Will increasing regulatory oversight improve quality of care in the nation’s nursing homes?

Last month I wrote about the hearing to be held by the House Committee on Energy and Commerce Subcommittee on Oversight and Investigations regarding federal efforts to ensure quality of care and resident safety in nursing homes.

The Director of Health Care for the GAO focused his opening remarks on the GAO study of nursing homes that concluded in 2015. The next year, CMS instituted sweeping regulatory changes. So it remains to be seen how CMS’ new requirements of participation will impact the issues found in the GAO report. Ruth Ann Dorrill, Regional Inspector General, HHS OIG noted that the OIG previously made two recommendations to CMS to improve quality of care in nursing homes. First, to provide guidance to nursing homes about detecting and reducing harm to be included in facility Quality Assurance and Performance Improvement programs. Second, to instruct State Agencies to review facility practices for identifying and reducing adverse events, and link related deficiencies specifically to resident safety practices. CMS implemented these recommendations on adverse events in nursing homes as of August 2018.

The focus on deficiencies by the State Agencies is disappointing. Deficiencies result in civil money penalties, further reducing the resources available to care for nursing home residents. Ms. Dorrill testified that nursing home residents often have care needs similar to patients in hospitals. However, nursing homes are not reimbursed at the same rate as hospitals and, yet, are expected to provide similar care. It seems as though the residents are getting lost in the ever increasing cycle of regulation and enforcement. Regulatory oversight sounds good on paper, but does it work?

SUPPORT Act Expands Sunshine Act Disclosure Requirements, Covered Recipients

On October 24, 2018, President Donald Trump signed the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act), a combination of a number of previously passed House and Senate bills related to addressing the opioid crisis. One of the provisions of this lengthy bipartisan package of bills includes an expansion of the disclosure requirements initially imposed by the Physician Payments Sunshine Act.

Read the full text of this Alert on the Duane Morris LLP website.

Physician Compensation

By Patricia S. Hofstra

Today’s blog addresses compensation and benefits; a complicated subject of upmost interest to our clients. The blog touches on major points to consider regarding compensation and benefits. Physicians and physician groups must consult with compensation experts and legal counsel to insure that they understand the best possible, regulatory compliant compensation model for their needs. There are pros and cons and multiple variations of each model.  Continue reading Physician Compensation

Documentary Film Expensive for Hospitals

Three teaching hospitals allowed a documentary to be filmed at their hospitals to provide viewers with information regarding the care that academic medical centers deliver. Despite the fact that the hospitals received no patient complaints regarding the filming, and the hospitals took steps to avoid violating HIPAA by having the film producers get written permission from patients to participate in the film and the hospitals required the film crews to have HIPAA training, the hospitals paid nearly $1 million to the federal Health and Human Services Office for Civil Rights (OCR) for alleged HIPAA violations. The hospitals are also required to follow corrective action plans and be monitored by the OCR .

This is the second time that OCR has gone after hospitals for alleged HIPAA violations associated with medical documentary filming.

Apparently, according to the OCR, the hospitals, not the producers, should have gotten the patients’ authorizations before allowing the producers to film on site and that mistake cost the hospitals a total of $999,000.

Contractual Indemnification – DANGER

By Patricia S. Hofstra

Indemnity provisions are used to shift risk from one party to another. The intent of an indemnification provision in an agreement is to impose on one party the responsibility to pay the liability, damages, costs, expenses, and attorney fees for the other party to the agreement, under the circumstances set forth in the agreement.  An indemnification clause obligates one party to compensate the other party for losses or damages. This compensation is separate and apart from other contractual obligations and damages.  Continue reading Contractual Indemnification – DANGER

Tolerating Bad Behavior by Medical Staff Members Proves Costly

On September 7, 2018, a jury awarded more than $10 million to seven healthcare professionals based on allegations that the hospital failed to protect the women from two male doctors with troubling histories. According to the news reports, neither of the physicians were employed by the hospital, although both doctors were members of the medical staff and had clinical privileges at the hospital.

The bulk of the award, more than $7 million in punitive damages, went to a female anesthesiologist who was allegedly choked and pushed up against the wall in a locker room by a surgeon. The attack was witnessed by other hospital staff and patients, according to the complaint. The anesthesiologist reported the incident to hospital leadership and was asked to consider dropping the matter. The surgeon was reported as having a long history of workplace violence that was known to the hospital and the chief of the surgery department. While the chief met with the surgeon after each incident, according to the anesthesiologist’s attorney, no formal disciplinary action was ever taken.

