FTC Seeks Changes to Protect Consumer Health Information

The Federal Trade Commission (“FTC”) is urging Congress to ensure the data brokerage industry becomes more transparent and accountable, which could change the way consumers’ personal, health-related information is gathered and shared.  These recommendations may change the landscape of the HIPAA regulations to better ensure protection of sensitive health information.

On May 27, 2014, the FTC released a report based upon its comprehensive study of nine data brokers, ranging in size and prominence in the community.  Data brokers make millions of dollars each year collecting and disseminating massive amounts of personal, sensitive information they have obtained from consumers.  This affects nearly every consumer in the United States, and the current laws in place do not effectively regulate data brokers or their access to consumer information, especially when it comes to individuals’ health-related information. Continue reading

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Experienced Nurse Practitioners Will Have More Flexibility with Collaborators in 2015

There’s some cautiously good news for nurse practitioners in New York State: nurse practitioners with about two years of experience will no longer have to complete written practice agreements with physicians, beginning in 2015.  Instead, experienced nurse practitioners will need to have a “collaborative relationship” with either a physician in the nurse practitioner’s specialty or a hospital that uses physicians in the nurse practitioner’s specialty.

As current nurse practitioners know, all nurse practitioners must have a written practice agreement and written practice protocols that govern the nurse practitioner’s practice.  When a nurse practitioner and a physician differ concerning diagnosis or treatment, the physician’s diagnosis or treatment wins out. 

Under the new law, which takes effect on January 1, 2015, nurse practitioners who have been practicing for more than 3,600 hours—just about two years—can instead have “collaborative relationships” hospitals or physicians.  Nurse practitioners will have to complete forms that the Department of Education will develop to describe the nurse practitioner’s relationship with the hospital or physician.  As part of the collaborative relationship, a nurse practitioner can communicate in person, by phone, or by email with the hospital or physician to discuss patient care and referrals.  Just as before, if a nurse practitioner and a physician disagree, the physician’s recommendation stands.

The new law will sunset on June 30, 2020.  Before then, the budget requires the state to begin collecting information statewide about access to care, and will issue a report on these issues on September 1, 2018.

We have spoken with the Office of the Professions, and that office is aware of the new law, and is evaluating its options for enforcing it.  Although the law does not go into effect until next year, nurse practitioners who have practiced for more than 3,600 hours should begin evaluating their options for future collaboration.

The budget bill that enacted the new law, know as the Nurse Practitioners Modernization Act, may be viewed here.

We will be monitoring this issue as the regulators begin work to put the new law into effect.  If you have questions on this and any other issues relevant to Nurse Practitioners, please feel free to contact Caitlin Monjeau at cmonjeau@oalaw.com.

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Office of the Medicaid Inspector General Releases 2014-2015 Work Plan

The New York State Office of the Medicaid Inspector General (“OMIG) has released its State Fiscal Year 2014-2015 Work Plan. You can find the press release at: http://www.omig.ny.gov/latest-news/764-2014-15-work-plan

The Work Plan is a road map of where the OMIG intends to go in terms of its anti fraud, waste and abuse efforts within the Medicaid program. The OMIG’s mission is one of “preventing and detecting fraudulent, abusive, and wasteful practices within the Medicaid [program and recovering improperly expended Medicaid funds while promoting high quality patient care.” The Work Plan intends to “fight fraud, improve integrity and quality, and save taxpayer dollars.”

According to the Work Plan, the OMIG has established nine “business line teams” that each consist of multiple OMIG personnel from various functional areas within the OMIG that work as a team. The goals of these specialized, multidisciplinary teams include improved efficiency, more thorough reviews and investigations, and reduced time to completion.

