4th Circuit Affirms Withholding of WV Medicaid Funds

Today the United States Court of Appeals for the 4th Circuit affirmed a ruling by the district court in West Virginia which sustained a disallowance of federal funding by the Centers for Medicare & Medicaid Services (CMS) against the West Virginia Medicaid Program.

The 4th Circuit Decision in West Virginia Department of Health and Human Resources, Bureau for Medical Services vs. Kathleen Sebelius, et al. ruled that CMS acted within its authority when it withheld from the West Virginia Department of Health and Human Resources, Bureau of Medical Services, West Virginia'a Medicaid Program (DHHR) approximately $634,000 (which was reduced to approximately $446,000)in Medicaid funding, which represented it share of overpayment made to providers as a result of Dey, Inc., a pharmaceutical company, alleged fraud. CMS notified DHHR of the disallowance after Dey entered into an $850,000 settlement of claims brought by the West Virginia Attorney General on behalf of West Virginia under West Virginia's Consumer Credit and Protection Act.

The disallowance by CMS was calculated by multiplying the state's estimated damages allocable to Medicaid, approximately 67% by the settlement amount adn then multiplied this figure by West Virginia's FMAP rate of 78.14% to arrive at the $446,000 amount. The HHS Department of Appeals Board concluded that this allocation methodology was reasonable.

I have only done an initial review of the decision and won't go into the merits of the arguments at this time. Read the full decision for a more complete understanding of the decision and check out today's article in the Charleston Daily Mail.

Practical Guidance on Medicare Physician Signature Requirements

I was recently researching the physician signature requirements under the Medicare program and found this resource outlining some of key questions and answers around the requirements.

The Centers for Medicare & Medicaid Services Medicare Learning Network has issued a fact sheet on Comprehensive Error Rate Testing (CERT) Signature Requirements with the Q and A. Also mentioned in the guidance as a resourceis the Medicare Learning Network's MLN Matters Article MM6698, "Signature Guidelines for Medical Review Purposes."

CMS and ONC Issue Rules on Proposing a Definition of Meaningful Use and Setting Standards for EHR Incentive Program

Yesterday the Centers for Medicare & Medicare Services (CMS) and the Office of the National Coordinator for Health Information Technology (ONC) issued two regulations laying the foundation for improving quality, efficiency and safety through meaningful use of certified electronic health record (EHR) technology.

The two regulations are part of the implementation of the EHR incentive programs for physicians and hospitals enacted under the HITECH provisions of the American Recovery and Reinvestment Act of 2009 (ARRA). CMS issued a proposed rule outlining the proposed provisions governing the EHR incentive programs, including defining the central concept of “meaningful use” of EHR technology. ONC issued an interim final regulation setting forth the initial standards, implementation specifications, and certification criteria for EHR technology.

For more details see the following CMS Press Release. Also, CMS has issued Fact Sheets on the proposed regulations:

• CMS Proposes Requirements for the Electronic Health Records (EHR) Medicaid Incentive Payment Program
  
• CMS Proposed Requirements for the Electronic Health Records (EHR) Medicare Incentive Program
  
• CMS Proposes Definition of Meaningful Use of Certified Electronic Health Records (EHR) Technology

Below are links to complete copies of the rules. Once they are published in the Federal Register I will update with the specific Fed Reg details. Some light reading for the New Year!

Medicare and Medicaid Programs; Electronic Health Record Incentive Program
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Proposed rule.
SUMMARY: This proposed rule would implement the provisions of the American Recovery and Reinvestment Act of 2009 (ARRA) (Pub. L. 111-5) that provide incentive payments to eligible professionals (EPs) and eligible hospitals participating in Medicare and Medicaid programs that adopt and meaningfully use certified electronic health record (EHR) technology. The proposed rule would specify the-- initial criteria an EP and eligible hospital must meet in order to qualify for the incentive payment; calculation of the incentive payment amounts; payment adjustments under Medicare for covered professional services and inpatient hospital services provided by EPs and eligible hospitals failing to meaningfully use certified EHR technology; and other program participation requirements. Also, as required by ARRA the Office of the National Coordinator for Health Information Technology (ONC) will be issuing a closely related interim final rule that specifies the Secretary’s adoption of an initial set of standards, implementation, specifications, and certification criteria for electronic health records. ONC will also be issuing a notice of proposed rulemaking on the process for organizations to conduct the certification of EHR technology.

