New Jersey Healthcare Blog

Just another WordPress weblog

Medicare Solvency

July 29, 2014 | No Comments
Posted by Frank Ciesla

As we have in the past years, (http://www.njhealthcareblog.com/2012/04/medicare-solvency-a-continuing-challenge-update/; http://www.njhealthcareblog.com/2013/06/2013-annual-report-of-the-board-of-trustees-of-the-federal-hospital-insurance-and-federal-supplemental-medical-insurance-trust-funds/), the following is our comment on the report recently issued in regard to the solvency of the Medicare program.  In this year’s report, if one were to review pages 276 and 277, which is the actuarial opinion, it points out some of the underlying myths as to the viability of the Medicare program projected in the report.  Obviously, the viability of the Medicare program is important to all health care providers, since a substantial number of beneficiaries of those health care services have those services paid for by the Medicare program.  I suggest that you read the entire attached statement of actuarial opinion.  It is only two pages but again, two highlights are significant.

The report states:

In past reports, the Board of Trustees has emphasized the virtual certainty that actual Part B expenditures will exceed the projections under current law due to further legislative action to avoid substantial reductions in the Medicare physician fee schedule.  Current law would require a physician fee reduction of almost 21 percent on April 1, 2015—an implausible expectation.

The report further goes on to state:

The Affordable Care Act is making important changes to the Medicare program that are designed, in part, to substantially improve its financial outlook.  While the ACA has been successful in reducing many Medicare expenditures to date, there is a strong possibility that certain of these changes will not be viable in the long range.  Specifically, the annual price updates for most categories of non-physician health services will be adjusted downward each year by the growth in economy-wide productivity.  The ability of health care providers to sustain these price reductions will be challenging as the best available evidence indicates that most providers cannot improve their productivity to this degree for a prolonged period given the labor-intensive nature of these services.

As seen by these two examples, in order to provide access to the Medicare beneficiaries, the current law, reducing payments to health care providers, cannot be enforced.  As set forth in the actuary’s opinion, and based upon prior experience, the current law will not be applied, resulting in much higher costs to the Medicare program.  Health care providers must be concerned as to the continued viability of the program since, while the program does not provide the health care, it provides the providers with the financial resources necessary for them to provide the health care.

July 21, 2014 Regulatory Developments

July 24, 2014 | No Comments
Posted by Beth Christian

  • On July 21, 2014 at 46 N.J.R. 1693, the Department of Human Services published notice of its adoption of amendments to its rules governing outpatient psychiatric services under Medicaid.
  • On July 21, 2014 at 46 N.J.R. 1694, the Department of Human Services published notice of its readoption of its regulations governing psychiatric adult acute partial hospital services.
  • On July 21, 2014 at 46 N.J.R. 1695, the Department of Banking and Insurance published notice of its readoption of amendments to its rules governing licensure and registration of third party administrators and certification of third party billing services.

Appeals Courts Issue Conflicting Decisions Regarding Health Care Exchange Subsidies Under the ACA

July 23, 2014 | No Comments
Posted by Beth Christian

Yesterday, two different federal appeals courts issued conflicting decisions regarding the provision of premium subsidies under the Affordable Care Act to individuals who access health insurance coverage in states that use the federal exchange.  A three judge panel of the U.S. Court of Appeals for the D.C. Circuit ruled that language of the Affordable Care Act  unambiguously restricted the subsidies to insurance purchased on exchanges “established by the State,” and vacated an IRS regulation which had extended the subsidies to insurance purchased through the federal exchange.  Several hours later, the U.S. District Court for the Fourth Circuit issued a decision which reached the opposite conclusion concerning the validity of the IRS regulation, finding that the regulation constituted a “permissible exercise of the agency’s discretion.  These two important rulings create a conflict between two federal appeals courts, and are likely to lead to a review of the issue by the United States Supreme Court.

