On October 23, 2014, CMS is hosting a call on 2013 Quality and Resource Use Reports (QRURs) for physician group practices and physician solo practitioners. The 2013 QRURs contain quality and cost performance data that will be used in determining the applicable Value-Based Payment Modifier for 2015.
On August 28, 2014, CMS announced the latest changes to the deadlines associated with the Sunshine Act “Open Payments" System review and dispute process resulting from additional system down-time. Specifically, because the system will be periodically unavailable on August 30 and September 5, CMS is making the following changes to the data review and correction periods:
- Review and dispute (45 days): 7/14/2014 – 8/3/2014, 8/14/2014 – 9/10/2014
- Correction period (15 days): 9/11/2014 – 9/25/2014
CMS is still standing by its September 30, 2014 target date for public release of the data, although it remains to be seen whether continuing questions about the data integrity and the shrinking window to resolve all technical issues will permit CMS to meet this deadline.
* Note that CMS announced on September 9 that it was extending the review and dispute period for one more day, through September 11, 2014.
CMS Revises Sunshine Act "Open Payments" System Review/Dispute Deadlines Amid Concerns about Data Accuracy
CMS has reopened the Open Payments system after it was taken offline temporarily to “resolve a data integrity issue.” According to a CMS press release, applicable manufacturers and group purchasing organizations (GPOs) had submitted intermingled data (e.g., wrong state license number or national provider identifier) for doctors with the same last and first names, which erroneously linked payments in the Open Payments system. CMS has enhanced its algorithms and validation checks in an attempt to resolve the issues and removed incorrect payment transactions. CMS states that it will remove the questionable data from the current review and dispute process and will not publish this data this year; according to multiple press reports, this has resulted in the removal of one-third of the records from the system.
CMS has also extended the Open Payments review and dispute deadline and the following 15-day corrections period deadline for each day the Open Payments system was offline. The review and dispute period now ends September 8, 2014, the correction period will run through September 9-23, 2014, and the public website launch date remains September 30, 2014.
CMS contends that its correction efforts underscores that it “is committed to ensuring the integrity of data made available to the public.” Nevertheless, the scope of the reported errors and the exclusion of millions of records raise broader questions about the accuracy and completeness of the database and heighten concerns about the potential for public and press misinterpretation of the incomplete data set.
On July 14, 2014, the Centers for Medicare & Medicaid Services (CMS) published its proposed rule to update the Medicare Hospital Outpatient Prospective Payment System (OPPS) and the Ambulatory Surgical Center (ASC) Payment System rates and policies for calendar year (CY) 2015. The following are highlights of this major rulemaking:
- OPPS rates would increase by 2.1% compared to 2014 levels, although rate changes for individual Ambulatory Payment Classifications (APCs) vary. This update reflects a 2.7% market basket increase, which is partially offset by a 0.4% multifactor productivity (MFP) adjustment and an additional 0.2% reduction, both of which were mandated by the Affordable Care Act (ACA). Hospitals that fail to meet the Hospital Outpatient Quality Reporting (OQR) Program reporting requirements are subject to an additional reduction of 2.0%. The actual update for individual procedures can vary based on changes in relative weights and other policies in the proposed rule. Overall, CMS expects to make $800 million in additional payments for OPPS services furnished in CY 2015 under the rule.
- CMS proposes expanding its packaging policy adopted in the 2014 final rule. Beginning in CY 2015, CMS proposes conditional packaging of all ancillary services when they are integral, ancillary, supportive, dependent, or adjunctive to a primary service (except for preventive, psychiatry, and drug administration services). The services proposed to be packaged under this policy are services assigned to APCs with a geometric mean cost of $100 or less. CMS proposes to make separate payment for these ancillary services when they are furnished by themselves. CMS expects to update and expand this policy in future years. CMS also proposes packaging all add-on codes, but it would allow certain combinations of primary service codes and especially costly add-on codes representing a more costly, complex variation of a procedure to trigger a complexity adjustment.
