In the recently published proposed rule related to the CY 2018 Hospital Outpatient Prospective Payment System (OPPS), the Centers for Medicare & Medicaid Services (CMS) announced that it is considering changes to the regulation governing the date of service (DOS) for clinical laboratory and pathology specimens.  The DOS rules are important to laboratories and hospitals because they dictate which party must bill Medicare for certain laboratory testing performed on stored specimens collected during a hospital procedure but ordered after the patient has left the hospital.  If revisions are ultimately finalized, the proposal could have significant business implications for independent laboratories and hospitals.

Continue Reading CMS May Decide to Permit Labs to Bill for Certain Tests Provided to Outpatients

Continuing its annual tradition, the U.S. Department of Justice (“DOJ”) and the U.S. Department of Health and Human Services (“HHS”) announced last week the largest ever health care fraud enforcement action by the Medicare Fraud Strike Force.  As part of the national health care fraud takedown, the government charged 412 defendants with approximately $1.3 billion in alleged fraud. In addition to these charges, HHS Office of Inspector General (“OIG”) is in the process of excluding 295 health care providers from participating in federal health care programs.

Continue Reading DOJ and OIG Announce Largest Ever National Health Care Fraud Takedown; Focus on Opioids

Earlier this month, the Centers for Medicare & Medicaid Services (CMS) released its 2018 Medicare Advantage and Part D Advance Notice and Draft Call Letter (“Draft Call Letter”).  For the majority of the letter’s provisions, CMS is proposing to continue its current course of action and is refraining from introducing new policies.  With that said, however, CMS is proposing several notable updates, including updates to the use of encounter data for risk adjustment and the 2018 Star Ratings.  This blog is to highlight some key provisions and changes as MA and Part D plans prepare and finalize comments.

Continue Reading CMS’s Draft 2018 Call Letter: Minor Updates, but Largely a Continuation of Current Policies

Today, our colleagues at ML Strategies released their first look at what the results of Tuesday’s election mean for health care.  The client alert addresses both the lame duck session and what to expect in 2017 and beyond.  Key issues areas include the future of the Affordable Care Act, MACRA, drug pricing, and FDA User Fee Act reauthorization.

In the coming days, ML Strategies will be sharing further insight into what the election means for health care and what to expect from the new administration and Congress.

The waiver of copayments, coinsurance, and deductibles owed by patients treated by out-of-network laboratories and other providers is a hot topic in the health care industry.  Despite the near absence of clear legal prohibitions on this practice, commercial insurers are aggressively pursuing out-of-network providers who fail to collect amounts owed by their members under a variety of statutory and common law theories.

For example, in 2015, Aetna filed suit against Health Diagnostic Laboratory (HDL), Tonya Mallory (HDL’s former CEO), and BlueWave Health Care Consultants (an independent sales group), alleging that they engaged in a variety of illegal actions, including the failure to collect any amounts owed by Aetna’s members, and that Aetna overpaid for services provided by HDL as a result.  While HDL settled, Aetna continues to pursue its claims against Ms. Mallory, who recently failed in her efforts to have the case against her dismissed.   However, a recent court decision may give providers some comfort.  In June 2016, a Texas federal district court prevented Cigna from recovering funds paid to Humble Surgical Hospital, which allegedly waived amounts owed by Cigna’s members and engaged in other misconduct.  The court dismissed all of Cigna’s claims and found that Cigna owed $13 million to Humble. Continue Reading Lessons Learned from FCA Settlement Involving Waiver of Medicare Coinsurance Amounts

Lawmakers are again eyeing ways to modernize the Medicare system, including a revamping of the identification cards used by Medicare beneficiaries. On Wednesday, the House Ways and Means’ health subcommittee held a hearing on spurring innovation in the health care system. In the meeting, Rep. Peter Roskam (R-Ill.)  said that he will revive legislation that will replace traditional Medicare identification cards with electronically readable cards.

