Health Law Advisor

Thought Leaders On Laws And Regulations Affecting Health Care And Life Sciences

Extension of Timeline for Publication of the Final Rule – Medicare Programs; Reporting and Returning of Overpayments

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By George B. Breen and David E. Matyas.

CMS announced on February 13  (and to be published in a Federal Register notice this week) that despite the general guideline that final rules be issued within 3 years of a proposed or interim final rule, CMS will be taking an additional year to finalize the “Medicare Program; Reporting and Returning of Overpayments” final rule.   In February 2012 (see EBG’s February 22, 2012 Client Alert), CMS issued a proposed rule on the requirements under the ACA to report and return overpayments within 60 days to the Medicare program for providers and suppliers of services under Parts A and B.  CMS stated, “in this case, the complexity of the rule and scope of comments warrants the extension of the timeline for publication.”

While this does not otherwise impact the necessity, per the statute, that overpayments must be returned, as CMS reminds in its announcement – it is interesting that CMS has taken this long to finalize a rule implementing this requirement.  Significantly, this delay means we still await the fate of CMS’s proposal to implement a ten-year look-back period for paid claims – in contrast to the current 4 year period for claims re-openings, except in cases of fraud.

Beyond HIPAA: New Jersey Law Requires Encryption of Personal Data by Health Insurance Carriers

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Our colleague Mollie K. O’Brien at Epstein Becker Green wrote an advisory on a new law that will increase the protection of personal information under HIPPA by mandating encryption on all computerized data collected by health insurance carriers: “Beyond HIPAA: New Jersey Law Requires Encryption of Personal Data by Health Insurance Carriers.” Following is an excerpt:

In response to data breaches that have occurred across the United States, several of which involved the theft of laptop computers, beginning August 1, 2015, health insurance carriers in New Jersey will be obligated to do more to protect patient information than simply comply with the federal Health Insurance Portability and Accountability Act (“HIPAA”). A new law, signed by Governor Chris Christie on January 9, 2015, specifically requires health insurance carriers to encrypt electronically gathered and stored personal information.

The key terms in the law are defined as follows:

  • “Health insurance carriers” means “an insurance company, health service corporation, hospital service corporation, medical service corporation, or health maintenance organization authorized to issue health benefits plans in this State.”
  • “Personal information” means “an individual’s first name or first initial and last name linked with any one or more of the following data elements: (1) Social Security number; (2) driver’s license number of State identification card number; (3) address; or (4) identifiable health information.”

Read the full advisory here.

CMS Proposes Home Health Physician Documentation Templates

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In the most recent updates to the Medicare Home Health Prospective Payment System,[1] CMS made significant changes to the face-to-face encounter documentation requirements by eliminating the physician narrative requirement for most home health services for care episodes beginning on or after January 1, 2015.[2] In making this change, CMS stated that the medical records of the certifying physician or the acute/post-acute care facility (if a patient in that setting was directly admitted to home health) must contain sufficient documentation to support the physician’s certification of patient eligibility for home health services.

Although the changes to the face-to-face encounter documentation were intended to eliminate the burden of the physician narrative requirement, home health providers have continued to assert that the new documentation requirements are equally burdensome and are too vague for providers to know what constitutes “sufficient” documentation to support a patient’s eligibility for home health services.

Earlier this week, CMS announced that it is considering developing voluntary clinical templates to help physicians adequately document their encounters with Medicare patients.[3] CMS has proposed a sample paper template progress note as well as suggested electronic clinical template elements for a progress note. The list of suggested elements for an electronic clinical template is intended to allow electronic health record vendors to create prompts to assist physicians when documenting the home health face-to-face encounter for Medicare. Once completed, the resulting paper or electronic progress note or clinic note would be incorporated into and become part of the physician’s medical record.

The sample paper and electronic templates provide some indication of what CMS may consider adequate physician documentation of a patient’s eligibility for home health services. Beginning in February, CMS is planning to host a series of Special Open Door Forums to provide opportunities for physicians, home health agencies, and other interested stakeholders to provide feedback on the proposed templates. CMS is also currently accepting public comments on the voluntary clinical templates via email at HomeHealthTemplate@cms.hhs.gov. We encourage home health agencies, physicians and other stakeholders to participate in the Special Open Door Forums and to email your comments to CMS.

HHS Announces Goals for Moving Medicare from Volume to Value Payments.

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By Arthur J. Fried.

In what is being called an historic announcement, Department of Health and Human Services Secretary Sylvia Mathews Burwell announced on Monday the setting of clear goals and timeframes for moving Medicare from volume to value payments.  The stated goals are to tie 30% of all Medicare provider payments to quality and cost of care by 2016, moving to 50% by 2018.   Nearly all fee-for-service payments will be aligned with quality and value – 85% by 2016 and 90% in 2018.  This transformation will be achieved by the expansion of mechanisms already in use – Accountable Care Organizations, Patient Centered Medical Homes, and Bundled Payments.  Like the Affordable Care Act itself, HHS believes that its initiative will unleash an even stronger movement in the private sector towards alternative payment methodologies, and is establishing the “Health Care Payment Learning & Action Network” to promote this public-private partnership, to be kicked-off in March.