- The proposed rule would implement, with revisions, a policy discussed in the final 2014 rule to replace existing device-dependent APCs in CY 2015. In short, CMS would make a single payment for all related or adjunctive hospital services provided to a patient in the furnishing of certain device dependent services, with certain exceptions. Under this policy, the comprehensive APC payment would include all outpatient services, including diagnostic procedures, laboratory tests and other diagnostic tests, and treatments that assist in the delivery of the primary procedure; visits and evaluations performed in association with the procedure; services and supplies used during the service; outpatient department services delivered by therapists as part of the comprehensive service; durable medical equipment (DME), as well as prosthetic and orthotic items and supplies when provided as part of the outpatient service; and any other outpatient components reported by HCPCS codes that are provided during the comprehensive service (except for certain services including mammography services, ambulance services, brachytherapy seeds, and pass-through drugs and devices). CMS proposes refining its 2014 policy to establish a total of 28 comprehensive-APCs for 2015 versus the 29 comprehensive APCs described in the 2014 final rule.
- CMS proposes to continue to calculate which the OPPS relative payment weights using distinct cost-to-charge ratios for cardiac catheterization, CT scan, MRI, and implantable medical devices.
- Under the proposed rule, the threshold for separate payment for outpatient drugs in 2015 would be a cost per day that exceeds $90, the same threshold as in 2014.
- The proposed rule would revise OQR measures and modify OQR Program validation, review, and corrections provisions.
- CMS proposes collecting data on services furnished in off-campus provider-based departments beginning in 2015. Hospitals and physicians would report a modifier for services furnished in an off-campus provider-based department on both hospital and physician claims. This information ultimately is intended to be used to improve the accuracy of Medicare physician fee schedule (MPFS) practice expense payments for services furnished in off-campus provider-based departments.
- The proposed rule would revise the expansion exception process for physician-owned hospitals under the rural provider and hospital ownership exceptions to the physician self-referral law. Specifically, CMS proposes to permit physician-owned hospitals to use additional data sources to demonstrate eligibility for an expansion exception as a “high Medicaid facility.”
- For CY 2015, CMS proposes an ASC prospective payment system update of 1.2%, reflecting a CPI-U update of 1.7%, offset by a 0.5% MFP adjustment. Payment updates for individual procedures vary. ASCs that do not meet quality reporting requirements are subject to a 2% payment reduction. CMS proposes adding 10 procedures to the ASC list of covered surgical procedures and refining the ASC quality program.
- CMS proposes to require a physician certification only for long-stay cases (defined as 20 days or more) and outlier cases. An admission order would continue to be required for all admissions.
- CMS proposes establishing a process to recover overpayments that result from the submission of erroneous payment data by a Medicare Advantage (MA) organization or Part D prescription drug plan sponsor if the plan fails to correct the data upon CMS request, with an appeals process for MA organizations and Part D sponsors.
CMS will accept comments on the proposed rule until September 2, 2014.
On July 11, 2014, CMS published its proposed rule to update the Medicare physician fee schedule for CY 2015. The proposed rule reflects enactment of the Protecting Access to Medicare Act (PAMA) of 2014, which provides for a 0% update to the conversion factor (CF) for MPFS services furnished between January 1, 2015 and March 31, 2015. In the Proposed Rule, CMS estimates that with the application of a budget neutrality adjustment, the CF for the first quarter of 2015 would be $35.7977 (compared to $35.8228 in 2014). Under PAMA, the CF will be adjusted on April 1, 2015 according to the Sustainable Growth Rate (SGR) formula unless Congress takes additional legislative action. CMS does not speculate on the CF that will be applicable April 1, 2015 through December 31, 2015, but CMS previously estimated that the SGR would result in about a 20.9% cut in MPFS payments for 2015 if Congress does not again intervene. There is an expectation that Congress eventually will override this payment cut, but the timing and extent of any such relief cannot be assured at this time. Other key provision in the proposed rule include the following:
- The proposed rule includes numerous proposals to review addition codes as being potentially misvalued, and to revise the data considered by CMS in assessing the value of procedures. CMS proposes to add about 80 codes to its list of potentially misvalued codes, most of which are high-expenditure specialty services that have not been recently reviewed. CMS also discusses implementation of a PAMA provision authorizing CMS to use alternative approaches to establish practice expense (PE) relative value units (RVUs), including the use of data from other suppliers and providers of services. CMS is specifically seeking comments on the possible use of the Medicare hospital outpatient cost data in the PE valuation methodology. In addition, CMS is proposing to transform all 10- and 90-day global surgery codes to 0-day global codes. Under this provision, CMS would include in the value for these procedures all services provided on the day of surgery, and pay separately for visits and services actually furnished after the day of the procedure, effective beginning in CY 2017.
