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Health Law News
- 6/3/2009 - von Briesen & Roper Legal Update
“Under Arrangements” Under Fire: Stark Rules Set to Become Effective October 1, 2009
New restrictions on per-click and percentage-based leasing
arrangements and “under arrangements” provider agreements become effective October 1, 2009. These limitations will
significantly diminish the ongoing utility of these models as a vehicle for hospital/physician collaboration. Hospitals
and physicians now have four months to restructure or abandon non-compliant arrangements, as existing arrangements will
not be grandfathered under the new rules. Read more...
- 6/2/2009 - Senate Finance Committee Proposes Legislation Mandating Charity Care Guidelines for Tax-Exempt Hospitals
The Senate Finance committee, led by Chuck Grassley (R-Iowa) and Max Baucus (D-Montana), is proposing a new enforcement
mechanism for tax-exempt hospitals under which hospitals would have to provide certain levels of community benefit. For
example, a tax-exempt hospital would be required to provide charity care equal to an as-yet unspecified percentage of its
patient revenue. Also, under the proposal, tax-exempt hospitals could not refuse to provide service based on a patient's
ability to pay and would have to follow certain procedures before instituting collection actions against patients. If the
tax-exempt hospital violates the charity care standards, the government could impose excise taxes or ultimately revoke its
tax-exempt status. See the full text of the Finance committee's proposed health system savings and revenue options
here.
The proposed requirements for tax-exempt hospitals begin on page 31 of the document.
The American Hospital Association opposes the one-size-fits-all standard and in a May 28, 2009 bulletin, urged hospital
leaders to contact their senators to oppose the proposed charity standards. The AHA's bulletin is available
here (available to AHA members only).
- 6/2/2009 - Representatives Ask Obama to Withdraw Regulations Set to Eliminate the Indirect Medical Education (“IME”) Adjustment
Two-hundred Twenty (220) members of the House of Representatives have signed a letter asking President Obama to withdraw
regulations that would eliminate the IME adjustment for teaching hospitals under the capital IPPS. The regulations created
by the Center for Medicare and Medicaid Services (“CMS”) were originally set to phase in cuts over two years, in 2009 and
2010. Congress prevented the first year of these cuts in the American Recovery and Reinvestment Act, but did not preclude
CMS from eliminating the IME adjustment in FY 2010. Citing, in part, the threat to the financial viability of teaching
hospitals, the Representatives have asked Obama to withdraw this policy in the FY 2010 IPPS rule. The letter follows a
similar letter sent by 52 Senators to CMS’s Acting Administrator in early May. You can view the House letter
here.
- 5/27/2009 - Fraud Enforcement and Recovery Act of 2009 Signed Into Law
On May 20, 2009, President Obama signed the Fraud Enforcement and Recovery Act
expanding protections for whistleblowers exposing fraud in federal contracting. The FERA was originally designed to combat
mortgage fraud, but also expands the whistleblower protections afforded by the False Claims Act. Among other provisions, the
FERA no longer allows companies to use subcontractors to avoid liability under anti-fraud laws and extends whistleblower
protection to contractors, subcontractors, and agents reporting fraud. Importantly, the FERA eliminates the requirement
for "specific intent" to defraud the government, and instead clarifies that a person is liable under the False Claims Act
when he or she knowingly makes a false claim to obtain money or property, any part of which is provided by the government.
Attorney General Eric Holder and HHS Secretary Kathleen Sebelius announced the formation of the Health Care Fraud Prevention
and Enforcement Action Team (HEAT) as a collaboration between federal agencies, such as HHS and the Department of Justice,
to fight Medicare fraud. The HEAT team will focus on prevention and training for providers on how to identify and avoid
fraud. Read the press release on HEAT.
- 5/26/2009 - OIG Advisory Opinion Approves On-Call Compensation
for Physicians Who Provide Care to Uninsured
In an Advisory Opinion posted on May 21, the OIG said a hospital could compensate certain physicians who provide care to
uninsured patients without the threat of sanctions.
The Opinion centered around an arrangement whereby a non-profit, 400-bed hospital proposed to compensate on-call physicians
who provide care to indigent and uninsured patients. The hospital cited a shortage of physicians available to provide the
requested services due in part to lack of reimbursement and increased liability for the services performed as reasons for
the proposed arrangement.