Expanding the Scope of Practice

July 18, 2014 | No Comments
Posted by Frank Ciesla

Consistent with our prior blogs (http://www.njhealthcareblog.com/2014/03/advanced-practice-nurses/; http://www.njhealthcareblog.com/2013/12/no-physician-shortage/; http://www.njhealthcareblog.com/2013/10/expansion-of-the-scope-of-practice-of-non-physicians-a-harbinger-of-things-to-come/; http://www.njhealthcareblog.com/2014/06/scope-of-practice-expansion/), in regard to expanding the scope of practice of the limited licensed practitioners, in the attached article from U.S.A. Today, it is suggested that the current primary care physicians will not meet the demand created by those who are now covered, as a result of the Affordable Care Act, through subsidized private insurance, private unsubsidized insurance or the Medicaid program.

It is also consistent with a recent article attached from Dallas Business in regard to the need for nurse practitioners that the demand is soaring for both nurse practitioners and physician assistants.

In a recent article in the Sunday, July 12th, edition of the Asbury Park Press, the State of Kentucky is permitting nurse practitioners to be able to practice after a period of time without oversight from physicians.

What is clear, again, as we pointed out in the past, is that there is a continued expansion of the scope of practice for limited licensed practitioners.

We will continue to update the inconsistent activities by the various states in regard to expanding the scope of practice.

July 7, 2014 Regulatory Developments

July 11, 2014 | No Comments
Posted by Beth Christian

Here are the most recent health care related regulatory developments as published in the New Jersey Register on July 7, 2014:

  • On July 7, 2014 at 46 NJR 1524, the Department of Human Services published notice of its proposed readoption with amendments to its regulations governing advance directives for mental health care.
  • On July 7, 2014 at 46 NJR 1545, the State Board of Medical Examiners published notice of its proposal of amendments to its regulations regarding prescription, administration and dispensing of drugs.  The proposed amendments would allow physicians to dispense or prescribe opioid antidotes to a person, such as a family member or a law enforcement officer, who may be in a position to assist another individual during an overdose episode.  The amendments were proposed as a result of the 2013 enactment of the Overdose Prevention Act, which encourages witnesses and victims of drug overdoses to seek medical assistance without fear of criminal or civil liability and recognizes the benefits of greater availability of opioid antidotes.  Under the Act, opioid antidotes may be administered by a person who is not at risk of an opioid overdose, but who may be in the position to assist another individual during an overdose.
  • On July 7, 2014 at 46 NJR 1548, the State Board of Respiratory Care published notice of its proposed amendments to its regulations regarding delegation by a respiratory care practitioner to unlicensed persons.  In addition to allowing unlicensed persons to perform certain maintenance assembly and cleaning duties, a respiratory care practitioner may delegate certain activities to an unlicensed assistant in an outpatient setting only.  These duties include demonstrating basic respiratory, non-assisted ventilation and oxygen equipment.  Demonstrations of equipment may not include administration of medication, which would constitute direct patient care.  The proposed amendments will be of particular interest to durable medical equipment providers.
  • On July 7, 2014 at 46 NJR 1642, the Health Care Facilities Financing Authority published notice of its adoption of new rules governing the payment of prevailing wages in Authority projects.
  • On July 7, 2014 at 46 NJR 1644, the State Board of Chiropractic Examiners published notice of readoption with amendments to its regulations governing continuing education, permissible practice structures, and the use of particular diagnostic tests.  Among other things, the amendments add licensed health care facilities and health maintenance organizations as permissible locations where chiropractic physicians may be employed.
  • On July 7, 2014 at 46 NJR 1656, the State Board of Social Work Examiners published notice of its receipt of a petition for rulemaking filed by the New Jersey Association of Mental Health and Addiction Agencies, Inc. which seeks to be approved as a continuing education provider for licensees of the Board of Social Work Examiners.

Sustainable Growth Rate

July 3, 2014 | No Comments
Posted by Frank Ciesla

In an interview, the new president of the American Medical Association, Dr. Robert Wah, set forth that one of the top priorities of the American Medical Association will be the resolution of the Medicare payment system for physicians, particularly the issue around the Sustainable Growth Rate.  As he pointed out in his answer to a question, Congress has just had the 17th patch and they have continued to kick the can down the road.

