Attorney General Holder and Secretary Sebelius were joined in the announcement by FBI Executive Assistant Director Shawn Henry, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and HHS Inspector General Daniel R. Levinson.

As part of a coordinated action, 70 individuals were charged by Strike Force prosecutors in indictments unsealed Tuesday, September 6. On Wednesday, they accused persons in six cities of a variety of Medicare fraud schemes involving approximately $263.6 million in false billings.

As part of takedown operations last week, 18 additional defendants were charged in Detroit and one defendant was charged in Miami in cases unsealed on September 1, for their alleged roles in Medicare fraud schemes involving approximately $29.4 million in fraudulent claims.

Additionally, two individuals were scheduled to appear in court Wednesday on charges filed on August 24 for their roles in a separate $2 million health care fraud scheme. This coordinated takedown involved the highest amount of false Medicare billings in a single takedown in Strike Force history.

The joint Department of Justice-HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing. Over the course of the past week, approximately 400 law enforcement agents from the FBI, HHS-Office of Inspector General (HHS-OIG), multiple Medicaid Fraud Control Units, and other state and local law enforcement agencies participated in the takedown. In addition to making arrests, agents also executed 18 search warrants in connection with ongoing strike force investigations.

“The defendants charged in this takedown are accused of stealing precious taxpayer resources and defrauding Medicare  – jeopardizing the integrity of our health care system and our nation’s most critical health care program for personal gain,” said Attorney General Holder. ”Our highly coordinated, nationwide Strike Force operations are working aggressively to combat Medicare fraud and our anti-health care fraud efforts have never been more innovative, collaborative, aggressive – or effective.  We will continue to work with our law enforcement partners and partners across government to fight against health care fraud.”

“Today’s arrests are a powerful warning to those who would try to defraud taxpayers and Medicare beneficiaries,” said HHS Secretary Sebelius.  “These arrests illustrate close cooperation between the Medicare program that identified these fraudsters and the law enforcement officials who acted swiftly to cut them off.  And our efforts to stop criminals don’t end here because the Affordable Care Act gives us new tools to prevent Medicare fraud before it is committed – better protecting seniors and the integrity of the Medicare program for generations to come.”

The defendants charged are accused of various health care fraud-related crimes, including conspiracy to defraud the Medicare program, health care fraud, violations of the anti-kickback statutes and money laundering.  The charges are based on a variety of alleged fraud schemes involving various medical treatments and services such as home health care, physical and occupational therapy, mental health services, psychotherapy and durable medical equipment (DME).

Claims for non-existent services

According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare for treatments that were medically unnecessary and oftentimes never provided.  In many cases, indictments and complaints allege that patient recruiters, Medicare beneficiaries and other co-conspirators were paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could submit fraudulent billing to Medicare for services that were medically unnecessary or never provided. Collectively, the doctors, nurses, medical professionals, health care company owners and others charged in the indictments and complaints are accused of conspiring to submit a total of approximately $295 million in fraudulent billing.

“The health care system is part of our nation’s infrastructure and we must do everything in our power to protect the integrity of Medicare and the system at large,” said FBI Executive Assistant Director Henry. “Working together as partners, we can stop criminals who seek to steal American taxpayers’ hard-earned dollars and we help ensure our nation’s health care system is there for those who need it.”

“As charged in these indictments, the defendants cover nearly the entire spectrum of healthcare providers, and perpetrated a variety of fraudulent schemes,” said Assistant Attorney General Breuer.  “From Brooklyn to Miami to Los Angeles, the defendants allegedly treated the Medicare program like a personal piggy bank. Today’s Strike Force operations should serve as a wake-up call to would-be fraudsters nationwide.   With Strike Force teams now in nine cities across the country, and employing sophisticated, data-driven law enforcement methods, we are determined to hold criminally responsible those who defraud Medicare.”

“The warning should be unambiguously clear by now,” said HHS Inspector General Levinson.  “We will continue using the combined law enforcement might of Strike Forces around the country to combat health care fraud.”

