CMS to Publish Proposed Rule Allowing LTC Pre-Dispute Arbitration Agreements as Condition of Admission

By on June 8, 2017

Today (June 8, 2017), CMS is publishing its proposed rule removing prohibitions against binding pre-dispute arbitration provisions in long-term care agreements.  On October 4, 2016, CMS published a final rule entitled “Reform of Requirements for Long-Term Care Facilities.” The final rule amended 42 C.F.R. 483.70(n) to prohibit LTC facilities from entering into pre-dispute arbitration agreements with any resident or his or her representative, or requiring that a resident sign an arbitration agreement as a condition of admission. The final rule required 1) that an agreement for post-dispute binding arbitration must be entered into by the resident voluntarily; 2) that the parties must agree on the selection of a neutral arbitrator; and 3) that the arbitral venue must be convenient to both parties. The arbitration agreement could be signed by another individual only if allowed under state law and all other requirements under the Federal Rule were met.  Particularly, a resident’s admission or right to remain at the facility could not be made contingent upon the resident or his or her representative signing an arbitration agreement.

However, in October 2016, the American Health Care Association and a group of affiliated nursing homes succeeded in obtaining a preliminary injunction in the United States District Court for the Northern District of Mississippi.  The district court held that the plaintiffs were likely to prevail in their challenge to the 2016 final rule. It concluded that it would likely hold that the rule’s prohibition against LTC facilities entering into pre-dispute arbitration agreements was in conflict with the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq. The court also reasoned that it was unlikely that CMS could justify the rule, or could overcome the FAA’s presumption in favor of arbitration, by relying on the agency’s general statutory authority under the Medicare and Medicaid statutes to establish rights for residents (sections 1891(c)(1)(A)(xi) and 1919(c)(1)(A)(xi) of the Act) or to promulgate rules to protect the health, safety and well-being of residents in LTC facilities (sections 1819(d)(4)(B) and 1919(d)(4)(B) of the Act).  CMS subsequently issued a nation-wide instruction on December 9, 2016, directing state survey agency directors not to enforce the 2016 final rule’s prohibition of pre-dispute arbitration provisions,  while the injunction remained in effect.

Under the recently announced policy change, CMS would retain provisions of the 2016 final rule related to protecting the interests of LTC residents, including the requirement that the agreement be explained to the resident and his or her representative in a form and manner that he or she understands. However, the proposed rule would remove the following:

  • the requirement at §483.70(n)(1) precluding facilities from entering into pre-dispute agreements for binding arbitration with any resident or resident’s representative;
  • the prohibition at §483.70(n)(2)(iii) banning facilities from requiring that residents sign arbitration agreements as a condition of admission to a facility;
  • certain provisions regarding the terms of arbitration agreements.

The proposed rule would retain the requirement that a copy of the signed agreement for binding arbitration and the arbitrator’s final decision must be retained by the facility for 5 years and be available for inspection upon request by CMS or its designee. Comments on the proposed rule must be received at CMS by 5:00 p.m. on August 7, 2017.

Filed under Arbitration, Long Term Care, Medicaid, Medicare, Medicare Rules, Nursing Home Regulations, Nursing Homes Tagged with , , , , , , , , ,

Behavioral Health System to Pay $860,000 for Anti-Kickback Statute Violations

By on February 18, 2017

Under a civil settlement with the Department of Justice, El Paso Behavioral Healthcare, formerly University Behavioral Health of El Paso, LLC (“UBH”), has been ordered to pay over three-quarters of a million dollars to resolve allegations that it made improper payments to a doctor in exchange for patient referrals, and submitted false claims to Medicare.

The allegations focused on the Medicare claims of several patients from a physician whose office received payments above fair market value, or payments for services that were not rendered pursuant to a physician services agreement which also provided for the improper referral of the physician’s patients to UBH for Medicare-reimbursed services.

Federal law, including the Anti-Kickback Act and the Stark Law, seeks to ensure that services reimbursable by federal healthcare programs are paid at fair market value and based on the best interests of patients rather than the personal financial interests of referring physicians.

Periodic review of physician agreements should be a key component of any effective compliance program. In addition to the potential criminal sanctions that may be imposed for anti-kickback violations, Medicare claims arising from such improper financial relationships may result in substantial additional false claims liability. Healthcare facilities which discover Medicare overpayments through an effective compliance program can limit their liability through self-reporting.  Read more here.

