Colorado Proposes Changes to General Licensure Rules Concerning Review and Approval of Quality Management Plans for Health Care Entities

By on August 18, 2014

The Health Facilities and Emergency Medical Services Division of the Colorado Department of Public Health and Environment (CDPHE) issued proposed amendments to its general licensure rules for health care entities on July 16, 2014.  The division plans to update its rules for the first time since the health facility quality management privilege, C.R.S. § 25-3-109, was enacted in 1988.  A rulemaking hearing is scheduled for Oct. 15, 2014.

The division is amending its regulations to strike language exempting certain health care entities from having a quality management plan, as the statute does not exempt any licensed health care entity from this requirement.  Thus, the proposed rule requires every health care entity licensed or certified by the CDPHE pursuant to C.R.S. § 25-1.5-103(1)(a) to establish a quality management program appropriate to the facility’s size and type that evaluates the quality of patient or resident care and safety.

In addition, the division is amending its rules regarding approval of quality management plans, stating that the current rule language is outdated and is being revised to align with the new health inspection process.  Thus, the proposed rule eliminates the requirement that facilities submit quality management plans for approval.  Instead, every health care entity that must have a quality management plan will be required to develop a quality management plan that shall be available to the CDPHE during the initial licensure survey and each re-licensure survey.  Significantly, the proposed regulations state that the plan for a health care entity’s quality management program shall be considered approved if the CDPHE does not cite any deficient practice related to it.  If the CDPHE finds that a quality management plan does not meet regulatory requirements, it will inform the facility of the specific reasons for disapproval and establish a reasonable date for resubmittal of a revised plan.

On a related note, the Colorado Supreme Court should issue a decision shortly under the former licensing rules.  In Simpson v. Cedar Springs Hospital, Inc., Colo. No. 2013 SA 124, a hospital challenged a trial court’s order to produce documents from its quality management meetings after the trial court found that a hospital had not implemented a quality manage­ment program approved by the CDPHE, such that its quality management materials were subject to the privilege created by C.R.S. § 25-3-109.  The trial court had rejected the hospital’s argument that the evidence that the CDPHE had licensed the hospital and renewed its license established that the hospital had an approved quality management program.

Health care facilities in Colorado should follow the CDPHE’s rulemaking as well as the Colorado Supreme Court’s decision in Simpson as they will provide important information about the scope and requirements of Colorado’s quality management privilege

Filed under Colorado Department of Public Health and Environment, General Licensure Rules, Health Care Entities, Quality Management Plans

CMS Plans to Expand Five-Star Rating System Beyond Nursing Homes

By on August 13, 2014

HC BLOG_five starsDr. Patrick Conway, a deputy administrator at the Centers for Medicare and Medicaid Services (CMS) announced on CMS’s blog in June that the agency plans to add a star rating system later in 2014 and early in 2015 for several other health care providers.  According to Conway, CMS plans to add a star rating system to the Hospital Compare, Dialysis Facility Compare, and Home Health Compare websites.  The Nursing Home Compare website already uses star ratings, and the Physician Compare website just started to include star ratings for certain physician group practices.

CMS launched the five-star system for nursing homes in December 2008.  The overall five-star rating for each nursing home is based upon the star ratings for three separate categories: 1) health inspections; 2) quality measures; and 3) staffing.  To determine a nursing home’s overall rating, CMS begins with the facility’s health inspection rating and then adds or subtracts “stars” depending on the facility’s staffing rating and its quality measures rating.  Thus, a facility’s overall rating is an aggregate of its scores in these three areas.

Although CMS intended that consumers use the five-star rating system to help them choose nursing homes, the system has been used beyond its intended purpose.  For example, in tort cases against a facility, attorneys for nursing home residents and/or family members frequently attempt to introduce into evidence the nursing home’s five-star rating.  It is possible that the same situation will occur with the five-star rating system CMS intends to launch for hospitals, dialysis facilities, and home health companies.  However, CMS never intended that the five-star nursing home rating system should serve as a standard of care.  In fact, CMS states that the quality measures (one of the components of the five-star rating) on Nursing Home Compare “[a]ren’t benchmarks, thresholds, guidelines, or standards of care, and aren’t appropriate for use in a lawsuit.”

