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As previously reported, CMS has published its final rule to establish a Medicare Comprehensive Care for Joint Replacement (CJR) model that establishes a bundled payment framework for acute care hospitals for lower extremity joint replacement surgery (LEJR) episodes of care in selected geographic areas. The CJR initiative is particularly significant given that it is

On November 16, 2015, CMS released its final rule to establish a Medicare Comprehensive Care for Joint Replacement (CJR) model that will test whether bundled payments to acute care hospitals for lower extremity joint replacement surgery (LEJR) episodes of care will reduce Medicare expenditures while preserving or enhancing the quality of care for Medicare beneficiaries. CMS estimates that this initiative – which will be mandatory for most hospitals operating in selected geographical areas –will include about 23% of all LEJR episodes nationally and will result in approximately $343 million in net Medicare savings over five years. The advance version of the final rule is lengthy (more than 1000 pages) and complex. The basic framework of the program aligns with the program specifications set forth in CMS’s July 14, 2015 proposed rule. CMS did, however, push back the start date for the initiative; the regulations, while effective on January 15, 2016, are applicable when the first model performance period begins on April 1, 2016. Our preliminary observations regarding key features of the final rule and notable changes from the proposed rule include the following:
Continue Reading CMS Finalizes “Comprehensive Care for Joint Replacement” Model

On August 6, 2015, CMS is publishing its final rule to update Medicare hospice payment rates and the wage index for fiscal year (FY) 2016.  CMS estimates that the final rule will increase overall payments to hospices by about 1.1%, or $160 million, in FY 2016.  This increase reflects a 1.6% hospice payment update percentage, which in turn is reduced by the use of updated wage index data and the last year of the phase-out of the wage index budget neutrality adjustment factor (-0.7% decrease), and increased as a result of a transition to new Office of Management and Budget Core Based Statistical Area (CBSA) delineations for the FY 2016 hospice wage index (0.2% increase). In the final rule, CMS adopts its proposal to create two different payment rates for routine home care (RHC), effective January 1, 2016.  Under this policy, CMS will apply a higher base payment rate for the first 60 days of hospice care and a reduced base payment rate for subsequent days. CMS also adopted a service intensity add-on (SIA) payment for services provided in the last 7 days of a beneficiary’s life, if the following criteria are met: 
Continue Reading CMS Finalizes Medicare Hospice Wage Index/Rates for FY 2016

As promised in our July 21st post, our team has compiled a comprehensive analysis of the Centers for Medicare and Medicaid Services’ (CMS) proposed rule to establish a Medicare Comprehensive Care for Joint Replacement (CCJR) model, under which CMS would provide a bundled payment to hospitals for an episode of lower extremity joint

On June 9, 2015, the Office of the Inspector General of the Department of Health and Human Services (OIG) released a fraud alert warning physicians to scrutinize carefully the conditions and terms of any medical director or other compensation arrangement they enter into with potential recipients of Federal health care program business. The risks associated with these arrangements under the anti-kickback statute are not new. However, the fraud alert signals  the OIG’s current focus on physicians, which reportedly has also included hiring additional attorneys to handle investigative and enforcement activity involving physicians. Moreover, the government now has access to unprecedented amounts of data regarding financial arrangements between physicians and drug and device manufacturers.

The fraud alert follows on the heels of a dozen recent settlements between the OIG and individual physicians who allegedly received kickbacks disguised as medical directorships and other office staff arrangements. In those settlements, the OIG determined the physicians played an integral role in the schemes and specifically alleged that the agreements:Continue Reading An Apple a Day Keeps the OIG Away: Practical Guidelines for Structuring Physician Compensation Arrangements to Avoid Kickback Allegations

