Health Care Lawyer Blog

It’s no secret that the health care reform legislation steamrolled through Congress late last year has lost much of its momentum. Although the headline-seizing GOP victory in Massachusetts last week only means the loss of one single Senate seat, political commentators and lawmakers have acknowledged this virtually eliminates the chance of a final health care reform bill being passed anytime soon. Indeed, last Tuesday’s events in a tiny state of only 6.5 million has thrown Capitol Hill into a tailspin, with many viewing it as a catastrophic failure of the Democratic party and Newsweek’s latest cover story referring to Obama as the “stymied President of 2010.”

What’s devastating and frustrating is that while everyone agrees the current health care system doesn’t work, apparently no one will agree or take action on how to fix it. Even the anti-health care fraud legislation introduced last year by Senators Ted Kaufman (D-Del.) and Charles Grassely (R-Iowa) hasn’t advanced since October 28 and November 16, respectively, when the bills were referred to Senate committees. Is America so far politically divided that we can’t even agree that unscrupulous practitioners stealing health care funds is wrong and needs to be stopped?

After the jump - why health care fraud affects everyone

Continue reading "Editorial: Stopping Fraud Should Be A First Step in Health Care Reform" »

By now, everyone knows (or should know) that under the Stimulus Bill, health care providers are required to make “meaningful use” of electronic health records (EHRs) by 2011 or face penalties in the form of reduced Medicare/Medicaid payments. What has been unknown until recently is what exactly “meaningful use” actually means.

The Centers for Medicare and Medicare Services (CMS) and the Office of the National Coordinator for Health Information Technology (ONC) issued two proposed regulations December 30, 2009 outlining the terms of the EHR incentive programs, and identifying how providers can make “meaningful use” of EHR and the standards and specifications that will be used to develop “certified” EHR technology.

Both regulations are open to public comment until on or about March 2, 2010 and will take effect sometime in early 2010.

Here are some highlights from the regulations:

Definition of Meaningful User

CMS’s proposed rule defines the term “meaningful user” as an eligible professional or eligible hospital that, during the specified reporting period, meets the following three requirements:
(1) Demonstrates use of certified EHR technology in a meaningful manner;
(2) Demonstrates to the satisfaction of the Secretary that certified EHR technology is connected in a manner that provides for the electronic exchange of health information to improve the quality of health care such a promoting care coordination, in accordance with all laws and standards applicable to the exchange of information; and
(3) Using its certified EHR technology, submits to the Secretary, in a form and manner specified by the Secretary, information on clinical quality measures and other measures specified by the Secretary.

Both the CMS and ONC guidelines make clear that a major consideration of whether “meaningful use” is achieved will be a provider’s ability to securely exchange information among providers, and between providers and patients, using standardized data elements and technologies. The interim final rule issued by ONC set forth these standards and specifications on how to achieve meaningful use; for example, one recognized problem is how providers using EHR actually report patient data. For instance, one provider’s EHR program may list patient demographic information as (PatientAge, Patient Sex, Patient Address), while another provider’s may list similar information in a different way (Date of Birth, Gender, City/State). In order to achieve maximum interoperability, these information models must be reconciled.

After the jump - a phased approach to implementation

Continue reading "CMS/OCN Issue Proposed Definition of “Meaningful Use”, Set Standards for Electronic Health Records" »

This week the Health and Human Services Office of Inspector General (OIG) released its Fall 2009 Semi-Annual Report to Congress, detailing the office's audit, investigation, and evaluation accomplishments for the second half of the fiscal year. The Report announced $20.97 billion in savings and expected recoveries for the entire fiscal year 2009, which includes $16.48 in implemented recommendations to put funds to better use; $492 million in audit receivables (from HHS/OIG internal audits), and $4 billion in investigative receivables (from Government investigations).

Sadly, however, these numbers lack any real punch in the big picture of health care expenditures. For starters, the first half of FY 2009 reported $274.8 million in audit receivables and $2.2 billion in investigative receivables, which means numbers for the second half of the FY are down $57.6 million and $400 million, respectively. Secondly, the OIG report also disclosed that for the FY 2008, the cost of the Medicare and Medicaid programs (for the federal government and states) was a combined $812.9 billion. Given that the FBI estimates that approximately 3-10 percent of health care spending each year is wasted on fraud and abuse, this means the OIG should be able to recoup roughly $24 billion to $81.29 billion each year.

While the OIG recoveries are a step in the right direction, it is clear that any effective health care reform plan must include extensive pro-active measures to help combat fraud and abuse. Otherwise, expanding health care coverage will only mean increased opportunities for unscrupulous individuals to take advantage of the system.

