Hot Spots in Compliance 2016

Patric HooperKatrina PagonisHooper, Lundy & Bookman, PC

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Overview

Topics Covered OIG Work Plan Meaningful Use Audits Site Neutrality: Bipartisan Budget Act

Section 603 and Off-Campus HOPDs False Claims Act Update

2016 OIG Work Plan

Released November 2, 2015 Available at: http://oig.hhs.gov/reports-

and-publications/archives/workplan/2016/oig-work-plan-2016.pdf

Hospitals Addressed pp. 5-11 Meaningful Use pp. 75-76

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2016 OIG Work Plan NEWFocus Areas

Few new areas of focus in 2016 Medical Device Credits for Replaced

Medical Devices Medicare Payments During MS-DRG

Payment Window CMS Validation of Hospital-Submitted

Quality Reporting Data

Revised: Medicare Oversight of Provider-Based Status

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2016 Work Plan: Areas of Continued Focus

Comparison of provider-based and free-standing clinics

Hospitals’ use of outpatient and inpatient stays under Medicare’s two-midnight rule

Review of hospital wage index data used to calculate Medicare payments

Medicare costs associated with defective medical devices

Analysis of salaries included in hospital cost reports

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2016 Work Plan: Areas of Continued Focus

Nationwide review of cardiac catheterization and heart biopsies Review Medicare payments for right heart

catheterizations (RHC) and heart biopsies billed during the same operative session and determine if hospitals complied with Medicare billing requirements

Payments for patients diagnosed with kwashiorkor Evaluate whether the diagnosis is adequately

supported by medical record documentation (protein deficiency confusion)

Bone marrow or stem cell transplants Indirect medical education payments

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2016 Work Plan: Areas of Continued Focus

Intensity-modulated radiation therapy (IMRT) Focus on services performed as part of developing

an IMRT plan that are required to be bundled but were billed separately

Hospital preparedness and response to high-risk infectious diseases Recent lessons from pandemic or highly contagious

diseases (e.g., Ebola) Previous focus on natural disaster preparedness

(Superstorm Sandy)

Meaningful Use Audits

OIG Work Plan As of December 2015, $31.9 billion paid

in Medicare and Medicaid EHR Incentive Payments $12.5 billion to Eligible Professionals $18.9 billion to Eligible Hospitals and

CAHs Surpasses CBO’s estimate ($30 billion)

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CMS Progressive Goals for Each Stage

HIT will likely be key to a data-driven reimbursement future

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Stage 1

Stage 2

Stage 3

Meaningful Use Timeline (after October 2015 Final Rule)

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“Certified” EHR Technology (CEHRT)

Must demonstrate Meaningful Use with EHR “certified” by designated certification agencies Commercially available software Self-developed technology may be certified

Standards are set by the Office of the National Coordinator for Health IT (ONC) 2011 Edition 2014 Edition 2015 Edition

In 2016, must use 2014 edition, 2015 edition, or 2014/2015 combination CEHRT

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Single Set of Objectives and Measures

Objectives and Measures All providers are required to attest to a

single set of objectives and measures EPs—ten objectives EHs and CAHs—nine objectives

Replaces old core and menu structure Transition for newer meaningful users: 2015—eight alternate measures/exclusions 2016—two alternate exclusions

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2015/2016 Measures for Eligible Hospitals

Protect Patient Health Information Clinical Decision Support* Computerized Provider Order Entry (CPOE)** Electronic Prescribing (eRx)** Health Information Exchange* Patient-Specific Education* Medication Reconciliation* Patient Electronic Access* Public Health Reporting*

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2016 Changes to Alternate Measures and Exclusions

Eliminates alternate measures available in 2015 and reduces alternate exclusions

Remaining alternate exclusions for providers scheduled to be in Stage 1 in 2016 CPOE measures 2 and 3 (lab and radiology

orders) eRx objective and measure (exclusion also

available for providers scheduled to demonstrate Stage 2 that did not intend to select eRx objective)

Reporting on Clinical Quality Measures (CQMs)

Beginning in 2014, all providers beyond their first year of demonstrating meaningful use (regardless of their stage) must report CQMs

EPs must report on nine CQMs across three domains

EHs and CAHs must report on 16 across three domains

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Reporting on CQMs:Eligible Hospital Options

