Home Care Law Blog

Florida's Legislature Addresses Physician Payments

I just read an article in Home Health Line about a new Florida statute that went into effect July 1.  The statute attempts to undo some of the mess created by last year's revised licensure statute.  (You may recall that Florida passed a massive revision to its home health licensure statute that incorporated fraud and abuse into the licensure standards.).  

The Florida legislature appears to have recognized that the complete prohibition on payments to physicians, except for one medical director, was not reasonable in the home health industry (or any other industry).  According to the article, the Florida legislature's response was to allow any relationship that fell within a Stark exception.  This is a little bit of good news in Florida, as Stark gives providers a little bit of leeway to rent office space from a physician and to contract with a Physician to be a consultant, medical director, etc.

Of course, the legislation leaves the anti-kickback issues within the purview of the licensing body.  This means that the Florida Agency for Health Care Administration will have its surveyors surveying for Stark violations.  This is problematic, because surveyors don't understand fraud and abuse (they shouldn't have to, it's not really their specialty).  If a surveyor "determines" you have a Stark problem, it can lead to fines and even losing your license.  Of course, the surveyor likely will not really understand Stark, which means you end up litigating a "Stark issue" that should never have been raised in the first place.  This of course, leads to legal fees, wasted time, and other costs.  (Not to mention the risk that you are incorrectly found to have violated the referral prohibition anyways.)

The article quotes a former Florida AHCA attorney and a few providers about what a bad idea expanding the exception is.  They cite to cases of home health agencies paying doctors cash in the parking lot in exchange for referrals.  This seems to miss the point as this kind of activity is a violation of federal law even with the exceptions allowed (assuming, as the article seems to, that the referrals are Medicare or Medicaid cases).  For example, cash payments for referrals are routinely prosecuted under the Anti-Kickback statute.  

In my opinion, this kind of activity should be dealt with under the laws intended to combat fraud and abuse.  Neither Stark nor the Anti-kickback statute creates an exception for cash payments for referrals and this misconduct would arguably create a prohibited financial relationship in violation of Stark even with all of the 20+ exceptions to Stark. It seems the main attraction to removing the exceptions is it makes it easier for the surveyors to enforce. 

In essence, the exceptions get in the way of enforcing the prohibition.  If an exception is getting in the way of pursuing a provider, it is likely because the providers have invoked an exception as a legitimate reason for the exchange of remuneration.  If they have a legitimate reason for the exchange that falls within one of OIG's or CMS's safe harbors/exceptions, why should the HHA lose its license?  CMS and OIG have spent many years considering what relationships are appropriate in health care and promulgating safe harbors/exceptions. (I think they need more, but that is another post.)  These safe harbors and exceptions have included notice and comment rulemaking that has resulted in input from providers.  It seems at least a little problematic that providers in Florida would be subject to losing their license for an arrangement that would not be considered a prohibited referral under Stark.  

Recognizing the exceptions to Stark fixes this problem and is a good first step in fixing the problems created by last years home health law re-write.  However, I continue to think incorporating fraud and abuse issues into the licensure requirements is the real problem here.  Making fraud and abuse issues part of the licensure requirements  asks an entity that has little or no experience with Stark or the Anti-kickback statute to enforce its standards.  Surveyors will now have to consider Stark and all of its exceptions when presented with an agency that has a financial relationship with a referring physician.  (Of course, this is why the people in the article said the exception had to go.)  Having realized that the exceptions needed to apply, Florida now needs to realize that there are other ways to link a violation to a license than asking a surveyor to apply the standards in a survey.  

Employee choice, good for employees, not union members.

The next time you hear an SEIU spokesperson (or any other union for that matter) mention the need for the Employee Free Choice Act to protect employees from the evil employers, you might mention this story to them.  This story might also be useful in an organizing campaign so that employees know who it is they are dealing with.  

The article details SEIU's efforts to deny members efforts to leave SEIU and join another union.(Think of SEIU like the labor union equivalent of Bendini, Lambert & Locke.)  The article points out the while SEIU is in favor of Card Check for your employees, it opposes it for SEIU members.  SEIU is also being accused of intimidating members to keep them from switching unions. (Huh, isn't that what they say only evil employers will do.)  Another point to raise with your elected representatives is that if SEIU will do this to their members, what will they do to get non-members to sign a card.  This is why secret ballot elections are so important.

