Home Care Law Blog

CMS proposes changes to Home Health Payments and finalizes Hospice payments.

CMS posted a proposed rule and a final rule yesterday that will interest home health and hospice providers.

The proposed home health rule outlines proposed changes to the home health payment system designed to reduce fraud. You can download it here.

Of note,the market basket will go up %2.2.  The rule would also target outlier payments.  The rule proposes to reduce outlier payments by capping them at %10 of payments per agency and %2.5 of total HH PPS payments.  This would amount to cutting the payments in half, as the current rules cap outlier payments at %5 of total HH PPS Payments.  This outlier change is proposed as a response to the abuse of the outlier payments in recent fraud cases.  (Think Miami.) CMS proposes to then take this money and use it to increase home health payments in general.  In essence this %2.5 will move from the "outlier side" to the regular rate side.  Huh, a proposal to increase home health reimbursement, that is surprising.

The rule also proposes to use OASIS data to measure quality.  The rule proposes to penalize agencies that do not submit the quality data by reducing their market basket increase from %2.2 to %0.2.

Oh, wait, I forgot about year three of the phase in that will result in 2010 episode rates being reduced by %2.75 from 2009. 

The proposed rule also includes enrollment and other requirements designed to respond to the recent proliferation of agencies.  The proposal includes: prohibition on sharing practice locations with other providers; requiring an individual or entity that purchases an HHA within three years of its enrollment in Medicare to re-enroll (the provider agreement would not transfer) this rule would apply to any sales or transfers that are pending at the time the rule becomes effective; reactivations of deactivated HHA medicare numbers would also require a survey.

The rule solicits further comments on physician involvement in POCs.

Hospice Rule

The hospice final rule provides a %1.4 increase in hospice payments for 2010.  You can download the entire rule here.

The rule adopts the MedPAC proposal requiring physicians to provide a "narrative" of the clinical justification of the patient's terminal prognosis on the certification and recertification.

The final rule also adjusts the phase-out of the wage index budget neutrality rule.

  

Employee Free Choice Act - still alive

Well, now that card check appears to be off the table, employers are correctly targeting the binding arbitration provisions that the unions want.  Binding arbitration has not received a lot of attention in the last few months, because of the furor over card check.  However, binding arbitration is just as onerous for employers, because of how it may impact negotiations.  

The AP has a story from yesterday detailing the ongoing efforts to stop EFCA completely.  (An excellent idea in my opinion.)  It has some comments from businesses about why the binding arbitration provisions are a bad idea and their efforts to stop binding arbitration as well.  (I have chronicled some of these issue here on the blog over the last few months as well.)  The article mentions that one of the proposed compromises on arbitration is "baseball style" arbitration in which each party makes an offer and the arbitrator picks one.  Of course, this is how baseball addresses individual player contracts, not the league's collective bargaining agreement. (Maybe the NFL could try this proposal as a way to avoid a lockout in 2010, oh, wait, I digress.)   

There is also an article in Tuesday's Investor's Business Daily that discusses some of the reasons you should oppose binding arbitration.  In the article Senator Jim DeMint also raises an interesting theory - card check was never really the union's ultimate goal.  Senator DeMint's theory is that card check was a throw away that the Union put into the EFCA with the intention of dumping it later to save the arbitration provision.  It is an interesting theory, but I think the unions figured they would get both, because of the huge political contributions they made to the Democratic party last year.  This was always the "payoff" - make it easy to add union members and then, through biding arbitration, make it easy to negotiate a more favorable contract.  

The unions are only jettisoning card check now, because of the successful efforts to oppose it by the business community.  Regardless of what the intent was, the bottom line is that the EFCA situation continues to be "in flux" and home health, hospice, and private duty providers should continue to contact their Senators about how the EFCA's binding arbitration provisions would eliminate employee's rights to vote on a contract and potentially burden them with an agreement imposed upon them by a government functionary who knows nothing about their business.   

Fraud enforcement continues

There was an AP article on Forbes website yesterday detailing another massive bust resulting from the HEAT strike force efforts of the DOJ.

The story says that 32 people were arrested in New York, Boston, Houston and Louisiana.  The article does not specify if there were any home health agencies or hospices involved in these arrests, but the author does make a point of including home health in her list of "new schemes" health care criminals are pursuing.

