Health Reform Connect

Indiana DCS Residential Rate Review Requests Due Soon

Thursday, December 1, 2011 by Krieg DeVault LLP

For Indiana residential treatment providers who receive referrals from the Indiana Department of Child Services ("DCS"), it is important to know that deadlines are looming (if not already passed) to seek a rate review of the new rates DCS assigned to such providers for the 2012 calendar year. Residential providers have likely already received their rate letters, and depending on when those letters are dated, the providers may have only days left to request a rate review if they are unhappy with the new rate. Specifically, providers have 30 days from the date on the DCS rate letter to submit their review request.

Since DCS formulated the new rate-setting rules earlier this year, and since DCS issued their first round of rate letters for year 2012, Krieg DeVault has gained tremendous experience in drafting and submitting the necessary documentation in order to have a provider's rate reviewed, and to preserve their future appeal rights. If you would like assistance in requesting a review of your DCS rate, contact Kristen L. Gentry at 317-238-6288.

OIG: Physician/Lab Arrangement Could Implicate Health Care Fraud and Abuse Laws

Thursday, December 1, 2011 by Krieg DeVault LLP

In an Advisory Opinion issued on November 23, 2011, the Office of Inspector General ("OIG") stated that an arrangement involving a laboratory company and a physician's office could implicate the Anti-Kickback Statute ("AKS"), as it would not meet the requirements of any safe harbor. Specifically, the proposed arrangement would involve the laboratory company setting up an allergy testing lab on the physician's behalf, and on an exclusive basis with the physician. Under this arrangement, the laboratory company would provide the personnel working in the lab, and the physician would bill Federal health care and other third party payor programs for the lab services, and would then pay the laboratory company sixty percent (60%) of the physician's gross collections for the lab services. The OIG stated that because the compensation to be paid to the laboratory would not be fixed in advance of entering into the arrangement, the arrangement would not qualify under any AKS safe harbor.

The OIG voiced additional concern over potentially improper and abusive marketing activities that may occur under the arrangement in that the laboratory company would have access to the physician's patients' information, and would thereby have the opportunity to encourage the physician to order medically unnecessary tests. The OIG stated that this would be considered suspect marketing activity.

For more information on this article or the OIG Advisory Opinion, please contact Leigh Ann O'Neill at 317-238-6346.

Indiana DCS Publishes Residential Provider Manual

Tuesday, November 8, 2011 by Krieg DeVault LLP

Recently, the Indiana Department of Child Services ("DCS") published its Residential Treatment Service Provider Manual (the "Manual") which sets forth guidance on the new DCS rate-setting rules which apply to residential providers, and may significantly impact Indiana Medicaid providers. In particular, the Manual provides guidance on how residential providers must go about requesting a review of their new DCS residential rates. Letters recently went out to providers indicating what their future DCS rates will be, and if a provider disagrees with the rate, the provider has only thirty (30) days from the date of the letter to request a rate review. Importantly, the Manual sets out the following points:

The request for review is applicable when the provider believes that:

Errors have been made in the cost report submitted to the department, calculation of the rate, or the determination by the department of the reasonableness of any cost; or,
The determination of the rate by the department has an adverse impact on child welfare in Indiana and no other residential provider in the State of Indiana, or other licensed provider, can adequately address the adverse impact to child welfare in the State of Indiana.

The administrative review request must be submitted on the DCS form, Residential Treatment Services Provider and Child Placing Agency Rates Administrative Review Request (available here). The request must contain the following:

Identification of the current rate and approved new rate, as applicable to a specific program or service offered by the residential provider;
An updated or revised cost report for the applicable program or service, including an itemized statement of administrative and indirect costs that the residential provider considers allowable under the provisions of this rule;
A clear, concise statement of the reasons for the requested change; and
A detailed statement of related information in support of the change.

The DCS review of the rate will include at least three (3) representatives from DCS, with at least one (1) representative each being from Fiscal, Programs and Services, and Legal/Licensing. DCS will notify the provider of its decision on the administrative review within thirty (30) days of DCS’ receipt of the request for review. If DCS issues a decision approving the base rate, the provider may request an administrative appeal within fifteen (15) days of receipt of DCS’ notice of the administrative review decision.

