Health Care Compliance Watch

Electronic Health Records and the Medicare / Medicaid Incentive Program: Five Reasons to Hold Off on Purchasing an Electronic Health Records Product

Ilana Sable — Tue, 07 Sep 2010 06:18:20 -0500

If your health care practice has not yet purchased and/or converted to an Electronic Health Records (“EHR”) product, there are, at minimum, five reasons why your practice should consider holding off on making the purchase for a few more months.

To date, no EHR product has been certified as capable of meeting the criteria to support “meaningful use and quality eligible providers and hospitals” for funding under the American Recovery and Reinvestment Act (“ARRA”). In fact, it was only on August 30, 2010 that the Office of the National Coordinator for Health Information Technology announced that it had approved two organizations – CCHIT and The Drummond Group - to act as Authorized Testing and Certification Bodies (“authorized body”) to begin certifying EHR products. Eligible professionals, hospitals and critical access hospitals participating in the incentive program must use an EHR product certified by an authorized body to receive benefits.
Providers hoping to participate under the Medicaid Incentive Program will not have complete “meaningful use” criteria until (and unless) each individual State launches its additional requirements for meaningful use. States choosing to launch a Medicaid Incentive Program will do so beginning in January, 2011. In doing so, each State will be required to identify four (4) additional core “meaningful use” objectives for their Medicaid providers. Until each State has identified its individual core objectives, Medicaid providers have no way of knowing whether, and with what functionality, an EHR product can fulfill the practices specific EHR needs.
Most EHR products will require upgrades and/or additions before becoming certified EHR products. Most EHR products on the market today will need to (a) be upgraded and/or (b) add new functionality to meet the criteria of a certified EHR product. For instance, CCHIT certified less than thirty EHR products - there exist three hundred+ vendors on the market today - as meeting “Preliminary ARRA” requirements (“Preliminary ARRA” certification was given to EHR products that were tested against and met the published certification criteria and standards in the HHS Interim Final Rule of January 13, 2010).
Registration for the EHR Incentive Programs does not begin until January, 2011. Providers will not be able to register for an EHR incentive program until January, 2011 and attestation for the Medicare Incentive Program will not begin until April, 2011. Accordingly, while early use of an EHR product may have distinct and undisputable benefit to any health care practice, in terms of the incentive programs there is no immediate need to commit to any one product until data on certified EHR technology is available.
Multiple demonstrations and training are critical to making an informed decision. Providers are encouraged to begin conducting their search for an EHR product early on and to audit as many products as possible. Moreover, once a practice has narrowed its EHR search down to a particular product, it is encouraged to participate in multiple demonstrations and to include its key employees (i.e. medical billers and coders, compliance officers, nurses and intake personnel) for individual feedback and criticism. Keep in mind that demonstrations by sales representatives and individual software testing can take a few hours each time so the sooner providers begin researching and testing these EHR products, the easier it will be to make an informed decision when the time to purchase an EHR product comes.

How to Use the CMS Approved Audit Issues as Compliance Guidance for Your Medical Practice

Ilana Sable — Fri, 06 Aug 2010 08:39:34 -0500

While it is impossible to pinpoint the exact areas that Recovery Audit Contractors (“RACs") will target when reviewing medical bills sent to Medicare, each regional RAC is required to post its current “issues under review” and disclose to the public the specific codes and/or procedures currently being audited by automated reviews (where no medical record is involved in the review).

For instance, the “issues under review” identified by Region A - Diversified Collection Services (which audits New York and New Jersey, among other states) are:

• IV Hydration

• Bronchoscopy services

• Blood transfusions

• Untimed Codes

• Neulasta: J2505; injection, Pegfilgrastim, 6mg

• Once In A Lifetime codes

• Newborn/Pediatric codes (i.e. newborn pediatric codes Billed for patients exceeding age limits)

• New patient visits

• Duplicate claims - Part B only

• Global billing of radiology or diagnostic tests in the facility setting

• Add-on codes

If your medical practice provides services that are identified as “issues under review,” the first step in any internal review and self-audit is to have the practices medical biller(s) and performing physician(s) review: (a) the applicable local coverage determinations (“LCDs”) and (b) the “issue description” and “issue references” disclosed with the specific “issue under review.” In most cases, the practice can easily correct the “issue” being audited by using an alternate code, submitting claims that are more detailed and/or limiting the services to allowable: beneficiaries, duration, frequency or levels.

