OIG Issues Investigative Advisory on Medicaid Fraud & Patient Harm Involving Personal Care Services (PCS)

Continuing the drumbeat of increased regulatory scrutiny on long-term care providers, the Office of Inspector General (OIG) of the Department of Health and Human Services in early October 2016 released an Investigative Advisory on Medicaid Fraud and Patient Harm Involving Personal Care Services: https://oig.hhs.gov/reports-and-publications/portfolio/mpcs.asp.

In the OIG’s words, the Investigative Advisory “highlights several of the most significant program vulnerabilities related to PCS that OIG continues to encounter during the course of Federal investigations,” and “summarizes fraud schemes in Federal investigations involving PCS from November 2012 through August 2016.”

Noting that it has already “issued numerous reports highlighting vulnerabilities in PCS that are believed to have contributed to high improper payments, questionable care quality, and high amounts of fraud,” the OIG stated its concern that “State PCS programs will remain susceptible to fraud unless CMS takes preventive, nationwide action to address systemic vulnerabilities.” It also referenced the previously stated goal of preventing fraud and patient harm before it occurs, instead of engaging in “pay and chase” activities and attempting to recover payments already made to providers, after the fraud or sub-standard care has taken place.

The PCS fraud schemes cited by the OIG include:

  • Multiple PCS attendants billing for visits to the same patient in Washington, in which caregivers persuaded the patient to sign blank time sheets and submitted claims for periods when the patient was out of the country.
  • A criminal prosecution of more than 40 individuals associated with a PCS agency in Alaska, where the owner authorized employees to submit false time sheets for services not provided and also billed Medicaid for services provided by employees who were not legally authorized to bill.
  • The submission of over $34,000 in claims by a PCS attendant in Illinois, who
    had been excluded from all Federal programs for allegedly diverting controlled substances from her employer, for services not provided (including services she claimed to have provided while she was on vacation in the Caribbean and Central America).
  • A case in which a Missouri PCS attendant submitted claims for providing care to four beneficiaries simultaneously while working a full-time job, over a 130-day period.
  • A Virginia PCS attendant billing Medicaid for care not provided, which included 20 hours per week of accompanying the beneficiary to doctors’ appointments over a 2-month period.

The Investigative Advisory also referenced several recent cases of patient harm: some involving abuse or neglect by PCS attendants that have resulted in deaths and hospitalizations, and other that involved provision of care while impaired. The OIG expressed the view that these cases demonstrate that “CMS and the States do not have sufficient controls for individuals entering beneficiary homes to provide Medicaid-funded services,” and that “CMS needs to take regulatory action to establish safeguards that will prevent fraudulent or abusive providers from enrolling or remaining as PCS attendants and better protect the PCS program from fraud and patient hmm and neglect.”

Key unimplemented OIG recommendations, which could be the subject of future regulations, include:

  • Establishing minimum Federal qualifications and screening standards for PCS workers, including background checks.
  • Requiring States to enroll or register all PCS attendants and assign them unique numbers.
  • Requiring that PCS claims identify the dates of service and the PCS attendant who provided the service.
  • Additional controls to ensure that PCS are allowed under program rules and are actually provided.

Is CMS listening to PAC provider’s concerns about securing physician documentation?

In a recent FAQ CMS published relating to the Pre-claim Review Demonstration for Home Health Services, CMS provided an interesting response to a question about  what home health agencies (HHAs) should do if a certifying physician won’t provide documentation.

Post-acute care (PAC) providers, including HHAs, have been concerned with an inability to secure documentation from physicians and/or to secure timely physician visits in order to meet regulatory compliance expectations.  In the FAQ, published 9/15/16, CMS provides –

Q.  What should HHAs do if the certifying physician will not provide documentation?

A. CMS created an informational letter directed towards physicians that will be available for download on the Pre-Claim Review Demonstration for Home Health Services website. Home Health Agencies can give the letter to physicians reminding them of their responsibility to provide the documentation. If the physician and/or facility will still not provide the documentation, Home Health Agencies should notify their MAC or CMS (at HHPreClaimDemo@cms.hhs.gov) of the uncooperative physicians and/or facilities. Physicians and/or facilities who show patterns of non-compliance with this requirement, including those physicians and/or facilities whose records are inadequate or incomplete, may be subject to increased reviews, such as through provider specific probe reviews.

This statement from CMS reveals that it has started to hear and respond to PAC provider concerns about securing physician documentation in order to meet CMS compliance requirements.  Real behavior change may come when providers use the process outlined and CMS follows up on complaints. However, whether or not providers actually use the process of notifying the MAC or CMS, given the referral relationship providers maintain with physicians, remains to be seen.