- CMS proposes a new process intended to enhance transparency in MPFS ratesetting and ensure that all payment input revisions are subjected to public comment prior to being used for payment. In short, beginning with the MPFS proposed rule for CY 2016, CMS will include proposed values for all new, revised, and potentially misvalued codes for which it has complete American Medical Association’s Relative Value Update Committee (RUC) recommendations by January 15th of the preceding year (thus for the CY 2016 rulemaking, CMS would include in the proposed rule proposed values for services for which it has RUC recommendations by January 15, 2015). CMS would delay consideration of RUC recommendations received after January 15th of a year. For codes that describe wholly new services, CMS will work with the RUC to try to receive recommendations in time to include proposed values in the proposed rule; if not, and CMS determines that it is in the public interest for Medicare to begin using the code, CMS would establish values for the code’s initial year as under current policy. CMS is also revising how it accounts for costs associated with radiation therapy equipment and x-ray services.
- CMS proposes numerous changes to the Physician Quality Reporting System (PQRS), including the addition of 28 new individual measures and two measure groups, and removal of 73 measures. CMS also proposes that eligible professionals who see at least one Medicare patient in a face-to-face encounter report measures from a new cross-cutting measures set in addition to other required measures. The proposed rule also includes revisions to Shared Savings Program/accountable care organization (ACO) quality requirements, including changes to the scoring strategy to recognize quality improvement, revisions to quality measure benchmarks, and revisions to individual quality measures.
- CMS proposes changes to the Physician Value-Based Payment Modifier program, under which CMS will adjust payment to physicians based on the quality of care compared to costs. For 2017 (the last year in a three-year phase-in period), CMS proposes to apply the Value Modifier to physicians in groups with two or more eligible professionals (EPs) and to physicians who are solo practitioners. CMS also would apply the Value Modifier beginning in CY 2017 to non-physician EPs in groups with two or more EPs and to non-physician EPs who are solo practitioners. Moreover, CMS proposes a number of changes to the payment adjustment framework for 2017, increasing the potential upward and downward adjustment to +/- 4%.
- CMS raises concerns about “operational and program integrity issues” arising from the use of substitute (locum tenens) physicians to fill staffing needs or to replace a physician who has permanently left a medical group, particularly with regard to potentially inappropriate use of the departed physician’s Provider Transaction Access Numbers (PTAN) or National Provider Identifier (NPI). CMS solicits comments on specific questions associated with substitute physician billing arrangements as the agency considers whether to adopt regulations in this area, including with regard to implications for the physician self-referral law.
- CMS is proposing changes to its Physician Payment Sunshine Act regulations, also known as the Open Payments program. These provisions are discussed in a separate post.
- Among many other things, the proposed rule also would: establish a revised local coverage determination (LCD) process for all new draft clinical diagnostic laboratory test LCDs published on or after January 1, 2015; require physicians (and hospitals) to report a modifier for services furnished in an off-campus provider-based department; update malpractice RVUs; revise Geographic Practice Cost Indices; reduce beneficiary cost-sharing associated for anesthesia related to screening colonoscopies; and add to the list of services that can be furnished to Medicare beneficiaries under the telehealth benefit annual wellness visits, psychoanalysis, psychotherapy, and prolonged evaluation and management services.
