Major Changes Announced Regarding Home Health Care and Other Long Term Providers Standards/Conditions of Participation

There have been two major changes announced by the federal government that affect Home Health Agencies (“HHAs”) and other Long Term Care Health Providers.  On October 6, 2014, President Obama signed into law the Improving Medicare Post-Acute Care Transformation Act of 2014 (“IMPACT Act of 2014”).   Concurrently, on the same day, the Centers for Medicare & Medicaid Services (“CMS”) issued a proposed rule to make changes to the Conditions of Participation for home health agencies (“HH-CoP”), which appeared in the Federal Register on October 9, 2014.

1.    
IMPACT ACT of 2014

The major provisions of the legislation was a Standardization of Post-Acute Data. CMS is going to require the standardization of assessment data for all post –acute care (“PAC”) providers.  The Act defines PAC Providers as HHAs, skilled nursing facilities (“SNFs”), Inpatient Rehabilitation Facilities (“IRFs”) and long-term care hospitals (“LTCHs”).  The Medicare Act is amended to add new Section 1899B.  The Act requires PAC providers to report standardized patient assessment data and requires PAC providers to report standardized quality measures and resource use measures. The Act also requires the Secretary of Health and Human Services (“HHS”, “Secretary”) to modify PAC assessment instruments to allow for the submission of standardized patient assessment data and to allow for comparison of such data across all such providers.

The IMPACT Act requires PAC providers to report standardized patient assessment data under the applicable reporting requirements by October 1, 2018 for SNFs, IRFs and LTCHs and by January 1, 2019 for HHAs.  At a minimum, the Secretary shall require reporting at times of admission and discharge.  The standardized patient assessment data shall include functional status, self-care at admission and PAC provider discharge, cognitive function and mental status, special services, medical condition, impairments, prior functioning levels, and other categories the Secretary deems appropriate and necessary.  By October 1, 2018 for SNFs, IRFs and LTCHs and by January 1, 2019 for HHAs, the Secretary shall ensure a match between the patient assessment data submission and any claims data that is also submitted for such patient.  The Secretary shall use the matched data to assess prior and concurrent service use and for any other appropriate purposes. 

The Secretary shall specify additional quality measures that PAC provides are required to submit under the applicable reporting provisions, starting on October 1, 2016 for SNFs, IRFs, and  for HHAs  on either January 1, 2017 or January 1, 2019 for five (5) quality domains: functional status and changes in function; skin integrity and changes in skin integrity; medication reconciliation; incidences of major falls and patient preference regarding treatment and discharge options.  By October 1, 2018 and by January 1, 2019 for HHAs, the Secretary shall create procedures for making available to the public information pertaining to individual PAC performance related to the resource use measures.
HHS has created payment consequences under the applicable reporting provisions.  In addition, HHS has created Hospice survey and certification requirements, requiring routine Hospice surveys at least once every three years, conducting focused medical review of Hospices with long stays (patients receiving care for more than 180 days) , and updated the Hospice payment cap, tying the hospice cap to the hospital market basket. 

2.     HH-C o Ps

The Proposed Rule would modernize Medicare HH-CoPs for the first time since 1989, to ensure safe delivery to the quality care to home health patients.  The proposed regulation emphasizes patient rights, improves the process of care planning delivery and coordination, streamlines regulatory requirements and encourages ongoing data-driven quality improved.  The revised CoPs would focus on patient outcomes, provide for continuous and ongoing quality assessment and performance improvements.  HHS will eliminate many of the process details from the current requirements that do not achieve predictability and ensure desire outcomes. For example, HHS will not incorporate any specific clinical practice guideline or professional standards of practice; rather the HHA would be responsible for identifying its own performance problems through a QAPI program addressing them and continuously striving to improve the quality of clinical care, patient outcomes and satisfaction, as well as efficiency and economy.  HHS will remove the requirements that the HHA send a summary of care to the attending physician at least once every 60 days, that the HHA have a group of professional personnel to advise its operation and that the HHA conduct a quarterly evaluation of its program via chart review.   Comments are due to CMS by December 9, 2014.   

Should you wish additional information or if you have questions regarding this article, please do not hesitate to contact Charles MacKelvie at (312) 235-1117 of Meghan McNab at (317) 808-5863.

Proposed Rule Revising the AKS Safe Harbors and CMP Rules

On October 3, 2014, the Department of Health and Human Services, Office of Inspector General (“OIG”) published a proposed rule amending the safe harbors to the anti-kickback statute (“AKS”) and the civil monetary penalty (“CMP”) rules.  

The AKS, authorizes penalties of up to five years in jail and $25,000 in fines, for individuals or entities that knowingly and willfully offer, pay, solicit, or receive remuneration in order to induce or reward the referral for individuals or entities that knowingly and willfully offer, pay, solicit, or receive remuneration in order to induce or reward the referral of business reimbursable under Federal health care programs. However, the statute and current regulations provide safe harbors that protect certain arrangements that might otherwise implicate the AKS, from penalty. The proposed rule adds the following safe harbors:
  • pharmacy waivers of cost-sharing for financially needy Medicare Part D beneficiaries;
  • waivers of cost-sharing for emergency ambulance services furnished by State- or municipality-owned ambulance services;
  • certain remuneration between Medicare Advantage organizations and federally qualified health centers (“FQHCs”);
  • discounts by manufacturers on drugs furnished to beneficiaries under the Medicare; Coverage Gap Discount Program; and
  • certain free or discounted local transportation services.
The proposed rule revises the definition of “remuneration” in the CMP regulations, adding the following statutory exceptions, which will allow these listed patient inducements to circumvent triggering a CMP:
  • copayment reductions for certain hospital outpatient department services;
  • certain remuneration that poses a low risk of harm and promotes access to care;
  • coupons, rebates, or other retailer reward programs that meet specified requirements;
  • certain remuneration to financially needy individuals; and
  • copayment waivers for the first fill of general drugs.
The proposed rule also codifies a gainsharing CMP provision as set forth in Social Security Act 1128A(b).