Less than one month until Red Flags Rule Deadline

I know, you've heard this one before, but the Red Flags Rule deadline is currently set for August 1.  This means you have less than a month to finish putting your plan together.  As I have said before, for home health and hospice compliance won't be that difficult.  The FTC has even acknowledged that for providers who routinely see their clients, compliance with the Red Flags Rule should be relatively simple. See here.  (Note, I said relatively simple, not simple.)

With the deadline approaching, I thought you would appreciate this story. It is a story about the wrinkles that hospitals are discovering as they implement their Red Flags Rule policies and procedures.  The story is interesting for two reasons, one the case of a red flag that led the hospital to identify a patient who actually thought he was someone else.  The patient was using his cousin's name, not to take advantage of his cousin's insurance, but because he thought he was his cousin.  The hospital learned of it when the cousin called to complain about a bill.  The point is that this is another example of how a Red Flag might indicate something other than identity theft.

The other interesting point in the article is the discussion of whether a home health agency or other post-acute care provider can assume the hospital has properly identified the patient.  In my opinion, you cannot make that assumption.  Not surprisingly, the person interviewed in the article drew the same conclusion.  They then discuss what options they have for identifying patients.  

Minimum Wage Set to Increase on July 24

This is still a few weeks off, but my partner thought this was worth mentioning early in the month.  On July 24, 2009, the federal minimum wage will increase to $7.25 an hour.  If you are in a state with a higher minimum wage, your covered employees in that state would be entitled to the state's higher minimum wage.

For larger providers and/or providers who use a service like Paychex, this is something that is most likely already being taken care of for you (assuming you pay anyone minimum wage).  Smaller providers, who do their own payroll or who use an outside accountant or bookkeeper to handle payroll are the ones who might not realize this is coming. (again, its only an issue if you pay minimum wage, something that is not extremely common in this industry).  If you fall into that category you should mention this to your "payroll department" to make sure that you are prepared on July 24, to start paying any minimum wage employees the higher minimum wage.   

You want to be sure you are ready for this if necessary, because wage and hour violations are a very expensive form of non-compliance.

Back from the Break

Well, another Fourth of July has come and gone. For those of in the midwest, it was a rather soggy Fourth.  But with the passing of the Fourth, Congress is returning to work this week.  This means more work on health care reform and more need for vigilance on how Congress is treating home health and hospice reimbursement.  I found a couple of interesting articles related to health care reform and home health this morning.  Both make for good reading and provide more "ammunition" when talking to your Senators about health care reform and the need to properly fund home health and hospice.

The first is an article that appeared in Roll Call yesterday.  It was written by the President of the American Association for Homecare and focuses mostly on HME, but many of his points are equally valid for home health. (I think you could simply substitute the phrase home health for many of his points about DME, other than competitive bidding.)  He raises the issues of cost savings from home care as a key reason to adequately fund HME.  This holds true for home health as well.  As you may recall, the recent study, that showed the rather significant savings to Medicare from properly utilizing home health.

Another article reports the results of a recent survey in Massachusetts regarding physicians thoughts about home health care.  According to the article "almost all the doctors [who responded to the survey] said home health services allowed them to better manage their patients' care, and most of them also agreed that they eased stress on family members. Nearly 9 in 10 doctors said the services can cut the number of patients who need to be admitted to the hospital and two-thirds believe emergency room visits can be reduced. Two-thirds of respondents also said remote monitoring of vital signs could cut costs."  This is more support for the value of home health.  Home health not only allows for better care for the patient, it makes life less stressful on the family as well.  I am not a doctor or a nurse, but I imagine that this also makes life better for the patient.  (Above and beyond the fact that the patient is back in his or her home and not sitting in an institution somewhere wishing they could be back in their own home.)

