CMS proposes rolling back 2-midnight rule
The controversial 2-midnight rule may be no more following CMS’ release of its latest proposed rule for the hospital inpatient prospective payment system (IPPS). When it was first put in place for fiscal year 2014, the 2-midnight rule established a benchmark for inpatient admissions where a Medicare Part A payment would be considered reasonable and necessary for patient stays that lasted at least two midnights. Stays that didn’t reach that benchmark would be billed as outpatient services, which are covered by Medicare Part B and tend to result in lower hospital reimbursements.
Under the new proposed rule, CMS would no longer impose a 0.2% payment cut for inpatient stays under the 2-midnight rule. Hospitals would also receive a one-time 0.6% payment in fiscal year 2017 to offset the reduction in inpatient payments over the previous three years.
In the proposed rule, CMS wrote, "We still believe the assumptions underlying the 0.2[%] reduction to the rates put in place beginning in FY 2014 were reasonable at the time we made them in 2013. Nevertheless … in the context of this case, we believe it would be appropriate to use our authority … to prospectively remove, beginning in FY 2017, the 0.2[%] reduction to the rates put in place beginning in FY 2014."
The proposed rule, which would affect about 3,330 acute care hospitals and 430 long-term care hospitals, would apply to patient discharges from October 1, 2016 and later.
Under the proposed rule, acute care hospitals that are meaningful use electronic health record (EHR) users and that successfully participate in the Hospital Inpatient Quality Reporting Program would receive a 0.9% payment increase.
Overall, CMS estimates that the elimination of the payment cut and proposed payment increases will result in an additional $ 539 million in payments in fiscal year 2017.
CMS held a comment period for the proposed rule, which ended in June. A final rule will be issued August 1.
The proposed rule comes as welcome news to some. Following the announcement of the proposed rule, the American Hospital Association (AHA) released a statement from President and CEO Rick Pollack that said, "[The] rule includes a very important outcome because it reverses the inappropriate and unfair 0.2[%] payment reduction for inpatient services that was implemented as part of the original ‘two-midnight’ policy. The AHA successfully challenged [CMS’] interpretation through the courts to convince them to restore the resources that hospitals are lawfully due."
Background
Two years ago, CMS enacted the payment cuts for inpatient stays to offset an anticipated increase in inpatient admissions as a result of the 2014 IPPS 2-midnight rule. The increase in admissions was predicted to cost $ 220 million.
Following the rule’s introduction, there was vocal opposition to the rule from hospitals that argued it arbitrarily complicated care for Medicare beneficiaries, and legal challenges were subsequently launched over the 0.2% cut.
In the case Shands Jacksonville Medical Center v. Burwell, several hospitals and hospital associations, including the AHA, questioned whether Sylvia Burwell, secretary of the Department of Health and Human Services (HHS), had the authority to make the proposed across-the-board reductions, and whether her prediction of the $ 220 million increase was valid.
In September, the U.S. District Court for the District of Columbia found that HHS did have the authority to reduce the reimbursement rates, but that the justification for the 0.2% cut was lacking.
In his ruling, District Judge Randolph Moss wrote, "The Court is unable to evaluate whether the [s]ecretary’s decision was reasonable because her omission prevented the public from offering meaningful comments. The [p]laintiffs never had the opportunity to explain where, in their view, she went wrong, and, thus, the [s]ecretary never had to provide a reasoned justification of her position."
Moss ordered Burwell to provide additional justification for the reimbursement cut and allow a public comment period. CMS issued a request for comments in December.
The following month, 55 additional hospitals filed a similar lawsuit over the 2-midnight rule’s 0.2% inpatient payment cut and the estimated increase in inpatient admissions the cut was based on.
CMS pauses reviews of short-stay claims
On a related note, in May, CMS put a temporary pause on reviews performed by Beneficiary and Family Centered Care Quality Improvement Organizations (BFCC-QIO) to determine if payments under Medicare Part A are appropriate for claims for inpatient stays that span less than two midnights.
In a message posted June 6, CMS explained it "became aware of inconsistencies in the BFCC-QIOs’ application of the two-midnight policy for short hospital stay reviews, and … we temporarily paused short stay patient status reviews to give us time to improve standardization in the BFCC-QIOs’ review process."