As we pointed out in numerous prior blogs (http://www.njhealthcareblog.com/2014/04/sgr-patch/; http://www.njhealthcareblog.com/2014/03/sustainable-growth-rate-%E2%80%93-here-we-go-again/; http://www.njhealthcareblog.com/2014/03/sustainable-growth-rate-update/; http://www.njhealthcareblog.com/2014/03/follow-up-on-sustainable-growth-rate/; http://www.njhealthcareblog.com/2014/03/continuing-saga-of-the-sustainable-growth-rate/; http://www.njhealthcareblog.com/2014/03/still-no-sustainable-growth-rate-resolution/; http://www.njhealthcareblog.com/2014/02/sustainable-growth-rate-2/; http://www.njhealthcareblog.com/2014/02/sustainable-growth-rate-an-update-as-to-the-status-of-the-congressional-response/), this will be an ongoing issue and I do not expect it to be resolved until after the November midterm elections, if it is resolved at all.  There is as equal chance they will just kick the can down the road.

OIG Issues Special Fraud Alert Concerning Laboratory Payments to Referring Physicians

June 25, 2014 | No Comments
Posted by Beth Christian

Earlier today, the OIG issued a Special Fraud Alert concerning laboratory payments to referring physicians.  The OIG identified 2 different types of payment arrangements that may be viewed as problematic under the Anti-Kickback law: blood specimen collection, processing and packaging arrangements and registry payments.

The OIG described specimen processing arrangements as payments from laboratories to physicians for certain specified duties, which may include blood specimen collection and centrifuging, maintaining the specimens at a particular temperature, and packaging the specimens so that they are not damaged in transport. The OIG indicated that payments are typically made to referring physicians on a per-specimen or per-patient-encounter basis, and often are associated with expensive or specialized tests.  The concern raised by the OIG is that since Medicare (and other third party payors) allow nominal payments in certain circumstances for specimen collection and for processing and packaging specimens for transport to a laboratory, payment by the laboratory to the physician amounts to unlawful remuneration because the physician is effectively being paid twice for the same work.  The OIG also raised concerns that such payments may be made in amounts which exceed fair market value, although the OIG cautioned that such payments may be suspect if one purpose of the arrangement is to induce or reward referrals of Federal health care program business “regardless of whether the payment is fair market value for services rendered.”

The OIG identified the following characteristics specimen processing arrangements that may be suspect:

  • Payment exceeds fair market value for services actually rendered by the party receiving the payment.
  • The payment is for services for which payment is also made by a third party, such as Medicare.
  • Payment is made directly to the ordering physician rather than to the ordering physician’s group practice, which may bear the cost of collecting and processing the specimen.
  • Payment is made on a per-specimen basis for more than one specimen collected during a single patient encounter or on a per-test, per-patient, or other basis that takes into account the volume or value of referrals.
  • Payment is offered on the condition that the physician order either a specified volume or type of tests or test panel, especially if the panel includes duplicative tests (e.g., two or more tests performed using different methodologies that are intended to provide the same clinical information), or tests that otherwise are not reasonable and necessary or reimbursable.
  • Payment is made to the physician or the physician’s group practice, despite the fact that the specimen processing is actually being performed by a phlebotomist placed in the physician’s office by the laboratory or a third party.

The OIG also noted that payment arrangements can be problematic even if they are structured to carve out work performed on specimens from non-Federal health care program beneficiaries.

The OIG also raised concerns about payments for registry maintenance and observational outcomes databases.  Under these arrangements, which often involve patients presenting with specific disease profiles, laboratories pay a physician for certain specified duties, including submitting patient data to be incorporated into the registry, answering patient questions about the registry, and reviewing registry reports. While the OIG found that such payments may be appropriate in certain limited circumstances, such payments may induce physicians to order medically unnecessary or duplicative tests, including duplicative tests performed for the purpose of obtaining comparative data, and to order those tests from laboratories that offer registry arrangements in lieu of other, potentially clinically superior, laboratories.