CMS will accept comments on the rule until September 2, 2014.
CMS has made a series of announcements related to the Sunshine Act Open Payments system, including information about the Open Payments review, dispute and correction process that runs from July 14 through August 27, 2014. This period allows physicians and teaching hospitals to review and initiate any disputes they may have regarding the data reported about them by applicable manufacturers and applicable group purchasing organizations. CMS has also extensively updated the Open Payments User Guide, which is intended to provide industry, physicians, and teaching hospitals with a comprehensive understanding of the Open Payments system and reporting requirements.
CMS Proposes Changes to Sunshine Act "Open Payments" Regulations in 2015 Medicare Physician Fee Schedule Rule
Today the Centers for Medicare & Medicaid Services (CMS) issued an advance copy of the CY 2015 Medicare Physician Fee Schedule (PFS) proposed rule, which includes certain changes to the regulations implementing the Physician Payment Sunshine Act, also known as the Open Payments program. These proposed changes come just three days after the inaugural deadline for applicable manufacturers and group purchasing organizations (GPOs) to report to CMS detailed information regarding payments and transfers of value made to physicians and teaching hospitals, as well as physician ownership information.
As previously reported, the Physician Payment Sunshine Act and related regulations require pharmaceutical and medical device manufacturers and GPOs to register with and submit to CMS data on their financial relationships with physicians and teaching hospitals. This financial data will be made publicly available on the CMS Open Payments website.
In the PFS proposed rule, CMS proposes the following changes to the Physician Payment Sunshine Act regulations:
- Deleting the definition of “covered device” as duplicative of the definition of “covered drug, device, biological or medical supply”
- Deleting the reporting exclusion for payments made to speakers at accredited continuing medical education events when certain requirements are met. Although CMS is deleting this express exclusion, it notes that such payments may still be excluded generally from reporting under the separate exclusion for indirect payments, which applies in those instances in which the applicable manufacturer is unaware of the identity of the covered recipient. In other words, the practical impact of this change may not be significant in the long run.
- Requiring the reporting of the marketed name of the drug, device, biological, or medical supply related to the payment being reported. Previously, CMS finalized that for drugs and biologicals, manufacturers must report the market name of a related product, but that for devices and medial supplies, manufacturers could report either the name under which the product is marketed or the general therapeutic area or product category associated with the device or medical supply.
- Requiring manufacturers to report stocks, stock options or any other ownership interest as distinct categories.
The proposed rule will be published in the Federal Register on July 11, 2014, and comments are due to CMS by September 2, 2014.
Today the HHS OIG issued a Special Fraud Alert highlighting its concerns regarding two trends involving transfers of value from laboratories to physicians that the OIG believes “present a substantial risk of fraud and abuse under the anti-kickback statute.” Specifically, the OIG details risks involved with certain compensation paid by laboratories to referring physicians and physician group practices for (1) blood specimen collection, processing, and packaging, and (2) submitting patient data to a registry or database. The Special Fraud Alert reiterates the OIG’s “longstanding concerns” when payments from laboratories to physicians exceed the fair market value of the physicians’ services or reflect the volume or value of referrals of federal health care program business. Reed Smith is preparing an analysis of the Alert.
The GAO recently examined “self-referral” for outpatient physical therapy (PT) services, which the GAO defines as a provider referring patients to entities in which the provider or the provider's family members have a financial interest. According to the GAO, non-self-referred PT services per 1,000 Medicare FFS beneficiaries increased by 41% from 2004 to 2010, while the number of self-referred PT was generally flat. Expenditures associated with non-self-referred PT services also grew at a higher rate than for self-referred services. The GAO observed that these findings differ from its prior reviews of self-referrals involving advanced imaging, anatomic pathology, and intensity-modulated radiation therapy, in which the GAO found that self-referred services and expenditures grew faster than non-self-referred services and expenditures. The GAO suggests that a potential reason for this difference is that non-self-referred PT services can be performed by providers who can directly influence the amount, duration, and frequency of PT services through the Medicare written plan of care, whereas radiologists, for example, generally do not have the discretion to order more imaging services or more intense imaging procedures.
