Whistleblower Lawsuit Unsealed Alleging Stark Law Violations

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On April 19th, 2013 an Eastern District of Virginia court case was unsealed that alleged violations of the False Claims Act (“FCA”), Anti-Kickback Statute (“AKS”), and the Stark Law. In particular the Relator, or whistleblower, alleged that Bon Secours Health System and its hospital operated concierge program violated these laws. The Relator was an employee who had worked in this concierge program.  The program and the employees servicing the program performed certain work that previously had been done by physicians’ offices. For example the hospitals concierge program would schedule patients, obtain insurance pre-authorization, and collect copayments and deductibles.

Although the court granted the defendant's motion to dismiss the Relators complaint, the court did grant leave so the Relator could amend the complaint. This occurred because the Relator must allege with reliability that an actual false claim was submitted to the government. Nevertheless this is important because concierge services for referring physicians can be problematic under the AKS and the Stark Law. If these additional services do not serve as a benefit for the care provided by hospitals and only serve as a benefit for referring physicians and such programs may create risk for hospitals that provide such services to physicians.

If you have any questions about the Stark Law, the Anti-Kickback Statute, or this article, please feel free to contact Robert A. Wade at (574) 485-2002 or Alex T. Krouse at (574) 485-2003.

Additional Guidance from HHS on Third-Party Payment of Premiums and Cost Sharing of Marketplace Qualified Health Plan Enrollees

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On May 21, 2014, the Secretary of Health and Human Services (“HHS”), Kathleen Sebelius, published a letter to the American Hospital Association (“AHA”) (“HHS Letter”) in response to the AHA’s questions about qualified health plan (QHP) issuers accepting premium and cost-sharing payments from third-party payors.

This HHS Letter is an additional level of clarification in a series of various guidance documents issued by CMS in the past year on this subject matter.  Such past guidance includes:
  • an October 2013 letter to Representative Jim McDermott stating that QHPs that are offered through the Federally-facilitated Marketplaces (FFMs) are not considered “federal health care programs;”
  • a November 4, 2013 Frequently Asked Questions document expressing concern regarding hospitals, other health care providers, and other commercial entities payment of premiums and cost-sharing obligations on behalf of QHP enrollees in Marketplaces;
  • February 7, 2014  guidance clarifying the November 4th FAQ does not apply to payments for premiums and cost sharing made on behalf of QHP enrollees by Indian tribes, tribal organizations, urban Indian organizations, and state and federal government programs or grantees, and private, not-for-profit foundations, in certain circumstances; and
  • a March 19, 2014 interim final rule requiring issuers of QHPs to accept premium and cost-sharing payments made on behalf of enrollees by the Ryan White HIV/AIDS Program, other federal and state government programs that provide premium and cost sharing support for specific individuals, and Indian tribes, tribal organizations, and urban Indian organizations.

The HHS Letter states that third-party payments of premiums and cost sharing made on behalf of Marketplace QHP enrollees by private, not-for-profit foundations are not prohibited to the extent the payments are made in a manner consistent with the February 7, 2014 guidance.  The February 7, 2014 guidance allows payment to be made by private, not-for-profit foundations on behalf of QHP enrollees, if the QHP enrollees satisfy defined criteria based on financial status, and do not consider enrollees’ health status.  In addition, CMS expects that premium and cost-sharing payments cover the entire policy year.   In the HHS Letter, HHS then declined to issue any additional guidance in the area at that time.
For questions on this HHS Letter and previous guidance please contact Meghan McNab at mmcnab@kdlegal.com.

HHS Proposes a New Rule to Help Providers Make Use of Certified EHR Technology

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In the May 23, 2014 Federal Register, the United States Department of Health and Human Services published a May 20, 2014 Proposed Rule broadening the scope  whereby eligible professionals and hospitals, including critical access hospitals, may use certified electronic health record (“EHR”) technology  (“CEHRT”) to demonstrate meaningful use. The Proposed Rule, from the Centers for Medicare & Medicaid Services (“CMS”) and the Office of the National Coordinator for Health Information Technology (“ONC”), would also change the requirements for the reporting of clinical quality measures for 2014. 

