The Centers for Medicare & Medicaid Services (CMS) contracts with private companies also known as sponsors to provide Medicare services and benefits under Parts C and D. However, when a sponsor fails to comply with program and/or contract requirements, sponsors are subject to a wide range of enforcement action by CMS. Enforcement and contract actions available to CMS include intermediate type sanctions (i.e., suspension of payment, marketing or enrollment), termination, and most notably, civil monetary penalties (CMPs). Historically, the majority of enforcement action taken involve the imposition of CMPs. Thus, plan sponsors are strongly encouraged to adopt an aggressive compliance plan that includes mock periodic audits in order to prevent potential deficiency findings by CMS.
It is not news that Hurricanes Harvey and Irma have rocked Texas and the Florida mainland, and Irma has left unimaginable damage throughout the Caribbean and Florida Keys. During both hurricanes, considerable media attention was directed to how well hospitals and other sub-acute care providers in the affected areas were prepared for and responded to these events. When coupled with the loss of multiple lives occurring at the Rehab Center at Hollywood Hills, seemingly due, at least in part, to exposure to extremely elevated temperatures during an extended power outage, emergency readiness should be near the top of every health care provider and supplier agenda. Providers and suppliers should also be mindful of a rapidly approaching regulatory deadline Medicare requirement for continued participation on the topic of emergency preparedness.
Earlier this year, the Florida legislature passed prohibitions against balance billing by out-of-network providers for emergency services and where the patient goes to a contracted facility but does not have an opportunity to choose a provider such as emergency room physicians, pathologists, anesthesiologists and radiologists.
Specific reimbursement requirements went into effect on October 1, 2016 for certain out-of-network providers of emergency and non-emergency services, where a patient has no opportunity to choose the provider.
Under these circumstances, an Insurer must pay the greater amount of either:
(a) The amount negotiated with an in-network provider in the same community where services were performed;
(b) The usual and customary rate received by a provider for the same service in the community where service was provided; or
The Supreme Court of the United States in the case of Universal Health Services v. United States ex rel. Escobar (decided 6/16/2016) extended the reach of the False Claims Act (FCA) to cover implied false certifications made “in certain circumstances” by healthcare providers in requesting payment for goods and services.
At issue was a theory of liability known as the “implied false certification theory” and whether this theory was valid under the FCA. The implied false certification theory treats a payment request as an implied certification of compliance with relevant statutes, regulations or contract requirements that are a material condition of payment and treats a failure to disclose a violation as a misrepresentation that renders the claim false or fraudulent.
There is nothing readily understood about the term medical necessity. In healthcare it is the “overarching criterion for payment”. There is no payment for services or supplies if there is no medical necessity to support it. Today, every provider at some time is faced with a denial because of lack of medical necessity. Physician providers will usually hear that payors do not get in the way of the physician-patient relationship. Payors typically state that they never tell a physician how to practice medicine and a denial based on lack of medical necessity is for purposes of payment only. However, what provider, on a routine basis, will continue to order care and services which medically unacceptable and not supported for payment purposes?
The definition of medical necessity varies from one commercial plan to another. Federal law such as Medicare has its definition and so does state law under programs such as Medicaid. Various medical associations such as the AMA also define medical necessity.
Generally, medical necessity refers to services or supplies which are required for the treatment of an illness, injury, diseased condition or impairment and which is consistent with a patient’s diagnosis or symptoms and are in accordance with generally accepted standards of medical practice. Services or supplies must not be ordered only as a convenience to the patient or provider. Of course care and services which are investigational or unproven are not considered medically necessary.
As the shift from fee for service to value based payment develops, one thing is crystal clear: volume is no longer king. Prior to 2010, medical providers were being paid on the amount of services that they rendered. The more patients that they treated, the more money they made. That certainty has disappeared with value based compensation and outcomes are now driving the compensation. To be successful, a provider must learn to bend both the quality and cost curve. In short, providers must increase quality while decreasing costs.
When contemplating negotiating or entering into a value based contract, the first thing to consider is the amount of financial risk that your practice or healthcare business can take on. The four main types of financial payments are:
The best way to determine which payment model best suits your needs is to hire a qualified financial healthcare analyst who will be able to generate financial risk modeling. A provider will then have a common starting point to negotiate as well as a better understanding of the issues, risks, and potential cost savings involved.
443 Providers sign up for the CMMI Oncology Care Model including numerous providers in Florida. The Oncology Care Model is a new payment model for physician practices administering chemotherapy. Practices receive reimbursement via an episode based payment model that incentivizes high quality coordinated care. Letters of Intent from payers (several of which are Florida payers) wishing to participate in the new model were submitted and Letters of Intent from providers wishing to participate were also submitted. A list of those payers and providers who submitted LOIs can be found at http://innovation.cms.gov/initiatives/Oncology-Care/ .
Like a scene from the popular Netflix series, House of Cards, Governor Scott has requested that State agencies list critical services in light of a possible government shutdown over a battle of the budget. It is important to note that Floridians relying on Medicaid could be impacted and shifting their care from the Primary Care Doctors back to the Emergency Departments. Lawmakers will have a special session from June 1-20 with the goal of passing a budget.
In the meantime, hospitals have responded to Governor Scott’s challenge for profit sharing and likening healthcare to baseball. The Florida Hospital Association responded equating the profit sharing to an additional tax on hospitals. The Florida Hospital Association stated that hospitals already contribute roughly $1.3 billion to Medicaid as supported by a report commissioned by the State. Governor Scott also drew criticism from State Senator Don Gaetz in a talk radio interview where he likened the Governor’s profit sharing to government price controls.
In the “good old days” (in healthcare, that means more than a week ago), it was understood that if a client didn’t accept any state or federal healthcare program dollars (e.g. Medicare, Medicaid, CHAMPUS, TriCare, Supp Plans), they would not expect to get a “knock on the door” from any federal regulatory authority. No federal or state healthcare program dollars used to mean the client would only tend to hear from state regulators or commercial payors. Those days are done!
Federal law enforcement is increasingly pursuing alleged criminal wrongdoing in the “non-government” healthcare space. One of their favorite weapons is 18 U.S.C. 1347, the Federal Healthcare Fraud Statute, which gives federal law enforcement broad enforcement authority with respect to suspected wrongdoing involving interactions between healthcare providers and commercial insurers.
Balance billing occurs when a provider collects from a patient the difference between the amount billed for a covered service and the amount paid for that service. Balance billing does not apply when collecting deductibles, copayments or coinsurance.
Under Florida law, a provider may not balance bill a patient for any service, if an HMO is liable and responsible for payment. Contrary to what many people believe, this is true whether you are in-network or out-of-network. Even hospital based out-of-network physicians, such as anesthesiologists, pathologists, radiologists or emergency room physicians cannot balance bill HMO members where the hospital has a contract with the HMO or there was authorization given for an episode of care.
Health law is the federal, state, and local law, rules, regulations and other jurisprudence among providers, payers and vendors to the healthcare industry and its patient and delivery of health care services; all with an emphasis on operations, regulatory and transactional legal issues.