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Health Care Attorneys | Mintz Levin Law Firm

GAO Report Analyzes Options for Medicare Card Technology

Posted in Health Care Reform, Payors & PBMs

Example of a Medicare CardHistorically, the Center for Medicare and Medicaid Services (“CMS“) issues all Medicare beneficiaries a paper card that includes the beneficiary’s name, Medicare number and eligibility status. Beneficiaries present the cards to providers who in turn use the cards to verify eligibility and to submit claims for reimbursement. The Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA“) contains two provisions related to the identification cards.

Originally recommended by the Government Accountability Office (“GAO“) in 2013, the first card-related provision in MACRA requires CMS to banish Social Security Numbers (“SSNs“) from the identification cards within four years after the date MACRA is enacted. The relevant provision of MACRA can be found here.

The second provision requires the Secretary of Health and Human Services (“HHS“) to consider using electronic Medicare beneficiary and provider cards if the Secretary determines that it is cost effective and technologically viable. In light of the GAO’s recent report entitled “Medicare — Potential Uses of Electronically Readable Cards for Beneficiaries and Providers“, it is unlikely that the Secretary will determine that a robust implementation of electronically readable cards is either cost effective or technologically viable. However, as discussed below, electronically readable Medicare cards could receive a more limited introduction as means of more efficiently conveying beneficiary identity and insurance information.

The report was commissioned by various members of congress, including  U.S. Senators Tom Carper (D-Del.), Ron Johnson (R-Wis.), Mark Kirk (R-Ill.), and Ron Wyden (D-Ore.), as well as by U.S. Representatives Sander Levin (D-Mich.), Kevin Brady (R-Texas), Peter Roskam (R-Ill.) and Earl Blumenauer (D-Ore.). In its report, the GAO:

  1. evaluates the different functions and features of electronically readable cards;
  2. examines the potential benefits and limitations associated with the use of electronically readable cards in Medicare;
  3. examines the steps CMS and Medicare providers would need to take to implement and use electronically readable cards; and
  4. describe the lessons learned from the implementation and use of electronically readable cards in other countries.

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New York Medicaid Redesign Program May Be Anticompetitive

Posted in Antitrust, Health Care Reform, Hospitals & Health Systems, Payors & PBMs, Physicians

In an April 22, 2015 letter to the New York State Department of Health, the Federal Trade Commission (FTC) cautioned that part of the state’s Medicaid reform program may sanction anticompetitive behavior. The FTC’s concern stems from the Certificate of Public Advantage (COPA) regulations, which offer federal antitrust immunity for certain collaborations among providers participating in the Delivery System Reform Incentive Payments (DSRIP) program.  Mintz Levin has prepared an advisory examining the FTC’s letter and its antitrust warnings, and what they mean for hospitals and providers looking to achieve greater efficiencies through collaborative activities.

Proposed GME Legislation Looks to Increase Residency Slots

Posted in Accreditation Council for Graduate Medical Education, ACGME, Health Care Reform, Hospitals & Health Systems, Pharma & Medical Devices

Last week, new bi-partisan legislation was introduced to increase the number of graduate medical education (GME) slots over the next five years at teaching hospitals and academic medical centers.  If passed, the Resident Physician Shortage Reduction Act of 2015 (S. 1148/H.R. 2124) will create 3,000 additional full time equivalent (FTE) residency slots each year from 2017 through 2021, for a total of 15,000 new residency slots.  Half of the 3,000 slots must be used for a “shortage specialty residency program,” as defined by the Health Resources and Services Administration (HRSA), until the National Health Care Workforce issues a new report on specialty shortages in 2018.

The purpose of the legislation is to guard against the precipitous shortfall of primary care physicians that at least one study is predicting will occur by 2025 – another says 2035 – if there is no increase in residency training slots.  The shortfall is said to be due primarily to changing demographics and the expansion of health care insurance as a result of federal health care reform. Continue Reading

FDA Finalizes Key Guidance Documents on Biosimilars

Posted in Food and Drug Administration (FDA), Health Care Reform, Payors & PBMs, Pharma & Medical Devices, Pharmacies

On the heels of its approval of the first biosimilar product in March, FDA has just released final versions of three key biosimilar guidance documents under the Biologics Price Competition and Innovation Act (BPCIA). The newly finalized documents update draft guidance documents published in February 2012. Together, the three final guidance documents present FDA’s approach for determining biosimilarity and the critical scientific and quality issues that sponsors will need to address in their so-called “351(k) applications” (named after the new section added to the Public Health Service Act by the BPCIA).