The Proposed Rule was created to address stakeholder concern over the availability and access to the 2014 Edition CEHRT.  The Proposed Rule:
  • Extends Stage 2 meaningful use through 2016.
  • Begins Stage 2 meaning use in 2017;
  • Allows providers to use the 2011 Edition CEHRT or a combination or the 2011 and 2014 Edition
CEHRT for the EHR reporting in 2014 in order to meet the requirements of meaningful use for Medicare and Medicaid EHR Incentive Programs. Since the Incentive Program began in 2011, more than 370,000 professionals and hospitals nationwide have received an incentive payment.

Beginning in 2015, all eligible hospitals and professionals would still be required to report using the 2014 Edition CEHRT.

If you would like more information, please contact Charles F. MacKelvie.

CMS Revises Medicare Conditions of Participation

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The Centers for Medicare & Medicaid Services (CMS) published a final rule on May 12, 2014 which makes numerous modifications to the Medicare Conditions of Participation (COP)  governing hospitals and other Medicare certified suppliers, including but not limited to the following:    
  • In the case of hospitals,
    • CMS will no longer prohibit a multi-hospital system to establish a unified and integrated medical staff.  As an alternative, CMS will reinterpret the current COP to permit either a unique medical staff for each hospital, or a unified and integrated medical staff that is shared by multiple hospitals within a hospital system, but only if the arrangement complies with certain conditions that have been newly adopted by CMS.

    • CMS has deleted the COP that requires a member of the hospital’s medical staff to serve on the hospital’s governing body.  As an alternative, CMS has adopted a new COP that requires the governing body to directly and periodically consult with the individual responsible for the hospital’s organized medical staff or his/her designee.  In the case of a multi-hospital system that uses a single governing body to oversee its multiple hospitals, the COP requires the governing body to similarly consult with the individual responsible for the medical staff of each of the affiliated hospitals.
    • CMS has modified the medical staff COP to include, in accordance with state law, other categories of physicians and non-physician practitioners who are determined to be eligible for appointment by the hospital’s governing body.

    • CMS has modified the COP in order to permit hospitals to credential registered dietitians and other clinically qualified nutrition professionals who are qualified to prescribe diets for hospitalized patients. 
    • CMS has revised the hospital COP for outpatient services to permit practitioners not otherwise on the hospital’s medical staff to order outpatient services for their patients when authorized by the medical staff and permitted by state law. 
    • CMS has modified the nuclear medicine COP such that a pharmacist or physician will no longer required to be present and provide “direct” supervision during the delivery of off-hour nuclear medicine tests. 
    • CMS has reclassified the COP governing swing bed services as an optional service.
  • In the case of critical access hospitals,
    • CMS has deleted the COP that requires the critical access hospital to involve “at least one member who is not a member of the CAH staff” in the development of patient care policies.  CMS determined that this COP is no longer necessary and often represents an unnecessary burden.
    • CMS has revised the COP which requires a physician to be physically present for sufficient periods of time, at least once in every two (2) week period, except in extraordinary circumstances.  Instead, the physician presence will be required, depending on the needs of the facility and its patients.  CMS will similarly revise this COP as it applies to rural health clinics and federally qualified health centers.
  • In the case of ambulatory surgery centers, which are only permitted to perform limited radiological services integral to the performance of certain surgical procedures, CMS will no longer subject the ASC to hospital requirements for radiology services and instead, only apply those requirements specific to the procedures permitted in the ASC setting.
  • In the case of buildings containing long term care facilities, CMS recognizes that some facilities were not able to meet the August 13, 2013 deadline for automatic sprinkler systems.  So to permit continuing access to these facilities, particularly in the event of financial strain, CMS will permit facilities to apply for a deadline extension, not to exceed two (2) years with the possibility of an additional one (1) year extension, but only if certain conditions apply.   
Additionally, please note that these modifications become effective on July 11, 2014, except in the case of the modifications governing long term care facilities and the related automatic sprinkler system requirements, which became effective upon publication, on May 12, 2014.
For additional information, or to obtain a complete summary of all modifications, please consult the Federal Register at http://www.gpo.gov/fdsys/pkg/FR-2014-05-12/pdf/2014-10687.pdf or contact Susan Ziel at sziel@kdlegal.com or Alex Krouse at akrouse@kdlegal.com. 

Federal Court Rules That 340B Orphan Drug Rule Is Invalid

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On May 23, 2014, the United States District Court for the District of Columbia issued a decision invalidating a regulation addressing restrictions  on the purchase of orphan drugs through  the 340 B Drug Discount Program; the Court enjoined enforcement of the regulation.  The Court determined that the United States Department of Health and Human Services did not have (HHS) did not have rule making authority to issue the regulation. 

