november health law update
TRANSCRIPT
FEDERAL UPDATE
Final ACO Rules Released, Along with OIG, FTC, DOJ and IRS Guidance
TheCentersforMedicare&MedicaidServices(CMS)releasedonOctober20,2011itsfinalruleforAccountableCareOrganizations(ACOs)participatingintheMedicareSharedSavingsProgram.Respondingtomorethan1,300publiccommentstotherulefirstproposedundertheAffordableCareActthispastApril,CMSmadesignificantmodificationsintendedtoreducetheburdenandcostsforparticipatingACOs.
Highlights of Medicare Shared Savings Program Changes:
•Staggeredstartdatesforearlyentries:April1,2012andJuly1,2012
•Extendedinitialtermsforearlyentries
•Riskandnon-risktracksstillavailable,butthenon-risktrackdoesnotrequirethesharingoflossesinanyyear
•Beneficiariesareassignedusingapreliminaryprospectivemethod,withafinalreconciliation
•Beneficiariesareassignedbyprimarycareservicesperformedbyspecialists,PAsandNPs,inadditiontothoseprovidedbyprimarycarephysicians
•Qualitymeasuresreducedfrom65measuresin5domainsto33measuresin4domains
•Longerphase-inforqualitymeasures:firstyear,payforreporting;secondandthirdyear,payforreportingandperformance
•ACOstoshareonfirstdollarsavedoncetheminimumsavingsrateisachieved
•Nowithholdofsharedsavings
•Flexibleapproachtoantitrustcompliance
CoincidingwiththeMedicareSharedSavingsProgramfinalrule,CMSandtheDepartmentofHealth&HumanServicesOfficeofInspectorGeneralreleasedaninterimfinalruleconcerningwaiversforfederalfraudandabuselawsandtheStarkLaw(thefederalphysicianself-referrallaw).TheinterimfinalruleincludesmanageablerequirementsandoffersprotectionforACOparticipantsduringtheperiodleadinguptoparticipationinthesharedsavingsprogram,aswellaswaiversforparticipationintheprogramandforsharedsavingsdistributions,andwaiversforrelationshipsotherwisecomplyingwithaStarkLawexceptionandforbeneficiaryincentives.
AlsoreleasedistheFederalTradeCommissionandDepartmentofJusticejointstatementofantitrustenforce-mentpolicyforACOsparticipatinginthesharedsavingsprogram,andtheIRSfactsheetfortax-exemptorganizationsparticipatinginthesharedsavingsprogram.BoththejointstatementandthefactsheetdemonstrategreaterflexibilityforACOparticipants.Theantitruststatement,inparticular,continuestoincludea30%thresholdandacomplicatedprimaryserviceareacalculationforcompliancewiththesafetyzone,butiteliminatesthepreviouslyrequiredreviewofACOswithagreatermarketshare.Instead,thestatementreferstotheruleofreasonanalysis,andclinicalandfinancialintegration,firstdiscussedinthe1996statementsofantitrustenforcementpolicy.
•CMS’sFinalRulecanbefoundathttp://www.ofr.gov/OFRUpload/OFRData/2011-27461_PI.pdf
•TheFederalTradeCommissionandDepartmentofJusticejointstatementregardingantitrustenforcementpolicycanbefoundathttp://www.justice.gov/opa/pr/2011/October/11-at-1384.html
In This Issue:
Final ACO Rules Released
OIG Issues Three Advisory Opinions
No Retroactive Liability Under NJ False Claims Act
Brach Eichler in the News
HIPAA Corner
November 2011
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•TheCMSandtheHHSOIGinterimfinalruleconcerningwaiversforfraudandabuseandself-referrallawscanbefoundathttp://www.ofr.gov/OFRUpload/OFRData/2011-27460_PI.pdf
•TheIRSfactsheetrelatingtotax-exemptorganizationsparticipatinginACOscanbefoundathttp://www.irs.gov/newsroom/article/0,,id=248490,00.html
For additional information, contact:
Kevin M. Lastorino | 973.403.3129 | [email protected] D. Fanburg | 973.403.3107 | [email protected]
OIG Disapproves of Management Services Arrangement Between Pathology Lab and Management Company Owned by Referring Physicians
InarecentAdvisoryOpinion,No.11-15,theU.S.Depart-mentofHealth&HumanServicesOfficeofInspectorGen-eral(OIG)concludedthataproposedarrangement,wherebyphysicianinvestorsinamanagementcompanywouldprovidelaboratorymanagementservicesonapercentagebasistoaclinicallaboratorytowhichtheyalsoreferpatients,couldpo-tentiallygenerateprohibitedremunerationunderthefederalAnti-KickbackStatute.
