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Monday, August 30, 2010

CCH® Reimbursement Integrated Library
The Reimbursement Integrated Library delivers the key performance indicators for maximizing reimbursement. The Library includes three invaluable titles:
  • Dennis Barry's Reimbursement Advisor - This monthly newsletter provides all the facts about reimbursement strategies to minimize the adverse effects of DRGs, RBRVs, APCs and capitation to optimize hospital reimbursement.
  • Receivables Report - This monthly newsletter includes actual profit-improvement examples from facilities nationwide, secrets for successfully challenging denials, tips for using automation to increase cash flow, and strategies your colleagues are using now to prepare for health care reform.
  • Hospital Accounts Receivable Analysis - This quarterly journal is a synopsis of statistical data related to hospital receivables.

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Reimbursement Integrated Library

Reimbursement Advisor

Dennis Barry’s Reimbursement Advisor

September 2010, Vol. 26, No. 1

In the September 2010 issue of Dennis Barry’s Reimbursement Advisor, authors examine highlights of the most recent report on the recovery audit contractor (RAC) program, a Provider Reimbursement Review Board (PRRB) decision on reopening of untimely RAC denials, Medicare conditions of participation and verbal orders, Medicare payment errors and resident counts under the Patient Protection and Affordable Care Act (PPACA).
  • Providers rack up RAC wins:
    CMS reports 64% of RAC appeals decided in providers’ favor. The most recent update on the RAC program reveals that providers are winning appeals more often than not. According to a June 2010 report by the Centers for Medicare and Medicaid Services (CMS), 64.4% of providers have won their appeals of RAC denials, or nearly double the rate of success noted in an earlier report. In this article, authors highlight outcomes of RAC appeals outlined in the most recent CMS evaluation of the RAC program.

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    • October 2010 highlights --- Among the articles coming in the October 2010 issue:

    • a recent PRRB decision that highlights the need to submit all claims with cost reports, and
    • CMS action to reduce timely filing deadline as mandated by PPACA.

Read this month's Advisor on IRN. Subscribers only

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Receivables Report

Receivables Report

September 2010, Volume 25, No. 9

  • Operating Like a Business
    Over the years, industry experts have advised hospitals to treat their operations more “like a business” in terms of managing patient accounts. Along those lines, we provide a turnaround story about a health system that began to do just that—and achieved success. To find out what they did and how, read the profile in the September Receivables Report.

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    • Read this month's Advisor on IRN. Subscribers only

    Read this month's Advisor on IntelliConnect. Subscribers only

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    HARA

    Hospital Accounts Receivable Analysis

    1st Quarter 2010, vol. 24, no. 2
    • GDRO Improves
      Hospitals responding to the HARA survey kept with tradition in delivering solid GDRO performance in the first quarter of a new year. Nationally, the GDRO average improved to 42.39 days in first quarter 2010, a 5.53-day improvement from the fourth quarter 2009 GDRO average of 47.92 days. The HARA Report breaks it all down for you.
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    Headlines
    from Medicare and Medicaid Guide

    Medical equipment supplier protections strengthened

    Another step to increase protections for Medicare and beneficiaries from potentially fraudulent suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) has been implemented by CMS. The new regulation will enhance Medicare enrollment requirements for DMEPOS suppliers by adding new standards and strengthening existing standards. These new and stronger standards are designed to reduce fraud and provide additional assurance that beneficiaries are being served by legitimate suppliers.

    New standards

    The Final rule will: (1) require suppliers to obtain oxygen from a state-licensed oxygen supplier; (2) require suppliers to remain open to the public for at least 30 hours a week, with exceptions for physicians or licensed non-physician practitioners furnishing services to their own patient(s) as part of their professional service, and suppliers working with custom made orthotics and prosthetics; (3) ensure that suppliers continue to maintain ordering and referring documentation from physicians or non-physician practitioners; and (4) prohibit suppliers from sharing a practice location with certain other Medicare providers and suppliers subject to certain exceptions.

    Existing standards

    The Final rule will revise existing supplier standards to ensure that the supplier: (1) maintains a physical facility on an appropriate site that measures at least 200 square feet (except for state-licensed orthotic and prosthetic personnel providing custom fabricated orthotics or prosthetics in private practice); (2) be in a location that is accessible to the public (i.e., Medicare beneficiaries, CMS, the National Supplier Clearinghouse (NSC), and its agents) and not in a gated community or other area where access is restricted; (3) be accessible and staffed during posted hours of operation; (4) maintain a permanent visible sign in plain view and post hours of operation; and (5) be in a location that contains space for storing business records, including the supplier’s delivery, maintenance, and beneficiary communication records.

    The use of cell phones, beeper numbers and pagers as a primary business telephone number also will be prohibited under the Final rule. In addition, answering machines and answering services may not be used exclusively as a supplier’s primary telephone number during posted business hours.

    The existing prohibition on a supplier’s telephone solicitation of a Medicare beneficiary will be expanded to include in-person contacts, e-mails, instant messaging and Internet coercive advertising.