In addition, the GAO found that the relationship between provider self-referral status and PT referral patterns was mixed, and varied on the basis of referring provider specialty, Medicare beneficiary practice size, and geography. Self-referring providers in the three specialties that GAO examined (family practice, internal medicine, and orthopedic surgery) generally referred more beneficiaries for PT services on average than non-self-referring providers, but ordered fewer PT services per beneficiary compared to non-self-referring providers. The GAO also found that PT service referrals in the year a provider began to self-refer increased at a higher rate relative to non-self-referring providers of the same specialty.
In the report, “Medicare Physical Therapy: Self-Referring Providers Generally Referred More Beneficiaries but Fewer Services per Beneficiary,” the GAO concluded that regardless of referral patterns, the substantial growth in PT services raises concerns about costs for Medicare and beneficiaries. The GAO suggests that CMS’s initiative to collect additional information on beneficiary functional status on all PT claims may help CMS better assess the appropriateness of PT treatment provided by both self-referring and non-self-referring providers.
The House Energy and Commerce Committee has scheduled a May 21 hearing entitled “Keeping the Promise: Site of Service Medicare Payment Reforms,” which will focus on two bills that seek to equalize payments between different providers:
- The Medicare Patient Access to Cancer Treatment Act of 2014, which would establish payment parity under the Medicare program for ambulatory cancer care services furnished in the hospital outpatient department and the physician office setting.
- The Bundling and Coordinating Post-Acute Care (BACPAC) Act of 2014, which would provide bundled payments for post-acute care services under Medicare Parts A and B.
The Committee will examine whether such proposals can save money for beneficiaries and the Medicare program without compromising quality of care.
CMS to Implement Ordering/Referring Denial Edits for HHA Certifying Physicians, Effective July 1, 2014
CMS plans to apply “Phase 2” ordering and referring denial edits to certifying physicians of Part A home health agency (HHA) services effective July 1, 2014. These edits, which currently apply only to the attending physician of an HHA, will ensure that the physician that certifies the patient’s eligibility to receive services under the Medicare home health benefit has a valid individual National Provider Identifier (NPI) and are of a specialty type eligible to order and refer the HHA items and services on the claim. The edits will deny the claim when this information is missing or invalid.
CMS is inviting comments on the Physician Payment Sunshine Act “Open Payments Program” dispute resolution and corrections process. As previously reported, the Physician Payment Sunshine Act requires pharmaceutical and medical device manufacturers and group purchasing organizations (GPOs) to register with and submit to CMS data on their financial relationships with physicians and teaching hospitals. This financial data will be made publicly available on the CMS Open Payments website. On May 5, 2014, CMS published a notice soliciting additional feedback on the dispute resolution and corrections process, under which covered recipients and physician owners or investors have an opportunity to dispute certain information regarding a payment or other transfer of value. Comments will be accepted until June 2, 2014.
On May 1, 2014, CMS will begin accepting recommendations for potential Physician Quality Reporting System (PQRS) quality measures for 2016 and future rulemaking years. Quality measure proposals also will be considered for use in other physician quality programs, including the Value Based Modifier, Physician Compare, and the Medicare Shared Savings Program.
CMS is hosting a series of Special Open Door Forum calls to solicit feedback on data elements for a new “Suggested Electronic Clinical Template for Home Health.” Specifically, CMS seeks input on a list of clinical elements within a Suggested Electronic Clinical Template that would assist physicians when documenting the home health face-to-face encounter for Medicare purposes. Upcoming calls are scheduled for May 20, June 19, and July 16, 2014.
While attention has been focused on Medicare physician payment data released by CMS yesterday, upcoming Sunshine Act data will shine a new spotlight on financial relationships between physicians and pharmaceutical and medical device companies – with potential FCA implications.