Filed under Five-Star Rating System, Nursing Homes

Medicare Advantage Risk-Adjustment Fraud – Where’s the False Claim? (Part I)

By on August 11, 2014

I recently saw this article discussing a False Claims Act (FCA) case pending in federal district court in Florida.  The theory is an interesting one involving the Medicare Advantage program.  The full story is available here and here, but I’ll provide a brief synopsis.

In 2003, Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act (MMA), which required the Centers for Medicare and Medicaid Services (CMS) to initiate the formal implementation of a fully risk-adjusted capitation reimbursement model for Medicare Advantage.  Essentially, a risk-adjusted model recognizes that many Medicare Advantage beneficiaries experience health conditions that can be very costly, to the point where a single hospitalization can wipe out the entire amount of premiums the Medicare Advantage managed care organization received over the course of the year.  Therefore, it pays higher premiums for those beneficiaries who have been diagnosed with conditions that make them more likely to use significant health care resources over the course of the year (e.g., diabetics, people suffering renal failure, etc.).

You can see the potential for fraud and abuse.  If Medicare Advantage plans get paid more for covering high-risk beneficiaries, then they’ll have an incentive to exaggerate the poor health of their beneficiaries.  Doctors will err on the side of diagnosing their patients with the more serious conditions in borderline (and perhaps not-so-borderline) cases.  That’s what the plaintiff alleges the provider did in the case linked above (I won’t name the company, but you can click through).  In related news, CMS recently announced that it intends to scrutinize Medicare Advantage risk-adjustment data submitted by plans to ensure its accuracy, primarily in an attempt to deter this potential practice.

But there’s a problem from the government’s point of view.  Where’s the claim?  The FCA only covers false claims submitted to the government for payment, or false records or statements material to false claims.  It is not a general HC BLOG_HHSfraud statute.  And it is at least debatable whether a trumped up diagnosis submitted for risk-adjustment purposes falls within the “false claim” category.  Now, it’s probably inarguable that if a Medicare Advantage plan knowingly included false or exaggerated diagnosis data when it submitted its capitated reimbursement request, that conduct would be a false claim.  But that’s unlikely to happen.  Instead, the plans normally will just aggregate the data they receive from their doctors without investigating its accuracy (which would be impossible on any large scale).  And in the absence of any direct connection between the receipt of false data and the submission of the reimbursement request, it’s hard to cite any specific false claim.

Now, it’s important to note that the Department of Health and Human Services (HHS) rejects this analysis.  It takes the position that the FCA encompasses risk-adjustment fraud (see note 12 for FCA actions brought by HHS).  But all of the matters involving this theory have settled before a court can opine on the issue, so we have no judicial pronouncement on whether HHS’s interpretation is a viable one.

And there’s one more thing.  The Medicare Advantage program seems to be growing, despite cuts made in the Affordable Care Act (ACA).  (It is only used by 30 percent of the population eligible for Medicare, tallying about 15.7 million beneficiaries.)  But it is not the only federal health care program that uses a risk-adjustment model.  In fact, the ACA contains a virtually identical concept to help offset insurance plans that cover high-risk individuals through the state and federal insurance exchanges.  These plans theoretically will have the same incentive as the Medicare Advantage plans to exaggerate – or even lie about – their enrollees’ health conditions.  There is an important difference between the two risk-adjustment approaches though – how Congress has decided to treat them for FCA purposes.  That difference may be crucial to the question of whether and how false or exaggerated risk-adjustment data is covered by the ACA.  More on that in my next post.

Filed under Affordable Care Act, False Claims Act, Medicare Advantage Risk-Adjustment Fraud

Face-to-Face Documentation Remains Home Health Compliance Risk Area

By on August 6, 2014

The home health face-to-face documentation requirement remains a compliance risk area as evidenced by recent government activity.  The Patient Protection and Affordable Care Act changed the home health payment requirements as of Jan. 1, 2011, to require a physician or certain nonphysician practitioners to have and document a face-to-face encounter prior to certifying the patient’s eligibility for home health services.  42 C.F.R. § 424.22(a)(1)(v).  This requirement, which is a condition for payment, mandates that the face-to-face encounter occur within a certain timeframe and include an explanation of why the clinical findings support that the patient is homebound and needs intermittent skilled nursing services or therapy services.