    Full text of the Final rule will be provided in Report No. 1626 under ¶181,081.

    Final Rule, 75 FR 52629, August 26, 2010.

    HHS expands coverage of tobacco cessation counseling

    Medicare coverage has been expanded by HHS to include evidence-based tobacco cessation counseling. Previously, Medicare had covered tobacco counseling only for individuals diagnosed with a recognized tobacco-related disease or showed signs or symptoms of such a disease. Under the new coverage, any smoker covered by Medicare will be able to receive tobacco cessation counseling from a qualified physician or other Medicare-recognized practitioner. In addition, all beneficiaries will continue to have access to smoking-cessation prescription medication through the Medicare prescription drug program (Part D).

    The new benefit will cover two individual tobacco cessation counseling attempts per year, with each attempt including up to four sessions, with a total annual benefit of eight sessions per Medicare patient. This final coverage decision will apply to services under Parts A and B of Medicare and does not change the existing policies for Part D, or any state-level policies for Medicaid or the Children’s Health Insurance Program.

    HHS plans to issue guidance shortly regarding the new benefit for pregnant women to receive Medicaid-covered tobacco cessation counseling. This new Patient Protection and Affordable Care Act (PPACA) (P.L. 111-152) benefit, requires states to make coverage available to pregnant Medicaid beneficiaries by October 1, 2010.

    Also under PPACA, effective January 1, 2011, Medicare will cover other preventive care services, such as certain colorectal cancer screening and mammograms at no cost to beneficiaries. PPACA also gives beneficiaries access to a no-cost annual physical exam so they can partner with their doctors to develop and update personal prevention plans, which will be based on their current health needs and risk factors.

    HHS Press Release, August 25, 2010.

    CMS issues reminder on testing transaction standards

    CMS has issued a reminder to health care providers, health plans, clearinghouses, and vendors that beginning in January 2011, entities covered under the Health Insurance Portability and Accountability Act (HIPAA) should be ready to test with their trading partners the functionality of the entities’ practice management and/or other related software featuring Accredited Standards Committee X12 Technical Reports Type 3, Version 005010 (Version 5010) electronic health care transaction standards. Use of the Version 5010 standards for HIPAA electronic health care transactions, including claims, remittance advice, eligibility inquiries, referral authorization, and other administrative transactions, will be mandatory on January 1, 2012.

    The Version 5010 standards also provide the framework needed for use of the revised medical data code sets (ICD-10-CM and ICD-10-PCS), that must be implemented on October 1, 2013.

    The greatly expanded ICD-10 code sets will support quality reporting, pay-for-performance, bio-surveillance, and other critical activities, and provide terminology for use of electronic health records (EHRs). The ICD-10 code sets will also link to the standards and certification criteria for demonstrating “meaningful use” of certified EHR technology under the EHR incentive program.

    In addition, use of the National Council for Prescription Drug Programs (NCPDP) Version D.0 standard for retail pharmacy transactions, and NCPDP Version 3.0, the standard for the Medicaid pharmacy subrogation transaction, also must be implemented on January 1, 2012. Small health plans, however, have an additional year and must be compliant with Version 3.0 on January 1, 2013.

    CMS Press Release, August 24, 2010.

    Provider subject to recoupment for false enrollment application

    The HHS Secretary properly held that payments to a Medicare services provider that had falsified its Medicare enrollment application were an overpayment subject to recoupment. The president and majority owner of the provider was a physician who had previously been convicted for committing a Medicare-related crime and was excluded from the Medicare program. In a letter to the physician, the HHS Secretary advised that the physician would receive no Medicare payment for any items or service that he furnished, ordered, or prescribed, and that payment would not be made to any entity in which he served or owned in any capacity for any services.

    When the office manager of the provider submitted a Medicare provider/supplier enrollment application to CMS, he failed to disclose the physician’s controlling ownership interest and position in the business. The office manager and the physician later pleaded guilty to making a misrepresentation in a Medicare enrollment application in violation of 18 U.S.C. §1001. Subsequently, CMS notified the provider that it was overpaid by $311,263.13 because the physician was excluded and acted as the majority owner of the business.

    Mandatory exclusion

    Contrary to CMS’s argument, the terms of the HHS Secretary’s letter to the physician did not exclude the provider from the program under the mandatory exclusion provisions of Soc. Sec. Act §1128(a). The provider had not been convicted of any relevant offense and was therefore not covered under those provisions.

    Instead, as an entity controlled by a sanctioned individual, the provider was covered by the permissive exclusion provision under Soc. Sec. Act §1128(b). The physician never personally furnished any Medicare services for the provider nor did he wholly own the provider. Therefore, the terms of the HHS Secretary’s exclusion letter did not cover any payments to the provider.

    Misrepresentations in enrollment application

    Under Soc. Sec. Act §1124A(a), no payment may be made for items or services furnished by any disclosing Part B provider unless the provider has provided the HHS Secretary with full and complete information. Therefore, it was permissible to conclude that the provider’s misrepresentations in its enrollment application automatically excluded it from the Medicare program and that payments to the provider were subject to recoupment.

