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Recent Compliance Developments You Should Know About

on Thursday, 18 August 2016 in Health Law Advisory: Zachary J. Buxton, Editor

1. Check out the OIG’s 2016 Mid-Year Work Plan update that lists items that have been completed , postponed or cancelled and adds new items that have been added to the Work Plan since October 2016. http://oig.hhs.gov/reports-and-publications/workplan/index.asp

2. Is the demise of provider based status coming? CMS and the OIG have long had concerns about the higher payments allowed under a provider-based designation and has periodically issued clarifications, guidance and regulations in order to establish closer controls over this type of payment. Most recently, the Bipartisan Budget Act of 2015 eliminated higher payment for new off-campus provider-based facilities, but existing facilities continue to receive the higher payment which can be as much as 50% higher than that received by freestanding counterparts.

The OIG recently conducted a study of a random sample of 333 hospitals to determine the number of provider-based facilities that they operated. As a next step, the OIG looked at supporting documentation for sample of 50 hospitals that owned provider-based facilities that had not completed a voluntary attestation that provider-based requirements were being met for these facilities. The OIG analyzed compliance of the off-campus provider-based facilities owned by these 50 hospitals as well as gathering and analyzing information from CMS about its oversight of the facilities. The results of the study were that generally, due to the voluntary aspect of the attestation process, CMS does not have accurate information about provider-based facilities or compliance with provider-based requirements.

Analysis of compliance by the facilities reviewed indicated that a number of provider-based requirements were not met, likely resulting in improper payments. The OIG noted the challenges faced by CMS in overseeing provider-based compliance and payments as well as stating a concern that there is insufficient evidence that services in provider-based facilities provide identifiable additional benefits that warrant the added cost to Medicare and program beneficiaries.

3. There may be an end (somewhere) in sight for the long backlogs in the Medicare appeal process. There has been a years-long backlog in cases seeking an administrative Law Judge (ALJ) hearing. DHHS has proposed a rule that is open to comment until August 29th that outlines proposals to resolve the issue. In addition to requesting additional resources at all levels of appeal, and seeking legislative reforms, (both requiring Congressional approval), the rule proposes several procedural changes that would not require statutory changes:

–Select decisions by the Medicare Appeals Council would be binding on CMS and all CMS contractors and thereby precedential. However, the Departmental Appeals Board Chair would be given discretion to designate which Council decisions would be binding and precedential. Such decisions will be published in the Federal Register and also posted to the DHHS website.

–A new category of decision-making would be added. Senior attorneys would be designated as “Attorney Adjudicators” for the purpose of making decisions in cases where appeals do not require an ALJ hearing. The parties would waive their right to a hearing in favor of a more expedient decision-making process.

–The calculation of the amount in controversy would be simplified by mandating the use of the Medicare allowable amount. In cases where a post-payment denial and recoupment demand specifies the amount—the amount stated in the demand will define the amount in controversy.

–Other proposed procedural improvements include setting limits on the number of government entities that can participate in the hearings and the establishment of adjudication time frames.

Julie A. Knutson

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