New ESRD Quality Rule Published

The Centers for Medicare & Medicaid Services (CMS) issued a final rule on January 5, 2011, that adjusts Medicare payments to renal dialysis facilities based on how well they meet or exceed performance standards for quality measures. The final rule establishes the performance standards, scoring methodology, and incentive payment structure under the End-Stage Renal Disease (ESRD) Quality Incentive Program (QIP). The final rule also provides for public disclosure of individual dialysis facility performance scores. The ESRD QIP was mandated by Congress in the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), which also required CMS to implement a bundled prospective payment system (PPS) for ESRD facilities to replace the existing payment methodology based on a composite rate, plus separately billable items and services. CMS began paying dialysis facilities under the ESRD PPS on January 1, 2011. As required by MIPPA, the ESRD QIP payment adjustments will apply to payments for services on or after January 1, 2012. For more information, please click here.

EHR Incentive Program Registration Underway

The Centers for Medicare & Medicaid Services (CMS) and the Office of the National Coordinator for Health Information Technology (ONC) began registration for the Medicare and Medicaid Electronic Health Record (EHR) incentive programs. Registration is also available for the Medicaid EHR Incentive Program for the following states: Alaska, Iowa, Kentucky, Louisiana, Oklahoma, Michigan, Mississippi, North Carolina, South Carolina, Tennessee and Texas. In February 2011, registration will open in California, Missouri and North Dakota. Other states likely will launch their Medicaid EHR incentive programs during the spring and summer of 2011. Registration is a prerequisite to any eventual receipt of incentive payments.

Under the Health Information Technology for Economic and Clinical Health Act (HITECH Act), Medicare and Medicaid incentive payments will be available to eligible professionals, eligible hospitals, and critical access hospitals when they adopt certified EHR technology and successfully demonstrate "meaningful use" of the technology. Professionals who meet the eligibility requirements for both the Medicare and Medicaid EHR incentive programs must select which program they wish to participate in when they register. They cannot participate in both programs; however, after receiving payment, they may change their program selection once before 2015. Hospitals that are eligible for both programs can receive payments from both Medicare and Medicaid.

CMS announced the following key dates for the Medicare and Medicaid incentive programs' first year:

  • January 3, 2011 – Registration for the Medicare EHR incentive program begins.
  • January 3, 2011 – States that are ready may launch their incentive programs for Medicaid providers.
  • January 2011 – Some state agencies begin issuing Medicaid EHR incentive payments.
  • April 2011 – Attestation for the Medicare EHR incentive program begins.
  • May 2011 – Issuing of Medicare EHR incentive payments expected to begin.
  • July 3, 2011 – Last day for eligible hospitals to begin their 90-day reporting period to demonstrate meaningful use for the Medicare EHR incentive program for federal FY 2011.
  • September 30, 2011 – Federal FY 2011 payment year ends at midnight for eligible hospitals and critical access hospitals (CAHs).
  • October 3, 2011 – Last day for eligible professionals to begin their 90-day reporting period for calendar year 2011 to demonstrate meaningful use for the Medicare EHR incentive program.
  • November 30, 2011 – Last day for eligible hospitals and CAHs to register and attest to receive an incentive payment for federal fiscal year 2011.
  • December 31, 2011 – Calendar 2011 payment year ends for eligible professionals.

For more information about the program and registration, please click here.

Permanent Certification Program Final Rule for Health IT Released

On January 7, 2011, the Department of Health and Human Services Office of the National Coordinator for Health IT (ONC) issued the final rule to establish the permanent certification program for health information technology. The temporary certification program, established through a final rule published on June 24, 2010, will continue to be in effect until it sunsets on December 31, 2011 -- or at a later date when the processes necessary for the permanent certification program to operate are completed.

The permanent certification program provides new features that are intended to enhance the certification of health information technology, including increasing the comprehensiveness, transparency, reliability and efficiency of the current processes used for the certification of electronic health record (EHR) technology. Meaningful use of "Certified EHR Technology" is a core requirement for eligible health care providers who seek to qualify to receive incentive payments under the Medicare and Medicaid Electronic Health Record Incentive Programs as authorized by the Health Information Technology for Economic and Clinical Health (HITECH) Act.

Three Recent OIG Opinions Provide Guidance on Permissible Payments for Marketing Activity in Sleep Center Arrangements

Per-test marketing fees paid by hospitals to sleep centers have recently come under fire from the Office of Inspector General of the U.S. Department of Health and Human Services (OIG) in a set of three recent advisory opinions on arrangements between hospitals and sleep-testing providers. The OIG approved a fixed fee arrangement for a sleep center to provide marketing services on behalf of a hospital in one opinion, but condemned a separate deal in which a per-test fee covered both marketing services and all other services of the sleep center. In the third case, the OIG approved a per-test fee for sleep center services which excluded marketing.