    Florida Med Center of Clearwater, Inc. v. Sebelius, 11th Cir., August 19, 2010, ¶303,522.

    Hospitals’ psychiatric units not subject to reimbursement cap

    The district court erred in upholding CMS’ interpretation of 42 C.F.R. §413.40(c)(4) when calculating the reimbursement amount for costs incurred by several acute-care hospitals’ psychiatric units in fiscal years (FYs) 2003, 2004, and 2005 by basing reimbursement on capped amounts rather than reasonable costs.

    Capped reimbursement scheme

    Under the Balanced Budget Act of 1997 (BBA) (P.L. 105-33), the hospitals’ psychiatric units were subject to a capped reimbursement scheme, which imposed a ceiling on the reimbursement amount the hospitals could receive. The BBA cap scheme expired in 2002 under the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act (BBRA) (P.L. 106-113). Beginning at the end of the cap period in 2003, the BBRA directed CMS to make payments for inpatient hospital services furnished by psychiatric units in accordance with the prospective payment system. CMS did not, however, implement this directive until 2005.

    In 2003, the hospitals submitted their reimbursement requests to the fiscal intermediary (FI) based on reasonable cost under 42 C.F.R. §413.40(c)(4)(iii)(A). The FI rejected those figures and calculated reimbursement based on the capped amounts from 2002 pursuant to 45 C.F.R. §413.40(c)(4)(ii). The hospitals disputed this calculation and argued that the FI’s calculation extended the BBA cap provisions beyond the 2002 expiration date.

    Reasonable costs

    The Fifth Circuit held that Soc. Sec. Act §1886(b)(3)(A) was ambiguous on the issue of calculating hospital reimbursement in FYs 2003 through 2005. Congress did not specify how CMS was to calculate reimbursements after the expiration of the caps, and no prospective payment system was in place. In light of the statute’s ambiguity, CMS’ regulations were entitled to deference.

    CMS’ interpretation of its own regulation, however, was contrary to the text of the regulation and, therefore, not entitled to deference. Contrary to CMS’ argument, the only provision in effect after 2002 was 42 C.F.R. §413.40(c)(4)(iii)(A), which required CMS to base the hospitals’ reimbursement amounts on their reasonable costs. Accordingly, the hospitals’ psychiatric units’ reimbursements in FYs 2003 through 2005 should not have been based on the capped reimbursement amounts, as CMS had argued.

    Hardy Wilson Memorial Hospital v. Sebelius, 5th Cir., August 19, 2010, ¶303,524.
    Decisions and Developments
    CMS Manuals

    New Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) specialty code for ocularists

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 2030, August 20, 2010, ¶159,218.

    Clarification on beneficiary-submitted claims to Carriers or A/B MACs

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 2031, August 20, 2010, ¶159,219.

    End Stage Renal Disease (ESRD) Prospective Payment System (PPS) and consolidated billing for limited Part B services

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 2033, August 20, 2010, ¶159,220.

    Medicare contractors required to provide notification to State Medicaid Plan or Child Health Plan regarding Medicare revocations

    Medicare Program Integrity Manual, Pub. 100-08, Transmittal No. 350, August 20, 2010, ¶159,221.

    Discarded drugs and biological policy at contractor discretion

    One-Time Notification Manual, Pub. 100-20, Transmittal No. 758, August 20, 2010, ¶159,222.

    Deactivation letters for the Fiscal Intermediary Standard System (FISS)

    One-Time Notification Manual, Pub. 100-20, Transmittal No. 759, August 20, 2010, ¶159,223.

    Revisions to Change Request (CR) 5949: Integrated Data Repository (IDR) claims sourcing from shared systems implementation based on conference calls and further research

    One-Time Notification Manual, Pub. 100-20, Transmittal No. 761, August 20, 2010, ¶159,224.

    Additional conference call and research hours in support of CR 5949

    One-Time Notification Manual, Pub. 100-20, Transmittal No. 762, August 20, 2010, ¶159,225.
    DAB Decisions

    CPR and smoking hazard

    CMS reasonably imposed civil monetary penalties and a denial of payment for new admissions (DPNA) on a skilled nursing facility (SNF) for its failure to substantially comply with program participation requirements to provide necessary care and services to maintain a resident’s well-being and to ensure that the environment was free of accident hazards. The SNF violated 42 C.F.R. §483.25 when staff members did not check a resident’s airway or immediately begin CPR, as required by the SNF’s own internal policy upon discovering that the resident was not breathing, had no pulse, had dilated pupils, and was cold to the touch. Two staff members were found not to be properly trained in CPR, and when CPR was finally administered, a staff member’s technique had to be corrected. The SNF violated 42 C.F.R. §483.25(h) when it permitted a resident with a documented history of risky cigarette smoking behavior to store matches and a cigarette lighter in his room, which he used to set fire to his bedding. Although the SNF contended that it could not foresee that the resident’s possession of smoking materials would cause an accident, the evidence showed that the SNF had performed an assessment that identified the hazards posed by allowing the resident to possess the materials and to smoke without supervision. The SNF had adopted interventions to address these concerns, but never provided staff with the necessary instructions to implement them. Given the SNF’s history of noncompliance and repetitive serious deficiencies, and the fact that both of these residents suffered actual harm, the per instance civil money penalty of $3,000 per violation, which is in the lower half of the range permitted, and the imposition of a DPNA are reasonable.