Filed under Compliance Guidance, Medicare Tagged with , , , , , , ,

CMS Publishes Final Rule: Sweeping Changes to Home Health Agency CoPs

By on January 23, 2017

On January 13, 2017, CMS published its final rule revising the conditions of participation (CoPs) that home health agencies (HHAs) must meet to participate in Medicare and Medicaid programs. The final rule implements the proposed rules published in the Federal Register October 9, 2014 (79 FR 61164), and becomes effective July 13 2017.

Among its many changes, the final rule redefines terms and establishes new standards for the content of comprehensive patient assessments, care planning, coordination of services, quality of care, quality of assessments and performance improvement (QAPI), skilled professional services, home health aid services, and clinical record keeping. The rule also makes changes to personnel requirements including limiting who can be an HHA administrator. To review the final rule in its entirety, click here.

Filed under Centers for Medicare and Medicaid Services, Home Health Agencies, Medicaid, Medicare, Medicare Rules Tagged with , , , , , , , ,

Tis the Season to be Giving – OIG Increases “Nominal Gifts” Limit

By on January 3, 2017

The Office of the Inspector General (OIG) announced this Holiday season that it is increasing the monetary value of gifts falling under the nominal value exception to Medicare’s Civil Money Penalty Law.  Under section 1128A(a)(5) of the Social Security Act [42 U.S.C. §1320a-7(a)], a person who offers or transfers to a Medicare or Medicaid beneficiary any remuneration that the person knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of Medicare or Medicaid payable items or services may be liable for civil monetary penalties (CMPs) of up to $10,000 for each wrongful act. “Remuneration” includes waivers of copayments and deductible amounts (or any part thereof) and transfers of items or services for other than fair market value[1].

However, as the OIG explained in its December 7, 2016 “Policy Statement Regarding Gifts of Nominal Value to Medicare and Medicaid Beneficiaries,” Congress intended to permit inexpensive gifts of nominal value.  The OIG has previously interpreted “inexpensive” and “nominal value” to mean a retail value of no more than $10 per item or $50 in the aggregate per patient on an annual basis, noting that it would periodically review these limits and adjust them according to inflation, if appropriate.[2]

The OIG now believes that the figures from 2000 should be adjusted. Thus, as of December 7, 2016, the OIG has modified its interpretation of “nominal value” to mean having a retail value of no more than $15 per item or $75 in the aggregate per patient on an annual basis.  The items may not be in the form of cash or cash equivalents. If a gift has a value at or below these thresholds, then the gift need not fit into an exception to section 1128A(a)(5).  Happy Holidays from the OIG.

[1] See section 1128A(i)(6) of the Act.

[2] See, e.g., 65 FR 24400, 24411 (Apr. 26, 2000).

Filed under Civil Monetary Penalties, Medicaid, Medicare, Office of Inspector General Tagged with , , , , , ,

CMS ISSUES CHANGES TO REQUIREMENTS OF PARTICIPATION AFFECTING LTC FACILITIES: ARBITRATION IS OUT—ARE WAIVER OF JURY TRIALS IN?

By on October 4, 2016

Effective November 28, 2016, long-term care facilities that participate in Medicare and Medicaid will no longer be able to enter into “pre-dispute” agreements for binding arbitration with their residents.  The Centers for Medicare & Medicaid Services (CMS) issued the final rule on September 28, 2016, after consideration of extensive comments from key stakeholders in the long-term care community regarding proposed revisions.

Under the rule, a facility can ask a resident or a resident’s representative to enter into an arbitration agreement after a dispute arises.  However, the facility must comply with several requirements, such as ensuring that the agreement provides for the selection of a neutral arbitrator and a venue convenient to both parties.  Further, a resident’s right to remain in the facility cannot be contingent upon entering into the arbitration agreement and the agreement cannot contain language that discourages communications with federal, state or local surveyors and other officials.

As one of the more controversial changes, critics of the new arbitration rule have reacted strongly against the change and have commented that this part of the rule “clearly exceeds” CMS’s statutory authority.  In its response to public comments, CMS explains that the Secretary of Health and Human Services has the authority to administer the program under the Social Security Act by setting general practice parameters for payment under Medicare and Medicaid.  CMS further cites to its authority to promulgate regulations for residents’ health, safety and well-being and states that there is “significant evidence that pre-dispute arbitration agreements have a deleterious impact on the quality of care for Medicare and Medicaid patients.”  Nevertheless, there are several legal bases upon which to challenge the agency’s ability to preclude an arbitration agreement.

