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CMS Outlines Expansion of Audit Program to Medicare Advantage

January 20, 2016


Medicare's Recovery Audit Contractor (RAC) program was implemented nationwide for Medicare Parts A and B in January 2010.  The Affordable Care Act calls for the program to be expanded to cover Medicare Advantage plans, and last month CMS released a draft Scope of Work to “solicit comment on, and interest in CMS entering into a contract with RACs to identify underpayments and overpayments, and recouping overpayments associated with diagnosis data submitted to the Centers for Medicare & Medicaid Services (CMS) by Medicare Advantage Organizations.”  Up to now, CMS has conducted limited audits of MA Plans covering only about five percent of Medicare Advantage Organization Contracts.  The Scope of Work document outlines plans to significantly expand those audits by contracting with RACs, who currently audit only Medicare Part A & B payments.


Results from Medicare’s Hospital Acquired Conditions Reduction Program – 758 Hospitals Penalized

January 13, 2016


One of the Affordable Care Act’s tools for shifting from a volume-based to a value-based payment system is the Hospital Acquired Conditions (HAC) Reduction Program.  The HAC Reduction Program cuts payments by one percent for the hospitals that rank in the worst-performing quartile of all hospitals on risk-adjusted HAC quality measures.  The program took effect for discharges beginning on October 1, 2014 (FY2015).


Reducing Readmissions in 2016


Once patients are discharged from the hospital, they have no desire to return.  Hospitals also would prefer patients not be readmitted due to medical issues associated with their hospital stay.
Patient readmissions are a major problem plaguing the U.S. healthcare system and policymakers are taking steps to reduce them.  The efforts to reduce re-hospitalizations begin at the hospital and end with the transition of patients to their home and their community.  But while improving a patient’s transition from hospital to home is important, it is just one factor in preventing readmissions. 


CMS Proposes Revisions to Discharge Planning Requirements

December 30, 2015


In late October 2015, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule seeking to modernize the conditions of participation (CoP) related to its discharge planning requirements (Proposed Rule).  The Proposed Rule aims to bring the existing discharge planning regulations in line with current practice as well as improve quality of care and reduce avoidable complications. Although the Proposed Rule applies to hospitals, inpatient rehabilitation facilities, critical access hospitals and home health agencies, this alert focuses on some of the key changes to the hospital CoPs.


Being Prepared for Risk Assessment

December 16, 2015


In 2008, the following statement about our healthcare system appeared in the New England Journal of Medicine:


The OIG Work Plan for 2016

December 9, 2015

The Department of Health and Human Services’ Office of the Inspector General (OIG) released its Work Plan for Fiscal Year 2016 on November 2, 2015.  The Work Plan is published annually and describes OIG’s new and ongoing audit, compliance and enforcement priorities for the upcoming year.  It allows providers to identify corporate compliance risk areas and helps to focus providers’ ongoing efforts in connection with their compliance program activities, audits and policy development.  Compliance officers should be familiar with the Work Plan when preparing their own organizations’ compliance program priorities to ensure they include the pertinent risk areas identified by OIG for the year ahead.


Healthcare and the FCC Duke it Out Over the Telephone Consumer Protection Act

December 2, 2015


The Federal Communications Commission (FCC) issued a Declaratory Ruling and Order (Declaratory Ruling)1 on July 10, 2015 in response to 21 separate requests2 seeking clarifications to the Telephone Consumer Protection Act (TCPA).3  The Declaratory Ruling has acute implications for any organization that uses an autodialer or prerecorded messages to make non-emergency calls to wireless phones without obtaining the consumer’s prior express consent.


The Two-Midnight Rule is Here to Stay

November 25, 2015


In its 2016 Final Hospital Outpatient Prospective Payment System (OPPS Final Rule), the Centers for Medicare and Medicaid Services (CMS) reiterated its controversial Two-Midnight Rule (Rule), modified its existing exceptions to the Rule and revised its auditing methodology to have Quality Improvement Organization (QIO) contractors conduct reviews instead of Medicare Administrative Contractors (MACs).  Despite industry pressure, CMS rejected the notion of a One-Midnight Rule and also rejected requests to push back the enforcement date beyond January 1, 2016.


Protecting the Privacy and Security of Healthcare Data

November 18, 2015


A misplaced flash drive; a lost cell phone or laptop computer; a message forwarded to a personal email account; a database hacked by a cybercriminal.  While they implicate very different levels of severity, all are examples of cyber-security incidents that are in the news every day.


Health Insurance Company Mergers and Acquisitions

November 11, 2015


Health insurance companies are once again seeking to grow through consolidation.  The potential for a landscape dominated by just a handful of insurance behemoths is raising concerns across the industry.


Demystifying the Bundled Payment Initiative

November 4, 2015


America’s healthcare system is on an unsustainable path.  There are well-documented gaps in care and variation in quality.  The federal government projects that from 2014-2024 national health spending will grow at an average rate of 5.8 percent per year, rising from $2.8 trillion to $4.8 trillion.  To put this into perspective, healthcare spending is projected to grow 1.1 percent faster than our gross domestic product per year over the coming decade, accounting for nearly 20 percent of the U.S. economy.1


The Tuomey Saga Has Finally Come to a $72.4 Million End

October 28, 2015


Many have heard of the landmark whistleblower case of U.S. ex rel. Drakeford v. Tuomey Healthcare System, Inc. where Tuomey Healthcare System engaged in part-time employment contracts that violated the Federal Stark Law (Stark) and the Federal False Claims Act (FCA).  This month Tuomey and the federal government reached a $72.4 million settlement, ending the decade-long saga.