BFCC-QIOs will use the temporary pause to complete retraining on the two-midnight policy and to review all claims that were denied since last October. BFCC-QIOs began conducting the short-stay claim reviews in October, which were previously conducted by Medicare Administrative Contractors.
CMS believes audit activities will resume in 60?90 days, according to the update it posted in June. In the meantime, hospitals that previously had a claim denied should check with their BFCC-QIO to see if the claim has been denied before filing an appeal. Hospitals that have already filed appeals will have the findings of the re-review performed by the BFCC-QIO shared with the appeals adjudicators.
Five simple tips to help healthcare organizations prevent fraud
by Elizabeth Stepp, senior counsel at Oberheiden Law Group, in Dallas
It’s impossible to calculate the amount of healthcare fraud that exists, as much of it slips under the radar. However, healthcare fraud poses a serious problem, putting the health and welfare of beneficiaries at risk while costing taxpayers billions of dollars.
Preventing healthcare fraud and abuse is challenging, especially for hospitals, hospices, and other similar organizations. While there are a lot of honest and well-intentioned healthcare providers, there are quite a few perpetrators?ranging from street criminals to large companies. As such, owners of healthcare organizations need to be on their guard at all times. After all, allegations of fraud and abuse against low-level or top brass employees can affect the reputation of any healthcare organization.
But if you’re the owner of a small or large healthcare organization, don’t let this worry you. The following are some tips to help you prevent your organization’s reputation from taking a hit, and to avoid costly lawsuits.
Perform background checks before hiring
Pre-employment screening for employees, as well as contingent or temporary workers, is a common best practice for healthcare organizations. That being said, not all organizations have the time and resources to perform thorough background checks. Add to this a shortage of quality caregivers plus an increase in the number of patients, and employers find it easy to rely on trust instead of facts.
Since a single scam artist can taint your organization’s reputation, avoid employing or hiring individuals just because they appear to be trustworthy. Make sure pre-employment background checks include the following:
- Education verification: Verify training and accreditation.
- Employment verification: Crosscheck length of employment, position, and performance with previous companies. Note reasons for leaving and analyze gaps in employment history.
- Record verification: Ensure that civil records are clean and confirm that there are no criminal records.
Additionally, check personal references, verify Social Security numbers, and have individuals undergo drug tests.
Have policies and procedures in place
Formalized policies and procedures promote regulatory compliance and workplace safety, and above all guarantee safe and quality patient care. Healthcare organizations also need to have policies and procedures in place to safeguard protected information. Start with defining access and authorization controls, and separate duties in order to reduce opportunities of fraud.
Make sure that policies and procedures are up-to-date and well written, so as to reduce practice variability. Practice that varies from one person to another can lead to sub-standard care and reliance on memory, which in turn can cause errors and oversights. Apart from this, organizations should have a defined set of internal controls to produce accurate financial reports, help comply with laws and regulations, oversee asset protection, and so on.
If you’re not sure about which policies to implement, getting in touch with a healthcare fraud defense attorney will be helpful. These lawyers can defend your case, and they know what it takes to prevent becoming a victim of fraud.
Perform audits regularly
Accurate and complete clinical documentation is important if you want to provide quality healthcare. The best way to improve documentation, and the care that your organization provides, is to conduct regular medical audits. Medical audits can also improve the financial health of your organization, and determine areas that need corrections and improvements.
Ensure that medical auditing and monitoring in your healthcare organizations is:
- A regular and ongoing process
- Conducted by qualified professionals who lay emphasis on government enforcement actions and ensure compliance with internal, state, and federal rules and regulations
- Performed by keeping senior officials and board members in the loop
Protect data
For healthcare organizations, protecting data can mean reducing the number of emergent care cases, improving patient outcomes, providing better oversight and care, and increasing revenue. This makes it necessary for all healthcare organizations?big and small?to protect data. That being said, a lot of small- and mid-sized healthcare organizations think spending on data protection is pointless, as even organizations that take the appropriate steps are attacked by fraudsters.
Sure, data breaches keep happening. But, if you do what’s right, you can definitely protect your organization from being an easy target?and healthcare abusers like easy targets.
Here are some things to keep in mind:
- Dumping data in the trash can gives dumpster divers an opportunity to steal and sell private data. Make a point to shred all data before it is discarded.