Multiple home health providers accused

• In Miami, 45 defendants, including one doctor and one nurse, were charged for their participation in various fraud schemes involving a total of $159 million in false billings for home health care, mental health services, occupational and physical therapy, DME and HIV infusion.  Another defendant in Miami was charged on September 1 for a $1 million Medicare fraud scheme.
• In one case, 24 defendants are charged for participating in a community mental health center fraud scheme involving more than $50 million in fraudulent billing. According to court documents, the defendants allegedly paid patient recruiters to refer ineligible beneficiaries to the mental health center.  In some instances, beneficiaries who were residents of halfway houses were allegedly threatened with eviction if they did not agree to attend the mental health center.
• In Houston, two individuals were charged with fraud schemes involving $62 million in false billings for home health care and DME. According to an indictment, one defendant allegedly sold beneficiary information to 100 different Houston-area home health care agencies in exchange for illegal payments.  The indictment alleges that the home agencies then used the beneficiary information to bill Medicare for services that were unnecessary or never provided.
• Ten defendants were charged in Baton Rouge for participating in schemes involving more than $24 million related to false claims for home health care and DME. According to one indictment, a doctor, nurse and five other co-conspirators participated in a scheme to bill Medicare for more than $19 million in skilled nursing and other home health services that were medically unnecessary or never provided.
• Six defendants, including two doctors, were charged in Los Angeles for their roles in schemes to defraud Medicare of more than $10.7 million. In Brooklyn, three defendants, including two doctors, were charged for a fraud scheme involving more than $3.4 million in false claims for medically unnecessary physical therapy. Two defendants, including a doctor, are making initial appearances today in U.S. federal court in Dallas after being charged for a scheme to defraud Medicare of approximately $2.1 million.
• In Detroit, 18 defendants, including three doctors, were charged last week for schemes to defraud Medicare of more than $28 million. According to an indictment, 14 of the defendants participated in a home health care scheme that submitted more than $14 million in false claims to Medicare.
• Finally, four defendants including one doctor were charged in Chicago for their alleged roles in schemes to defraud Medicare of more than $4.4 million.

The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

Since their inception in March 2007, Strike Force operations in nine locations have charged more than 1,140 defendants who collectively have falsely billed the Medicare program for more than $2.9 billion.  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

The cases announced today are being prosecuted and investigated by Medicare Fraud Strike Force teams comprised of attorneys from the Fraud Section of the Justice Department’s Criminal Division and from the U.S. Attorney’s Offices for the Southern District of Florida, the Eastern District of Michigan, the Eastern District of New York, the Southern District of Texas, the Central District of California, the Middle District of Louisiana; the Northern District of Illinois, and the Northern District of Texas; and agents from the FBI, HHS-OIG, and state Medicaid Fraud Control Units.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.

There is still time to register for CMS-sponsored, free ACO Learning Sessions, set for Monday, June 20 through Wednesday, June 22, 2011 in Minneapolis, Minnesota. Individuals wishing to attend this session may register for free at https://acoregister.rti.org/.

These free “Accelerated Development Learning Sessions” (ADLS) for providers interested in learning more about how to coordinate patient care through Accountable Care Organizations (ACOs) are offered by the Center for Medicare and Medicaid Innovation.

Four ACO Accelerated Development Learning Sessions are being offered in 2011, with the first session scheduled for June 20-22 in Minneapolis. Each session will teach providers interested in becoming ACOs what steps they can take to improve care delivery and how to develop an action plan for moving toward providing better coordinated care.

Registration for the first session is now open for teams of between two and four senior leaders from healthcare delivery organizations interested in forming an ACO or from an existing ACO. In addition, the plenary sessions will be made available via webcast and all materials from the sessions will be publicly available on the Innovation Center Website: http://innovations.cms.gov/areas-of-focus/seamless-and-coordinated-care-models/acolearningsession.

http://AC= ORegister.rti.org.

CMS encourages all providers learn about ACOs and states that the benefits of attending an Accelerated Development Learning Session include:

• Access to faculty with ACO experience. Faculty at each ADLS will be senior leadership from organizations that have already developed many of the characteristics of an ACO. These practitioners have first-hand experience with what is working and not working in the field.
• Deep understanding of ACO core competencies. The ADLS will cover several core competencies and strategies for building ACO capacities.  Individual sessions and faculty will help participants complete corresponding sections of a comprehensive ACO implementation plan, including defining ACO goals and an action plan for establishing ACO core competencies.
• Guided start to developing an implementation plan. Participants are encouraged to complete a comprehensive implementation plan for establishing the core competencies of an ACO, based on an understanding of their current readiness and gap analysis.  Each organization will begin the crucial process of identifying specific goals for care improvement. Resources, toolkits, and faculty support will be provided to help participants complete, update, and prepare to implement a comprehensive implementation plan that includes benchmarks for developing each core competency over the next one to three years.

For more information, CMS has posted a Frequently Asked Questions page

https://acoregister.rti.org/index.cfm?fuseaction3Ddsp_faq

The U.S. Department of Health and Human Services announced this week the availability of approximately $40 million to strengthen and better coordinate activities within state and territorial health departments aimed at preventing chronic diseases and promoting health. Created by the Affordable Care Act, this initiative targets the nation’s five leading chronic disease-related causes of death and disability: heart disease, cancer, stroke, diabetes, and arthritis.

“Chronic diseases are responsible for 7 out of 10 deaths among Americans each year, and they account for about three-fourths of the more than $2.5 trillion our nation spends annually on medical care,” said HHS Secretary Kathleen Sebelius. “Fortunately, many chronic diseases are preventable, and these new resources will assist states and territories in the implementation of proven prevention and wellness programs that will save lives and lower health care costs for all Americans.”

This announcement is one part of the first-ever Prevention & Wellness Month, as the Obama Administration is highlighting announcements, activities, and tips that will help Americans get healthy and stay healthy. The new initiative will support the implementation of public health programs, surveillance of chronic diseases, translation of research into public health practice, and development of tools and resources for health workers and other leaders at the national, state, and community levels.

