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The Deficit Reduction Act of 2005 (the “DRA”) mandated that the Centers for Medicare and Medicaid Services (“CMS”) continue to study specialty hospitals and their effect on local community health care delivery. The study was due to be completed by August 8, 2006. However, ranking Senators have asked CMS to collect further data before completing its report. They have expressed concern that the study includes data for states in which specialty hospitals are not allowed to operate and has not included some traditional hospitals that compete directly with specialty hospitals. The DRA permits an extension of the August 8 deadline, however.
Continue Reading Investigation of Specialty Hospitals

Under the Deficit Reduction Act of 2005, acute care hospitals that report certain quality data can receive increased reimbursement rates for inpatient services. The Centers for Medicare and Medicaid Services (“CMS”) recently issued a final rule, on August 1, 2006, permitting acute care hospitals to receive, on average, a 3.5% increase in reimbursement rates for reporting quality data.
Continue Reading Hospital Reimbursement Increases for Reporting Quality Data

The Medicare Modernization Act of 2003 (the “MMA”) requires the Centers for Medicare and Medicaid Services (“CMS”) to enter into contracts with “Part A/Part B Medicare Administrative Contractors” by the year 2011. The contracts with these entities will replace the existing contracts that CMS has with intermediaries for Medicare Part A claims and with carriers for Medicare Part B claims. The new contracts will be awarded to entities on a state-grouped, geographic basis. These entities will be expected to handle both Part A and Part B claims.
Continue Reading First Medicare Administrative Contract Awarded

On July 27, 2006, the U.S. House of Representatives passed by a vote of 270-148 H.R. 4157, which is intended to promote the use of health information technology (HIT) to improve the safety and quality of the nation’s health care system. This legislation has several significant aspects affecting the use of HIT, including codification of the Bush administration’s Office of the National Coordinator for Health Information Technology. According to the legislation, some of the National Coordinator for HIT’s ongoing responsibilities shall include maintaining and updating a strategic plan to guide the nationwide implementation of standards for HIT, serving as a principal advisor to the Department of Health and Human Services (DHHS) on the use of HIT, and coordinating HIT policies and programs across federal agencies.
Continue Reading U.S. House of Representatives Passes Health Information Technology Legislation

On April 24, 2006, the Inspector General of the U.S. Department of Health and Human Services (the “IG”), Daniel R. Levinson, issued an open letter to health care providers, focusing specifically on physicians and hospital providers. This letter focuses on potential violations of the Stark and anti-kickback statutes in the context of the hospital-physician relationship. The letter states that several hospital providers are discovering, through their compliance programs, improper financial arrangements under the Stark law, which is a strict liability statute. Stark prohibits the referral of Medicare or Medicaid patients to a hospital by any physician who has a “financial relationship” with the hospital. The financial relationship can take the form of either an ownership interest or a compensation arrangement. There are numerous exceptions to the Stark law’s prohibition, but each element of an exception must be met to avoid the strict liability of the Stark law.
Continue Reading INSPECTOR GENERAL RELEASES OPEN LETTER

In a report issued by the Office of Inspector General (“OIG”) of the United States Department of Health and Human Services (“DHHS”) earlier this year, the OIG suggests that Medicare beneficiaries with certain diseases have experienced higher rates of hospital readmission and more hospital emergency department visits since the implementation of the prospective payment system (“PPS”) as a method of reimbursing home health agencies.
Continue Reading OIG Report Suggests Future Monitoring of Home Health Agency Quality of Care

The Office of Inspector General (OIG) concluded in Advisory Opinion No. 06-02 issued on March 21, 2006 that two programs proposed by a durable medical equipment (DME) manufacturer to physician practices would create a significant risk of fraud and abuse. The OIG also commented that it could impose administrative sanctions on the physician practices and DME manufacturer under the Federal anti-kickback law and other federal statutes and regulations if these proposed programs were utilized.
Continue Reading OIG Comments on Proposed Durable Medical Equipment Arrangement By Physician Practice and Supplier

The Office of Inspector General (“OIG”) of the United States Department of Health and Human Services (“DHHS”) recently issued Advisory Opinion No. 06-01, which opined unfavorably regarding a home health agency’s practice of providing prospective postoperative patients with preoperative home safety assessments.
Continue Reading OIG Issues Unfavorable Advisory Opinion Regarding Home Health Agency Practice

The Louisiana Medicaid Program has notified health care providers that they may be able to receive reimbursement for medical treatment provided to uninsured evacuees of Hurricanes Katrina and Rita. To be reimbursed, the provider must have been enrolled in Medicaid as of August 24, 2005.
Continue Reading Medicaid Payment For Uncompensated Care Provided to Hurricane Evacuees

In 1999, the Institute of Medicine reported that an estimated 98,000 people die each year as a result of medical errors. On July 29, 2005, nearly six years after that notable report, President Bush signed into law the Patient Safety and Quality Improvement Act of 2005 (the “Act”). This new legislation seeks to reduce the number of future medical errors by creating a national medical error reporting system.
Continue Reading New Law Establishes National Database for Reporting Medical Errors