The article also mentions that about half of the doctors had to keep their patients in the hospital longer, because they could not find a home health agency to take the patient.  This last point reinforces the need for proper funding for home health and hospice.  Every day a patient has to stay in the hospital costs Medicare something along the lines of $5,000.  A few days in the hospital for half of the patients will add up very quickly.  All of that is money that can be saved just through the simple expedient of having home health available.

These are points to remember and be prepared to raise when your state association or NAHC asks you to call your Congressional representatives about home health reimbursement.  You might want to call even if you are not asked.  Home health and hospice do not have huge lobbies.  Any efforts to avert future rate cuts have to be grass roots.

First Court Case Under FERA

That sure didn't take long.  A federal district court has already had an opportunity to address the 2009 amendments to the False Claims Act contained in the Fraud Enforcement and Recovery Act of 2009 ("FERA").  The case involves claims of intentional upcoding by a physician.  What is interesting is that the Plaintiff attempted to avail themselves of more favorable language in FERA, but the court ruled that applying the 2009 amendments to conduct that occurred in 2002 and 2003 was an inappropriate retroactive application of the statute.

In this case the physician had submitted in appropriate claims, but the intermediary had downcoded or denied all of the physician's upcoded claims, which meant the physician did not actually receive any additional money as a result of his upcoding.  This created an issue for the Plaintiff, because one of his claims required actual payment or approval by the government.  Because the Plaintiff had not alleged any of the false claims were actually paid, the court ruled that this claim must fail. (Note that this was only one of his claims, so his suit would have survived regardless.) 

The Plaintiff attempted to avoid this fate by pointing to the wording of the same section of the false claims act after the FERA amendments.  With the pasage of FERA, the Court noted that the section of the act that required a false claim to be paid or approved no longer applied. It now required simply that a false statement be used that was "material to a false or fraudulent claim".  In the Courts words, FERA amended the False Claims Act in this way "arguably to eliminate the actual payment or approval requirement." 

This meant that if the 2009 amendments applied to the doctors 2002-2003 conduct, the Plaintiff's second claim would survive the motion to dismiss, even though the intermediary caught the upcoded claims and did not pay them.  The Court determined that applying FERA retroactively in this fashion would not meet the standards set forth by the Supreme Court, because it would increase the defendant's liability for past conduct ("retroactive effects").  The Court noted that FERA specifically stated the amendments would apply to conduct occurring on or after the date the amendments were enacted and that Congress had specifically directed against applying the amendments in a way that would have retroactive effects.  Thus, the Plaintiffs second claim was dismissed, because the claims were not actually paid.

This case does illustrate how the FERA amendments have broadened the False Claims Act.  Conduct that was clearly outside of the "paid or approved" language of the FCA is likely now within the "material statement" portion of the FCA.  It may be a moot point, as it was arguably within other language of the FCA. (Which raises a collateral question - if it was covered anyway, why did we need this amendment?)

Recovery Audit Contractor Update

Last Friday, CMS posted an update to its RAC website.  This update is in response to questions CMS has been receiving regarding the timing of RAC reviews.  Many providers have asked CMS when will they be "eligible" for RAC reviews.  CMS has clarified that RAC reviews are not being phased in by provider type, but by review type.  In other words, automated reviews, then complex reviews, then medical necessity reviews.

As a helpful guide, CMS has published a document that outlines this phase in strategy.  The guide is divided into two columns, reflecting the phase-in map's color coding.  Yellow states and green states (which were originally scheduled for March 1, 2009 phase-in) are on the earlier schedule.  Blue States (which were originally scheduled for August 1, 2009 phase -in) are on a later schedule.

A key point made by CMS is that no reviews will occur in a state until provider outreach has occurred in that state.  CMS also notes that before any reviews take place they must have been approved by CMS and posted to the RAC website.  CMS expects the first such postings to take place in July 2009.  

Home health and hospice providers in the yellow states should start checking for RAC outreaches in their states.  (You can find a schedule here.)  You should also be checking your RAC's website for posted reviews.  Once you see those, you will know that the automated reviews have begun and that other reviews will be coming on-line as scheduled.  If you are in a blue state, you should start checking your RAC's website in August.  (Just go ahead and put it on the calendar. You will be glad you did.)