For more information on the FAQ, home health, Medicare payment, or regulatory compliance in general, please feel free to contact Ari Markenson at amarkenson@duanemorris.com or 212.692.1012.

CMS Arbitration Rules

By Susan V. Kayser

CMS has released the final version of a broad-based proposed rule update that will take effect November 28, 2016.  One of the most notable provisions is a prohibition on including a mandatory arbitration provision in a nursing home admission agreement.  Long a bone of contention, with strong advocacy efforts on each side of the question of whether such mandatory clauses should be allowed, it remains to be seen whether the rule will be challenged in court.  Those against mandatory arbitration say it deprives individuals of their day in court; those in favor say there are benefits, including less expensive and quicker resolution of claims.

Only admissions agreements of future residents will be affected by the new rule.  Providers should note too that arbitration clauses are not banned altogether.  In a blog post on September 28, 2016, Acting CMS Administrator Andy Slavitt stated “[f]acilities and residents will still be able to use arbitration on a voluntary basis at the time a dispute arises.”  He went on to say that “[e]ven then, these agreements will need to be clearly explained to residents, including the understanding that these arbitration agreements are voluntary, and that these agreements should not prevent or discourage residents and families from talking to authorities about quality of care concerns.”

The new rule includes a number of other new or modified provisions, which according to CMS were designed to set higher standards for quality and safety in long-term care facilities and protect and empower residents, with a focus on preventing abuse and neglect in facilities.

Government Cracks Down On Nursing Home Use of Social Media

On August 5, 2016, the Centers for Medicare and Medicaid Services (CMS) published a Survey and Certification Memorandum (Notice) urging State health departments to enforce violations by nursing homes in posting patient images on social media. This development was interesting given that the Office for Civil Rights (OCR), the enforcer of the Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules, presumably should already be cracking down on any such violations of resident rights as a violation of HIPAA. According to Modern Healthcare, increased instances of nursing home staff inappropriately posting resident pictures on social media may have sparked this pronouncement by CMS.

Specifically, CMS will more strictly enforce, through State agencies, corrective actions to ensure that employee postings of residents in a degrading manner do not occur in the nursing home setting. Interestingly, the Notice does not discuss nursing homes reporting such employee conduct to OCR, but does indicate that employees should report such postings on social media of residents as abuse “to at least one law enforcement agency.” Continue reading Government Cracks Down On Nursing Home Use of Social Media

Duane Morris’ Michael E. Clark to Present at ABA’s Third Medical Device & Healthcare Technology Compliance Institute

Duane Morris special counsel Michael E. Clark will serve as program chair and moderate the panel discussion, “Yates Memorandum: The New Normal?” during the American Bar Association’s (ABA) Third Medical Device & Healthcare Technology Compliance Institute, to be held on October 13–14, 2016, in Washington, D.C. Mr. Clark’s presentation will take place on Thursday, October 13, at 9:00 a.m.

The session will feature a discussion of the Department of Justice’s new policy to prosecute corporate executives with a focus on the ethical considerations of representing corporations and executives. There will be an emphasis on ethical considerations, including scope of representation, client identification and duties. CLE Ethics Credit is available.

For more information, please visit the event listing on the Duane Morris website.

Another Positive Development for the Medical Marijuana Industry

Just one week after the DEA and FDA reiterated the federal government’s willingness to allow broader research into the health benefits of cannabis, the Ninth Circuit Court of Appeals issued a decision barring the DOJ from using federal funds to prosecute individuals and businesses conducting activities in compliance with state medical cannabis laws and regulations.

In U.S. v. McIntosh, No. 15-10117, (9th Cir. 2016), the Court determined that a rider (§ 542) to the appropriations act that funded the government through September 30, 2015, which provided that funds made available under that act could not be used “to prevent [] States from implementing their own State laws that authorize the use, distribution, possession. of cultivation of medical marijuana,” was to be read as prohibiting the federal government from prosecuting individuals and businesses acting pursuant to those state laws and regulations because such prosecution would effectively prevent the states from implementing their cannabis laws and regulations.

As the Court explained, “DOJ, without taking any legal action against the Medical Marijuana States, prevents them from implementing their laws that authorize the use, distribution, possession, or cultivation of medical marijuana by prosecuting individuals for use, distribution, possession, or cultivation of medical marijuana that is authorized by such laws. By officially permitting certain conduct, state law provides for nonprosecution of individuals who engage in such conduct. If the federal government prosecutes such individuals, it has prevented the state from giving practical effect to its law.”