Health Information Technology: Initial Set of Standards, Implementation Specifications, and Certification Criteria for Electronic Health Record Technology
AGENCY: Office of the National Coordinator for Health Information Technology,
Department of Health and Human Services.
ACTION: Interim final rule.
SUMMARY: The Department of Health and Human Services (HHS) is issuing this interim final rule with a request for comments to adopt an initial set of standards, implementation specifications, and certification criteria, as required by section 3004(b)(1) of the Public Health Service Act. This interim final rule represents the first step in an incremental approach to adopting standards, implementation specifications, and certification criteria to enhance the interoperability, functionality, utility, and security of health information technology and to support its meaningful use. The certification criteria adopted in this initial set establish the capabilities and related standards that certified electronic health record (EHR) technology will need to include in order to, at a minimum, support the achievement of the proposed meaningful use Stage 1 (beginning in 2011) by eligible professionals and eligible hospitals under the Medicare and Medicaid EHR Incentive Programs.

HIPAA Security Rule Enforcement Delegated to OCR

Today HHS Secretary Kathleen Sebelius announced that enforcement of the Security Rule under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) will be delegated to the Office for Civil Rights (OCR).

The official delegation occurred on July 27, 2009. More information about the transition of authority for the administration and enforcement of the Security Rule can be found in the OCR press release. The official Delegation of Authority by the Office of the Secretary has been issued and will appear in the August 4, 2009 Federal Register.

Prior to today, administration and enforcement of the HIPAA Security Rule has been the responsibility of the Centers for Medicare & Medicaid Services (CMS).

Providence Health & Services Agrees To $100,000 Voluntary Settlement of Potential HIPAA Violation

The U.S. Department of Health and Human Services (HHS) issued a press release last Thursday that it had entered into a Resolution Agreement with Seattle-based Providence Heath & ServicesHealth Insurance Portability and Accountability Act of 1996 (HIPAA) privacy and security rules. The agreement calls for Providence to pay a voluntary settlement of $100,000 and implement a detailed corrective action plan to ensure against future theft or loss of electronic patient health information (ePHI).

The incidents giving rise to the agreement involved two Providence entities, Providence Home and Community Services and Providence Hospice and Home Care. On or about December 30, 2005, data contained on several computer backup disks and tapes was stolen from the unattended car of a Providence employee. In addition to the theft of disks and tapes, several laptop computers were stolen from Providence employees on September 29, 2005, December 7, 2005, February 27, 2006, and March 3, 2006. The laptops, disks and tapes involved in those thefts contained the unencrypted records of more than 386,000 patients of Providence.

Under the terms of the Resolution Agreement, Providence agrees to pay $100,000 by check or electronic funds to HHS. Providence also agrees to enter into and abide by the terms of the Corrective Action Plan that is incorporated into the agreement. The Corrective Action Plan is effective for three years and requires that Providence submit copies of its written policies and procedures to HHS for approval. The Corrective Action Plan outlines nine categories of minimum content required in the policies and procedures. Specifically, the Corrective Action Plan requires that Providence to:

• Conduct a risk assessment of potential risks and vulnerabilities to the confidentiality, integrity, and availability of ePHI when it is created, received, maintained, used or transmitted off-site;
• Implement a risk management plan that incorporates security measures sufficient to reduce the risks and vulnerabilities identified by the risk assessment to a reasonable and appropriate level; and
• Implement several physical and technical safeguards, including encryption, to ensure the protection of ePHI whenever it is stored or transported off-site by any portable device or electronic media.

The Corrective Action Plan also requires Providence train and monitor its workforce so that all employees are familiar with the policies and procedures. Providence is also required to submit to HHS both a one-time Implementation Report and Annual Reports for three years detailing its compliance to the policies and procedures under the Resolution Agreement.

Initially, HHS officials received more than 30 complaints about the stolen tapes and disks after Providence, pursuant to state notification laws, informed patients of theft. Providence also reported the stolen media to HHS. Providence faced a pending class action lawsuit alleging that the health system failed to safeguard the data as required by HIPAA and violated Oregon’s Unfair Trade Practices Act. The proposed class action was dismissed in November, 2007. The incident was also investigated by the Oregon Attorney General’s Office resulting in an Assurance of Voluntary Compliance Agreement requiring Providence to provide credit monitoring services, credit restoration services, implement security program enhancements and pay $95,764 into the Consumer Protection and Education Revolving Account.

Providence settlement and corrective action plan sends a signal that OCR and CMS are taking a stronger position against privacy and security incidents. The settlement should prompt providers who are required to comply with HIPAA to reexamine their privacy and security policies, procedures, employee training protocols and ongoing monitoring of compliance.