If you have not started preparing for the RAC's, now is as good a time as any.  I have touched on that topic here, and there are many other resources available.  Some key points that are worth repeating, audit claims now to identify errors.  You can determine specific errors to look for by looking at your history of claims and past errors you have made as well as by looking at guidance documents from CMS and OIG.  Auditing and monitoring will play a big role in preparing for RACs.  

You should also consider employee training and making sure you have procedures in place to respond to document requests and recoupment requests.  Responding to document request and/or timely appealing recoupment requests is also very important.  You would hate to owe money simply because you responded to slowly.

OIG's Testimony to Congress

Last Thursday, The Inspector General of the Department of Health and Human Services testified before the House Energy and Commerce's Subcommittee on Health.  The purpose of his testimony was to discuss opportunities to address Waste, Fraud and Abuse as part of the "health care reform" effort.  

There was not a whole lot of new detail in this testimony, as he spent a lot of time reviewing what has been going on in South Florida and the new joint effort between DOJ and HHS to operate its "HEAT" strike force.  The Inspector General mentioned a number of vulnerabilities in the Medicare/Medicaid system and touched on Home health specifically.

His testimony regarding fraud in the home health/personal services industry touched on overpayments in New York.  The State of New York paid for services from providers that did not meet program coverage requirements.  The Inspector testified that this was  result of New York's failure to properly monitor providers for compliance with certain state and federal requirements.  

The Inspector also mentioned home health and personal services were subject to the same vulnerabilities as the DME program.  These included improper enrollments due to providers circumventing enrollment requirements, providers circumventing billing requirements, providers providing kickbacks, high payment error rates, and excessive reimbursement rates.  These are all areas that have been covered here and in many other forums over the last few months.

The Inspector did not mention Hospice at all.  Lucky for you hospice providers.

Everyone, hospice, home health and personal services should be interested to note the recommendations the Inspector made to Congress for addressing these problems.  The Inspector announced OIG's Five-Principle Strategy:

1.  Enrollment:  Scrutinize individuals and entities that want to participate as providers and suppliers prior to their enrollment.

2.  Payment: Establish payment methodologies that are reasonable and responsive to changes in the marketplace.  The inspector did not advocate rate cuts, per se, but did illustrate how the current system leads to Medicare paying 4 times the price of some DME equipment.  His point was that paying four time the price for an item was wasteful.

3.  Compliance:  Assisting providers with adopting practices that promote compliance.

4.  Oversight:  Vigilantly monitor programs for evidence of fraud, waste, and abuse.

5.  Response:  Respond swiftly to detected fraud, impose penalties steep enough to deter others, and promptly remedy identified vulnerabilities.

None of these proposals are new, unique or earth shattering.  For providers, the main one that will involve work is the third "Principle".  You have to implement and update your own compliance program and take steps to instill a "culture of compliance."  This third principle is another reminder to providers, you need to be taking a look at your compliance plans.  If you have not updated them in years, if you don't have one, or if you don't think yours is effective, now is the time to do something about it.  OIG is giving everybody in the home health, hospice, and personal services industries a clear signal that it is still serious about compliance and that you should be as well.

Interesting article on SEIU's tactics

Here is a story to file away in the event you ever find yourself dealing with a union campaign involving SEIU.  According to this press release from NUHW (SEIU's competitor) in a recent election SEIU used a number of tactics that it routinely accuses employers of using to intimidate and disenfranchise voters.

The election was ordered after self-directed care aides who were SEIU members petitioned for an election to leave SEIU and have NUHW become their representative.  What ensued was a massive organizing campaign in which SEIU spent ten million dollars and flew in a thousand staffers to try to win the election.  In the end, SEIU won, but only by two hundred or so votes.

In the aftermath of the campaign, workers are coming forward to describe the questionable tactics used by SEIU.  According to these homecare workers, SEIU threatened members that if they voted to decertify SEIU and certify NUHM as their union, they would lose their health insurance benefits, their hours, and their wages.  These are all things SEIU routinely accuses employers of doing in campaigns.  