Is Your Medical Practice Complying with Medicare's Documentation Requirements?

Ilana Sable — Wed, 28 Jul 2010 06:07:37 -0500

When submitting medical bills to Medicare, it is important to note that for a Medicare claim to be paid (and retained after an audit), certain requirements must be met. For instance,

(1) There must exist sufficient documentation in the provider’s records to verify that the services were provided to eligible beneficiaries;

(2) Medicare’s coverage and billing requirements must be met (including that requirement that the services be reasonable and necessary); and

(3) Services must be provided at the appropriate level of care and must be coded correctly.

These requirements are especially important where providers receive Additional Documentation Requests (“ADR’s”) from Medicare contractors or are subject to an audit. It is important to note that, upon request by a Medicare contractor (including a Recovery Audit Contractor), medical documentation must be submitted within forty-five days of the date of the request. If the provider (a) fails to submit documentation or (b) provides insufficient documentation for the services billed, Medicare takes the position that that there is no justification for the services or level of care billed and will either deny the claim or consider any prior payment an “overpayment” and request that the provider repay the amount previously paid on the claim. Moreover, now that Medicare’s RAC program has been extended to each state, ensuring that your medical practice is compliant with Medicare’s documentation requirements is an absolute necessity.

More importantly, in addition to Medicare and Medicaid, medical practices must be mindful of documentation requirements imposed by their state and federal government. Accordingly, when evaluating a practice’s medical records and medical documentation, providers are encouraged to conduct internal audits and investigations, and identify corrective actions that promote compliance with all of the administrations and agencies that regulate medical practices.

What Protections Do Medicare Providers Have When Being Audited by Recovery Audit Contractors?

Ilana Sable — Mon, 26 Jul 2010 05:41:37 -0500

When implementing the Recovery Audit Contractor (“RAC”) program, Medicare incorporated a variety of limitations and requirements that RACs are required to abide by when conducting audits of Medicare providers. Most significantly, Medicare providers should be aware of the following mandates when being audited by a RAC:

When conducting audits, RACs are limited to looking back up to three years from the date a claim was paid, with a maximum look back date of October 1, 2007.

RACs are limited in the number of medical records that they can request from a provider within a forty-five day period (medical record limits depend on the type and size of the practice).

RACs must accept and review extension requests if providers are unable to submit documentation in a timely manner.

After submission of an Additional Documentation Request (ADR) letter, RACs must initiate at least one additional contact with the provider before issuing a denial for failure to submit documentation.

When reviewing Evaluation and Management (“E/M”) services, RACs cannot look for incorrect levels of service (reviews of E/M services are limited to, among other things, reviews for duplicate claims and/or payments, unbundling and violations of global surgery rules).

RACs are prohibited from reviewing claims that were previously reviewed by another Medicare contractor (i.e. Medicare Administrative Contractors (“MACs”) or that underwent a Prepayment Review.

These points are not exhaustive and demonstrate the need for providers to understand their rights and protections when going through the audit process. The RAC program was designed with ample controls and provider protections, and it can be extremely costly and time consuming (if not debilitating) when Medicare providers fail to enforce their rights and protections when being audited by a RAC.

A Primer on the 1995 and 1997 Documentation Guidelines for Evaluation and Management Services

Ilana Sable — Fri, 09 Jul 2010 08:24:28 -0500

After a recent post discussing preparation and maintenance of medical records, I received several requests for further information regarding the 1995 and 1997 Documentation Guidelines for Evaluation and Management (“E/M”) Services that I briefly discussed.

The 1995 guidelines are applicable to: (a) all medical and surgical services and (b) in all settings. The 1997 guidelines, in addition to incorporating the 1995 guidelines, focus on specialists and outline each component of a typical E/M service. The following is an outline of the general principles that health care practices must adhere to when structuring medical records in accordance with the 1995 and 1997 guidelines.

The medical record should be complete and legible.

The documentation of each patient encounter should include:

· reason for the encounter and relevant history, physical examination findings and prior diagnostic test results;

· assessment, clinical impression or diagnosis;

· plan for care; and

· date and legible identity of the observer.

If not documented, the rationale for ordering diagnostic and other ancillary services should be easily inferred.