Last Wednesday the Centers for Medicare and Medicaid Services (“CMS”) published the final rule (subject to comment period) for the 2010 Medicare Physicians’ Fee Schedule. (See 74 FR 61738, Nov. 25, 2009.) Notably, the Fee Schedule includes a proposed decrease of 21 percent in the physician fee schedule conversion factor, meaning reimbursements for many procedures will drop significantly under the new rule. The most affected practitioners will be rheumatologists, surgeons, pain management specialists, radiologists and non-invasive cardiologists. For example, reimbursement costs-for-procedure for echocardiography will drop roughly 35 percent under the proposed rule.

However, Congress has already intervened – on November 19, the U.S. House passed legislation which would allocate $210 billion over the next 10 years to prevent the reductions to physicians participating in the Medicare program. The bill (H.R. 3961), which still needs Senate approval, would create a new formula would actually boost doctors’ payments by 1.2 percent, instead of the 21 percent reduction now scheduled to take effect.

According to House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.), the proposed Fee Schedule formula is too low and “would bring about havoc in the Medicare program.”

While the Obama administration has endorsed the plan (a Nov. 19 statement from Press Secretary Robert Gibbs called the measure “an important step forward”), the future of the bill in the Senate is not so certain. For starters, the Senate will begin debates this week on the passage of the Senate’s health care reform bill, the “Patient Protection and Affordable Care Act.” With the Patient Protection Act guaranteed to seize the spotlight, it is likely that little attention will be given to the H.R. 3961. Additionally, the Senate already blocked a similar proposal last month.

A proposal which would have imposed a 3 percent tax on physicians' gross revenues was defeated Wednesday in the Michigan State Senate. HB 5386, which was intended to raise state Medicaid funds and in turn garner additional federal matching funds, was stopped short by a 32-4 vote in the Republican-controlled Senate.

The tax was designed to ultimately increase access to health care by producing higher payments to physicians who treat Medicaid patients. However, opponents to the bill such as the Michigan State Medical Society expressed concerns that such a tax would exacerbate the already-present drought of primary care physicians in Michigan by provoking doctors to look elsewhere for employment.

It’s not just a new techo-fad – the federal government is serious about Electronic Health Records.

How serious? Enough so that one of the many health care-related provisions tucked into this year’s American Recovery and Reinvestment Act (a.k.a. the Stimulus Bill) mandates that health care providers make “meaningful use” of Electronic Health Records (EHRs) by 2011. Providers who fail to do so will be penalized in the form of reduced Medicare and Medicaid reimbursements. However, the proverbial “carrot” is that providers who do make meaningful use of EHRs can receive thousands of dollars in Medicare/Medicaid incentive payments, as well as grant monies to help implement EHR systems.

According to an open letter released earlier this month by David Blumenthal, the National Coordinator for Health Information Technology, eligible physicians (including those in solo or small practices) who make “meaningful use” of certified EHRs can receive up to $44,000 over five years in Medicare incentive payments, or $63,750 over six years under Medicaid. Hospitals that become meaningful EHR users could receive up to four years of financial incentives payments under Medicare beginning in 2011, and up to six years of incentive payments under Medicaid beginning in October 2012.

What is “Meaningful Use”?
The question most providers are undoubtedly asking at this point is – what exactly does “meaningful use” mean? A formal definition of what constitutes “meaningful use” will be issued by the Centers for Medicare and Medicaid Services (CMS), which is scheduled to publish a definition by December 31.

After the jump - a glimpse at what may constitute "meaningful use"

Continue reading "Health Care Providers Should Prepare to Make “Meaningful Use” of EHR" »

Stopping health care fraud is by no means an easy task. New figures released by the U.S. Department of Justice, however, reveal hundreds of instances where whistleblowers have reported health care fraud, but the U.S. Government has let the cases languish for months or even years while deciding whether to get involved. In effect, the government has been tipped off on potential fraud, but has not taken action.

According to numbers released from the U.S. Department of Justice (USDOJ) to Sen. Charles Grassley (R-Iowa), there are currently 985 health care-related qui tam/False Claims Act cases pending a decision from the USDOJ on whether or not to intervene. Under the federal False Claims Act, a private individual who is aware of fraud against the government can file a whistleblower or "qui tam" lawsuit against the defendants. Once the case is filed, the government must make a decision to intervene. However, as noted by Grassley, such cases often sit stagnant for months or even years while the government makes an intervention decision. Specifically, USDOJ data shows that on average, it takes the Department of Justice 12.3 months to decide whether to intervene on a case.