    Country Villa Watsonville East Nursing Center v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-08-662, Dec. No. CR2181, August 18, 2010, ¶122,259.

    Effective date of provider enrollment

    A physician unsuccessfully requested a hearing to change the effective date of his participation in Medicare after he requested the hearing 29 days after the 60 day filing deadline expired. Although the physician was given the opportunity to show good cause for an extension of the 60 day deadline, his response stated that he was not aware the time limit applied to him and he erroneously assumed an appeal of an effective date could be filed at any time, which is not an adequate demonstration of good cause.

    Bautista v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-10-781, Dec. No. CR2185, July 16, 2010, ¶122,262.

    Effective date of provider enrollment

    A physician’s reconsideration request on the effective date of his enrollment was remanded to CMS for development of the record and a determination based on the facts. CMS had granted him an effective enrollment date of May 18, 2009, but the physician asserted that he was a Medicare contracted provider required to re-enroll in the program, and that he began this process in 2007. He alleged that, due to miscommunication with the Medicare contractor and extreme difficulty in connecting with knowledgable contractor staff, his application form for re-enrollment was mailed back and forth between his office and the contractor’s several times. The date the CMS contractor received the physician’s application is integral to the correct determination of the physician’s effective date for Medicare billing privileges as found in 42 C.F.R. §424.520. CMS failed to document the date of receipt of the physician’s enrollment application and failed to explain how the contractor determined that May 18, 2009, was the effective date of enrollment. CMS’ failure to obtain a proper date of receipt is particularly egregious because it is the sole basis for CMS’ argument and for the contractor’s determination of the effective date. Furthermore, neither the reconsideration decision or CMS’ motions and supporting memorandums provide any argument or explanation in response to the physician’s account of the events.

    Hirasuna v. CMS, HHS Departmental Appeals Board, Doc. No. C-10-459, Dec. No. CR2176, July 7, 2010, ¶122,255.

    Effective date of provider enrollment

    CMS properly determined that a physician’s date of enrollment was July 8, 2009, and she was allowed to bill for services during a retroactive period beginning on June 8, 2009. The evidence supported a finding that a physician’s application received by the Medicare contractor in November 2008 did not contain a signed certification section, and the physician did not prove that a signed complete approvable application was received by the contractor prior to July 8, 2009. The physician claimed she submitted a signed certification with her November 2008 application, however, CMS submitted a copy of what it contends was the application the physician submitted and that copy does not contain a signed certification section. The application CMS provided was marked with a code affixed by the contractor that marks each page sequentially when an application is received. The signed certification that the physician claims CMS returned to her from the November 2008 application does not have the contractor’s code markings. CMS’ evidence is compelling because the numerical markings on the returned application are consecutive from page 1 to page 50 and it does not contain the two pre-printed pages of the form that correspond with the missing certification statement section. This evidence strongly suggests that the pages of the form regarding the signed certification section were not included in the application at the time the contractor received it. CMS’ complete, consecutively numbered date-stamped copy of the application was a more credible piece of evidence that accurately reflects what was actually received by the CMS contractor in contrast to the physician’s single page signed certification section that was highlighted in yellow but did not contain the date-stamps.

    Tri-Valley Family Medicine Inc. v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-10-422, Dec. No. CR2179, July 9, 2010, ¶122,257.

    Effective date of provider enrollment

    CMS correctly assigned August 25, 2009, as the effective date of enrollment for a certified registered nurse anesthetist (CRNA) because the CRNA did not offer credible evidence that she submitted an application in May 2009. It was undisputed that the CMS contractor received an enrollment application from the CRNA on August 25, 2009. Although the CRNA claims a prior application was sent by regular mail on May 12, 2009, the CRNA did not prove the CMS contractor received another application prior to August 25, 2009. The CRNA did not offer anything beyond her assertions that she had mailed an application in May 2009 and the record does not contain a copy of the first application or any record of its mailing. The CRNA also did not offer evidence of calls made to the CMS contractor. Absent any copy of the May application or the testimony about its contents, the Departmental Appeals Board will not assume that it was identical to the August application and would have been processed to approval in the same way. Furthermore, the Board has no authority to alter or deviate from the limitation under 42 C.F.R. §424.521(a) on a retroactive billing period of 30 days. Accordingly, the retroactive billing period for the CRNA cannot be earlier than July 27, 2009, and the CMS decision regarding the effective date of enrollment was affirmed.

    West v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No.C-10-399 Dec. No. CR2170, June 30, 2010, ¶122,250.