The administrative appeal request must be submitted on the DCS form, Residential Treatment Services Provider and Child Placing Agency Rates Administrative Appeal Request (available here). An administrative appeal against DCS will be conducted under applicable provisions of the Administrative Orders and Procedures Act. The residential provider will have the burden of proving that, by a preponderance of the evidence, DCS’ decision following the administrative review was erroneous. Two (2) or more separate appeals with the same or substantially the same facts may be consolidated by the administrative law judge into one appeal. During the period of a review or an appeal, DCS will pay the rate stated in the most recent letter mailed to the provider. If a new rate is established during the review or appeal, the new rate will be applied retroactively to the effective date stated in the original rate notification letter. Any rates already paid will be adjusted up or down.

If you have questions regarding the Manual, or would like assistance with requesting a review of your DCS residential rate, please contact Leigh Ann Lauth O'Neill at 317-238-6346.

Accountable Care Organizations Final Rule Released

Friday, October 21, 2011 by Krieg DeVault LLP

On Thursday October 20, 2011, the Department of Health and Human Services released for public inspection the final rule implementing the Medicare Shared Savings Program for Accountable Care Organizations ("ACOs"), which originates under section 3022 of the Patient Protection and Affordable Care Act ("PPACA"). The proposed version of the rule was met with significant consternation on the part of the industry players who will likely form ACOs. There has been general agreement among the key stakeholders that the proposed rule was overly prescriptive and too burdensome. Due to that fact, many who submitted comments on the proposed rule suggested that an interim final rule be published before a final rule. While HHS states in the final rule that it attempted to reduce or eliminate burdensome and prescriptive requirements that may discourage participation in the Shared Savings Program, HHS declined to publish an interim final rule as it was apparently satisfied enough with the framework of the proposed rule such that an interim final rule was not merited.

The official version of the final rule will be published in the Federal Register on November 2, 2011, at which time it is expected that the Innovation Center will officially launch its Advance Payment Model program, which is aimed at determining if pre-payment of a portion of future shared savings might spur ACO participation. Information on the Advances Payment Model program can be found here.

For more information on the Final Rule, please contact one of our health care reform lawyers, Leigh Ann O'Neill or Tom Neal.

ASC Notice Rule Eased

Friday, October 21, 2011 by Krieg DeVault LLP

ASC Groups can rejoice in the recently posted Final Rule which eases the cumbersome requirements relating to patients' rights notices that were to be provided prior to the date of a patient's surgery. Under the original version of the patients' rights requirements under the Conditions for Coverage applicable to ASCs, the ASC was required to provide the patient with certain notices at least a full day before the date of the patient's surgical procedure. In reaction to significant backlash from the provider community, the Centers for Medicare and Medicaid Services ("CMS") provided a half-hearted exception to the rule only in instances where the patient's referral for the ASC services was given on the same day as the ASC service, and where delay in providing the service would adversely effect the patient's health. The Final Rule, which will be published in the Federal Register on October 24, 2011, provides significant flexibility with respect to this rule by further easing the patients' rights notice requirement by mandating that the notice simply be given "prior to the start of the surgical procedure."

If you have questions about this article, or about other ASC compliance requirements, please contact Leigh Ann Lauth O'Neill at 317-238-6346.

IOM Publishes Criteria for Essential Benefits Development

Wednesday, October 12, 2011 by Krieg DeVault LLP

As part of the Patient Protection and Affordable Care Act (PPACA), States are required to offer an Affordable Insurance Exchange (possibly run by State, or Federal government) by January 1, 2014. The Exchanges will offer health coverage to those who are eligible for the premium assistance for coverage under a “qualified health plan.” In order to be a “qualified health plan,” the Exchange plans must meet certain requirements, including covering “essential health benefits.” The actual statutory language of the PPACA requires the essential benefits include at least the following items and services:

• Ambulatory patient services

• Emergency services

• Hospitalization

• Maternity and newborn care

• Mental health and substance use disorder services, including behavioral health treatment

• Prescription drugs

• Rehabilitative and habilitative services and devices

• Laboratory services

• Preventive and wellness services and chronic disease management.

• Pediatric services, including oral and vision care.

However, when it comes to specific items and services that will be included in the definition of "essential health benefits," the Department of Health and Human Services is required to promulgate a rule. As one might imagine, this particular rule includes highly political issues, and it is speculated that a proposed rule may not be published until after the 2012 election.