Attest to CQMs through the Registration and Attestation System

eReport through Hospital Inpatient Quality Reporting (IQR)

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Payment Adjustments

Adjustments began October 1, 2014 Applies to providers eligible to participate

in Medicare EHR Incentive Program Payment adjustment is applicable to the

percentage increase to the Inpatient Prospective Payment System (IPPS) payment rate for those eligible hospitals that are not meaningful EHR users

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Payment Adjustments

Adjustment starts at 25% of the annual increase to the IPPS

By 2017, adjustment will be 75% of the annual increase to the IPPS

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2015 2016 2017 2018 2019 2020+% Decrease in Annual Increase to IPPS

25% 50% 75% 75% 75% 75%

Payment Adjustments

Payment Adjustment

Year

Providers Demonstrating MU for First Time

Providers that Previously

Demonstrated MUFY 2016 90-day period in FY 2014 or 2015

(ends by June 30, 2015)90-day period in FY

2014FY 2017 90-day period in FY/CY 2015 or

CY 2016 (must attest by Oct. 1, 2016)

90-day period in FY2015 or CY 2015

FY 2018 90-day period in CY 2016 or 2017 (must attest by Oct. 1, 2017)

CY 2016

FY 2019 90-day period in CY 2017 CY 2017(Stage 3: 90-day period

in CY 2017)FY 2020 90-day period in CY 2018 CY 2018

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Hardship Exceptions

Hardship Applications for 2017 EPs: Due March 15, 2016 EHs and CAHs: April 1, 2016

New streamlined application Bases for Hardship Exception: Lack of control over the availability of

CEHRT (EP only) Lack of face-to-face patient interaction

(EP only)20

Hardship Exceptions

Bases for Hardship Exception (cont.): Insufficient internet connectivity Extreme and uncontrollable

Circumstances Disaster Practice or hospital closure Severe financial distress (bankruptcy or

debt restructuring) EHR certification/vendor issues

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Hardship Exceptions

Must reapply every year (where application is required)

Maximum five years of hardship exceptions

CMS says hardship determinations are not appealable

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Hardship Exceptions: Tips

Prepare and submit early On CMS-provided Hardship Application

forms, ignore and do not check boxes that do not apply E.g., “Unforeseen and/or Uncontrollable

Circumstances”

Designated representative may submit hardship application on behalf of providers

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Automatic Hardship Exceptions

Automatic Hardship Exceptions: New hospitals (10/1/2014 to 9/30/2016) New EPs Specialists (Anesthesiology, Diagnostic

Radiology, Interventional Radiology, Nuclear Medicine, Pathology)

Hospital-based EPs are not subject to payment adjustment

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Compliance Considerations

Regulatory compliance is significant because meaningful use impacts reimbursement

Possible overpayments Entirety of EHR incentive payment

(failing to meet any MU measure) Portion of EHR incentive payment

(mistake in data used to calculate) Payment adjustments owed

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Compliance Considerations

Potential strategies: Designating resources for meaningful use

questions (e.g., compliance, legal) Developing policies and procedures

regarding meaningful use and documentation retention

Conducting periodic, internal audits Assuring compliance with other EHR

incentive program requirements26

Document Retention

At least six years post attestation Including the documentation that supports

the values you entered in the Attestation Module for clinical quality measures

Documentation that supports payment calculations

CMS suggests that providers download and/or print a copy of the report used at the time of attestation for their records

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Examples of Additional Documentation

Drug-Drug/Drug-Allergy interaction checks Dated screenshots

Protect electronic health information Report documenting procedures performed and

results, dated prior to the end of the reporting period

Electronic exchange of health information Dated screenshots documenting test exchange Dated record of electronic transmission Communication from receiving provider

confirming successful exchange28

Examples of Additional Documentation

CQMs Validate all CQM data submitted

Exclusions Report showing denominator of zero Other documentation substantiating exclusion

Other unique issues Permissible elections made by EP or eligible

hospital Documentation and analysis to support any

deviation from report (e.g., correcting for user error)

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Internal Audits

May be useful tool to uncover issues when they can still be remedied

Timing? Pre-attestation audits are more likely to allow for resolution of issues

Goals? Audit should not substitute for attestation

processes Audit should be focused on spot-checking

processes and providing recommendations for improvement

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Government Meaningful Use Audits

Government wants to ensure incentive payments are/were appropriate

Types of audits Pre-payment (random and may target

suspicious/anomalous data) Post-payment

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Meaningful Use Audits (cont.)