    Felony conviction

    CMS properly revoked a physician’s Medicare enrollment and billing privileges based on his felony conviction of conspiracy to defraud the Social Security Administration. Even though the physician argued he did not have the propensity to harm the Medicare program, 42 C.F.R. §424.535(a)(3) authorizes CMS to revoke a provider’s agreement and billing privileges for any financial crime listed under the regulation. Any felony offense related to those enumerated crimes is deemed detrimental to the best interests of the Medicare program and its beneficiaries, and CMS is not obliged to prove that a specific provider’s offense actually has a detrimental effect. Despite the physician’s contention that he was not actually guilty of the crime, to which he pled guilty, CMS did not have authority to look past the conviction. CMS did not err by making the revocation effective upon the date the physician entered his plea in court instead of the date the physician agreed to enter the plea.

    Patel v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-10-329, Dec. No. CR2171, June 30, 2010, ¶122,251.

    Mobile laboratory

    An application for enrollment in Medicare by an independent diagnostic testing facility (IDTF) supplier was denied because the IDTF failed to enroll its leased mobile magnetic resonance imaging (MRI) unit separately. Under 42 C.F.R. §410.33(g)(16) an IDTF is required to enroll for any diagnostic testing services that it furnishes to a Medicare beneficiary, regardless of whether the service is furnished in a mobile or fixed base location. The IDTF alleged that it did not need to enroll its mobile MRI unit because it is part of the original facility and that by updating its enrollment application it met the requirements. The IDTF’s MRI unit was located inside a trailer and travelled from place to place from one fixed IDTF location to another, and as such it was not part of the original facility, but a separate facility which required a separate enrollment.

    Presbyterian Imaging Centers, LLC v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. Nos. C-10-434 and C-10-435, Dec. No. CR2190, July 22, 2010, ¶122,267.

    Physician’s enrollment date

    CMS’ motion for summary disposition regarding the effective date of a physician’s enrollment as a Medicare provider was granted as there was no disputed evidence about the date when the physician’s application was filed. The physician argued that the date of enrollment should be 79 days earlier than the date set by CMS’ contractor because of confusion about earlier forms that had been submitted to the contractor to update information on the doctor’s new practice group. It was undisputed, however, that the earlier forms only pertained to the practice group and did not mention the physician. The agency’s contractor properly set the physician’s enrollment date, under 42 C.F.R. §424.520, as the date it received a signed application from the doctor, and it properly permitted the physician’s Medicare billing privileges to begin, under 42 C.F.R. §424.521, 30 days prior to the application date.

    Kramer v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-10-397, Dec. No. CR2183, July 14, 2010, ¶122,260.

    Physician’s date of enrollment

    A physician who claimed she was inadvertently unlinked from her medical group by CMS, and then asked to submit a new enrollment application had the right to a hearing, but a more factual record is necessary to determine if her effective date should be reconsidered. The wording of 42 C.F.R. §498.3(b)(15) is straight forward in providing that the effective date of a Medicare provider or supplier approval is an appealable initial determination and includes no qualifying or limiting language. Although CMS argues that 42 C.F.R. §498.3(b)(15) applies only to those suppliers or providers subject to survey and certification, CMS has not identified in what respect the wording of section 498.3(b)(15) is ambiguous or unclear to permit that interpretation. The physician argued she should not have been required to submit a new provider enrollment application in the fall of 2009 and that she was continuously enrolled as a member of the physicians group since 2003. Because certain dates, namely the date that the contractor received the physician’s application is unclear from the evidence, as well as CMS’ lack of reasoning as to why a new enrollment application was needed if this was an administrative error, the case was dismissed and CMS was required to more fully develop the basis for a new determination. The physician is given the opportunity to request a new hearing after the subsequent new determination.

    Sahai v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-10-347, Dec. No. CR2172, July 1, 2010, ¶122,252.

    Physical therapist’s enrollment date

    The issue of the effective date of a physical therapist’s Medicare enrollment was remanded to CMS due to an inadequate written record concerning when the enrollment application was sent. The plain language of 42 C.F.R. §498.3(b)(15) permits Medicare suppliers such as the physical therapy supplier to appeal initial determinations such as the enrollment effective date decision, despite CMS’ argument that the regulation only applies to providers subject to survey and certification. The supplier argued that CMS’ contractor lost the therapist’s first application, and that the therapist should be enrolled six months before the enrollment date assigned by the contractor. CMS did not challenge the supplier’s account of events, and the agency’s contractor did not provide the actual date of receipt of the application. The supplier did not offer evidence proving that the first application was sent when alleged. Without any proof of the earlier filing date, the administrative law judge could not change the effective date of enrollment. The inadequate written record of CMS’ reconsideration decision could not support a final decision on the merits. The case was dismissed without prejudice and remanded to CMS so that the agency or its contractor could review all relevant materials and issue a new determination. The supplier will be permitted to file a new request for a hearing if CMS’ decision on remand is unfavorable.