OIG Advisory Opinions 10-23, 10-24 and 10-14 described essentially the same arrangement: a sleep-testing provider furnished equipment, technology, supplies and staff necessary to operate a hospital's sleep center; the hospital provided the space, utilities, housekeeping, communications, pharmacy and other support services for the sleep center. In two cases (Opinions 10-23 and 10-24), the sleep-testing provider also furnished marketing and education services for the sleep center. The sleep center in Opinion 10-23 provided a part-time marketing manager who, among other things, would visit the offices of potential physician referrals sources and educate the physicians and their staff about the hospital's sleep-testing services and the test ordering process. In Opinion 10-24, the sleep center provided the same marketing services on a full-time basis. Both arrangements contained various safeguards, including: the sleep-testing provider's compensation was represented to be fair market value; no physician ownership in the sleep-testing provider; and no ancillary services were provided by the sleep-testing provider. The sleep-testing provider in Opinion 10-14 did not provide any marketing or external education services for the hospital.

The OIG approved a separate fixed fee for marketing services in Opinion 10-24, which also involved two other distinct fixed fees (one for equipment and one for staff and other services and supplies). In Opinion 10-23, however, the OIG disapproved an all-inclusive per-test fee the hospital paid to the sleep-testing provider to cover all services, including marketing, equipment, staff and others. Despite the safeguards, the OIG declared that the hospital's payment of an all-inclusive per-test fee could result in the OIG imposing sanctions under the OIG's exclusionary authority at Section 1128(b)(7) of the Social Security Act, or the civil monetary penalty provision at Section 1128(a)(7) of the SSA, as relating to prohibited acts under the federal Anti-Kickback Statute.

The OIG stated in Opinion 10-23 "[m]arketing fees paid on the basis of successful orders for items or services are inherently subject to abuse because they are linked to business generated by the marketer. Because the Requestor receives a fee each time its marketing efforts are successful, the Requestor's financial incentive to arrange for or recommend the Hospital's sleep testing facility is heightened." The OIG did not find the same risk in Opinion 10-24, noting that the separate fee for marketing in that arrangement would be set in advance and therefore would not vary based on the value and volume of referrals. The OIG stated, "even though the Requestor would be in a position to influence the generation of 'under arrangements' business, the provision of full-time services combined with the aggregate, set in advance, fair market value fee structure of the Proposed Arrangement (including the fees for the equipment rental, as-needed services and supplies, and marketing), which does not vary based on the value or volume of referrals or tests performed, would mitigate against any undue or additional incentive to generate unnecessary or an increased volume of sleep tests."

Although it has a long-standing dislike for per-click fees generally, in Opinion 10-14 the OIG opined that a per-test fee for an arrangement similar to the other two would be permissible because the sleep-testing provider did not provide marketing or educational services that would create an incentive for the sleep-testing provider to refer to the sleep center. In approving the per-test fee, the OIG stated "the per-test fee takes into account only items and services provided by Requestor that are necessary to perform sleep testing services for patients admitted to the Hospital and does not include amounts attributable to ancillary services and supplies that Requestor does not provide under the Arrangement (such as marketing or DME) or other items or services not integral to furnishing sleep studies."

Level of Supervision for Radiation Oncology Services Under Final Hospital OPPS Rules for CY 2011

The Centers for Medicare and Medicaid Services (CMS) issued Hospital Outpatient Prospective Payment System rules for CY 2011 (CY 2011 Rules) on November 2, 2010, and changed the requirements for supervision of outpatient therapeutic and diagnostic services. An official version of these rules was published in the Federal Register on November 24, 2010. The following is a description of the changes that affect hospitals.

A. Supervision of Hospital Outpatient Therapeutic Services
There are two significant changes under the CY 2011 Rules as they relate to the supervision of hospital outpatient therapeutic services: (1) a revised definition of "direct supervision;" and (2) a two-tiered approach to supervision for a few specified hospital outpatient therapeutic services referred to as "nonsurgical extended duration therapeutic services."

First, for most therapeutic services furnished in an outpatient department of the hospital, the physician or non-physician practitioner (i.e., clinical psychologist, licensed clinical social worker, physician assistant, nurse practitioner, clinical nurse specialist or certified nurse midwife) must provide direct supervision throughout the entire provision of service. Under the CY 2011 Rules, the definition of "direct supervision" has been revised by removing all references to the physical location of the supervising professional. Specifically, the new definition of "direct supervision" removes references to "on the same campus" and "in the off-campus provider-based department of the hospital."