The OIG identified the following as being characteristics of potentially suspect registry arrangements:

  • The laboratory requires, encourages, or recommends that physicians who enter into registry arrangements to perform the tests with a stated frequency (e.g., four times per year) to be eligible to receive, or to not receive a reduction in, compensation.
  • The laboratory collects comparative data for the registry from, and bills for, multiple tests that may be duplicative (e.g., two or more tests performed using different methodologies that are intended to provide the same clinical information) or that otherwise are not reasonable and necessary.
  • Compensation paid to physicians pursuant to registry arrangements is on a per patient or other basis that takes into account the value or volume of referrals.
  • Compensation paid to physicians pursuant to registry arrangements is not fair market value for the physicians’ efforts in collecting and reporting patient data.
  • Compensation paid to physicians pursuant to registry arrangements is not supported by documentation, submitted by the physicians in a timely manner, memorializing the physicians’ efforts.
  • The laboratory offers registry arrangements only for tests (or disease states associated with tests) for which it has obtained patents or that it exclusively performs.
  • When a test is performed by multiple laboratories, the laboratory collects data only from the tests it performs.
  • The tests associated with the registry arrangement are presented on the offering laboratory’s requisition in a manner that makes it more difficult for the ordering physician to make an independent medical necessity decision with regard to each test for which the laboratory will bill (e.g., disease-related panels).

The OIG found that concerns also arise when a physician is selected to collect data for a registry on the basis of their prior or anticipated referrals, rather than their specialty, sub-specialty or other relevant attribute.  The OIG also noted that “Even legitimate actions taken to substantiate such claims, including, for example, retaining an independent Institutional Review Board to develop study protocols and participation guidelines, will not protect a registry arrangement if one purpose of the arrangement is to induce or reward referrals.”

The laboratory market is a very competitive one.  The issuance of the referenced Special Fraud Alert, as well as recent large scale investigations and criminal indictments involving laboratory and physician relationships (including the Biodiagnostic Laboratory Services LLC investigation here in New Jersey: https://tinyurl.com/cf5djfw) demonstrates that the OIG has turned an increased focus on relationships between laboratories and physicians.

Scope of Practice Expansion

June 23, 2014 | No Comments
Posted by Frank Ciesla

Just an update of our survey regarding the actions in various states expanding the scope of practice.   The State of Illinois has just passed a statute authorizing dentists to provide flu vaccines to patients age 18 and older.  In the State of Michigan, there is legislation now pending which has passed the Senate and is up for consideration in the House to expand the scope of practice of post-graduate nurses covering nurse practitioners, nurse midwives, nurse anesthetists and nurse specialists.  If passed, the bill would provide them with the ability to write prescriptions or to test or undertake other activities without physician approval, opening the door for them to practice independently.

As we pointed out in previous blogs (http://www.njhealthcareblog.com/2014/03/advanced-practice-nurses/; http://www.njhealthcareblog.com/2013/12/no-physician-shortage/; http://www.njhealthcareblog.com/2013/10/expansion-of-the-scope-of-practice-of-non-physicians-a-harbinger-of-things-to-come/), there is a trend in the United States on a totally inconsistent basis for the states to keep expanding the practice of limited licensed professionals to meet the shortage of physicians.

June 16, 2014 Regulatory Developments

June 23, 2014 | No Comments
Posted by Beth Christian

  • On June 16, 2014 at 46 NJR 1413, the State Board of Pharmacy published notice of its proposal of an amendment to its rules governing minimum standards for container integrity.
  • On June 16, 2014 at 46 NJR 1477, the State Board of Polysomnography published notice of its adoption of amendments to its rules governing licensure and the requirement that applicants hold current certification in basic life support or cardiopulmonary resuscitation/automated external defibrillator to the level of the health care provider or professional rescuer standard as issued by the American Heart Association, the American Red Cross or, another entity deemed by the Department of Health to comply with American Heart Association CPR guidelines.

The Expensive Consequences of Failing to Create Corporate Documents For Your Practice

June 13, 2014 | No Comments
Posted by Ari Burd

It is imperative for every practice, big or small, to have written documents setting forth the rights, duties, and obligations of the practice owners. Regrettably, having your accountant file your LLC Certificate of Formation or Articles of Incorporation when applying for your EIN, is not adequate. If you are a partnership, you should have a  partnership agreement. If you are an LLC, you should have an operating agreement. If you are a PC, you should have a shareholder agreement. If you have non-owner physician employees, you should have employment agreements in place.

For the full article, Click Here.

keep looking »
IE8 Web Slice Add Web Slice