In issuing the Opinion, the OIG found that the proposed arrangement presented a low risk of fraud and abuse because the
hospital provided sufficient safeguards to reduce the risk that it would violate the Anti-Kickback Statute. Factors that
supported the OIG’s conclusion included the fact that the hospital certified that the compensation would be fair market
value, without regard to business generated between the parties; that the hospital had legitimate reasons for providing the
compensation; that the compensation would be offered uniformly to all physicians who meet the criteria for receiving
payment; and that the proposed arrangement would promote a public benefit by preventing additional on-call shortages.
The complete Advisory Opinion can be accessed
here.
- 5/21/2009 - ONCHIT Implementation Plan
The Office of the National Coordinator for Health Information Technology recently published an operating plan to meet all the statutory
requirements of the HITECH Act and Recovery Act. While we continue to say "don't do anything yet", it looks like providers, health
plans and entities that furnish services to providers and health plans should be ready to make significant changes to their policies
and practices relating to information technology beginning in mid-August, 2009. The Implementation Plan can be viewed
here.
- 5/13/2009 - Employers Face New Issues In Reacting to Pandemic Influenza
Health systems and other employers are responding to the H1N1 influenza outbreak by developing call-in lines for sick
employees to track the spread of the flu among workers. Employers are also implementing policies that encourage employees
to stay home if they have the flu or have been exposed to the virus. In some such policies, workers are being told that
absences in connection with H1N1 will not be charged as "occurrences" under occurrence-based absenteeism policies or
charged against sick time. The Centers for Disease Control have developed a workplace planning
web page
to provide employers with some guidance. If you need assistance developing policies in response to H1N1, please contact
vB&R Labor and Employment Attorneys Doris Brosnan,
Dan Dennehy, or Sarah Platt.
- 5/8/2009 - CMS Has Issued Its IPPS FY 2010 Proposed Rule on May 1, 2009
You can view the full 1228 page proposed rule
here, but a few highlights from the
proposed rule follow below.
- CMS plans to add four new measures, retire one existing measure, and combine two measures that hospitals must report in FY
2010 to receive the full Inpatient Prospective Payment System (“IPPS”) market basket update for FY 2011.
- CMS plans to update hospital rates for general acute care hospitals under the IPPS with a 2.1% increase for inflation and
a 1.9% reduction for a documentation and coding adjustment, for a net increase of 0.2% for FY 2010.
- CMS plans to update payment rates to long-term care hospitals (“LTCH”) under the LTCH PPS with a 2.4% increase for
inflation and a 1.8% reduction for a documentation and coding adjustment, for a net increase of 0.6% for FY 2010.
The documentation and coding adjustments are part of CMS’s goal of achieving budget neutrality following changes in hospital
documentation and coding practices after the adoption of the MS-DRG and MS-LTCH-DRG classification systems. These systems
led to changes in documentation and coding practices that result in higher aggregate payments to hospitals, but which do
not reflect an increase in patients’ severity of illness. An additional 6.6% in adjustments for acute care hospitals will
be needed for FY 2011 and 2012 to reach the Medicare Actuary’s estimate of a necessary 8.5% adjustment to achieve budget
neutrality. Comments to these proposals and other changes in the propose rule are due on June 30, 2009.
- 5/1/2009 - Senate Finance Committee Releases Document Detailing Health Care Reform Policy Options
Among the options under consideration are bonus payments to primary care providers and surgeons practicing in underserved
areas. According to the document released by the Senate Finance Committee on April 29, 2009, providers who “furnish at
least 60% of their services in specified ambulatory settings would receive a bonus of at least 5% over the fee schedule
amount for providing certain E/M services.” Additionally, general surgeons who provide services in “newly defined rural
general surgeon scarcity areas” would receive 5% bonus “or some other amount” over the fee schedule for services provided
between January 1, 2010 and December 31, 2014. While these bonuses would likely be offset by pay cuts for other fee schedule
services in accordance with MedPAC budget neutrality recommendations, the document leaves open the option for alternative
funding sources.
The complete report discussing these and other policy options can be accessed
here.
According to a press release issued
by the Committee, public comments on the policy options outlined in the document may be directed to
Health_Reform@finance-dem.senate.gov by May 15, 2009.