Commencing January 1, 2011, the definition of "direct supervision" is revised simply to require immediate availability, meaning physically present, interruptible and able to furnish assistance and direction through the performance of the procedure, but without reference to any particular physical boundary. This new definition will now apply equally in the hospital or in on-campus or off-campus provider-based departments. In the commentary to the CY 2011 Rules, CMS states that it wishes to allow flexibility in providing for direct supervision from a location other than the hospital campus or provider-based department that still allows the physician to be immediately available to furnish direction and assistance. For example, this new policy would allow supervision from any location within an off-campus building that houses multiple provider-based departments of a hospital, as long as the supervising practitioner is immediately available, rather than requiring a supervising practitioner to be located within each provider-based department in that building.

Although the CY 2011 Rules change the definition of "direct supervision," CMS emphasizes that it is not relaxing the requirement; that is, CMS continues to expect the supervising practitioner to be physically present for the services he or she is supervising. CMS believes that removing specific boundaries provides reasonable flexibility but also holds the practitioner accountable for determining, in individual circumstances, how to be physically and immediately available when supervising therapeutic services provided "incident to" a physician's service in the outpatient setting.

Secondly, for a few specified hospital outpatient therapeutic services referred to as "nonsurgical extended duration therapeutic services," the CY 2011 Rules require direct supervision (per the new definition described above) for the initiation of these services. "Initiation" means the beginning portion of the nonsurgical extended duration therapeutic service, which ends when the patient is stable and the supervising practitioner believes the remainder of the service can be delivered safely under general supervision. CMS adopts the same definition of "general supervision" currently used for certain outpatient diagnostic services under the Medicare Physician Fee Schedule (MPFS) Relative Value Unit File (i.e., service is furnished under the overall direction and control of the physician, but his or her physical presence is not required during the performance of the procedure). CMS chose not to further define the term "initiation" or set time limits on this portion of service because it believes that the determination that a patient is sufficiently stable to transfer from direct supervision to general supervision, and the timing of that decision, are clinical judgments that are best to leave to the discretion of the supervising practitioner.

There are currently 16 "nonsurgical extended duration therapeutic services." CMS chose these services to include on the list because they have a significant monitoring component that can extend for a sizable period of time and is typically performed by auxiliary personnel, they are not primarily surgical in nature, and they typically have a low risk of complication after assessment at the beginning of the service.

In response to comments from numerous providers regarding the expansion of this list, CMS will propose in next year's rules an independent review process that will allow for the assessment of the appropriate supervision levels for individual outpatient therapeutic services.

B. Supervision of Hospital Outpatient Diagnostic Services
There have been no significant changes to the supervision requirement for hospital outpatient diagnostic services except that, under the CY 2011 Rules, CMS adopts the same change in the definition of "direct supervision" as it made for outpatient therapeutic services described above. Therefore, direct supervision will now mean immediately available, without reference to any physical boundary. The level of supervision for outpatient diagnostic services will continue to be in accordance with the levels assigned for the individual test as listed in the MPFS Relative Value Unit File.

C. Non-Enforcement of Direct Supervision Policy Through CY 2011
Under the CY 2011 Rules, CMS extends its decision not to enforce the direct supervision policy for therapeutic services provided in critical access hospitals (CAH) through calendar year 2011. Further, CMS is expanding this non-enforcement policy to include small and rural hospitals with 100 or fewer beds. A hospital will be considered "rural" if it is either geographically located in a rural area, or paid through the outpatient PPS with a wage index for a rural area.

The Expanding Library of Government Educational Tools

As the regulatory compliance landscape becomes increasingly laden with landmines, government agencies have been busy drawing maps for the unprepared.

The newest navigational guideline is the work of the Office of Inspector General for the Department of Health and Human Services (OIG). In November, OIG released its booklet entitled "A Roadmap for New Physicians: Avoiding Medicare and Medicaid Fraud and Abuse." Though the booklet is a basic primer targeted to newly practicing physicians, it is well worth a read for any practitioner. The booklet provides a concise review of key fraud and abuse laws and sheds some light on issues the OIG is prioritizing. Five pages of the booklet are dedicated to physician relationships with other providers, including hospitals. This section specifically offers physicians and other providers a list of questions they should ask when contemplating new integration strategies such as developing an accountable care organization. Although it is anticipated that the yet-to-be-issued regulations for accountable care organizations may carve out new exceptions to the Stark law for certain arrangements, for now this booklet is a relevant and straightforward resource for physicians and hospitals considering integration.