On April 20, 2015, the Office of the Inspector General of the Department of Health and Human Services (“OIG”) released educational guidance designed to assist governing boards of health care organizations (“Boards”) in their compliance oversight functions. This guidance, entitled “Practical Guidance for Health Care Governing Boards on Compliance Oversight” (the “Guidance”), was developed in a collaborative effort among the OIG, the Association of Healthcare Internal Auditors (“AHIA”), the American Health Lawyers Association (“AHLA”), and the Health Care Compliance Association (“HCCA”). The Guidance updates previous guidance issued by OIG and AHLA, and incorporates insight from the AHIA and HCCA to help assist the internal auditors, compliance officers, and lawyers that report to the Boards. The document addresses four key issues relating to a Board’s oversight and review of compliance program functions: (1) the roles and relationships among an organization’s audit, compliance, and legal departments; (2) the mechanisms and processes for reporting to the Board; (3) identifying and auditing regulatory risk; and (4) methods to encourage organization-wide accountability for achieving compliance goals and objectives.
Continue Reading OIG Partners with Industry Associations by Issuing Practical Guidance for Health Care Governing Boards on Compliance Oversight

Today President Obama signed into law H.R. 2, the “Medicare Access and CHIP Reauthorization Act of 2015” (MACRA), which reforms Medicare payment policy for physician services and adopts a series of policy changes affecting a wide range of providers and suppliers. Most notably, MACRA permanently repeals the statutory Sustainable Growth Rate (SGR) formula, achieving a goal that has eluded Congress for years. Now, after a period of stable payment updates, MACRA will link physician payment updates to quality, value measurements, and participation in alternative payment models.
Continue Reading President Obama Signs MACRA: Permanently Reforms Medicare Physician Reimbursement Framework, Includes Other Health Policy Provisions

On December 5, 2014, the Centers for Medicare & Medicaid Services (CMS) published a final rule that expands the circumstances under which it may deny or revoke the Medicare enrollment of entities and individuals on program integrity grounds, effective February 3, 2015. Among other things, the final rule: allows CMS to deny enrollment to providers, suppliers, and owners that previously were affiliated with an entity with unpaid Medicare debt; allows CMS to deny or revoke enrollment if a managing employee has been convicted of certain felony offenses; and enables CMS to revoke Medicare billing privileges for a “pattern or practice” of improper claims submissions. CMS is not finalizing its proposal to dramatically increase the potential reward for individuals who provide tips leading to the recovery of Medicare funds.
Continue Reading CMS Finalizes Rule to Strengthen Medicare Provider Enrollment Regulations and Permit Revocations for Patterns/Practices of Improper Claims Submissions; Defers Expanded Awards for Medicare Fraud Tipsters

On November 6, 2014, CMS published a final rule that makes significant and highly technical changes to Medicare payment policies for durable medical equipment (DME), prosthetics, orthotics, and supplies (DMEPOS).  Notably, the rule finalizes a new methodology for adjusting Medicare DMEPOS fee schedule payment amounts across the country using information from the Medicare DMEPOS Competitive Bidding Program (CBP). CMS estimates that this methodology will cut Medicare DMEPOS reimbursement by more than $4.4 billion over fiscal years 2016 through 2020. The rule also finalizes a mechanism to test the use of bundled monthly payment amounts for certain DME under competitive bidding; modifies CBP change of ownership (CHOW) and termination of contract rules; and codifies Medicare hearing aid coverage policy. Note that CMS did not adopt its proposal to clarify practitioner qualifications for providing custom fitting services for orthotics. The following is a summary of the final rule, with particular emphasis on revisions to CMS’s July 11, 2014 proposed rule.
Continue Reading CMS Adopts Major Changes to Medicare DMEPOS Payment/Coverage Policy Inside/Outside of Competitive Bidding Areas

As part of the final 2015 Medicare physician fee schedule rule, CMS is adopting – with certain refinements – its proposed changes to the regulations implementing the Physician Payment Sunshine Act. By way of background, the Sunshine Act requires pharmaceutical and medical device manufacturers and group purchasing organizations to submit to CMS certain

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

Medicare suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) should be on the alert for enhanced Medicare supplier standard compliance monitoring by CMS, the National Supplier Clearinghouse (NSC), and their agents. Recently, these entities have taken draconian actions to revoke the enrollment of a number of suppliers who failed to be present during indicated hours of operation. Recent Administrative Law Judge (ALJ) decisions have upheld such revocations for technical violation of the Medicare supplier standard, even in the face of extenuating circumstances, reinforcing the need for suppliers to review their practices and policies to ensure full compliance.
Continue Reading Is anybody home? Medicare contractors on the prowl for DMEPOS supplier violations of posted business hours and other physical facility standards.