Patient Engagement—Theory and Trends

October 21, 2015


The movement towards making it easier for patients to access their health records electronically is a key component of “patient engagement."


Compensating Physicians for Referrals: Hospitals Settle Costly Lawsuits

October 14, 2015


There are good ways in which to accomplish physician-hospital integration, and then there are bad ways.  More specifically, aligning the financial interests of physicians and hospitals can implicate the federal Stark Law, which prohibits paying physicians for referrals.  Two recent settlements entered into between health systems and the Department of Justice show that the government is very serious about enforcing the Stark rules.


Has the IRS Used Salami Tactics to Update Section 501(r)?

October 7, 2015


Under the Patient Protection and Affordable Care Act (PPACA), that was enacted March 23, 2010 and amended by the Health Care and Education Reconciliation Act of 2010, the Internal Revenue Service (IRS) has released new rules for Section 501(c)(3) of the Internal Revenue Code that adds new requirements for hospitals and healthcare organizations to justify their tax-exempt status.


An Updated Healthcare Information Technology (Health IT) Plan

September 23, 2015


On Monday, the U.S. Department of Health and Human Services’ Office of the National Coordinator for Health Information Technology (ONC), outlined their continued vision, goals and strategy for health IT with the release of the Federal Health IT Strategic Plan 2015–2020(Plan).  The Plan’s aim is to improve the health IT infrastructure. However, its focus centers more on patient-centered healthcare than what is needed to  implement strategies that will support the nation’s continued development of a secure health IT and data driven infrastructure.


The Healthcare Industry Should Prepare for Increased HIPAA Oversight and Enforcement with the Release of Two OIG Reports

September 30, 2015


On September 29, 2015, the Department of Health and Human Services Office of Inspector General (OIG) released two reports  aimed at bolstering the action and reaction of the Office of Civil Rights (OCR) with respect to its administering and enforcing the Health Insurance Portability and Accountability Act of 1996 (HIPAA).  In its reports, OCR Should Strengthen Its Oversight of Covered Entities' Compliance With the HIPAA Privacy Standards (Oversight Report) and OCR Should Strengthen Its Followup of Breaches of Patient Health Information Reported by Covered Entities (Followup Report), the OIG identified areas of weakness in the OCR’s review of covered entities’ compliance with the HIPAA Privacy Rule and the OCR’s action and responses to notification of breaches.  The OIG recommends the OCR tighten up its processes to improve its ability to identify areas of weakness in the industry as well as assist it in identifying areas of systemic noncompliance.


Revenue Cycle Integrity Must Precede Data Analytics

September 16, 2015


The transition to value-based payment calls for healthcare systems to rethink and redesign care delivery across services lines.  Service line management is well defined in the healthcare industry as a means to determine which of its diverse services are profitable and how the market share of a given service compares to competing providers.  Service lines are typically limited to a handful of well defined, mutually exclusive categories or groupings of individual services or interventions such as oncology, cardiovascular and orthopedics.  Since no such service line designation exists in standard transactional coding systems or taxonomies, service line is generally assigned based on primary diagnosis codes, procedure codes and other patient attributes such as age, gender or genetic characteristics.


Ten Tips as the Thirty Day Countdown to the ICD-10 Implementation Begins

September 2, 2015


In last week’s Alert we provided you with the Centers for Medicare and Medicaid Services’ (CMS) most recent Guidance regarding the ICD-10 implementation.  This week we want to provide you with some additional insight and tips on ensuring you are ready for the October 1, 2015 effective date.


CMS Issues 13 New FAQs Clarifying its Recent ICD-10 Guidance

August 26, 2015


On July 6, 2015, the Centers for Medicare and Medicaid Services (CMS) and the American Medical Association (AMA) jointly announced efforts to help physicians prepare for the October 1st changeover to ICD-10 diagnosis coding.  The joint announcement indicated that a full year from October 1, 2015, Medicare review contractors will not deny physician claims “based solely on the specificity of the ICD-10 diagnosis code as long as the physician/practitioner used a valid code from the right family.”  Confronted with many requests for a clarification of what constitutes “a valid code from the right family,” CMS issued a longer set of Frequently Asked Questions (FAQs) on July 27, and then revised those FAQs again on July 31.  The short answer is that a “valid” code is one consisting of three to seven characters but “a three-character code is to be used only if it is not further subdivided,” and the right “family” is, as we suspected, CMS-speak for what ICD-9 and ICD-10 call “categories” of codes.


Merger and Acquisition Mania Requires Scrutiny

August 12, 2015


Hospitals merge with other hospitals.


Insurance companies are acquiring hospitals. 


Hospitals are buying, or creating, their own insurance companies.


Insurance companies are acquiring other insurance companies.


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