Broad areas of Medicaid service provision that the OMIG has established business line teams for include, but are not limited to, the following: home and community care services; hospital and outpatient services; managed care; medical services in an educational setting; mental health, chemical dependence and developmental disabilities services; pharmacy and durable medical equipment; physicans, dentists and laboratories; residential health care facilities; and transportation.  Each business line will face varying degrees of scrutiny by the OMIG during this state fiscal year. There is a discussion of each area in the Work Plan available at: http://omig.ny.gov/images/stories/work_plan/2014-15_work_plan.pdf

In addition to the Business Line Teams discussed above, the OMIG also conducts various activities that relate to Medicaid program integrity across multiple business lines. The OMIG is again emphasizing the requirement for Medicaid providers to have an effective compliance plan, and the OMIG will be reviewing compliance plans for effectiveness. Part of an effective compliance plan, and the most significant part as far as the government is concerned, is the ability of the provider to identify and return Medicaid overpayments that the provider has received. The 60 day “report, repay and explain” self-disclosure requirement imposed by the federal Affordable Care Act is also a game changer. The OMIG will continue to review providers who do not make periodic self disclosures or who have never made such disclosures.

The areas listed in the OMIG’s Work Plan that cross multiple business lines are as follows:

AIDS-Related Issues

Ambulatory Patient Groups

Collaborative Efforts with Law Enforcement/Medicare Fraud Strike Force

Collaborative Managed Care Surveys

Compliance Program General Guidance and Assistance

Compliance Program Reviews

Corporate Integrity Agreement Enforcement

County Demonstration Program

Enrollment and Reinstatement

Estate and Casualty Recovery

Fee-for-Service Third-Party Retroactive Recovery Projects

Kickbacks and Inducements

Location of Services Unknown to New York State Department of Health

Managed Care Third-Party Retroactive Recovery Projects

Medicaid Consumer Investigations

Medicaid Electronic Health Records Incentive Payment Program

Medicaid Integrity Contract Audits

Medicaid Recovery Audit Contractor

Medicare Coordination of Benefits with Provider-Submitted Claims

Patient Protection from Disqualified Providers

Payment Error Rate Measurement Project

Pre-Enrollment Review

Prepayment Insurance Verification

Prepayment Review

Prior Findings

Self-Disclosure Efforts

Third-Party Liability and Commercial Direct Billing

Undercover Operations

There will be a continued emphasis on excluding those providers who commit fraud and abuse. Those who commit “inappropriate and fraudulent acts” will face exclusion from the Medicaid program, then, by operation of law, exclusion from the Medicare program, and in essence become virtually unemployable by most health care providers who accept federal funds.

If you would like to discuss any of the areas identified in the OMIG’s Work Plan, or anything else related to the Medicaid program, please feel free to contact the author of this article, David R. Ross, Esq., who was formerly New York State’s Acting Medicaid Inspector General under Governors Pataki and Spitzer. Mr. Ross was also the Director of OMIG audits and investigations as well as the OMIG’s General Counsel. He can be contacted via e-mail at dross@oalaw.com or reached by telephone at (518) 462-5601.


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National Health Care Fraud Abuse Control Program Reports Record Recoveries and Return on Investment

Through their Health Care Fraud Abuse Control program (“HCFAC”), the United States Departments of Justice (“DOJ”) and the United States Department of Health and Human Services (“HHS”) have recovered more than $19 billion from health care providers over the last five years.  A report released on February 26 shows that the program’s three-year return on investment in fraud and abuse investigations is $8.10 for every dollar spent—this is a record high for the 17-year-old program.  These numbers suggest that the federal government’s interest in investigating and prosecuting health care fraud and abuse is as strong as ever.

For perspective, the current five-year recovery amount—$19.2 billion—is more than double the $9.4 billion recovery for the previous five-year period.  All of this is despite the loss of $30.6 million as a result of the budget-related sequestration in 2013.

HCFAC is a creation of the 1996 HIPAA statute, and is a joint project of DOJ and HHS.  Moreover, the high reported return on investment illustrates that HCFAC is a money-maker for Medicare—HCFAC’s appropriations come from the Medicare Hospital Insurance Trust Fund, also known as the Medicare Part A Trust Fund.

In the last year alone, DOJ filed 137 cases in this area, and charged 345 individuals with crimes.  It secured 234 guilty pleas and 46 convictions.  Defendants sentenced in the 2013 fiscal year served an average of 52 months in prison.