While some reports regarding these approaches have shown mixed results, Secretary Burwell cited data showing savings of $116 billion from previous trends, and anticipates even further inroads into the cost curve with Monday’s announcement.  Various national provider associations were supportive of the initiative. Others noted, however, that physicians need flexibility in the way payments are administered and that continued reductions in payments to hospitals could impair their ability to invest in delivery reforms.  Some urged HHS to recognize the value of new treatment and pharmacological advances in the developing payment methodologies.

Whatever the outcome of these initiatives, this announcement signals that government payment policies will continue to strongly influence the transformation of the American health care system for the foreseeable future. Indeed, almost immediately, several large hospital systems and payors likewise announced significant goals for quality and cost incentives in their contracts.

President Obama to Announce New Privacy Initiatives in SOTU

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By Evan J. Nagler

The State of the Union Address, scheduled for January 20, 2015, will contain new initiatives related to privacy, White House officials say. The known initiatives are the introduction of a data breach reporting bill, a bill restricting the sale of student information, and a Consumer Privacy Bill of Rights.

SETTING A NATIONAL DATA BREACH REPORTING STANDARD

President Obama is planning on introducing a data breach bill that would standardize the reporting period nationwide at 30 days. The proposed Personal Data Notification and Protection Act would require direct customer notification. The law would also criminalize selling consumer identities overseas.

Presently, most states have their own consumer data protection laws requiring customer notification in the event of a breach. The new bill may preempt stricter state laws such as California’s 5-day window for reporting.

RESTRICTING THE USE OF STUDENT DATA

The White House will also propose the Student Digital Privacy Act, based on a California law passed last September. The main purpose of the bill is to restrict the sale of student data for use unrelated to education as well as restricting targeted advertising based on school-collected data. The bill seeks to restrict commercial uses while at the same time ensuring that outcome-based studies are allowed to continue.

ENACTING THE CONSUMER PRIVACY BILL OF RIGHTS

In 2012, the White House revealed plans for a Consumer Privacy Bill of Rights. This white paper laid out a set of seven guiding principles for consumer privacy (see Appendix A of the linked PDF). After receiving and incorporating suggestions during the last three years, the President will reportedly ask Congress to enact a revised Consumer Privacy Bill of Rights into law. The bill would ensure more control over personal data for individuals, more closely in line with the rules in place in the European Union.

STAY TUNED FOR UPDATES

As more information is released regarding the President’s privacy and security plans, we will cover it here, so check back in the coming days.


Comment Period on Proposed QHP Certification Guidance and Proposed Rule That May Impact Health Insurance Issuers’ Offering of Private Health Insurance Products

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By: Helaine I. Fingold

Stakeholders received insight on the Obama administration’s expected approach to the certification and oversight of qualified health plans (“QHPs”) late Friday, December 19, 2014, with the release by the Centers for Medicare & Medicaid Services (“CMS”) of its Draft 2016 Letter to Issuers in the Federally-facilitated Marketplaces (“Draft Letter”). This annual release comes more than a month earlier than the release of the 2015 version of this document.

While the Draft Letter largely mirrors the provisions of its 2015 predecessor, or restates earlier proposals, CMS does include several significant changes in approach for the 2016 application cycle. These changes include the use of an earlier timeline for application submission, review, and approval, as well as a more extensive review of benefit offerings for compliance with non-discrimination requirements.

That same day, the administration, through the Departments of Health and Human Services, Labor and Treasury (collectively, “Departments”) released a proposed amendment to expand federal regulations on excepted benefits to exempt wraparound coverage offered by group health plans from specific Affordable Care Act market-wide health insurance reform requirements (“Proposed Rule”).

The Draft Letter speaks specifically to issuers seeking to offer QHPs in the individual and small group markets through the Federally-facilitated Marketplaces.  However, issuers seeking to offer coverage in State-based Marketplaces and outside the Marketplace should also closely review this guidance for insights into CMS’s perspective on market-wide provisions discussed in the context of QHPs.  The Proposed Rule addresses small and large employer group health insurance offerings.

CMS is accepting comments on the Draft Letter through January 12, 2015. The Departments are accepting comments on the Proposed Rule through January 22, 2015.

 

Supreme Court Lowers the Bar for Class Action Removal

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Stuart M. GersonOn December 15, 2014, the Supreme Court of the United States decided Dart Cherokee Basin Operating Co. v. Owens, a class action removal case.

In short, the Dart case is welcome news to employers. Standards for removing a case from state to federal court have been an abiding point of concern for employers faced with “home town” class actions. In more recent times, this problem has become a point of interest to employers in health care and other industries that are beset by cybersecurity and data breach cases originating in state courts but calling for the application of federal privacy standards. Dart should help them substantially.

In the Dart decision, the Supreme Court held that a defendant seeking to remove a case from state to federal court – who must file in the federal forum a notice of removal “containing a short and plain statement of the grounds for removal”  pursuant to 28 U. S. C. §1446(a) – need include only a plausible allegation that the amount in controversy exceeds the jurisdictional threshold. The notice need not contain evidentiary submissions. Section 1446(a) thus tracks the general pleading requirement traditionally required by the Federal Rules of Civil Procedure.