More importantly, this type of activity is illegal.  The workers stated that even after warnings, the SEIU staffers kept making threats.  They used phone calls, letters, in-person visits, etc. to keep making these threats.  The article linked to above details even more tactics that were allegedly employed by SEIU in this fight.

This is pretty interesting, because as NUHW and SEIU keep fighting, the unions true colors are coming out.  An interesting point for employers and others to consider - if SEIU is such a wonderful, pro-worker union, why do they have to threaten their own members in this fashion.  Something else to keep in mind - SEIU is willing to engage in many questionable practices to win an organizing campaign; imagine how the EFCA would make it even easier for them to win when they are willing to go to these lengths to win.  Legislators, and the public, need to be made aware of this type of activity.  It puts the EFCA, and other related issues, into the proper context.  (It also seems to support the EFCA-Iranian elections comparisons made elsewhere.)

New U.S. Supreme Court case on Age Discrimination

The U.S. Supreme Court handed down a decision last week in a case, Gross v. FBL, involving allegations of aged discrimination.  The plaintiff alleged that he was "demoted" and that his "demotion" was based "at least in part" on his age.  In other words, the employer's motives may have been both discriminatory and legitimate.  This is known as a mixed motives case.  In mixed motives cases, courts have applied a standard that required the plaintiff to show that the discriminatory motive was a "motivating" or substantial factor in the action.

The Plaintiff did not have any "direct evidence" i.e. statement's or documentation stating he was being demoted because of his age, but instead relied upon indirect evidence. This is rather common in discrimination cases, because rarely do you have any obviously discriminatory statements, etc.  (Could this be because most employers are demoting and/or firing people for legitimate business reasons? Nah? That couldn't be possible.)

The trial court gave the jury several instructions.  One stated that the the jury should find in favor of the plaintiff if he had proved, by a preponderance of the evidence, that age was a "motivating factor" in his demotion.  The Court also instructed the jury that if they found the plaintiff had presented evidence of discrimination the burden of proof shifted to the employer to prove that "[it] would have demoted [him] regardless of his age." 

What the court was doing was applying the mixed motives, burden shifting approach to the case.  In this approach, once the plaintiff has provided proof that the substantial or motivating factor in the employer's conduct was discriminatory, the employer must then prove it would have taken the action it did, regardless of the discriminatory factor (age, race, sex, etc.)  This approach was taken out of Title VII cases and had been applied to age discrimination cases for a number of years.

On appeal, the U.S. Supreme Court ruled that this approach is not applicable to age discrimination cases.  The U.S. Supreme Court ruled that the mixed motives burden shifting approach should not have been applied and that the plaintiff "should have been held to the burden of persuasion applicable to typical, non-mixed motives cases."  In other words, the Plaintiff should have had to carry the burden of proving, by a preponderance of the evidence, that age was a determining factor in the employer's action.

 

The Court then went one step further.  The parties had asked the court to address whether indirect evidence was appropriate in a mixed motives case.  The Court addressed whether the Act even allowed "mixed motives" cases.  The Court held that it does not.  The Court looked at the history of the ADEA and compared it to Title VII.  The Court noted recent amendments to Title VII that were not applied to the ADEA.  The Court then analyzed the wording of the ADEA.  Based on this analysis, the Court ruled that in an age discrimination case, the plaintiff must prove that age was a "but-for" cause of the challenged adverse employment action.  This means that the plaintiff must show that "but-for" his age, the challenged action would not have happened.  This is a much higher burden for the plaintiff and eliminates "mixed motives" cases.  The Court also noted that the burden of proof is always on the plaintiff in these cases, even when the plaintiff has produced some evidence of discrimination.

This is a great case for employers.  It actually applies the wording of the statute and provides a simple bright line rule.  As the workforce ages, this case will make it less burdensome to take legitimate actions against employees who are over forty.

One note, because this is an interpretation of a statute, Congress can amend the ADEA to reverse this decision.  Given Congress' recent actions in this regard, I would anticipate Congress at least considering some action.  Employers should be prepared to speak out against such an action. The Supreme Court noted in its opinion how unworkable a mixed motives burden shifting approach is in these cases.  All it does is drive up the cost of doing business, because, in most cases, the employer has to prove itself innocent.