Like most recent articles involving health care fraud, the author paints a picture that includes seizing Rolls Royces  and million dollar homes as well as freezing bank accounts.  This kind of coverage makes all health care providers look bad.  As these task forces continue their efforts providers need to be working hard on their compliance efforts.  The only way to counteract this bad press is to show the home health and hospice industry is committed to ethical compliant behavior.  These individuals who are getting arrested are criminals pretending to be home health, hospice, and other providers.  Providers need to help inform the public of this fact.

The article gives some background on the HEAT task forces.  In that background, the article mentions an interesting fact about how defendants are being charged in these cases.  Instead of just charging health care fraud conduct, the DOJ is charging all 'relevant conduct.'  According to the article this has resulted in an average increase of %20 in the sentences served by defendants.  This is a good thing, although, when I was starting out as a public defender, the prosecutors I knew always charged every relevant crime the evidence could support.  I am surprised to hear the feds were not doing that in these cases.  Especially given how the federal sentencing guidelines work.  

FTC delays Red Flag Rule to November 1

In order to provide more time to "educate" small businesses, the FTC is delaying enforcement of the Red Flags Rule to November 1, 2009.  The FTC believes smaller providers are unsure of their obligations and will be promulgating additional guidance.

The announcement references a FAQ in which the FTC states "that Commission staff would be unlikely to recommend bringing a law enforcement action if entities know their customers or clients individually, or if they perform services in or around their customers’ homes, or if they operate in sectors where identity theft is rare and they have not themselves been the target of identity theft." 

This reinforces what I have said in the past - complying with this rule is not going to be that burdensome.  (The fact that the FTC says they would be unlikely to take action does not mean you should completely ignore this.) It will be interesting to see what the additional guidance states, I doubt they will simply say certain providers can ignore the rule, but this seems to indicate they will try to reduce the burden further. 

Read the announcement here.  I will post the guidance as soon as its available.

Another effort to make MedPAC an administrative agency

You may recall a few weeks ago I posted about a piece of legislation that would make MedPAC an administrative agency with the power to enact its recommendations directly.  Well last week, the White House unveiled a similar proposal.  This piece of legislation, dubbed the "Independent Medicare Advisory Council Act of 2009", would create a council within the executive branch that would take over MedPAC's job.

The council would have the authority to recommend rates and certain other changes to the Medicare system.  IMAC (is there a trademark violation their?  iMac v. IMAC?  Apple loves to sue over that stuff, but I digress) would issue recommendations on October 1 or December 31 for certain programs.  For home health e, the recommendations would be on December 31 and hospice would be in the October 1 report.  

The President would review and either approve or disapprove the recommendations.  If the President disapproved any part of the recommendation, it would be viewed as disapproving the whole report.  If approved, the recommendations would go to Congress.  Congress would have thirty days to review the report.  If Congress disapproved of the recommendations, Congress would need to pass a joint resolution.  If the recommendations are ultimately approved, then the Secretary would promulgate regulations to implement the recommendations.

This legislation contains two rather onerous provisions.  First, all recommendations have to result in "no increase in aggregate Medicare expenditures over the ten year period" in comparison to the expenditures that would result over the same ten year period without the update.  From the context of the legislation and the letter from the White House to Nancy Pelosi, it appears that this is a cost containment strategy - each proposal must keep to the same ten year aggregate total as if you maintained the status quo.  I suppose that will allow for some rate increases over the years, because most ten year projections include projections for increased spending, but it seems that this will "lock-in" the ten year projection from the first year IMAC is in place.  Because the present year's recommendations will always have to match the aggregate spending from the previous year's recommendations  when projected out for the next ten. In turn next year, would have to match this year, which had to match last year, when projected out.  Is it just me or does that sound like we are locking in a budget number?  If we are, in ten years, providers are going to feel a real pinch.  

These recommendations must also either improve the quality of care or the efficiency of the Medicare system.  That seems like a very high bar for the council to meet.  It begs the question - how will that be measured?  I suspect the "efficiency recommendations" will create headaches for providers as well. 

The other provision is the "judicial review" provision.  IMAC severely limits the ability of parties impacted by the Council's proposal to seek judicial review.  In effect, by making this an administrative agency and attempting to limit judicial review, they are trying to eliminate the providers' opportunity to object to their proposals.  Under the current system providers can object to Congress before MedPAC's recommendations are put into place.  This is a good think, because MedPAC's recommendations are not usually very good for providers.  