As we discussed last year, the move is caused by two provisions in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The first provision requires Social Security Numbers to be removed from Medicare identification cards within four years after MACRA’s enactment. The second provision requires the Secretary of the Department of Health and Human Services to consider using electronic Medicare beneficiary and provider cards if the Secretary determines that it is cost effective and technologically viable. A report by the Government Accountability Office (GAO) entitled “Medicare — Potential Uses of Electronically Readable Cards for Beneficiaries and Providers“ casts some doubt on whether a robust implementation of electronically readable cards is either cost effective or technologically viable. However, electronically readable Medicare cards could receive a more limited introduction as means of more efficiently conveying beneficiary identity and insurance information. In addition to reducing errors, this could serve to combat fraud that is made possible by the personal information currently found on each beneficiary’s identification card.

image1_133753922Last month, the U.S. Government Accountability Office (GAO) released a report in which it found that manufacturer drug coupon programs for privately insured patients could potentially cause the Medicare Part B program to overspend on certain high-cost Part B drugs. The pricing for most drugs reimbursed by the Medicare Part B program is based on each drug’s average sales price (ASP), which is defined as the amount that physicians and other purchasers pay manufacturers for the drug. Currently, the ASP does not take into account drug coupons offered to privately insured patients. Continue Reading GAO Report Suggests Discount Coupons Impact Medicare Spending for Part B Drugs

Last week, the OIG issued a favorable opinion to a hospice provider seeking to make supplemental payments to skilled nursing facilities.  Under the proposed arrangement, the hospice provider would make a supplemental payment to the nursing facility for dual-eligible individuals electing the hospice benefit that would be in addition to and separate from what the managed care organization (“MCO”) pays the nursing facility.

This supplemental payment by the hospice provider is different than the traditional payments that hospice providers make to nursing facilities for dual-eligible individuals.  Traditionally, when a dual-eligible individual residing in a nursing facility elects the hospice benefit, Medicare pays the hospice provider a per diem rate that does not include room and board.  Medicaid is responsible for paying the individual’s room and board.  Medicaid pays room and board to the hospice provider and the hospice provider pays the nursing facility the negotiated rate.  In a 1998 Special Fraud Alert on nursing home arrangements with hospices, the OIG specifically stated that this payment arrangement, in which the hospice provider pays the nursing facility only after receiving payment from Medicaid, is acceptable. Continue Reading OIG Gives Green Light to Hospice Provider’s Payment to Nursing Facilities

CMS issued a final rule, published in the Federal Register on Friday, June 10, 2016, updating how the performance of ACOs participating in the Medicare Shared Savings Program (MSSP) is measured and compensated.  This rule is part of an ongoing effort to move Medicare away from a model that pays for each service provided towards a system that rewards physicians for coordinating with each other to improve quality of patient care and outcomes while reducing cost.  CMS views ACOs as a major part of this transition, and according to its press release, believes that the current updates should help more ACOs successfully participate in the MSSP by “improving the shared savings payment methodology and providing a new participation option for certain ACOs to move to the more advanced tracks of the program.”  The major changes relate to three areas:

Continue Reading New Rules for ACOs in the MSSP

Thus far, 2016 has been a relatively quiet year for the 340B program at the federal level.  Neither Congress nor the Health Resource and Service Administration (HRSA) has shown an appetite to take on the issues plaguing the program.  In fact, late last month, the Department of Health and Human Services indicated that the program is likely to remain in its status quo until at least the end of the year.  In its regulatory agenda released May 2015, HRSA stated it will delay the release of its final 340B Program Omnibus Guidance to the end of 2016.  HRSA also indicated it will delay its 340B manufacturer civil monetary penalty rule and proposed administrative dispute resolution rule.

Although HRSA has not provided any further information for the reason of the delay, it does not come as a surprise.  When the D.C. District Court invalidated HRSA’s orphan drug “interpretive” rule in October 2015, we hypothesized that this may call into question HRSA’s willingness to proceed on the Proposed Guidance.  The fact is, a number of the provisions in the Proposed Guidance impose duties in the name of compliance that go beyond statutory requirements, and under the Court’s decision, such provisions may be unenforceable.  This delay may be the first step in HRSA’s decision to eventually pull the Proposed Guidance and spare itself the attacks. Continue Reading Delays in 340B Mega-Guidance and a Recap of the Latest 340B Updates