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Data Breach Nightmare Scenario: News Affiliate Reports Improper Disposal of Patient Information

Posted in Pharmacies, Privacy & Security/HIPAA/HITECH

A tip from a local Denver news outlet lead to a compliance review, investigation and ultimately a resolution agreement between the Department of Health and Human Services’ Office for Civil Rights (“OCR”) and Denver-based Cornell Prescription Pharmacy (“CPP”). On January 11, 2012, 9 News, the Denver NBC news affiliate, reported to OCR that certain patient information was being disposed of in a dumpster that was accessible to the public. The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) is the primary Federal regulation governing the security and privacy of certain personally identifiable health information or “PHI.”  Under HIPAA’s Privacy Rule, pharmacies such as CPP are required to implement appropriate administrative, technical and physical safeguards to protect the privacy of PHI, in any form. See 45 CFR 164.530(c). The disposal of paper records containing PHI in a publicly-accessible dumpster is, of course, unreasonable by any measure.

Just two days after receiving the report, OCR initiated a compliance review and investigation of CPP. OCR’s investigation found that CPP had failed to:

  1. reasonably safeguard their PHI, as required by the Privacy Rule;
  2. implement written policies and procedures to comply with the Privacy Rule;  and
  3. document and train its workforce on its Privacy Rule policies and procedures.

Under the terms of the resolution agreement (a copy of which can be found here), CPP is required to pay HHS $125,000 and agree to a corrective action plan (“CAP”). CPP will not be required to admit wrongdoing under the terms of the resolution agreement. Under the CAP, CPP is required to develop written policies and procedures to comply with HIPAA, provide those policies and procedures to HHS by May 22, 2015, and implement said procedures within 30 days of receiving HHS’ final approval.  CPP is also required to produce an implementation report as well as annual reports for the next two years.

“Regardless of size, organizations cannot abandon protected health information or dispose of it in dumpsters or other containers that are accessible by the public or other unauthorized persons,” said OCR Director Jocelyn Samuels. “Even in our increasingly electronic world, it is critical that policies and procedures be in place for secure disposal of patient information, whether that information is in electronic form or on paper.”

While not as easily transferable as its digital counterpart, the information in paper-based medical records remains extremely lucrative in the black market. It has been estimated that your medical data can fetch as much as 10 times the value of your credit card number. Understandably, health care providers and others covered by HIPAA will face increasing scrutiny given this lucrative black market as well as the recent high profile breaches at various health insurance companies across the United States. Notwithstanding a recent delay, OCR is planning to conduct a new round of audits to prevent the situations discussed above. “We are committed to implementing a robust audit program,” Samuels said. ” I can’t promise you the specific date, but it’s happening.” As OCR readies its Phase II audit program, regulated entities can be assured that NBC news and others, will be watching for evidence of non-compliance.

States Move to Impose Limits on Biosimilar Drug Substitution

Posted in Health Care Reform, Payors & PBMs, Pharma & Medical Devices, Pharmacies

In early April, Colorado joined multiple other states in passing a biosimilar substitution law that addresses the circumstances under which an FDA-approved interchangeable biosimilar product may be substituted for the prescribed biological product. The National Conference of State Legislatures (“NCSL”) reports that through the end of 2014, eight states have passed biosimilar substitution laws and a dozen or more states have bills pending in their current legislative sessions. Moreover, at least one State Board of Pharmacy (Idaho) has taken action on biosimilar substitution by proposing an amendment to the regulations governing the practice of pharmacy. Many of the state provisions focus on the type of notice required for biosimilar substitution, who must be notified of the substitution, and when that notice must be conveyed.

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MACRA’s Advancement of EHR Interoperability and Telehealth

Posted in Health Care Reform, Physicians, Privacy & Security/HIPAA/HITECH, Telemedicine

This is the fourth and final post in our series on the Medicare Access and CHIP Reauthorization Act (MACRA). Pub.L. No. 114-10. We’ve previously covered the repeal of the Sustainable Growth Rate (SGR) in our April 20th post, payment provisions and offsets in our April 21st post, and provisions relating to program integrity and fraud and abuse in our April 23rd post. In this post, we’ll be looking at other important provisions contained in MACRA, including the extension of CHIP funding through fiscal year 2017 and the advancement of interoperability in electronic health record (EHR) systems.

Section 106(a): Medicare Opt-Out and Private Contracts

Since 1998, Medicare has permitted physicians and certain other providers to enter into private contracts with Medicare beneficiaries under Part B and to bill for services without being limited by the upper payment limits established by Medicare. When providers make this “opt-out” decision, they also must agree to decline any reimbursement from Medicare for all Medicare beneficiaries for two years, except in cases of emergency or urgent care provided to a Medicare beneficiary with whom the provider does not have a private contract. MACRA allows private contracts between providers and Medicare beneficiaries to be automatically extended unless the provider furnishes the beneficiary with notice that the contract will not be extended 30 days prior to the expiration of the contract. Additionally, MACRA requires the Department of Health and Human Services (HHS) to make publicly available information regarding opt-out physicians. The information about opt-out physicians will include the number and specialties of opt-out physicians, as well as the proportion of opt-out providers billing for emergency or urgent care. HHS must post this information on its website and update it on an annual basis.