The regulation at issue, which became effective October 1, 2013, allowed rural referral centers (RRCs), sole community hospitals (SCHs), critical access hospitals (CAHs) and cancer hospitals to purchase organ drugs with 340B discounts when the drugs were being used for non-orphan designation.  HHS issued the regulation to clarify a provision in the 340B Statue that prohibits RRCs, SCHs, CAHs an cancer hospitals from purchasing “drugs designated…for a rare disease or condition” with 340B discounts. Federal law provides incentives to drug manufactures to develop drugs that are used to treat at least one rare disease or condition, or “orphan drugs”, although these drugs are usually also used to treat common illnesses. The reason they are deemed “orphan drugs” is because efforts to research , invest in and produce them would otherwise be abandoned if not for the incentives Congress has provided pharmaceutical manufacturers to do so.

The Pharmaceutical Research and Manufacturers Association of American (PhRMA), the plaintiff, argued that HHS did not have the authority to issue the regulation and that the language of the statutory prohibition restricted all 340B orphan drug  purchases, regardless of how the drug was being used.  The Court determined that Congress had not given HHS the broad rulemaking authority to issue prophylactic rules under the 340B Statute.  Instead, the Statue grants HHS the authority to issue rulemaking only with respect to : (1) the establishment of an administrative dispute resolution process; (2) the standards for calculating ceiling prices and (3) the imposition of civil monetary penalties.   Importantly, the Court did not state that HHS regulation contravened the language of the statutory orphan drug prohibition or that it was an unreasonable interpretation of that prohibition.  In setting June 13th date for HHS to submit supplemental briefs on the issue, the court left open the possibility that the regulation could be upheld an  interpretative rule.

It should be noted that HHS plans to issue 340B “mega-regs” in June to address the broad range of topics related to the 340B Program.  Many of the “meg-reg” topics are arguably outside the three areas that the Court identified are within HHS’ authority to issue regulations under the 340B Program.  

Three Hospital organizations filed amicus curiae briefs supporting the regulation.  They were the American Hospital Association, the Safety Net Hospitals for Pharmaceutical Access, American’s Essential Hospitals and the National Rural Health Association.

If you would like more information, please contact Charles F. MacKelvie.

Indiana Supreme Court Clarifies Requirement of “Immediate” Reporting in Cases of Suspected Child Abuse or Neglect

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In a split decision, the Indiana Supreme Court upheld the conviction of a high school principal who failed to immediately report allegations of child abuse after receiving information that a minor student had been raped by another student of the same age. The principal was convicted at the trial court level but the Court of Appeals overturned the conviction.  The Indiana Supreme Court reversed and ruled that the evidence was sufficient to show that the principal’s four (4) hour wait to call the child abuse hotline after learning of the alleged rape violated the statute requiring “immediate” reporting of child abuse.

The critical issue in this case was the court’s interpretation of “immediately” as it is used in Indiana Code Section 31-33-5-1.  Citing ordinary dictionary definitions and legislative intent, the Indiana Supreme Court conclude “immediately” means without any intermediate intervention or appreciable delay. In upholding the conviction, the Indiana Supreme Court evaluated (1) the identity of the person to whom the victim reports abuse; (2) the impact of any delay in reporting the abuse to the authorities might have on evidence of the alleged crime; (3) the length of time between the victim's report and the report to the authorities; and (4) the circumstances of any delay in reporting.  In support of its decision, the Indiana Supreme Court noted that although the principal began an investigation into the allegations, he also engaged in a number of other, unrelated, administrative activities prior to any report being made. 

This ruling has clear application beyond a school setting and impact those in the medical and mental health community who may become privy to this information during treatment with patients and clients.  While the desire to conduct a preliminary investigation into the veracity of reports or allegations of child abuse or neglect is understandable, those whose duty to report are trigged by receipt of this information delay making an immediate report at their own peril, even where an underlying crime may not ultimately be charged.

Smith v. State, 18S02-1304-CR-297, 2014 WL 1258337 (Ind. Mar. 27, 2014)

If you would like more information, please contact Joshua D. Hague.