Comments on the proposed rule may be submitted until December 2, 2014, after which the OIG will review the comments, revise the rule as necessary and publish a final rule.
Should you wish additional information or if you have questions regarding this article, please do not hesitate to contact Meghan McNab at 317.808.5863 or Susan Ziel at 612.564.1927.

Physician Sunshine Act Payments Published by CMS

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This past week, the Centers for Medicare & Medicaid Services (“CMS”) opened up data that included direct or indirect payments to physicians and teaching hospitals from drug and device manufacturers to the public.   Some information is currently not included as it may have been excluded due to authenticity concerns. Additional data may still be in the process of being disputed. You can access all the data by clicking here. 

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.

Providers should review the data as soon as possible to ensure accuracy of these public payments.  To initiate disputes, providers must contact CMS by the end of the calendar year in which the data was reported.  For example, if a manufacturer reported payments to CMS on March 31, 2014, listed providers would have until December 31, 2014 to initiate a disput

If you have any questions regarding the dispute 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.


Recent Indiana Decision Regarding Non-Compete Clauses

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The Indiana Court of Appeals recently ruled that a liquidated damages provision in a non-competition agreement and concern for the public interest will not prevent a medical practice from obtaining a preliminary injunction against a former physician.  In Pinnacle Healthcare, LLC v. Sheets, a physician who had signed an employment agreement containing non-competition, non-solicitation, non-disparagement and liquidated damages provisions informed his practice employer of his intention to terminate his employment for cause based on the practice’s alleged failure to pay money owed to the physician.  The physician subsequently (i) filed a complaint against the practice for the amounts allegedly owed and sought a temporary restraining order and a preliminary injunction to prohibit the practice from enforcing the restrictive covenants, and (ii) opened a competing medical practice in the same building as the practice.  The practice then filed a counterclaim against the physician, including a preliminary injunction to enforce the restrictive covenants.

The Court of Appeals ruled that it was improper for the trial court to deny the practice’s motion for a preliminary injunction on the facts presented.  The Court made clear that the existence of a liquidated damages clause is not an admission of the adequacy of a legal remedy but, at most, is an alternative to equitable relief such as a preliminary injunction. 

The Court further stated that the public interest in community access to medical services and the opportunity for a patient to choose his or her own medical provider are insufficient, alone, to make a non-competition clause in a physician employment agreement unenforceable or prevent injunctive relief.  Of note, there was a shortage of medical care in the community in which the physician practiced, as both the physician and a nurse from a local hospital indicated there were no other physicians available to take care of the physician’s patients.
 
Parties entering into agreements with restrictive covenants should consider the following takeaways from the Court of Appeals decision:

·         A 25 mile radius for the non-competition restrictions was deemed enforceable.

·         Absent an exclusive remedy provision, a liquidated damages provision does not establish that monetary damages are adequate, thereby barring injunctive relief.

·         A lack of physicians in the area covered by a non-competition obligation is not a public policy concern sufficient to bar injunctive relief.

If you have any questions about this recent case or its implications for your contractual arrangements, please contact Brian Heaton at bheaton@kdlegal.com or (317) 238-6354, Michael Gaston-Bell at mgaston-bell@kdlegal.com or (317) 238-6331, or any other member of the Krieg DeVault Healthcare Practice Group.


Recent OIG Enforcement Actions Involving Excluded Individuals and Entities

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The Office of Inspector General (“OIG”) for the U.S. Department of Health and Human Services has the authority to exclude individuals and entities from Federal health care programs.  The OIG maintains a List of Excluded Individuals and Entities (“LEIE”) on its website which is updated on a regular basis. Please click here to access the list.

Any health care provider or supplier should query the LEIE before employing any individual, or alternatively, before contracting with any individual or entity,  so to ensure that the party is not listed in the LEIE.  During the course of these employment and contractual relationships, the provider or supplier should also take the steps necessary to update these LEIE queries on a regular basis in accordance with applicable requirements.  To do otherwise, leaves the provider or supplier at risk of an OIG enforcement action that could result in civil money penalties. 
We would like to bring to your attention three 2014 cases that were published on the OIG website which illustrate the importance of these requirements. Please click here for more information.
The first case involved a chain of senior living communities which settled a case with the OIG for $353,248.82 for allegedly employing two excluded individuals.   The second case involved a university-based health care system including four hospitals and 10 neighborhood health care centers which entered into a settlement agreement for $197,839.94 with the OIG, again for allegedly employing three excluded individuals.  The third case, involved a not-for-profit faith-based long-term-care organization which entered into a settlement agreement for $30,121.82 with the OIG for allegedly employing a single excluded individual. 
If you have questions regarding these enforcement actions, the OIG requirements, or the  adequacy of your current policies and procedures to address these requirements, please contact Susan Ziel at sziel@kdlegal.com.