In October 2010, the Centers for Medicare and Medicare Services (CMS) released the first edition of its new Medicare Quarterly Provider Compliance Newsletter as part of its Medicare Learning Network. These newsletters are intended to cover the key Medicare general errors and billing issues that CMS has identified for the quarter.

The information included in the newsletter not only suggests ways providers can avoid common billing errors, it also provides suggestions for which guidance to look to for each issue. Some of the first report's tips were general reminders, such as the importance of including sufficient documentation within the medical record. More specific topics covered included: (i) direction to guidance on which injectable drugs may be covered as drugs furnished "incident to" a physician's service; (ii) a notification that inpatient care settings are not medically necessary for particular cardiac pacemaker implantations, and a recommendation to use of Condition Code 44 to change the status of a patient from inpatient to outpatient; (iii) how to handle issues of inpatient services provided in the wrong setting; and (iv) which sections of the Program Integrity Manual have been recently amended.
Both of these compliance resources provide helpful hints on what issues are gaining scrutiny and offer tips for avoiding penalties from non-compliance, whether due to fraud and abuse claims or billing errors.

To access A Roadmap for New Physicians click here. For more information about the Medicare Quarterly Provider Compliance Newsletter visit the CMS website here or click here to download the first issue of the Quarterly Provider Compliance Newsletter.

Additional Telemedicine Services Approved for Medicare Reimbursement

Effective January 1, 2011, the Centers for Medicare and Medicare Services (CMS) has approved additional telemedicine services for Medicare reimbursement, including: individual and group kidney disease education services; individual and group diabetes self-management training services; group medical nutrition therapy, health and behavior assessment and intervention services, subsequent hospital care services; and subsequent nursing facility care services.

For a complete list of the of the CPT codes that are newly approved for reimbursement and CMS requirements for reimbursement for all approved telemedicine procedures, please click here.

CMS Issues Final Rule on the Medicare Conditions of Participation for Hospitals for Equal Patient Visitation Rights

On November 19, 2010, the Centers for Medicare & Medicaid Services (CMS) issued a final rule revising the Medicare Conditions of Participation for hospitals and critical access hospitals to ensure equal patient visitation rights. Effective January 18, 2011, hospitals and critical access hospitals must inform patients of their visitation rights and must have written policies and procedures regarding visitation rights of patients. Such policies must address the patient's right to receive visitors, regardless of whether the visitor has a legal relationship to the patient, as well as address clinical and other reasonable restrictions on patient visitation rights.

This addition to the Conditions of Participation for hospitals and critical access hospitals arises from an April 15, 2010, Presidential Memorandum on Hospital Visitation to the Secretary of Health and Human Services (HHS). Within the memorandum, the president directed HHS to develop requirements to address the rights of patients to choose who may and may not visit him or her, and to ensure that all designated visitors enjoy visitation privileges that are no more restrictive than those that immediate family members enjoy. The memorandum specifically addressed that patients are often denied access and social support from certain visitors, such as a close friend or a same-sex partner, because such visitors are not immediate family members of the patient. The memorandum also notes that such visitor restrictions negatively affect the care of the patient because such visitors may know valuable information about the patient.

Specifically, these new regulations require hospitals and critical access hospitals to inform each patient (or the patient's support person) of his or her visitation rights, as well as of any hospital determined clinical restrictions or other reasonable limitations on his or her visitation rights, when he or she is informed of his or her other patient rights at the time of admission. The support person for the patient does not necessarily have to be the patient's legal representative, it could be any person who is there to support the patient during hospitalization. The hospital must specifically inform the patient (or the patient's support person) of the right -- subject to his or her consent and the right to withdraw or deny such consent -- to receive the visitors whom he or she designates, including same-sex domestic partners and non-family members. Furthermore, hospitals and critical access hospitals must have policies and procedures on patient visitation rights. These polices and procedures should include any clinically necessary or reasonable restriction or limitation that the hospital may need to place on such visitation rights, as well as the reason for the clinical restriction or limitation. Finally, hospitals and critical access hospitals may not restrict patient visitation rights based on race, color, national origin, religion, sex, gender identity, sexual orientation, or disability, and must insure that all visitors -- regardless of their legal relationship to the patient -- have the same visitation privileges consistent with patient preferences.

The patient visitation rights regulation for hospitals will be set forth within 42 C.F.R. § 482.13(h). The patient visitation rights regulation for critical access hospitals will be set forth in 42 C.F.R. § 485.635(f). The new regulations are available here.

Source: Health Law Regulatory Update