Past and present diagnoses should be accessible to the treating and/or consulting physician.

Appropriate health risk factors should be identified.

The patient's progress, response to and changes in treatment, and revision of diagnosis should be documented.

The CPT and ICD-9-CM codes reported on the health insurance claim form or billing statement should be supported by the documentation in the medical record.

The CMS website has further information regarding the 1995 (pdf) and 1997 (pdf) guidelines.

AUDIT DEFENSE - PART I: Monitoring Your Practices Medical Records

Ilana Sable — Tue, 06 Jul 2010 08:00:51 -0500

“If it isn’t documented, it hasn’t been done.”

This axiom is synonymous with the health care industry and is especially relevant when discussing audit defense. Whenever I sit down with a new audit defense client, my first three questions are always the same - “What do your medical charts and records look like? How often do you review and monitor the medical notes and records of the other physicians and ancillary medical staff in your practice? When was the last time that you conducted an internal audit to monitor your practices billing and coding, diagnostic testing and patient follow-up?” This line of questioning is almost always met with a wrinkled expression and furrowed brow, and I immediately know that I have my work cut out for me.

When discussing medical records, health care practices must guide themselves around three fundamental principles. The first is that both private carriers and federal payors review medical records using the 1995 and 1997 Documentation Guidelines for Evaluation and Management (“E/M”) Services, and that any health care practice expecting to be reimbursed for services rendered must do the same.

The second is that each state has its own state-specific laws regarding a health care practices structure, care and maintenance of its medical records. In New York, the law mandates that, among other things, health care professionals must maintain a record for each patient “which accurately reflects the evaluation and treatment of the patient,” and unless otherwise provided by law, all patient records must be retained for at least six years. Moreover, in New York, obstetrical records and records of minor patients must be retained for at least six years and until one year after the minor patient reaches the age of 21 years.

The third is that a medical record is wholly incomplete without accurate and consistent documentation of a patient’s follow-up care. What steps were taken after the physician ordered the pricey diagnostic tests? What was the result of the extended IV Hydration Therapy? If the follow-up care and treatment results go unanswered, questions of medical necessity, abuse and even professional misconduct can follow.

Auditors, investigators and prosecutors alike are always looking for the lapse in the story – the missing link that can be painted into an abusive, unnecessary or even unlawful method of care. Above all, maintaining clear, consistent and well-monitored medical records is a health care practices most powerful tool in any audit defense situation.

Can Your Medical Practice Afford to Keep Treating Medicare Patients?

Ilana Sable — Wed, 30 Jun 2010 08:00:42 -0500

While Congress continues to tackle the difficult decision of when (not “if”) to implement a 21% cut in Medicare payments to physicians, medical practices are facing the equally difficult decision of whether they can afford to keep treating Medicare patients.

On June 24, the House of Representatives passed a six month deferral of the proposed 21% cuts in the Medicare physician fee schedule and retroactively reversed the June 1, 2010 payment cut for 6 months. Physicians were also given a 2.2% fee schedule increase. This temporary deferral marks the tenth time in less than eight years that Congress has blocked the proposed 21% cut in Medicare payments to physicians. Although Congress has pushed the proposed cuts a bit further down the road, the deferral is nothing more than a temporary fix. The Medicare Trust is rapidly depleting and lawmakers have no long term option other than to drastically reduce the country’s Medicare spending.

The bigger issue is that even without the proposed 21% payment cut, physicians across the country have been facing the hard business decision of whether they can afford to keep treating Medicare payments for several years. Many doctors – mainly primary care physicians such as internists and gynecologists – have increasingly stopped treating Medicare patients due to Medicare’s low reimbursement rates, growing demands for supporting medical documents and audits. On average, Medicare pays providers approximately 78% of what commercial insurers pay yet demands a great deal more effort and time in receiving, and often times retaining, payment for services rendered. Plus, with the advent of the RAC program, physicians are finding that they need what amounts to a secondary degree in billing and coding just to stay ahead of the audits and recoupments.

The end result: an increasing amount of physicians are choosing to put the needs of their medical practices above the needs of their senior patients and have either stopped accepting new Medicare patients or have opted-out out of the Medicare program entirely. According to the Centers for Medicare and Medicaid Services, approximately 10 % of physicians have opted out of the Medicare program, with the number of physicians opting-out of the program steadily rising ever year.