In April 2014, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) studied compliance with the face-to-face documentation requirement for home health, concluding there was limited compliance with this requirement.  OIG, “Limited Compliance with Medicare’s Home Health Face-to-Face Documentation Requirements,” April 2014.  The OIG found that 32 percent of home health claims that required face-to-face encounters did not meet Medicare documentation requirements, resulting in $2 billion in payments that should not have been made.  The deficient claims had no face-to-face documentation or had face-to-face documentation that lacked at least one of the required elements.  The OIG also found that physicians were inconsistent in completing the narrative content on the face-to-face documentation, even though the Centers for Medicare and Medicaid Services (CMS) provided an example of how this can be accomplished in as little as three sentences.

On July 7, 2014, CMS issued a proposed rule modifying the face-to-face documentation requirement.  79 Fed. Reg. 38366 (July 7, 2014).  CMS proposed three changes to the face-to-face encounter requirements.

1) CMS proposes to eliminate the physician narrative requirement.  The physician would still certify that a face-to-face encounter occurred with a physician or allowed nonphysician practitioner.

2) CMS proposes that to determine whether the patient is or was eligible to receive Medicare home health services, CMS will review “only the medical record for the patient or the acute/post-acute care facility … used to support the physician’s certification of patient eligibility.”  If the patient’s medical record used by the physician to certify eligibility was not “sufficient” to demonstrate the patient was eligible to receive home health services, CMS will not pay for the services.

3) CMS proposes that physician claims for certification/re-certification of eligibility for home health services would not be covered if the home health agency’s claim was not covered because the patient was not eligible for home health services due to an incomplete certification/recertification or insufficient documentation.  This change will be implemented through subregulatory guidance.

Although CMS claims that the changes will simplify the face-to-face documentation requirement by eliminating the physician narrative, it also expects that there should be sufficient evidence in the patient’s medical record to demonstrate that the patient is eligible for the home health benefit.  However, to date, CMS has not provided guidance on what constitutes “sufficient” documentation.  The deadline to file comments to the proposed rule is 5 p.m. on Sept. 2, 2014.

Until a final rule is in effect, home health agencies must comply with the current regulatory requirements for face-to-face encounter documentation.  CMS has issued various documents that can assist in completing the face-to-face documentation, including a Medicare Learning Network (MLN) newsletter discussing the documentation requirements, as well as answers to 49 questions about the face-to-face encounter documentation requirements.  Home health agencies should review this guidance in conjunction with their policies and procedures to ensure compliance with the face-to-face documentation requirement.

Filed under Face-to-Face Documentation Requirements, Home Health Agencies

Eleventh Circuit Affirms Conviction Against Nursing Home Owner Brought Under Worthless-Services Theory

By on August 4, 2014

In United States v. Houser, No. 12-14302, June 24, 2014, the 11th U.S. Circuit Court of Appeals affirmed the conviction of a nursing home operator for conspiring with his wife to defraud the Medicare and Medicaid programs by billing for criminally worthless services, as well as for payroll tax fraud and failure to pay personal tax returns.

The trial court’s order of conviction states that the government proved beyond a reasonable doubt that three nursing facilities operated by the defendant submitted or caused to be submitted false or fraudulent claims to the Medicare and Medicaid programs for worthless services because the services were not provided, were deficient, inadequate, substandard, did not promote the maintenance or enhancement of the residents’ quality of health, and were of a quality that failed to meet professionally recognized standards of health care. The 11th Circuit adopted the trial court’s description of the nursing homes’ conditions as “barbaric” and “uncivilized.” According to the Department of Justice, this was the first conviction following a trial in federal court for submitting claims for worthless services.

On appeal, the 11th Circuit rejected the defendant’s argument that attaching the worthless-services concept used in civil actions on to the federal health care fraud statute makes the statute unconstitutionally vague because it is not possible to determine at what point health care services have crossed the line from bad to criminally worthless. While the appeals court did not endorse or adopt the worthless-services theory, it upheld the conviction because certain required services were not provided to residents at all.

This decision is noteworthy because it shows that the government will go to great lengths to prosecute quality of care cases, including developing new ways to prosecute health care fraud. This trend will likely continue, especially in light of the Department of Health & Human Services (HHS) Office of Inspector General (OIG) 2013 report identifying problems with the quality of care in nursing homes. OIG, “Skilled Nursing Facilities Often Fail to Meet Care Planning and Discharge Planning Requirements,” Feb. 2013.

Filed under Medicaid, Medicare, Nursing Homes, Worthless-Services Theory