- 4/29/2009 - Wisconsin Lawmakers Approve Stricter Standards on Pre-Existing Conditions for Health Insurers
The AP reports,
"State lawmakers have approved tightening health insurance standards for pre-existing conditions." At present, "health
insurers can refuse to cover a pre-existing condition for two years in individual policies. The state Assembly voted 61-38
to approve a bill that would reduce that to one year." The legislation "also allows insurers to look back for pre-existing
conditions in current policy holders for only one year. Right now, they can go through a person's entire medical history."
Furthermore, the measure "calls for insurers to renew individual polices without additional underwriting."
- 4/27/2009 - A Group of Organizations Requests CMS to Reconsider Recent Guidance on Supervision Requirements for
Hospital Outpatient Therapeutic Services
A group of 12 organizations has submitted a letter to CMS requesting that it withdraw its recent guidance on the supervision
required for hospital outpatient therapeutic services provided incident to a physician’s services. The guidance, provided in
the 2009 Outpatient Prospective Payment System (“OPPS”) Final Rule published on November 18, 2008, made several
“clarifications” to the supervision requirement for such services. See 73 Fed. Reg. 68702-4.
First, CMS “clarified” that it requires “direct supervision” for therapeutic services provided incident to a physician’s
services in a hospital and in provider-based departments of the hospital (both on and off campus). In the 2001 OPPS Final
Rule, CMS had required direct supervision for off-campus provider-based departments, but stated that direct supervision did
not apply to services furnished in an on-campus outpatient hospital department. Second, CMS stated in the 2009 OPPS Final
Rule that for provider-based departments, the physician providing the supervision must be present in the provider-based
department. CMS has since incorporated this concept into the Medicare Benefit Policy Manual, Chapter 6, §20.5.1.
In the letter, the group of organizations has requested that CMS withdraw this guidance or, at least, give providers more
time to make any necessary changes to become compliant. The group asserts that “there was a clear lack of effective and
adequate notice about the CMS policy change, which as a result, affected the opportunity to comment on the proposal.” The
group asserts that the “new policy places a considerable burden on hospitals, requiring them to engage more physicians for
direct supervisory coverage without a clear clinical need.” The group also urges CMS to schedule a meeting to allow
providers to offer feedback to CMS about these requirements. You can view the letter
here.
- 4/23/2009 - OIG: “How you pay determines how you will be cheated.”
In a formal statement before the U.S. Senate Committee on Finance’s April 21, 2009 Roundtable Discussion on Health Care
Reform, Chief Counsel to the Inspector General, Lewis Morris, discussed why combating waste, fraud, and abuse must be an
essential component of any strategy to reform the health care system. Morris emphasized OIG’s impressive return on investment
when it comes to fraud and abuse enforcement. Morris noted that from FY 2006 through FY 2008, OIG’s investigative receivables
averaged $2.04 billion and its audit disallowances resulting from Medicare and Medicaid oversight averaged $1.22 billion per
year. The result was a Medicare and Medicaid specific return on investment for OIG oversight of $17:$1. In addition, in FY
2008, implemented OIG recommendations resulted in $16.72 billion in savings and funds put to better use. OIG opened 1,750
new health care fraud investigations and had over 2,500 health care investigations open at the end of FY 2008.
Morris detailed the following five principles for combating health care fraud, waste, and abuse:
1. Scrutinize individuals and entities that want to participate as providers and suppliers, prior to their enrollment in health care programs.
2. Establish payment methodologies that are reasonable and responsive to changes in the marketplace.
3. Assist health care providers and suppliers in adopting practices that promote compliance with program requirements, including quality and safety standards.
4. Vigilantly monitor the programs for evidence of fraud, waste, and abuse.
5. Respond swiftly to detected frauds, impose sufficient punishment to deter others, and promptly remedy program vulnerabilities.
To be sure, health care reform will include comprehensive fraud and abuse enforcement as a critical cost saving component.
You can view the complete statement here.
- 4/22/2009 - Joint Commission Releases Revised Scoring Guidelines
The Joint Commission has released scoring guidelines for the current list of revisions that are expected to be implemented
on July 1.
Intending to bring existing standards in line with the Medicare Conditions of Participation, The Joint Commission previously
released an update in January, shortly after the 2009 standards went into effect.
These latest revisions came about after discussions with CMS where certain new or revised standards were found to be
covered elsewhere in the standards and thus unneeded.
A crosswalk between the first and second updates, including scoring information, can be found
here.