The Dart decision also resolves a longstanding split among the Circuit Courts of Appeals, adopting the view of a majority of the lower courts while categorically rejecting the Tenth Circuit’s requirement that an evidentiary submission had to accompany the notice of removal under the Class Action Fairness Act.

Perhaps even more noteworthy than its rejection of any requirement to submit evidence in support of removal is the Supreme Court’s categorical refusal to imply any presumption against removal to federal court. Parties have been attempting to rely upon such a presumption, often with success, for years. The Supreme Court, however, has now made it clear that there is no basis in law for it and for that reason, coupled with the requirement that a party do no more than plausibly allege the jurisdictional amount in controversy, has substantially eased the burden on a defendant’s removal of a state court action to federal court.

For those who think that the judicial conservatives and liberals always vote in a bloc and that the conservatives are always pro-business, one notes that this arguably pro-business decision was authored by Justice Ginsburg, who was joined by the Chief Justice and by Justices Breyer, Alito, and Sotomayor.  Justices Scalia, Kennedy, Thomas, and Kagan were all in dissent. One also notes that the 5-4 split should not be taken as a sign of potential weakness in the majority opinion.  The four dissenters did not dwell on the merits; they simply believed that, for jurisdictional reasons, the issue decided was not properly before the Court.

Deadline Extended for Comments on Proposed Changes to Home Health Conditions of Participation

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In response to multiple requests, the Centers for Medicare and Medicaid Services (“CMS”) have extended the deadline for comments on the proposed changes to the home health conditions of participation (“CoPs”).  Home health providers and other interested stakeholders now have until 5:00 p.m. EST on January 7, 2015 to submit comments to CMS.

The proposed changes to the CoPs were published on October 9, 2014[1] and represent the most significant changes to the home health CoPs in seventeen years.  According to CMS, the new CoPs are intended to better reflect modern home health practice by acknowledging the interdisciplinary view of patient care and allowing home health agencies greater flexibility in meeting quality care standards.  The proposed changes include:

  • Enhanced and expanded patient rights requirements;
  • Changes to plan of care requirements and the process for transfer and discharge of patients;
  • New requirements for the development of Quality Assessment and Performance Improvement (“QAPI”) programs; and
  • New requirements for infection prevention and control.

The 2013 Home Health Prospective Payment System final rule authorized CMS to impose intermediate sanctions on home health agencies that are found to be out of compliance with the CoPs.[2]  In addition to terminating a home health agency’s provider agreement, CMS may now impose alternative sanctions including, civil monetary penalties, suspension of payments for all new admissions, temporary management of the home health agency, directed plans of correction, and directed in-service training.[3]  In light of these potential sanctions, we urge home health agencies to closely review the proposed changes to the CoPs and consider how your organization will comply with the new requirements.  We also encourage home health agencies to respond to the various aspects of the proposed rule that CMS has specifically asked for comments on.

 


[1] 79 Fed. Reg. 61,164.

[2] 77 Fed. Reg. 67,068.

[3] 42 C.F.R. § 488.820.

Recent Legislative and Regulatory Efforts Continue to Change the Regulatory Landscape for Hospice and Home Health Providers

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Our colleaguesEmily E. Bajcsi, Clifford E. Barnes, Marshall E. Jackson Jr., and Serra J. Schlanger recently published a client alert on legislative and regulatory efforts impacting the hospice and home health industries:

  • President Obama signed the Improving Medicare Post-Acute Care Transformation Act of 2014 (“the IMPACT Act”) into law;
  • The Centers for Medicare and Medicaid (“CMS”) published the Medicare Home Health Prospective Payment System final rule for calendar year 2015 (“Final Rule”); and
  • CMS published proposed changes to the home health conditions of participation and are accepting comments through December 8, 2014.

Each of these announcements has the potential to result in substantial changes to the hospice and home health industries.  For the full client alert, please click here.

 

EBG’s Stuart M. Gerson and Christopher Farella to Speak at Essex County Bar Super CLE Event

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On Wednesday, December 10, 2014 colleague Stuart M. Gerson of Epstein Becker Green’s Litigation and Health Care and Life Sciences practices in the firm’s Washington, DC and New York offices will join a panel discussion on “The Manay Faces of the Affordable Care Act.”  Christopher Farella of Epstein Becker Green’s Litigation and Labor and Employment practices in the firm’s Newark office will serve as moderator.

Issues to be addressed include:

  • State of play with respect to various aspects of the ACA, particularly the employer mandate, including a discussion of recent case law.
  • How recent election results could impact amendments to the ACA.
  • The interplay between the ERISA settler and fiduciary functions that the ACA requires.
  • The interplay between the ACA and other employment laws.
  • Managing employee populations and the treatment of full time, part time and variable hour employees for coverage offerings.
  • The impact of the ACA insurance market reforms on the individual and small employer insurance markets in NJ.
  • The unintended consequences of the ACA for employers.

For more information, click here.