State and territorial health activities will focus on reducing age-adjusted mortality due to chronic diseases and reducing the prevalence of disabling chronic diseases. In addition, the initiative will aim to improve health and quality of life by promoting environmental and policy changes related to nutrition, physical activity, and clinical preventive services and by promoting education and management skills for people diagnosed with or at high risk for chronic diseases.

“Many chronic diseases share common risk factors, afflict similar population groups the hardest, and can be effectively addressed by the same public health strategies,” said Dr. Thomas Frieden, director of HHS’s Centers for Disease Control and Prevention, which oversees the initiative. “That’s why it’s so important to help state and territorial health departments develop the organizational capacity and management approaches to deal with chronic diseases holistically, not just as separate conditions.”

CDC expects to award funds for 3-year coordinated statewide chronic disease programs to all 58 U.S. states and territories, with approximately $40 million available for the first 12-month budget period. As a critical requirement, successful grantees will create or update statewide plans that demonstrate coordinated approaches to addressing the leading causes of chronic disease deaths and their associated risk factors, including but not limited to heart disease, cancer, stroke, arthritis, diabetes, nutrition, physical activity, and obesity. Tobacco use, a leading risk factor for chronic diseases, is not part of the initiative but will continue to be addressed through CDC’s other statewide prevention programs.

State and territorial health departments interested in submitting proposals for the Prevention and Public Health Fund Coordinated Chronic Disease Prevention and Health Promotion Program can find more information at www.grants.gov. The application deadline is July 22, 2011.

CMS Announces National Version 5010 Testing Days: 6/15 and 8/24

The Version 5010 compliance date – Sunday, January 1, 2012 – is fast approaching.  All HIPAA-covered entities should be taking steps now to get ready, including conducting external testing to ensure timely compliance.

Medicare Fee-for-Service (FFS) trading partners are  encouraged to contact their Medicare Administrative Contractors (MACs) now and facilitate testing to gain a better understanding of MAC testing protocols and the transition to Version 5010.

To assist in this effort, CMS will conduct two “National 5010 Testing Days.” They are to be held Wednesday, June 15, 2011 and Wednesday, August 24, 2011. These are opportunities for trading partners to come together and test compliance efforts that are already underway, with the added benefit of real-time help desk support and direct and immediate access to MACs.

CMS encourages all trading partners to participate, including providers, clearinghouses and vendors.

More details concerning transactions to be tested are forthcoming from your local MAC. Additionally, there are several State Medicaid Agencies that will be participating in the National 5010 testing days; more details will follow directly from them.

CMS emphasizes that these national events do not preclude trading partners from testing transactions immediately with their MAC and encourages you to begin working with your MAC now to ensure timely compliance.

Note that successful testing is required before a trading partner may be placed into production.

http://www.CMS.gov/Versions5010andD0

CMS Seeks Comments on Vascular Readmissions Measure

CMS has contracted with Yale New Haven Health Services Corporation / Center for Outcomes Research and Evaluation (YNHHSC/CORE) to develop a readmission measure for patients undergoing vascular procedures. This measure is being developed using Medicare Part A inpatient and outpatient administrative claims data and is designed for potential use in public reporting.

CMS is calling for public comment on the measure currently in development, titled “Hospital-Level 30-Day All-Cause Risk-Standardized Readmission Rate
(RSRR) following Vascular Procedures.” CMS is requesting stakeholder review and public comment of this measure. All measure comments are welcome, but CMS says it is particularly interested in feedback in the following areas:

• Definition of the cohort;
• Definition of the outcome;
• Risk adjustment; and
• Technical Expert Panel (TEP) comments.

The measure specifications are outlined in the Measure Information Form (MIF); you may also review the TEP Summary Report (both available at https://www.CMS.gov/MMS/17_CallforPublicComment.asp).

Comments on the measures must be received by Thursday, June 30, 11:59 pm EDT and may be general or specific to the measure. Comments received will be posted approximately four weeks after the public comment period closes.

In a keynote session at last week’s McKesson home care and hospice customer meeting, Melanie Duerr, RN, a Fazzi Associates partner, and her sister Kathleen O’Donnell, CPA, a professor at Onondaga Community College, offer stern warnings that now is the time to begin to prepare for the ICD-10 conversion and that your project must include every department.

We plan an extensive interview with Melanie and Kathleen soon but a brief summary of their excellent presentation will provide some background and lay the groundwork for that future article.

How complex will ICD-9 to ICD-10 conversion be?

Canada was presented as a good benchmark. With one single nationwide healthcare payer, one-fifth the population and one designated training firm, Canada completed its conversion in five years. Measurements indicated a dip in productivity that return to pre-ICD-10 levels after six months.

