Experts reveal three ways to stay compliant in this increasingly hot risk area.

Last week, we addressed how the feds will likely be increasing their scrutiny of financial relationships between physicians and DME manufacturers. buy cialis online The people who are looking for the best medicines that are used for the enhanced timing and stamina. While it may be hard to say whether prosecutions against individual practitioners will increase, it’s always good to see a risk area developing ahead of the game.

When prosecutors see cases that are not necessarily in a gray area, where intent won’t be difficult to prove, “I don’t think they will hesitate to bring them,” predicts John Oroho an attorney with Porzio Bromberg & Newman in Morristown, N.J.

The good news is that physicians can keep their financial dealings with manufacturers in the safety zone. Here’s how:

Strategy 1: Pay close attention to how you set up financial relationships. Of course physicians can still do deals with manufacturers, but they have to be careful about how the arrangements are structured, advises John Jones Jr., a lawyer with Pepper Hamilton in Philadelphia. The arrangements “need to be set at fair market value [and] be at arm’s length,” he says. “A physician consultant has to actually perform the services” for the company, he adds. And the physician cannot get paid for referrals.

For example, suppose a surgeon serves as a consultant to a device maker and has a royalty arrangement for helping to engineer the device-maker’s implantable orthopedic device. In that case, the physician can’t receive royalties on the devices used by the hospitals where he practices and implants the devices, says Jones. (The doctor can, however, receive the usual third-party reimbursement for performing the surgeries.) “This applies to any product,” Jones says.

“On the pharma side,” Jones adds, “we have seen doctors sometimes actually become an extension of a [drug company’s] sales force where they get into marketing a drug – that’s a big no-no.” But: “Just because a pharma company paid a physician $50,000 in consulting fees in a given year would not in and of itself be sufficient to prove that that physician” violated the anti-kickback statute,  counsels attorney Daniel Margolis, with Pillsbury Winthrop Shaw Pittman in New York City.

Neither should “the mere fact” that the physician serving as consultant to the company prescribes significant amounts of the company’s drug. Margolis notes that “oftentimes, companies retain physicians as consultants or speakers because they know the physician is familiar with the drug and … genuinely believes it has worked well in his or her practice.”

Strategy No. 2: Take the high road with self-disclosure. Jones advocates physicians disclosing their relationships with manufacturers/vendors to hospitals and their other practice sites. And “even if not required by state law, physicians should consider disclosing that [information] to the patient ….”

Wayne J. Miller, an attorney with The Compliance Group in Los Angeles, points out that “many doctor groups and facilities already require medical staff or member doctors to disclose arrangements with vendors as part of a conflict of interest review.”

Also, decisions about what product to use “should always be based on input from multiple doctors as to [the product’s] medical quality, cost and other appropriate facets,” says Miller.

Strategy No. 3: Consider unwinding problematic relationships with manufacturers, advises Miller. That may be appropriate to do, especially with ones that have already been under scrutiny, he says. Also consider whether to disclose a terminated relationship to the government or payors “to the extent there may be a legal or reimbursement impact.”

Excerpted from Medicare Compliance & Reimbursement.

Your case management struggles may have a simpler fix than you realize. AUDIO: Back to Basics: Case Management Roles and Models Revisited.

Transparency of prescriber-supplier relationships is increasing.

With the new health care reform law in place, the feds will soon be able to take a harder look at financial relationships between physicians and companies that make drugs, biologics, medical devices and supplies.

The feds are already hot on the trail of medical device manufacturers concerning mortality rates and quality. Here’s what you need to know and do to stay out of federal prosecutors’ crosshairs.

The PPACA incorporates provisions of the Physician Payment Sunshine Act, which requires manufacturers to report annually to HHS how much they’ve tendered of value to “covered recipients,” e.g., physicians and teaching hospitals.

The annual reporting requirement goes into effect on March 31, 2013 for payments made from Jan. 1 through Dec. 31, 2012. The companies have to report the date, amount, and form of payment (cash, stock, services, etc.), whatever the arrangement is – and the product involved, says attorney John Jones Jr., with Pepper Hamilton in Philadelphia. (Manufacturers don’t have to report anything under $10 unless the annual aggregate amount to a “covered recipient” surpasses $100.)

The government, says Jones, can look at the payment information reported by manufacturers and say, “‘Hey, wait a minute, Dr. A in Philadelphia got $15 million a year from this device maker for consulting services, whereas Dr. B in the same area got $2 million. What’s different about those two arrangements to explain the discrepancy?”