While CMS’s comments cite to a resident’s waiver of the right to a jury trial as a major factor considered in its decision to disallow pre-dispute arbitration agreements, the final rule does not expressly preclude jury trial waiver provisions within facility admissions agreements.  Jury waivers may help to address runaway verdicts that have become a concern in negligence cases in past years, while still respecting expressed concerns that arbitration presents undue costs to residents and creates an environment of “secrecy.”  Note that state law may vary on whether such waivers are enforceable.

Also remarkable is CMS’s comment that it will not address waiver of class-action litigation in this rule, but rather reserve the issue for consideration during future rulemaking.

The broad-sweeping final rule also contains several other provisions that directly affect compliance programs, training of nursing staff, updating infection and control programs, and other key requirements that long-term care facilities must comply with in order to participate in the Medicare and Medicaid programs.  It is advisable for long-term care facilities to promptly consult with a knowledgeable healthcare attorney to assess modifications to admissions packets and to otherwise establish the framework necessary to comply with the revised Requirements of Participation.

Filed under Arbitration, Centers for Medicare and Medicaid Services, Department of Health and Human Services, Health Care Facilities, Hospice Programs, Long Term Care, Medicaid, Medicare, Nursing Home Regulations, Nursing Homes, Uncategorized Tagged with , , , , ,

CMS Releases Nursing Home Enforcement Information

By on June 15, 2016

On June 3, 2016, the Centers for Medicare and Medicaid Services (CMS) posted information about nursing home provider enforcement from 2006 to 2014 as part of the agency’s “ongoing efforts to ensure transparency, consistency of application of enforcement remedies, and data management to track enforcement actions across the nation.” The report includes general information about nursing home enforcement, frequently asked questions about enforcement, and enforcement reports detailing the distribution of federal enforcement remedies from 2006 to 2014.

The CMS enforcement reports provide information about CMS and state survey agency enforcement actions for all Health Inspection and Life Safety Code Standard and Complaint surveys from 2006 to 2014. The reports show the percent of providers with remedies in effect (rather than imposed) and detail civil monetary penalties by region, as well as the frequency of per day and per instance civil monetary penalties in effect. There is additional data on the number of facilities by region with the following enforcement remedies: denial of payment; discretionary and mandatory denial of payment for new admissions; directed in service training; directed plan of correction; termination; state monitoring; temporary management; transfer of residents; and facility closure.

The CMS report also discusses the impact of the recession that began in December 2007 and officially ended in June 2009. The period before the recession showed an increase in survey activities, initiatives, and deficiency citations, while there was a decline in overall survey activities and enforcement actions after the recession began.

Filed under Centers for Medicare and Medicaid Services, Long Term Care, Medicare, Nursing Home Regulations, Nursing Homes

CMS Releases Final Rule On Return of Overpayments

By on February 12, 2016

The Centers for Medicare & Medicaid Services released its final rule today on the return of overpayments. The final rule requires providers and suppliers receiving funds under the Medicare/Medicaid program to report and return overpayments within 60 days of identifying the overpayment, or the date a corresponding cost report is due, whichever is later. As published in the February 12, 2016 Federal Register, the final rule clarifies the meaning of overpayment identification, the required lookback period, and the methods available for reporting and returning identified overpayments to CMS. See https://www.federalregister.gov/articles/2016/02/12/2016-02789/medicare-program-reporting-and-returning-of-overpayments.

Identification

The point in time in which an overpayment is identified is significant because it triggers the start of the 60-day period in which overpayments must be returned. CMS originally proposed that an overpayment is identified only when “the person has actual knowledge of the existence of the overpayment or acts in reckless disregard or deliberate ignorance of the overpayment.” The final rule changes the meaning of identification, stating that “a person has identified an overpayment when the person has or should have, through the exercise of reasonable diligence, determined that the person has received an overpayment and quantified the amount of the overpayment. The change places a burden on healthcare providers and suppliers to have reasonable policies and programs in place which monitor the receipt of Medicare/Medicaid payments.

6-Year Lookback Period

The final rule also softens the period for which health care providers and suppliers may be liable for the return of overpayments. As the rule was originally proposed, CMS required a 10-year lookback period, consistent with the False Claims Act. Now, overpayments must be reported and returned only if a person identifies the overpayment within six years of the date the overpayment was received.

Guidance in Reporting and Returning Overpayments

The final rule provides that providers and suppliers must use an applicable claims adjustment, credit balance, self-reported refund, or other appropriate process to satisfy the obligation to report and return overpayments. If a health care provider or supplier has reported a self-identified overpayment to either the Self-Referral Disclosure Protocol managed by CMS or the Self-Disclosure Protocol managed by the Office of the Inspector General (OIG), the provider or supplier is considered to be in compliance with the provisions of this rule as long as they are actively engaged in the respective protocol.