How is it possible that Canada was able to begin that long ago?  Isn’t ICD-10 brand new? Actually, no. ICD-10 was endorsed by the Forty-Third World Health Assembly of the World Health Organization (WHO) in May 1990 and came into use in WHO member states beginning in 1994. Most industrialized countries, including the Republic of South Africa the presenters pointed out, completed their conversion long ago. Is the United States ready to meet the government’s October 1, 2013 deadline? Is the U.S. healthcare community taking the task seriously yet?

The presenters offered one possibly telling indicator:

• The American Health Information Management Association (AHIMA) has made a three-and-a-half minute video available on YouTube recapping its Second Annual ICD-10 Summit and providing resources to gather information. To date, YouTube reports about 900 views of that video, posted May 6, 2010. In the video, AHIMA reports conference attendance was just over 400, double last year’s Summit.  http://www.youtube.com/watch?v=DqunZSM2RXo
• For comparison, a YouTube video of a baby laughing hysterically at paper being torn up has been viewed more than 16 million times since posted two months ago.

Challenge and opportunity

Duerr and O’Donnell do not pull any punches when describing ICD-10’s full implication for the entire U.S. healthcare industry. “This is an opportunity,” they contend. “The wise provider will use it to clean house. That means everything. Clean up operations, personnel, processes and technology and improve efficiencies.”

“This is not an IT project,” Ms. Duerr reiterated. “Your Strategic Imperative Team, which ought to be in place by now considering that you have less than two and a half years to prepare, should consist of representatives from your coders, QA, field staff, trainers, operations, supervisors and  your CEO and CFO. Your software vendor and your IT staff should be involved but the bulk of your activities will extend far beyond their areas.” In other words, do not look to your software vendor to “do ICD-10” for you, they emphasized.

To those who have grown accustomed to the federal habit of moving deadlines, the Duerr and O’Donnell reminded their audience that CMS has been quite adamant that this deadline will be different. It will come to pass on October 1, 2013, right on schedule. “They cannot put it off any longer,” O’Donnell said. “First of all, the rest of the world has already converted.”

The second reason cited is that, “As complexity of diagnoses increases, more detail was needed to translate several descriptive paragraphs into a line of numbers that can be read by a machine,” Duerr explained. “By matching the complexity of the classification system to the complexity of today’s diagnoses, we can improve care quality, documentation accuracy and payment reliability.”

Summary of basics

• ICD-9’s 24,000 codes will be replaced by about 9 times as many. The exact number is impossible to pin down, and largely irrelevant, as there is no one-to-one correlation. One coder training and certifying body, AAPC, estimates the change as going from 17,000 codes to 141,000
• ICD-9 has five numerical places plus an alpha column that can be one of two letters
• ICD-10 will use seven distinct entries, beginning with an alpha column that makes use of 24 letters and including a column that can be alpha or numerical and a new category to identify the episode count
• Early research indicates that newly trained coders score higher on tests after training than do coders with 30 years of experience
• To prepare for the 2013 conversion, updates to ICD-9 will cease following the scheduled 10/1/2011 update
• Recent research indicated 12% of U.S. healthcare providers have budgeted for ICD-10 transition planning
• Two years is considered the minimum time it will take most providers to be ready for October 1, 2013.

A good place to start reading is a document published by CMS, “ICD-10 Myths and Facts,” and available on the CMS web site.

Medicare claims denials, which have increased in the last two years due to the government’s crackdown on fraud, once focused on two reasons for blocking payment: beneficiary eligibility and medical necessity. One deals with the patient’s appropriateness for the Medicare home health benefit; the other with the appropriateness of the care provided to an eligible patient.

When a home care provider appeals a payment denial, the battleground progresses from one level to the next until an Administrative Law Judge rules on the validity of whichever denial reason had been used. Was the patient eligible for the services provided, and were those services appropriate or excessive for the patient’s condition? (See our 2009 primer on the multi-tiered appeals process.)

Today, RHHIs are paying more attention to medical necessity than they used to, especially with regard to episodes with five to nine visits. In a growing number of claim denial cases, the intermediary’s auditor is less concerned with whether a patient met homebound status criteria but how much service was reasonable and necessary. More frequently than chance would dictate, denial letters dispose of just enough visits to kick a full-pay episode down to a LUPA. When there were seven visits, they deny three; when there were five visits, they deny one. Rarely if ever do agencies see a seven- or ten-visit episode reduced to five.

Two ways to explain the anomaly
There are two possible explanations for an increase in the number of denials that flirt with the edge of the LUPA line.

1.      RHHIs have been instructed by CMS to control Medicare spending by identifying episodes that can be easily reduced from the $2,000-$3,000 range to the $300-$400 range. They are to do it by denying a number of visits, not an entire episode, but so few visits that the provider will not deem the denial worth contesting.

2.      More and more providers appear to be improperly pushing episodes that should be LUPAs into the 5-plus visit range. Though they know these episodes are likely to be returned to LUPA status months, perhaps years, later, they are happy to live on the “float” from the RAP payment, which is either 50% or 60% of the full episode HHRG amount, knowing it will be justifiably returned to a LUPA by the RHHI.

