Holland & Hart Healthcare Law Blog

CMS ISSUES MEMORANDUM REGARDING HOSPITAL EMTALA OPTIONS IN EVENT OF H1N1 FLU PANDEMIC.

On August 14, 2009, CMS issued a memorandum on requirements of hospitals under the Emergency Medical Treatment and Labor Act (“EMTALA”) in the event of a surge in hospital emergency room visits for H1N1 influenza treatment. EMTALA requires all hospitals to provide an appropriate medical screening examination on presentation to determine whether the patient has an Emergency Medical Condition. If it determines that one exists, the hospital must treat and stabilize the patient within its capacity or transfer a patient to a hospital that has a capability and capacity to stabilize the condition. In anticipation of a surge in emergency room visits CMS issued additional guidance for hospitals to comply with EMTALA.

GENERAL COUNSEL LIABILITY IN HEALTH CARE ETHICS AND COMPLIANCE OVERSIGHT.

It is not easy being General Counsel for a health care system and growing more difficult with the advent of Corporate Integrity Agreement and Public Securities Obligations.  It is also dangerous and unwise to accept responsibility for Chief Compliance Officer as well as Chief Legal Officer. The ongoing travails of Christi R. Sulzbach, Esq. former Executive Vice President and General Counsel and Chief Compliance Officer of Tenet Healthcare Corporation is a case in point. Ms.Sulzbach, who resigned her position at Tenet in 2003, settled a case brought against her by the Securities Exchange Commission. arising out of a Tenet scheme to defraud Medicare by over reporting its costs so as to increase Medicare payments under its enhanced payment program for “Outlier” patient conditions.  Tenet settled for 10 Million Dollars several years ago. 

Greg Piche' and Joan Ditges RAC Audit Audioconference Scheduled for June 18, 2009

Greg Piche' and Joan Didges, R.N. will present an audioconference on RAC Audits captioned "How to Guard Your Practice from Medicare RAC Audits." on June 18, 2009 at 1:00 P.M. ET. The Webinar is sponsored by Part B News and Decsion Health.  Further Information can be found at

http://www.decisionhealth.com/conferences/A1799/home.html

TWENTY-FIVE STEPS IN DEFENSE OF RAC AUDITS.

Recovery Audit Contractors (RACs) are in the process of saddling up for the nationwide roll out of their Medicare payment recoupment mission. Here are twenty-five recommended proactive steps to circle the wagons and defend the RAC threat.

1. Develop and implement a written audit defense plan- the government bounty hunters are coming your way and they will be looking for the  low lying fruit.

2. Select an audit team or responsible persons depending upon the size of your organization. Including if appropriate internal audit, billing and coding, medical records, risk management and the CFO.

3. Assign specific team member responsibilities in dealing with anticipated audit issues.

4. Consider running an internal pre-audit to identify vulnerabilities such as “medical necessity” and “duplication of services.”

RAC AUDITS AND NEW FEDERAL FALSE CLAIMS ACT EXPOSURE.UNDER THE FRAUD ENFORCEMENT RECOVERY ACT OF 2009 (“FERA”).

The federal squeeze of health care providers is underway. Federal Medicare recovery “bounty hunters,” the Recovery Audit Contractors (“RAC”), are marshalling resources for the anticipated, algorithm primed, data mining hunt for Medicare overpayments from hospitals, physicians, DME companies, hospices and other providers, which is likely to bloom in the second half of this year. Those that attempt to mislead the government or its computer toting agents in order to limit the harvest are facing additional potential exposure under the Federal False Claims Act, 31 U.S.C. §3729-3733 (“FCA”).

CHILD MEDICARE SUIT MAY PROCEED IN SOUTH CAROLINA

Senior U.S. District Judge Malcolm Howard recently ruled that a motion to dismiss a class action brought by the defendants in McCartney v. Lanier Cansler, Secretary North Carolina Department of Health and Human Services, No 7:08-CV-57-H(3), must be denied. The plaintiffs claim that they were denied access to mental health and developmental disability benefits without a prompt hearing and that the defendant failed to adopt reasonable standards for implementation of its Medicaid program.  The three minor plaintiffs through their parents as next of kin brought the class action to restore the children’s rights prospectively. They are not suing form damages.