Last week marked the deadline for pharmaceutical and medical device manufacturers and group purchasing organizations (GPOs) to register with and submit aggregate 2013 payment and investment interest data to the Centers for Medicare & Medicaid Services (CMS) on certain financial relationships between themselves and physicians and teaching hospitals, as required by the Physician Payment Sunshine Act.1 In May, manufacturers and GPOs will be required to submit to CMS detailed 2013 payment data. With some exceptions, CMS will be making these data public by September 1, 2014. While the publicly available data are intended to provide more transparency for patients – to allow them to have a better understanding of the financial relationships between physicians and pharmaceutical and medical device companies – patients will certainly not be the only group interested in this public information. The Department of Health and Human Services (HHS) Office of the Inspector General (OIG), Department of Justice (DOJ), and relators’ attorneys will likely utilize these data to initiate investigations and support complaints under the federal False Claims Act (FCA). As with the recent release of the 2012 Medicare Part B Physician Fee Schedule data, members of the media will likely make inferences about certain financial relationships.
The U.S. government recovered $3.8 billion in settlements and judgments from civil cases involving fraud against the government in the fiscal year ending Sept. 30, 2013.2 Fiscal 2014 looks to be a record-breaking year, with ever-increasing civil settlements by major pharmaceutical companies.3
As the reporting deadlines approach, it is worth considering an interesting, and largely unknown, potential implication of the public availability of these data: How will it affect future FCA litigation? The publically available Sunshine Act data could become relevant to FCA litigation in a variety of ways; two in particular are discussed below.
Anti-Kickback Statute Violations
The data could give rise to suspicions of violations of the federal Anti-kickback Statute (AKS). The AKS makes it a criminal offense to knowingly and willfully offer or pay remuneration to induce the referral of, or arrange for the provisions of, federal health care program business.4 In other words, the law prohibits any person or entity from giving, receiving – or offering to give or receive – anything of value in return for or to induce referrals for businesses covered by Medicare, Medicaid, or any other federally funded health care program. Violators of the AKS face imprisonment, criminal, and civil fines, as well as exclusion from federal health care programs.5
It is easy to see how publishing information regarding payments from pharmaceutical and medical device manufacturers to physicians and teaching hospitals could implicate the AKS, and by extension, the FCA. The Patient Protection and Affordable Care Act (ACA) made explicit that violations of the AKS are also violations of the FCA.6 Any payment from a pharmaceutical or medical device manufacturer to a physician who prescribes a product manufactured by the company providing the payment could be viewed as potentially inappropriate remuneration intended to influence prescribing behavior.
Publically available information reported as a result of the Sunshine Act may also have off-label promotion implications. Notably, reports to CMS must include the name of the drug or the type of device that forms the basis of the payment.7 Tying the payment to a particular drug or type of device could raise suspicions of off-label promotion. A pharmaceutical or medical device manufacturer that promotes its products for uses for which the product has not yet been approved by the United States Food and Drug Administration (FDA), i.e., off-label uses, is at risk of FCA liability. A false claim can arise when a manufacturer promotes a product for off-label, non-covered uses (that is, for a use that both has not been approved by FDA and is not covered by the federal health care programs). Payments going to physicians who specialize in an area that is outside the scope of a pharmaceutical or medical device’s approved indication could necessarily raise suspicions that the manufacturer is promoting the product for unapproved uses.
Besides the risk of government identifying potential issues for further investigation and prosecution as a result of reported Sunshine Act data, private parties may also mine the publically available data. One substantial impediment to relators’ attorneys using Physician Sunshine Payment data in FCA litigation is the limitation that publicly available data cannot form the basis of a whistleblower claim.8 This is known as the public disclosure bar, although the effectiveness of this defense has been diminished with recent FCA amendments.