- 4/21/2009 - Senators Baucus and Kennedy Aim For a Draft of Healthcare Reform Legislation by Early June
In a letter to President Barack Obama dated April 20, 2009, Senators Max Baucus (Senate Finance Committee Chairman) and
Edward Kennedy (Senate Health, Education, Labor, and Pensions Committee Chairman) informed President Obama that they have
set an “aggressive schedule” for healthcare reform. The Senators stated that their committees plan to mark-up legislation
in early June, with the intention that the two committees can quickly merge their drafts into a single bill. The Senators
did not discuss the legislation in detail, but asserted that “comprehensive healthcare reform legislation will responsibly
contain costs, improve quality, enhance disease prevention, and provide coverage to all Americans.” You can view the
letter here.
- 4/21/2009 - HHS Releases Guidance for Securing Health Information and Preventing Harm from Breaches
The U.S. Department of Health and Human Services (HHS) published guidance
regarding technologies and methodologies to
secure health information and prevent harm by rendering health information unusable, unreadable, or indecipherable to
unauthorized individuals. The American Recovery and Reinvestment Act required publication of the guidance by April 18.
This builds on the existing requirements of the HIPAA Privacy and Security Rules, which are unchanged.
The guidance issued provides steps entities can take to secure personal health information and establishes the trigger
for when entities must notify that patient data has been compromised. This guidance is related to “breach notification”
regulations, which will be issued by HHS and the Federal Trade Commission (FTC) respectively. The HHS regulations will
apply to entities covered by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and the FTC regulation
will apply to vendors of personal health records and certain others not covered by HIPAA. The Recovery Act requires that
these regulations be published within 180 days of enactment.
The guidance must be updated annually but HHS may update and reissue it this year, after public comment is considered and
at the same time HHS’ breach notification regulation is published.
- 4/20/2009 - Healthy Workforce Act Is Introduced
A bill that would provide a tax credit to companies offering “effective and comprehensive wellness programs” was introduced
in both the House and Senate on April 2. The Healthy Workforce Act (H.R. 1897, S. 803) would amend the Internal Revenue
Code to provide a credit for 50 percent of the costs employers would incur in implementing such wellness programs for
their employees. The bill was introduced by Senators Tom Harkin (D-IA) and John Cornyn (R-TX) and Representatives Earl
Blumenauer (D-OR) and Mary Bono Mack (R-CA). Similar legislation was introduced and debated in 2007 but died in
committee.
According to information provided by Sen. Harkin, to be eligible for this credit, businesses would need to provide
programs that include, among other elements, “health risk assessments, health awareness and behavior change programs,
meaningful incentives for program participation and an employee committee that tailors programs to meet workforce needs.”
While the current bill has not yet been published, it is likely the same if not substantially similar to the bill
introduced in 2007. The full version is available
here. That bill capped the credit
amount at $200 per employee for businesses with fewer than 200 employees, and $100 per employee for those with more
than 200 employees.
The House bill has been referred to the House Committee on Ways and Means, and the Senate version to the Senate Committee
on Finance.
- 4/16/2009 - FTC Publishes Proposed Breach Notification Rule for Electronic Health Information
The Federal Trade Commission announced today that it will publish a Federal Register notice of a proposed rule that
requires that consumers be notified when the security of their electronic health information is breached (the "Proposed
Rule").
The Proposed Rule is a first step in the implementation of the American Recovery and Reinvestment Act of 2009's (the "Act")
breach notification requirement. The Act requires that the Department of Health and Human Services and the FTC study and, in
early 2010, publish a report on potential privacy, security, and breach notification requirements to be applicable to
vendors of personal health records and any third-party entities from which those vendors purchase services.
In the interim, the Act requires that the FTC issue a temporary rule requiring these entities to notify consumers if the
security of their health information is breached; that temporary rule is the Proposed Rule announced today. Most
importantly, the Proposed Rule defines what actions trigger the notice, as well as the timing, method, and content of notice.
The notice will be published in the Federal Register shortly, and is available now on the FTC’s
web site.
- 4/13/2009 - CMS Selects 14 Communities to Participate in its Care Transitions Project to Improve Hospital Readmission Rates
CMS has selected the following 14 communities to participate in its Care Transitions Project: (1) Providence, Rhode Island;
(2) Upper Capitol Region, New York; (3) Western Pennsylvania; (4) Southwestern New Jersey; (5) Metro Atlanta East, Georgia;
(6) Miami; (7) Tuscaloosa, Alabama; (8) Evansville, Indiana; (9) Greater Lansing Area, Michigan; (10) Omaha, Nebraska;
(11) Baton Rouge, Louisiana; (12) North West Denver, Colorado; (13) Harlingen, Texas; and (14) Whatcom County, Washington.