Undertheproposedarrangement,acompanyownedandmanagedbyphysicianswouldenterintoamanagementservicesagreementwithapathologylaboratoryforatermofthreeyears.Themanagementcompanywouldfurnishthepathologylabwiththecompletearrayofclinicallabo-ratorypathologyservicesforafixedmaximumnumberofhourseachyear,aswellasutilities,furniture,fixturesandtheexclusiveuseoflaboratoryspaceandequipment.Themanagementcompanywouldalsoprovidethepathologylabwithmarketingandbillingservices,aswellasessentialnon-physicianstaff.Inturn,thepathologylaboratorywouldpaythemanagementcompanyausagefeethatwouldbecalculatedbasedonapercentageofthelaboratory’sincome,fixedinadvanceforatermof12months,whichgenerallywouldcorrespondtothevolumeofthelaboratory’suseofthemanagementcompany’sservices,personnelandequipment.Furthermore,thephysicianowners/managersofthemanage-mentcompanywouldlikelyhavelittleornobackgroundintheclinicallaboratoryservicesfield.
TheOIGnotedthesimilaritythisarrangementhaswiththequestionablejointventurearrangementsthathavebeenthe
subjectofpreviousOIGguidance.Underthisarrangement,theincomeofthephysician-ownedentitywouldvarywiththevolumeorvalueofreferralsfromthephysicianinvestors.Becausethataggregateusagefeespaidbythemanagementcompanywouldnotbesetinadvanceandwouldbecalculatedbasedonapercentageofthepathologylabora-tory’sincome,theOIGfoundthatthisfeestructurewouldeffectivelylinkthephysicianinvestors’profitdistributionstothelaboratorybusinesstheysendthepathologylab,posingconsiderableriskofoverutilizationoflaboratoryservices,distortedmedicaldecision-makingandincreasedcoststofederalhealthcareprograms.
Asaresult,theOIGconcludedthattheproposedarrange-mentappearstohavenobusinesspurposeotherthantopermitthephysicianinvestorstoprofitfromthebusinesstheygenerateforthepathologylabintheformoftheirlaboratoryspecimenreferrals.Basedonthesefacts,theOIGconcludedthattheproposedarrangementwouldposemorethanaminimalriskoffraudandabuseunderthefederalAnti-KickbackStatuteandtherewasnosafeharbortobringthisarrangementintocompliance.
For additional information contact:
John D. Fanburg | 973.403.3107 | [email protected] Grelecki | 973.403.3140 | [email protected]
Specialty Therapeutics Model – High Cost Drug Assistance Approved by OIG
Inamodificationofanearlieradvisoryopinion,theU.S.DepartmentofHealth&HumanServicesOfficeofInspectorGeneral(OIG)approvedanarrangementthatwouldallowanorganizationtosubsidizethehighcosttopatientsforspecialtytherapeuticsprescribedforparticularchronicorlife-threateningdiseasesandenroll“participatingpharmacies”tostreamlinethepatientapprovalprocess.Thesedrugsareespeciallyburdensomeforrecipientsbecausetheygenerallyrequirephysicianadministration,self-administrationbyinjectionorinfusion,specialhandlingorstorage,orsignificantpatienteducation.
