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UAB School of Health Professions 30 th National Symposium for Healthcare Executives. Implementing and Responding to Health Care Reform: Legal Issues. August 7, 2010. James M. Pool Maynard, Cooper & Gale, P.C. 1901 6th Avenue North Regions/Harbert Plaza Birmingham, Alabama 35203

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implementing and responding to health care reform legal issues

UAB School of Health Professions

30th National Symposium for Healthcare Executives

Implementing and Responding to Health Care Reform: Legal Issues

August 7, 2010

James M. Pool

Maynard, Cooper & Gale, P.C.

1901 6th Avenue North

Regions/Harbert Plaza

Birmingham, Alabama 35203

(205) 254-1050

Email: jpool@maynardcooper.com

overview
Overview:
  • New requirements for tax-exempt hospitals
  • New payment methodologies and a review of possible legal issues
  • New enforcement/compliance requirements
new requirements for tax exempt providers
New requirements for tax-exempt providers
  • Documented financial assistance policies
    • Written financial assistance policies must include:
      • Specifics on eligibility criteria pertaining to free and discounted care
      • Method of applying for financial assistance
      • Specifics on how patient charges are calculated
      • Process of collection activities
      • Process for publicizing the financial assistance plan
      • Separate policy on emergency care provided
    • Effective immediately
new requirements for tax exempt providers1
New requirements for tax-exempt providers
  • Limits on collection practices
    • Hospitals must make a reasonable effort to determine whether or not a patient is eligible for assistance under the hospital’s financial assistance policy before they begin collection actions
    • Effective immediately
  • Limits on patient charges
    • Hospitals must use amounts generally charged by using lowest negotiated commercial rates for those patients qualifying for financial assistance
    • Effective immediately
new requirements for tax exempt providers2
New requirements for tax-exempt providers
  • Community health needs assessment
    • An assessment must be conducted at least every three years
    • One per facility in the case of multiple hospitals within health system
    • Effective for tax years beginning after March 23, 2012
    • Failure to comply will be subject to a tax of $50k per year
accountable care organizations medical homes value based purchasing bundling
Accountable Care Organizations/Medical Homes/Value Based Purchasing/Bundling
  • ACOs
  • Defined as
    • Group of providers and suppliers
    • Physicians in group practice arrangements
    • Networks of individual practices of physicians
    • Partnerships or joint venture arrangements between hospitals and physicians
    • Hospitals and their employed physicians
    • Such other groups of providers of services and suppliers as the Secretary determines appropriate
accountable care organizations medical homes value based purchasing bundling1
Accountable Care Organizations/Medical Homes/Value Based Purchasing/Bundling
  • An ACO must have:
    • Leadership and management structure
    • Mechanism for joint decision-making
    • Formal legal structure to receive payment
  • Must agree to participate for three-year minimum
  • Must agree to take at least 5000 beneficiaries
  • Might it be an Organized Health Care Arrangement?
accountable care organizations medical homes value based purchasing bundling2
Accountable Care Organizations/Medical Homes/Value Based Purchasing/Bundling
  • Medical Homes
    • Care model includes physician, whole person orientation, coordinated care, quality measures, HIT use, and payment for value of patient centered care
    • “Primary care”: provision of integrated health services by clinicians accountable for addressing large majority of personal health care needs, developing sustained partnership with patients, practicing in context of family and community
    • Grants to states or state designated entities, tribes to establish community based health teams supporting care medical homes
accountable care organizations medical homes value based purchasing bundling3
Accountable Care Organizations/Medical Homes/Value Based Purchasing/Bundling
  • Medical Homes: Medicaid Option for Enrollees with Chronic Conditions
    • Medicaid state option for enrollees with chronic condition or serious mental health condition
    • Enrollees designate provider, healthcare team as health home
    • Qualifying providers to meet systems standards and deliver comprehensive care management; care coordination and health promotion; comprehensive transitional care
  • Multi-payer Advanced Primary Care Practice Demo launched June 2010; applications due August 2010
accountable care organizations medical homes value based purchasing bundling4
Accountable Care Organizations/Medical Homes/Value Based Purchasing/Bundling
  • Independence at home – Medicare Demo Project
    • Provide high need Medicare beneficiaries with primary services in home; sharing savings if preventable hospitalizations reduced
    • Defines “independence at home medical practice”
accountable care organizations medical homes value based purchasing bundling5
Accountable Care Organizations/Medical Homes/Value Based Purchasing/Bundling
  • A hospital value-based purchasing program (VBP) would be established to incentivize quality outcomes for acute care hospitals
