May 9, 2013

Exclusion From Federal Health Care Programs: New Guidance From The United States HHS OIG

The United States Department of Health and Human Services Office of the Inspector General (OIG) has issued a Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs (“the Bulletin”).  The Bulletin replaces the previous OIG bulletin on this topic issued in 1999.  Exclusions from federal health care programs (including but not limited to Medicaid, Medicare, TRICARE, and veterans’ programs) often result from criminal and civil actions taken by governmental entities against providers.

The Bulletin details the consequences of exclusion from federal health care programs.  Guidance is also provided regarding civil monetary penalty liability for a provider who employs an excluded individual. The Bulletin provides guidance to the health care industry on the scope and frequency of screening employees and contractors against the OIG’s List of Excluded Individuals and Entities (LEIE) to determine whether they are excluded persons.  The Bulletin also recommends using the OIG’s recently revised self-disclosure protocol to disclose any employees who are excluded individuals.

Additionally, the Bulletin describes the scope and effect of the legal prohibition on payment by Federal health care programs for items or services furnished by an excluded person, or at the medical direction, or on the prescription of, an excluded person. For purposes of OIG exclusion, payment by a Federal health care program includes amounts based on a cost report, fee schedule, prospective payment system, capitated rate, or other payment methodology. The Bulletin also describes how exclusions can be violated and the administrative sanctions OIG can pursue against those who have violated an exclusion.

The new US HHS OIG Special Advisory Bulletin can be found at http://oig.hhs.gov/exclusions/advisories.asp.

The 1999 version can be found at http://oig.hhs.gov/exclusions/effects_of_exclusion.asp.

For more information, please contact the author, David R. Ross, who served as Acting Medicaid Inspector General under governors Pataki and Spitzer, as well as General Counsel, Deputy Medicaid Inspector General, and Director of Audits and Investigations for the Office of the Medicaid Inspector General (OMIG).

 

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April 10, 2013

Proposed Rule to Extend and Amend the Exception to Donate Electronic Health Records Items and Services

The Office of Inspector General for the Department of Health and Human Services (OIG) and the Centers for Medicare and Medicaid Services (CMS) published on April 10, 2013 proposed rules to extend and amend the Electronic Health Records (EHR) donation exceptions under the Anti-Kickback Statute and Stark Law, respectively.

The proposed rules would extend the exceptions until the end of 2016, but both the OIG and CMS are seeking comments on extending the sunset date to December 31, 2021, which corresponds to the end of the EHR Medicaid incentives program.  Under the current law, both exceptions are set to sunset on December 31, 2013 .

In addition, the OIG and CMS propose to amend the conditions of the EHR donation exceptions by removing the electronic prescribing requirement and redefining (i.e. limiting) the type of entities that can donate.   The current EHR donation exceptions permit donations by any individual or entity that provides patients with health care items or services covered by a Federal health care program, based on a public policy initiative to expedite adoption and use of EHR systems.  The proposed rules would remove, among other entities, clinical laboratories and pharmacies from the definition of a protected donor.

Finally, the OIG and CMS propose to address a critical issue identified as “data and referral lock-in,” in which EHR technology that appears to support the interoperable exchange of information on its face, in practice restricts the recipient provider to transmit data and communicate only with the donor entity to control referrals.  In response, the OIG and CMS propose to require that the donated EHR software is certified in accordance with the definition of Certified EHR Technology applicable on the date of the donation. Under the current law, both exceptions require only that the EHR software is interoperable.

Comments on the proposed rules will be accepted for 61 days from the date of publication, which is June 10, 2013.

This post is contributed by Charles Dunham.


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March 29, 2013

OIG: PODs “Inherently Suspect”

On Tuesday, the federal Office of the Inspector General (“OIG”) issued a Special Fraud Alert (“Fraud Alert”) detailing the OIG’s concerns with Physician-Owned Entities.  Specifically, the alert dealt with physician-owned distributorships, or PODs.  PODs are typically entities that make money by selling or arranging for the sale of implantable medical devices.

The United States Senate Finance Committee produced a report on PODs (“Senate Report”) in June of 2011.  According to the Senate Report, PODs are structured to give physicians who choose the medical devices that they implant in patients some payment derived from the profits that the sale of the devices generate.  Senate Report at 2.  For example, a surgeon who chooses a certain kind of stent may receive  a payment from the stent manufacturer based upon the sale of the stent.  The Senate Report indicated that PODs have proliferated among surgeons and surgical practices as reimbursements have declined.  Senate Report at 3.

As the Senate Report points out, PODs seem to create financial incentives for the doctors involved to choose medical devices that will generate payments for themselves.  Senate Report at 5.  The Committee that authored the report was troubled by anecdotal evidence that surgeons, who happened to be members of PODs, performed multiple expensive and risky procedures using implants for which the POD was compensated.  Senate Report at 5.  The Report concluded that PODs stood on uncertain legal ground in the quick-moving health care arena; the Committee specifically charged the OIG with addressing this issue.  Senate Report at 8.