In2007,theOIGapprovedtheorganization’sarrangementtoprovidefinancialassistancetocertainfinanciallyneedyrecipients,includingfederalhealthcareprogrambeneficiaries,withspecifiedseriousillnesses(OIGAdvisoryOpinionNo.07-18).Theapprovedarrangementrequiredthatpatientsmusthavehealthinsurancecoverageforthe
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particulardisease,theinsurancemustcoverthemedicationinissue,themedicationmustbeusedtotreatthedisease,andthepatientmustmeetcertainminimumincomequalifications.TheOIGhasnowamendedtheapprovaltoincludeasubsidyforspecialtytherapeuticsandasystemofenrolling“participatingpharmacies”becausetheOIGhasdeterminedthatthesechangesdonotincreasetherisktothefederalhealthcareprograms.
Theconcerniswhethernarrowly-defineddiseasecategoriescouldresultinpatientsbeingsteeredtoparticulardrugsbasedontheavailabilityofthesubsidyandencouragedonorstocontributetotheorganizationthathaveaninterestinsellingthoseproductsinviolationoftheAnti-KickbackStatute.However,theOIGwassatisfiedthattheorganizationwouldretaindecision-makingauthorityaboutdiseasefundstobeestablished,andeachspecialtytherapeuticcoveredwouldbemarketedbyatleasttwodifferentmanufacturers.TheOIGdeterminedthatprogramsusingwidelyrecognizedclinicalstandardscoveringarangeofavailableproductspresentsufficientlylowriskthatdonorcontributionswouldimproperlyinfluencereferralsorapatient’sselectionofaserviceproviderorsupplier.
Further,theOIGdidnotobjecttopharmaciesenrollingas“participatingpharmacies,”inordertoaccessanefficientprocessingsystem.TheOIGdeterminedthatthearrangementwasacceptablebecauseitisopentoanypharmacy,patientscoulduseanypharmacy,andanypharmacycouldstillbilltheorganizationdirectly.
For additional information, contact:
Joseph M. Gorrell | 973.403.3112 | [email protected] M. Dornfeld | 973.403.3136 | [email protected]
OIG Looks Favorably on Limited Co-Management of Patients by Ophthalmologists and Optometrists
Lastmonth,theU.S.DepartmentofHealth&HumanServicesOfficeofInspectorGeneral(OIG)alsoissuedAdvisoryOpinion11-14,whichpermitsophthalmologistsandoptometriststoco-managepatientswhoundergocataractsurgeryfortheimplantingofpremiumintraocularlenses(PremiumIOLs).AlthoughMedicarecoversconventionalintraocularlenses,itonlypartiallycoversPremiumIOLs.
Undertheproposedarrangement,afterimplantingPremiumIOLs,theophthalmologygroupwouldgivethepatienttheoptionofobtainingfollow-upcarewithanophthalmologistoranoptometrist.Inthisway,theophthalmologistsandoptometristswouldco-managethecataractpatient’scare.However,theoptometristmaychargeseparatelyforhis/herservicestotheextentnotcoveredbyMedicare.TheophthalmologygroupaskedtheOIGwhethersuchaco-managementarrangementwouldconstituteremunerationintheformofanopportunitytoearnafeeforfollow-upcaretoareferralsource,namely,theoptometristswhomayhavereferredthepatienttotheophthalmologistforthecataractsurgeryinthefirstplace.
TheOIGconcludedthattheproposedco-managementarrangementwaspermissibleforthefollowingreasons:
•Therewouldbenowrittenorunwrittenagreementstoco-managepatients.Moreover,patientswouldbeinformedthattheycouldseekfollow-upcarefromophthalmologistsoroptometrists
•Patientswouldbeinformedthattheoptometristmaychargeaseparatefeeforhis/herservicesrelatedtothePremiumIOLs
•TheincreasedcostsassociatedwiththePremiumIOLsarenotcoveredbyMedicare
InissuingAdvisoryOpinion11-14,theOIGcautionedthattheopiniondoesnotaddressotherproblematicco-managementarrangementsinwhichophthalmologistsandoptometristssplitaglobalfee.Accordingly,theAdvisoryOpinionislimitedinscopetothespecificfactsoftheproposedarrangement.