If the first conjecture is the one causing the recently observed payment denial increase, it is a clever tactic on the part of government contractors increasingly pressured to control Medicare costs. It results in high dollar denials, typically 80% to 90% of the original claim amount, which the RHHI can present to the provider as “partially favorable.” This category used throughout the RHHI, QIC, and ALJ appeals process to indicate the episode payment was not denied in its entirety; only a few visits were removed.

More than clever, this tactic is a newfound cash cow for the RHHI as well as a way to demonstrate to CMS that it is aggressively pursuing inappropriate payments.

In the second scenario, of course, the RHHI is fully justified in denying the extra visits and returning the episode to the LUPA reimbursement level the provider knows full well the original claim should have requested. In court before the ALJ, if it even goes that far, providers tapping into this “free government loan” program rarely contest these denials. On the contrary, they expected them and they accept them.

Whether the first or second theory is causing the recent denial activity spurt, important questions must be asked. Are there instances where 5- to 9-visit episodes should not be reduced to four? Are there times when that fifth visit was obviously legitimate? Whose judgment should be trusted to make such a determination? A nurse? Or an RHHI financial auditor?

Home care financial consultants and appeals experts observing this phenomenon try to answer these questions every day. In a recent example, one unnamed agency reported its creativity at finding ways to avoid LUPA episodes had reached expert level, until their FI demanded they produce 80 charts for audit. After review, most had at least some individual visits disallowed, reducing about 20% of them to LUPAs, for a payback demand of approximately $40,000.

The nature of the beast
“Keep in mind who is making these determinations,” advises appeals consultant Michael McGowan. “RHHI contracts are awarded to insurance companies. No CFO or claims officer should ever be surprised when their intermediary behaves like an insurance company, it is simply their nature.”

“How exactly do insurance companies behave?” McGowan is quick to add. “Home care agencies that accept health insurance beneficiaries as patients know that obtaining HMO authorization is a visit-by-visit battle. If you would normally see a patient once a week for nine weeks, the company’s authorization desk clerk will argue that three total visits should be sufficient. If you would normally see the patient three times a week for two weeks the insurance company will argue the same. ‘We’ll give you three and see what happens.’”

Insurance companies refer to payments for patient care as ‘medical losses’ and do everything they can to keep their medical-loss ratio (MLR) as low as possible in order to keep Wall Street and large shareholders happy. According to health insurance industry whistle-blower and former insider Wendell Potter, the average MLR in America has dropped from 90% to just under 80% since 1994, the year the industry defeated President Clinton’s reform attempt.¹

National Government Services, for example, is not just the largest home health intermediary, it is a division of WellPoint. WellPoint is the darling of Wall Street because it has steadily lowered its MLR since 1994 as it has been buying up not-for-profit Blue Cross / Blue Shield companies and converting them to for-profit business units.

Aetna, on the other hand, once lost 20% of its stock price in a single day upon disclosing that its quarterly MLR had increased from 77.9% to 79.4%.

Potter describes the urgency of the situation:

If anyone hates to see the MLR going up more than investors do, it is the insurance company executives and their favored senior managers – who get much of their bonus compensation in the form of stock options. When an increase in the MLR prompts investors to unload shares, the stock price will go down – and along with it, the value of an executive’s stock options. The CEO and other top executives can make or lose millions in one day, depending on which way the MLR goes.

McGowan reasons that insurance company practices do not end at the door separating a corporation’s commercial side from its CMS contractor side. “Knowing that NGS is a unit within WellPoint and that its history is rooted in one of the not-for-profit Blues that WellPoint acquired and converted to for-profit status, one is lead to suspect when reading denial statements from the RHHI medical review department that HMO utilization standards are being applied to traditional Medicare PPS.”

Those standards are well-known to home care agency staff tasked with negotiating with HMO authorization clerks: severe limitations on services such as restrictions on the number of nursing visits, reduced or eliminated non-medical care by home health aides, and the assumption that physical therapy is of little benefit.

When an appeal reaches the ALJ, McGowan – who spends a substantial amount of time in CMS courts – notes, judicial behavior has parallel to that of the RHHI medical reviewers. “Partially favorable decisions that drop episodes to LUPA status are coming down more frequently than they used to,” he asserts. “In court today, the battle is visit by visit until there are only four visits left. No longer do we talk about the nurse’s plan of treatment across the entire episode of care. It is clear to me that judges are specifically looking for the point where the patient stabilized and could have been discharged to outpatient therapy.”

Comparing patient outcomes between normal and minimal service levels
Questions remain once the above practice changes have been explored. Whether RHHIs are improperly denying just the right number of visits or some agencies are improperly adding visits to LUPA episodes, further investigation is need to declare definitively that either practice harms patients.