If your practice is considering reducing the amount of Medicare patients that it accepts or opting-out of the Medicare program entirely, there are several critical questions that must be asked an evaluated when making these decisions.

· How much time, effort and secondary support (including staff members and physicians) is allocated toward preparing, processing and submitting medical bills to Medicare?

· How much time, effort and secondary support (again, including staff members and physicians) goes into requests for supporting documents and audits?

· On average, how do Medicare reimbursement rates measure up against reimbursement rates from commercial carriers for: (a) rate of claims paid and (b) amount paid on claims?

· How much additional time would physicians and staff members have to allocate toward other projects if the practice reduced or eliminated its treatment of Medicare patients?

· Would the practice require less staff, space and/or secondary support if it reduced or eliminated its treatment of Medicare patients?

U.S. Department of Justice Uses the False Claims Act to Recover $2.85 Million from New York City Ambulance Companies for Medicare Fraud.

Ilana Sable — Mon, 21 Jun 2010 13:27:15 -0500

On June 4, 2010 the U.S. Department of Justice announced the recovery of $2.85 million dollars from three New York City ambulance companies – SEZ Metro Corp., SEZ North Corp. and Big Apple Ambulance Service Inc. – to resolve false claims made to Medicare under the False Claims Act (“FCA”). The FCA gives the federal government (as well as private citizens) a cause of action against those who submit false claims to the government by and through its various agencies and/or departments. In this case, the Justice Department alleges that the ambulance companies used, or caused the use of, false records to appeal a large scale Medicare program refund demand.

Under Medicare rules, ambulance companies can lawfully bill the Medicare program for non-emergency transports only if a patient cannot be transported by any other means. Here, Medicare audited the ambulance companies past billings – audits that can go as far back as seven years under some circumstances – and concluded that the ambulance companies had charged Medicare tens of millions of dollars for ambulance trips that did not meet the standards required by the Medicare rules. When Medicare demanded a refund the ambulance companies proceeded by disputing Medicare’s decision through the Medicare appeals process and, in support of their appeals, submitted false claims by causing hundreds of forged letters purported to come from health care providers that attested to the need and medical necessity of the non-emergency ambulance transports.

This action was originally filed by a whistleblower – a private citizen who was the former financial officer for one of the ambulance companies – under the qui tam provision of the false claims act. The qui tam provisions permit private citizens to file suit on behalf of the United States and share in any recovery. Here, the former financial officer’s share of the settlement will be $618,450.00.

It is unclear whether the original Medicare audit that prompted this case was a product of Medicare’s recently instituted Recovery Audit Contractor (RAC) program.

What Must Health Care Practices Consider When Entering A Debt Collection Service Agreement?

Ilana Sable — Mon, 15 Feb 2010 20:45:21 -0500

When hiring a third party collection agency to recover receivables due for unpaid health care services, health care practices tend to focus on fees and commissions and often lose sight of other equally important issues. Below are a few key questions that health care practices are encouraged to ask and evaluate before entering a Debt Collection Service Agreement in order to avoid the common pitfalls associates with these types of transactions.

1. Will we need to disclose Protected Health Information (“PHI”) when working with the collection agency? If the answer is “yes,” the practice will need to enter a Business Associate Agreement that is compliant with The Health Insurance Portability and Accountability Act (“HIPAA”) and The American Recovery and Reinvestment Act of 2009 (including its expansion of the HIPAA rules and regulations) and must contractually require that the collection agency protect the privacy of the PHI. There may also be State mandated privacy regulations that are more restrictive than HIPAA and ARRA that must be taken into account.

2. What method of practice does the collection agency utilize? In addition to conducting itself in accordance with the Fair Debt Collection Practices Act and Fair Credit Reporting Act, State laws governing collection agencies and collection methods must be reviewed and incorporated into the Agreement to insure that the collection agency is complying with State specific rules and regulations when collecting debt for the health care practice.

3. How will the health care practice monitor the collection agency’s activities? It is important to incorporate language that will enable the health care practice to monitor the collection agency’s activities during the debt collection process, including: patient communications, complaints, requests for information, debts collected and/or settled, legal actions, judgments and garnishments. The practice will also want to include language establishing when and how this information will be obtained. A consistent system of monitoring and reporting is especially critical in the event that the relationship is terminated and the health care practice is left to pick up where the collection agency left off.

