The FTC has extended the deadline for enforcement of the Red Flags Rule until December 31, 2010, with the hope that Congress will remedy some unintended consequences of the legislation establishing the Red Flags Rule. For more information and to read the FTC press release click here. Other guidance materials may be found on the MRSC and FTC websites and on previous blog postings.
Health Reform includes Changes in the Stark Self-Referral Act
March 26, 2010 By
Earlier this week the Congress passed the Patient Protection and Affordable Healthcare Act, otherwise known as Health Reform. Included in the Act were instructions to CMS to make changes to the regulations implementing the Stark Self-Referral Act (the “Stark Law”). These changes will have a direct effect on the financial relationships between physicians and DHS entities such as hospitals.
General Overview of the Stark Law
Unless an exception applies, the Stark Law, 42 U.S.C. § 1395nn, prohibits a physician from making a referral to an entity for the furnishing of designated health services (“DHS”) that would otherwise be covered by Medicare if the physician (or an immediate family member) has a financial relationship with the entity. Further, entities may not submit a claim or bill any payor for DHS furnished pursuant to a prohibited referral. State Medicaid programs may not receive federal funds for DHS rendered pursuant to referrals that would be prohibited if the services had been covered by Medicare.
The exceptions are organized into three categories: (i) exceptions for certain services (known as the general exceptions); (ii) exceptions for certain ownership and investment interests; and (iii) exceptions for certain compensation arrangements. The exceptions typically require contracts between the parties which set out, among other provisions, that any compensation paid between the parties does not take into account the volume or value of referrals or any other business generated between the parties, is based on fair market value, is set in advance, is in writing, and is for at least a one-year term.
New Changes
Section 6409 – Medicare Self-Referral Disclosure Protocol
This section requires that HHS implement a disclosure protocol for actual and potential Stark law violations. This protocol, termed the self-referral disclosure protocol (“SRDP”) must be developed within six months and the instructions must be posted on the CMS website. The SRDP instructions shall include the name of the specific person or office to whom the disclosures should be made and the implication of the SRDP on any corporate integrity agreements and corporate compliance agreements.
Importantly, HHS is authorized to reduce the amount due for any violations under the Stark Law. In evaluating whether to reduce the amounts owed, HHS may consider the following factors:
1) Nature and extent of the improper or illegal practice;
2) Timeliness of self-disclosure;
3) The cooperation in providing additional information; and
4) Such other factors as HHS deems appropriate.
HHS is also required to submit a report to Congress on the implementation of the SRDP which shall include the number of providers making disclosures, the amounts collected, the types of violations reported, and such other necessary information to evaluate the impact of the SRDP.
Section 6001 – Limitation on Medicare Exception to the Prohibition on Certain Physician Referrals for Hospitals
Section 6001 modifies the Stark Law exception that allows physicians to hold an ownership interest in hospitals. This detailed section limits the expansion of physician owned hospitals, increases disclosure requirements related to physician ownership and provider agreements (including the names of the physicians and the extent of the ownership interest) to patients, on the hospital website, hospital advertising, and in annual statements to HHS, and expands requirements regarding physician ownership in the hospitals.
Section 6003 – Disclosure Requirements for In-Office Ancillary Services Exception to the Prohibition on Physician Self-Referral for Certain Imaging Services
This section amends the in-office ancillary services exception by requiring a physician making a referral for MRI, CT or PET services (or other services designated by HHS) to inform the patient in writing, at the time of the referral, that these services may be obtained from a person or entity other than the referring physician, a physician within the group practice, or an individual directly supervised by that physician or a physician in the group practice. In addition, the physician must provide the patient with a list of providers who furnish these services in the area in which the patient resides. The effective date of the amendment if for services furnished on or after January 1, 2010 (unclear how this applies retroactively).
For more information about Stark or if you have questions please contact Don Black.
FTC Extends Enforcement Deadline for Red Flags Rule to June 1, 2010.