Not to be outdone, the Centers for Medicare and Medicaid Services (“CMS”) have banned over 225,000 individuals and entities from billing Medicare between March 2011 and September 2013.

The OIG Report may be accessed here: http://oig.hhs.gov/publications/docs/hcfac/FY2013-hcfac.pdf

The HHS Press Release may be accessed here: http://www.hhs.gov/news/press/2014pres/02/20140226a.html

Caitlin Monjeau and David Ross contributed this post.

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The OMIG At Work: A Year Of Record Recoveries?

The New York State Office of the Medicaid Inspector General (OMIG) has announced that it has recovered $851 million in Medicaid funds for 2013.  If accurate, this amount will have set a new record (the prior record is claimed to have been $468 million for 2012) for the OMIG in a state where over $53 billion is spent annually on Medicaid. According to the Daily News, more than one half of the $851 million in recoveries, $496 million, originated from a settled dispute with the federal government about whether Medicare (vs. Medicaid) should have been billed for certain home health services. If the $851 million figure is reduced by the amount of the federal settlement, the amount recovered by the OMIG becomes $355 million for 2013.

Governor Cuomo issued a press release on the OMIG recoveries. “With more than $851 million recovered from Medicaid abuses in 2013 alone – the most in the State’s history – New York is truly leading the nation in fighting fraud and protecting taxpayer dollars,” Governor Cuomo said. “Our focus on cleaning up the Medicaid program is showing record-breaking results, and OMIG’s efforts serve as a role model for other states to follow. Eliminating this kind of waste is vital to transforming New York’s healthcare system, and this year’s tremendous amount of recoveries shows that we are well on our way to building a healthier and fairer New York.”

“Fighting Medicaid fraud is a cornerstone of our efforts, and anyone who steals from Medicaid should know that we will find them. OMIG is proud of this record result,” said Medicaid Inspector General James C. Cox. “This is an extraordinary accomplishment, and an historical achievement. Through dedication and perseverance, our staff not only met but exceeded all expectations in recoveries for the year. Governor Cuomo’s support was crucial to our efforts.”

The OMIG’s mission is “to enhance the integrity of the New York State Medicaid program by preventing and detecting fraudulent, abusive, and wasteful practices within the Medicaid program and recovering improperly expended Medicaid funds while promoting a high quality of patient care.”

The Daily News article can be found here: http://www.nydailynews.com/new-york/ny-recoups-851-million-medicaid-funds-article-1.1599885.  Governor Cuomo’s press release can be found here: http://www.governor.ny.gov/press/02032014-medicaid-recoveries.

For more information, please contact the author, David R. Ross, who served as Acting New York State 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). You may call David at 518.462.5601 or e-mail him at dross@oalaw.com

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Not-for-Profits, Revitalized

On December 18, 2013, Governor Cuomo signed the New York Non-Profit Revitalization Act of 2013 (“NPRA”).  This is the first time there has been a major change in the New York Not-for-Profit Corporation Law since 1970.  The Act aims “to reduce unnecessary and outdated burdens on nonprofits and to enhance nonprofit governance and oversight to prevent fraud and improve public trust.”

Re-Categorization of Corporations Types

The new Act eliminates the categorizations of Type A, B, C, and D corporations.  Nonprofit corporations formed on or after July 1, 2014 will be defined as either a “Charitable” or a “Non-Charitable” corporation. Charitable corporations are any nonprofits with a “charitable purpose,” defined as educational, religious, scientific, literary, cultural, or prevention of cruelty to children or animal purposes. “Non-charitable” corporations are all other corporations formed under the N-PCL.

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HIPAA Violation Settlement for Failure to Establish Breach Notification Policies and Procedures

A Massachusetts dermatology practice, APDerm, has agree to make a $150,000 payment and enter into a corrective action plan with the U.S. Department of Health and Human Services’ Office for Civil Rights in order to settle potential violations of HIPAA Privacy, Security, and Breach Notification Rules.  According to HHS, this is the first settlement entered into by an entity for a failure to have breach notification policies and procedures in place under the HITECH Act.