Shortly after the alleged choking incident in the locker room, six female nurses and technicians who used the locker room were unlawfully recorded by a different doctor, as they used the restroom and changed their clothes. Criminal charges were brought against the doctor for the secret videotaping, but according to the complaint, the hospital delayed in suspending the doctor’s medical staff privileges. The remainder of the jury award went to the six nurses and technicians who were secretly videotaped.

The take away – juries are willing to find hospitals responsible for the acts of their non-employed medical staff members. Hospitals need to take prompt and appropriate action at the first sign of inappropriate behavior. While this case involved medical staff members, prompt and appropriate action is also required at the first sign of inappropriate behavior by anyone on the hospital’s premises.

What’s on the federal regulatory horizon for nursing homes?

The federal government cannot agree on whether to increase or decrease regulatory burdens on nursing facilities. Yesterday, the United States House Committee on Ways and Means and the Subcommittee on Health wrote to the Centers for Medicare and Medicaid Services urging further reduction of regulatory burdens on health systems, hospitals, and nursing homes. Tomorrow, the House Committee on Energy and Commerce Subcommittee on Oversight and Investigations will hold a hearing examining federal efforts to ensure quality of care and resident safety in nursing homes.

The Ways and Means Committee’s letter noted that providers with post-acute care beds devote 8.1 full-time employees to compliance with regulatory requirements. Over half of those employees are clinical staff who could otherwise be caring for residents. The letter applauded recent efforts to reduce the regulatory burden and urged further reductions.

In contrast, the Committee on Energy and Commerce suggests that CMS isn’t doing enough to ensure quality care in the nation’s nursing homes. The Committee’s background report recites a number of news reports in which seniors died or were abused in nursing homes. Three witnesses have been invited to testify: Kate Goodrich, M.D., Chief Medical Officer of CMS; Ruth Ann Dorrill, Regional Inspector General, HHS OIG; and John Dicken, Director, Health Care GAO. Topics to be addressed include efforts made to ensure that nursing homes are meeting the federal regulatory standards and CMS’ oversight of state agencies that work with CMS to inspect nursing homes. The undertone of the Committee’s background report is that CMS needs to increase enforcement, including higher civil money penalties and exclusion from participation in federal health care programs.

It is hard to see how higher monetary penalties will improve quality care as it further reduces the resources available to care for residents.

Settlement of the Osteopathic Physicians Class Action Against the American Osteopathic Association

Duane Morris is very pleased to announce the settlement of the Osteopathic Physicians Class Action against the American Osteopathic Association, Talone, et. al v. American Osteopathic Association.  The Court has granted preliminary approval of the settlement, and members of the class and sub-classes will be receiving notice of the settlement in the coming weeks.

The settlement is a resolution of the claims the class representatives asserted against the AOA that was negotiated over a period of approximately four months, and that provides a range of benefits to tens of thousands of DOs.  Those benefits are estimated in value to be worth significantly more than $35,000,000.

Please see our announcement for more information.

 

Payer Audits and False Claims Actions Challenging Medical Necessary on the Rise

We’re seeing a substantial increase in payer audits and false claims causes of action based on allegations that procedures and charges were not medically necessary.

Historically, courts have been deferential to a physician’s medical judgment in false claims causes of action. However, a federal appeals court recently found that a physician’s medical judgment could be false or fraudulent leading to a cause of action under the False Claims Act. The appellate court ruling overturned a lower court decision which had granted the physician’s motion to dismiss, finding that treatment decisions based on medical judgment could not be considered false under the False Claims Act. This shift in deferential treatment with respect to a physician’s medical judgment could dramatically increase false claims causes of action against physicians.

In addition, clinical laboratories are getting more and more requests for medical records and facing an increasing number of payment denials based on lack of medical necessity. Prepayment review is more common than ever. The combination of having to respond to medical record requests, payer audits and prepayment reviews on each and every lab test can be cost prohibitive. There is no easy fix.

