Legal Insights and Perspectives for the Healthcare Industry

We hope you were able to join us for last month's Fast Break on the Physician Fee Schedule proposed rule. If not, you missed a great session featuring Eric Knickrehm discussing the important changes the proposed rule would have on Medicare Part B. 

Eric provided an overview of the most important aspects of the proposed rule, which was published on August 4, 2019. A number of these changes highlight CMS's increasing emphasis on preventive and low acuity care. For instance, CMS has continued to incentivize Transitional Care Management services and Chronic Care Management services to ensure that patients who were either recently hospitalized or are very likely to be hospitalized have effective care management to avoid further hospitalization.

We address more than a dozen key proposals from the CMS outpatient prospective payment system (OPPS) and ambulatory surgical center payment systems proposed rule in a recent LawFlash. Chief among them is the agency’s bold new proposal for a broad price transparency program. Other notable proposals include continuing payment reductions for 340B drugs and grandfathered off-campus provider-based departments, both the subject of pending litigation in federal court. CMS is soliciting public input on a multitude of proposals from this rule, and comments are due September 27, 2019. Hospitals will want to carefully assess these changes and consider submitting comments before these proposals become final rules.

Read the full LawFlash > >

Two OIG inspection reports detailing the results of onsite hospice surveys during a five-year period ending three years ago in 2016 build on the body of hospice industry evaluations conducted by the OIG, garnering significant negative press attention. Many in the hospice industry believe the OIG reports lack balance and focus excessively on the negative findings associated with a small minority of hospices. In light of CMS’s concurrent initiative to put “patients over paperwork” and reduce regulatory burdens on providers, OIG’s call for enhanced regulatory oversight and expanded reporting requirements for hospice may strike some industry watchers as out of step with the administration’s efforts to reduce unnecessary red tape, but OIG sticks to its watchdog role.

Read the LawFlash

For those providers—and there are more than a few—that believe the administrative and regulatory burdens associated with participating in the Medicare and Medicaid programs negatively affect their ability to furnish high-quality, cost-effective healthcare, now is the time to make your voice heard! On June 11, the Centers for Medicare & Medicaid Services (CMS) and the US Department of Treasury released a request for information (RFI) on Reducing Administrative Burden to Put Patients Over Paperwork. The RFI invites patients, their families, the medical community, and other healthcare stakeholders to submit comments on how CMS can reduce administrative, regulatory, and subregulatory burdens on providers. The goal of the initiative is to clear away needlessly complex, outdated, or duplicative requirements, allowing practitioners to spend more time with patients and less time on cutting through the red tape.

In CMS’s continuing effort to take “a strategic approach to protecting taxpayer dollars and reducing regulation to put patients over paperwork,” Administrator Seema Verma recently highlighted changes to the Recovery Audit Program that are intended to make the program more provider friendly. Recovery Audit Contractors (RACs) review payments made to healthcare providers under Medicare Fee-for-Service plans. RACs have been controversial among providers due to concerns about their accuracy. In addition, although they are charged with identifying both overpayments and underpayments, unlike UPICs and MACs, RACs receive a percentage of the overpayments they recover, which historically has caused some disgruntled providers to characterize RACs as “bounty hunters” that are less concerned with program integrity than with their own bottom lines. Administrator Verma acknowledges that CMS has received many complaints in the past from providers that have found the audits to be time consuming and expensive.

In an opinion of significant importance to the administration of the Medicare program, the US Supreme Court issued a 7–1 decision requiring the Centers for Medicare & Medicaid Services (CMS) to follow notice and comment rulemaking when adopting a “statement of policy” that establishes or changes a “substantive legal standard.” The near unanimous Court[1] upheld the DC Circuit Court’s decision in Allina Health Services v. Price, 863 F.3d 937, 939 (DC Cir. 2017), which highlighted an important distinction between Medicare Act and Administrative Procedure Act (APA) rulemaking requirements.

The APA establishes a statutory exemption from notice and comment rulemaking procedures in the case of “interpretive rules, general statements of policy . . . or agency . . . practice.” 5 USC § 553(b)(A) (emphasis added). CMS relied on an assumption that this “interpretive rule exception” applied to the policy it adopted in order to include Medicare Part C patient days in the Medicare fraction of the payment formula used to calculate the qualification for, and amount of, the Medicare disproportionate share hospital (DSH) payment adjustment. The policy resulted in the reduction of Medicare DSH payments for hospitals until 2013, when the agency furnished notice and comment. Like the DC Circuit, the Supreme Court rejected the government’s argument that the Medicare Act rulemaking requirement in 42 USC § 1395hh(a)(2) implicitly incorporated a similar interpretive rule exception permitting such a policy.

Healthcare partners Al Shay and Howard Young and associate Jake Harper recently contributed to the Health Care Compliance Legal Issues Manual, a publication by the American Health Lawyers Association (AHLA).

The latest edition of AHLA’s Health Care Compliance Legal Issues Manual gives readers an up-to-date look at issues critical to healthcare compliance, including tips for conducting internal investigations; audit basics; overviews of the False Claims Act, Stark Law, and Anti-Kickback Statute; healthcare privacy; and more.

CMS finalized a rule last month that will significantly expand access to telehealth services for patients in Medicare Advantage plans. Implementing provisions of the Bipartisan Budget Act of 2018 (BiBA), the new rule will allow patients to (finally) receive healthcare services from the comfort of their homes. According to CMS Administrator Seema Verma, “With these new telehealth benefits, Medicare Advantage enrollees will be able to access the latest technology and have greater access to telehealth.”

We're excited to introduce Tele-Tuesdays, a new feature on Health Law Scan where we'll bring you the latest updates in the world of telehealth legal issues. From new regulations and legislation to enforcement actions and changes in the telehealth landscape, we'll cover it all.

Federally, telehealth continues to be a central feature of the government’s efforts to expand access and control soaring healthcare costs. Just last week, CMS finalized its rules implementing the Bipartisan Budget Act of 2018, which will increase flexibility for Medicare Advantage (MA) plans offering telehealth services irrespective of whether a patient is in a rural or urban area. Right now, MA plans are working feverishly to redesign their telehealth benefits in anticipation of plan year 2020. Providers interested in offering telehealth services should assess their current MA contracts and consider engaging with plans to make sure their telehealth services are covered. According to Kaiser Family Foundation, MA plans now cover 34% of Medicare beneficiaries, so this will be a momentous occasion in the expansion of telehealth coverage. And should the results of this expansion be as favorable as anticipated, expect future legislation that will expand telehealth to all Medicare beneficiaries, whether enrolled in MA plans or in Original Medicare.

The Centers for Medicare & Medicaid Services (CMS) published a proposed rule on March 4 to help patients more easily access their complete health information in interoperable forms across programs that CMS administers (the Interoperability Rule). In the rule’s preamble, CMS lays out a vision of an environment in which a patient’s health information can move seamlessly between health plans, providers, and post-acute care settings. CMS observes that while adoption of electronic health records (EHRs) by healthcare providers has been significant, progress on interoperability needs to be accelerated. The Interoperability Rule fact sheet is available here. While there are several new proposals and requests for information in the 71-page document, this post provides an overview of two of the Interoperability Rule’s proposals.