    Albany Physical Therapy v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-10-506, Dec. No. CR2184, July 16, 2010, ¶122,261.

    Reasonableness of CMPs

    The finding of substantial noncompliance relating to accident prevention by long term care facility (LTCF) and the resulting civil money penalty (CMP) were correct and reasonable, based on the undisputed evidence in the record. During a survey of the facility, it was discovered that a schizophrenic resident who had recently attempted suicide by cutting himself with a razor blade and who had been under behavioral monitoring, had both a razor blade and a rimless mirror in his possession. The LTCF was found to not be insubstantial compliance with 42 C.F.R. §483.25(h) regarding the prevention of accidents at the level of immediate jeopardy and a $7,000 CMP was imposed; the facility appealed. Although the behavioral monitoring orders had been discontinued, the surveyor found that the facility ineffectively monitored the resident’s environment because the staff was aware of his tendency to pilfer razor blades from nurse aide carts and of the rimless mirror he owned, and made no attempt to prevent him from pilfering the razor blades. Because the facility did not take the steps necessary to keep the resident safe, it was properly found to not be in substantial compliance with §483.25(h). Further, the CMP was found to be reasonable because this was modest considering the penalty range can reach as much as $10,000. The facility merely claimed that the CMP amounted to a “financial burden,” which does not show that it was unreasonable, and the deficiencies were severe enough to warrant this penalty.

    Golden Cross Health Care of Fresno, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-09-568, Dec. No. CR2186, July 19, 2010, ¶122,263.

    Reasonableness of CMPs

    A long term care facility (LTCF) was properly found to not be in substantial compliance with Medicare requirements that amounted to immediate jeopardy to resident health and safety, and a $4,550 per day civil money penalty (CMP) was reasonable. It was the facility’s policy to determine advance directives at the time of admission and for the staff to comply with those instructions. A LTCF resident, who had an advance directive on file that included the instruction to “use cardiac massage or artificial ventilation to resuscitate” in the case of death, was found not breathing but was not resuscitated and died. During a survey, this incident was reviewed, and the LTCF was found to not be in substantial compliance with several Medicare requirements, five of them rising to the immediate jeopardy level, stemming from the neglect of this resident and her plan of care. Although after the fact, the nurses claimed that “signs of irreversible death” were present, and thus attempting CPR (cardio-pulmonary resuscitation) would be futile, those signs were not recorded in contemporaneous notes in the resident’s chart. Presumably, should such extreme signs be present, the nurses would have recorded such. Not only did the facility not resuscitate the resident when they were required to attempt to do so, but they also failed to report the suspected incident of neglect as required by facility policy and Medicare requirements. Only after the surveyor began to look into the incident did the LTCF’s administrator conduct any sort of investigation, and that which was conducted was inadequate. The finding that the deficiencies rose to the immediate jeopardy level was not clearly erroneous considering that four nurses were informed of the resident’s condition and none of them could explain why they failed to provide CPR to a full-code resident. The LTCF argued that it was brought back into substantial compliance by holding a training session on following residents’ advance directives. This argument, however, was ineffective because it would not be in substantial compliance with Medicare requirements until there is an effective plan of correction implemented and a single training session fails to demonstrate a plan. Further, the amount of the CMP was reasonable because it was in the low end of the penalty range, which could reach as much as $10,000 per day, and taking into account all of the facility’s deficiencies.

    Woodland Oaks Healthcare Facility v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-09-340, Dec. No. CR2175, July 7, 2010, ¶122,254.

    Revocation of supplier number

    A durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) supplier had its supplier number properly revoked because it did not have a compliant surety bond in place. CMS revised Medicare regulations to require that, being October 2, 2009, all suppliers must meet the surety bond requirement, which essentially triggered on off cycle revalidation and suppliers were required to submit proof of a compliant surety bond. The DMEPOS supplier failed to submit a surety bond as requested by CMS, and was informed that its billing privileges were revoked. On reconsideration, the supplier submitted a continuation certification, but not only was the certificate not signed by an official of the supplier as required by regulation, but it did not separately cover this location. The continuation certificate was therefore inadequate to show compliance with surety bond requirements. The revocation of its supplier number was appropriate and it was not outside of the regulatory authority of CMS to revoke its billing privileges.

    Baker’s Bay Nursing Association d/b/a Rivers Edge Nursing & Rehabilitation Center, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-10-440, Dec. No. CR2177, July 7, 2010, ¶122,256.

    Right to hearing

    A skilled nursing facility’s (SNF) hearing request was dismissed because CMS rescinded the enforcement remedies and thus, no right to a hearing existed. The SNF was found to be noncompliant with Medicare and Medicaid requirements during a complaint survey and was notified that CMS was imposing a $5,000 per instance civil money penalty (CMP), a denial of payment for new admissions (DPNA), and that its provider agreement would be terminated should it not be brought into compliance by a specified date. The SNF was later brought into substantial compliance before the deadline, but the enforcement remedies, those being the CMPs and DPNA, remained in effect and the SNF requested a hearing. CMS submitted a motion to dismiss and cited a letter informing the facility that the enforcement remedies had been rescinded. Where CMS has not imposed a remedy, or the remedy has been rescinded, a facility has no hearing right.