I recently spoke at a webinar hosted by Karen Zupko and Associates on preparing for a payment audit and tactical strategies for defense. My best advice on tactical strategies for defending a payment audit is to be prepared. Have a compliance program in place and conduct regular self- audits. If a concern is identified during a self- audit, get experienced health care legal counsel involved immediately to preserve privilege and get guidance. A link to the webinar I did with Karen is attached.

http://iplayerhd.com/player/video/e7f7423f-9c31-403b-b56c-90053bb38754/share

 

 

CMS Retreats on Jurisdiction for Medicare Provider Reimbursement Appeals of Self-Disallowed Items, But How Far?

By Christopher L. Crosswhite

On April 23, 2018, the Administrator of the Centers for Medicare and Medicaid Services (“CMS”) adopted a new ruling conceding the jurisdiction of the Provider Reimbursement Review Board (“PRRB”) in certain circumstances over costs or items “self-disallowed” by the provider. In Ruling No. CMS-1727-R (the “Ruling”), the Administrator announced that the PRRB has jurisdiction over a provider’s appeal regarding Medicare payment for an item that the provider did not include in its cost report when the following circumstances exist:

  1. The appeal is pending on or after April 23, 2018, or was initiated on or after that date; and
  2. The cost reporting period under appeal ended on or after December 31, 2008, and began before January 1, 2016; and
  3. The provider had a good faith belief that the item was not allowable under Medicare regulations or payment policy.

This Ruling represents a retreat from regulations adopted in 2008, which required that in order to appeal an item to the PRRB, a provider must either claim Medicare payment for the item in its cost report or include the item as a protested amount in the cost report. CMS took the position that a provider could not be “dissatisfied” with the Medicare contractor’s determination of Medicare reimbursement, as required by the statute for a PRRB appeal, if the contractor made no determination on the item because it was not included in the cost report, even if reimbursement was prohibited under Medicare policy. The Ruling indicates that CMS is retreating from this position because of the 2016 decision of the U.S. District Court for the District of Columbia in Banner Heart Hospital v. Burwell, which held that the PRRB had jurisdiction over the hospitals’ challenge to Medicare outlier payment regulations despite the hospitals’ failure to claim protested amounts related to their challenge. The district court found that a cost report claim for additional outlier payments would have been futile because the Medicare contractor had no authority or discretion under the outlier payment regulations to make payment as sought by the hospitals. The Ruling states that CMS has decided to apply the holding in Banner Heart in similar administrative appeals.

The Ruling does not entirely do away with the requirement of including an item in the cost report in order to pursue Medicare reimbursement for it in a subsequent appeal. First, the Ruling applies only if the cost reporting period under appeal began before January 1, 2016. This end date is not coincidental—for periods beginning on or after January 1, 2016, CMS has simply shifted the requirement that an item be included in the cost report from being a prerequisite for PRRB jurisdiction to being a so-called “general substantive requirement” for Medicare payment. Second, the Ruling applies only where the provider had a good faith belief that the item was not allowable. The Ruling indicates that “a provider would rarely be able to demonstrate a good faith belief that an item is not allowable when that item is actually allowable under a Medicare payment regulation or other policy.”

Unfortunately, the Ruling may muddy the waters regarding the use of protested amounts in the Medicare cost report. The Ruling acknowledges that providers sometimes claim items through protested amounts “out of concern that a cost report claim for reimbursement of an item deemed non-allowable might raise program integrity questions.” Notwithstanding the Ruling, “a provider still may elect to self-disallow a specific item deemed non-allowable by filing the pertinent parts of its cost report under protest.” But the Ruling then states as follows:

“However, if the PRRB… were to determine that, despite the provider’s self-disallowance of the specific item under appeal, the Medicare contractor actually had the authority or discretion to make payment for the specific item at issue in the manner sought by the provider on appeal and the provider did not demonstrate a good faith belief that such item is not allowable, then the [PRRB] shall apply the Third implementation step for this Ruling.”

Under the third implementation step, the provider’s appeal of the item is to be dismissed for failure to meet the “dissatisfaction” requirement for jurisdiction. One problem with this statement is that providers sometimes claim items as protested amounts where the Medicare contractor has disallowed the item in previous cost report audits for lack of sufficient documentation. The adequacy of documentation to support reimbursement is one area where the Medicare contractor would seem to have discretion to allow payment. Why would CMS want to discourage providers from taking a cautious approach in claiming items in the cost report that have been disallowed in previous audits?

Christopher L. Crosswhite practices in the area of healthcare law, concentrating on Medicare and Medicaid law and regulations, Medicare reimbursement controversies and appeals, and healthcare fraud and abuse provisions.