HHS Proposes New Rules on Civil Monetary Penalties

HHS’s Office of the Inspector General (OIG) has issued a new proposed rule that makes a number of changes to its civil monetary penalty authority. Among other changes, this rule would increase the maximum reduction of penalties when providers can show mitigating circumstances. It also makes providers who cause more than $15,000 of losses to Medicare/Medicaid subject to increased penalties.

The rule also explains the factors that OIG will consider in determining how much in penalties it will assess. These include the provider’s history and whether other wrongful conduct was involved. OIG will also consider whether the provider followed self-disclosure protocols and took corrective action. Providers should review their self-disclosure policies to determine whether they reflect the new factors.

© 2014 Parsonage Vandenack Williams LLC

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Study Identifies Common Medicare Billing Issues

CMS has released results from its recent study on common billing mistakes by health care providers. Among the most common mistakes include unbundling – the practice of submitting claims by piecemeal to maximize reimbursements for tests and procedures that are required to be submitted together at a reduced cost.  Other common mistakes are using the wrong diagnosis code to support an MRI and coding a subsequent Annual Wellness Visit improperly as an initial wellness visit.

 The study also revealed that common forms of underbilling include coding for the wrong surgery and using a lower level of Evaluation and Management than the documentation supports.

More information on the study can be found at: Comprehensive Error Rate Testing (CERT).

© 2014 Parsonage Vandenack Williams LLC

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Billing Policy Pointers

Physicians frequently lose revenue or create legal issues as a result of billing policies and collection attempts.  In order to ensure that patients are better served and that the practice does not lose revenues, it is important to inform patients of the practice’s billing policy as early as possible.  Staff should explain the practice’s billing policy over the phone when patients make their initial appointments.  The practice should also provide a clear, friendly explanation of the practice’s billing policy in the office for new patients.  Keep in mind that copayments, being an extremely common form of patient obligation, frequently create problems.  As such, it may be advisable for staff to inform patients that failure to make a copayment is a violation of their contract with a health insurer, if necessary.

Physicians should also consider the roles of staff in explaining and enforcing billing policy.  Clear policies and best practices should be set in place for office staff who handle payments, and privacy measures should be carefully planned out. Billing information may be a source of HIPAA violations if privacy becomes an issue, making it an especially important consideration.  Physicians also have an important role in billing policy issues, since the degree of trust they share with patients can help make conversations about billing more effective.  In short, physicians should evaluate how to discuss their practice’s billing policy over the phone or in writing at the office.  Remember that this is an ideal time to ensure that your billing policy is well-drafted and in compliance with state and federal laws.

© 2012 Parsonage Vandenack Williams LLC

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OIG Releases 2012 Work Plan

Among the new areas of focus for the Office of Inspector General (the “OIG”) is increased scrutiny for incident-to services performed by non-physician practitioners.  Specifically, the OIG is planning on investigating whether the non-physician practitioners are qualified to be performing the incident-to services that are being billed by physicians.  This concern and others are highlighted in the recently published 2012 OIG Work Plan.  Your practice can use this Work Plan to help keep your compliance plan current.  Doing so allows your practice to be prepared for any audit or investigation by the OIG.

The Work Plan contains 349 new and continuing initiatives.  Others include:

  • Ensuring that physicians who have opted out of Medicare are no longer submitting claims;
  • Reviewing the qualifications to become a critical access hospital;
  • Investigating whether physician’s services were properly coded to the appropriate place of service (i.e. provided in a hospital vs. the physician’s office); and
  • Examining the safety and quality of care for patients having surgeries and procedures in ambulatory surgical centers.

The entire Work Plan can be read at: OIG 2012 Work Plan

© 2011 Parsonage Vandenack Williams LLC

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New Program Changes the Way Medicare Reimburses Health Care Providers

A pilot program called the Bundled Payments for Care Improvement Initiative (the “Bundling Initiative”) has recently been unveiled by The Department of Health and Human Services (the “Department”).  The program is designed to change the way Medicare reimburses health care providers. 

Under the current method, Medicare makes separate payments to each provider. In an effort to encourage better coordinated care and decreased costs, the Bundling Initiative calls for Medicare to pay one lump sum to the hospital for an “episode”, such as a hip replacement or heart bypass surgery, and the hospital would then distribute the payment to participating providers.  The concept is that if Medicare pays only one large payment, the individual providers will communicate with each other to promote efficient and high quality care.  Obviously, the Department is ignoring the possibilities of abuse by some providers, especially the recipient provider.

The Bundling Initiative is seeking applications for four defined models of care.  Three of the models involve retrospective bundled payments, and one model would pay providers prospectively.  Interested providers must submit a nonbinding letter of intent to the Department by September 22, 2011 for Model 1 and November 4, 2011 for Models 2-4. 

© 2011 Parsonage Vandenack Williams LLC

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On March 1, 2010, the 21 percent overall cut in Medicare reimbursements to physicians became effective.  However, it could still be averted by a month-long stay that the U.S. House passed on February 25, 2010; action is pending in the Senate.

In the meantime, more physician practices are considering not accepting new Medicare patients. Many other physicians are seeking employment at hospitals.  Others are focusing more on patients who pay out of pocket and ending relationships with insurers that cut rates.

If the Senate passes the temporary fix that is expected to put the 21 percent cut on hold, it would be the latest in a series of patches that have become a nearly annual custom in Congress since 2003.

