Home Care Law Blog

Interesting Information on SEIU organizers' tactics

Here is a video, courtesy of Breitbart TV, that has several interviews of individuals who were involved in the NUHW - SEIU fight out in California.  It offers a very clear explanation of why providers need to be afraid of the Employee Free Choice Act.  This is the kind of union vote you can expect if anything like card check passes.

It also makes it clear that you need to be proactive and work to educate your employees in advance, because once SEIU shows up, they do not appear to be restrained by notions such as honesty, professionalism, etc.  They will do whatever it takes to get your employees to sign cards and, later, to vote for the union.  Your employees ought to know, in advance, that they do not have to put up with this kind of behavior and to suspect what they are being told by union reps.  If your employees have questions, you can always show them the video.

Ok, now, on to the video:

FMLA Update

My partner, John Gilliland, asked me to pass the following information along regarding recent amendments to the FMLA.

On October 28, 2009, President Obama singed into law the National Defense Authorization Act of 2010.  It amends the Family and Medical Leave law ("the FMLA") in several respects that will require changes to your existing FMLA policies concerning exigency leave and military caregiver leave.

For exigency leave, the current Department of Labor regulations limit this leave to the spouse, son, daughter, or parent of Reserve or National Guard members.  The new law extends the entitlement to exigency leave to the spouse, son daughter, or parent of active duty members in the regular Armed Forces as well as members of the Reserve and Guard.

For military caregiver leave (also known as leave to care for a covered service member with a serious injury or illness), the new law expands the leave to cover caring for veterans who are undergoing medical treatment, recuperation or therapy for a serious injury or illness at any time during the period of five years preceding the date on which the veteran undergoes the treatment.  In other words, the caregiver is able to take up to 26 weeks of leave to care for a veteran for up to five years after the service member leaves the military service.

The law does not state an effective date for these provisions.  Consequently, it is not yet clear whether these amendments take effect immediately or only after implementing regulations are issued.  However, the amendments most likely take affect upon the President's signature.  

Regulations to reflect the new provisions will be forthcoming but we do not know when.  We suggest you treat the new amendments to be in effect now. 

For your information, attached is a copy of the amendments to the FMLA.  They will make the most sense if you compare them to the current FMLA law which can be found on the Wage and Hour Divisions website at:  http://www.dol.gov/whd/fmla/fmlaAmended.htm  Amendments to your FMLA policies could be made now or you may prefer to wait for regulations to be issued.  If you wait for regulations, however, remember that the changes appear to already be in effect.

 

Congress to Consider Legislation Mandating Paid Sick Days

Earlier this year, I posted on the Health Families Act, an act that would mandate employers provide paid sick days to their employees.  According to this story in the L.A. Times, Congress is set to consider this legislation next week.  

The article does not name the act, but the description in the article is the Health Families Act.  This act was originally introduced by Senator Kennedy, but is appears to have been taken up by Senator Dodd.  According to Thomas (the Library of Congress' web site) the Healthy Families Act is still in committee.  This article may simply mean the Committee will get to the act next week.  This would be the next step in moving the legislation through the Senate.

You should know, that there is an identical bill (H.R. 2460) in the House as well as another bill that is more narrowly tailored to time off for employees with contagious diseases.  

This legislation will require employers to provide one hour of paid sick time for every thirty hours worked.  The paid sick time must be provided to full time and part time employees.  Obviously, for providers that do not already provide this benefit, the cost of employees will go up if this legislation passes.  Increasing the cost of caregivers at a time when Congress is considering massively cutting reimbursement is not a very good idea.  I will try to keep you posted on what happens with this legislation.  

You may recall, that this is the third time this bill has been introduced into Congress and it still has not passed.  It seems much more likely to pass this time, although that is an observation made without any special insight, just looking at party-line numbers and the number of co-sponsors for both bills.  Once more, it is a good idea to start looking at the costs and how this would impact your business so that you can start educating your Congressional representatives.  (You ought to be getting good at this by now.)

Have a great weekend!