Until then, HHS has requested the Institute of Medicine (IOM) to assist in this rulemaking process by proposing a set of criteria and methods that should be used in deciding what benefits are most important for coverage as essential health benefits. The IOM Released its report on Oct. 6, 2011: Essential Health Benefits: Balancing Coverage and Costs. In this report, the IOM recommended the following criteria to guide essential health benefit content on specific components:

• Be safe—expected benefits should be greater than expected harms.

• Be medically effective and supported by a sufficient evidence base, or in the absence of evidence on effectiveness, a credible standard of care is used.

• Demonstrate meaningful improvement in outcomes over current effective services/treatments.

• Be a medical service, not serving primarily a social or educational function.

• Be cost effective, so that the health gain for individual and population health is sufficient to justify the additional cost to taxpayers and consumers.

The IOM also suggested the following caveats:

• Failure to meet any of the criteria should result in exclusion or significant limits on coverage.

• Each component would still be subject to the criteria for assembling the aggregate EHB package.

• Inclusion does not mean that it is appropriate for every person to receive every component.

While the IOM's report does not shed enormous light on which items and services might ultimately be included as "essential health benefits," the direction the IOM has provided to HHS is useful. If you have questions regarding the IOM report, or other health reform issues, please contact one of our health reform lawyers, Leigh Ann O'Neill at 317-238-6346.

Increased FMAP Available for Non-Institutional Long Term Services

Friday, September 30, 2011 by Krieg DeVault LLP

The Centers for Medicare and Medicaid Services ("CMS") recently published a State Medicaid Director letter providing details on the State Balancing Incentive Payment Program funded by Section 10202 of the Patient Protection and Affordable Care Act ("PPACA"). Section 10202 provides for enhanced Federal Medical Assistance Percentage ("FMAP") payments (up to a 5% increase) to states that undertake to offer non-institutionally based long term services and supports. Specifically, the State Medicaid Director letter states that the increased FMAP is meant to "assist States in transforming their long-term care systems by improving systems performance and efficiency, creating tools to facilitate person-centered assessment and care-planning, as well as enhancing quality measurement and oversight." The long term service and supports encouraged by the increased funding include: Home and community-based services, Home health care services, Personal care services, PACE program services, and Self-directed personal assistance services.

Increased payments to states under this program will run from October 1, 2011 through September 30, 2015, and the total expenditures cannot exceed $3 billion. In order to obtain the increased FMAP rates, a State must apply for this program.

Further information on the requirements for the increase FMAP can be found in the Application. If you have any questions regarding this program, please contact Leigh Ann O'Neill at 317-238-6346.

Medicaid RAC Rule Finalized

Tuesday, September 20, 2011 by Krieg DeVault LLP

Section 6411 of the Patient Protection and Affordable Care Act (PPACA) expanded Federal efforts in the auditing and health care fraud arena by requiring that the Recovery Audit Contractor (RAC) program, which had previously only applied to Medicare, be applied to Medicaid as well. The Medicaid RAC programs will be operated by each individual State, but will be jointly funded by the State and the Federal government.

On September 16, 2001, the Centers for Medicare and Medicaid Services finalized the rule that will implement the health care fraud and abuse program. The Final Rule "provides guidance to States related to Federal/State funding of State start-up, operation and maintenance costs of Medicaid Recovery Audit Contractors (Medicaid RACs) and the payment methodology for State payments to Medicaid RACs." While the framework for the Medicaid RAC program was established in the corresponding proposed rule, the Final Rule sets forth the following important points:

States may exclude Medicaid managed care claims from review by Medicaid RACs
States must coordinate the recovery audit efforts of their Medicaid RACs with other auditing entities
States must set limits on the number and frequency of medical records to be reviewed by the Medicaid RACs subject to requests for exceptions made by the RACs
RACs must not review claims that are older than 3 years from the date of the claim, unless it receives approval from the State
RACs should not audit claims that have already been audited or that are currently being audited by another entity
If a provider appeals a Medicaid RAC overpayment determination and the determination is reversed, at any level, then the Medicaid RAC must return its contingency within a reasonable timeframe as prescribed by the State
States must adequately incentivize the detection of underpayments and States must notify providers of underpayments that are identified by the Medicaid RACs
States must provide appeal rights under State law or administrative procedures to Medicaid providers that seek review of an adverse Medicaid RAC determination

The Final Rule becomes effective on January 1, 2012.