Under the formula by which doctors are paid by Medicare, growth in total payments to physicians cannot exceed annual growth in the nation’s gross domestic product.  As the United States population ages, doctors are serving more patients and using more costly treatments and tests accompanied by advances in technology.  As a result, physicians are requesting reimbursements that exceed GDP growth, which has averaged about 3 percent. Medicare is required to ensure that total payments do not exceed budget.

Lobbyists for physicians, including the American Medical Association, have played the primary role in persuading Congress to keep the rate cuts from going into effect.

© 2010 Parsonage Vandenack Williams LLC

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FTC Red Flag Rules Enforcement Delayed Until June 1, 2010

The Federal Trade Commission (“FTC”) has again extended enforcement of the Red Flag Rules, now until June 1, 2010.

The latest delay comes at the request of Congress, which is considering a bill that amends the identity theft rule by eliminating entities with fewer than 20 employees from complying.  The House of Representatives passed that bill in late October 2009. The bill is now in the hands of the Senate.

The Red Flag Rules impact financial institutions and creditors subject to FTC jurisdiction. According to the Rules, created under the Fair and Accurate Credit Transactions Act, creditors of covered accounts must establish a program to detect, prevent and mitigate identity theft.

Originally, the Red Flag Rules would have taken effect on November 1, 2008, which was then extended to May 1, 2009, and then further extended to November 1, 2009.

For more information on the Red Flag Rules, visit: https://vwhealthlaw.wordpress.com/category/red-flag-rules/.

© 2009 Parsonage Vandenack Williams LLC

  For more information, contact info@pvwlaw.com

MGMA Releases Proposed 2010 Medicare Physician Fee Schedule Analysis –

The Centers for Medicare & Medicaid Services (“CMS”) recently released the 2010 Medicare proposed physician fee schedule along with a related press release and fact sheet. The regulation includes provisions that confirm a 21.5 percent reduction in 2010 Medicare physician payments unless Congress enacts legislation to reverse this cut.  The regulation also proposes to “remove physician-administered drugs from the definition of “physician services” for purposes of computing the physician update formula in anticipation of enactment of legislation to provide fundamental reforms to Medicare physician payments,” a move that has been advocated by the Medical Group Management Association (“MGMA”) for a long time.

MGMA analyzed the regulation’s impact on medical group practices and is making its analysis available only to members at mgma.com. The proposed fee schedule includes provisions that would affect physician practices as follows:

  • Start implementation of the congressionally-mandated requirement that suppliers of advanced diagnostic imaging services become accredited
  • Notably change the practice expense relative value units for many covered services
  • Increase the equipment usage assumption for equipment costing greater than $1 million
  • Transfer responsibility from the patient to the Medicare program for co-payments for covered outpatient mental health services
  • Add a group practice reporting option to both the Physician Quality Reporting Initiative and the E-Prescribing Incentive Program

 The member-only analysis can be accessed here: http://www.mgma.com/policy/default.aspx?id=5802.

© 2009 Parsonage Vandenack Williams LLC

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How to Select a Third-Party Billing Entity

 Selecting a third-party billing entity (“TPBE”) can be a difficult process for medical group administrators and their organizations.  A TPBE usually offers medical billing services, which may include charge-data entry, billing, electronic claims submission, payment posting and collection follow-up.

             Upon beginning a search for a TPBE, a medical group must first set its own priorities and determine the services it needs.  The following are some important things to consider regarding TPBEs:

 1.    Size. 

 Large TPBEs typically have the benefits of in-depth compliance programs, multispecialty expertise, many employees, cross-training, and the ability to offer additional services.  However, large TPBEs may also include higher TPBE overhead costs, inconvenient locations, and the potential for high employee turnover.

 Small TPBEs typically have the benefits of lower prices and less overhead, more personalized service, quicker response time, and potentially more control for the medical group.  On the other hand, they may only have limited compliance plans and limited multispecialty expertise, there may be coverage issues due to fewer employees, and they may offer fewer services.

 2.    Scope of Services.

 The medical group should decide whether it wants to pay extra for services such as record storage, computer equipment, software upgrades, ad-hoc reports, correspondence backlogs, and in-person representation for appeals with payers.

 3.  Billing.

 The group should decide how to be billed: per transaction or per claim? By a flat monthly fee or a percentage of practice revenue collected?  It is important to ask vendors for samples of management reports such as accounts receivable, charges billed, collection/revenue, denied claims, credit balance, and contractual and other write-offs.  Vendors should also be asked for a list of policies and procedures, a sample contract, and a tour of the facility.

             Finally, before entering into a contract, the medical group should refer to the Department of Health and Human Services’ Office of Inspector General’s guidelines for TPBEs (http://oig.hhs.gov/fraud/docs/complianceguidance/thirdparty.pdf) to ensure vendor compliance. 

It is a good idea for medical groups to include specific terms and agreed-upon standards in the contract for the following: (1) maximum average number of days in accounts receivable; (2) maximum number of charge lag days; (3) other benchmark numbers important to the group; and (4) consequences if the TPBE does not achieve the stipulated benchmarks.  The group will need to provide the TPBE with accurate billing and patient information so that both parties can meet the terms of the contract.  Knowledge on both sided will greatly help to build a successful long-term billing arrangement.[1]

 [1] (Billing) Help Wanted, MGMA Connexion, February 2008, pp. 27-28.


© 2008 Parsonage Vandenack Williams LLC


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