For additional information, contact:
Debra C. Lienhardt | 973.364.5203 | [email protected] C. Brower | 973.403.3103 | [email protected]
OIG Issues 2012 Work Plan
TheU.S.DepartmentofHealth&HumanServicesOfficeofInspectorGeneral(OIG)hasreleasedits2012WorkPlan,whichidentifiesvariouscomplianceandauditprojectsitwilladdressduringthefiscalyear.TheWorkPlanincludesprojectsplannedineachoftheDepartmentofHealth&HumanServices’majorentities:CMS,thepublichealthagencies,theAdministrationsforChildrenandFamilies,andtheAdministrationonAging.TheWorkPlanalsoincludesinformationonprojectsrelatedtoissuesthataffectmultipleprograms,suchasstateandlocalgovernmentuseoffederal
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funds.TheWorkPlanaddressesMedicarePartsA,B,CandD;Medicaidreviews;legalandinvestigativeinitiativesandpublichealthandhumanservicesreviews.
Someofthekeyhospitalinitiativesinclude:
•Reviewinghospitals’controlsforensuringtheaccuracyandvalidityofdatarelatedtoqualityofcarethatissubmittedtoCMS
•ReviewingMedicarepaymentstohospitalstodeterminecompliancewithselected(notspecified)billingrequirements
•Interviewing/surveyinghospitalleadershipandcomplianceofficersabouttheircomplianceprograms
TheWorkPlancontainsthefollowingkeyinitiativesforphysicians:
•ReviewingtheextenttowhichproviderscomplywithassignmentrulesanddeterminingtowhatextentbeneficiariesarebilledinexcessofamountsallowedbyMedicare
•Reviewingphysicianbillingforincident-toservicestodeterminewhetherpaymentforsuchserviceshadahighererrorratethannon-incident-toservices
Somekeyinitiativesforlong-termcareinclude:
•ReviewingMedicare-andMedicaid-certifiednursinghomes’implementationoftheAffordableCareActrequirementthatnursinghomeshavecomplianceandethicsprogramsthatincludeeightspecificcomponentsonorafter2013
•ReviewingCMS’andStates’useofenforcementmeasurestodeterminetheireffectonthequalityofcarebeneficiariesreceiveinpoorlyperformingnursinghomes
Somekeyinitiativesaffectinghomehealthagencies(HHA)include:
•ReviewingHHAclaimsnotaccompaniedwithOASISdata,andclaimsinconsistentwithOASISdata
•ReviewingHHAstoidentifythoseagenciesexhibiting“questionablebilling,”whichtheOIGdefinesasclaimsthatexhibit“certaincharacteristicsthatmayindicatepotentialfraud”
•ReviewinghomehealthclaimstodeterminethedegreetowhichsuchclaimsmeetMedicarecoveragerequirements
For additional information, contact:
Carol Grelecki | 973.403.3140 | [email protected] E. Manigan | 973.403.3132 | [email protected]
STATE UPDATE
Court Makes Clear That NJ False Claims Act Does Not Apply Retroactively
TheNewJerseyAppellateDivisionrecentlyheldthattheNewJerseyFalseClaimsActdoesnotapplyretroactivelytoallegedfalseclaimsthatweresubmittedbeforeMarch13,2008,theeffectivedateoftheAct.
Inthecase,State v. Corr. Med. Serv., Inc.,from1996throughMarch31,2005,CorrectionalDentalAssociates(CDA)provideddentalservicestoinmatesofNewJersey’sprisons.In2005,thecontractwasawardedtoCorrectionalMedicalServices(CMS)andAllCareDentalGroup,forthedentalportionofinmatecare.In2005,LeslieHayling,theownerofCDA,commencedaninvestigationofCMSandAllCare,whichledhimtoconcludethatAllCarewassubmittingfalseclaimsforpaymentunderthedentalportionofthecontract.