According to the press release, an unencrypted thumb drive containing electronic protected health information (“ePHI”) of over 2,200 people was stolen from the vehicle of an APDerm employee in October 2011.  After HHS was notified of the situation, its investigation revelaed that APDerm did not conduct an adequate risk assessment of the vulnerabilities to the confidentiality of the ePHI it maintained prior to the loss of the thumb drive.  HHS also determined that APDerm did not qualify with the Breach Notification Rule by failing to have written policies and procedures in place to address such breaches, and by failing to train workers regarding the requirements of this rule.  HHS also found that the failure to safeguard the unencrypted thumb drive amounted to an impermissible disclosure of ePHI when it was stolen from the APDerm employee’s car.

The corrective action plan entered into by APDerm requires it to perform a risk analysis, develop breach notification policies and procedures, and establish an implementation plan for those procedures, each of which must be reviewed and approved by HHS.

The HHS press release is available here: http://www.hhs.gov/news/press/2013pres/12/20131226a.html

The Resolution Agreement is here: http://www.hhs.gov/ocr/privacy/hipaa/enforcement/examples/apderm-resolution-agreement.pdf


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Fourth Circuit Decision Addresses Constitutionality of Per-Claim Penalty under Federal False Claims Act

The decision delivered just before Christmas by the United States Court of Appeals for the Fourth Circuit in US ex rel. Kurt Bunk, et al., v. Gosselin Worldwide Moving, N.V., et al. is of value and of interest to all healthcare providers subject to the reach of the Federal False Claims Act (hereafter “FCA”). Although not dealing with the healthcare market, the decision serves as another illustration of the potential scope of per-claim civil penalties under the FCA and the vitality of such penalties when  analyzed under the United States Constitution’s bar on excessive fines via the Eighth Amendment. Continue reading

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OMIG Posts Assisted Living Program Audit Protocols

The New York State Office of the Medicaid Inspector General (OMIG) has released its final audit protocols for Assisted Living Programs (ALPs). These protocols became effective November 22, 2013 and are the OMIG’s audit tool that they will use when conducting their audits of ALPs.  The protocols contain 22 areas of potential disallowances based upon various documentation requirements and timelines.

The protocols explain what will constitute an error to the OMIG and lead to the OMIG attempting to recoup money previously paid for Medicaid claims.  These protocols provide the best source of information as to what the OMIG will be looking for during an ALP audit, as well as what criteria ALP providers should be auditing themselves against. Click here to view the protocols. 

This post was written by David R. Ross, Shareholder of O’Connell and Aronowitz. Mr. Ross presented, along with Medicaid Inspector General James Cox, on OMIG ALP audits at the NYSHFA/NYSCAL Fall Conference last year in Troy, New York.

Mr. Ross served as General Counsel and Director of Audits and Investigations at the OMIG and was also the Acting Medicaid Inspector General under Governors Pataki and Spitzer. Please contact Mr. Ross for more information at dross@oalaw.com

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Applicability of Fraud and Abuse Rules to the Marketplace Clarified … Somewhat

One of the lingering questions about the Health Insurance Marketplace created under the Affordable Care Act is whether plans on the Marketplace are considered part of a Federal health care program, thus opening up potential liability under the Anti-Kickback Statute. There was concern that the broad language defining a “Federal health care program” would apply to the Exchanges because of the federal tax subsidizes provided to individuals on the private market.  Under 42 U.S.C. 1320a-7b(f)(1), a “Federal health care program” is defined as “any plan or program that provides health benefits, whether directly, through insurance, or otherwise, which is funded directly, in whole or in part, by the United States Government.”  This presented the possibility that, by virtue of the inclusion of federal subsidy payments, even private insurance plans on the Marketplace and the state Exchanges would constitute Federal health care programs and necessitate compliance with the entire array of federal legal requirements.    Continue reading

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