Articles Posted in Payer Reimbursement


Vitreo Retinal Consultants of the Palm Beaches, P.A. (VRC) sued the U.S. Department of Health and Human Resources (HHS) to recover payments it made to Medicare, having previously refunded the payments to Medicare based on Medicare’s notice of overpayment. The Eleventh Circuit affirmed the decision of the U.S. District Court, which upheld the administrative decision supporting Medicare’s overpayment notice.  The ophthalmologist/owner of the VRC was indicted and charged with 46 counts of healthcare fraud, according to a Department of Justice press release.

Georgia Medicare Reimbursement Attorneys

VRC treated Medicare patients who suffered from age-related macular degeneration (AMD) and similar retinal diseases with intravitreal injections of Lucentis, a Medicare Part B drug approved by the FDA.   There was no dispute in the case that the drug was medically reasonable and necessary for treatment of AMD.  However, the FDA labeling instructed that the full contents of the 2.0-mg vial be injected into a syringe for purposes of injecting a single 0.5-mg dose of Lucentis into the patient’s eye once a month.  The label clearly stated that “[e]ach vial should only be used for the treatment of a single eye.”  VRC did not follow the labeling instructions; rather, it treated up to three patients from a single vile.

Based on applicable Medicare reimbursement rates, if administered as per the FDA label, a physician would inject 0.5 mg into the patient’s eye, dispose of 1.5 mg, and receive reimbursement in the amount of approximately $2,025, the average total cost of the vial.  VRC would bill Medicare $2,025 for every 0.5-mg dose it administered, however, and be reimbursed $2,025 for every dose.  Since VRC would get up to three doses from a single vial, it was reimbursed up to $6,075 per vial, about three times the allowed reimbursement.

Medicare’s contractor issued a preliminary overpayment determination of $8.9 million.  Reconsideration was denied and the overpayment determination was upheld by and administrative law judge and the Medicare Appeals Council. VRC filed suit, and the US District Court deferred to the agency decision.

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889854_freedom_2The U.S. Centers for Medicare & Medicaid Services (CMS) recently finalized a final rule to effectuate the federal government’s ability under the Affordable Care Act (ACA) to recover self-identified overpayments, applicable to Medicare Parts A and B.  CMS’ implementing overpayment rule is the latest sword in the government’s formidable arsenal to combat fraud and abuse with regard to healthcare reimbursement under federal programs.  Physicians and other healthcare businesses and suppliers should take heed, as they will be subject to considerable potential financial liability and professional risks for noncompliance with the new overpayment rules.  Our Atlanta/Augusta business and healthcare law firm follows developments in healthcare fraud and abuse laws.

New Teeth for ACA Fraud and Abuse Provisions

Section 6402 of the ACA requires physicians, healthcare providers and suppliers, managed care plans, and other groups to self-report and refund to the government any Medicare or Medicaid overpayments by the latter of 60 days from the date the overpayment is identified or the date any corresponding cost report is due. The failure to do so subjects the offending party to civil monetary penalties and exclusion from all federal healthcare reimbursement programs.  Additionally, according to the new overpayment rules, the retained overpayment is an “obligation” under the False Claims Act (FCA), subjecting the violator to all the financial consequences that attend FCA liability.  The new rule is part of CMS’ final regulations to implement the ACA’s requirements with regard to overpayments as concerns Medicare Part A and B.

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usa-dollar-bills-1431130-mCMS recently announced what it describes as the largest-ever multi-payer initiative to improve primary care in America,” known as Comprehensive Primary Care Plus (CPC+). Though much of the press release is couched in terms of improving patient care — and surely CPC+ is intended to do so — the real impetus appears to be the government’s critical need to control healthcare costs funded by federal programs.

Atlanta/Augusta, Georgia Physician Practice Lawyers

The idea is to support a new primary care delivery model that will incentivize and reward value and quality.  The current Administration’s goal is to have 50% of all Medicare fee-for-service payments made via alternative payment models by 2018.  The Center for Medicare and Medicaid Innovation, which exists pursuant to Section 1115A of the Social Security Act (added under the Affordable Care Act) for the purpose of testing new payment and service delivery models, developed CPC+ as part of its mission, to aid the federal government in its efforts to curb its healthcare costs and enhance the quality of healthcare delivery.

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For several years, hospital administrators have been adjusting to changes in federal rules for calculating patients’ unpaid medical bills into hospital Medicare reimbursement.

The federal government provides funding to hospitals that treat indigent patients under so-called “Disproportionate Share Hospital (DSH) programs,” which provide partial compensation to facilities based on a formula.  Many of the roughly 3,100 hospitals receiving DSH payments are teaching hospitals or those in large urban areas.