CMS Releases New Physician Self Referral (Stark) FAQs

The Centers for Medicare & Medicaid Services (CMS) recently modified its website and included a new Frequently Asked Questions (FAQ) section under the Physician Self Referral (Stark) section. CMS added 12 new Stark FAQs on January 31, 2008. A number of these new FAQs relate to the new Stark III regulations.

HHS Announces Physician EHR Demo Project

Yesterday HHS announced that CMS will involve physicians in a five year demonstration project encouraging small and medium physician practices to adopt electronic health records.

Excerpt from Secretary Leavitt's announcement:

“This demonstration is designed to show that streamlining health care management with electronic health records will reduce medical errors and improve quality of care for 3.6 million Americans. By linking higher payment to use of EHRs to meet quality measures, we will encourage adoption of health information technology at the community level, where 60 percent of patients receive care,” Secretary Leavitt said. “We also anticipate that EHRs will produce significant savings for Medicare over time by improving quality of care. This is another step in our ongoing effort to become a smart purchaser of health care -- paying for better, rather than simply paying for more.”

Conducted by the Centers for Medicare & Medicaid Services (CMS), the demonstration would be open to participation by up to 1,200 physician practices beginning in the spring. Over a five-year period, the program will provide financial incentives to physician groups using certified EHRs to meet certain clinical quality measures. A bonus will be provided each year based on a physician group’s score on a standardized survey that assesses the specific EHR functions a group employs to support the delivery of care.

The CMS demonstration also will help advance Secretary Leavitt’s efforts to shift health care in the U.S. toward a system based on value. The Department is working to effect change through its Value-Driven Health Care initiative, which is based on Four Cornerstones: interoperable electronic health records, public reporting of provider quality information, public reporting of cost information, and incentives for value comparison.

For more info check out the HHS Press Release.

Thanks to the Medicare Update blog for a tip on this new project.

CMS Stark III Regulations Now Available

Today CMS released the final Stark III physician self-referral rule available on the Physician Self Referral section of the CMS website and will be published in the September 5 Federal Register. 516 pages of light health care regulatory reading for the Labor Day Holiday.

The Phase III Stark Final Rule (CMS-1810-F) is officially titled, "Medicare Program; Physicians' Referrals to Health Care Entities With Which They Have Financial Relationships (Phase III)". The regulations will be effective 90 days after the publication date which is expected to be September 5, 2007. Read the CMS press release.

UPDATE: CMS has also provided an unofficial redline version of the Stark regulations showing the existing regulations and incorporating in the new Stark III changes.

UPDATE (7/5/07): The official version was published in the Federal Register on September 5, 2007. A complete copy of the regulations can be found here. The effective date of Phase III Final Rule is December 4, 2007.

UPDATE (11/11/07): David Harlow reports that certain provisions of Stark III will be delayed for up to a year (December 4, 2008).

Below is a copy of the rule summary and the table of contents directly from the final rule:

Summary: This final rule is the third phase (Phase III) of a final rulemaking amending our regulations regarding the physician self-referral prohibition in section 1877 of the Social Security Act (the Act). Specifically, this rule finalizes, and responds to public comments regarding, the Phase II interim final rule with comment period published on March 26, 2004, which set forth the self-referral prohibition and applicable definitions, interpreted various statutory exceptions to the prohibition, and created additional regulatory exceptions for arrangements that do not pose a risk of program or patient abuse (69 FR 16054).

In general, in response to public comments, in this Phase III final rule, we have reduced the regulatory burden on the health care industry through the interpretation of statutory exceptions and modification of the exceptions that were created using the Secretary’s discretionary authority under section 1877(b)(4) of the Act to promulgate exceptions for financial relationships that pose no risk of program or patient abuse.