Limited Liability for a “Responsible Party”

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The Indiana Court of Appeals (Hutchinson v. Trilogy Health Services, LLC, Case No. 30A01-1307-SC-316) recently ruled that an individual was not necessarily liable for the outstanding amount due from a nursing facility resident despite having signed an admission agreement with a responsible party/agent provision.  The Court discussed important factors affecting the use and enforceability of such provisions under Indiana law.


Patient was admitted to the Health Facility on November 11, 2011.  Upon admission, Patient’s Daughter signed the Health Facility’s Move-In Agreement (“Agreement”) as a “Responsible Party/Agent.”  The Agreement states that the resident shall provide the Health Facility with a written agreement that authorizes the Responsible Party/Agent to manage, use, control or access her income, financial accounts, etc.  The Agreement further states that the Responsible Party/Agent agrees to pay for the resident’s services and supplies provided by the Health Facility.  Further, the Responsible Party/Agent agrees to pay to the Health Facility the full amount of the resident’s income and resources that the Responsible Party/Agent controls or accesses. The Health Facility initiated a lawsuit against Patient and Daughter (collectively, “Defendants”) for payment of services rendered to Patient during her stay at the Health Facility.  During the trial, Daughter testified that she was not Patient’s power of attorney and had no authority to manage her funds.  The trial court entered judgment in favor of the Health Facility in the amount of $2,610.87, plus court costs.  Daughter  appealed the judgment to the Indiana Court of Appeals (“Court”).

Court’s Opinion
The Court acknowledged that Congress has imposed limitations on family members being financially responsible for a family member’s care, and cited federal Medicare/Medicaid regulations that prohibit a nursing facility from requiring a guaranty as a condition of admission to a nursing facility.  The Court further noted that resident rights advocates have argued that responsible party/agent provisions contradict the intent of the foregoing federal statutes and should be declared unenforceable under Indiana law.  However, the Court also noted that there are federal statutes that permit a nursing facility to “require an individual, who has legal access to a resident’s income or resources available to pay for care in the facility, to sign a contract (without incurring personal financial liability) to provide payment from the resident’s income or resources for such care.”  42 U.S.C. §§ 1395i-3(c)(5)(B)(ii), 1396r(c)(5)(B)(ii); 42 C.F.R. § 483.12(d)(2). The Court decided that it did not need to address the fundamental legality of responsible party/agent provisions.  Instead, the Court found that there was no evidence showing that Daughter had power of attorney or other authority to manage or control her mother’s assets, and the Health Facility did not have any documentation indicating that Patient had delegated such authority to her Daughter.

Considerations from Court’s Opinion
While the Court of Appeals overturned the county court’s decision on evidentiary grounds, it is noteworthy that the Court raised the issue of whether such responsible party provisions can be used in a manner comparable to a guaranty.  Further, the Court revealed an interest in scrutinizing such arrangements to make sure that the responsible party is fully informed of such potential exposure and has the requisite legal documentation to be held liable for a resident’s obligations.
If you have any questions about this recent case or its implications for your operations, please contact Stacy Long (slong@kdlegal.com), David Jose (djose@kdlegal.com), or any other member of the Krieg DeVault Healthcare Practice Group.                     

HIPAA Security Risk Assessments … Accurate, Up-To-Date and Documented?

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During 2014, two different audit programs conducted by the U.S. Department of Health and Human Services (“HHS”) will continue to focus on HIPAA security risk assessments. 

The first audit program, currently being conducted by HHS’ Centers for Medicare and Medicaid Services (“CMS”), concerns eligible hospitals and professionals who seek incentive payments for “meaningful use” of electronic health records under the EHR Incentive Program for Program Year 2013.  One of the “meaningful use” audit criteria for this Program Year requires documentary evidence that a security risk assessment or analysis was conducted to ensure the privacy and security of patients’ protected health information. 

The second audit program, to be conducted by HHS’ Office of Civil Rights (“OCR”), will concern both HIPAA Covered Entities and Business Associates and their compliance with HIPAA privacy and security requirements.  Evidence of security risk assessments will be critical to the OCR’s 2014 audit criteria.  

As a result of a collaborative effort by the OCR and HHS’ Office of the National Coordinator for Health Information Technology (“ONC”), a new security risk assessment tool has been published online at www.HealthIT.gov/security-risk-assessment.  Additional video and tutorial resources are also available.  These tools are available to assist HIPAA covered entities and business associates, and those covered entities seeking “meaningful use” incentive payments, to comply with the related HIPAA and Program Year 2013 requirements. 