Process Audit Letter via email requests documents

with two-week turnaround Documents are provided A HIPAA-covered entity is allowed to

disclose PHI to a health oversight agency for activities authorized by law, such as audits But remember minimum necessary rule

Auditor reviews conduct based on documents or may require on-site reviews/questions

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Auditors

Medicare CMS’ Audit Contractor: Figliozzi and

Company (Accountants) Audits all measures for one attestation

OIG Audits Audits selected measures for three years

Medi-Cal DHCS Audits OIG Audits

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OIG Work Plan Relating to EHRs

Whether providers were entitled to Medicare/Medicaid EHR incentive payments

CMS’ oversight of Medicare/Medicaid EHR incentive payments

Protection of electronic health information, including through a security risk analysis of CEHRT

FDA oversight of hospitals’ networked medical devices that are integrated with EHR systems

The extent to which hospitals have EHR contingency plans, as required by the HIPAA Security Rule

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OIG Audit of Medi-Cal EHR Incentive Payment Calculations

Requested data re: inclusion/exclusion of the following data: Bad Debt and Courtesy Discounts Nursery Services Psychiatric Services Rehabilitation Services SNF Services Hospice Services NICU and Other ICU Services Labor and Delivery Services Unpaid Medicaid Bed Days

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Appeal Rights (CMS)

Types of appeals Failed MU Audit Failed MU Reporting MU Eligibility

Filing deadline: 30 days from adverse audit determination

letter (Failed MU Audit) 30 days from attestation deadline Must file form and all supporting

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The Next Phase: MIPS

Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) established the Merit-based Incentive Payment System (MIPS)

MIPS combines PQRS, Value Modifier, and Medicare EHR Incentive Program into a program based on: Quality Resource use Clinical practice improvement Meaningful use of certified EHR technology

Rulemaking expected this spring37

Site Neutrality and Off-Campus Outpatient Departments

Section 603 of the Bipartisan Budget Act of 2015, enacted November 2, 2015

Adopts site neutrality for certain off-campus HOPDs starting January 1, 2017

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Overview of Section 603

Beginning 1/1/2017: No OPPS reimbursement for items and services furnished “by an off-campus outpatient department of a provider” except if furnished by: An on-campus HOPD An HOPD within 250 yards of a remote campus A dedicated emergency department A grandfathered HOPD

Payment may be available under other payment systems (e.g., ASC, PFS)

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On-Campus HOPDs

Defined in provider-based rules (42 CFR 413.65)

Campus is: Area “immediately adjacent” to provider’s

main buildings Areas and structures “located within 250

yards” of the main buildings Other areas per regional office determination

Note: on-campus locations are “on the hospital property” for EMTALA purposes

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250 Yards?

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C

D

A

E

B

Main Hospital

Remote Locations

Facility that furnishes inpatient hospital services under the name, ownership, and financial and administrative control of the main provider

Does not include a “satellite facility” (in another hospital’s building or on another hospital’s campus)

Regional office does not have discretion regarding 250-yard rule for remote locations

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Dedicated ED Exception

Section 603 excludes “items and services furnished by a dedicated emergency department (as defined in section 489.24(b) of title 42 of the Code of Federal Regulation)”

Exclusion is based on site of service, permitting OPPS reimbursement for non-emergency services furnished in an ED

Section 489.24 is CMS’ EMTALA regulation

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Off-Campus EDs and California Law Issues

California recognizes the following ED types: Basic emergency medical service, physician

on duty Comprehensive emergency medical service Standby emergency medical service, physician

on call Standby ED must be located in a specifically

designated area of the hospital There is a possible argument that a standby ED

may be off-campus in a separate physical plant under a consolidated license

CDPH has taken a more restrictive view

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Grandfathered HOPDs

Exception for “a department of a provider (as [defined in 413.65(b)]) that was billing under this subsection with respect to covered OPD services furnished prior to the date of enactment of this paragraph”

Key question: Was the HOPD billing for covered OPD services as of November 2, 2015?

