A series of recoupment letters from the New York State Medicaid Fraud Control Unit (MFCU) to healthcare providers who have management or billing company arrangements based on a percentage of collections has prompted the Medical Society of the State of New York (MSSNY) to warn its members that such arrangements are fraudulent under Medicaid law.  The warning, posted on its blog on February 10, 2017, also urged members to review their billing arrangements to make sure the compensation is based either on time or a fixed, flat fee.

In a redacted MFCU recoupment letter linked to the post, MFCU states that as a result of an audit and investigation, it has determined that the percentage based contract violates state and federal Medicaid regulations, including Section 360.7.5(c), which permits Medicaid providers to contract with billing agents if the compensation paid to the agent is “reasonably related to the cost of the services” and “unrelated, directly or indirectly, to the dollar amounts billed and collected.”  The audit period was five years, and MFCU sought to collect the overpayment amount plus an additional nine percent (9%) interest. Continue Reading New York Medical Society Warns Providers to Avoid Percentage-Based Fees

The Massachusetts Department of Public Health (DPH) has promulgated final Hospital Licensure Regulations.  Approved by unanimous vote of the Massachusetts Public Health Council (PHC) on March 8, 2017, DPH anticipates that the Hospital Licensure Regulations (105 CMR 130.000, et seq.) will be published in the Massachusetts Register in April, 2017.  The regulations will become effective as of the date of such publication.

As noted in our September 26, 2016 Blog Post, the amendments are part of DPH’s overall regulatory review process needed to comply with Governor Baker’s Executive Order 562, which directed all executive branch state agencies to review and, where possible, streamline, simplify and improve regulations.  At Wednesday’s PHC meeting, Commissioner Monica Bharel, M.D., MPH introduced the presentation of the final regulation by senior DPH staff, indicating that the regulation is part of DPH’s public health informed view of system transformation.  In its materials accompanying the presentation of the regulations, DPH noted that the regulation is intended to ensure a high quality of care, industry standardization, and strong consumer protection for persons receiving hospital care.

In response to comments received in response to the proposed revisions, DPH made a number of further revisions to clarify definitions and licensure requirements, streamline administrative and staffing requirements, and remove duplicative and unnecessary reporting requirements (aligning, when possible, reporting requirements of other state agencies).  A summary of comments received, and DPH’s responses to such comments, is contained in the Information Briefing provided to Dr. Bharel and the PHC. Continue Reading Massachusetts Department of Public Health – Final Hospital Licensure Regulations

Earlier this week, the Office of Inspector General for the Department of Health and Human Services (“OIG”) posted its fiscal year (“FY”) 2016 data about Medicaid Fraud Control Units (“MFCUs”) across the country.

Federal law requires each state to operate a MFCU separate and distinct from the state Medicaid Agency. MFCUs are charged with investigating and prosecuting fraud committed by Medicaid providers and in the state’s administration of the Medicaid Program, as well as patient abuse/neglect that occurs in a Medicaid-funded facility or at the hands of Medicaid providers.  MFCUs currently operate in 49 states and the District of Columbia (North Dakota presently has a waiver but proposals to create a MFCU have been introduced in the state legislature).  They are typically part of a state’s Attorney General’s office and are required to employ investigators, attorneys and auditors.  The OIG is responsible for overseeing MFCUs.  It annually recertifies MFCUs, assesses their performance and compliance with Federal requirements, and administers a Federal grant award that funds a portion of each MFCU’s operational costs. Continue Reading OIG Releases FY 2016 Statistical Data About Medicaid Fraud Control Units

money_388130419Currently, state Medicaid programs have flexibility in developing payment policies, including utilizing supplemental payments and non-federal supplemental payment mechanisms. Supplemental payments pay providers above what they receive for an individual service through Medicaid provider rates.  Supplemental payments include disproportionate share hospital (DSH) and upper payment limit (UPL) payments and are a critical funding source for many safety net providers. States can fund the non-federal share of these payments through intergovernmental transfers, provider taxes, and certified public expenditures.

However, there is limited transparency and data available on supplemental payments. As a result, states can use these funding structures to increase their total federal Medicaid match. The total percentage of federal funding for each state’s Medicaid program is often referred to as the effective Federal Medical Assistance Percentage (FMAP). However, due to data limitations on supplemental payments, we do not know what any state’s effective FMAP actually is.

The American Health Care Act is the House Republican bill to repeal and replace the Affordable Care Act. Its details became available March 6th. This bill changes the structure of Medicaid supplemental payments, with the exception of DSH payments. States’ reaction to the bill will tell us more about Medicaid supplemental payments than we’ve ever known, and whether the financing system in the proposed bill will provide equivalent federal funding. Continue Reading Medicaid Supplemental Payments under The American Health Care Act

Medicaid expansion in the Affordable Care Act (ACA) required coverage of individuals with incomes from 0% of the federal poverty level (FPL) through 133% of the FPL.  The requirement to cover this group was overturned in NFIB v. Sebelius.  As a result, it is now up to states to determine whether they will offer Medicaid coverage to these individuals.  This new category of eligible Medicaid beneficiaries is often referred to as childless adults.

A number of Republicans, both governors and those in Congress, have taken to using the term “able-bodied” to refer to this group.  If you are able-boded, the theory goes, the Medicaid program should reasonably expect you to work. As a result, some Medicaid expansion and Medicaid reform proposals have included work requirements as an eligibility criteria for Medicaid. We can expect this topic to continue to be raised as we get deeper into ACA reform. Continue Reading Who Are the Medicaid Able-Bodied?