Advocates of the effort to make MedPAC an administrative agency argue that it will take the politics out of rate setting.  I disagree. As I discussed in the above linked post, it will simply move the lobbying from Congress to the Executive Branch.  Call my cynical, but a program as large as Medicare is not going to hand out the kind of money it does without provider groups offering their two cents.  The input of provider groups is not, as some believe, a bad thing.  They have a much clearer understanding of how much it costs to care for the sick, because their members are out there doing just that.  They add some needed perspective to the government's mistaken belief that every Medicare provider is getting rich off of the system.

Providers should keep a close eye on these two bills, because it will make MedPAC's recommendations fare more likely to occur and IMAC, with it "aggregate spending cap" is also likely to result in far more draconian rate setting.

Employee Free Choice Act - You're not out of the woods yet

There are a number of articles today regarding last week's news of the card-check compromise.  A number of them point out that, while the Employee Free Choice Act without card check is better than the EFCA with card check, it is still a bad piece of legislation.  For example, this column in yesterday's Wall Street Journal discusses the problems employers will face with the binding arbitration provisions.  This blog also discusses the fact that even with the compromise the Employee Free Choice Act is, at best, flawed.

This article in the Atlantic from yesterday afternoon sheds some additional light on the maneuvering in Congress.  From the quotes in the article, it sounds like the major business lobbies are targeting the arbitration provisions as heavily as they targeted the card check provisions.  This makes sense, because with the binding arbitration provisions, once the election is over, the union could very well take unreasonable negotiating positions in order to force the contract negotiations to the Federal Mediation service which, would very likely lead to a contract with terms that the Union would otherwise have not been able to obtain from the employer through negotiations.  My partner has suggested that it would create a system where the union would come to the table with extreme demands figuring that, at worst, the Mediator would take the middle position.  By taking extreme positions the Union would hope to force the "middle position" closer to its real goals.

Of course, the union would say that the Employer could do the same thing, but the mediation process is likely to be more favorable to the Union which would mean the employer has not motivation to force the issue to a mediator.  The employer is likely to want to avoid binding arbitration.

Another issue mentioned in one of the linked articles is the idea that binding arbitration is as undemocratic as card check.  The mediator sets the terms of the contract and the union members do not get to vote on it at all.  (Isn't this whole process supposed to be about the employees?)  I think that is another point that is as easy to make as card check, because it again denies the employees a voice or a right to vote a contract up or down - when did democracy stop being a good thing?

For home health, private duty, and hospice providers, it is important that you keep monitoring this and keep calling your Senators.  The reason card check was pulled was because the moderate Democrats in the Senate heard the calls from their constituents.  Now is the time to keep the pressure up, not to relax. This bill is still alive, still bad for businesses and job growth and the unions are not going to simply accept defeat.  You should continue to let your Senator know that you are opposed to this bill.  If you have not mentioned binding arbitration before, now is a good time to raise your concerns about that.  (If you are represented by one of the Senators that made card check go away, you might want to thank them.)

Card Check Dropped From EFCA

According to today's New York Times, as part of a cpromise to secure 60 votes, the card check provision has been dropped from the Employee Free Chooce Act. The compromise does alter the voting requirements, including shortening the deadline for when an election must occur. It is not perfect, but for now employees will continue to have the right to a secret ballot election. I am on the road and posting from my iPhone. I will post more on this subject later today.

House Health Care Reform Bill Gores Home Health

I have not had time to read the 1,000 pages of health care reform currently before the U.S. House of Representatives, but Bill Dombi and everyone over at NAHC has and what they found is not good for the home health industry.  I have been saying for a while now that home health was getting set up for massive cuts and it looks like they did what they were hinting at doing.

According to an alert from NAHC, the bill would result in $57 billion in cuts to home health over the next ten years. That means home health care is footing about %10 of the cost of cuts.  

It would also result in  $9.8 billion in cuts to hospice over the next ten years.

These are very large cuts and according to NAHC "the House bill includes every possible recommendation by the Medicare Payment Advisory Commission (MedPAC) in an effort to generate the maximum possible funding for health care reform".  You know its bad for home health and hospice if they adopted every MedPAC recommendation.  As I have mentioned elsewhere, MedPAC's recommendations were pretty bad for home health and hospice providers.

If you have not called your Congressman or Congresswoman, now is a really good time to do so.  These proposed cuts would have a grave impact on home health care and hospice care at a time when the aging population in this country is counting on these services more and more.

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.