On May 3, 2012, the Centers for Medicare and Medicaid Services (CMS) officially announced that it will delay data-collection and reporting requirements under the Patient Protection and Affordable Care Act’s (ACA) Physician Payments Sunshine Act (the “Sunshine Act”), due in part to the large number of comments received in response to CMS’s December 19, 2011, proposed rules. Data collection by CMS will not start until at least January 1, 2013. 

The Sunshine Act imposes two reporting requirements:
(1) Covered manufacturers must annually report payments or gifts to physicians or teaching hospitals; and
(2) Covered manufacturers and group purchasing organizations must annually report physician ownership and investment interests.

Although the Sunshine Act does not require report submissions until March 31, 2013, the first reporting period will cover payments made during fiscal year 2012. Thus, even though CMS will not promulgate final rules until later this year, covered manufacturers and group may want to create internal procedures to collect the necessary data as soon as possible. 

The Minnesota Attorney General is on a mission to eliminate over-aggressive debt collection behavior in the hospital industry.  Her target is Accretive Health, Inc., a national company that provides support services to hospitals in Minnesota and other states on debt collection and revenue cycle management using sophisticated data analysis tools.  Already other states have announced investigations, and federal investigations are likely to follow.  The AG has also raised issues regarding the health system that used Accretive, Fairview Health Services, a nine-hospital system in Minnesota.  Any hospital that outsources collections, revenue cycle management and related financial activities, or even performs them in-house, should closely review its compliance with best practices, including the AHA’s Statement on Hospital Billing and Collection Practices, agreed to in writing by many hospitals some years ago.   

Accretive’s troubles began with the theft of a laptop that contained information on over 23,000 individuals. On January 19, 2012, the AG brought an action in federal court against Accretive, alleging HIPAA violations as well as violations of federal and state debt collection laws.  On April 24, she issued a six-volume, 150 page corpus, billed as a compliance review, that with much hyperbole described Accretive’s conduct and included specific examples of alleged unlawful behavior.  Her allegations described numerous calls to patients with outstanding balances using scripts that falsely threatened follow-up actions; demands that patients make co-pay and deductible payments prior to receiving services; and heavy-handed requests for payment information at bedside and in the ER.  She claimed that her authority to investigate Accretive, a third party vendor to hospitals, derived from non-profit, charitable trust, and charitable solicitation laws governing non-profit hospitals.  She also discussed at length Fairview’s alleged failure to oversee Accretive and to ensure that Fairview’s debt collection and other activities supported the system’s charitable purpose.  

Although Accretive agreed to cease operations in Minnesota and also filed a motion to dismiss the AG’s complaint, the damage has been done.  Accretive’s stock has fallen over 50% since the AG issued the results of her compliance review.  Fairview terminated its contract with Accretive and other hospitals are reviewing their arrangements with the company.  Fairview’s reputation has also suffered significant damage, and the complaints from patients over debt collection practices at the system keep coming.  While hospitals struggle in these economic times to manage revenues, debt and collections, it is imperative to ensure that collections and related practices stay focused on the consumer. 

When physicians are excluded from medical staff privileges because the hospital has entered into an exclusive agreement with other physicians, the element of “exclusion” often raises the suggestion that somehow the antitrust laws are implicated and competition has been adversely affected.  The recent opinion of the United States Court of Appeals for the Third Circuit in Bocobo v. Radiology Consultants of South Jersey, P.A., et al. , No. 07-3142 (3d Cir. April 13, 2012)(not precedential), explains why the antitrust laws do not afford a remedy to an excluded physician when a  hospital contracts with a provider group that does not include the plaintiff physician.

The Centers for Medicare and Medicaid Services (CMS) has embarked upon a massive data gathering, data mining, and data matching program. While this program has been operating virtually under the radar, providers should be aware that Big Brother sees all and knows all.

On June 30, 2011, CMS’ Fraud Prevention System (“FPS”) started pre-payment screening of all Medicare fee-for-service claims -- 4.5 million per day according to CMS. These claims are being monitored and analyzed using "sophisticated algorithms and models to identify suspicious behavior."

On April 12, 2012, the Centers for Medicare & Medicaid Services (“CMS”) released a final rule with comment period (“Final Rules”) implementing changes to the Medicare Advantage program and Medicare’s prescription drug benefit program, referred to as Medicare Parts C and D, respectively. Part C and D plan sponsors and other participants should carefully review the changes, particularly those related to increased transparency and exclusion from Parts C and D. The Final Rules are the latest effort by CMS to improve accountability, transparency, and effectiveness of the Medicare program. 

Included among these regulations are changes to the law under the Affordable Care Act (“ACA”). The Final Rules codify Medicare’s Coverage Gap Discount program, a program enacted in January 2011 through the ACA to eliminate the prescription drug coverage “donut hole.” They also implement section 6005 of the ACA, which requires Medicare Part D sponsors and other entities with pharmacy benefit managers to report certain information and also provides that such reports will remain confidential. Penalties will be imposed for failure to comply with the reporting requirements.

