Announced in the Consolidated Appropriations Act of 2021, Rural Emergency Hospitals (REHs) will be a new type of Medicare provider starting January 1, 2023.  REHs are meant to help address the stressed health care system of rural providers by providing an option to closure for distressed critical access hospitals (CAHs) and small rural hospitals.

Existing CAHs and rural hospitals with fewer than 50 beds will be eligible to convert to an REH.  CMS is streamlining this process so that this conversion to be an REH can be accomplished through a change of information on an existing Medicare 855A enrollment rather than through a new provider application, which carries potentially significant delays and potential gaps in payment.  REHs are designed to provide primarily emergency department, observation, and outpatient services.  Because REHs will not provide inpatient care, an area that often creates a significant financial and operational burden on CAHs and small rural hospitals, REHs will allow locally-delivered healthcare to continue to be furnished by existing providers.
Continue Reading Rural Emergency Hospitals – CY 2023 OPPS Final Rule Includes Additional Information on New Medicare Provider Type

On August 19, 2022, the Department of Health and Human Services Office of Inspector General (“OIG”) posted Advisory Opinion 22-16 (“AO 22-16”) to its website, a favorable opinion concluding that the OIG would not impose sanctions in connection with a program that offered $25 gift cards to Medicare Advantage (“MA”) plan enrollees who completed an online educational program about the potential risk, benefits, and expectations related to surgery. AO 22-16 is the latest in a string of recent OIG advisory opinions addressing arrangements involving remuneration to Federal health care program beneficiaries – the ninth such advisory opinion in 2022 alone.

The company that requested this advisory opinion contracts with Medicare Advantage Organizations (“MAOs”) to offer the educational program to MA plan enrollees and charges the MAOs a per-member, per-month fee for the program. MA plan enrollees who take the educational program and complete a survey receive a $25 gift card, which may be for a big box store or online retailer that offers a wide variety of items. The company that offers the educational program sends mailings and email correspondence to MA plan enrollees about the educational program but does not advertise or market the program to individuals who are not enrollees of a MA plan that has contracted with the company. The MAOs are prohibited by their contract with the company from including information about the gift cards offered under the program in marketing materials to prospective enrollees.
Continue Reading OIG Approves Gift Cards for Medicare Managed Care Enrollees Who Complete Online Education

On April 20, 2022, the Department of Justice (DOJ) announced a nationwide coordinated enforcement action targeting COVID-19-related fraud involving charges against 21 individuals across nine federal districts, and over $149 million in alleged false claims submitted to federal programs.[1]

This marks the first significant DOJ enforcement action since Attorney General Merrick Garland named Associate Deputy Attorney General Kevin Chambers as the Director for COVID-19 Fraud Enforcement on March 10, an appointment President Biden previewed in his State of the Union address on March 1.
Continue Reading DOJ Announces Enforcement Action Involving “Largest and Most Wide-Ranging” COVID-19 Fraud Detected to Date

On April 14, 2022, the Centers for Medicare & Medicaid Services (CMS) issued new guidance on the Independent Dispute Resolution (IDR) process, created under the No Surprises Act (NSA) to provide a mechanism for payers and providers to resolve disputes as to appropriate payment amounts for certain out-of-network claims. In addition, the Departments of Health and Human Services, Labor and the Treasury launched two online portals– one to host the IDR process for providers and payers and one to host the patient-provider dispute resolution process for self-pay and uninsured patients.

This new guidance replaces earlier instruction from the agency on how the IDR process would operate and what the independent arbitrator was required to consider. The prior guidance was withdrawn after a successful legal challenge to the interim final rule implementing the No Surprises Act provisions on the IDR process, specifically with respect to the weight to be given to the Qualifying Payment Amount (QPA). The QPA is essentially the payer’s median contracted rate for similar services. The QPA is used to calculate patient cost sharing and must be considered by the independent arbitrator in resolving a payment dispute between a payer and an out-of-network provider. Initially, regulators directed arbitrators to use the QPA as a baseline, and when choosing between the parties’ proposed payment offers to choose the amount closest to the QPA unless one of the parties submitted credible information demonstrating that the appropriate payment amount was materially different from QPA.
Continue Reading No Surprises Act Update – New IDR Guidance

In this episode of the Diagnosing Health Care Podcast:  This term, the Supreme Court of the United States is set to rule in a Medicare reimbursement case that has sparked a fresh look at the historical deference often granted to agencies and whether it should remain, be modified, or even be overruled.