- Conduct a risk assessment in accordance with government regulations to help you review security policies, identify threats posed to your organization, and expose system vulnerabilities.
- Remind employees to keep a watchful eye on data and to never leave electronic devices or records unattended.
- Encryption technology known as SSL, or Secure Socket Layer, can prevent data breaches.
- Keep a note of who can access records and manage user identities. Also, allow employees access to information that is pertinent to their position.
- Use complex passwords and two-factor authentication where possible.
- Have a guest wireless network that’s separate from the main corporate network to offer additional protection.
- Get in touch with a cloud vendor or a local security firm to host information systems. Clarify if you’ll be paying for a suite of services or just certain parts, such as encryption or threat management.
- If you can’t afford to spend on data protection, turn to free open-source tools.
Make it easy to report fraud
Reporting fraud and abuse?or any suspicious activity?should be an easy process. You’ll also have to set up a system so that vendors, employees, and patients and their family members can report abuse anonymously.
Most importantly, take required action on all complaints received. By addressing issues promptly, you’ll instill confidence among your employees and patients.
Protect your healthcare organization today
As an honest healthcare provider, you’d certainly want your healthcare organization to be free of fraud and abuse. Having the right intentions alone won’t be able to help you achieve your goals; you’ll have to take the necessary steps too.
With the information given here, you now know what you need to do to ensure that your healthcare organization is safe. Implement these tips right away, and say goodbye to fraud and abuse!
What can be done about bias in peer review?
by Kym Morrissey, BA, CPHQ, CNMT, RT(N), peer review coordinator at St. Anthony Hospital in Lakewood, Colorado
A number of articles have been written about bias in peer review?what it is, how it affects the overall peer review process, and types of bias, to name a few. Bias is understandably the stumbling block to effective peer review. It is the one factor that can take a well-meaning committee that is truly focused on improvement and make it appear as if it is practicing sham peer review.
At St. Anthony Hospital, our professional review committee is a multidisciplinary committee that represents the most active specialties of the medical staff; it also has representation from internal medicine and primary care. Over the years, changes to committee scoring have been implemented to help score more fairly and with less bias.
To assess whether these changes have made an impact, we conduct a biannual survey to assess the perception of the peer review committee members. This has been done since 2009. For the past seven years, we have asked the same questions to allow for comparison across time as new members join, old members step down, and efforts toward improvement are implemented. Two questions specifically designed to assess bias have consistently been included in the survey:
- Do you feel that the cases are reviewed in a fair and impartial manner by the committee members?
- Do you feel that the action taken at the meeting is appropriate?
The results of those two questions reflect improvements that have been made and the impact of those improvements on our survey results. (See the chart at bottom-left.)
In 2010, multi-level scoring was implemented but included patient outcome, which inherently biases the case review, particularly if the outcome isn’t good. In 2012, the committee moved to a multilevel scoring system where overall practitioner care, issue identification, and documentation comprised the final case assessment. The perception of bias is slowly improving with the change to the multi-level scoring.
In 2013, one of the committee members suggested blind voting to increase members’ ability to vote with their conscience without the pressure of a show of hands. Initially this was done with a voting sheet, and the scores were tallied and reported during the meeting, but this method proved too onerous. The committee then started utilizing an audience response system to allow the members to vote privately. The voting results are displayed immediately so that the members are aware of the case level assessment.
It has been interesting to watch the voting reflect the opinions of the members. Previously a show of hands would be unanimous; it would be difficult to say that members were voting according to their conscience. Group pressure would prevail, and hands would go up as members looked around the table. With an audience response system, the results are more telling?rarely is there a unanimous vote. A simple majority determines the level assigned. In the case of a tie, the committee may discuss a few of the salient points again and then revote the question. The voting results are displayed immediately so that the members are aware of the case level assessment.
In reviewing the survey, the 2014 results marked the first time a unanimous response was registered to the question of whether the actions taken by the committee were appropriate. From a low of 41% in 2011 to 100% in 2014, we may say that anonymous voting has given the committee the freedom to vote truthfully and the peace of mind that actions are appropriate. The verbatim comments from the most recent survey of peer review committee members bear this out:
- "The electronic voting has made final determinations more consistent and fair."