The Final Rules make several additional changes to Medicare Parts C and D including:

1. CMS’ adoption of the authority to exclude any plan sponsors who fail to achieve at least a 3-star rating for three consecutive years on CMS’ performance quality rating; 
2. Changing the Part D appeals process to allow prescribers to request a reconsideration on an enrollee’s behalf without first obtaining an appointed representative form;
3. Allowing dual eligible special needs plans that meet integration and performance standards to expand their supplemental benefit offerings to include benefits such as nonskilled nursing services, personal care services, or other long term care services where CMS finds that the benefit will improve integration of care for the dual eligible population;
4. Permitting Medicare Advantage plans to limit durable medical equipment to ‘‘preferred’’ brands and manufacturers so long as beneficiary access protections are in place including access to all preferred brands, a transition period during plan changes that allow enrollees to retain durable medical equipment, providing medical necessity exceptions to plan limitations and appeal rights for brand or manufacturer based denials, and full disclosure of plan limitations on durable medical equipment;
5. Application of a lower, pro-rated cost sharing when prescriptions are dispensed with less than a month’s supply where appropriate; and,
6. Requiring Part D sponsors to include an active and valid prescriber National Provider Identifier on prescription drug event records submitted to CMS.

Read CMS’ announcement on the changes here. 

On March 12, 2012, the U.S. Department of Health and Human Services (HHS) released the long-anticipated Final Rule and Interim Final Rules (the "Rules") on the Patient Protection and Affordable Care Act's (ACA) state health insurance exchanges ("Exchange(s)"), a key element of President Obama's healthcare reform plan. Set to go into effect on January 1, 2014, the goals of the Exchanges are to enhance competition, improve availability of affordable health insurance options and allow small businesses the same purchasing power that large businesses currently enjoy. As described in the Rules, the Exchanges will operate as competitive marketplaces, allowing individual consumers and small businesses to directly compare pricing and quality of health insurance options, among other factors.

The Final Rule incorporates two proposed rules originally published in mid-2011 that together implement what HHS refers to as the Exchange establishment and eligibility rules that address the eligibility, enrollment and plan function of the Exchanges. Affording substantial discretion to states in the design and operation of the Exchanges, the Final Rule details minimum federal standards for the establishment and operation of the Exchanges, minimum standards that health insurers must meet in order to participate in the Exchange and offer a qualified health plan, and standards of participation for the Small Business Health Options Program.

Read the full text of the Duane Morris Alert.

In a bold and seemingly unprecedented move, Aetna recently sued several California surgery centers for an alleged “fraudulent billing scheme”.  The lawsuit alleges that the surgery centers induced physicians to refer patients to the surgery centers with promises that the patients would not have any financial responsibility for their coinsurance and deductibles.  Aetna claims that the surgery centers then turned around and submitted charges for reimbursement that were artificially inflated driving up the cost of health insurance coverage.

Aetna’s lawsuit alleges that providers are liable for engaging in a fraudulent and illegal kickback scheme when they waive a patient’s coinsurance and deductible amounts, even if the provider bills the patient but ultimately does not collect from the patient.  Aetna is asking the court to require the surgery centers to pay damages, to disgorge their profits, and pay Aetna’s attorney fees.  Aetna is also asking the court to issue an injunction preventing such “fee-forgiving” practices, in the future.

Aetna’s theories of liability are somewhat novel and it remains to be determined if they will be successful.  Providers should be aware that insurers are increasingly using aggressive litigation tactics to challenge unauthorized discount arrangements between providers and patients.  As a result of increased scrutiny by third party payors with respect to charges and waivers of co-pays and deductibles, providers should review their billing and collection practices to ensure contractual, legal and regulatory compliance.

On February 21, 2012, CMS announced its first award of repayable loans to seven Consumer Operated and Oriented Plans (CO-OPs).  The awards will help CO-OPs establish private, non-profit, consumer-governed health insurance companies with the goal of expanding health insurance options for consumers and small businesses.  The CO-OPs will eventually operate in each states’ health insurance exchange under the Affordable Care Act, but will also offer plans outside of the exchange.  Starting on January 1, 2014, the first seven CO-OPs will become operational in eight states. 

On February 9, 2012, the Department of Health and Human Services, the Department of Labor, and the Department of the Treasury jointly issued final regulations pursuant to the Affordable Care Act regarding plain-language health insurance plan descriptions. Health insurers will soon be required to present health plan benefits and coverage information in a clear, consistent and comparable manner.                

Starting on September 23, 2012, health insurers and group health plans will be required to provide two significant tools to help consumers navigate the health insurance market.  First, a Summary of Benefits Coverage (“SBC”) will outline key features of a plan, such as the covered benefits, cost-sharing provisions, and coverage limitations and exceptions.  The SBC will also include a standardized plan comparison chart, showing common procedures and the corresponding plan coverage.  The second tool, a Uniform Glossary, will explain terms commonly used in health insurance coverage, such as “deductible” and “co-payment”. Insurers must provide the SBC and Uniform Glossary at certain times during the enrollment process, such as when consumers are shopping for coverage, when coverage is renewed, when certain changes occur and upon request.  The Uniform Glossary will also be publicly accessible on government websites, granting consumers easier access to insurance information.   

To view the final rule, visit: http://ofr.gov/OFRUpload/OFRData/2012-03228_PI.pdf.

‘Mobile health’ (mHealth), which is defined loosely as health care delivered wirelessly, is set to transform health care.  A perfect example is the Ford Motor Company’s ‘Car That Cares,’ which it announced at the 2012 International Consumer Electronics Show in Las Vegas in January.