“These cases were brought forward by patriotic individuals who are sticking their necks out to do what’s right. We can’t just let these whistleblowers sit in limbo for years while the federal bureaucracy takes its time deciding what to do,” Grassley said in a statement Thursday. “I want to know what the Justice Department needs in order to speed up these decisions. People who put everything on the line to speak up when they think there’s fraud against the taxpayers can’t live their lives this way.”

Click here for the full report.

As lawmakers scramble to devise ways to fund the health care overhaul, a recent estimate from the Federal Bureau of Investigation shows there may be a cool $75-$250 billion floating about in the health care system.

It may not be easy to recoup, but that’s the amount that could be saved each year by eliminating fraud and abuse in public and private health care programs. The estimate, which appears as part of an article published by HHS OIG chief counsel Lewis Morris in the latest issue of “Health Affairs” (September/October 2008, Vol. 28, No. 5) also means that roughly 3-10 percent of total health spending is wrongfully siphoned away by fraudsters.

Given that Medicare is expected to cost the federal government $503.1 billion in fiscal year 2009 (and Medicaid is anticipated to cost federal and state governments $386 billion), these numbers make clear that health care fraud is not just committed by a few scattered criminals masquerading as health care providers. Instead, such fraud is pervasive and extends all the way from Pfizer boardrooms to infusion clinics.

While combating such fraud may seem daunting, the article identifies several ways in which fraud can be controlled:

Five ways to combat health care fraud after the jump:

Continue reading "3-10% of Health Care Funding Lost to Fraud Each Year" »

A nursing home’s lawsuit against a long-term care pharmacy provider for failure to provide prescriptions as promised was dismissed by the Michigan Court of Appeals on the grounds that plaintiff’s claims against defendant were grounded in tort law, and not contract law. In Woodward Nursing Home, Inc. v. Medical Arts, Inc., (unpublished opinion issued June 25, 2009), Plaintiff entered into a written contract with Defendant whereby Defendant agreed to provide prescription medications and supplies for Plaintiff’s nursing home residents. Plaintiff alleged that it sent Defendant a prescription order on August 11, 2004, but that Defendant failed to process or deliver the prescription for more than twelve days and then lied about their reasons for nonperformance.

Plaintiff then filed suit in Wayne County Circuit Court, claiming that Defendant’s delay in filling the prescriptions caused it to lose a valuable Medicaid program certification. As a result, Plaintiff was forced to cease operating as a nursing home, was charged with regulatory sanctions, and had its provider agreement with the Michigan Medicaid program terminated.

Plaintiff’s original complaint against Defendant alleged breach of contract, negligence, malpractice and fraud. After Defendant’s Motion for Summary Disposition was denied, Defendants appealed the case to the Michigan Court of Appeals, which held that Plaintiff’s contract claim warranted dismissal because Plaintiff had failed to provide copies of the pertinent contracts pursuant to MCR 2.113(F). The COA further held that Plaintiff should have filed a notice of intent and affidavit of merit with respect to its medical malpractice claims.

Continue reading "Nursing Home's Claim Against Pharmacy for Non-Performance Dismissed; Michigan COA Holds Damages Stemmed From Tort, Not Breach of Contract" »

As I reported earlier, the Michigan Medicaid False Claims Act was amended effective January 1, 2006 through the efforts of Attorney General Mike Cox and Representative David Law (R., Commerce). I worked actively for passage of the amendment and testified before the Michigan House of Representative Judiciary committee, then chaired by Rep. Law..

The State of Michigan can recoup extra funds from combined state/federal recoveries because of the provisions of the federal Deficit Reduction Act of 2005 ('DRA"). To explain, shortly after the the Michigan Medicaid False Claims Act amendment passed the Michigan Legislature and Governor Granholm signed the Act, the U.S. Congress passed the DRA providing for a 10% incentive to States which enacted a "compliant" Qui Tam statute addressing Medicaid fraud. Specifically, the Medicaid program is a joint federal/state program. Thus, in Michigan, the federal government pays about 56% and the state 44% of the costs of the Medicaid program and fraud recoveries are divided on the same percentage.

If the state has a "compliant" Qui Tam statute, the state receives an extra 10% of the recovery--that is, 54% in Michigan--of the recovery--instead of 44%--a significant amount of money since most recoveries are in the tens of millions of dollars or more!!

However, on December 21, 2006, the U.S, Department of Health and Human Services/Office of Inspector General ("HHS/OIG") advised the state, by letter, that its Medicaid False Claims Act was NOT "DRA compliant" (that is, a mirror image of the federal False Claims Act).