Program Integrity Issues in the Final CY 2010 Home Health PPS Rule

Earlier this year, CMS proposed a number of changes in the Home Health PPS Proposed Rule that were aimed at program integrity.  In the Final rule, CMS announces that it will be finalizing two of those rules, one related to CHOWs and one related to deactivation of billing privileges.

As of January 1, 2010, a home health agency that has been in existence for less than three years cannot have its provider agreement transferred as part of a CHOW.  Instead, the new owners will need to reapply as Medicare providers and undergo an accreditation survey or a state survey.  This means you cannot start up a Medicare home health agency with the idea of later selling it as a "turn-key" agency, unless you operate it for at least thirty six months from the "effective date of enrollment in Medicare."  

The regulations specifically states that this prohibition on transfers applies to stock or asset sales.  That is an interesting change, because prior to  this statement, no one considered a stock sale a CHOW.  The definition of CHOW specifically excludes stock sales.  It seems that this may create a conflict within CMS's own regulations.

The comments to the rule state CMS' belief that the rule applies not only to CHOW's submitted after January 1, 2010, but also to CHOW's pending on January 1, 2010.  Of course, court's generally frown upon retroactive applications of the law such as that.  Applying this rule to CHOW's that are pending on January 1, 2010 creates a huge number of problems for providers, because it effectively eliminates the benefit of the bargain the parties struck.  A bargain that everyone understood to be acceptable at the time of the closing.  Now, CMS comes along months after the deal closed and says you can't do that.  It will be interesting to see how that plays out, because I imaging a number of companies will challenge CMS on this issue.  

One other point, this rule change does not mean you cannot sell your agency during that first thirty-six months. It means that the agency will be worth less to a potential buyer, because you cannot transfer the provider agreement through the CHOW process.  

Another change CMS made was to require home health agencies whose billing privileges have been deactivated due to inactivity to undergo a state survey or an accreditation survey before the privileges are reactivated.  This means that if you have not billed Medicare in the previous twelve months, you will need to undergo a survey before you can bill.  This may delay billing for Medicare services significantly.  If you are a low volume Medicare provider, you need to be certain that you are providing some Medicare services at all times (or at least a few times a year).  If you do not, you should avoid taking a new Medicare case until you have undergone the resurvey.  (Otherwise you will find you are providing services for free.)

CMS had made some other proposals in the rule, including a prohibition on HHAs sharing, leasing, or co-locating with other providers.  CMS has withdrawn all of its proposals related to this prohibition.  CMS received a large volume of comments in opposition to these proposals that pointed out the many legitimate practices the rule would have outlawed.  CMS will continue to look at this issue, as they continue to suspect these arrangements are abusive.

Some thoughts on the CY 2010 Home Health PPS Rate Final Rule

In the final rule, CMS is revising the market basket update down from 2.2% to 2.0%.  This is based on further recalculation using additional data.  The best quote is when CMS says that market basket increase is not designed to "account for changes in total costs", but to "measure input price pressures."  So hey, quit complaining about costs, CMS has adequately measured your input price pressures.  (And these guys want to run the entire health care system?)  The bottom line is that you get a 2.0% market basket increase, but several other cuts.  At lest the physicians got hit harder.  (I know, Congress will ride to the docs rescue, but I'm not bitter about that. (Just in case the sarcasm didn't travel through the internet, that was sarcastic.)

The standard sixty day episode payment rate will be $2,312.94 for CY 2010.

If you do not submit required quality data, that amount will go down to $2,267.59.

In the final rule, CMS announces it will finalize a number of its proposed changes.  The biggest change is to CMS' outlier policy.  CMS states in the final rule that it intends to go forward, as of January 1, 2010, with it policy to cap outlier payments at 10% of the agency's total year to date home health payments.  The cap will be implemented on a rolling basis.  In other words, as claims come in, any outlier payments will be checked against the year to date total.  If an outlier payment would put the agency in the position of exceeding the 10% cap, CMS will not remit the amount.  It is important to note that when a claim is submitted that would exceed the cap, only the outlier portion of the payment is withheld, not the entire claim.  CMS is also decreasing the FDL ration to 0.67.  This is being done for several reasons.  First, CMS is attempting to reduce the outlier pool to 2.5% from 5%.  This would allow CMS to put the 2.5% back into regular home health claims reimbursement which would allow CMS to raise rates slightly.