The Project is designed to improve the quality of care by reducing hospital readmission rates. State Quality Improvement
Organizations will work with providers in each community to introduce process improvements and enhance coordination across
the continuum of care. Care Transition teams will have the flexibility to customize their interventions for locality specific
diseases and causes of readmission. The Project will last through summer 2011. To view CMS’s press release click
here,
or click here for additional
information on the Project.
- 4/13/09 - IRS Solicits Comments on Redesigned Form 990
On April 6, 2009, the Internal Revenue Service posted a
link requesting feedback from tax-exempt
organizations on the revised Form 990, the information return filed by such organizations each year. The redesigned Form
990 is being used for the first time for the 2008 tax year. The IRS notes that comments will be considered as future
revisions to the Form 990 are made and to identify areas where tax-exempt organizations may need further guidance and
assistance. Comments should be sent by email to: Form990Revision@irs.gov.
- 4/10/09 - OIG Enters Into $2 Million Civil Monetary Penalty Settlement With Radiology Practice
The Office of Inspector General (OIG) for the Department of Health and Human Services has entered into a Civil Monetary
Penalty (CMP) settlement agreement with West Valley Imaging Limited Partnership. The defendants will pay $2 million to
resolve allegations that they submitted false or fraudulent claims to Medicare. OIG alleged that the defendants
intentionally defrauded Medicare by improperly providing diagnostic tests to Medicare beneficiaries without the required
treating physicians’ orders, billing for certain tests under CPT codes not supported by the medical records, and failing
to satisfy certain other Medicare billing and coverage requirements. The $2 million settlement is one of the largest ever
negotiated under OIG’s CMP authority. A link to the full civil monetary penalty settlement release
is here.
- 4/9/09 - The Sixth Circuit Court of Appeals Issues An Opinion Interpreting EMTALA’s Reach
In the case, Moses v. Providence Hospital and Medical Centers, Inc., the hospital discharged a patient who was
allegedly suffering from mental illness. The patient had been admitted as an inpatient after his wife brought him to
the emergency room of the hospital. After his release, the patient killed his wife. The wife’s representatives sued
both the hospital and the psychiatrist. The court made several decisions in the case which affect EMTALA’s reach for
hospitals in Kentucky, Michigan, Ohio, and Tennessee.
First, the court determined that EMTALA permits a non-patient (in this case, the representative of the person harmed
by the patient) who is directly harmed by an EMTALA violation to sue a hospital for the violation. The hospital had tried
to argue that only patients who were directly harmed by a violation could sue under EMTALA. As to the lawsuit against
the psychiatrist, the court continued to hold that individuals, such as physicians, are not subject to a lawsuit under
EMTALA’s private right of action.
Second, the court refused to give deference to an EMTALA regulation that provides that a hospital’s EMTALA obligations end
once the hospital admits an individual as an inpatient in good faith. See 42 C.F.R. § 489.24(d)(2)(i). The court believed
that this regulation was contrary to the plain language of EMTALA and held that “a hospital may not release a patient with
an emergency medical condition without first determining that the patient has actually stabilized, even if the hospital
properly admitted the patient.”
Finally, the court held that a mental health emergency can qualify as an “emergency medical condition,” thereby invoking
EMTALA’s obligations to screen and either stabilize or transfer. The court, however, found that an issue of fact existed as
to the patient’s condition at his initial screening and at his discharge (i.e. whether he was stabilized and what the
doctors actually believed), and remanded the case accordingly. To see the opinion, click
here.
- 4/7/09 - The New York State Office of the Medicaid Inspector General Publishes Self-Disclosure Guidance
The State of New York Office of the Medicaid Inspector General (the “OMIG”) published a Provider Self-Disclosure Guidance
document (the “Guidance”) last month. The Guidance discusses the advantages of disclosure, when to disclose, the process
to disclose, and the steps to repay. The OMIG states that the Guidance gives providers more flexibility to disclose
overpayments and that providers who self-disclose will usually achieve a better outcome than they would if the OMIG
discovers the matter independently. The OMIG expects to complete most disclosures within six months and consulted with
industry stakeholders to produce the Guidance. To review the Guidance or the related Voluntary Disclosure Form,
click here.