More than three years after publication of final regulations to implement Affordable Care Act (ACA) provisions that strengthen provider and supplier enrollment screening provisions under federal health care programs, the Centers for Medicare & Medicaid Services (CMS) has selected a Fingerprint-Based Background Check Contractor and intends to phase in fingerprint-based background checks beginning in 2014.
Continue Reading CMS to Implement Fingerprint-Based Background Checks for High-Risk Providers and Suppliers in 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 False Claims Act (FCA) implications.

Specifically, 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. 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. It is likely that the Department of Health and Human Services Office of the Inspector General, Department of Justice, and relators’ attorneys will utilize these data to initiate investigations and support complaints under the federal FCA.
Continue Reading Will Physician Payment Sunshine Act Data Usher in a New Era of False Claims Act Litigation?

The Centers for Medicare & Medicaid Services (CMS) has published the long-awaited Final Rule to implement the “Sunshine” provisions of the Affordable Care Act of 2010 (ACA).  The Sunshine provisions – intended to provide increased transparency regarding the scope and nature of financial and other relationships among manufacturers, physicians, and teaching hospitals – require that

The Centers for Medicare & Medicaid Services (CMS) released late today its final rule implementing the physician payment transparency provisions of the Patient Protection and Affordable Care Act (Section 6002), commonly referred to as the “Physician Payments Sunshine Act.” Among other things, the Act requires drug, device, biological or medical supply manufacturers to report

This post was also written by Tillman J. Breckenridge. As has been widely reported, today the U.S. Supreme Court ruled that the Affordable Care Act’s (ACA) individual health insurance mandate does not violate the Constitution because it may be viewed as a permissible tax on individuals who do not obtain health insurance.  The only provision of the law that the Court invalidated is a Medicaid provision that threatened states with the loss of existing Medicaid funding if they decline to comply with the ACA’s Medicaid coverage extension. By preserving the vast majority of the landmark health reform law, the Court avoided the policy chaos that would have resulted from striking down the ACA in its entirety. There is now legal certainty for state and federal governments, health care providers and suppliers, drug and device manufacturers, employers and individuals.  As discussed below, the focus in Washington will return to continuing implementation of the law. Nevertheless, although the legal battle is over, the political fight will continue and likely reverberate through the coming Presidential and Congressional election campaigns.
Continue Reading Supreme Court Upholds ACA Insurance Mandate, Limits Withholding of Medicaid Funds to States

The Centers for Medicare & Medicaid Services (CMS), tasked with implementing the Physician Payments Sunshine Act, announced yesterday that it will not require pharmaceutical, device, and other applicable manufacturers and group purchasing organizations (GPOs) to begin collecting reportable data before 2013.
Continue Reading CMS Announces Data Collection for the Physician Payments Sunshine Act Will Not Be Required Before 2013

On December 19, 2011, the Centers for Medicare & Medicaid Services (“CMS”) published a proposed rule (the “Proposed Rule”) related to section 6002 of the Affordable Care Act, commonly referred to as the “Physician Payment Sunshine Act” (so referenced herein, or as the “Act”). The Physician Payment Sunshine Act requires applicable manufacturers of drugs, devices, biologicals, or medical supplies covered under Medicare, Medicaid, or CHIP to report annually to the Secretary of the Department of Health and Human Services (“Secretary”) certain payments or other transfers of value to physicians and teaching hospitals. Additionally, applicable manufacturers and applicable group purchasing organizations (“GPOs”) must report certain information regarding the ownership or investment interests in them that are held by physicians or their immediate family members.
Continue Reading Overview and Analysis of the Proposed Federal Sunshine Regulations

The Centers for Medicare & Medicaid Services (“CMS”) released today a proposed rule implementing the physician payment transparency provisions of the Patient Protection and Affordable Care Act (Section 6002), commonly referred to as the “Physician Payments Sunshine Act.” Among other things, the Act requires drug, device, biological or medical supply manufacturers to report payments or other transfers of value to physicians and other covered recipients. In addition, the Act requires manufacturers and group purchasing organizations (GPOs) to report certain information regarding ownership or investment interests held by a physician in the manufacturer or GPO.
Continue Reading CMS Releases Long-Awaited Physician Payments Sunshine Act Proposed Rule