Step 1.  Establish the expenditure benchmark.  The expenditure benchmark is a three-year benchmark (one year for each year in the agreement period).

Determining Patient Population for Whom the Benchmark is Calculated

 CMS’ methodology for establishing an ACO’s expenditure benchmark is based on the Medicare FFS Parts A and B expenditures of beneficiaries who would have been assigned to the ACO in any of the three years prior to the start of an ACO’s agreement period using the ACO participants’ TINs identified at the start of the agreement period.  CMS indicated, however, that it favors a benchmarking methodology based on an ACO’s actual  assigned population and intends to revisit whether it should adopt such a methodology in future rulemaking.

CMS calculates the benchmark expenditures by categorizing beneficiaries in the following cost categories:  ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries and aged/non-dual eligible Medicare and Medicaid beneficiaries.  CMS also finalized its proposal to truncate an assigned beneficiary’s total annual Parts A and B FFS per capita expenditures at the 99th percentile of the national Medicare FFS expenditures for each benchmark performance year, which has the advantage of excluding outlier payments from the expenditure benchmark calculations.  CMS adopted its proposed policy of weighting benchmark expenditures for each benchmark year as follows:  BY1 = 10%, BY2 = 30% and BY3 = 60%.

Benchmark Adjustments

 CMS adopted the CMS-HHC risk adjustment model that has been used under the Medicare Advantage program for adjusting the ACO’s benchmark expenditures. CMS will make additional risk adjustments for performance years to take into account changes in assigned beneficiaries.  For newly assigned beneficiaries, CMS will annually update the ACO’s CMS-HHC risk scores.  For continuously assigned beneficiaries, if there is no decline in the ACO’s CMS-HHC risk scores, CMS will use demographic factors to adjust for severity and case mix.  However, if the continuously assigned population shows a decline in its CMS-HHC risk scores, CMS will lower the risk score for that population.  An ACO’s updated benchmark will be restated in the appropriate performance year based on the health status of the ACO’s assigned beneficiaries.  In addition, CMS will make adjustments for  ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries and aged/non-dual eligible Medicare and Medicaid beneficiaries.

Trending Factors

CMS finalized its proposal to trend forward the most recent three years of per-beneficiary expenditures using growth rates in per beneficiary expenditures for Medicare Parts A and B services in order to estimate the benchmark for each ACO.  In addition, CMS will make calculations for separate cost categories for ESRD, disabled, aged/dual eligible Medicare and Medicaid beneficiaries and aged/non-dual eligible Medicare and Medicaid beneficiaries.  For initial expenditure determinations in the performance period, CMS finalized its proposed rule to use the national growth rate in expenditures for Part A and B services for FFS beneficiaries.  During the rest of the agreement period, CMS will update the benchmark by a flat amount, using the projected absolute amount of growth in national per capita Medicare Part A and B expenditures.

Step 2.  Determine per capita Medicare expenditures in each performance year of the agreement period.

Step 3.  Determine the appropriate minimum savings rate (MSR).

 CMS stated that the purpose of the MSR is to account for normal variation in expenditures.

Track 1 MSR Sliding Scale – Under Track 1, CMS adopted a sliding MSR scale to account for normal variation in expenditures based on the number of Medicare fee for service beneficiaries assigned to the ACO.  For Track 1 the sliding scale varies from a high of 3.6% – 3.9% for 5,000-5,999 assigned beneficiaries, to a low of 2% for 60,000+ assigned beneficiaries.

Track 2 – Flat 2% MSR.  Under Track 2, CMS will apply a flat two percent MSR to all ACOs.

Step 4.  Determine the appropriate sharing rate for ACOs meeting or exceeding the MSR.

 For those ACOs that have realized savings by meeting or exceeding the MSR, the following shared savings rate percentages will apply:

Track 1 – The ACO may earn up to 50% of the shared savings.

Track 2 – The ACO may  earn up to 60% of the shared savings.

Both Track 1 and Track 2 ACOs will share on a first dollar savings once the ACO achieves savings in excess of the MSR.

Step 5.  Determine the required sharing cap.

 CMS adopted the following payment limits, which are the maximum amounts of shared savings that can be realized by the ACO in any performance year and are intended to avoid creating incentives for excessive reductions in utilization.

Track 1 – 10% of the ACO’s updated expenditure benchmark for the performance year.

Track 2 – 15% of the ACO’s updated expenditure benchmark for the performance year.

Determining Shared Losses

 Just as shared savings must be calculated for ACOs, shared losses for Track 2 ACOs must also be determined.  The methodology for determining shared losses under Track 2 will mirror the methodology for determining shared savings, including a formula for calculating shared losses based on the final sharing rate, use of a MLR to protect against losses resulting from random variation and a loss sharing limit to provide a ceiling on the amount of losses an ACO will be required to repay.  To be responsible for sharing losses with the Medicare program, an ACO’s average per capita Medicare expenditures for the performance year must exceed its updated benchmark costs for the year by at least two percent.  Once losses meet or exceed the MLR (which is calculated as one minus the final sharing rate), an ACO would be responsible for paying the percentage of excess expenditures, on a first dollar basis, up to the proposed annual limit (60%) on shared losses.

For more information regarding the shared savings model or ACO’s in general, please contact Carrie Soli.

Filed Under: Accountable Care Organizations, Health Reform, Medicare

DOH Policy Statement on PET/CT Certification Requirements

September 15, 2010 By

On August 13, 2010, the Washington State Department of Health (DOH) issued an interpretive/policy statement that certified nuclear medicine technologists who obtain Computed Tomography (CT) certification through the American Registry of Radiologic Technologists (ARRT) or diagnostic radiologic technologists who have obtained Positron Emission Tomography (PET) certification through the Nuclear Medicine Technology Certification Board (NMTCB) may perform fusion imaging PET/CT procedures without holding dual certification as a nuclear medicine technologist and as a diagnostic radiologic technologist.  The DOH determined that the previous requirement of having individuals with dual certification operating the PET/CT equipment or by assigning two individuals, one of whom was a nuclear medicine technologist and one of whom was a diagnostic/radiographer, is inefficient, cost prohibitive and creates a limitation to patient access to the technology. 

 To view the interpretative statement, click here.

Filed Under: Washington