• How do patient outcomes, including mortality rates, compare between HMO financially driven visit limitations and nurse-controlled plans of treatment?
• If outcomes are similar, HMO standards may be doing no harm and, therefore, nurse-driven care levels may be too high, indicating many episodes can remain at LUPA levels without negatively impacting outcomes.
• If patient outcomes are worse when visits are limited by HMO financial concerns, it will be safe to conclude that agencies are justified in insisting on higher care levels and fewer LUPAs.

Unfortunately, documenting relative outcome levels is nearly impossible. Home care OASIS data is readily available but insurance companies carefully guard their outcome data, calling it proprietary corporate secrets. Whichever one of the three possibilities above is eventually supported by further research, it must be remembered that treatment level decisions grow as much out of pre-existing goals and assumptions as out of concern for patients.

Within an HMO, where decisions are made by financial managers with an eye on the company’s stock price, the focus is on getting the patient out of home care and into the outpatient arena, where long-term care can be delivered by rehab clinics and the patient’s personal physician.

Medicare certified home health care agencies, on the other hand, concentrate on patient care and providing the full range of services necessary to return the patient to self-sufficiency, curing the entire suite of problems and conditions noted in the plan of treatment or at least moving the patient toward self-management of a chronic condition. They prefer not to send the patient to another care center but to complete treatment themselves.

Where a minimal number of visits may be sufficient to meet the HMO’s goal, a full 60 or 120 days of treatment and teaching may be necessary to make a home care nurse comfortable discharging the patient.

When home health fiscal intermediaries begin to impose HMO-type care limitations on nurses who are accustomed to Medicare paying for their services all the way through to desired outcomes, expect an inevitable clash of cultures. According to consultant McGowan, that clash has already begun.

Agencies that might be intentionally pushing LUPA episodes to five or six visits have already begun to see an accelerating denial rate and shrinking number of successful appeals. HMO bottom-line-oriented practice standards may not be appropriate for Medicare home health beneficiaries in most cases. If, however, CMS has instructed RHHIs to use them, providers have little option but to adjust.

___________________________________________

1Potter, W.  Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR Is Killing Health Care and Deceiving Americans. Bloomsbury Press, 2010.

Physician groups have already begun to provide educational webinars and conference sessions to provide information practices will need to prepare for both compliance issues. The AMA has developed a toolkit explaining the challenges presented by 5010 and ICD-10, including critical software modifications, upcoming compliance dates and a compliance roadmap.

A spokesperson for the Medical Group Management Association described IDC-10 as one of the most complex changes ever faced by medical groups. “But 5010 won’t be a slam-dunk either,” he said, reminding his audience that some software vendors in the clinical practice space lagged behind other stakeholders in their readiness for the HIPAA 4010 transactions set, as well as the national provider identifier. “Now, 5010 is a launching pad for ICD-10, so physician practices need a game plan for how they will deal with their vendors.”

This has not been as much of a problem in home care and hospice, where software vendors are accustomed to responding quickly to CMS rules that are known to change unexpectedly from proposed to final versions, often at the last minute and with little warning.

Nevertheless, advice going out to physicians
applies to post-acute providers as well. The time is now to find out when your vendor will be providing 5010 upgrades and be sure you are on their testing schedules. Most experts warn against assuming CMS will put off 5010 and ICD-10 deadlines, even though they have done so for other regulatory changes so often in the past. Note the unusually firm tone found on the CMS web site:

On October 1, 2013, medical coding in U.S. health care settings will change from ICD-9 to ICD-10. The transition will require business and systems changes throughout the health care industry. Everyone who is covered by the Health Insurance Portability and Accountability Act (HIPAA) must make the transition, not just those who submit Medicare or Medicaid claims.

The first ICD-10-related compliance date is less than 2 years away. On January 1, 2012, standards for electronic health transactions change from Version 4010/4010A1 to Version 5010. Unlike Version 4010, Version 5010 accommodates the ICD-10 code structure. This change occurs before the ICD-10 implementation date to allow adequate testing and implementation time.

The compliance dates are firm and not subject to change. If you are not ready, your claims will not be paid. Preparing now can help you avoid potential reimbursement issues. (Emphasis added)

CMS educational resources for health care providers to prepare for the transitions to:

• ICD-10 medical coding: compliance deadline October 1, 2013
• Version 5010 standards for electronic health claims: compliance deadline January 1, 2012

are available at http://www.cms.gov/ICD10/05a_ProviderResources.asp.

Having 30-plus customers online before its first anniversary celebration is a headline in itself. Vice president of sales and marketing Brad Caldwell attributes the Atlanta-based company’s early success to a unique pricing model, based on a percentage of revenue rather than per-seat licensing.

A company news release indicates that ContinuLink rolled out a real-time PECOS support tool, offering cross-verification of provider names, on June 28, four days after CMS released its new PECOS regulation. Without leaving the ContinuLink application, customers are now able to see whether their referring physicians have registered with the PECOS database.

“ContinuLink believes we were the first system in the country to have integrated real-time PECOS support with cross verification of provider name with NPI and PECOS files to assure claims are not rejected incorrectly,” Caldwell said.

