Physician’s Practice Settles Stark Law Violation for $1.3M

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On August 14, 2014, the Department of Justice issued a press release stating it recently entered into a settlement agreement with Cardiovascular Specialists, P.C., d/b/a New York Heart Center of Syracuse, New York related to alleged Stark Law violations for over $1.3 million.  Specifically, the settlement resolves allegations that physician compensation may have been determined in a manner that took into account the volume or value of the physician’s referrals for nuclear scans and CT scans.  According to our research, the practice currently has ten (10) total physicians.

This is significant because the Stark Law prohibits physician practices from furnishing certain imaging, physical therapy, and other services that are ancillary to the physician’s core practice unless an exception is met.  In this settlement, the group offered imaging services in its office locations and allegedly the group’s physicians were being paid based off the volume of the referrals for those imaging services.  Such practice is prohibited under the Stark Law because practice groups must meet specific requirements from a compensation perspective to fit within an exception under the Stark Law.

If your physician group is offering durable medical equipment, physical therapy services, imaging services, or other designated health services and your group has questions regarding the Stark Law and appropriate compensation methodologies, please contact Robert A. Wade at (574) 485-2002 or Alex T. Krouse at (574) 485-2003.

Physician and Hospital Sunshine Act Review and Dispute Date Extended

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As we previously discussed here, soon all direct or indirect payments to physicians and teaching hospitals from drug and device manufacturers will be publicly available.   The Physician Payment Sunshine Act is a national transparency program in which certain manufacturers of drugs, devices, biologicals, and medical supplies and government purchasing organizations (“GPOs”) are required to disclose certain financial relationships with teaching hospitals and physicians.

As required under the Sunshine Act, manufacturers of covered products and entities under common ownership with those manufacturers must, on an annual basis, report payments or other transfers of value made to teaching hospitals and physicians. Further, GPOs are required to report payments or other transfers of value made to physician owners or investors.

Once the information has been submitted, teaching hospitals and physicians will have a period during which they can review and dispute the data.  Originally, the review and dispute period was to end on August 27, 2014.  However, this period has now been extended to September 8, 2014.  Further, once reviews and disputes have been made, a correction period will occur between September 9th and September 23rd.  All information will still be made public on September 30th, 2014 as previously stated by the Centers for Medicare & Medicaid Services.
It is imperative physicians and teaching hospitals take advantage of this extension to ensure accuracy of the data which will become publicly available on September 30th, 2014.  If you have any questions regarding the registration process or the compliance issues related to the Sunshine Act, feel free to contact Alex T. Krouse at (574) 485-2003 or Susan E. Ziel at (612) 564-1927.

CMS Issues Proposed HHA Rule

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On July 7, 2014, the Centers for Medicare and Medicaid Services (“CMS”) published a proposed rule in the Federal Register that updates the Home Health Prospective Payment System (HH-PPS) rates for calendar year (CY) 2015.  Additionally, the rule makes changes to the Medicare Conditions of Participation and imposes several other requirements for home health agencies (HHAs).  CMS believes the changes will foster greater efficiency, flexibility, payment accuracy and improved quality.  CMS estimates that approximately 3.5 million beneficiaries received home health services from nearly 12,000 home health agencies, costing Medicare approximately $18 million, in 2013.  CMS projects the Medicare payments to HHAs in CY 2015 will be reduced by 0.30 % or -$58 million.  CMS will accept changes until September 2, 2014. 

1.     Proposed Changes to Home Health PPS

The Affordable Care Act (“ACA”) requires that, beginning in CY 2014, CMS apply an adjustment to the national standardized 60-day episode rate and other applicable amounts to reflect factors such as changes in the number of visits in an episode, the mix of services in an episode, the level of intensity of services in an episode, the average cost of providing care per episode and other relevant factors. The proposed rule implements the second year of the four year phase-in of the rebasing adjustments to the national, standardized 60-day episode payment rate (there is an $80.95 reduction, as the proposed national standardized 60-day payment for CY 2015 is $2,922.76), the national visit rates (3.5% increase to CY 2010 amounts) and the Non-Routine Supplies (“NRS”) factor (2.82% reduction in the NRS conversion factor).  CMS also proposes to recalibrate the HH-PPS case-mix weights, change the wage index and adjust the home health market basket.  According to CMS, the proposed changes will decrease Medicare payments for freestanding HHAs by 0.3%, for facility-based HHAs by 0.4%, and for nonprofit HHAs by 0.6%.
2.     Proposed Changes to Face to Face Encounter Requirements

Following the successful lawsuit by the National Association for Home Care and Hospice (NAHC), CMS proposes three changes to the face to face (F2F) requirements for certification of a Medicare beneficiary’s eligibility for home health care.  The ACA mandates that the certifying physician or non-physician must have a F2F encounter with the beneficiary before they certify the beneficiary’s eligibility for the home health benefit. Current regulations require the encounter occur within 90 days before care begins or up to 30 days after care began.  The three changes are:

·         CMS will no longer require that the documentation of the F2F encounter include a narrative explaining why the encounter supports the patient being homebound and in need of skilled services.  However, the certifying physician still must document that the encounter occurred and date when it occurred.