Section 106(b): EHR Interoperability

The Health Information Technology for Economic and Clinical Health Act of 2009 authorized Medicare and Medicaid to provide incentive payments to eligible hospitals and physicians who attest to “meaningfully using” certified EHR technology.  Although the ostensible purpose of the Meaningful Use Program was to encourage physicians and hospitals to adopt EHR technology, the program also was used to drive a variety of quality delivery changes for these providers. While the incentives have accomplished the limited goal of expanding the use of EHR, the benefits have been limited due to ongoing problems with interoperability among EHR systems. (“Interoperability” refers to the capability of EHR systems to be able to use the information exchanged among systems based on common standards.)  MACRA requires HHS to establish metrics by July 1, 2016, for measuring how hospitals and providers progress in moving toward the goal of widespread interoperability of EHR systems. HHS will have to submit a report to Congress if this goal has not been met by December 31, 2018.  In this report, HHS would be required to make recommendations for achieving this goal, such as adjusting payments and de-certifying certain EHR technology. MACRA also requires the Meaningful Use Program to require attestations by eligible hospitals and physicians that they have “not knowingly and willfully taken action (such as to disable functionality) to limit or restrict the compatibility or interoperability of the certified EHR technology.”  This is a standard in the Stark Law EHR exception and Anti-Kickback EHR safe harbor.  Finally, HHS is also required to submit a report to Congress (within one year from the date of enactment of MACRA) on methods to aid providers in comparing and selecting certified EHR technology. Continue Reading

MACRA: Program Integrity and Fraud and Abuse Provisions

Posted in Fraud & Abuse, Health Care Reform, Physicians, Uncategorized

On Thursday April 16th, President Obama signed into law the Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”). Pub.L. 114-10. In two previous posts, we discussed MACRA’s repeal of the Sustainable Growth Rate formula (the “SGR”) and physician payment reform, and the payment provisions and offsets established by MACRA. This third post will detail the Program integrity and fraud and abuse provisions of MACRA.

Section 101(e)(7): Promoting Alternative Payment Models – Study and Report on Fraud Related to Alternative Payment Models under the Medicare Program

Buried within Section 101, which is the provision repealing the SGR and authorizing various reforms to physician reimbursement, Subsection (e)(7) includes a required study and report on fraud related to alternative payment models under the Medicare Program. This study will be conducted by the Secretary of the Department of Health and Human Services (the “Secretary”) and examine the applicability of Federal fraud prevention laws to the items and services furnished to Medicare beneficiaries for which payment is made under an alternative payment model defined by MACRA. In addition, this study will identify aspects of those same alternative payment models that are vulnerable to fraudulent activity and consider the implications of waivers of federal fraud prevention laws in support of such alternative payment models.

Within two years of the enactment of MACRA, the Secretary is required to submit to Congress a report providing the results of this study, which will include recommended actions to reduce the identified vulnerabilities of the alternative payment models and, as appropriate, recommendations from the Inspector General of the Department of Health and Human Services (“HHS”) regarding possible changes in Federal fraud prevention laws to reduce those vulnerabilities.

Section 104: Empowering Beneficiary Choices Through Continued Access to Information on Physicians’ Services

Section 104 requires that beginning in 2015, the Secretary make publicly available on an annual basis, through a searchable database, information regarding physicians and, as appropriate, other eligible professionals (which are defined to include physicians, physical or occupational therapists, qualified speech-language pathologists, qualified audiologists, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, certified nurse-midwives, clinical social workers, clinical psychologists, and registered dietitians or nutrition professionals) on items and services furnished to Medicare beneficiaries.

Section 104 of MACRA requires the Secretary to provide at least the following types of information:

  1. The number of services furnished to beneficiaries of Medicare Part B by physicians or other eligible professionals (which may include information on the most frequent services furnished or groupings of services);
  2. Submitted charges and payments for services; and
  3. A unique identifier for the physician or eligible professional that is available to the public (e.g., NPI number).

Additional requirements of Section 104 include that the information made available under this Section must be searchable by at least:

  1. The specialty or type of physician or other eligible professional;
  2. Characteristics of the services furnished (e.g., volume or groupings of services); and
  3. The location of the physician or other eligible professional.

Beginning in 2016, the Secretary is required to integrate the information made available under this section on the Physician Compare website hosted by the Centers for Medicare & Medicaid Services (“CMS”).

This required publication of data will be similar to the 2012 Medicare Provider Utilization and Payment Data information made public by the Secretary in April 2014. As we discussed in a previous post dated April 10, 2014, HHS’s original and historic release of Medicare payment data last year was the result of multi-year litigation, which resulted in a federal judge overturning an injunction that had been in place since the late 1970s prohibiting HHS from disclosing information about Medicare payments to individual physicians.