That said, the Sunshine Act data, even if not the basis of a claim, could nonetheless impact the litigation in many ways. For example, it could provide additional evidence for the government to review in reaching its decision whether to intervene in a qui tam action. Both OIG and DOJ could review the data before it is publicly available to assist in the determination that a given matter warrants intervention. Additionally, the publicly available data – beyond providing flavor in support of an FCA claim and assisting with meeting the heightened pleading standard associated with fraud allegations9 – could be a potential mine for plaintiff attorneys to locate areas of focus. Relators’ attorneys will no doubt track the data to ascertain potential problem drugs or companies about which they can then dedicate efforts to uncovering fraud and abuse in the federal health care system.
It remains to be seen how all of these risks will play out going forward. Courts will have to decide how these new data will fit into FCA litigation. OIG and DOJ will have to determine how much to rely on the new information. And relators’ attorneys will need to make decisions about how many resources to dedicate to mining the Sunshine Act data.
One potential consequence that we are already starting to see occur is that pharmaceutical and medical device manufacturers may halt or limit payments to physicians, and/or that physicians themselves will be reluctant to accept such payments, e.g., for research, for expenses associated with training on a device, and the like. Companies may decide to do so for a variety of reasons, including avoiding the administrative burdens associated with tracking and reporting such payments for purposes of the Sunshine Act, fear of FCA litigation, or for public relations reasons. Many physicians simply do not want their names publicized. It remains to be seen how these trends will evolve.
1 42 C.F.R. § 403.908(a).
2 DOJ Press Release, available at: http://www.justice.gov/opa/pr/2013/December/13-civ-1352.html. 3 See, e.g., DOJ Press Release, available at: http://www.justice.gov/opa/pr/2013/November/13-ag-1170.html.
4 42 U.S.C. § 1320a-7.
6 42 U.S.C. § 1320a-7b(g). Note that manufacturers may submit “assumptions documents” as part of Sunshine reporting. Although CMS stated in the preamble to the Sunshine regulations its belief that the contents of such documents “should not be made public,” it acknowledged that it could provide access to the documents during an audit or investigation by other HHS divisions, the Office of Inspector General, or the Department of Justice.
7 42 C.F.R. 403.94(c)(8).
8 31 U.S.C. § 3730(e)(4).
9 Fed. R. Civ. P. Rule 9(b).
This post was written by Paul Pitts.
California State Senator Ed Hernandez, O.D., Chair of the Senate Health Committee, has introduced legislation that would close an exception in state law that currently permits physicians to provide advanced imaging, anatomic pathology, radiation therapy, and physical therapy within their office or the office of their group practice. Under current law, the so-called “in-office exception” permits physicians to refer patients to their own practice for these services, which are typically ancillary to the primary service of the referring physician. If this legislation is adopted, California’s self-referral law would be more restrictive than the federal physician self-referral law, commonly referred to as the Stark law. Physicians in California residing outside of rural areas would be prohibited from referring any patients, regardless of source of payment, for advanced imaging, anatomic pathology, radiation therapy, and physical therapy performed by the referring physician’s own practice. The proposed legislation, Senate Bill 1215, is scheduled for an April 21, 2014 hearing before the Senate Business, Professions and Economic Development Committee. Comments on the legislation may be sent to the committee at State Capitol, Room 2053 Sacramento, California 95814.
The OIG has issued a report examining questionable Medicare billing for electrodiagnostic tests, which are used to evaluate patients who may have nerve damage and which the OIG has identified as an area vulnerable to fraud, waste, and abuse. According to the OIG, 4,901 physicians had questionable billing for Medicare electrodiagnostic tests in 2011, based on seven measures of questionable billing developed by the OIG (e.g., physicians with an unusually high percentage of electrodiagnostic test claims using modifier 59 or 25, physicians with an unusually high average number of miles between the physicians’ and beneficiaries’ locations, and physicians with an unusually high average number of electrodiagnostic test claims for the same beneficiary on the same day). These questionable claims totaled $139 million in 2011, with physicians in the New York, Los Angeles, and Houston areas having the highest total questionable billing. In response to these findings, the OIG recommend that CMS: increase its monitoring of billing for electrodiagnostic tests; provide additional guidance and education to physicians regarding electrodiagnostic tests, and take appropriate action regarding physicians identified as having inappropriate or questionable billing.