Filed under Centers for Medicare and Medicaid Services, Medicaid, Medicare

New York Federal Court Issues First Interpretation of “Identified” Under the Affordable Care Act’s 60-Day Rule

By on August 26, 2015

In Kane v. Healthfirst, Inc. et al., a New York federal court became the first court to interpret when the clock starts running on the 60 days allowed to report and return an overpayment of Medicare and Medicaid funds under the Affordable Care Act. The Affordable Care Act requires a person who receives an overpayment of Medicare or Medicaid funds to report and return the overpayment within 60 days of the “date on which the overpayment was identified.” 42 U.S.C. § 1320a-7k(d)(2)(A). Any overpayment that is kept beyond the 60 days may be a reverse false claim under the False Claims Act, which imposes liability for any person who “knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government.” 31 U.S.C. § 3729(a)(1)(G).

Kane is significant for health care providers because the Affordable Care Act does not define the term “identified,” nor has the Centers for Medicare and Medicaid Services (CMS) defined this term in the Medicaid context. However, CMS has issued a final rule that applies to Medicare Advantage and the Medicare Part D Prescription Drug Program stating that an overpayment is identified when there is actual knowledge of the existence of an overpayment or if a person or entity acts in deliberate ignorance of, or with reckless disregard to the overpayment’s existence. 79 Fed. Reg. 29,844 (May 23, 2014). CMS has also issued a proposed rule applicable to Medicare providers and suppliers that adopts the same definition of “identified” that the agency adopted for Medicare Parts C and D. 77 Fed. Reg. 9,179 (Feb. 16, 2012). In this proposed rule, CMS noted that a provider or supplier may receive information about a potential overpayment that creates an obligation to inquire about whether or not there is an overpayment. If the inquiry reveals an overpayment, the 60-day deadline to report and return the overpayment runs from the date that the inquiry reveals the overpayment. CMS cautions that a failure to make a reasonable inquiry after receiving information about a potential overpayment could result in the provider knowingly retaining an overpayment. Id.

The Kane litigation arose out of a software glitch that mistakenly generated codes telling providers that they could seek additional payment from secondary payors such as Medicaid. The providers should have been told that they could not seek secondary payment for the services, except for co-payments from certain patients. As a result of this software glitch, three hospitals that were part of a network of non-profit hospitals incorrectly submitted claims to Medicaid.

Approximately 21 months after the hospitals began to bill improperly for Medicaid services, the New York State Comptroller’s office approached the hospitals with questions about the incorrect billing, ultimately revealing that there was a software problem. After the problem was discovered, an employee, relator Kane, was assigned to investigate what claims had been improperly billed to Medicaid. Five months after the Comptroller told the hospital network about the software problem, Kane informed management about 900 potential claims that contained the erroneous billing code. Kane indicated that further analysis would be needed to confirm his findings. The parties did not dispute that Kane’s listing of the incorrect billings was overly inclusive and included claims that were improperly billed as well as some claims that were billed appropriately.

Acknowledging that CMS’ rules do not technically apply in the context of Medicaid, the Kane court nonetheless adopted CMS’ interpretation of the term “identified” that the agency adopted for Medicare Parts C and D and proposed to adopt for Medicare suppliers and providers. Thus, the court concluded that Kane’s e-mail triggered the 60-day timeframe to report and return overpayments. The court reasoned that Kane had put the hospital network on notice of potential overpayments, rejecting the hospitals’ argument that the court should adopt a definition of “identified” that means “classified with certainty.”

As the first court to interpret the term “identified” under the 60-day rule, Kane is an important decision for health care providers. It is possible that other courts will also side with CMS’ interpretation of “identified.” Thus, absent further guidance from CMS or the courts, health care providers should proceed to investigate carefully and quickly all allegations of alleged overpayments and document their efforts, in order to defend against any possible violation of the 60-day rule.

Filed under Affordable Care Act, Centers for Medicare and Medicaid Services, False Claims Act, Medicaid, Medicare

CMS Proposes Rule Updating Nursing Home Conditions of Participation

By on July 31, 2015

On July 16, 2015, the Centers for Medicare and Medicaid Services (CMS) issued a lengthy proposed rule revising the requirements that long term care facilities must meet to participate in the Medicare and Medicaid programs. This is the first comprehensive revision of long term care facilities’ conditions of participation since 1991. CMS states that it revised many of the requirements to reflect current clinical practice standards, noting that innovations in resident care and quality assessment practices have emerged since the last revision. Comments on the proposed rule will be accepted until 5 p.m. on September 14, 2015.