4. What are the health care practice’s options and obligations when terminating the Agreement? Can the health care practice freely stop working with the collection agency or does the Agreement incorporate restrictive language? How will existing collection accounts be handled upon termination of the Agreement? These questions are easily overlooked yet often become obstacles in terminating relationships and retrieving crucial information.

How Can a New York City Provider Purchase EHR Software Through the New York Department of Health and Mental Hygiene?

Ilana Sable — Sun, 29 Nov 2009 16:58:35 -0500

Primary care practices (including family medicine, pediatrics, internal medicine and OB/GYN) located in under-served NYC communities may be eligible to receive a $4,000.00 grant toward an eClinicalWorks EHR software package. The grant is administered by the New York Department of Health and Mental Hygiene in support of its Primary Care Information Project ("PCIP").

PCIP is a New York City grant program that was developed to promote "prevention-oriented EHR's" among providers who care for NYC's under-served and vulnerable populations. Primary care practices that are eligible for, and receive, the EHR grant will be required to participate in certain quality improvement efforts, including quality reporting and linkage to public health information systems.

While the $4,000.00 grant money will not cover the entire cost of running an EHR based practice, it is enough to cover the initial conversion costs ( including eClinicalWorks EHR licensing, staff training and 2 years of maintenance and support). In addition, by converting to EHR, primary care practices may become eligible for the financial incentives available under other government programs, including the ARRA.

eClinicalWorks EHR has recieved 2008 CCHIT certification (the most current certification offered by CCHIT) and, as with all other EHR software, it remains to be seen whether it will receive the upcoming CCHIT ARRA certification.

What Does CCHIT EHR Certification Mean For Receiving Financial Incentives Under the ARRA?

Ilana Sable — Sun, 01 Nov 2009 19:23:57 -0500

The Certification Commission for Health Information Technology ("CCHIT"), a non-profit organization that independently certifies health information technology, has put together a preliminary ARRA certification criteria for EHR (pdf) that it believes will meet the requirements for receiving EHR financial incentives available under the ARRA.

Currently, CCHIT is the only Department of Health and Human Services ("HHS") recognized certifying body. As such, it will likely determine which EHR software will enable providers to make "meaningful use" of their EHR when HHS publishes the final definition of "meaningful use." When the definition is published, certification will be necessary for providers to receive the financial incentives available under the ARRA.

The preliminary guide focuses on Ambulatory and In Patient EHR, and promises ongoing updates as more information becomes available.

Definition of "Meaningful Use" Expected in Late 2009

Ilana Sable — Mon, 12 Oct 2009 22:04:57 -0500

As an update on the progress that Health and Human Services (“HHS”), in conjunction with the Centers for Medicare and Medicaid Services (“CMS”) and the National Coordinator for Health Information, is making toward defining “meaningful use," HHS is reporting that the proposed rule (defining “meaningful use”), is targeted for publication in late 2009.

On a related issue, recently, I have been receiving an increasing number of questions from readers wondering whether their practices will be among those eligible for incentive payments under the ARRA. My response has always been, and remains, that these questions can not be answered until the exact definition of "meaningful use" is fleshed out. However, in the interim, HHS has defined "eligible professional" in the following ways:

For the Medicare Incentives:

A physician as defined in section 1861(r) of the Social Security Act, which includes the following five types of professional:

Doctor of medicine or osteopathy
Doctor of dental surgery or medicine
Doctor of podiatric medicine
Doctor of optometry
Chiropractor

For the Medicaid Incentives:

Physicians
Dentists
Certified nurse-midwives
Nurse Practitioners
Physician Assistants who are participating in Federally Qualified Health Centers or Rural Health Clinics led by physician assistants.

I hope that helps to clear up some of the confusion.

CMS Approved Audit Issues By Region

Ilana Sable — Mon, 28 Sep 2009 12:58:11 -0500

While it is difficult to pinpoint the exact areas that Recovery Audit Contractors ("RACs") will look to recover improper payments, it is worthwhile to review the current CMS Approved Audit Issues and use them as guidance for internal reviews and self-auditing.