    Life Care Center of Attleboro v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-10-681, Dec. No. CR2187, July 19, 2010, ¶122,264.

    SNF noncompliance

    CMS properly found that: (1) a skilled nursing facility (SNF) failed to comply substantially with Medicare participation requirements, (2) its noncompliance constituted an immediate jeopardy for its residents, and (3) civil money penalties were properly imposed. Under 42 C.F.R. §483.25(h)(2), the SNF was required to ensure its residents received the supervision and assistance devices they needed to prevent accidents. The SNF had been aware that a number of its residents were prone to falling, yet failed to implement measures that better protected residents against falling, for example, through increased supervision and personal assistance. The SNF moreover failed to carry out its own policy mandating its staff to develop new interventions for residents prone to falls. In addition, the SNF failed to carry out an express physician’s order governing the transfer of a resident. As a result, that resident was seriously injured. The SNF’s continuous noncompliance supported a finding of immediate jeopardy given, among other things, the serious injuries to the residents resulting from its noncompliance, the persisting likelihood of serious injury, and the SNF’s pattern of failing to implement protective measures. Civil money penalties for each day of the SNF’s immediate jeopardy level of noncompliance were therefore reasonable.

    Community Care of Rutherford County, Inc. v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-09-595, Dec. No. CR2173, July 6, 2010, ¶122,253.

    Site visits

    Revocation of a durable medical equipment (DME) supplier’s Medicare enrollment was reversed because a preponderance of the evidence suggests the supplier was fully operational as a business at the time of a CMS site visit. The supplier received a retroactive revocation notice based on the inability of the inspector to discern whether the facility was open for business during attempted CMS site visits four months after the revocation effective date. The DME supplier, however, noted that no CMS inspector was present at its facilities on the dates in question and that it was open during the hours. The photographs provided as evidence of non-operational status were not credible as they could have been altered and the CMS inspector did not provide any other evidence of his attempts to gain entry to the facility. Although CMS eventually gained entry during a site visit, the rationale of the revocation was based on visits after the effective date of the revocation. Allowing CMS to base its revocation during a reconsideration hearing on visits after the effective date of revocation would be prejudicial to the supplier.

    E & I Medical Services v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-10-393, Dec. No. CR2189, July 20, 2010, ¶122,266.

    Surety bonds

    A durable medical equipment supplier’s Medicare enrollment was properly revoked because the supplier was not in compliance with surety bond requirements. The supplier alleged that CMS was limited to making surety bond requirements at enrollment, renewal, or when making a change of ownership, and that the supplier was outside of those limited times. Under 42 C.F.R. §424.57(c)(26) a supplier of durable medical equipment must provide CMS on a continuing basis a surety bond in an amount that is not less than $50,000 and 42 C.F.R. §424.57(d)(12) permits CMS at any time to require a supplier to demonstrate compliance with the surety bond requirements. The supplier noted that it submitted a valid continuation of a surety bond which did not include the signature of an authorized or delegated official because it was a continuation to the existing bond. The issue was not whether the supplier eventually achieved compliance with the surety bond requirement, but whether CMS correctly found that, at the time of the revocation, the supplier was not in compliance and that CMS therefore had authority to revoke. The regulations did not support the notion that CMS could only request surety bond requirements at specific intervals.

    Absecon Manor Nursing Home Association v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-10-441, Dec. No. CR2188, July 20, 2010, ¶122,265.
    Medicaid

    Audit appeal

    A self-employed Medicaid care coordinator successfully argued that the state agency failed to provide her with adequate notice of its decision to recoup payments after an audit. The communications sent were deficient because they did not contain sufficient information to permit her to challenge the audit’s finding, which she should now be permitted to do. Therefore, the case is remanded with instructions that the coordinator is to be provided another 30 day period to request administrative review of the recoupment decision. The original notice was defective because although it stated that the provider had 30 days to appeal the audit it did not state any amount that the state intended to recoup, but it did state that by extrapolation it was determined that the coordinator had been over payed by $2,370.70. Later the state sent another letter which demanded payment and contained for the first time the amount that was to be recouped. The second letter also stated it was a final agency claim. The state moved to dismiss the coordinator’s claim arguing that by failing to appeal within the 30 days stated in the original notice she had chosen not to pursue her administrative remedies. The coordinator also argued that the formulaic tool used in the audit process is a regulation, and that the state agency should have complied with the process for adopting new regulations, however the protocol does not create any new substantive requirements and is merely the implementation of a policy decision.

    Smart v. State of Alaska, S. Ct. Alaska, August 20, 2010, ¶303,525.