Questions regarding these audit procedures or the conduct of a security risk assessment process should be directed to Susan Ziel at sziel@kdlegal.com or Meghan McNab at mmcnab@kdlegal.com.  

Minnesota Passes Law Permitting Independent Practice for Advanced Practice Nurses

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On May 13, 2014, Minnesota’s Governor Dayton signed a new law that allows advanced practice nurses to provide health care services to their patients without the need for a written collaborative practice agreement with one or more physicians.  The law will take effect January 1, 2015 and will apply to nurse midwives, nurse practitioners, clinical nurse specialists and registered nurse anesthetists.  New advanced practice nurse graduates will be required to work at least 2,080 hours in a hospital or collaborative clinic setting before they are eligible to qualify under the new law. 
Minnesota is the ninth state to make these changes which allow for independent practice and prescribing autonomy.

For additional information, contact Susan Ziel at sziel@kdlegal.com.  

OIG Proposed Rule Expands Civil Monetary Penalties

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This week, the Office of Inspector General (“OIG”) issued a proposed rule which would amend the Civil Monetary Penalties (“CMP”) law.  The OIG is authorized to seek CMPs for various violations such as submitting false or fraudulent claims or for Anti-Kickback Statute (“AKS”) violations.  The CMPs assessed range from $10,000 per improper claim to $50,000 for each improper violation of the AKS.
The revised regulations would allow for additional penalties for the following:

  • Timely access to records not granted to the OIG;

  • Ordering or prescribing covered services while excluded from a Federal program;
  • Making false statements, omissions, or misrepresentations in an enrollment application;
  • Failure to report and return overpayments; and
  • Making or using a false record or statement that is material to a false or fraudulent claim.
These changes stemmed from the authorities under the Affordable Care Act (“ACA”).  Since the enactment of the ACA, the government has increasingly focused on strengthening fraud and abuse regulations and increasing funding to deter fraud.  This change in regulations is one of the additional steps the government is taking in stepping up its efforts to deter fraud in healthcare.  Comments to the proposed rule must be submitted no later than July 11, 2014.
If you have any questions about the proposed CMPs or if you would like to submit a comment, please feel free to contact Robert A. Wade at (574) 485-2002 or Alex T. Krouse at (574) 485-2003.

New Medicaid Requirements will have significant effect on Nursing Homes & Home and Community Based Services Providers

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Effective June 1, 2014, the State of Indiana is changing the Medicaid eligibility/determination process.  Among other changes, Medicaid-eligible nursing home residents or those receiving Home and Community Based Services under a Medicaid waiver may have gross income up to $2,163.00 per month. Waiver recipients and nursing home residents with income exceeding the $2,163.00 limit must establish a valid Qualified Income Trust (“QIT”), also known as a “Miller trust”, to maintain Medicaid eligibility. Existing Medicaid members whose gross income exceeds the limit and who do not establish a Miller trust will lose their eligibility.  New applicants with gross income above the limit must establish a Miller trust before applying for Medicaid in order to be eligible.