OnAugust25,2008,Haylingfiledaqui tamsuitagainstAllCarefortheclaimsAllCaresubmittedfromApril1,2005throughMarch31,2007.Inaqui tamsuit,thepersonbring-ingtheaction,knownastherelator,isawardedashareoftheproceedsofasuccessfulaction.Followingservice,thede-fendantsmovedtodismissthecomplaintbecausetheclaimsweresubmittedbeforetheeffectivedateoftheAct.
ThecourtdeterminedthattheActisnotretroactivelyapplicabletoconductoccurringpriortoitseffectivedate.ThecourtappliedacceptedrulesofstatutoryconstructionandfoundthatanyexceptionstotherulethattheapplicationofnewlawsaretobeappliedprospectivelyonlydidnotapplyinthiscasebecausethestatuteclearlysetforthaneffectivedateofMarch13,2008.Thecourtadditionallydeterminedthattherewasnorequirementtoapplythestatuteretroactivelytomakethestatuteworkable,togiveitthemostsensibleinterpretation,orforanyoftheotherreasonsthatweresuggestedtothecourt.
For additional information, contact:
Joseph M. Gorrell | 973.403.3112 | [email protected] Mark E. Manigan | 973.403.3132 | [email protected]
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DHSS Implements Mandatory Universal Transfer Form
NewJerseyregulationsrequiringthemandatoryuseoftheNewJerseyDepartmentofHealthandSeniorServices(DHSS)UniversalTransferForm(UTF)(N.J.A.C.8:43E-13)wentintoeffectonOctober30,2011.TheUTFistobecompletedandsentbyalllicensedhealthcarefacilitieswithapatient,wheneverapatientistransferredtoanotherlicensedhealthcarefacilityorprogram.
DHSSinstituteduseoftheUTFtoensurethataccuratecommunicationofpertinent,accurateclinicalpatientcareinformationisconveyedatthetimeoftransferofapatientbetweenhealthcarefacilitiesorprograms.TheUTFismeanttoconveypatientinformationrequiredunderfederalregulationsaswellasspecificfactsthataphysicianornursemayneedtoimmediatelybegincaringforapatientwhenthepatientarrivesatanewfacilityorprogram.
TheUTFwasdesigned,testedandrefinedoverathree-yearperiodbyaspecialtaskforcecomprisedofmedicalprofessionals,DHSS,healthcareassociationsandRutgersUniversity.InresponsetocommentsDHSSreceivedontheproposeduseoftheUFT,DHSSdevelopedinstructionsfortheUTF,whichincludesexplanationsoftheacronymsandphrasesusedontheUFT.TheUTFandtheinstructionsareavailableathttp://web.doh.state.nj.us/apps2/form.
For additional information, contact:
Carol Grelecki | 973.403.3140 | [email protected] M. Lastorino | 973.403.3129 | [email protected]
Brach Eichler In The News
BrachEichlerManagingMemberJohnFanburg,whoalsochairsthehealthcarepracticegroup,isoneofsixindividualsinNewJerseywhohavebeenselectedasfinalistsintheExecutiveoftheYearcategoryinthe2011BusinessoftheYearawardsprogrampresentedbyNJBIZ,NewJersey’spremierbusinessnewspublication.TheBusinessoftheYearawardsprogramcelebratesNewJersey’smostdynamicbusinessesandbusinessleaderswhoshareacommitmenttoprofessionalexcellence,businessgrowthandthecommunity.
BrachEichlerwashonoredbytheBergenVolunteerMedicalInitiative,receivingtheCorporateSpiritofGivingAward.
HealthcarepracticegroupmemberKevinLastorinoisspeakingon“UnderstandingAccountableCareOrganizations(ACOs)”tothemembersoftheHunterdonCountyMedicalSocietyatitsmonthlymeetingonNovember15.