The primary areas where physicians could be vulnerable to prosecutions are “antikickback law and possibly violation of the Stark self referral prohibition,” says Wayne J. Miller, an attorney with The Compliance Group in Los Angeles. “The health care reform act also makes clear that anti-kickback and Stark violations are also to be considered a false claim violation. …”

Miller points out that “recent settlements involving large pharma and some DME suppliers are already resulting in action against facilities.” And he expects “the next tier of enforcement involving alleged kickbacks will move to individual or group providers.”

And device manufacturers are bracing for new guidelines from the FDA, which is getting worried about the safety of devices like infusion pumps, according to a recent piece in the New York Times. DME manufacturers could get hit with new taxes to cover the costs of health care reform, as HIT News reported last week. And where the money goes, so goes the federal nose…

Next week, we’ll cover three compliance strategies physicians can implement to keep their financial dealings with manufacturers in the safety zone, in the midst of increased oversight in this area.

Excerpted from Medicare Compliance & Reimbursement.

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HIPAA Refresher Week: June 21, 2010 to June 25, 2010. AUDIOS: Learn everything about HIPPA.

Aggressive power wheelchair marketing tactics part of a Medicare fraud scheme.

A fugitive owner of a Los Angeles-based durable medical equipment company was sentenced to nine years in prison following a more than $1 million power wheelchair fraud case, a Department of Justice (DOJ) press release announced on March 25.

Leonard Nwafor, owner and operator of Pacific City Group Inc (aka Pacific City Medical Equipment) will also serve three years of supervised release following his prison term, pay $526,243 in restitution and $25,000 in fines, and forfeit more than $526,000 in stolen Medicare funds.

He was convicted in September 2008 of conspiracy to commit health care fraud, as well as health care fraud. He has since fled and become a fugitive enemy of the government.

According to DOJ, Nwafor submitted $1,109,438 in fraudulent claims to Medicare and consequently received $526,243 in payments. All claims were for expensive, high-end power wheelchairs and wheelchair accessories that beneficiaries didn’t need.

Nwafor’s main scheme focused on recruiting beneficiaries through “marketers”, who approached potential recruits on the streets, community events, and at home. The marketers either forced or paid these beneficiaries in order to extract Medicare information and get more referrals, a witness claimed. Nwafor billed Medicare for power wheelchairs — at $7,000 each — on behalf of more than 170 beneficiaries who didn’t use them.

Nwafor and his co-conspirators went to great lengths to carry out their fraudulent scheme. One witness testified that an individual purporting to be from Medicare, but who was actually associated with Nwafor, threatened to terminate the Medicare benefits of the beneficiary and her husband unless they accepted two power wheelchairs that the beneficiary and her husband did not need.

He also used names of LA physicians on fake prescriptions, which he presented to support his fraudulent claims to Medicare. His accomplice Ajibola Sadiqr had pleaded guilty and is due to be sentenced in April.

The Medicare Fraud Strike Force (HEAT), supervised by the Criminal Division’s Fraud Section and the US Attorney’s Office for the Central District of California, is behind the filing of the case against Nwafor. Since its inception in 2007, the agency has gone after more than 500 individuals who have scammed Medicare for a total of about $1.1 billion.

As the old “Red Book” included unimplemented monetary recommendations, it’s a good place to predict of your facility will pull any audits in the near future on several “priority” issues, which the OIG breaks down by categories.

Traditional/fee-for-service Medicare providers, take note of the following:

• Hospitals’ bad debt payments from CMS on inpatient PPS claims for unpaid deductibles and coinsurance may be coming to an end if the OIG gets its way. “[H]ospitals have little incentive to aggressively collect the unpaid deductible and coinsurance amounts when Medicare pays these amounts,” says the OIG. “As a result, hospitals have received unallowable bad-debt payments” – to the tune of a $340 million savings, according to the OIG.

The agency is recommending that CMS, which disagreed with the recommendations, eliminate bad-debt payments, reimburse PPS hospitals for bad debts only if the hospitals lost money on their Medicare operations, and seek legislative authority to further modify bad-debt policies.