For more information regarding the Medicaid RAC program and the Final Rule, please contact Leigh Ann O'Neill.

Obama Proposes Deficit Cuts: Includes Medicare and Medicaid Savings

Tuesday, September 20, 2011 by Krieg DeVault LLP

On September 19, 2011 the President proposed a plan that would include $320 billion in health care spending cuts. As part of the plan, the President proposes to cut Medicare spending by $248 billion and Medicaid spending by $72 billion over the next 10 years. While the President pledges not to cut benefits for individuals receiving Medicare and Medicaid assistance, the plan would affect the payments for drug companies, hospitals, nursing home facilities, and home health agencies. The plan would heighten efforts to curb fraud and abuse expenses, and the White House claims such efforts would be partially responsible for $224 billion in savings from reducing overpayments. Additionally, the plan would increase costs for new Medicare beneficiaries by imposing higher Part B deductibles and introducing cost-sharing for home health services.

A fact sheet on the deficit plan can be accessed here. For questions regarding the President's proposal, please contact Leigh Ann Lauth O'Neill at 317-238-6346.

HHS Announces $700 Million in Health Center Grants

Friday, September 9, 2011 by Krieg DeVault LLP

Today the Department of Health and Human Services (HHS) announced the availability of $700 million in grant funds authorized under the Patient Protection and Affordable Care Act (PPACA). The funding comes in two programs:

One makes $600 million available to "existing health centers across the country for longer-term projects to expand their facilities, hire more employees and serve more patients."
The other makes $100 million available and "emphasizes shorter-term projects and will provide [funding] to existing health centers to address immediate facility needs."

For more information on this funding opportunity, click here. Additionally, if you are interested in more information about other primary care grants and health care reform grants, please visit us at Health Reform Connect, or contact one of our health care reform lawyers, Leigh Ann O'Neill.

PPACA Payment Bundling Program Announced

Tuesday, August 23, 2011 by Krieg DeVault LLP

The Patient Protection and Affordable Care Act (PPACA) included multiple bundled payment provisions aimed at exploring health care payment reform options. Today, the Department of Health and Human Services (HHS) announced the first payment bundling program to be rolled out, called the Bundled Payments for Care Improvement initiative. The program will involve bundling payments to a group of providers who are involved in providing a patient with certain care necessary and related to a particular episode of care.

HHS is seeking applications for payment bundling programs, giving the applicants flexibility in determining which episodes of care and which services will be covered by the bundled payment. In order to apply, providers should start by visiting the Center for Medicare and Medicaid Innovation.

If you have questions about this article, or about the payment bundling program, please contact one of our health care reform lawyers, Leigh Ann O'Neill at 317-238-6346.

Final Rule to Impact Hospice and Long Term Care Payments

Tuesday, August 9, 2011 by Krieg DeVault LLP

On August 5, 2011, the Department of Health and Human Services published its Final Rule implementing section 3004 of the Patient Protection and Affordable Care Act ("PPACA"). The Final Rule will impact long term care rates. Specifically, this Section requires Long Term Care Hospitals (LTCHs), Inpatient Rehabilitation Hospitals (IRHs), and Hospice programs to submit certain quality measures information for rate year 2014 and subsequent rate years. Failure to submit the required information will result in a reduction, by 2%, of the annual update to a standard Federal Medicare rate for discharges applicable to LTCHs and IRHs, and an update to the annual Medicare market basket applicable to Hospice programs.

The Final Rule adopts the first of two quality measures that must be reported beginning in 2014:

(1) Urinary Catheter-Associated Urinary Tract Infections (CAUTI); and
(2) Pressure Ulcers that are New or Have Worsened.

Additionally, the Final Rule also discusses a third measure that HHS is currently developing and intends to propose to adopt for FY 2014 in future rulemaking. That measure will be the 30-day Comprehensive All-Cause Risk-Standardized Readmission Measure.

If you have questions about the Final Rule or other health care payment reform issues, please contact one of our health care reform lawyers, Leigh Ann O'Neill, or visit us at Health Reform Connect.