What are the requirements for a Miller Trust?
  • A Miller trust is a legal arrangement which allows a Medicaid recipient to place a portion or all of his or her income into the trust and thereby exclude it from income for eligibility purposes.
  • Establishing a Miller trust requires completion of three steps.
    • Step 1 - Establish a valid Miller trust document.
    • Step 2 - Set up a bank account that will be the trust account.
    • Step 3 - Take action to deposit at least the portion of the gross income exceeding $2,163.00 into the trust account.
  • A Miller trust must be irrevocable.
  • The Miller trust must state that, upon the primary beneficiary’s death, the Indiana Family and Social Services Administration or its successor agency becomes beneficiary of any remaining trust property up to an amount equal to the total medical assistance paid on behalf of the primary beneficiary by the State of Indiana. 
Is a separate bank account required?
  • Not necessarily however best practice is to set this up as a separate account and only deposit the amount in excess of the $2,163. 
  • Only the beneficiary’s income can be deposited into the account.
  • The Miller trust may be emptied-out each month except for the minimum amount required to maintain the account.
What type of account should be used?
  • A no minimum, no fee account should be used.  However funds in the Miller trust may only be used for certain allowable expenses.
Who can serve as the trustee of the Miller Trust?
  • An attorney-in-fact, guardian or authorized representative are the most common choices to serve as the trustee. 
  • Some nursing homes are allowing a representative of the facility to serve as the trustee however note that a trustee is a fiduciary, who under the law has a special duty to the beneficiary of the trust. This duty is a strict duty. 
  • The resident may not be the trustee of the trust. 
Who can be the Settlor of the Miller Trust?
  • A Settlor is the person who creates the trust. The settlor can be the resident, a legal guardian or resident’s power of attorney if the granted the authority to establish trusts on the individual’s behalf.
  • Concerns regarding the unauthorized practice of law if the facility is filing out the Miller trust form and explaining the terms and process.
  • Incapacitated residents should already be under a guardianship. If not, the best course of action it to establish a guardianship so the guardian can appoint a trustee.  
Will all banks allow for the creation of a Miller Trust?
  • Unfortunately, not all banks are willing to create Miller Trusts. 
  • FSSA has indicated that the nursing home’s resident fund management system may be used to set up a Miller Trust. However special care should be used to not co-mingle these funds with other funds held on behalf of the resident.
FSSA Resources
Although FSSA notified those Medicaid recipients affected by this change, Providers were not copied on the notices. Therefore, it is recommended that Providers proactively inform their residents of the new requirements. According to FSSA, existing Medicaid recipients subject to the Miller Trust requirements will continue to be eligible for the month of June and beyond as long as all Miller trust materials are submitted by June 30, 2014.

For those Providers who serve beneficiaries that will subject to these new requirements, we recommend that you educate your key staff members on the Miller Trusts as well as the timing issues to minimize adverse Medicaid eligibility issues for your beneficiaries.  There are important operational considerations and best practices that can be established.  

Please contact Lori McLaughlin at lmclaughlin@kdlegal.com, Laura Bonadies at lbonadies@kdlegal.com or any member of the Krieg Devault Health Care Practice Group if you wish to schedule an in-service for your staff or need assistance in reviewing and updating your Medicaid protocols to incorporate the Miller Trust requirements.  

Federal Government Pursuing Physicians for Stark Law Violations

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In April, a physician-owned Ohio cardiology clinic agreed to pay $1 million to settle violations of the False Claims Act stemming from an arrangement with two local hospitals.  As a precursor to this settlement, in 2011 Ohio Valley Medical Center and East Ohio Regional Hospital agreed to pay $3.8 million to settle allegations that it violated the Stark Law.  These allegations involved the same cardiology clinic.  In the 2011 release by the Department of Justice, it was mentioned that “[p]hase two of the case involves pursuing the physicians involved and requiring that they return prohibited payments.”
Historically, the Federal government has only pursued hospitals in these types of arrangements involving the Stark Law because the hospital billed for and received reimbursement from the tainted referral.  However, the Stark Law also prohibits physicians who have a financial relationship with an entity from referring patients to that entity.  Each referral, unless an exception is met under the Stark Law, may be deemed by the government to be false and therefore a penalty may be required to be paid by the referring physician.  
Although most is still unknown regarding the cardiology clinic agreeing to pay $1 million, this settlement stands for the proposition that the Federal government may seek a financial penalty from physician groups in which egregious Stark Law violations have occurred. 

If you have any questions about this settlement, the Stark Law, or other healthcare issues, please feel free to contact Robert A. Wade at (574)-485-2002 or Alex T. Krouse at (574)-485-2003.

Proposed Coordinated Care Program for Medicaid Disabled Population

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On April 23, 2014, Joe Moser, the Indiana Medicaid Director, presented a new Coordinated Care Program for Indiana Medicaid’s Disabled Population (“Program”).  The new Program, a Medicaid managed care program for the Aged, Blind and Disabled (“ABD”) populations, arose from House Enrolled Act 1328 (2013), which required the FSSA (through the ABD Task Force) to report on managing Indiana Medicaid ABD enrollees.  FSSA and its ABD Task Force submitted a report to the Indiana General Assembly and will now implement risk-based managed care; care will be capitated and managed by managed care entities (MCEs), for the ABD population.

Currently the Medicaid enrollees who will be served by this Program are receiving their benefits under a fee-for-service (FFS) Medicaid program, with a voluntary Care Select program available to a subset of this population.   Under the new Program, Care Select will cease and certain disabled Medicaid enrollees will be served under a new managed care program. 