HealthcarepracticegroupmemberMarkManiganspokeon“HotTopicsinTrenton/BusinessTrends”totheNewJerseyOrthopaedicSociety’sfallmeeting.OnOctober27,Mr.ManiganalsospokeattheCouncilonStatePublicAffairs’StateoftheState2011ConferenceonRevitalizingOurEconomy.Thetopic:“HealthcareinNewJersey:WhoWillPaytheBill?”
Lastmonth,JohnFanburgpresenteda“LegalUpdate”atthe61stAnnualSeminar&AnnualMeetingoftheNewJerseySocietyofPathologists.
HIPAA CORNEROnSeptember14,2011,ScienceApplicationsInternationalCorporation(SAIC),initsroleasabusinessassociateand/orsubcontractorforTRICARE,themilitaryhealthplan,reportedadatabreachinvolvingpersonalinformationimpactinganestimated4.9millionmilitaryclinicandhospitalpatients.AccordingtothepressstatementissuedbyTRICARE,theinformationwascontainedonbackuptapesfromanelectronichealthrecordusedinthemilitaryhealthsystemtocapturepatientdatafrom1992throughSeptember7,2011,andincludedSocialSecuritynumbers,addressesandphonenumbers,andsomepersonalhealthdatasuchasclinicalnotes,laboratorytestsandprescriptions.Nofinancialdata,suchascreditcardorbankaccountinformation,wascontainedonthebackuptapes.
Initspressstatement,TRICAREadvisedthattheriskofharmtopatientswasjudgedtobelowdespitethedataelementsinvolved,sinceretrievingthedataonthetapeswouldhaverequiredknowledgeofandaccesstospecifichardwareandsoftwareandknowledgeofthesystemanddatastructure.Notwithstandingthedeterminationthattheriskofharmwaslow,TRICAREnotifiedbeneficiariesaffectedbythebreachduetoDepartmentofDefenserequirementsandthetotalityofthecircumstances.
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Members
Todd C. Brower | 973.403.3103 | [email protected] Lani M. Dornfeld | 973.403.3136 | [email protected] D. Fanburg, Chair | 973.403.3107 | [email protected] Joseph M. Gorrell | 973.403.3112 | [email protected]
Carol Grelecki | 973.403.3140 | [email protected] M. Lastorino | 973.403.3129 | [email protected] C. Lienhardt | 973.364.5203 | [email protected] E. Manigan | 973.403.3132 | [email protected]
Notonlyshouldthisincidentremindcoveredhealthcareprovidersoftheimportanceoftheirbreachnotificationpoliciesandprocedures,butalsooftheirrelationshipswiththeirbusinessassociates.Businessassociateagreementsshouldensurethatbusinessassociatesarerequiredtonotifythecoveredproviderofasecuritybreachpromptlysothattheprovidercandeterminenextsteps,includingwhetherornottonotifyaffectedindividuals.Bywayofbackground,theHealthInformationTechnologyforEconomicandClinicalHealthAct’sbreachnotificationrulerequiresthatcoveredhealthcareprovidersinformtheirpatientswhenthere
hasbeenabreachoftheirprotectedhealthinformation.Theterm“breach”isbroadlydefinedastheunauthorizedacquisition,access,useordisclosureofprotectedhealthinformationinamannernotpermittedbytheHIPAAprivacyrulewhichcompromisesthesecurityorprivacyofsuchinformation.
For additional information, contact:
Lani M. Dornfeld | 973.403.3136 | [email protected] Todd C. Brower | 973.403.3103 | [email protected]
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Health Law Practice Group | 101 Eisenhower Parkway, Roseland, NJ 07068 | 973.228.5700
Counsel
Richard B. Robins | 973.403.3147 | [email protected]
Associates
Jenny Carroll | 973.364.5223 | [email protected] Ehrenkranz | 973.364.5234 | [email protected] Fuhrman | 973.364.5214 | [email protected] M. Jennings | 973.364.5204 | [email protected]
Leonard Lipsky | 973.364.5218 | [email protected] Senthil | 973.403.3150 | [email protected] J. Yun | 973.364.5229 | [email protected]