November 2, 2009 By
The FTC has extended the deadline for enforcement of the Red Flags Rule until June 1, 2010, at the request of Congress. This delay comes on the heels of a U.S. District Court ruling on October 30, 2009, which held that the FTC may not apply the Red Flags Rule to law firms. The Commission previously delayed enforcement of the Rule until November 1, 2009. The FTC’s Press Release may be found here. Other guidance materials may be found on the MRSC and FTC websites and on previous blog postings.
Critical Access Hospital Bed Limit Temporarily Waived for H1N1
November 1, 2009 By
This past week, President Obama and HHS Secretary Kathleen Sebelius officially declared a national state of emergency allowing Critical Access Hospitals (CAH) to exceed the daily limit of 25 occupied beds. This is not an indefinite waiver of the limit, and this exception does not apply where H1N1 patients are not a contributing factor to the bed capacity. The waiver is temporary and is only granted upon a submission from the CAH requesting the increase in bed limits.
The following information must be included with the request and sent to the regional CMS office:
- Name
- City and State
- Provider Number
- Hospital Main Contact Person and Contact Information – Phone number, etc
- Explanation/Reason for waiver request
- Number of beds over the limit and duration of beds occupied as a result of the reason for which you are filing the waiver
It is unclear how long CMS will allow this bed limit waiver. In addition, CMS will not issue the waiver prior to the point at which the CAH exceeds the bed count.
To read more about this waiver and other Section 1135 waivers please read the links below:
President Obama’s Declaration of a National Emergency
CMS Explanation of Section 1135 Waivers
Waiver issued by Secretary Sebelius
Further Explanation of Waiver from Flu.gov
HIPAA Breach Notification Rules Issued
August 20, 2009 By
On August 19th, HHS issued new rules requiring HIPAA covered entities to notify individuals when their health information is breached. The breach notification rules implement provisions of the HITECH Act, passed as part of the federal stimulus legislation in February. A full copy of the new rules is available here.
The breach notification requirements will become effective on September 23rd, 2009.
Significant changes to HIPAA include:
- Notice must be provided to individuals within 60 days from discovery of a breach.
- The notice must contain detailed elements specified in the rules.
- For breaches involving more than 500 individuals, the notice must notify “prominent media outlets”, as well as HHS, within 60 days.
- All breaches must be reported to HHS on an annual basis.
- Covered entities must change policies and procedures as necessary to comply with these new rules.
- Workforce members must be trained about the impact of the new data breach requirements.
Note that the policy development and training requirements apply to all covered entities.
In addition, the regulations contain updated guidance on what it will take to adequately secure (whether through encryption or otherwise) health information in order to minimize the impact of the notification rules.
Health care organizations need to move quickly to ensure compliance with these complex new rules in an extremely compressed time frame.
New Washington State Insurance Regulation Should Expedite Payment of Claims
August 11, 2009 By
Coordination of Benefits. Effective September 1, 2009 medical insurance plans will be subject to clearly defined time frame requirements for the processing of claims involving coordination of benefits. The goal of the amended regulation is to expedite the payment of both the primary and secondary claims. Amendments to WAC 284-51-215 require plans to cooperate when more than one plan covers an individual, and to determine which plan is primary within 30 days. The primary plan is then required to pay 95% of claims within 30 days of the determination it is the primary carrier, subject to extension if the plan must wait for needed information from the provider. The amendments also require the secondary plan to process claims within 30 days of receipt of the primary plan’s explanation of benefit information needed for the secondary plan to process the claim. If the secondary plan receives a claim without adequate information from the primary plan, it must notify the enrollee or primary plan as soon as possible, but no longer than 30 days. If a primary plan does not adjudicate a clean and complete claim within 60 days, the provider or enrollee may submit the claim to the secondary plan which must then pay the claim as the primary plan within 30 days. The new provisions do not apply when Medicare is the primary plan. These new provisions should provide both enrollees and providers with an important new tool to expedite the timely processing and payment of claims involving coordination of benefits. As new provider and facility agreements are negotiated with health plans in Washington, these amendments should be incorporated into the agreement language governing coordination and payment of benefits.
To see the revised rule click here.