- 4/6/09 - OIG posts an advisory opinion concerning an employment contract entered into concurrently with a real
estate purchase contract between employer and new employee. Read the full advisory opinion here.
- 4/3/09 - FTC Offers How-To Guide for Compliance with the "Red Flag Rules"
The Federal Trade Commission has issued a guide to help organizations comply with new privacy measures designed to protect
against identity theft, called the "Red Flag Rules." The rules apply to any company that provides goods or services without
requiring payment in full at the time the goods or services are provided. The FTC has taken the position that the rules
apply to health care providers who offer payment plans, billing options, and/or defer payment for services rendered. The FTC
publication includes guidance for businesses on determing whether the rules are applicable to them and tips on designing an
identity theft prevention program.
The guide is available here. For
further detail on Red Flag Rules, see von Briesen & Roper's article,
"Red Flag Rules: Are They Applicable to You?".
View a sample Identity Theft Prevention Policy for hospitals drafted by the American Hospital Association here.
- 3/31/09 - Medicare Set to Begin a Three Year Nursing Home Value-Based Purchasing Demonstration in Four States (Including Wisconsin) This Summer
Beginning around July 2009, Medicare will provide financial incentives for nursing homes in Arizona, Mississippi, New York
and Wisconsin to improve their quality of care over the next three years. Both free-standing and hospital-based facilities
may opt to participate in the program. Measure areas will include staffing, avoidance of hospitalizations, outcomes and
survey deficiencies. Participants in each state will be randomly assigned to a demonstration group or a comparison group.
Top performers for performance and top performers for improvement may each be eligible for a cash incentive drawn from a
pool of savings attributable to the quality improvement (i.e. avoiding hospitalizations) in their state. Click
here
for CMS’s news release or here
for additional information.
- CMS to Begin Enforcing Stricter Provider Enrollment Rules
CMS will begin enforcing new restrictive provider enrollment policies beginning April 1. Under the new policies,
physicians, non-physician practitioners, and physician or non-physician practitioner organizations may bill for services
provided no more than 30 days prior to the effective date of enrollment. The effective date of enrollment will be the
later of either the application date or the date the provider started seeing patients at the practice location. Providers
should take steps to ensure timely submission of enrollment applications in order to avoid claim denials.
In addition, under the new rules, providers must report major changes such as changes in ownership or practice location
and final adverse actions within 30 days.
A link to the CMS transmittal detailing the new rules as well as illustrative examples of how the new regulations will
affect providers can be found here.
- "Conscience Rights" Rule Set to be Overturned. Open Comment Period for Providers Until April 9.
HHS is proposing to rescind its recent rule (published in the Federal Register on December 19, 2008, 73 FR 78072, 48 CFR
Part 88) protecting healthcare providers from providing services that conflict with their religious beliefs, such as
abortion. Church-affiliated healthcare groups are pushing for retention of the rule, which was enacted in part to support
existing laws protecting "conscience rights" decisions and prohibiting discrimination against providers refusing to
perform abortions or related activities. Critics of the rule are concerned that it limits access to patient care and
increases the potential that individuals, especially underserved individuals, will be denied access to services. The
Department is soliciting public comment to aid in its consideration of whether to rescind the rule.
A link to the March 10, 2009, Federal Register notice is available here.
A link to a March 23, 2009, article discussing Catholic criticism of the proposed rule rescission is
available here.
- OIG Posts Open Letter to Health Care Providers
In an Open Letter dated March 24, 2009, the Office of Inspector General has further refined its Self-Disclosure Protocol
by narrowing its scope to address only those disclosures that involve liability under both the physician self-referral and
anti-kickback statutes. For those submissions accepted into the SDP following the date of the Open Letter, the OIG further
requires a minimum $50,000 settlement amount to resolve the matter. The OIG submits that this refinement builds upon its
previous initiatives, and notes that its Letter focuses the applicability of the SDP to those matters that involve kickbacks
intended to induce or reward a physician's referrals. The OIG Open Letter can be found
here.