The State’s goals for the new Program are to: (1) improve care coordination across the healthcare delivery system; (2) promote preventive and holistic care addressing physical, behavioral, medical and social needs; (3) increase consumer engagement in the management and treatment of conditions; (4) improve quality of care and health outcomes; and (5) introduce greater accountability by health plans.

Enrollment for the Program is expected to equal 75,500.  The populations included in the Program will consist of:

  1. SSI recipients currently enrolled in Hoosier Healthwise (“HHW”) that will move into an ABD category effective June 1, 2014 due to the 1634 transition;
  2. Individuals age 16-64 who are working and disabled with income below 350% of the federal poverty level (M.E.D. Works Non-Dual);
  3. Individuals qualifying for Medicaid because of disability who have at least one chronic medical condition qualifying them for the current Care Select program;
  4. Individuals who will transition to full Medicaid eligibility with Indiana’s 1634 transition on June 1, 2014[1]; and
  5. Individuals qualifying for Medicaid because of disability and who reside in the community and are not enrolled in a Home and Community Based Services (“HCBS”) waiver.
Individuals dually eligible for Medicare and Medicaid, Institutionalized Individuals (Nursing Facilities and ICFs/IID), HCBS Waiver Enrollees, and Money Follows the Person Grant Enrollees will be excluded from the Program.  Other excluded populations are undocumented citizens eligible for emergency services only, wards, present and former foster care children, children receiving adoption assistance, the present Hoosier Healthwise and Healthy Indiana Plan populations, those in the Family Planning Eligibility Program, Breast and Cervical Care Program enrollees, and Medicare Savings Program enrollees.

The Program will provide primary care, acute care, prescription drug, behavioral health, emergency services, and transportation care, but will carve-out Medicaid Rehabilitation Option (MRO) services delivered by Indiana’s community mental health centers, 1915(i) HCBS offered through the Medicaid State plan, dental services, FirstSteps, and individualized education plans, which are care plans developed by schools for special needs students. 

FSSA released the Request for Information (RFI) related to the Program on April 15, 2014, and plans to issue a Request for Proposal (RFP) soon.  It is anticipated that the MCEs which currently have Medicaid managed care contracts with the State will respond: MDWise, Anthem and Managed Health Services, as well as new MCEs. The State plans to select the winning MCEs by fall, and hopes to begin Member Enrollment by January 1, 2015.  For more information on this Program see the attached presentation slides or contact Meghan McNab at mmcnab@kdlegal.com or Leah Mannweiler at lmannweiler@kdlegal.com.

Indiana was historically referred to as a “209(b)” state, which means that Indiana did not follow federal social security guidelines for Medicaid disability eligibility and instead applied stricter eligibility requirements. On June 1, 2014, Indiana is transitioning to a 1634 state, which means Indiana will follow the federal guidelines for Medicaid eligibility and any individual who receives Supplemental Security Income (SSI) will automatically qualify for Medicaid.  As part of the transition from a 209(b) state to a 1634 state, Indiana will no longer be required to operate a spend down program.

Unencrypted Laptops Stolen, Resulting in OCR Resolution Agreements Totaling $1,975,220

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On April 22, 2014, Health and Human Services’ Office of Civil Rights (OCR) published two additional Resolution Agreements which resolve potential HIPAA violations involving stolen laptops that contained protected health information but which were not encrypted.

The first Resolution Agreement concerns Concentra Health Services, a health care provider located in Springfield, Missouri (Concentra), which had an unencrypted laptop stolen from one of Concentra’s physical therapy centers during November 2011.  The second Resolution Agreement concerns QCA Health Plan, Inc. of Arkansas which had an unencrypted laptop stolen from a workforce member’s car.

A copy of both Resolution Agreements can be found on the OCR website at http://www.hhs.gov/ocr/privacy/hipaa/enforcement/examples/stolenlaptops-agreements.html.

Please be advised that if you or your organization qualifies as a HIPAA Covered Entity or Business Associate, it is essential that your HIPAA Security Risk Assessment, in addition to your HIPAA Policies and Procedures, are up-to-date, particularly in regard to the HIPAA security safeguards, including but not limited to encryption, that are necessary to protect laptops and other mobile devices from a Breach involving Unsecured PHI. 

If you have questions, please contact Susan Ziel at sziel@kdlegal.com.