• Practitioners should note that the fee schedule might be adjusted regarding pre- and post-operative evaluation and management (E&M) services that are provided during the global surgery period in eye surgeries. Since the OIG found that the fees aren’t reflecting the actual number of services provided because CMS hasn’t adjusted the RVUs for certain codes, it’s asking CMS to adjust the estimated number of E&M services within eye global surgery fees to reflect the number of E&M services actually being provided to beneficiaries, or use the financial results of the audit, in conjunction with other information, during the annual update of the physician fee schedule.

CMS has acknowledged the problem and has promised to work with the AMA’s RVU Committee and physician specialty societies “to identify and correct those services in which the number of E&M services has changed during the global period.” CMS did note that the OIG failed to examine the “intensity level of the E&M services that were actually performed” and recommended that further analysis should be conducted before proposing any changes in the current number of E&M services assigned to eye surgeries.

• DME suppliers should be on the look-out for audits in three areas:

• Following audits in South Florida and Los Angeles that revealed many suppliers’ failure to maintain physical facilities or be accessible in any way, the OIG got suspicious and now wants to make sure that CMS strengthens the DMEPOS supplier enrollment process.
• Despite Congress’s refusal to address the issue, the OIG is still goading CMS to reduce the rental period for home oxygen equipment from 36 months to 13 months.
• DME suppliers are apparently still out there paying doctors to write fraudulent scripts for inhalation drugs and paying benes to accept unnecessary meds, according to the OIG. Inhalation drug claims (which are covered in conjunction with DME) in South Florida are thus the latest thorn in the agency’s side, and it asks CMS to continue to ensure that Medicare contractors are enforcing the coverage guidelines for the drugs.

Ophthalmology and optometry practices: To comply, you need to keep your E/M vs. eye code ratios on target. Here’s how.

Think the Recovery Audit Contractors are sticking to big-money providers? Think again.

Medicare’s audit bounty hunters may not yet have specified home health agency or hospice topics for review, but that doesn’t mean you have nothing to worry about from the new Recovery Audit Contractors.

Some observers thought that RACs’ permanent program reviews would stick to examining providers with big pockets — hospitals and perhaps physicians. RACs have hit those providers hard, but the four national contractors have also gotten 24 durable medical equipment topics approved for review, too.

RACs’ willingness to target DME when the sector represents such a small piece of the larger Medicare pie may mean they’re prepared to hit HHAs and hospices soon too.

“I think it is just a matter of time,” says hospice consultant Heather Wilson with Weatherbee Resources in Hyannis, Mass. “Home health and hospice were excluded from the RAC demonstration project, but they are explicitly included as a target in the permanent RAC program.”

Because RACs get paid on a contingency basis, they have an incentive to go after “every type of provider allowed,” Wilson tells Eli’s Home Care Connection.

RACs have to branch out from the hospital, physician, and DME supplier areas they’ve already covered, notes attorney Robert Markette Jr., who’ll be speaking more on the topic in this upcoming audio. Home care is a next logical place for reviews.

Hospices May Make Juicier Targets

“Hospice … could become a target of RACs much more quickly than the home health agencies,” predicts RAC expert Mark Sharp with BKD in Springfield, Mo. That’s because unlike HHAs, hospices have a higher claims review limit, meaning RACs can review more of their claims.

RACs can review 10 percent of a hospice’s average monthly paid Medicare claims (maximum of 200) per 45-day period, per NPI, notes law firm Arent Fox on its Web site.

In contrast, for HHAs, RACs can review  just 1 percent of average monthly Medicare services (maximum of 200) per 45-day period, per NPI,  Arent Fox says. And for DME, they can review 1 percent of average monthly paid Medicare services per 45-day period, per NPI.

So why would RACs go after DME and not HHAs if their claims review limit is the same? “Since the home health claims tend to be smaller … this limit does not allow the RACs to have a lot of opportunity to identify material improper payments,” which means lower contingency fees for the RACs, Sharp explains. Thus, it may not “make it worth their efforts.”

Suppliers, on the other hand, can have a “more voluminous” number of claims, “with some claims being significantly larger in dollars than home health,” Sharp notes. And numerous recent high-profile fraud busts in the HME industry probably don’t help, Markette adds.

Use Manual For Bundling Backup

Even though HHAs and hospices aren’t singled out for RAC scrutiny right now, some of the DME topics still will have an impact on them. That’s because Region D RAC Health Data Insights recently received CMS approval for these issues: “DME while in Hospice,” “Hospice Related Services ” B,” and “Medical Supplies and Home Health Consolidated Billing.”