The clock is winding down for Congress to pass Medicare sustainable growth rate (SGR) formula reform legislation before the latest temporary spending patch expires at the end of the month and doctors again face steep cut in Medicare physician fee schedule (MPFS) payments. While there had been high hopes for a permanent reform once key committee leaders reached agreement on a bipartisan, bicameral SGR reform bill, financing the roughly $180 billion package (including funding for various expiring Medicare provisions) has been the sticking point. When the House of Representatives approved its version of the bill on March 14 (H.R. 4015), it relied on savings attributed to repeal of the ACA individual insurance mandate to finance the bill – a proposal which drew a veto threat from the Administration and which will not be considered by the Senate. On the other hand, Senate Finance Committee Chairman Wyden has suggested offsetting the costs by capturing savings from “overseas contingency operations” funds (future war spending that is not expected to be expended) or not offsetting the costs – neither of which would pass the House. Given this impasse, lawmakers are exploring another temporary fix, potentially through the end of 2014, with offsets for the smaller package likely to come from reductions in other Medicare spending. If Congress does not reach an agreement, MPFS payments will be subject to an approximate 24% cut on April 1, 2014 (although CMS announced in the final MPFS rule the conversion factor would be reduced by 20.1%, the Congressional Budget Office estimates that given other adjustments in the rule, the effective update to physician payments for 2014 will be a reduction of 23.7% if the rule goes into effect).
The four Durable Medical Equipment (DME) Medicare Administrative Contractor (DME MAC) medical directors have issued a joint open letter to physicians warning about “various marketing schemes” perpetrated by DME suppliers. Such methods cited by the DME MACs in a March 5, 2014 “Dear Physician” letter include unsolicited orders for medical equipment or supplies; advertisements that Medicare will provide the doctor with payment for patient referrals; or pre-completed medical necessity forms with instructions to just “Sign and Date Here.” The DME MACs note that doctors “are under no obligation to support or justify these supplier solicitations,” or to sign orders for items not initiated by the doctor or that were provided by the supplier without prior consultation. The letter suggests that physicians review the patient’s medical record before signing orders, and view with skepticism unsolicited orders for patients no longer in their care or who have not been seen in a long period of time. Physicians should document in the patient’s medical record the medical justification for any DME ordered. The letter also asks doctors to report suspected abuse to the OIG, which we note has long-standing concerns about DMEPOS supplier marketing practices. Particularly in light of tightened CMS requirements related to physician documentation of DMEPOS orders, the DME MACs’ open letter provides another reminder for suppliers to review their policies and practices in this area.
CMS Considering Innovative Episode-Based Payment Models for Outpatient Specialty Practitioner Services
CMS is requesting public comments on ways to structure new models for delivering and paying for Medicare outpatient specialty practitioner services. The first broad model CMS is considering is a procedural episode-based payment model, where the episode of care would be defined around an outpatient surgical or interventional procedure such as colonoscopy or cardiac catheterization. Payment under this model would include all related services furnished during the episode, such as practitioners’ services (e.g., anesthesia, pathology, and/or radiology), diagnostic tests, Medicare-covered prescription drugs, and if applicable, ambulatory surgical center or hospital outpatient department facility payments.
A second model being considered is described as a complex and chronic disease management episode-based payment model. In this case, the episode would be defined as a prolonged period of time for management of the condition by a specialist practitioner, and the bundle could contain the same comprehensive services as contemplated under the procedural interventional model. In both models, CMS is concentrating on care by specialist practitioners other than medical oncologists, since a potential oncology model is being developed on a separate track.
CMS is exploring these options under its Affordable Care Act authority to test innovative payment and service delivery models that have the potential to reduce program expenditures while preserving or enhancing the quality of care for Medicare, Medicaid and Children’s Health Insurance Program beneficiaries.
** Note that CMS has extended the comment period from March 13, 2014 until April 10, 2014.