·         CMS will only review documentation from the beneficiary’s certifying physician or discharging facility to determine initial home care eligibility.

·         If a patient is ineligible for covered services, CMS will consider the claim, despite the physician’s claim for certification or recertification of eligibility, to be a non-covered service.

CMS has clarified that a F2F encounter is required only for the physician’s certification and not for recertification of eligibility for subsequent episodes.  Moreover, the F2F encounter is required for certifications, rather than initial episodes, with a “certification being considered as any time a new start of care assessment is completed to initiate care.”

3.     Proposed Changes to Home Health Quality Reporting
CMS proposes a minimum threshold for the number of OASIS assessments an HHA must submit to CMS for quality reporting purposes as well as a condition of payment.  HHAs that do not submit quality measure data to CMS will see a two percent reduction in their annual payment update. Beginning in the reporting period July 1, 2015 through June 30, 2016, HHAs must submit OASIS assessments covering at least 70% of all patients and episodes of care (the minimum compliance threshold).  The threshold level will increase by 10% beginning on July 1, 2016 and another 10% on July 1, 2017, so that the threshold will be 90% by July 1, 2018.

4.     Proposed Changes to Conditions of Participation for Speech Language Pathologists

Under its proposed rule, CMS will tie the requirements for a qualified Speech Language Pathologist (SLP) to state licensure requirements.  If finalized, CMS would require a qualified SLP to have a masters or doctorate degree in speech language pathology and be licensed as an SLP in the state in which the SLP provides services. 

5.     Other Proposed Changes 

·         CMS proposes to simplify therapy reassessment timeframes by requiring therapy reassessments every 14 calendar days rather than before the 14th and 20th visits, as is current policy, and once every 30 calendar days.

·         CMS would like comments on a value-based purchasing model (“VBP”) for HHAs that CMS may test in CY 2016 in five to eight states.  The proposed model is based on the Hospital VBP Program and would offer greater potential benefits and risks to motivate HHAs to make substantive investments necessary to improve quality of care.

·         CMS proposes to limit the ability of an Administrative Law Judge, state hearing officer or higher administrative review authority to reduce to zero a civil monetary penalty imposed by CMS on an HHA if the reviewing authority finds that a basis for imposing the penalty exists.

·         As announced by the Secretary of HHS, CMS is expected to issue an interim final rule to require the use of ICD-10-CM beginning October 1, 2015.  Until that time, HHAs must use the ICD-9-CM diagnosis codes for their claims.

·         CMS is soliciting comments on coverage of home health services to patients with a primary diagnosis of diabetes, after commenting that CMS has concerns about the Medicare coverage of unnecessary home health care for diabetic patients. 

Should you have any questions regarding these proposed changes, please do not hesitate to contact Charles MacKelvie at (312) 235-1117 or or Meghan Linvill McNab at (317) 808-5863 or

CMS Extends Moratorium on New Home Health Agencies in Certain Geographic Areas

click here to learn more... Effective July 29, 2014, the Centers for Medicare & Medicaid Services (“CMS”) announced that it is issuing a six-month extension of its moratoria for newly enrolling home health agencies in specified geographic regions that will prohibit new provider and supplier applications in such areas. 

CMS has twice previously used this Affordable Care Act tool as part of its efforts to fight fraud, safeguard taxpayer dollars, and ensure access to care is not interrupted, and may continue to do so in the future.   The moratoria will not prevent existing providers and suppliers from continuing to deliver and bill for their services.  The moratorium extension does not extend nationally, but zeroes in on newly-enrolling home health agencies in the metropolitan areas of Chicago, Fort Lauderdale, Detroit, Dallas, Houston, and Miami.

An advanced copy of the Federal Register notice indicates that, according to CMS, “the extension is necessary because the significant potential for fraud, waste and abuse continues in these areas.”  A copy of the moratoria in the Federal Register may be accessed here.

Should you have any questions regarding the moratoria, please do not hesitate to contact Lori McLaughlin at (219) 227-6075 or