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Existing HOPDs: Does Grandfathering Survive?

Relocation Renovation and expansion From on-campus to off-campus location? From off-campus to off-campus location?

Acquisition by a new hospital Break in operations Non-compliance with provider-based rules

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Hypothetical Relocation of an Imaging Center

Current imaging center is off-campus Lease is expiring in August 2016 Space is problematic (HVAC issues, no

sprinkler system, etc.)

Hospital purchases new off-campus site in March 2015; begins construction

Will use substantially the same equipment/personnel in the new space

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Hypothetical Relocation of an Imaging Center

What if the new imaging center would add PET/CT services?

What if the services stay the same, but the new space is 50% larger?

What if the current HOPD was located on the main hospital campus?

What if the hospital opened an outpatient infusion department in the old imaging department space?

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Acquisition of a Hospital (and its HOPDs)

Do the HOPDs continue to be grandfathered post-acquisition? Exception for “a department of a provider (as

[defined in 413.65(b)]) that was billing under this subsection with respect to covered OPD services furnished prior to the date of enactment of this paragraph”

Is assumption of the provider number necessary to continue grandfathering? Sufficient?

If grandfathering can survive an acquisition, due diligence re: provider-based status will be key

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CMS Guidance?

CMS will not offer any guidance until the OPPS proposed rule (mid-June or July) OPPS rule is typically finalized in

November In the interim, providers can educate

CMS by submitting scenarios via e-mail

Note, 2016 is a “grace” period; site-neutral payment is not implemented until January 1, 2017

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Further Congressional Action

Letter from Reps. Upton (House Energy and Commerce Committee Chairman) and Pitts (Health Subcommittee Chairman)

Invites comments from stakeholders on site-neutral payment policies and proposals

Emphasis on budget neutrality

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False Claims Act (FCA) Update

The FCA continues to be the government’s weapon of choice to enforce its anti-fraud efforts in healthcare

The FCA is a civil remedy used to recover money falsely claimed by government contractors, including health care providers

It may be enforced by private parties (whistleblowers) through it qui tam provisions

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Updates

In FY 2015, DOJ recovered over $1.9 billion in settlements and judgments from civil false claims cases involving the health care industry

Recoveries are less than last year due to fewer pharmaceutical cases ($96 million)

Hospitals involved in $330 million in settlements and judgments ($216 million from cardiac device settlement with nearly 500 hospitals in a qui tam case)

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Updates

Qui Tam Suits 80 percent of FCA recoveries involved

qui tam suits 638 qui tam suits filed in FY 2015 (health

care and non-health care) Increasing emphasis on Stark/AKS,

particularly in cases brought by the government

Ramp up of FCA suits against MA plans

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United Health Services v. U.S. ex rel. Escobar

FCA suit pending in the Supreme Court Focuses on implied false certification

theory Timeline Petition granted on Dec. 4, 2015 Oral arguments in late April Decision expected by the end of June

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Escobar—Questions Presented

Whether the “implied certification” theory of legal falsity under the FCA is viable;

If so, whether the implied certification theory of liability requires that the statute, regulation, or contractual provision violated expressly state that it is a condition of payment

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Statistical Sampling and Extrapolation

United States ex rel. Martin v. Life Care Centers of America Inc. (E.D. Tenn., Sep. 2014)

Court found sampling and extrapolation permissible to establish FCA liability Government sample of 400 admissions Arguing extrapolation to 54,396

additional admissions

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“Yates” Memorandum: Individual Liability

September 9, 2015 memo on “Individual Accountability for Corporate Wrongdoing”

Enhances focus on litigating claims against individuals Cooperation credit only where corporation

discloses relevant facts about individual misconduct

Investigate individuals at every stage Corporate settlements will no longer typically

include a release from liability for the corporation’s officers, directors, and employees

Look beyond individual’s ability to pay

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Questions?

Thank you

Patric HooperFounding PartnerHooper, Lundy & Bookman, PC(310) 551-8165phooper@health-law.com

Katrina A. PagonisSenior CounselHooper, Lundy & Bookman, PC(415) 875-8515kpagonis@health-law.com

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