ContinuLink CEO Satish Movva added, “This highlights the strength of using a centrally hosted, web-based system, where updates and system enhancements can be rapidly and seamlessly rolled out without user intervention and without service interruption.”

We spoke with Terri Santangelo, RN, BSN, VP of Clinical Operations with ContinuLink’s newest client, FirstLantic Healthcare, Inc. in Delray Beach, Florida. Ask if her agency was struggling with PECOS, Santangelo could only manage a restrained “Ugh!” but said she is looking forward to getting through training and going live on October 1 and beginning to use the new vendor’s PECOS lookup feature.

In addition to the PECOS enrollment and physician name cross verification, ContinuLink also enhanced the system to automatically take pending enrollments into account. On June 30, additional functionality was added to give real time verification of new physicians as new referrals or physicians were entered into the system.

The machine readable file for this initiative became available to software developers June 24. Following complaints from the AMA, the PECOS deadline and scope of claims marked for payment denial has changed numerous times since December, 2008. (see Sidebar: “PECOS History”)

One ContinuLink customer, Sarah Ahmed of Fresno, California, noted her vendor’s foresight, stating, “We came in on Monday morning thinking, as most home care providers did, that we would have to start manually checking each referring physician by hand but we found that all of our physicians were already checked for PECOS eligibility by name and NPI.”

About Continulink

ContinuLink provides a hosted, “Software as a Service” (SaaS) application for home health care, hospice, private duty and supplemental medical staffing businesses. The company was incorporated in Delaware on July 20, 2009 and is owned by Sentinel Capital Partners of NYC. Interim Healthcare remains its largest customer.

www.continulink.com

The proposed rule, on display in the Federal Register today, represents a 4.75 percent decrease in Medicare payments to home health agencies (HHAs) for calendar year (CY) 2011. This is an estimated net decrease of $900 million compared to payments HHAs received in CY2010. It includes the combined effects of a market basket update, a wage index update, reductions to the home health prospective payment system (HH PPS) rates to account for increases in aggregate case-mix that are unrelated to underlying changes in patients’ health status, and other provisions mandated by the Affordable Care Act (ACA) of 2010.

The ACA mandates that CMS apply a 1 percentage point reduction to the CY2011 home health market basket amount, which equates to a proposed 1.4 percent update for HHAs in CY2011. CMS also proposes to further reduce HH PPS rates in CY2011 to account for additional growth in aggregate case-mix that is unrelated to changes in patients’ health status. Based on updated data analysis, instead of the planned 2.71 percent reduction for CY2011, CMS proposes to reduce HH PPS rates by 3.79 percent in CY2011 and an additional 3.79 percent in CY2012.

The ACA also changes the existing home health outlier policy through a 5 percent reduction to HH PPS rates, with total outlier payments not to exceed 2.5 percent of the total payments estimated for a given year. HHAs are also permanently subject to a 10 percent agency-level cap on outlier payments.

“The new HH PPS provisions will help ensure more accurate payments under Medicare and reflect prudent financial stewardship of the Medicare Trust Fund,” said Jonathan Blum, director of the Center for Medicare and deputy administrator for CMS.

The proposed rule also offers an approach to implement an ACA provision, which mandates that, prior to certifying a patient’s eligibility for the Medicare home health benefit, the physician must document that the physician or a non-physician practitioner has had a face-to-face encounter with the patient. “Patient care and access are ultimately what CMS is looking to protect, while working aggressively to prevent fraud. The proposed rule establishes timeframes for these encounters and documentation requirements associated with the provision,” Blum said.

In CY2010, CMS finalized a policy, which requires HHAs that change ownership within three years of initial enrollment to obtain a new State survey or accreditation. CMS now proposes exceptions to the 36-month provision for certain types of ownership transactions. CMS also proposes other changes to the 36-month rule and provides further clarification on its capitalization provisions. In addition, CMS proposes to clarify policies regarding the coverage of therapy services in the home health setting. Further, CMS provides clarification in this proposed rule regarding the quality reporting requirements for the CY2012 HH PPS rate update, as it relates to the Home Health Consumer Assessment of Healthcare Providers and Systems (HHCAHPS) Survey.

Finally, the rule proposes an approach to implement an ACA hospice provision, which requires a hospice physician or nurse practitioner to see a patient prior to recertifying the patient’s eligibility for hospice services.

Background

To qualify for the Medicare home health benefit, a Medicare beneficiary must be under the care of a physician, have an intermittent need for skilled nursing care, or need physical or speech therapy, or continue to need occupational therapy. The beneficiary must be homebound and receive home health services from a Medicare approved home health agency.

Medicare pays HHAs through a system of prospective payments that pays at higher rates to care for those beneficiaries with greater needs.  Payment rates are based on relevant data from patient assessments conducted by clinicians as currently required for all Medicare-participating HHAs.