Attorneys Stuart

On February 1, 2022, the U.S. Department of Justice (DOJ) released its annual False Claims Act (FCA) enforcement statistics for fiscal year (FY) 2021.[1]

With collections amounting to $5.6 billion, FY 2021 marks DOJ’s largest annual total FCA recovery since FY 2014, and more than twice the $2.3 billion received in FY 2020. FY 2021 was also a record-shattering year for DOJ as it relates to health care fraud enforcement; over $5 billion (90% of the total) was obtained from cases pursued against individuals and entities in the health care and life sciences industries.
Continue Reading DOJ Releases FY 2021 False Claims Act Recoveries: A Record-Shattering Year for Health Care and Life Sciences Enforcement, with Over $5 Billion Collected

On January 11, 2022, the Centers for Medicare and Medicaid Services (“CMS”) published an anticipated proposed National Coverage Determination (“NCD”) decision memorandum that begins the process of determining whether the Medicare program will cover FDA-approved monoclonal antibodies directed against amyloid for the treatment of Alzheimer’s Disease. (https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=Y&NCAId=305).

The proposed decision, which is subject to public comments that are due to CMS by February 10, 2022, does not endorse nationwide Medicare coverage for these drugs. Instead, CMS chose an alternate pathway known as Coverage with Evidence Development (“CED”).  If the proposal is adopted by CMS, it would set in motion a detailed regulatory process that includes temporary Medicare coverage for the drug but only for certain Medicare beneficiaries who are enrolled in an additional clinical trial intended to test whether these drugs will have a significant benefit for Medicare beneficiaries.  CMS expects to issue a decision by April 11, 2022 to approve or reject the CED process after reviewing comments from interested parties.
Continue Reading CMS “Splits the Baby” on Aduhelm—Medicare Coverage but Only with Evidence Development for Now

On November 12, 2021, the Centers for Medicare and Medicaid Services (“CMS”) released final guidance confirming that hospitals can be co-located with other hospitals or healthcare providers.

CMS’ aim for the guidance is to balance flexibility in service provision for providers with ensuring patient confidence in CMS’ quality of care oversight functions.

The final guidance provides direction to state surveyors in the evaluation of a hospital’s compliance with the Medicare Conditions of Participation (“CoPs”) when it is sharing space or contracted staff through service arrangements with another co-located hospital or healthcare provider.  CMS also reiterated a key tenet of co-location arrangements: that each provider must independently meet its applicable CoPs, but, overall, the final guidance is less prescriptive than the draft guidance CMS released in May 2019, and in its wake raises new questions for providers.

Continue Reading CMS Releases Long-Awaited Final Guidance on Hospital Co-Location and Space-Sharing Arrangements

On September 30, 2021, the Provider Reimbursement Review Board (the “Board”) issued a revised set of rules that become effective November 1, 2021. These new and revised rules affect all new and some pending Medicare Part A provider appeals. These rules clarify several aspects of Board appeals and simplify some of the Board’s complex procedures.

On September 15, 2021, CMS published a proposed rule that would repeal a final rule that created an expedited pathway for Medicare coverage of breakthrough devices and established formal criteria for applying the “reasonable and necessary” standard for coverage in Section 1862(a)(1)(A) of the Social Security Act, which has been the basic standard for coverage since the inception of the Medicare program.[1]  CMS has set a short period for comments, and interested parties must submit comments by October 15, 2021.

The new proposed rule reflects a significant policy change.  Where the initial rule focused on expanding access to new innovations, the current approach focuses more on Medicare program goals and outcomes data.
Continue Reading CMS Proposes to Reverse Course and Repeal Its Final Rule Expediting Medicare Coverage of Breakthrough Devices and Defining the Medicare “Reasonable and Necessary” Coverage Standard