The OIG’s recent Fraud Alert responds to this charge and indicates that PODs pose major problems, including the corruption of medical judgment, the overutilization of medical procedures, increased costs to Federal health care programs, and unfair competition.  Fraud Alert at 2.  Although intent is the determining factor in assessing whether a given POD is lawful under the federal anti-kickback statute, OIG concluded that PODs are “inherently suspect under the anti-kickback statute.”  Fraud Alert at 3.

OIG sets out a list of eight characteristics that it considers “suspect” in a POD, most of which indicate that referrals or the volume of referrals are the primary reason a physician involved with the POD might use a given device.  Fraud Alert at 3.  OIG does also make clear that this is not an exhaustive list.  Fraud Alert at 3-4.

The Special Fraud alert is available here.

The Senate Report is available here.

Caitlin Monjeau contributed this post.

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February 27, 2013

Brooklyn DA Creates New Healthcare Fraud Division

On Monday, Kings County District Attorney Charles J. Hynes announced the creation of a new Healthcare Fraud division within his office.  The 30-person team, headed by ADA Lauren Mack, will collaborate with federal authorities, including the United States Department of Health and Human Services Office of the Inspector General and the United States Attorney for the Eastern District of New York,  to investigate and prosecute doctors and pharmacists accused of committing fraud against Medicaid and Medicare.  The New York City Human Resources Administration will also work with this new unit.  The press release for the new unit is available here.

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February 26, 2013

Auditing the Auditors, Part II: New York State Senate Republicans Request Independent Audit of the OMIG

As a result of a recent Congressional report on New York State’s Medicaid program, the Legislative Gazette has reported that Senate Republican leader Dean Skelos and New York State Senate’s Republican Conference have called for an independent audit of the New York State Medicaid program. A Congressional panel had requested that federal auditors review New York State’s $54 billion Medicaid spending and fraud, waste and abuse oversight programs.

A previous post on this blog, available here, reported that the U.S. House of Representatives Committee on Oversight and Government Reform issued a report entitled “Billions of Federal Tax Dollars Misspent on New York’s Medicaid Program.“  Among its conclusions are that fraud, waste, abuse and mismanagement has permeated the New York State Medicaid program for decades; that New York must crack down on wealthy individuals posing as indigent patients, as well as on allegedly excessive salaries paid to health care executives; and that New York overcharged the federal government $15 billion on its developmentally disabled patient facilities and that the state must repay an appropriate amount of the funds.

The report also questioned the operations of the New York State Office of the Medicaid Inspector General (OMIG), which is tasked with investigating and auditing the misspending of taxpayer funds. Congressional officials said either the federal Centers for Medicare and Medicaid Services (CMS) or the Government Accounting Office (GAO) must send auditors to New York to review the OMIG and various Medicaid programs.

Senator Dean Skelos said that “An immediate, independent audit of the entire state Medicaid system is imperative” and also that “These are serious allegations against OMIG.”

Recently, current and past employees of the OMIG have publicly criticized the OMIG and alleged that the office is performing poorly and that its staff suffers from low morale.

The Legislative Gazette article is available here.

For more information, please contact the author, David R. Ross, who served as Acting Medicaid Inspector General under governors Pataki and Spitzer, as well as General Counsel, Deputy Medicaid Inspector General, and Director of Audits and Investigations for the OMIG.

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February 25, 2013

Your Tax Dollar At Work: Fighting Medicaid Fraud, Waste, and Abuse in NYC

The New York Post has reported that the New York City Human Resources Administration (“HRA”) spent $15.6 million on Medicaid audits of providers since 2006 and has managed to recover only $11 million in misspent Medicaid funds.  The paper also reported that Medicaid Inspector General James C. Cox wrote, in a February 15, 2013 letter to HRA Commissioner Robert Doar, that the recoveries were “disappointingly low” and also that he was “…particularly concerned . . . HRA’s backlogged audits are due to frequent inaccurate and missed audit findings.”

Deputy HRA Commissioner Connie Ress defended the agency’s audits, claiming that the State has been slow to respond to it. NYC, along with a limited number of counties in New York State, conduct their own Medicaid audits and investigations as part of the Office of the Medicaid Inspector General’s County Demonstration Project.

The New York Post article can be found here.

For more information, please contact the author, David R. Ross, who served as Acting Medicaid Inspector General under governors Pataki and Spitzer, as well as General Counsel, Deputy Medicaid Inspector General, and Director of Audits and Investigations for the Office of the Medicaid Inspector General (OMIG).

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February 15, 2013

Auditing the Auditors? Congressional Panel Requests Federal Audit of New York’s Medicaid Program

As a result of a recent Congressional report on New York State’s Medicaid program, a Congressional panel has requested that federal auditors review New York State’s $54 billion Medicaid spending and fraud, waste and abuse oversight programs.

The report of the U.S. House of Representatives Committee on Oversight and Government Reform, entitled “Billions of Federal Tax Dollars Misspent on New York’s Medicaid Program” is available here. Among its conclusions are that fraud, waste, abuse and mismanagement has permeated the New York State Medicaid program for decades; that New York must crack down on wealthy individuals posing as indigent patients, as well as on allegedly excessive salaries paid to health care executives; and that New York overcharged the federal government $15 billion on its developmentally disabled patient facilities and that the state must repay an appropriate amount of the funds.