All three reviews will be looking for things that should have been bundled into the hospice or HHA payment but received separate payment. This could cause suppliers, therapists, physicians, and others to come knocking on HHA and hospice doors for payment for claims dating as far back as Oct. 1, 2007.

HHAs and hospices are getting a first taste of RAC audits through these tangentially related topics, Markette observes.

Do this: That means now is a good time to brush up on the bundling rules for Medicare payment. If you’re a home health agency, you don’t have to pay every invoice for therapy or supplies that comes your way under HHA consolidated billing. “When you get a letter, don’t just say ‘we’ll cut you a check,’” Markette advises.

HHAs have to pay for supplies and services provided under arrangement during a patient’s episode, CMS explains in the Medicare Claims Processing Manual, Chapter 10, Section 20. “However, providing services either directly or under arrangement requires knowledge of the services provided during the episode,” CMS explains. “An HHA would not be responsible for payment to another provider in the situation in which they have no prior knowledge … of the services provided by that provider during an episode to a patient who is under their home health plan of care.”

In other words, if the therapist, supplier, or other provider didn’t get a contract with you prior to furnishing services, they are on the hook for payment, not you.

That means “before they provide services to a Medicare beneficiary, these providers or suppliers need to determine whether or not a home health episode of care exists for that beneficiary,” CMS instructs in the manual. They can ask the beneficiary, check with Medicare contractors, and/or check the Common Working File, the manual says.

In addition to the financial reasons for not paying, you could be courting compliance problems if you pay for services or supplies that weren’t medically necessary. If you plan to pay, you should ask the provider or supplier to justify the services first, Markette counsels.

Tip: Home care providers should prepare now for how to respond to such invoices, if you haven’t already, Markette suggests.

The above article is an abridged version of a longer article available to subscribers on Eli’s Home Care Connection. Subscribe to a free trial and get a sample letter HHAs can use to avoid compliance problems caused by after-the-fact invoices for bundled items or services.

CMS’s onerous new rules for durable medical equipment supply closets in physicians’ offices are on hold.

Under a controversial transmittal issued last August, DME suppliers would have to transfer their equipment to physicians if they kept a supply closet at the doctor’s office. Then docs would have to bill for the equipment under their own supplier numbers.

Now CMS has withdrawn the transmittal that contains those rules. “CMS is rescinding this change request to consider other implementation dates,” the agency says in an e-mail message to providers.

The rules would be “impractical for physicians and Medicare beneficiaries,” the American Association for Homecare notes. And “such an arrangement would have likely violated the physician ownership and referral statute — known as the Stark law.”

“The rule would have created serious disruptions in services for Medicare beneficiaries,” the trade group says. “We are very pleased with the decision that CMS has made.”

© Home Care Connection.

You can’t contact a new bene without his written consent, except in this instance.

We meant what we said and we said what we meant, the HHS Office of Inspector General essentially said when it reissued a 2003 fraud alert earlier this year. The OIG doesn’t want DME suppliers telemarketing Medicare beneficiaries except in these instances, the fraud alert explains:

• “the beneficiary has given written permission to the supplier to make contact by telephone;
• the contact is regarding a covered item that the supplier has already furnished the beneficiary; or
• the supplier has furnished at least one covered item to the beneficiary during the preceding 15 months.”

While the OIG’s fraud alert is meant to shield benes from DME suppliers hungry for Medicare dollars, it could slow patients’ access to medically necessary equipment, point out Reed Smith health care attorneys Elizabeth B. Carder-Thompson and Debra A. McCurdy in this recent blog post. Why the holdup?

Suppliers sometimes contact the bene after they they get the physician’s verbal or written order. But the fraud alert says that’s a no-no. The ”physician’s preliminary written or verbal order is not a substitute for the requisite written consent of a Medicare beneficiary,” the alert admonishes.

But now the OIG is changing its tune a bit in some recent ”Telemarketing FAQs.” Simply put, it’s OK for the supplier to call the bene for the first time if the physician has already told the bene he’s going to suss out a supplier for him. The supplier can’t call the bene if the physician doesn’t indicate that he’s going to contact a supplier. (See FAQ’s 3 and 4 to read these instructions in OIG-ese.)

Wow. With both benes and doctors involved, that’s a lot of flawless communication that needs to happen. Experience with both groups makes me think “Good Luck with that!” Let’s hope that all involved understand the rules, so that benes can get quick access to the DME their doctors say they need.