    • VBP program would transition from pay-for-reporting to pay-for-performance
    • Reduced payments to hospitals with high readmission rates begins
    • A percentage of hospital payment would be tied to hospital performance on quality measures related to common and high-cost conditions, such as cardiac, surgical and pneumonia care
accountable care organizations medical homes value based purchasing bundling6
Accountable Care Organizations/Medical Homes/Value Based Purchasing/Bundling
  • Quality measures for 5 conditions (AMI, heart failure, pneumonia, surgeries and hospital-acquired conditions)
  • In FY 2014 and beyond, will include efficiency measures
  • Any hospital meeting a “performance score” will receive a percentage add-on to payment
    • Will include levels of both
      • achievement and
      • improvement
    • Secretary will establish the methodology for assessing
    • Hospital’s performance will be public
accountable care organizations medical homes value based purchasing bundling7
Accountable Care Organizations/Medical Homes/Value Based Purchasing/Bundling
  • Establishes a national pilot program on payment bundling to encourage hospitals, doctors, and post-acute care providers to work together to achieve savings for Medicare through increased collaboration and improved coordination of patient care
accountable care organizations medical homes value based purchasing bundling8
Accountable Care Organizations/Medical Homes/Value Based Purchasing/Bundling
  • Test bundles
    • Hospital episode
    • Physician services in the hospital
    • Outpatient hospital visits
    • Post-acute care, including LTAC, SNF, IRF, and HHA
    • Other services deemed appropriate
accountable care organizations medical homes value based purchasing bundling9
Accountable Care Organizations/Medical Homes/Value Based Purchasing/Bundling
  • Legal issues raised by these requirements:
  • Are the physicians clinically integrated to a sufficient extent to avoid violating the price-fixing prohibition under the Sherman Act?
  • Does the integrated delivery system present any other antitrust issues?
accountable care organizations medical homes value based purchasing bundling10
Accountable Care Organizations/Medical Homes/Value Based Purchasing/Bundling
  • Are any “gainsharing arrangements” or similar “pay for performance” compensation arrangements (including risk-sharing arrangements) involved ?
  • Must there be an independent valuation for any quality incentive or shared savings payments?
  • Does the CMP Law prevent making any physician employment compensation contingent on a reduction in LOS and readmission rates?
accountable care organizations medical homes value based purchasing bundling11
Accountable Care Organizations/Medical Homes/Value Based Purchasing/Bundling
  • Can physician employees be paid a percentage of a hospital’s Medicare-related cost savings (or set-up in payment for quality) under the Stark employment exception without a volume/value of referrals problem?
  • If the Stark Law employment exception is limited to compensation “for identifiable services,” are changes in clinical and administrative conduct “identifiable services?” If so, what is the fair market value of the changes?
accountable care organizations medical homes value based purchasing bundling12
Accountable Care Organizations/Medical Homes/Value Based Purchasing/Bundling
  • How should compensation be allocated?
  • Which valuation methodologies will be used?
  • Will physicians/groups with IT capabilities and proven quality measure reporting track record be preferred?
  • What compensation levels should physicians be paid?
accountable care organizations medical homes value based purchasing bundling13
Accountable Care Organizations/Medical Homes/Value Based Purchasing/Bundling
  • What type of data will support physician compensation? Reported quality measures? Use of evidence-based protocols?
  • Will Anti-kickback/Stark laws require revision? From focus on referrals to focus on quality, efficiently provided services?
  • Will fair market value still be important (consider tax issues)?
  • Will current laws allow allocation of “shared savings”? Do behavioral changes constitute “services”?
new enforcement compliance
New Enforcement/Compliance
  • Enforcement:
    • Additional $250M to the Health Care Fraud and Abuse Control Account for investigation, prosecution of health care fraud
    • $75M for Medicaid Integrity Program for 2010; increases in following years per CPI
new enforcement compliance1
New Enforcement/Compliance
  • Enrollment, Documenting, Claims Submission:
    • Provider screening, provisional period
    • DME, HHA: Face to face encounters before certification, ordering
    • Maximum time: claim submission reduced to one calendar year
    • Physicians, suppliers to maintain records on DME, HHA other orders, provide access
new enforcement compliance2
New Enforcement/Compliance
  • Enrollment and Gatekeeping:
    • Additional disclosures for enrollment, revalidation: affiliation with provider that has uncollected debt or is subject to federal payment suspension, affiliation with physician who is excluded or has billing privileges denied
    • Compliance programs: new condition of participation; SNFs, nursing homes specified; potential extension to other entities
new enforcement compliance3
New Enforcement/Compliance