An Update on Reporting of Crimes in Long Term Care Facilities

Tuesday, August 2, 2011 by Krieg DeVault LLP

On June 17, 2011, the Centers for Medicare and Medicaid Services ("CMS") released Survey and Certification Memorandum 11-30-NH (the "Memorandum") (for a copy click: S&C 11-30-NH) that provides guidance to State Survey Agencies ("SSA"), the Indiana State Department of Health ("ISDH") in Indiana, regarding the reporting of reasonable suspicions of crimes in long term care facilities ("LTC") to the ISDH and a local law enforcement agency. For a general overview of the new reporting requirements, see related Krieg DeVault Health Care AlertFurther guidance to be published
CMS is expected issue additional guidance in the form of FAQs that will address some often asked questions about the implementation of the Memorandum. CMS is also expected to release a sample poster that LTCs may use for purposes of notifying individuals of their reporting obligations under the new requirements. Unfortunately, the CMS guidance is not expected to clarify certain grey areas of the reporting requirement such as what constitutes "reasonable suspicion" or who qualifies as a "contractor" of a LTC, which in turn requires that person (the contractor) to make a report if he or she forms a reasonable suspicion of a crime.
Indiana’s long term care trade associations, including the Indiana Health Care Association ("IHCA"), met the ISDH in mid-July to discuss the department’s implementation of the Memorandum. Due to the variety of questions that have been asked of the ISDH regarding implementation, the department intends to issue guidance regarding their enforcement of the new requirements. The ISDH is working on revisions to the Facility Incident Reporting Form in order to allow individuals (or facilities if making a group report; see Krieg DeVault Health Care Alert or the Memorandum regarding group reporting) to use that form when reporting reasonable suspicions of crimes to the ISDH.
Since the trade association with the ISDH in mid-July, the IHCA has followed-up with the ISDH to request specific items to be addressed in ISDH issued guidance. Such items include clarifying the definition of "crime" and "reasonable suspicion," clarifying when and on what basis LTCs can rely upon local law enforcement definitions/interpretations of "crime" and "reasonable suspicion," clarifying what documentation the ISDH will require LTCs to maintain in order to verify reports of crimes to local law enforcement, and an explanation on ISDH enforcement of alleged violations of the reporting requirement. While further guidance from the ISDH is expected, a timetable for such guidance has not yet been set.
The ISDH also recently had a meeting with the Indiana Attorney General’s ("AG") office to discuss in an attempt to gain the AG’s interest in clarifying ambiguities in the reporting requirement for Indiana’s providers. Attorneys General in other states have been interested in helping define ambiguities in the reporting requirement and assist with education of local law enforcement partners.
Lastly, both the IHCA and ISDH have reached out to the Indiana Sherriff’s Association and the Indiana Association of Chiefs of Police to alert their members to the new reporting requirement. Early communication with each of these law enforcement associations should help with the local understanding of the new reporting requirements. On August 1, 2011 the ISDH sent a letter to the above named law enforcement associations regarding the new reporting requirement (click here for a copy of the ISDH letter).
Recommendations
LTC facilities should immediately develop policies and procedures implementing the crimes reporting requirements. Though enforcement of the requirements is not expected to begin immediately, necessary drafting of policies, and training of covered individuals will take time.
Training of covered individuals (owners, operators, employees, managers, agents or contractors of the facility) regarding their individual duty under the requirement is critical. Each facility will want to be sure that each covered individual understands his/her responsibility, how to make a report, how to join a group report if a group report is being made, that the individual is are not to be retaliated against for making a report to the ISDH or local law enforcement and if retaliation occurs how the individual can make a report regarding such retaliation.
LTC facilities are encouraged to reach out to their local law enforcement agency, either the county sheriff or city/town police, as applicable, regarding communication of reports. Facilities should also consider engaging local law enforcement agencies further to request their assistance in helping training facility staff about what constitutes a "crime" and the concept of "reasonable suspicion."
If you have any questions about the crime reporting requirements, please contact Zach Cattell at 317-636-4341 or Leigh Ann O’Neill at 317-238-6346.

PT Billing for Medicare Home Health Patients

Monday, August 1, 2011 by Krieg DeVault LLP

When it comes to providing services to Medicare patients under the care of a home health aide agency, questions often arise as to who should be billed for the services. Chapter 10 of the Medicare Claims Processing Manual provides the answer. If a service provided to a home health patient is part of that patient's "plan of care," then typically, the payment is built into the prospective payment system rate paid to the home health agency. Therefore, if the service included in the plan of care was provided by someone outside of the home health agency, that provider should bill the home health agency for the service. If, however, the service was not included in the home health plan of care, then the provider is to bill Medicare separately. For instance, if physical therapy, occupational therapy, or speech pathology services are provided outside the home health plan of care, then the services are to be billed under the Medicare Physician Fee Schedule.