- United States Reaches $355,000 Settlement With Three Arizona Cardiologists
The United States has reached a settlement with three Arizona cardiologists resulting from alleged violations of the
Stark Law. The cardiologists formed a nuclear-imaging practice in January of 2007. The cardiologists later learned of
potential Stark Law violations and self reported the errors. The United States contended that from January 2007 to
October 2007, the three cardiologists submitted claims for payment to the Medicare Program in violation of the Stark
Law. The three cardiologists agreed to pay $355,000 to settle the matter. The settlement information released by the
U.S. Attorney’s Office in Arizona does not include details of the business practices or the legal violations. View a
copy of the press release here.
- New Recovery Act Office Created by HHS to Promote
Transparency in Stimulus Spending
As of March 11, 2009, the Department of Health and Human Services had disbursed more than $3 billion in stimulus funds,
mostly in Medicaid dollars. Led by former HHS Health Resources and Services Administration Deputy Administrator Dennis
Williams, HHS's new Office of Recovery Act Coordination intends to "enhance and streamline" the stimulus spending,
promising quick, organized, and transparent distribution of the estimated $137 billion in federal healthcare stimulus
spending. You can view weekly spending reports, funding opportunities, and state-specific Medicaid allocations at the
office's new web site: http://hhs.gov/recovery/.
- Three House Committee Chairs Aim for Health Reform Legislation to Reach the House Floor Before Congress' August Recess
Chairs Henry Waxman (Energy and Commerce), Charles Rangel (Ways and Means), and George Miller (Education and Labor) have
sent a letter to President Obama expressing their intent to bring national health care reform legislation to the House
floor before Congress' August recess. The chairs have agreed to coordinate efforts to pass the legislation. The full text
of the letter is available here. As discussed below, Senator Max Baucus has already expressed an intent to bring health
care reform legislation to the Senate floor by early summer.
- Sixth Circuit Case Holds That Medical Residents May Be Exempt From FICA Tax
On February 26, 2009, the U.S. Court of Appeals for the Sixth Circuit joined the Seventh and Eleventh Circuits in
holding that medical residents were not per se ineligible for the “student exception” from FICA tax. At issue in the
case was whether residents at Detroit Medical Center qualified as "students" under Internal Revenue Code sections
allowing an exemption from FICA tax for students. The Sixth Circuit rejected the IRS's assertion that the residents
were not students, and remanded the case to district court for further proceedings. To date, every U.S. Court of Appeals
that has rendered a decision regarding the applicability of the student FICA exception to medical residents' stipends
has rejected the IRS's position that medical residents were not students and therefore ineligible for the FICA exemption.
Read the complete opinion here.
- National Study Identifies Key Factors of Good Governance For Hospitals
On March 3, 2009, a hospital governance study conducted by accounting firm Grant Thornton LLP, in collaboration with the
American Hospital Association and the University of Iowa, identified six factors of good governance that contribute to a
hospital's effective operations. The study surveyed over 100 community health systems and polled chief executives on how well
their boards followed 39 governance benchmarks. An examination of 10 "high-performing" systems pinpointed the following key
factors that influence a hospital's operating performance, according to hospital board members and trustees surveyed:
- Strong values-based CEO leadership, often with emphasis on the importance of strong management teams;
- Well-understood system-wide mission, vision, and values;
- A highly committed and engaged board of directors;
- Strong clinical leadership and capabilities;
- Clearly-defined organizational objectives, targets, and metrics; and
- Healthy organizational culture.
Read the full report, Governance in High-Performing Community Health Systems: A Report on Trustee and CEO Views,
here.
- The AP reports that Senate Finance Committee Chairman Max Baucus aims for comprehensive health care reform
legislation to reach the Senate floor by early summer.
For more information, click here.
- The Economy's Impact on National Health Expenditures
CMS recently released its National Health Expenditure (NHE) projections for 2008-2018. The projections reveal that over
the next ten years average annual health spending growth is anticipated to outpace average annual growth in the overall
economy by 2.1 percentage points per year, and to significantly outpace gross domestic product (GDP) growth in 2008 and
2009. NHE growth rates between 2008 and 2009 are projected to be the largest single-year growth rates in GDP history.
Historical data shows that rapid increases in the health share of GDP coincide with periods of economic recessions. You
can find the NHE Projections report here.
- FY 2010 U.S. Government Budget Documents Released
On February 26, 2009, President Barack Obama unveiled the proposed budget for fiscal year 2010, which begins on
October 1, 2009. An overview of the $3.55 trillion budget is available
here.