6350-Pharma-Summit-blog-buttonThe pharmacy industry continues to be under scrutiny from all angles.  As legislative, agency, and enforcement priorities take shape under the new administration, the industry is faced with what seems like daily developments in terms of policy updates, legislation, and potential regulation.  Our 2017 Pharmacy Industry Summit will bring together stakeholders and thought leaders from across the industry to discuss legal and policy challenges facing manufacturers, PBMs, payors, pharmacies, and providers and to assess the various swirling initiatives and their potential impact on the industry.

The Summit will be held on April 5-6 at the Mintz Levin Washington, DC office.  Event details can be found here.

Session topics will include:

  • A Keynote Address from Mark Merritt, President and CEO of The Pharmaceutical Care Management Association (PCMA)
  • An update on the current state of Affordable Care Act Reform
  • Drug Pricing Debate and the Evolving Role of Pharmacy Industry Players
  • State Issues Affecting the Pharmaceutical Industry
  • Congressional Staffer Panel
  • Value-Based and Innovative Contracting and Reimbursement
  • FDA’s Impact on the Supply Chain – Evolving Policies and Changing Priorities
  • Government Enforcement and the Pharmaceutical Industry

We hope you can join us! Please register by March 29, 2017.

The Massachusetts Department of Public Health (DPH) Determination of Need (DoN) Program has promulgated final DoN regulations (shown here compared against the draft revisions.)  Approved by the Massachusetts Public Health Council (PHC) on January 11, 2017, DPH anticipates that the DoN regulations (105 CMR 100.000, et seq.) will be published in the Massachusetts Register on January 27, 2017, which will be their effective date.

Commissioner Monica Bharel, M.D., MPH emphasized that the overarching goal of these revisions is to meaningfully infuse public health and population health principles within this longstanding health care regulation. The Commissioner noted that it is her belief that successful cost containment must occur in the context of tackling social determinants of health. Our previous blog post, published at the time the draft revisions were presented to the PHC, reviews in some detail the DoN Program’s public policy goals underpinning these revisions, and we refer you to that post for more information.

At the presentation of the draft revisions to the PHC on August 23, 2016, DPH announced its intent to solicit and encourage robust public comment, and the public did not disappoint. A January 11, 2017 memorandum from senior DPH staff to Commissioner Bharel and members of the PHC requesting approval of the final proposed DoN regulations stated that DPH received over 100 comments, submitted at two public hearings and in writing during the 45-day public comment period. The memorandum summarizes not only the comments received, but the stakeholders who submitted the comments and DPH’s public policy rationale for its reaction to many of the comments. Materials (available here and here) accompanying the presentation of the final proposed DoN regulations also summarize the draft revisions, comments received and final proposed DoN regulations.

Many comments addressed the requirements for DoN review of ambulatory surgery, transfer of ownership, Community Health Initiative (CHI) projects, as well as application requirements, review process and criteria, and standard conditions.  Two areas that generated many of the public comments, and which resulted in adjustments to the proposed DoN regulations, are discussed below.  Continue Reading Massachusetts Determination of Need Program – Final Regulations

Continuing our current coverage of health policy issues and trends, Mintz Levin’s Health Law Practice and ML Strategies have issued a joint Alert regarding the Massachusetts Health Policy Commission’s Annual Cost Trends Hearings.  The hearings, which took place on October 17 and 18, provided an opportunity for a wide-ranging discussion of the Commonwealth’s health care system and its rising costs.  The Alert highlights the topics covered over the course of the hearing, and summarizes the points made by the academic, industry, and political leaders who participated. Many of these topics, including pharmaceutical spending, behavioral health, and alternative payment models, are at the core of emerging health policy discussions across the country.  You can read the full alert here.

As we’ve previously reported, the Massachusetts Department of Public Health (DPH) has recently proposed a number of amended regulations in connection with the regulatory review and overhaul mandated by Governor Baker’s Executive Order 562. Senior DPH staff presented these proposed regulations at a Public Health Council Meeting on September 14 (the “PHC Meeting”).  Today we are looking at proposed regulations related to Dialysis Units.  For our prior analysis of the proposed regulations on hospital licensing, please see here. Continue Reading Massachusetts Dialysis Unit Licensing Proposed Regulations – Key Take-Aways

The Massachusetts Department of Public Health (DPH) has released for public comment proposed amendments to DPH’s Hospital Licensure Regulations (105 CMR 130.00) (the “regulations”). The proposed amendments are designed to enable the regulations to meet a number of goals, among them ensuring a high quality of care, industry standardization and strong consumer protection for hospital patients. These amendments are part of DPH’s overall regulatory review process needed to comply with Governor Baker’s Executive Order 562, which directed all executive branch state agencies to review and, where possible, streamline, simplify and improve regulations.

The presentation to the Public Health Council (PHC) by attorneys Sherman Lohnes, Director of the Division of Health Care Facility Licensure and Certification, Bureau of Health Care Safety and Quality and Lauren Nelson, the Bureau’s Director of Policy and Quality Improvement, offers a good summary of many of the proposed changes.  This post features several items that are particularly noteworthy. Continue Reading Massachusetts Hospital Licensing Regulations Proposed Amendments – Key Take-Aways