The other factor is combating fraud.  CMS feels that outlier payments are a source of abuse and implementing this cap will reduce the likely hood of fraud.  CMS states in the comments that "suspect fraudulent outlier practices" are continuing to increase, which makes this effort even more important.  

CMS also discusses its ongoing monitoring of the case mix.  According to CMS, if they were to adjust payments to reflect "case mix creep", they would need to increase the 2.75% reduction for this year and next year to 3.51%, although later they state that the number is actually 6.89%.  They are attributing more than 13% of the increase in home health payments to upcoding and documentation issues, as opposed to increased acuity of patients, etc.  If upcoding is that rampant, CMS does not need a rate reduction, they need a fraud investigation.  Upcoding of 13% of claims is fraud and a very wide scale and it seems quite implausible.  It seems more likely that CMS' model is flawed, especially when they state that the variables in their model have not change much.  In other words, our model of reality is correct, reality itself is wrong.  Luckily, CMS has decided not to engage in any additional "adjustments" (beyond the already scheduled -2.75% adjustment) at this time, but given what CMS says in this final rule, the industry ought to be concerned that a future, negative, adjustment is on its way.  What the industry needs is some information (or its own model) to contrast against CMS.

CMS announces it will move forward with OASIS-C and the 2% reduction for failure to submit quality data, but that the new process measures will not be reported on home health compare until October 2010 at the earliest.  They also announce that the Home health Care Quality Data through CAHPS survey will continue to move forward, but not until CY 2012.   CMS will implement the survey on a voluntary basis in beginning in October 2009.  CMS does make a few other changes to this program.  First, only Medicare or Medicaid beneficiaries are eligible to take the survey.  Second, V-Codes may be submitted if ICD-9 codes are not available.  Finally, the change to CY 2012 means providers will need to do a test run in the third quarter of 2010 and being collecting data in the fourth quarter of 2010.  

CMS will continue to use the hospital wage data to calculate the home health wage index.

CMS is also going forward with its proposed changes to the COPs regarding skilled services, etc.   

There is also a great deal of discussion in the final rule regarding CMS' proposals related to MEdicare integrity and home health.  I will address those separately in a post tomorrow.

HHS posts CY 2010 Home Health PPS Rate Update Final Rule.

You can download it here.  I have not had a chance to read it yet.  I just wanted to make sure you knew it was out.  

More fraud enforcement on its way

Just in case the HEAT initiative, FERA, and the myriad of other government health care fraud efforts were not enough, last week Senator Leahy and the Senate Judiciary Committee proposed new legislation aimed at health care fraud.  The Health Care Fraud Enforcement Act of 2009 was introduce last week by Senator Ted Kaufman and co-sponsored by five other members of the Senate Judiciary Committee.  
 

This bill is designed to give the government even more tools to fight health care fraud.  The bill increases the criminal penalties for most health care fraud offenses.  If passed, it would also make it clear that claims submitted that arise out of a violation of the Anti-Kickback Statute are violations of the False Claims Act.  

The intent of this amendment is to make it possible to sue entities, under the False Claims Act, who pay kickbacks, even if they do not submit the claim for payment themselves. However, the amendment simply says that "a claim for items or services that are provided in violation of [the Anti-Kicback Statute] is a violation of the false claims act." In most cases, an Anti-Kickback Statute violation is actionable under the False Claims Act.  It seems that this is an unnecessary addition.  It might also make the innocent third party who submits the bill liable under the False Claims Act even if they were not a party to the kickback. This seems unlikely, because they would not meet the intent requirement under the Anti-Kickback Statute or other criminal statutes, because they would not know about the "downstream conduct."   