I. Background
II. General Comments
A. General
B. Compliance with the Anti-kickback Statute
III. Definitions--§411.351
A. Employee
B. Entity
C. Fair Market Value
D. “Incident to” Services
E. Physician in the Group Practice
F. Radiology and Certain Other Imaging Services and Radiation Therapy
G. Referral
H. Rural Area
IV. Group Practice--§411.352
V. Prohibition on Certain Referrals by Physicians and Limitations on Billing--§411.353
VI. Financial Relationship, Compensation, and Ownership or
Investment Interest--§411.354
A. Ownership
B. Compensation
C. Special Rules on Compensation
VII. General Exceptions to the Referral Prohibition Related
to Both Ownership/Investment and Compensation--
§411.355
A. Physician Services
B. In-office Ancillary Services
C. Services Furnished by an Organization (or Its Contractors or Subcontractors) to Enrollees
D. Reserved
E. Academic Medical Centers
F. Implants Furnished by an Ambulatory Surgical Center
G. EPO and Other Dialysis-related Drugs Furnished in or by an End-Stage Renal Dialysis Facility
H. Preventive Screening Tests, Immunizations, and Vaccines
I. Eyeglasses and Contact Lenses Following Cataract Surgery
J. Intra-family Rural Referrals
VIII. Exceptions to the Referral Prohibition Related to
Ownership or Investment Interests--§411.356
A. Publicly-traded Securities and Mutual Funds
B. Hospitals Located in Puerto Rico
C. Rural Providers
D. Ownership Interest in a Whole Hospital
IX. Exceptions to the Referral Prohibition Related to
Compensation Arrangements--§411.357
A. Rental of Office Space
B. Rental of Equipment
C. Bona Fide Employment Relationships
D. Personal Service Arrangements
E. Physician Recruitment
F. Isolated Transactions
G. Remuneration Unrelated to Designated Health Services
H. Group Practice Arrangements with a Hospital
I. Payments by a Physician
J. Charitable Donations by a Physician
K. Nonmonetary Compensation
L. Fair Market Value Compensation
M. Medical Staff Incidental Benefits
N. Risk-sharing Arrangements
O. Compliance Training
P. Indirect Compensation Arrangements
Q. Referral Services
R. Obstetrical Malpractice Insurance Subsidies
S. Professional Courtesy
T. Retention Payments in Underserved Areas
U. Community-wide Health Information Systems
X. Reporting Requirements--§411.361
XI. Miscellaneous (Other)
XII. Provisions of the Final Rule
XIII. Technical Corrections
XIV. Collection of Information Requirements
XV. Regulatory Impact Analysis
A. Overall Impact
B. Anticipated Effects
C. Alternatives Considered

Comments on the new regulations:

• Brian Peterson at his West Virginia Legal Weblog provides insight into the new regulations clarification of physician recruitment agreements and restrictive covenants in physician employment agreements.
  

Thanks to the AHLA Stark Law listserve for the tip on the final rule.

Latest on CMS's Challenge to WV Oxycontin Settlement

Larry Messina provides the latest on CMS's challenge to the $10M Oxycontin settlement by the West Virginia Attorney General's office against Purdue Pharma. Last month the West Virginia Bureau of Medical Services received from CMS a $4.1M notice of disallowance stating that the state failed to share a portion of the settlement with federal Medicare.

Larry Messina's article in today's Herald Dispatch, "Feds threaten $4.1M in Medicaid funds over Oxy Settlement".

CMS Proposed Rule Modifies PPS For Home Health Agencies

Last Friday, April 27, 2007, CMS issued a proposed rule (CMS-1541-P) modifying the prospective payment system (PPS) for home health agency reimbursement. The proposed rule will be officially published in the Federal Register on May 4, 2007. The details of how to comment on the proposed rule is included in the rule. According to the press release, the deadline for filing comments on the proposed rule June 26, 2007.

The summary from the proposed rule states:

This proposed rule would set forth an update to the 60-day national episode rates and the national per-visit amounts under the Medicare prospective payment system for home health services, effective on January 1, 2008. As part of this proposed rule, we are also proposing to rebase and revise the home health market basket to ensure it continues to adequately reflect the price changes of efficiently providing home health services. This proposed rule also would set forth the refinements to the payment system. In addition, this proposed rule would establish new quality of care data collection requirements.

CMS issued a press release, CMS Proposes Payment Changes For Medicare Home Health Services providing an overview of the proposed changes. Also, CMS issued a Fact Sheet outlining some of the proposed PPS home health changes as compared to the current home health PPS payment system. For more information go to the CMS Home Health Agency Center.

I plan to take a closer look at the proposed rule and would welcome any comments on what impact these changes may have on existing home health providers.

UPDATE (6/18/07): Today CMS issued correction of technical errors in the proposed rule issued May 4, 2007. The corrections are entitled, "Medicare Program; Home Health Prospective Payment System Refinement and Rate Update for Calendar Year 2008; Correction" (72 FR 33425).

Also, one of the comments to this post mentions materials from Beacon Health providing analysis on the proposed Home Health PPS Reform and tips for submitting comments to CMS. Those interested in the changes might want to check out this information.