A couple of exceptions must be noted: the following services, although they may be included in the home health plan of care, are to be billed separately:

Osteoporosis drugs (although the cost of administration is within the PPS rate); and
Durable medical equipment, including prosthetics, orthotics, and oxygen

If you have any questions about home health agency billing, please contact Susan Ziel at 317-238-6244, or Leigh Ann O'Neill at 317-238-6346.

PPACA CO-OP Proposed Rule Published

Tuesday, July 26, 2011 by Krieg DeVault LLP

On July 20th, the Department of Health and Human Services published its proposed rule under section 1132 of the Patient Protection and Affordable Care Act ("PPACA") regarding the "Establishment of Consumer Operated and Oriented Plan (CO–OP) Program." It is the purpose of the CO-OP program to foster the creation of qualified nonprofit health insurance issuers to offer qualified health plans in the individual and small group markets in the States in which the issuers are licensed to offer such plans. Under this section the Secretary of the Department of Health and Human Services will provide loans and grants to persons wanting to establish a qualified nonprofit health insurance company that would offer qualified health plans. In awarding such grants and loans, the Secretary must: 2) take into account the recommendations of the advisory board established under this section; 2) give priority to applicants that will offer qualified health plans on a Statewide basis, will utilize integrated care models, and have significant private support; and 3) ensure that there is sufficient funding to establish at least 1 qualified nonprofit health insurance issuer in each State, except that this requirement shall prohibit the Secretary from funding the establishment of multiple qualified nonprofit health insurance issuers in any State if the funding is sufficient to do so.

For more information on the proposed rule, or anything relate to health care reform, please visit us at Health Reform Connect, or contact one of our health care reform lawyers, Leigh Ann O'Neill at 317-238-6346.

Nursing Home Facilities Demonstration on the Horizon

Tuesday, July 19, 2011 by Krieg DeVault LLP

The Centers for Medicare and Medicaid Services (CMS) recently announced that in the fall it will begin a demonstration project with interested long term nursing facilities, aimed at reducing the number of resident hospital admissions. The demonstration project comes on the heels of a recent study that showed that up to 40% of nursing facility resident hospital admissions were preventable.

"Starting this fall, CMS will competitively select independent organizations to partner with and implement evidence-based interventions at interested nursing facilities. These interventions could include using nurse practitioners in nursing facilities, supporting transitions between hospitals and nursing facilities, and implementing best practices to prevent falls, pressure ulcers, urinary tract infections, or other events that lead to poor health outcomes and expensive hospitalizations."

To learn more about the upcoming demonstration project, click here or contact one of our health care reform lawyers, Leigh Ann O'Neill at 317-238-6346.

First of Multiple Exchange Rules Published

Tuesday, July 19, 2011 by Krieg DeVault LLP

On July 15, 2011 the Department of Health and Human Services published the first of multiple proposed rules on the establishment of the Health Care Exchanges called for under the Patient Protection and Affordable Care Act (PPACA). This proposed rule does not discuss the much-awaited "essential benefits" that will be required of insurance plans that will participate in the Exchanges, but rather describes:

How States are to go about establishing their Exchange (if they elect to do so, rather than defer to the Federal government to operate an Exchange on their behalf);
Minimum requirements that health insurers must meet to participate in the Exchange and to offer qualified health plans (QHPs);
Basic standards that employers must meet to participate in the Small Business Health Options Program.

Click here to read the full version of the PPACA Proposed Rule, or contact one of our health care reform lawyers, Leigh Ann O'Neill for more information.

6th Circuit Upholds Individual Mandate

Tuesday, July 12, 2011 by Krieg DeVault LLP

In its opinion, published on June 29, 2011, the United States Court of Appeals for the Sixth Circuit upheld the Patient Protection and Affordable Care Act's ("PPACA") individual mandate provision. The Thomas More Law Center and four individual plaintiffs brought the case up on appeal from the lower District Court's decision which also upheld the individual mandate. The plaintiffs argued that the individual mandate provision was unconstitutional as an impermissible exercise of Congress' Commerce Clause power. The court disagreed, and held that:

"By regulating the practice of self-insuring for the cost of health care delivery, the minimum coverage provision is facially constitutional under the Commerce Clause for two independent reasons. First, the provision regulates economic activity that Congress had a rational basis to believe has substantial effects on interstate commerce. In addition, Congress had a rational basis to believe that the provision was essential to its larger economic scheme reforming the interstate markets in health care and health insurance."