The statute also adds the Anti-Kickback Statute to the definition of federal health care fraud offenses.  This expands the scope of remedies available to the government when prosecuting these offenses.  The remedies now include: making the proceeds of the offense subject to forfeiture, making obstruction of these offenses a crime, include these offenses as specified unlawful activity for purposes of money laundering, and authorize the use of administrative subpoenas for the production of documents or authentication testimony.  This may be the change with the largest impact, because of the resulting availability of forfeiture.

Given that there are more criminals getting into health care fraud and that this trend appears to be in part due to the much milder sentences for health care fraud, taking steps to increase health care fraud penalties seems like a good step to combat this problem.  Clearly incorporating the Anti-Kickback Statute into the false claims act does not seem like such a great idea, because it most likely will not reach the parties the Senators wanted to reach. Furthermore, the False Claims Act already has a very wide reach and, under current case law, often reaches anti-kickback violations.  Adding this language to the anti-kickback statute may not change anything.  It might, however, lead to unintended consequences that make it even harder for law abiding providers to operate.  For example, they may become liable under the False Claims Act for recklessly disregarding "downstream" conduct.  

  

HHS Posts Interim Final HIPAA Enforcement Rule

As you may recall, the HITech Act made a number of changes to HIPAA, including beefing up the enforcement sections.  Late last week, HHS published its interim final Enforcement Rule that incorporates the increased civil penalties from the HITech Act.  

One of the less clear areas of the HITech Act was the penalties.  The way the statute was worded, made it sound like the high end of the penalties was basically the same for all violations, which makes little sense.  HHS acknowledged this problem in the comments to the rule and has proposed the following solution. The violations will be subject to the following ranges per violation:

    Did not know -- $100    -     $50,000  

    Reasonable cause -- $1,000 -     $50,000

    Willful Neglect - corrected --     $10,000 -     $50,000

    Willful Neglect not corrected --     $50,000

All categories will be subject to an overall cap of $1.5 million for all such violations of an identical provision in a year.  This provides for some very broad penalty ranges on the bottom end, which still does not make a lot of sense, but at least you can understand the scheme.  I do think that the notion that you can be penalized up to $50,000 for a violation at the lowest end and at the highest end is fundamentally flawed.  I think HHS should have structured it so that each tier ends at a level below the next tier, although I understand that they felt the statute tied their hands.  It will be interesting to see how penalties under these ranges play out.

The rule also amends the affirmative defenses to remove the defense that the entity did not know and by exercising reasonable diligence would not have known as well as expanding the we fixed it in time defense to all violations not due to willful neglect.

Finally, the interim rule defines a few terms.  The terms reasonable cause, reasonable diligence, and willful neglect are all defined in the rule.  These terms are part of the new penalty provisions and come into play in determining into which tier a violation falls. 

FTC extends the Red Flags Rule Deadline again.

Well, I checked a number of times of Friday for an announcement regarding the Red Flags rule.  When I left for the day, I assumed the deadline would not be extended, which, given the legislation pending in Congress, really surprised me.

Well, when I came into the office this morning, I found that the FTC did extend the deadline for enforcement.  It is now June 1, 2010.  You can read the FTC's press release here.

Basically, the FTC is extending the deadline, because Congress has asked it to do so.  Although, the press release notes that the U.S. District Court for the District of Columbia ruled on Friday that the Red Flags Rule does not apply to attorneys.  That case could be interesting, because it may have broader application, because there has always been an argument that the FTC's definition of Creditor was over broad.  That argument was one I felt most home care and hospice providers probably would not make, because it was cheaper to comply than to litigate with the FTC.  Especially give the FTC's recent pronouncements on compliance for entities who "know their customers."

If you have not implemented a Red Flags Rule compliance program, you now have until June 1, 2010.  I would recommend that if you do not have a program in place, you might wait until closer to June 1, 2010 to see what happens with the court case (I bet the FTC will appeal) and what the final legislation from Congress looks like.  These two factors may radically change how you address the Red Flags Rule.