The Court was also careful to warn industry participants that cannabis-related conduct falling outside a state’s cannabis laws and regulations would not be protected from federal prosecution:  “We conclude that § 542 prohibits the federal government only from preventing the implementation of those specific rules of state law that authorize the use, distribution, possession, or cultivation of medical marijuana. DOJ does not prevent the implementation of rules authorizing conduct when it prosecutes individuals who engage in conduct unauthorized under state medical marijuana laws. Individuals who do not strictly comply with all state-law conditions regarding the use, distribution, possession, and cultivation of medical marijuana have engaged in conduct that is unauthorized, and prosecuting such individuals does not violate § 542.”



Medicare’s Fraud Fighting 2YR ROI – $12.4 for every $1 Invested…

The U.S. Department of Health and Human Services (DHHS) and the Centers for Medicare and Medicare Services (CMS) recently released its – Annual Report to Congress on the Medicare and Medicaid Integrity Programs For Fiscal Years 2013 and 2014.

The biggest and most important take-away from the report – the government achieved “… a two-year average return on investment of 12.4 to 1 for the period that ended on September 30, 2014.”

Program integrity and fraud fighting efforts by DHHS and CMS have consistently represented a significant return on investment for the government. This is likely the single biggest reason why providers have not seen any serious reduction in program integrity efforts and fraud fighting enforcement over at least the last 10 years. Continue reading Medicare’s Fraud Fighting 2YR ROI – $12.4 for every $1 Invested…

Assessing Common Regulatory Risks in Health Care Provider Transactions: Where to start for PE investors…

Health care providers are heavily regulated, that’s no surprise to private equity investors. As a result, investing in health care provider businesses requires savvy in assessing what regulatory risks an acquisition target may present and whether or not those risks are an impediment to moving forward with a transaction.

Common risks include: reimbursement and claims issues, internal audits, external audits, regulatory investigations, criminal and civil government initiated litigation, and licensure and inspection citations or deficiencies.

The diligence process often uncovers one or many issues with any of these common risk areas. Continue reading Assessing Common Regulatory Risks in Health Care Provider Transactions: Where to start for PE investors…

CMS Preventative Measures…Pre-Claim Review Demonstration for Home Health Services

Beginning August 1, 2016, the Centers for Medicare & Medicaid Services (CMS) will be implementing a three-year Medicare pre-claim review demonstration for home health services in the states of Illinois, Florida, and Texas. Michigan and Massachusetts will follow in 2017. CMS is testing whether pre-claim review will help it prevent fraud occurring in Home Health Agencies (HHAs) as well as whether or not pre-claim review will help reduce expenditures while maintaining or improving quality of care.

During the pre-claim review demonstration period, HHAs will submit the same information they currently submit for payment, but will be required to do so earlier in the claims process. Continue reading CMS Preventative Measures…Pre-Claim Review Demonstration for Home Health Services

DOJ Settles Another FCA Case with A Hospice Over Patient Ineligibility

Following on the heels of a number of recent False Claims Act (“FCA”) cases alleging that patients were not eligible to receive hospice services (Good Shepherd Hospice Inc., Guardian Hospice of Georgia LLC,  Hospice of Arizona, L.C. and Altus Healthcare & Hospice Inc., to name a few), the U.S. attorney for the District of Colorado just completed an $18 million dollar settlement with UnitedHealth Group Inc. affiliate, OptumHealth LLC.

The settlement follows the DOJ’s 2014 intervention in two whistleblower-initiated FCA suits.   The whistleblowers, and eventually the DOJ, alleged that the hospice defrauded Medicare by billing services for hospice patients who were not terminally ill.  The DOJ had alleged that the Hospice’s  practices reportedly discouraged doctors from recommending that ineligible patients be removed from hospice and failed to monitor that nurses were accurately recording patients’ conditions in medical records.

As usage of the hospice benefit continues to increase at a rapid pace, investigations of whether or not patient eligibility is determined to be appropriate are going to continue. Additionally, the DOJ’s success in investigating and settling FCA cases relating to hospice eligibility issues  translates into continued enforcement efforts in this area. Providers should focus their compliance efforts on this important risk area and ensure that they are conducted period auditing and monitoring of patient eligibility and physician certifications for hospice care.

For more information on hospice FCA claims or investigations, hospice regulatory enforcement, or Medicare or regulatory compliance in general, please feel free to contact Ari Markenson at amarkenson@duanemorris.com or 212.692.1012.