The 6th Circuit's decision is only one of many more to come- at least three other circuit cases are pending- one each in the 3rd, 4th, and 11th Circuits.

If you would like more information on this decision or on health reform in general, contact one of our health care reform lawyers, Leigh Ann O'Neill, at 317-238-6346.

Reporting of Crimes in Long Term Care Facilities

Monday, July 11, 2011 by Krieg DeVault LLP

On June 17^th, 2011, the Centers for Medicare and Medicaid Services (“CMS”) released Survey and Certification Memorandum 11-30-NH (the “Memorandum”) (for a copy click: S&C 11-30-NH) that provides guidance to State Survey Agencies (“SSA") regarding the reporting of reasonable suspicions of crimes in long term care facilities (“LTC”), also known as the “Section 1150B requirements.” The requirement for covered individuals to report suspicions of crimes in LTCs to the SSA and at least one law enforcement agency, as well as requirements on LTCs to notify covered individuals of their duty to report, all stem from the Elder Justice Act that was part of the Patient Protection and Affordable Care Act ("PPACA").

The Memorandum has been long expected by the LTC industry and by SSAs and serves as the only official guidance from CMS on the suspicion of crimes reporting requirement. CMS acknowledges that there are “no CMS regulations that apply specifically to section 1150B [the "reporting requirements]” and the Memorandum serves to explain the requirements of the new law so that it is implemented without any delay that may be caused due to the rule-making process. CMS notes further guidance will be released that addresses implementation of the Civil Monetary Penalty component of the Section 1150B requirements.

The reporting law applies to all LTC facilities that received at least $10,000 in annual federal funds during the preceding year. The Memorandum specifies that the reporting obligation applies to Nursing Facilities, Skilled Nursing Facilities, hospices that provide services in long-term care facilities and ICFs/MR. Based on the Memorandum it does not appear that CMS has interpreted Section 1150B to apply to assisted living facilities receiving Medicaid waiver funds. Under the new law, a covered long term care facility must:

1. Determine each year whether it received at least $10,000 in Federal funds in the preceding year;

2. Annually notify all covered individuals of the individual’s reporting obligation (covered individuals are owners, operators, employees, managers, agents or contractors of the facility);

3. Post a notice in appropriate and conspicuous locations for employees that details employees’ rights, including information on how to file a complaint with the SSA if an employee is retaliated against for making a report to the SSA pursuant to the reporting requirement;

4. Not retaliate against a covered individual who lawfully reports a reasonable suspicion of a crime under Section 1150B.

The Memorandum then goes on to discuss functions that will be executed by “[a] facility that effectively implements section 1150B,” which are:

1. Coordination with State and local law enforcement to determine what actions are considered crimes;

2. Review existing facility policies and procedures to ensure compliance with existing CMS and State requirements for reporting incidents and complaints (i.e. policies and procedures in place for reporting of abuse, neglect or misappropriation of resident property); and

3. Develop and maintain policies and procedures to ensure compliance with Section 1150B.

Civil Monetary Penalty and exclusion sanctions may apply to individuals who fail to comply with the reporting requirements, to LTC facilities that retaliate against an employee who makes a lawful report, and LTC facilities are ineligible to receive Federal funds for any period they employ an excluded individual due to certain violations of the new law.

Covered individuals (owners, operators, employees, managers, agents or contractors of the facility) are required to report reasonable suspicions of crimes to the SSA and at least one local law enforcement agency. The required reporting time period depends on whether the reasonable suspicion was based on events that result in serious bodily injury; these suspicions must be reported immediately and no later than 2 hours after the suspicion was formed. All other events giving rise to a reasonable suspicion of a crime must be reported no later than 24 hours after the suspicion was formed.

While each covered individual has the right and duty to report to the SSA and at least one local law enforcement agency, multiple covered individuals may file a single report that includes information about the suspected crime from each covered individual. Each covered individual that joins a multiple-person report should be specifically identified. A multiple-person report may be further supplemented with additional information should additional covered individuals become aware of the incident or events giving rise to a reasonable suspicion of a crime. Thought the multiple-person reporting mechanism may be instituted by a facility, a facility may not prohibit an individual from directly reporting to the SSA or a local law enforcement agency.