Home health payment rates are updated annually by the home health market basket percentage increase. CMS uses the home health market basket index, which measures (and tracks) inflation in the prices of an appropriate mix of goods and services included in home health services.

Section 5201(c) of the Deficit Reduction Act (DRA) of 2005 provides for an adjustment to the home health market basket percentage update for CY2007 and subsequent years depending on HHAs submission of quality data.  HHAs that submit the required quality data would receive payments based on the home health market basket update of 1.4 percent for CY2011. If an HHA does not submit quality data, the home health market basket percentage increase would be reduced by 2 percentage points to -0.6 percent for CY2011.

More information is available at www.healthcare.gov, a new web portal made available by the U.S. Department of Health and Human Services.

The proposed rule will be published on July 23, 2010 at the Federal Register. The rule can be located at: http://edocket.access.gpo.gov/2010/pdf/2010-17753.pdf

DATES: To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. EDT on September 14, 2010.

ADDRESSES: In commenting, please refer to file code CMS–1510–P. Because of
staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.

You may submit comments in one of four ways (please choose only one of the ways listed):

1. Electronically. You may submit electronic comments on this regulation to http://www.regulations.gov. Follow the instructions under the ‘‘More Search Options’’ tab.
2. By regular mail. You may mail written comments to the following address ONLY:Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS–1510–P, P.O. Box 1850, Baltimore, MD 21244–1850.Please allow sufficient time for mailed comments to be received before the close of the comment period.
3. By express or overnight mail. You may send written comments to the following address ONLY:Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS–1510–P, Mail Stop C4–26–05, 7500 Security Boulevard, Baltimore, MD 21244–1850.
4. By hand or courier. If you prefer, you may deliver (by hand or courier) your written comments before the close of the comment period to either of the following addresses:

a. For delivery in Washington, DC:

Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445–G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201.

(Because access to the interior of the Hubert H. Humphrey Building is not readily available to persons without Federal government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.)

b. For delivery in Baltimore, MD:

Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244–1850.

If you intend to deliver your comments to the Baltimore address, please call (410) 786–7195 in advance to schedule your arrival with one of our staff members.

Comments mailed to the addresses Indicated as appropriate for hand or courier delivery may be delayed and received after the comment period.

Submission of comments on paperwork requirements

You may submit comments on this document’s paperwork requirements by following
the instructions at the end of the ‘‘Collection of Information Requirements’’ section in this document.

For further information, contact:

• Randy Throndset, (410) 786–0131 (overall HH PPS).
• James Bossenmeyer, (410) 786–9317 (for information related to payment safeguards).
• Doug Brown, (410) 786–0028 (for quality issues).
• Kathleen Walch, (410) 786–7970 (for skilled services requirements and
  clinical issues).

Inspection of Public Comments:

All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web site as soon as possible after they have been received: http://www.regulations.gov. Follow the search instructions on that Web site to view public comments.

Comments received timely will also be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard,
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. ET. To schedule an appointment to view public comments, phone 800–743–3951.

Home care software developer HealthWyse is providing software and services for its clients to make it easier to comply with the new PECOS regulation.  HealthWyse will offer a service that will automatically update the client’s physician database with the latest PECOS file from CMS. During the patient intake process, the software will indicate whether the referring physician is enrolled in PECOS.  There will also be a Management List that will flag those physicians with active patients who are not yet enrolled.

HealthWyse spokesperson Steven Booth said the vendor’s objective is to help clients automate these administrative processes so that they can focus on providing patient care. “This is an example of the advantages of deploying a hosted architecture,” Booth said. “Because we host the master copy of our client’s database, this is a relatively easy solution for us to put into place.”

HealthWyse customers also routinely replicate their data locally in order to maintain their own mirrored-copy. Some use a web-browser to access their data directly from the HealthWyse data center. “In either case,” Booth added, “HealthWyse automates updating PECOS data.”

Since October, 2009 Medicare EOB’s have included warnings about non-compliant physicians. Eventually, home care intake personnel will find themselves in the awkward position of having to refuse a patient and inform the referring physician the refusal is due to his or her failure to register in the PECOS database, preventing the home care agency from being paid if they were to provide services.

What is not clear yet is whether Medicare contractors will attempt to recoup monies paid during the warning period in a future audit. Since a payment denial reason such as this one is easily detected through automated computer audits, there is reason to believe it will attract the attention of Recovery Audit Contractors (RAC) if they ever turn their attention to home care.

Home infusion providers have an option if their software vendor does not offer a PECOS search function such as the one HealthWyse has announced. Rock-Pond Solutions, of Conway, Arkansas, released a PECOS Database Audit tool that will extract physician lists from CPR+, HomecareNet, Ascend-HI and Ascend or receive an Excel file from any system and audit it against the CMS PECOS database.

Rock-Pond CEO Pete Tanguay explained that his $600 service will provide audit results within 24 hours, notify the user when CMS updates its published data file, accept user physician files for PECOS audit an unlimited number of times for a year. Rock-Pond will accept physician files and process them at no charge through the end of July.