AUDIO TRAINING EVENT: Filing Frames, Lenses and CLs as DME: Get Paid & Protect Your Ophthalmology or Optometry Practice.

Industry points finger at confusing, overly complex documentation rules.

You may think the seat can’t get any hotter for durable medical equipment suppliers, but the HHS Office of Inspector General just turned the heat up another notch. Three out of five 2007 wheelchair claims the OIG inspected did not meet Medicare documentation requirements, the watchdog agency says in a new report. Two out of five claims had multiple errors per claim, the OIG says.

Out of $189 million the Centers for Medicare & Medicaid Services and Medicare beneficiaries paid for power wheelchairs in a six-month period during that year, $112 million was improper due to faulty documentation, the OIG says based on a 375-claim sample.

Biggest offenders: Complex rehab power wheelchairs had a higher documentation error rate, the OIG says. So did standard power wheelchairs submitted by low-volume suppliers.

Next: Check out this onerous list of documentation requirements …

The specialty evaluation report was another hot spot. It was “one of the documents most often not submitted by complex rehabilitation power wheelchair suppliers,” the OIG says. The OIG wants CMS to improve compliance with Medicare’s power wheelchair documentation requirements by conducting more review of wheelchair claims, recovering overpayments, taking “further actions” against suppliers that don’t meet documentation requirements, and increasing education.

Not so fast: The authorities shouldn’t be pointing a finger at suppliers for this problem, insists the American Association for Homecare. “The regulatory documentation requirements are confusing, onerous, and must be improved,” the trade group maintains.

“The OIG study does not illustrate a problem with provider compliance but rather it reflects the obstacles providers face with Medicare documentation and its paperwork requirements,” AAHomecare President Tyler Wilson says in a release.

“The paperwork requirements are confusing, shifting, and inconsistent.”

Wheelchair suppliers must have numerous types of documentation for wheelchairs, AAHomecare points out, including:

• a seven-element doctor’s prescription,

• supporting documentation from the patient’s medical record supplied by the physician,

• an onsite home assessment report,

• a detailed product description, and

• a specialty evaluation for complex rehabilitation power wheelchairs.

“The inequity and inefficiencies of this system are evident when, as the OIG found, only 7 percent of claims for complex rehabilitation wheelchairs meet Medicare’s documentation standards,” Wilson observes.

Plus: CMS has already slashed Medicare wheelchair payment rates by 35 percent in the past five years, AAHomecare says. “The OIG report actually confirms what wheelchair providers and physicians have said for the past three years,” Wilson says. “The Medicare documentation requirements for power wheelchairs are inconsistent, far too complex, and must be improved.”

Despite the industry’s vigorous defense and the looming competitive bidding program, the report could put wheelchair rates squarely in lawmakers’ sights when they’re looking for funding for other provisions in the health care reform package, observers worry.

© Eli’s Home Care Connection.

DME compliance tool available on CD: The right way to classify, organize & bill for DME.

Photo: Jan Kronsell, Wikipedia

New twist: ‘Shoe insert’ fraud.

As they say on the Louisiana bayou, “Laissez les bon temps roulez” or “Let the good times roll.” The good times for some Medicare fraudsters may come to a crashing halt, however, as HEAT rolls into Brooklyn, NY; Tampa, FL; and Baton Rouge, LA, according to this HHS release.

HEAT teams use data analysis to suss out potentially fraudulent billing patterns. They’re lead by a federal prosecutor from the region’s U.S. Attorneys’ Office or the Criminal Division’s Fraud Section, and have agents from the FBI and HHS-OIG working the case. HEAT teams have already pursued and indicted individuals for Medicare fraud in Miami, FL; Houston, TX; Los Angeles, CA; and Brooklyn, NY.

If previous HEAT busts are any indication, home care and durable medical equipment will be the focus. Previous arrests have involved alleged Medicare fraud for home health diabetes outliers, infusions, HIV treatments, ‘arthritis kits’ and now diabetic ’shoe inserts.’

“In Brooklyn, the two defendants are alleged to have billed Medicare for … expensive shoe inserts reserved for diabetes patients, when in fact much cheaper and over-the-counter shoe inserts were provided to beneficiaries who often did not need them,” says the HHS release.

HEAT’s not all you need to watch out for. Medicare Fraud Control Units are becoming more aggressive. Home health attorney Robert Markette’s CD teaches you how to protect your HHA.