- AHA Comments on CMS’s Proposed DFRR Rulemaking
The American Hospital Association (“AHA”) sent a letter in January to the Office of Budget
Management (“OBM”) in response to the Center for Medicare and Medicaid Services’ (“CMS”)
proposed rulemaking for a Disclosure of Financial Relationships Report (“DFRR”). In the letter, the AHA urges
the OBM to deny CMS authorization to proceed with the DFRR information collection plan. CMS would otherwise require
hospitals that receive the DFRR audit survey to complete the report and disclose information on their financial
relationships with physicians. Read the letter
here: 09116-cl-cms10236.pdf.
- Hospital Assessment Becomes Law
On February 19, 2009, Governor Doyle signed the Budget Adjustment Bill (2009 Senate Bill 62), creating an assessment on
hospital gross patient revenues. The assessment is expected to bring into Wisconsin hospitals a net gain of approximately
$200 million in higher Medicaid payments for fiscal year 2009, which payments are expected to begin flowing in next month
as implementation plans are already underway. The assessment was first proposed over two years ago, but the enacted
version increases the reimbursement amount to hospitals by over $50 million annually. The assessment will take effect
retroactively back to July 1, 2008, with the first full year of implementation beginning July 1, 2009.
For more information, click
on http://www.legis.state.wi.us/lfb/Misc/2009_02_16WI%20Leg.pdf,
which contains the Legislative Fiscal Bureau's summary of the entire Budget Adjustment legislation.
- President Obama has signed the economic stimulus bill into law. It includes major incentives for health
information technology. Click here for a list of the Health IT provisions.
- President Obama has signed into law the economic stimulus bill. Look for our updates on the law's impact in the
following areas:
- COBRA
- HIPAA
- Data breaches
- Medicare Payments to Hospitals
- Medical Assistance
- DSH Payments
- Indian Health Care
- HEALTH Information Technology adoption incentives
- Broadband infrastructure incentives
- Energy conservation funds
- Expansion of the Electric Grid
- Wisconsin Hospital Association Information Center (WHAIC) announces two new reports on its
PricePoint web site. The web site lists various inpatient and outpatient charges around the state.
- National Associations Present CMS with Draft Exceptions to the Stark Law
for Incentive Payment and Shared-Savings Programs
On February 17, 2009 the American Hospital Association, Federation of American Hospitals and Association of American Medical
Colleges submitted a comment letter to CMS presenting draft language for a regulation that creates two new self-referral
exceptions for hospital payments to physicians under: (1) quality improvement incentive-payment programs and (2)
shared-savings programs. Read the complete comment letter.
- CMS is moving forward with a two-stage implementation of the RAC program nationwide, following the withdrawal of bids by two companies to become RAC contractors.
For more information, visit the CMS web site.
- On February 12, 2009, the Internal Revenue Service ("IRS") released the final report on the tax-exempt hospital
project that began in 2006. The main goal of the project was for the IRS and the public to better understand how
tax-exempt hospitals benefit their communities. In July 2007, the IRS released an interim report summarizing the
reported community benefit data from questionnaires sent to a sample of more than 500 tax-exempt hospitals. The
final report summarizes the community benefit data and executive compensation across various demographics,
including the type of community in which the hospital is located and the hospital's revenue size. Read the
executive summary of the final report here.
- Rare Stark Law Case Addresses Requirements
of the Personal Services Exception
On January 21, 2009, the U.S. Court of Appeals for the Third Circuit found that an arrangement between an anesthesiology
group and a hospital failed to satisfy the personal services exception to the Stark Law. The ruling highlights the importance
of maintaining accurate and up-to-date written agreements. Read the complete opinion here.
- Latest Senate Markup of H.R.1 regarding HIT. Click here to view the entire document.
- Stimulate the Economy with HIPAA Actions by States Against Health Care Providers and Plans?
The National Law Journal is reporting noticed provisions in the proposed stimulus bills - providing state attorneys
general with new enforcement power for HIPAA violations, including civil damages and injunctions in federal courts.
Marcia Coyle writes...read more
- On Wednesday, February 4, President Barack Obama signed a bill extending health coverage to 4 million uninsured children,
a move he called a first step toward fulfilling a campaign pledge to provide insurance for all Americans.
The children's health bill calls for spending an additional $32.8 billion on SCHIP, which now enrolls an estimated 7
million children. Lawmakers generated that revenue by raising the federal tobacco tax. Health officials project that
there are about 8 million to 9 million uninsured children in the United States.
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