In order to comply, all that was needed was a simple bill adding civil monetary penalties of at least $5000 for each violation and making one other technical amendment. Since the revisions would not have had any negative fiscal impact on the state and would have had a potentially tremendous positive impact in the event of any recovery, one would have expected Representative Law to quickly introduce a clarification/modification bill and obtain quick passage--after all, the State would most certainly not turn down the opportunity to reverse the flow of funds from Michigan to Washington??

Unfortunately, in 2006 and 2007, petty partisan bickering was rampant in the Michigan Legislature--we were paralyzed by the absurd budget fight and leadership was non-existent.

Rep. Law, finally, on September 17, 2007, introduced a one-page bill. The date of introduction is significant. In addition to being a Saturday, the day of the Notre Dame-UM football game (a game, I suspect, Rep. Law, a Notre Dame grad, was attending), it was three days before Ray Sayeh, then a WXYZ-TV investigative reporter, had scheduled (at my request) an interview with the representative to discuss the failure to take action on the revisions.

Unfortunately, again because of partisanship and Democratic control of the House of Representatives, the bill went nowhere while the Attorney General continued to obtain recoveries from fraud-feasors and the unclaimed 10% incentive was lost to Washington.

Finally, on February 19, 2008, Representative Marc Courveau (D., Northville) introduced HB 5757. The amended FCA, as presented in HB 5757, would allow the Michigan FCA to become DRA compliant. Once again, the small changes made by HB 5757, as required by the federal HHS/OIG., would cost the state nothing in administrative or other costs and would bring millions of dollars in the future back from Washington.

HB 5757 quickly passed the House with NO opposition and was sent to the Senate.

Tragically, because of continued political maneuvering, the Bill sits in the Judiciary Committee.

It seems that Rep. Courveau was elected at the expense of a Republican and the leadership of the Judiciary Committee and Senate Majority Leader, Mike Bishop will not allow this largely unopposed, fiscally responsible bill, to be brought up at the committee or floor level because it would give "points" to Rep. Courveau!!!!

The State of Michigan is in a deep recession/depression, unemployment sits at 8.5%, the highest in the nation, GM is in deep trouble, the City of Detroit is selling assets and landmarks--such at the Detroit-Windsor tunnel--and the Legislature cannot pass a one-page bill that will bring money to the state and its Medicaid recipients.

This Bill is under the radar, unfortunately--Ray (now Rez) Sayeh has joined CNN International and is posted in Pakistan, columnists such as Brian Dickerson and others have been unresponsive despite my entreaties, my solicitations to the Legislature and the use of my contacts have been unavailing.

I am frustrated. Medicaid fraud is rampant, the Attorney General is acting diligently in pursuing the cheaters, and we have been filing qui tam cases under the new Act, but even if all of these activities are successful--and they will be--the State will not receive the full benefit of its recoveries!!!

I will not stop my efforts, but it will take action by my readers to move this along. Sen. Mike Bishop may be contacted by email and his office phone number is (517) 373-2417.

The other Senators on the Judiciary Committee may be emailed at:

senwkuipers@senate.michigan.gov Sen. Kuipers - Chair

senacropsey@senate.michigan.gov Sen. Cropsey

senasanborn@senate.michigan.gov Sen. Sanborn

senbpatterson@senate.michigan.gov Sen. Patterson

sengwhitmer@senate.michigan.gov Sen. Whitmer - minority vice-chair

senhclarke@senate.michigan.gov Sen. Clarke

senmprusi@senate.michigan.gov Sen. Prusi

Monica Navarro pointed out to me that WPS Medicare Part B e-News today reported that independent laboratories may no longer (for dates of service on or after July 1, 2008) bill Medicare for the technical component (TC) of physician pathology services furnished to patients of a covered hospital, regardless of the beneficiary's hospitalization status (inpatient or outpatient) on the date that the service was performed.

WPS indicated that this ruling has its genesis In the final physician fee schedule regulation published in the Federal Register on November 2, 1999, where the Centers for Medicare & Medicaid Services (CMS) stated that it would implement a policy to pay only the hospital for the TC of physician pathology services furnished to hospital patients. Prior to this proposal, any independent laboratory could bill the carrier under the physician fee schedule for the TC of physician pathology services for hospital patients. At the request of the industry, to allow independent laboratories and hospitals sufficient time to negotiate arrangements the implementation of this rule was administratively delayed. Subsequent legislation formalized a moratorium on the implementation of the rule. As such, during this time, the carriers and, more recently, Medicare Administrative Contractors (MAC), have continued to pay for the TC of physician pathology services when an independent laboratory furnishes this service to an inpatient or outpatient of a covered hospital.

The most recent extension of the moratorium was established by the Medicare, Medicaid, and SCHIP Extension Act (MMSEA). Section 104 of the MMSEA expired on June 30, 2008, thus ending the moratorium.