    FMAP temporary increase

    State Medicaid directors are advised that they must specifically request reimbursement under the temporary increase to the federal medical assistance percentage (FMAP) which was extended through June 30, 2011 by the Education, Jobs and Medicaid Assistance Act (P.L. 111-226). To qualify for the increase, state Medicaid agencies must continue to meet the same requirements imposed by the American Recovery and Reinvestment Act of 2009 (ARRA) (P.L. 111-5), including prompt payment of providers, maintenance of 2008 eligibility standards, and refraining from increasing the portion of Medicaid expenditures owed by political subdivisions. States may use the form letter that has been provided.

    CMSC Informational Bulletin, August 18, 2010, ¶53,583.

    Imputed income

    The trial court properly affirmed the determination of the county board that an applicant was not eligible for the aid to the medically indigent (AMI) program funded by the county because she was voluntarily unemployed and that the county board properly applied imputed income for full time work at minimum wage and assumed that she and her husband would receive federal income tax refunds of about $4,000 for each of the next three years in making their eligibility determination. The statutes governing the AMI program provide that: (1) the defined terms have the same meaning throughout the chapter unless otherwise stated; (2) the definition of “medically indigent” required the county to consider not only the applicant’s current income and resources, but also his or her ability to repay the expense over the next three years; (3) it is the policy of the state that each individual be responsible for his or her own medical expenses; and (4) the county may seek reimbursement from AMI recipients and may require them to work in order to repay the debt. The applicant testified that she was able to work and would look for work if necessary. Her testimony that she did not know with reasonable certainty what her refund would be was insufficient to overcome the county’s estimate, which was smaller than the refunds received for the last two years.

    St. Luke’s Magic Valley Regional Medical Center v. Board of County Commissioners of Gooding County, Idaho Supreme Court of State, August 16, 2010, ¶303,521.

    Felony convictions for false claims

    Circumstantial evidence supported the money laundering conviction of a chiropractor who was also convicted of mail fraud and aggravated identity theft for submitting false Medicaid claims for services provided to children he had not treated. The chiropractor argued that evidence that he withdrew cash from his checking account was not sufficient to prove he intended to conceal the proceeds from the reimbursement of his false claims, a necessary element under the money laundering statute (18 U.S.C. § 1956). However, the circumstantial evidence that he made large cash withdrawals that emptied the account within one week after he deposited each reimbursement check could have led a jury to conclude that he intended to conceal the location of the money, which violated the statute because money that could not be found could not be forfeited. Even though the jury was not given a formal instruction that, to be convicted of aggravated identity theft, the chiropractor had to know the means of identification he used to submit the false claims belonged to another person, the jury was properly provided with a special interrogatory that specifically asked it to make a finding on the knowledge element. Despite the trial court’s discretion to run the chiropractor’s 11 aggravated identity theft sentences concurrently, it reasonably chose to run two of the sentences consecutively because it felt it was improper to only punish him for one count when there were numerous victims.

    United States of America v. Dvorak, 8th Cir., August 20, 2010, ¶303,523.
    Medicare

    HIT meetings in September 2010

    The Office of the National Coordinator for Health Information Technology (ONC-HIT) will be holding a series of meetings that will be open to the public. The first meeting will be held by the HIT Policy Committee on September 14, 2010, from 10 a.m. to 4 p.m. eastern time (E.T.). The location is still to be determined, and up-to-date information may be found at http://healthit.hhs.gov. A second series of meetings will be held for the HIT Policy subcommittees. The HIT Policy subcommittees meetings will be via dial-in access only and the schedule is as follows: (1) Governance Workgroup, September 3, 2010, 1 p.m. to 3:30 p.m. E.T.; (2) Enrollment Workgroup, September 10, 2010, 11 a.m. to 2 p.m. E.T.; (3) Meaningful Use Workgroup, September 22, 2010, 9 a.m. to 3:30 p.m. E.T.; (4) Enrollment Workgroup, September 24, 2010, 10 a.m. to 3 p.m. E.T.; and (5) the Governance Workgroup, September 28, 2010, 10 a.m. to 4 p.m. E.T. Finally, the HIT Standards Committee's Workgroups will hold meetings via dial-in access only and the schedule is as follows: Vocabulary Task Force Hearing, September 1 and 2, 2010; and the Implementation Workgroup, September 15, 2010, 12 p.m. to 2 p.m. E.T. All workgroup meetings will also be available via webcast and details can be found at http://healthit.hhs.gov.

    Notice, 75 FR 51818, 75 FR 51819, and 75 FR 51820, August 23, 2010.

    ASC accreditation program

    The American Association for Accreditation of Ambulatory Surgery Facilities’ (AAAASF) has been unconditionally approved for continued recognition as a national accreditation program for ambulatory surgical centers (ASCs) that wish to participate in Medicare. After AAAASF submitted its renewal application, it was conditionally approved for three years with a 180 day probationary period due to noncompliance in a number of areas, including inadequate surveyor training and evaluation, incomplete facility survey files, and inaccurate and untimely data on deemed providers. AAAASF was evaluated and reviewed during the probationary period and has been found to meet or exceed Medicare requirements for participation in the program.

    Notice, 75 FR 51464, August 20, 2010, ¶262,895.
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