Stark Law Changes:

  • Self Disclosure Protocol
    • HHS to collaborate with OIG; to include specific instructions on submissions
    • Authorizes HHS Secretary to compromise payment and penalty amounts owed
      • Consideration of nature and extent of improper or illegal practice, the timeliness of disclosure, provider’s cooperation and any other factors deemed appropriate
new enforcement compliance4
New Enforcement/Compliance

Stark Law Changes:

  • Physician Owned Hospitals must have physician ownership, certif. by December 31, 2010 for grandfathering
    • Effectively ends whole hospital exception except for grandfathered physician-owned hospitals
      • Limits growth for existing physician owned hospitals, no increase in capacity, additional physician investors (limited exceptions)
      • Disclosure requirements: doctor ownership, safety issues if doctor not on site all hours
new enforcement compliance5
New Enforcement/Compliance

Stark Law Changes:

  • In-office ancillary services exception
    • Referring physician to inform patient in writing that specified imaging services may be secured from others; provide a list of suppliers in area
new enforcement compliance6
New Enforcement/Compliance

Anti-Kickback Law Changes:

  • Relaxes AKS intent requirement: Actual knowledge or specific intent to commit violation not required to demonstrate AKS violation
  • Amends 42 U.S.C.§1320a-7b: claim submitted to federal government based on AKS violation (false statements and illegal remuneration) constitutes “false or fraudulent claim” for FCA purposes
new enforcement compliance7
New Enforcement/Compliance

CMPs and Exclusions

  • New authority to exclude provider, supplier for false statements, misrepresentation in application, enrollment
  • Broadens permissive exclusion for failure to supply payment information to providers who order, refer for services (not just provide)
  • Physicians and suppliers to maintain (and provide access to) orders, payment request for DME, HHA certifications and other items
new enforcement compliance8
New Enforcement/Compliance

CMPs and Exclusions:

  • New/Amended CMPs:
    • Ordering or prescribing by excluded provider
    • Knowing false statement, omission on application, bid or contract
    • Failing to report and return known overpayment
    • False statement material to a false claim for payment; failing to grant timely access to OIG for audit, investigation
    • Beneficiary inducement: remuneration triggering CMPs amended to exclude: remuneration to promote access to care and low risk to patient or program; certain coupons/rebates, certain first fill drugs under Part D
new enforcement compliance9
New Enforcement/Compliance

False Claims Act – Post FERA

  • Public disclosure bar
    • Narrows bar to federal proceedings, reports, investigations
    • No longer jurisdictional bar
  • Original source exception broadened
    • No longer requires “direct knowledge” of allegations
    • Relator must provide information to government before public disclosure and information must be independent of and materially add to publicly disclosed allegations
new enforcement compliance10
New Enforcement/Compliance

Overpayments and Suspensions

  • Overpayments: requires overpayments be reported and returned within 60 days after overpayment is identified or by the date corresponding cost report was due, whichever is later
  • Failure to report and return creates basis for FCA liability
new enforcement compliance11
New Enforcement/Compliance

Enforcement Tools

  • Payment suspensions: authorizes suspension of payments to provider, supplier pending investigation of “credible” fraud allegation
  • Access by OIG to program claims and payment data and to beneficiary, provider, supplier information to support program integrity
  • Subpoenas
    • Extension of subpoena authority to program exclusion investigations
    • Adds administration subpoenas to obstruction of investigation law
new enforcement compliance12
New Enforcement/Compliance

Enforcement Tools

  • U.S. Sentencing Commission: amend the Sentencing Guidelines to increase penalties for “federal health care offense”
  • Federal health care fraud statute (18 U.S.C.§1347) amended: “…a person need not have actual knowledge of this section or specific intent to commit a violation of this section”; no proof of actual knowledge or specific intent required
  • Increases list of offenses qualifying as “federal health care offense.”
questions
Questions

UAB School of Health Professions

30th National Symposium for

Healthcare Executives

James M. Pool

Maynard, Cooper & Gale, P.C.

1901 6th Avenue North

Regions/Harbert Plaza

Birmingham, AL 35203

(205) 254-1050

Email: jpool@maynardcooper.com