- "I feel like I can express my opinion without risk of comment during the meeting because of electronic voting."
- "Originally thought the voting took too long; now I appreciate the anonymity."
In summary, from much of the literature that exists on professional peer review, there is a general opinion that bias is one of its inherent enemies. Even small attempts to reduce bias can add value. Will we ever be able to overcome all bias? In all honesty, no, but we should not give up the battle to reduce it.
Legal and regulatory news roundup
Find out what’s happening in the world of federal healthcare regulations by reviewing some recent headlines from across the country.
Hospital’s EMTALA violations threaten its federal funding
CMS has threatened to cut Medicare and Medicaid funding for Indian Health Service’s (IHS) Sioux San Hospital in Rapid City, South Dakota, after an unannounced inspection in May found deficiencies in the emergency department.
According to the CMS report, the hospital failed to provide patients with timely medical screening examinations to determine whether they had an emergency medical condition, which is a violation of the Emergency Medical Treatment and Active Labor Act of 1986 (EMTALA). CMS based its findings on a review of medical records and interviews with patients, patient representatives, and hospital staff.
A case cited in the CMS report recounts how a mother brought her 6-month-old baby to the emergency department at Sioux San complaining of congestion, cough, runny nose, and watery eyes. The attending provider diagnosed the baby with a viral respiratory infection without taking a patient history, which would have revealed that the baby was born premature and had a history of respiratory distress. The baby later had a seizure and spent time in the ICU at another facility.
Shortly after the inspection, CMS informed IHS that it had until June 15 to address the deficiencies or risk losing Medicare and Medicaid reimbursements. IHS has submitted a 31-point correction action plan, which CMS has accepted.
The corrective plan includes:
- A review and revision of the existing EMTALA policies and staff training on any updates.
- 24-hour coverage of the emergency department by a MD or DO every day. During high-volume periods, a second provider will be added.
- Pediatric assessment training for all emergency department physicians and nurses.
- A pediatrician on call 24/7 for consultations.
- Timely medical screening examinations provided for all patients in the emergency department.
- FPPE performed on the last 10 pediatric patients of all emergency department providers and medical staff.
- Daily situation reports for IHS area directors, prepared by the hospital’s CEO.
Three defendants plead guilty in $ 580 million fraud, kickback case
The U.S. government’s ongoing investigation into kickbacks paid for patient referrals and fraudulent billing at Pacific Hospital in Long Beach, California, has led to three more defendants pleading guilty to federal charges. They join six other individuals who have already pleaded guilty to charges of participating in a 15-year-long scheme that illegally referred thousands of patients to the hospital and generated hundreds of millions in fraudulent billings.
The investigation is looking into allegations that dozens of surgeons and other medical professionals participated in a scheme with Pacific Hospital in which they were paid kickbacks for referring patients to the hospital for spinal surgeries. Members of the conspiracy were paid $ 15,000 for every lumbar fusion surgery and $ 10,000 for every cervical fusion surgery referred to Pacific Hospital. During the last eight years of the scheme, Pacific Hospital submitted more than $ 580 million in bills for spinal surgeries, many of which were paid by the federal workers’ compensation system and the California workers’ compensation system.
The latest defendants to plead guilty are Michael Drobot Jr., Linda Martin, and Michael Barri.
Drobot Jr. pleaded guilty to charges of conspiracy and illegal kickback charges and faces up to 10 years in prison. He is the son of Michael Drobot Sr., the owner of Pacific Hospital who previously pleaded guilty to orchestrating the scheme in April 2014. Drobot Jr. solicited physicians and chiropractors to enter into the kickback arrangements with the hospital and served as a liaison with medical professionals.
Martin, a marketer for Pacific Hospital, also pleaded guilty to a conspiracy charge for recruiting medical professionals to refer patients to the hospital in exchange for kickbacks. She could be sentenced to up to five years in prison for her charge.
Barri, a chiropractor, pleaded guilty to a conspiracy count and admitted he received more than $ 158,000 in kickbacks during a nine-month period for referring dozens of patients to Pacific Hospital. Pacific Hospital used Barri’s referrals to bill insurance carriers $ 3.9 million for spinal surgeries. He faces up to five years in prison.