The Memorandum also provides SSAs with guidance on distinguishing between types of allegations that it may receive from covered individual reports. The allegation categories specified by CMS are (1) Events Giving Rise to a Suspected Crime; (2) Allegations of Individual Failure to Report; and (3) Allegations of Facility Failure to Comply with Section 1150B. In each case, if an SSA receives a report that falls into any of the above three categories, the SSA must assess the reported information and investigate based upon existing CMS policies and procedures for addressing complaints or incidents. Any deficiency citations issued will be ones that are currently specified in existing CMS regulations and guidance.

For example, the Memorandum states that an allegation that a covered individual did not report or were not informed of their duty to report could lead to a F226 tag (failure to develop and/or implement policies and procedures for reporting abuse/neglect) or an F493 tag (failure to develop and/or implement policies and procedures regarding management and operation of the facility).

The Memorandum expressly states that SSAs are to focus on “(a) the events giving rise to the reports made under this [Section 1150B] requirement and (b) the LTC facility’s responsibilities under existing CMS conditions and requirements to report incidents, prevent abuse or neglect, provide quality care and a safe environment, train staff, and similar duties of direct relevance to safety and quality of care.”

If you have questions about the Memorandum, or any other long term care law or issues, please contact Zach Cattell at zcattell@ihca.org or 317-616-9001 or Leigh Ann O'Neill at 317-238-6346.

Bed-Hold Policies: What is required of Indiana’s Long Term Care Facilities?

Monday, July 11, 2011 by Krieg DeVault LLP

Questions remain frequent among long term care providers in Indiana regarding facility-level impacts of the decision by the Indiana Office of Medicaid Policy and Planning (“OMPP”) to eliminate reimbursement for bed-hold days. The elimination of reimbursement for bed-holds was effective February 1, 2011 (For a copy of this bulletin, click here), and the Indiana Medicaid State Plan will be amended in the coming months to finalize elimination of reimbursement. OMPP has also posted, and periodically updated, a news summary on www.IndianaMedicaid.com that discusses the impact of the reimbursement changes on Indiana’s long term care facilities and their residents (Click here for the news summary).

More recently, requirements for long term care facilities to maintain updated bed-hold policies were discussed during a panel presentation at the 2011 Indiana Health Care Association's ("IHCA") Convention & Expo in May. In addition to the above OMPP-issued materials, the IHCA offers the following points for long term care facilities when developing bed-hold policies.

· Facilities must have a bed-hold policy that states whether or not the facility allows a resident to pay to hold a bed during a leave of absence

o Though facilities are not required to allow a resident to pay to hold a bed, facilities must still have a policy that states whether or not payment for holding a bed is permitted by the facility

· The duration of the bed-hold period must be clearly stated in the facility policy

· Bed-hold policies should state that Indiana Medicaid does not reimburse for bed-holds

· Payment by residents for bed-holds must follow applicable Medicare and Medicaid guidelines regarding billing for non-covered services

· Charges for bed-holds should be set at fair market value and must be equally applied to all residents regardless of payor source

o Facilities may be at risk for Anti-Kickback violations related to improper inducements to government program beneficiaries if charges for bed-holds are not fair market value and equal application of those charges are not maintained. However, an exception to the Anti-Kickback statute may apply in certain circumstances for bed-hold charges that are unable to be collected. This exception depends on certain elements regarding facility advertisements, other relevant services and financial need of the resident.

· If a resident on leave is expected to return to the facility, regardless of whether they have paid to hold a bed, the facility is not required to discharge the resident

· If a resident is discharged from a facility, however, the facility must permit the resident to return to the first available semi-private bed when (i) the resident continues to qualify for Medicaid, (ii) the resident requires nursing-level care and (iii) the facility is able to provide appropriate care for the resident.

o A resident may be discharged from the facility for many reasons including, but not limited to, the resident’s failure to pay for a bed-hold or when the bed-hold period expires. Facilities must follow applicable regulations and procedures when discharging a resident.

If you have questions about this article or about bed hold policies, please contact Zach Cattell at zcattell@ihca.org or 317-616-9001 or Leigh Ann O'Neill at 317-238-6346. .