Significantly, the report also questioned the operations of the New York State Office of the Medicaid Inspector General (OMIG), which is tasked with investigating and auditing the misspending of taxpayer funds. Congressional officials said either the federal Centers for Medicare and Medicaid Services (CMS) or the Government Accounting Office (GAO) must send auditors to New York to review the OMIG and various Medicaid programs.

Recently, current and past employees of the OMIG have publicly criticized the OMIG and alleged that the office is performing poorly and that its staff suffers from low morale.

For more information, please contact the author, David R. Ross, who served as Acting Medicaid Inspector General under governors Pataki and Spitzer, as well as General Counsel, Deputy Medicaid Inspector General, and Director of Audits and Investigations for the OMIG.

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February 15, 2013

Medicaid Provider Gets His Second Day In Court, Wins $7.7 Million Verdict Against His Accusers

A Brooklyn dentist who alleged that his career was ruined by a New York State Attorney General’s Office Medicaid Fraud Control Unit (MFCU) investigation has won a $7.7 million verdict against two of then-Attorney General Eliot Spitzer’s staff members.

According to court papers filed by Dr. Leonard Morse’s attorney, available here, the dentist was pursued by Elliot Spitzer’s MFCU because he was one of the top Medicaid billers in the state with 30,000 patients, almost all of whom were Medicaid eligible. He was criminally charged with stealing more that $1 million in false billings for dentures but was acquitted at trial. The dentist alleged that he lost his practice and his credibility in the field as a result of the publicity. He also alleged that the MFCU individuals had fabricated evidence.

After winning his case against his accusers, a legal battle that took almost 7 years, Dr. Morse was quoted in a New York Daily News article (available here) as feeling “totally vindicated.”

The jury deliberated for merely three hours. After requesting a calculator from the Judge, they rendered its $7.7 million verdict.

The AG’s office had no official comment but apparently they will appeal.

The New York Daily News also reported that Dr. Morse may have a new patient. As he was leaving the courtroom, one of the jurors in the case asked him to look at his tooth.

For more information, please contact the author, David R. Ross, who served as Acting Medicaid Inspector General under governors Pataki and Spitzer, as well as General Counsel, Deputy Medicaid Inspector General, and Director of Audits and Investigations for the Office of the Medicaid Inspector General (OMIG).

The complaint in this case may be found here: Morse v Spitzer (Complaint)

The New York Daily News article may be found here: http://www.nydailynews.com/dentist-wins-7-7m-ex-spitzer-staff-article-1.1262539

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January 20, 2013

Major Victory for Saratoga County Maplewood Manor in Appeal of OMIG Audit

Last week, Maplewood Manor, a nursing home owned and operated by Saratoga County and represented by Jeffrey J. Sherrin of O’Connell & Aronowitz, earned a major victory in its appeal of an audit conducted by the New York State Office of the Medicaid Inspector General (“OMIG”).  In a Decision After Hearing dated January 16, 2013, an Administrative Law Judge overturned the OMIG audit, which originally concluded that Maplewood Manor had been improperly reimbursed for the capital costs of a $3.7 million cogeneration plant because the nursing home’s base year Medicaid reimbursement rate included duplicative utility costs.  The decision is noteworthy because the ALJ refused to accept OMIG’s extension of the Daughters of Sarah case to Maplewood Manor.

Maplewood Manor is a 277-bed skilled nursing facility located in Ballston Spa, New York, and is governed by the Saratoga County Board of Supervisors.  By the early 2000s, the boilers and air conditioners at Maplewood Manor, which first opened in 1973, needed replacement and the limitations of the lighting systems and back-up generators were beginning to negatively impact the nursing home’s ability to ensure the comfort and safety of its residents.

At that time, Saratoga County sought out proposals to upgrade Maplewood Manor and to reign in its energy costs.  A committee of the Board of Supervisors eventually accepted a proposal for a “cogeneration project” which would construct a cogeneration plant at Maplewood Manor and improve the nursing home’s HVAC, lighting, and emergency backup generator systems. Continue reading →

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January 17, 2013

HIPAA Final Rule Posted

This afternoon, the Department of Health and Human Services posted a long-awaited, 563-page omnibus final rule under HIPAA, which will be published in the Federal Register on January 25, 2013, and which makes a variety of modifications to HIPAA’s Privacy, Security, Breach Notification, and Enforcement Rules.  According to the executive summary of the rule, these modifications are necessary  ”to strengthen the privacy and security protections . . . for individual’s health information maintained in electronic health records and other formats. This final rule also makes changes to the HIPAA rules that are designed to increase flexibility for and decrease burden on the regulated entities, as well as to harmonize certain requirements with those under the Department’s Human Subjects Protections regulations.”

Note that while the effective date of the final rules is March 26, 2013, covered entities have until September 23, 2013, to achieve compliance.

We will have further analysis on this final rule in the coming days.

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