Drobot Jr., Martin, and Barri, along with the previous six defendants, have agreed to cooperate with the ongoing investigation being conducted by the FBI, the U.S. Postal Service Office of Inspector General, IRS Criminal Investigation, and the California Department of Insurance.
Healthcare providers responding to online reviews may violate HIPAA
A report from ProPublica has found that some healthcare providers apparently violate HIPAA when replying to reviews on the rating website Yelp. After analyzing more than 1.7 million reviews on the website, ProPublica found that some physicians, dentists, and chiropractors shared patient health information when responding to online criticism from patients.
ProPublica identified more than 3,500 one-star reviews on Yelp that mentioned privacy and HIPAA. The report further details several instances of HIPAA violations, which have resulted in warnings from the U.S. Department of Health and Human Services’ Office for Civil Rights as well as ongoing investigations after the patients filed complaints. The Office for Civil Rights, however, does not track how many complaints it has received regarding HIPAA violations on Yelp.
ProPublica was able to speak to some patients who claim their personal information was disclosed by providers on Yelp. They said the violation of their medical privacy only compounded the damage they received from poor care.
Physician indicted on kickback charges
A federal grand jury has indicted Hailu T. Kabtimer, MD, of Henderson, Tennessee, with five counts of violating the federal anti-kickback act.
According to the U.S. Attorney’s Office for the Middle District of Tennessee, from 2013 to 2014, Kabtimer allegedly accepted cash payments in exchange for patients to a particular medical equipment supplier.
During that time, the indictments alleged Kabtimer allegedly accepted kickback payments on eight occasions, totaling $ 3,400. Additionally, Kabtimer allegedly accepted $ 200 for every patient he referred for a continuous positive airway pressure ventilator and $ 300 for every patient he referred for an oxygen unit.
In a statement, U.S. Attorney David Rivera said, "Medical providers who break the law to enrich themselves will be caught and prosecuted … This office and our law enforcement partners will continue our vigorous efforts to enforce the anti-kickback law and to hold accountable medical professionals who accept illegal cash kickbacks."
If found guilty, Kabtimer faces up to five years in prison for each count. He would also face forfeiture of any proceeds traced back to offenses.
Data breach compromises 4,000 patients’ protected health information
More than 4,000 patients of Complete Chiropractic & Bodywork Therapies (CCBT) of Ann Arbor, Michigan, were recently notified of a breach that may have been exposed their treatment and billing information. This includes patients’ encrypted electronic medical record data, such as their names, dates of birth, addresses, Social Security numbers, and health/diagnosis information.
CCBT reported the breach after discovering a server infected with malware. The server was immediately secured and disconnected from the internet; all workstation and vendor passwords were changed, and additional IT security safeguards were put in place, according to a statement released by CCBT.
An investigation determined that the malware was likely scanning for login and password information and that the first unauthorized access occurred four months prior to the breach’s discovery. However, CCBT noted that there was no indication that any patient information had been taken or inappropriately used.
CCBT has offered all affected patients a free year of identity theft protection.
Patient recruiter sentenced for Medicare fraud, kickback scheme
Carlos Rodriguez Nerey, owner and president of Nerey Professional Services, Inc., a Miami-based consulting and staffing company, will spend five years in prison for his role in a $ 2.3 million Medicare fraud scheme.
In April, following a one-week jury trial, Nerey was convicted of one count of conspiracy to defraud the United States and pay and receive healthcare kickbacks, and one count of receiving healthcare kickbacks. At Nerey’s recent sentencing, U.S. District Judge Darrin P. Gayles of the Southern District of Florida imposed the prison term and ordered that Nerey pay $ 2.3 million in restitutions.
From October 2014 to September 2015, Nerey would accept kickbacks from Miami-based healthcare agencies Mercy Home Care, Inc., and D&D&D Home Health Care, Inc., in exchange for referring Medicare beneficiaries to serve as patients. Some patients didn’t actually qualify for home healthcare services based on Medicare’s rules and regulations. Nerey’s actions contributed to the submission and subsequent payment of millions of dollars in fraudulent claims to Medicare.
According to evidence presented at trial, Nerey created a shell company to accept approximately $ 250,000 in kickbacks from the two home healthcare agencies. He had also previously worked for several other fraudulent home healthcare agencies in the area.