Some of the major provisions in the proposed rule include the following.

  • CMS proposes updating resident rights provisions, including addressing roommate choice. Under the proposed rule, a resident has the right to share a room with the roommate of his or her choice.The rooming arrangement could include a same-sex couple, siblings, other relatives, long term friends, or another combination as long as certain requirements are met.
  • The rule proposes a new section that focuses on facility responsibilities, bringing together many of the facility responsibilities dispersed throughout the current regulations. CMS proposes to revise visitation requirements to establish open visitation.
  • The rule would add a new section titled “Comprehensive Person-Centered Care Planning.” This proposal would require facilities to develop a baseline care plan for each resident within 48 hours of admission, which includes instructions about providing effective and person-centered care. This section also adds several other requirements, including expanding the required members of the interdisciplinary care team to add a nurse aide, a member of the food and nutrition services staff, and a social worker.
  • While CMS considered establishing minimum nurse hours per resident day, the proposed rule does not impose minimum staffing numbers or ratios. However, the proposed rule does include some new requirements related to staffing. The proposed rule adds a competency requirement for determining sufficient nursing staff based on a facility assessment. The facility assessment includes the number of residents, resident acuity, ranges of diagnoses, and care plan contents.
  • The proposed rule changes some pharmacy requirements. The rule proposes requiring a pharmacist to review a resident’s medical chart at least every six months when the resident is new, a prior resident returns or is transferred from a hospital or other facility, and during each monthly drug regimen when the resident has been prescribed or is taking a psychotropic drug, an antibiotic, or any drug the Quality Assessment and Assurance Committee has requested be included in the pharmacist’s month review. In addition, there are several proposed revisions to requirements regarding antipsychotic drugs, which the proposed rule revises to be referred to as psychotropic drugs, defined to include any drug that affects brain activities associated with mental processes and behavior.
  • The rule proposes specific requirements for binding arbitration agreements, including provisions to ensure that the agreement is voluntary, not permitting admission to be contingent on signing an arbitration agreement, and not allowing arbitration agreements to prohibit or discourage a resident or anyone else from communicating with federal, state, or local health care or health-related officials.
  • There are several new physical environment provisions in the proposed rule. CMS proposes that facilities certified after the effective date of the regulation accommodate no more than two residents in a bedroom and have a bathroom equipped with at least a toilet, sink, and shower in each room.
  • The proposed rule adds a new section on training requirements setting out all the requirements of an effective training program that facilities must develop, implement, and maintain.
  • There are also new provisions relating to laboratory, radiology, and other diagnostic services; dental services; food and nutrition services; food safety; specialized rehabilitative services; administration; quality assurance and performance improvement; and infection control.

Filed under Centers for Medicare and Medicaid Services, Long Term Care, Medicaid, Medicare, Nursing Homes

ONC Updates Guide to Privacy and Security of Electronic Health Information

By on June 1, 2015

The Office of the National Coordinator for Health Information Technology (ONC) recently issued an updated Guide to Privacy and Security of Electronic Health Information. The guide is a resource that can help health care providers comply with the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs’ privacy and security requirements and the HIPAA Privacy, Security, and Breach Notification Rules.

6-1The guide provides a summary of key information in the following areas:

  • Understanding HIPAA rules;
  • Patients’ Health Information Rights;
  • Electronic Health Records, the HIPAA Security Rules, and Cybersecurity; and
  • Medicare and Medicaid EHR Incentive Programs’ Meaningful Use Core Objectives that Address Privacy and Security.

The guide walks health care providers through the key components of each of these subject areas.

In addition, the guide provides tools for health care providers who want to implement a security management process or provide notification about a HIPAA breach. The guide has a sample seven-step approach that can be used to implement a security management process, including help addressing the security requirement contained in the Meaningful Use for the Medicare and Medicaid Electronic Health Record (EHR) Incentive Programs. Finally, the guide provides information about what to do if there is an impermissible use or disclosure under the Privacy Rule that compromises the security or privacy of protected health information. The information includes a risk assessment process for breaches, reporting breaches, and government investigation and enforcement of potential HIPAA violations.

Filed under Electronic Health Record, HIPAA Privacy Rule, Medicaid, Medicare, Office of the National Coordinator for Health Information Technology

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