The Patient Protection and Affordable Care Act changed the formula for calculating DSH payments in fiscal year 2014, significantly reducing the share hospitals received, with goals of reducing funding for the Medicare DSH payments initially by 75 percent and subsequently increasing payments based on the percent of the population uninsured and the amount of uncompensated care provided; and to reduce the Medicaid DSH program by $18.1 billion by 2020.

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The U.S. Centers for Medicare and Medicaid Services (CMS) issued a Final Rule earlier this week, which created prior authorization rules applicable to particular durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). The impetus for the rule is CMS’ determination that prior authorization will curb past issues with unnecessary utilization of DMEPOS, saving the government money and enhancing the care of Medicare beneficiaries.

Atlanta and Augusta Business and Healthcare Law Firm

The Social Security Act (the Act) authorizes CMS to periodically revise its list of DMEPOS that is subjected to unnecessary utilization and to develop a prior authorization process for such items. See the Act, § 1834(a)(15). CMS broadly considers “unnecessary utilization” to include “the furnishing of items that do not comply with one or more of Medicare’s coverage, coding, and payment rules.” The Final Rule creates a Master List of specific DMEPOS potentially subject to prior authorization. The so-called “Master List,” together with pertinent other information regarding the list, can be accessed via this link. An items presence on the Master List does not automatically create a prior authorization requirement. CMS will implement a subset of items on the Master List, a “Required Prior Authorization List,” which will be published in the Federal Register with 60 days’ notice before implementation.

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calculator-stethoscope-1004851-m.jpgMore than ever, physician innovation is needed in business models for medical practices to deal with problems associated with our cumbersome third party payer healthcare system. Our Atlanta health care law firm supports direct pay practice medicine as a positive trend. Many doctors are now setting up direct pay (a/k/a “concierge”) medical practices. This practice model in its purest form eliminates third party payers, and the patient-“member” of the concierge plan pays a fixed, prepaid fee for a menu of physician services that typically offer the patient greater access to the doctor. Varying hybrid concierge models exist that include some limited use of insurance plans. Direct Pay practices will likely continue to emerge and flourish as doctors seek smart business alternatives to deliver care in spite of a challenging regulatory and third-party payer healthcare environment.

For patients, belonging to a concierge practice usually means more access to and time with a doctor who really gets to know them and increasingly with flexible, affordable financial options to suit individual needs. For doctors, direct pay practice models can offer handsome compensation and desired relief from the medical hamster wheel of having to see a patient every six minutes to make reimbursement numbers work, with all the red tape and other burdens that attend having to spend too much time dealing with insurance companies. So what is the downside to a direct pay practice?

There are many legal and business issues unique to health care that confine doctors in how they set up a medical practice. These issues must be carefully evaluated to ensure medical compliance and avoid unpleasant business issues down the road. Although policy makers have not created direct restrictions prohibiting the concierge practice model, for those physicians who want to start or convert to this model, many legal considerations warrant caution and special care in setting up the business. Medicare presents a strong example. Doctors that accept Medicare reimbursement can either accept assignment and bill Medicare directly for their services or seek payment from the patient (who, in turn, seeks reimbursement from Medicare). Physicians can execute “participation agreements” with Medicare and receive greater reimbursement (5%). However, Medicare participating doctors cannot charge more than what is allowed by the Medicare fee schedules. Non-participating doctors who do not accept assignment cannot charge more than 115% of applicable amounts in the Medicare fee schedules. Violations of Medicare assignment rules can be prosecuted under the federal False Claims act.
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hospital-room-449234-m.jpgMedicare payments to community health centers are expected to increase by as much as $1.3 billion over the next five years, according to Bloomberg News, based on a new prospective payment system. On April 30, 2014, the U.S. Department of Health and Human Services’ Centers for Medicare & Medicaid Services (CMS) rendered a Final Rule that, among other things, implements methodology and payment rates for a prospective payment system (PPS) for federally qualified health centers (FQHC), effective October 1, 2014. The Final Rule stems from the Affordable Care Act’s (ACA) provisions to establish a new payment system for FQHC services under Medicare Part B (supplemental medical insurance) based on prospectively set rates.
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usa-dollar-bills-1431130-m.jpgNobody likes to work for free. Physicians and other healthcare providers are frequently at risk of non-payment for valuable services to patients due to third-party payer mistakes and/or attempts to arbitrarily delay, reduce or avoid reimbursement. A common practice of payers is, for example, to deny reimbursement based on an allegation that the provider did not submit correct paperwork or alleged improper coding. Another tactic of third third-party payers is to simply adjust a payment downward because the payer concludes the physician is entitled to less reimbursement based on what was paid on a prior, “similar” claim. Reimbursement issues have led 49 states to enact laws to address such problems. Unfortunately, State laws only mildly abate the problem for healthcare providers.

