Health Care Lawyer Blog

Congress has again delayed the pending 21 percent reduction in the 2010 Medicare Physician Fee Schedule. A bill that was swiftly passed through the House and Senate late last month grants an additional 30-day extension for implementing the cuts in physician reimbursement rates. The bill, H.R. 4691, also extended for one month the expiration deadline for unemployment benefits and COBRA health care subsidies.

In other postponement news, the FTC has (again) delayed enforcement of the Red Flags Rule from November 1, 2008 to June 1, 2010. The American Medical Association has continued its efforts to convince the FTC that the rule should not apply to physicians and their practices. Since the rule was issued, the AMA has objected to the FTC’s stance that physician practices are “creditors” since they accept insurance and bill patients after services have been provided, or if they allow patients to set up payment plans for services.

The AMA’s efforts are most likely spurred on by an October 2009 decision from the U.S. District Court for the District of Columbia held that the Red Flag Rules did not apply to attorneys. The decision was the result of a lawsuit filed by the American Bar Association which protested the application of the Red Flag Rules to attorneys. Specifically, the court held that the law was too vague to infer that Congress intended to regulate the legal profession as creditors.

As a blogger, I do so enjoy occasions where government officials confirm my observations.

For example, last Wednesday I posted on how health care reform legislation should focus on combating fraud as a way to reduce the rapidly escalating costs of care. On Thursday, during the National Summit on Health Care Fraud held in Bethesda, Maryland, Attorney General Eric Holder disclosed that Justice Department records show that efforts to combat health care fraud have stalled in the past two years.

Holder stated that two years after the federal government ramped up its efforts to combat Medicare fraud, the number of people charged with such fraud has barely changed. Specifically, federal prosecutors have charged 803 people with defrauding medical insurers in FY 2009. (Nearly all of the charges involved Medicare fraud.) This number represents a mere 2 percent increase since the government began deploying “strike forces” to target fraud in 2007.

The 2007 strike force targeted fraud in Miami, and following the inception of the Miami program the number of people charged with health care fraud leaped nearly 35 percent. The strike force program, also known as the Health Care Fraud Prevention & Enforcement Action Team or HEAT, has since been expanded to six other cities (Detroit, Houston, Los Angeles, Baton Rouge, New York, and Tampa). Strike force efforts in the latter three cities began in December of 2009.

Notably, according to Louis Saccoccio, head of the National Health Care Anti-Fraud Association, many of the charges constitute “low hanging fruit” and while the government has generally done a good job targeting fraud, there are many undiscovered cases.

During the Summit, Attorney General Holder noted that fraud costs Medicare an estimated $60 billion a year. This is number is significantly higher than reports from the FBI, which estimates that combined fraud in all health care programs eats up 3-10 percent of total health care spending. Since the operating costs for the Medicare program in FY 2008 ran around $460.9 billion, $60 billion in losses would mean that fraud accounts for 13 percent of the Medicare budget.

After the jump - where anti-fraud efforts will be directed

Continue reading "Anti-Health Care Fraud Efforts Stalled, According to AG" »

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" »

Each year, the proposed Medicare Physicians Fee Schedule (MPFS) rates threaten to take a nosedive, and each year Congress has stepped in to prevent those cuts from occurring. The 2010 MPFS (originally slated to take effect January 1, but subsequently delayed until February 28) contain cuts of 21.1 percent, which are the most significant since 1992. The Fee Schedule is based on Medicare’s sustainable growth rate (SGR), a formula which is based on the economy’s health and has threatened cuts to physician payments every year since 2003.

The proposed 2010 cuts apply to all practice areas, although those expected to be the most affected include reumathologists, surgeons, pain management specialists, radiologists, and non-invasive cardiologists. For example, payments for echocardiography procedures are expected to plummet 35.5 percent, and payments for MRI spine lumbars will drop around 20.93 percent.

Groups such as the AMA and AARP claim (not surprisingly) that linking physician reimbursement to the country’s gross domestic product growth is a mistake – specifically, such groups argue that the cost of running a medical practice typically grows at a higher rate than the GDP.

The versions of the House and Senate health care reform bills both replace versions of the MPFS with raises – 1.2 percent and .5 percent, respectively. The Senate bill is a one-year “patch” which only defers the program cuts to 2011. The House bill essentially erases accumulated SGR debt and gives physician a 1.2 percent raise based on the Medicare Economic Index, which measures inflation in physician-practice costs. This solution would add more than $200 billion to the federal deficit by wiping out the accumulated SGR debt.

With fate of both the House and Senate health care reform bills unclear after last week’s Massachusetts election, a separate vote may be needed to delay or cancel the 21.2 percent cut. The Senate is expected to vote on a debt-ceiling bill that would contain a permanent fix to the SGR and repeal the physician payment formula.