Even recognizing the general merits of annual publication of this type of data, the information has the potential to cause confusion. For example, certain physicians, notably oncologists and retinal surgeons, dispense drugs through their practices. Because Medicare pays these physicians directly for these drugs, without a detailed look at the CPT codes in the published data, it appears at first glance that these physicians receive disproportionately large incomes from treating Medicare patients.

Another example of problems caused by this data is the publication of charges. Only those who follow reimbursement closely understand that charge data is almost meaningless. This is because very few patients pay providers based on charges, but rather payment is typically based on a fee schedule set by third party payors. As a result, providers set their charges based on a variety of measures. In some cases charges are very close to the payment rates, and in some cases they are set well above payment rates in order to recoup from a small number of charge-paying patients losses the provider incurs from private payor reimbursement. All this appears to have been irrelevant to Congress as it has now mandated annual publication of providers’ charge data. Continue Reading

5 Takeaways from the HHS OIG’s Guidance for Health Care Governing Boards

Posted in Accountable Care Organizations, Clinical Laboratories, Fraud & Abuse, Home Health & Hospice, Hospitals & Health Systems, Long-term Care/Skilled Nursing Facilities, Payors & PBMs, Pharma & Medical Devices, Pharmacies, Physicians

Yesterday the HHS OIG, in collaboration with the Association of Healthcare Internal Auditors, the American Health Lawyers Association (AHLA), and the Health Care Compliance Association, released a guidance document entitled Practical Guidance for Health Care Governing Boards on Compliance Oversight (the Guidance).  This publication follows two previous guidance documents published by the HHS OIG and AHLA in 2003 and 2007. Below we have summarized the top 5 takeaways from the latest guidance document. Continue Reading

Beyond SGR – MACRA Provides Additional Payment Provisions and Offsets

Posted in Health Care Reform, Hospitals & Health Systems, Payors & PBMs, Physicians, Reimbursement

This is the second post in our continuing series on the Medicare Access and CHIP Reauthorization Act (MACRA). Pub.L. No: 114-10. In addition to repealing the Sustainable Growth Rate (SGR), which was covered in our April 20th post, MACRA includes several other payment provisions and offsets totaling $39.5 billion in savings over ten years. This blog post highlights some of the key payment provisions and offsets in Title II and IV of MACRA:

Section 201: Extension of Work GPCI Floor

The Geographic Practice Cost Index (GPCI) adjusts Medicare payments for geographic variations in physicians’ costs of providing care. There are three GPCIs: Malpractice, Physician Work, and Practice Expense. MACRA would extend the 1.0 floor on the Physician Work GPCI until January 1, 2018. The 1.0 value represents the average across all geographic areas. By extending the 1.0 floor the GPCI extension would prevent cuts of up to 3 percent in areas with an index of less than 1.0. This would be in the localities where the labor cost would be lower than the national average or 1.0.

Section 204: Extension of Increased Inpatient Hospital Payment Adjustment for Certain Low-Volume Hospitals

MACRA also extends an inpatient hospital payment adjustment for low-volume hospitals through fiscal year 2017. A low-volume hospital is defined as a hospital with less than 1,600 Medicare discharges and more than 25 miles away from any nearby hospital. Section 1886(d)(12) of the Social Security Act requires adjustment for these hospitals, which is now extended through fiscal year 2017.

Section 205: Extension of the Medicare-Dependent Hospital (MDH) Program

Under the MDH program, Congress has provided a special payment rate to hospitals qualifying as a MDH hospital. To qualify, a hospital must be located in a rural area, have 100 beds or less, not be the “sole community hospital,” and have at least 60 percent of inpatient days or discharges covered by Medicare. They are paid on a blend of current the prospective payment system and cost. MACRA extends this favored reimbursement status through fiscal year 2017.

These provisions come as a relief to many rural hospitals and providers, which would have seen a decrease in their reimbursement if these provisions were not extended.

Section 221: Extension of Funding for Community Health Centers, the National Health Service Corps, and Teaching Hospitals

Funding for the Community Health Center (CHCs) program and the National Health Service Corps (NHSC) was set to expire at the end of September 2015. MACRA extends funding for these programs through fiscal year 2017, keeping the funding amounts for fiscal year 2016 and 2017 at the current fiscal year 2015 level. It also extends funding through fiscal year 2017 for the Teaching Health Center Graduate Medical Education Payment Program, which expanded residency training in community-based settings. It provides $60 million for direct and indirect graduate medical education (GME) payments to teaching health centers. Further, MACRA subjects the 2016 and 2017 funding to Public Law 113-235, which restricts the use of these funds for abortion services. Continue Reading