Action that a healthcare provider can take to address payer abuse often depends largely on the State in which the provider is located. Some states allow physicians to take direct court action against a third-party payer with regard to reimbursement issues. Other States require providers to appeal to their insurance regulatory agencies to take action against a payer for any prompt pay issues, or similar exhaustion of administrative remedies. A regulatory agency may investigate and take action against a third-party payer. Provider options may also be affected by whether a State’s prompt pay laws are preempted by the Employee Retirement Income Security Act (ERISA), which provides its own remedies in some circumstances.

Steps physicians can take to protect reimbursement revenue and reduce the chance of disputes with payers include:

Read every word in your payer-physician contract: Pay close attention to the language used in the contract and the terms and conditions. Are the policies and procedures affecting payment clearly laid out? Does the language include a requirement for the payer to submit advance notice of any modifications to payment? Does the contract clearly define what is considered a “clean claim”?

Don’t procrastinate: In submitting claims, believe Murphy. Allow your practice more than enough time to submit a claim to a payer. You never know what delays, issues, or human errors could give a payer the opportunity to contend your claim was late or submitted incorrectly.

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1047190_instrument_collection.jpgThe concierge practice of medicine is the wave of the future. This is very good news for the American consumer and tax payer.

As the price tag for Medicare has increased, so has the pressure on federal lawmakers to do something to avoid the looming fiscal disaster that attends rising health care costs. Since the U.S. Taxpayer demands that Medicare costs somehow be contained while, ironically, the U.S. Voter (same person, different hat) views Medicare as a sacrosanct entitlement to consume health care, the lawmaker “solution” has thus far focused the cost-cutting pressure on the supply side of health care, including cutting physician reimbursement. See, e.g. The Plea for Repeal of the Medicare Sustainable Growth Rate, May 4, 2013 post, this Blog. The trend of private insurers and other non-government payers is to follow what Medicare does (at least with respect to setting physician reimbursement rates and billing rules). An unintended consequence of the downward pressure on physician reimbursement together with modern health care’s increasing red tape/regulation and associated costs and headaches has been to drive primary care physicians out of private practice altogether. They are fed up. Many doctors have found (or are looking for) hospital employment. Others have retired. This trend has been referred to as the “silent exodus” of physicians and threatens to profoundly impact patient access care in a negative way. See National Survey Points to a “Silent Exodus” of Physicians, Merritt Hawkins, September 24, 2012.

Thankfully, some physicians are discovering that the concierge practice of medicine can be a smart, rewarding way to own and operate a private medical practice as a business that, rather than suffering the severe strains of the third-party-payer model, is free to actually focus on practicing medicine. For many doctors, the concierge medical practice model is returning private practice to its correct state — a real practice of medicine, medical judgment and care that is patient focused and free from the intrusion into the business of rendering care that a commercial or governmental third-party payer necessarily creates.
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doc pic.jpgThe American Medical Association (AMA) and numerous other medical associations, including the Medical Association of Georgia (MAG), are a strong voice for repealing the Medical Sustainable Sustainable Growth Rate (SGR). Led by the AMA, a very large group of influential medical associations wrote Congress late last year advocating that the SGR is “an enormous impediment to successful health care delivery and payment reforms that can improve the quality of patient care while lowering growth in costs.” The call for repealing SGR is increasingly strong and urgent.

SGR is the method used by the U.S. Centers for Medicare and Medicaid Services (CMS) to set Medicare reimbursement rates for doctors with a formula purportedly tied to economic growth. The SGR issue derives from a well-intended but seriously flawed attempt to curb federal spending. Pursuant to the Balanced Budget Act of 1997, CMS employs SRG as a method to ensure yearly increases in Medicare expenses do not exceed increases in the level of growth in the U.S. Gross Domestic Product. Under the SGR scheme, if spending increases more than a set level, physician payments are adjusted downward; if spending is below a set level, rates are increased.

At first, the SGR formula arguably worked – to a degree – but only while the U.S. economy grew. After the US economy stalled in 2002, SGR number crunching changed for the worst as Medicare expenses exceeded projections, a trend that has continued. As a result, virtually every year for the last decade there has been a risk to physicians of very significant cuts in Medicare reimbursement rates required by law. Rather than repealing or revamping SGR, however, Congress has repeatedly effectuated a last minute, legislative patch “fix” to avert a crisis, deferring a permanent solution for future political wrangling. For example, with the latest “fix,” the American Taxpayer Relief Act of 2012, Congress delayed a 26.5 percent cut in Medicare physician payments for one year. The Congressional Budget Office projects that physician payments under Medicare will be reduced by about 25% in January 2014. Again, some fix will be needed, as the cuts would cause many medical practices to close, denying patients access to medical care. The recurrence of this political issue continues to frustrate physicians in a big way. Many have left the Medicare program; others threaten to do so. Access to medical care is thus diminished, contrary to the essential purpose of Medicare.
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