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.

Increasing access to health care may be a hot health care reform issue, but some legislators are focused on a different angle – making sure that health care funds are not squandered on fraud and abuse. Earlier this month Senator Ted Kaufman (D-Del) introduced the Health Care Fraud Enforcement Act of 2009 (S. 1959), which proposes to strengthen the federal sentencing guidelines and statutes governing health care fraud, forfeiture, money laundering and obstruction. Additionally, on Monday Senator Charles Grassley (R-Iowa) introduced the Fighting Medicare Payment Fraud Act of 2009 (S. 2774), which would give the Secretary of Health and Human Services authority to extend the time period in which Medicare payments must be made if the Secretary determines there is a likelihood of fraud, waste of abuse.

Kaufman Bill

The Kaufman bill, which was created to “building on the fraud-prevention efforts included in the [Senate Committees’] comprehensive health care reform bills” would make a few key reforms, including changing sentencing guidelines for criminals convicted of health care fraud, make punishments “commensurate with costs” of fraud, and increase whistleblower payments.

After the jump -- details on the Kaufman and Grassley Bills

Continue reading "Legislators Ramp Up Efforts to Stop Health Care Fraud" »

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" »

The firm of Frank, Haron, Weiner and Navarro has collaborated with the United States and Michigan governments to settle a false claims suit against St. John Health System for $822,000.

The lawsuit was filed in 2008 by the law firm under the qui tam provisions of the federal False Claims Act, Title 31, United States Code, Section 3730 (b) –(h) on behalf of Maria Hoepner and Frank Pink, D.D.S.

The Act (and similar state Acts, such as the Michigan Medicaid False Claims Act) provides incentives to private citizens, called Relators, who discover fraud against the federal government and who bring their information to the government and help pursue the defrauding entities. The qui tam provisions allow Relators to represent the interest of the government for damages and civil penalties for a violation of law, and if the action is successful, a portion of the recovery is provided to the Relators.

Ms. Hoepner was formerly the Clinic Coordinator for a dental clinic operated jointly by St. John Health System and the University of Detroit at St. John Detroit Riverview Center. Dr. Pink was a supervising and billing dentist at the clinic. The law suit claimed St. Johns Health System submitted or caused to be submitted claims to the Medicaid program, for dental or oral/maxillofacial care on behalf of three health care professionals at St. John Riverview Center.

Continue reading "Michigan Health Care Fraud Case Settled for $800,000 Against St. John" »

As part of the continuing push to reform health care, the Obama administration has announced a proposal to decrease Medicare payments for imaging services and to specialists such as cardiologists and radiologists, and use the savings to increase payments to primary care physicians.

Physicians who pursue careers in primary care may be compared to law school grads that join public interest associations – i.e,. they are foregoing the hefty paychecks of their peers who enter more specialized fields. For example, family medicine doctors earn an average of $185,000 per year, while specialists like radiologists or cardiologists can earn twice that much. However, the waning interest in primary care has led to a decrease in the number of primary care physicians, which is cited as one reason for the nation’s health care crisis. Specifically, patients without a primary care physician typically do not receive the type of preventative care that is essential to good health, such as cholesterol monitoring, smoking cessation guidance, or health management.

Take the following as an example – suppose Joe (let’s call him “Joe the Painter”) develops a nagging cough. He tries to make an appointment to see one of the few primary care physicians in his town who accept his insurance, but cannot get an appointment for several weeks. Joe decides he will just “tough it out” and hopes the cough will go away. Unfortunately, the cough gets worse. When Joe finally does get in to see a primary care doctor, the cough has evolved into severe bronchitis and Joe must be hospitalized. Joe spends several days in the hospital and receives thousands and thousands of dollars of medical treatment. As it turns out, his bronchitis was caused by a minor virus which could have easily been treated with an inexpensive antibiotic that his primary care physician could have prescribed.

Continue reading "Medicare Payments for Imaging, Specialists Slashed Under Proposed MPFS" »

The House and Senate this week voted by substantial margins to override President Bush’s veto of a Medicare package (H.R. 6331) that blocks the over 10% reimbursement cut to physicians that went into effect July 1 (See original Alert below.)

The U.S. Senate, this afternoon, passed the Medicare Improvements for Patients and Providers Act of 2008 (H.R. 6331) upon voting to end the Republican filibuster with 69 affirmative votes for cloture. The Senators had agreed that the bill would be considered passed if cloture was invoked. The Bill, among other things, eliminates the proposed 10.6% physician pay cut, instead instituting a 1.1% increase effective January 1, 2009.

Senator Ted Kennedy made his first appearance on the Senate Floor since his brain tumor was discovered.

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.