Hospitals & Health Systems

Pediatric critical care transport teams at the Alfred I. duPont Hospital for Children in Wilmington, Delaware participated in a study using iPads to communicate about the patient’s condition prior to and during transport.  The study, which was funded by the Nemours Fund for Children’s Health, found that use of iPads provided better communication between the transport…

Recently, the U.S. Department of Health and Human Services (HHS) announced a settlement with the Hospice of North Idaho (HONI) for potential violations of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Security Rule.  The settlement, which was for $50,000, is unique because it is the first settlement involving a breach of electronic…

A recent report by the Office of Inspector General for the Department of Health and Human Services (OIG) concluded that in Fiscal Year 2010, 61% of Medicare providers that appealed CMS payment decisions were fully successful in their respective appeal.  In other words, these providers persuaded the Administrative Law Judge (ALJ) handling the appeal to completely overturn previous adverse payment decisions made by CMS and its contractors.  Notably, of the 61% of providers that were successful, those appealing Part A and B claims had the most success, 67% and 59% respectively.

The Medicare overpayment appeal process consists of four levels.  At the first level of appeal, which is available after an initial overpayment determination, the individual or entity (appellant) appeals the overpayment decision to CMS’s Medicare Administrative Contractor.  If the appellant is unsuccessful, the next appeal is administered by CMS’s Qualified Independent Contractor (QIC).  The third level of appeal is administered by the ALJ, and the fourth level is administered by the Medicare Appeals Council.  OIG’s report contrasted the high success rate at the ALJ level to the low 20% success rate at the QIC level.  While there are many reasons for the difference, OIG’s report found that the main reason is that ALJs tend to view Medicare’s reimbursement and coverage policies less strictly than CMS’s contractors.  OIG also found that CMS participated in only 10% of all ALJ appeals, which resulted in the ALJ overturning CMS’s decision in 60% of these cases.

The California Supreme Court has agreed to hear a case to decide this issue (Fahlen v. Sutter Central Valley Hospitals, 208 Cal. App. 4th 557 (2012)).  The case pits the sometimes adverse interests of physicians against the interests of hospitals when employment and practice privilege issues collide.  Physicians who allege their privileges have been terminated in retaliation for blowing the whistle do not want to wait to file a whistleblower case until all administrative and judicial remedies concerning their clinical privileges are exhausted.  On the flip side, hospitals do not want to fight physicians on two fronts: in court and in the hospital’s own peer review process with the potential for judicial review.

The hospital in the case, Sutter Central Valley Hospitals, declined to renew the physician’s privileges after peer review proceedings, and that determination was upheld by the hospital’s board.  While the physician, Dr. Fahlen, might have been able to challenge that decision in court, he chose to file a lawsuit against the hospital with a number of claims, including claims under California’s whistleblower protection law (Cal. Health & Safety Code Section 1278.5, subd. (a)).  Dr. Fahlen claims that he lost his privileges as retaliation for blowing the whistle on dangerous nurses.

In its Semi-Annual Report to Congress, OIG announced that expected recoveries for FY 2012 are $6.9 billion.  The $6.9 billion consists of $923.8 million in audit receivables and $6 billion in investigative receivables.  The investigative receivables include criminal restitution, settlements pursuant to False Claims Act (FCA) cases and Civil Monetary Penalty (CMP) actions, and…

In a recent advisory opinion, the OIG stated that it would not seek sanctions against a hospital-based hospice agency for providing certain volunteer services to terminally ill patients who did not qualify for the hospice benefit. The OIG recognized that the volunteer services may ultimately influence the recipients to select the hospice, which was a…

The Office of Inspector General (OIG) of the Department of Health and Human Services has concluded that a per diem payment structure between a not-for-profit hospital and specialist physicians would not result in administrative sanctions under OIG’s civil monetary penalties law that relates to prohibited remuneration by the anti-kickback statute. According to an OIG Advisory Opinion that was posted this week:

Each year, [the hospital] allocates an aggregate annual payment amount per specialty for on-call coverage payments to participating physicians based on: (1) the likely number of days per month the specialty would be called; (2) the likely number of patients a participating physician would see per call day; and (3) the likely number of patients requiring inpatient care and post-discharge follow-up care in a participating physician’s office (OIG Advisory Opinion 12-15)

Once the aggregate amount per specialty is determined, the hospital divides this amount by 365 days to create the on-call coverage per diem fee to be paid to the specialty physicians. Notably, these physicians receive the per diem fee for each day of coverage under the arrangement even if they are not contacted by the emergency department to treat a patient.

Numerous elements of the particular arrangement at issue were highlighted by OIG as minimizing the risk of fraud and abuse. First, the per diem payment was certified by an independent consultant as commercially reasonable and within the range of fair market value for actual and necessary services. It was also calculated without regard to referrals or other business generated by the participating physicians. The OIG highlighted that the per diem amount was calculated annually in advance and was uniformly administered without regard to the individual physician’s referrals.

The Government Accountability Office (GAO) issued an interesting report in September that analyzed civil and criminal healthcare fraud cases.  The report is based on 2010 data from the various agencies in the federal government charged with investigating and pursuing healthcare fraud.  For purposes of this blog entry, I’m going to focus on some key numbers on the civil side. 

In 2010, the government investigated a total of 10,187 “subjects.”  Subjects included entities such as hospitals, medical clinics, and pharmacies, as well as individuals that provide services at these entities.

  • Of the 10,187 subjects investigated, 2,339 of the subjects were related to civil investigations, rather than criminal investigations.
  • Of the 2,339 civil investigations, nearly 20% of these were hospitals.  Medical centers or clinics made up another almost 18% of the total 2,339 civil investigations.
  • Of the total 2,339 civil investigations, the government actually pursued cases against 1,087.
  • Of the 1,087 civil cases the government pursued, the government either settled with, or won a judgment against, 55% of these subjects.
  • Of the 55% civil cases that either settled or resulted in a judgment for the government, 44% of these subjects were hospitals or medical facilities (medical practices or clinics).

These numbers are interesting because it shows that hospital or medical facilities make up over one third of all civil investigations and almost half of all settlements.  It is also interesting to look at the number of investigations that were based on qui tam filings.  A qui tam is a civil False Claims Act case brought by a private citizen, “relator” or “whistleblower,” on behalf of the government.  Once a case is filed, the Department of Justice and the Office of Inspector General are charged with investigating and making a determination about whether the government should pursue the case by becoming a party to the litigation.  In many cases, if the government believes the allegations have merit, the government will attempt to settle before actually litigating.