RECOVERY AUDIT CONTRACTORS (RAC) RETURN MARCH 1.

 They’re back!!!. After a brief intermission to allow the Government Accounting Office to deal with challenges to contract awards, the Government is again gearing up for the 50 state roll out of the Recovery Audit Contract Program where contingent fee contractors get to rummage through the records of hospitals, physicians, DME suppliers  and other Medicare suppliers to see if they can enrich themselves on the identification and recovery of Medicare overpayments going back 4 years.  The wildly successful six state pilot recoupment program implemented in New York, California, Florida, Arizona,  South Carolina and Massachusetts will be extended to a wider group of states divided into 4 regions, artfully described as A, B,C & D. From 2005 to 2008, the pilot contractors earned themselves a hefty $187,000.000.00 on $1.03,000, 000,000. in identified overpayments based upon their contingency ratios of 9 to 12.5%..

Exclusive Anethesia Arrangement Fails Personal Services Exemption Under Stark.

Normally, anesthesia services contracts do not receive a lot of scrutiny with respect to Stark or Anti-kickback Statute ("AKS") compliance. Recently, the federal 3rd Circuit Court of Appeals had a chance to review and reverse a summary judgment granted in favor of a hospital and its anesthesia providers who claimed that they were protected by the "personal services" exemption from Stark and the AKS. The Plaintiff in the Qui Tam lawsuit, United States  ex. rel. Kosenske v. Carlisle HMA, Inc., 3rd. Cir.,No. 07-4616, 2009), was a member of the anesthesia group which entered into an exclusive contract with the Carlisle Hospital for anesthesia services. The hospital provided free space and services to the anesthesia group, which is not an uncommon practice because that is generally considered part of the "arms length"negotiation price for the anesthesia services.

STATE CANNOT REDUCE MEDICALLY NECESSARY HOME HEALTH COVERAGE UNDER MEDICAID.

In Anna C. Moore v. M.D. Rhonda Medows, No. 107-CV-631 TWT (D.C.N.D. Georgia-Atlanta Div. June 4, 2008), an action for declaratory and equitable relief brought by a 12 year old Medicaid patient under 42 U.S.C. §1983, the U.S. District Court granted Ms. Moore summary judgment against the State of Georgia which sought to reduce the number of home duty nursing hours afforded the plaintiff from 94 prescribed by her doctor to 84 hours a week as a cost cutting measure.

Illinois Alleges “Price Fixing” Violation in Medicaid Boycott

Illinois Medicaid payments, by many accounts, are substantially below reasonable remuneration and doctors taking Medicaid patients do so at their personal cost.  Last month the Illinois Attorney General, Lisa Madigan, filed an antitrust action under the Illinois Antitrust Act against two physician groups representing ninety percent (90%) of the primary care market in Champaign County, Illinois for boycotting new Medicaid patients.  The case, The People of the State of Illinois ex rel. Lisa Madigan v. Carle Clinic Association, P.C.; Christie Clinic, P.C. (No. 07h115) is pending in the Sixth Judicial Circuit, Campaign County, Illinois, and asserts two counts under the state statute, which makes it illegal to:

make any contract with, or engage in any combination or conspiracy with, any person who is, or but for a prior agreement would be, a competitor of such person:
a.  for the purpose or with the effect of fixing, controlling or maintaining the price or rate charged for any commodity sold or bought by the parties thereto, or the fee charged or paid for any service performed or received by the parties thereto;
b.  fixing, controlling, maintaining, limiting, or discontinuing the production, manufacture, mining, sale or supply of any commodity, or the sale or supply of any service, for the purpose or with the effect stated in paragraph a. of subsection (1).