Physicians

President Barack Obama signed the American Taxpayer Relief Act of 2012, often called the “fiscal cliff” agreement, on January 2, 2013. Buried in the 59 pages of the act is a seven-line amendment to Section 1870 of the Social Security Act. This section bars recovery of overpayments from providers who are “without fault” and automatically deems a provider to be without fault three years from the year in which the original payment was made (unless there is evidence of fault). The three-year “without fault” limitation provision was enacted in 1972. Without much notice, the fiscal cliff deal extended this to five years.

The push for extension of the limitation began when the Department of Health and Human Service’s Office of Inspector General (OIG) issued a report recommending to the Centers for Medicare & Medicaid Services (CMS) that it pursue legislation to extend the statute of limitations. (See OIG, Obstacles to Collection of Millions in Medicare Overpayments.) This report blamed the time limitations on reopening and recovery of payments (four years and three years, respectively) as the reason why approximately $330 million in overpayments could not be recovered by CMS. The OIG also concluded that CMS’ inadequate guidance and monitoring of contractors was to blame. The Congressional Budget Office (CBO) has issued a report estimating that $500 million would be added to the federal treasury by 2022 as a result of the statute of limitation change. (See CBO, Detail on Estimated Budgetary Effects of Title VI.)

The biggest question for providers is how to deal with this change going forward. The following illustration demonstrates how the three-year limitation period applied: Provider was notified on February 22, 2009, that it had been paid for services provided to beneficiary. On January 2, 2013, the contractor determined that provider was overpaid for these services. If there was no evidence that provider acted fraudulently, this overpayment could not be recovered because under the statute of limitations the right to do so expired on December 31, 2012. Had the contractor determined that the provider was overpaid on any date prior to December 31, 2012, it would have been recoverable. (See Medicare Financial Management Manual, Chapter 3, Section 80.1.) Accordingly, any payments made in 2009 or before were not recoverable as of January 1, 2013.

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…

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.

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 FTC recently provided yet another warning to healthcare organizations that they must take the time to analyze potential antitrust implications when considering an acquisition or consolidation.  On August 6, the FTC  and Nevada Attorney General announced the filing of a lawsuit and proposed consent decrees settling litigation filed against Renown Health, the largest hospital provider in…

On August 16, 2012, the U.S. Court of Appeals for the Fifth Circuit dismissed an appeal challenging the Patient Protection and Affordable Care Act’s (PPACA’s) restriction on expansion by physician-owned hospitals.  The lawsuit was initially filed in the Eastern District of Texas by the physician-owned hospital trade group (Physicians Hospitals of America) and a physician-owned

…

With the passage of the ACA, the voluntary nature of compliance programs is about to change. Smaller healthcare organizations and other ancillary providers who have previously not established compliance programs will now be required to adopt formal programs.  The ACA mandates providers and suppliers participating in federal health care programs to implement compliance programs with “core elements” as a condition of enrollment.

The HHS Secretary is responsible for setting a timeline to implement the new “core elements” for each health care sector and then setting a timeline for providers to adopt compliance programs.  Details regarding the extent of the program have not yet been described or published.  Skilled nursing facilities are the first providers required to implement an effective compliance program by March 23, 2013.

Our Insight.  Your Advantage.  By doing the work now, healthcare organizations can get ahead and avoid surprises when HHS eventually publishes the mandatory compliance program rules for other healthcare sectors. Many in the healthcare industry anticipate the OIG’s voluntary compliance program guidance will serve as an example to HHS as it determines which compliance program elements shall be required.  As you prepare your compliance programs, 

The Missouri Supreme Court has ended the debate over the constitutionality of statutory caps on non-economic damages in common law causes of action, including medical malpractice claims for personal injury. In a 4-3 decision returned on July 31, 2012, the court in Watts v. Lester E. Cox Medical Centers found that the right to a…

Husch Blackwell Healthcare Department Chair Curt Chase and his co-presenters explore common hospital/physician relationships that generate serious and complex compliance issues at HCCA’s 16th Annual Compliance Institute in Las Vegas, NV.  They provide methods for effectively auditing, managing and conducting internal investigations and evaluate disclosure options and appropriate fixes.

To read the presentation, click below.