Diversified Collection Services, covering Region A (including New York and New Jersey), lists:

Pharmacy Supply and Dispensing Fees
Wheelchair Bundling
Urological Bundling

as the CMS Approved Audit Issues for Region A, and providers billing the codes that accompany these audit issues between October 1, 2007 - present may undergo an automated review (where no medical record is involved in the review) for overpayments.

The CMS Approved Audit Issues for the other three regions are as follows:

REGION B	REGION C	REGION D
Blood Transfusions IV-Hydration Bronchoscopy Services	Wheelchair Bundling Urological Bundling Clinical Social Worker Services Blood Transfusions Untimed Codes IV Hydration Therapy Bronchoscopy Services Once in a Lifetime Procedures Pediatric Codes Exceeding Age Parameters J2505; Injection, Pegfilgrastim, 6mg (Neulasta)	Newborn Pediatric Codes Billed for Patients Exceeding Age Limits Once in a Lifetime Procedures Untimed Codes Blood Transfusions Bronchoscopy Services IV Hydration Therapy Neulasta - J2505; Injection, Pegfilgrastim, 6mg.

Although the audit issues vary among each region, the overall focus of CMS is important to study because it explains the manner of billing that providers must avoid. Where, in the past, billing errors may have gone unnoticed, the advent of RACs will force providers to diligently research and review their billing and coding prior to submission for payment.

Who Will Finance The Conversion To ICD-10?

Ilana Sable — Thu, 10 Sep 2009 22:02:51 -0500

After reading a recent article posted by Angela Boynton, a frequent and informative writer with the American Academy of Professional Coders, titled "The Cost of ICD-10 Implementation," I am left wondering who will, realistically, finance the cost of conversion to ICD-10. In the article, Angela cites a study conducted by the The Medical Group Management Association which predicts astronomical ICD-10 implementations costs. The study found that, on average, it would cost :

$84,000.00 for the average small physician practice to upgrade to ICD-10;
$3,000,000.00 for large practice implementation;
$500,000.00 - $14,000,000.00 for health plans, depending on size.

While the article does not go into details regarding the scope and time frame for the projected costs (i.e. Are these "lifetime" costs or one-time conversion costs? Do these costs include new equipment, software, technical support, training and so forth?), it is clear that the health care industry will be addressing more than the burden associated with training and education.

However, I am not sure that these figures are accurate, nor that they will be paid by the health care providers. For instance, if a small physician practice is currently leasing billing software, or working with a medical billing company, wouldn't these service providers absorb most of the conversion costs?

My assumption is that current ICD-9 billing and coding software can easily be converted to, or updated for, ICD-10 functionality and compatibility. And even if my "easily converted" assumption is wrong, isn't it in the service providers' best interest to keep the costs to the end users - like small physician practices - as low as possible so that they can retain their client base?

As for those practices that use in-house billing and coding software that they own, it is probably best to hold off and buy a comprehensive software that incorporates ICD-10 billing and coding, and a certified electronic health records system ("EHR"). Most practices will be expending money for the EHR software no matter what happens with ICD-10, so waiting for one unified system will likely be the most cost effective approach. The problem for these practices is that they will be pressed to purchase the EHR software much sooner than ICD-10 will be in use.

Recovery Audit Contractors: Identifying Improper Medicare Payments

Ilana Sable — Mon, 07 Sep 2009 20:09:49 -0500

In an effort to identify improper Medicare payments and fight fraud, waste and abuse in the Medicare program, The Centers for Medicare & Medicaid Services ("CMS") awarded contracts to four permanent Recovery Audit Contractors ("RAC's"). The national RAC program is the outgrowth of a successful demonstration program that used RAC's to identify Medicare overpayments and underpayments to health care providers and suppliers in California , Florida , New York , Massachusetts , South Carolina and Arizona . The demonstration resulted in over $900 million in overpayments being returned to the Medicare Trust Fund between 2005 and 2008, and nearly $38 million in underpayments returned to health care providers.

Overpayments can occur when health care providers submit claims that do not meet Medicare’s coding or medical necessity policies.
Underpayments can occur when health care providers submit claims for a simple procedure but the medical record reveals that a more complicated procedure was actually performed.

Health care providers that will be reviewed for overpayments and underpayments include: hospitals, physician practices, nursing homes, home health agencies, durable medical equipment suppliers, and any other provider or supplier that bills Medicare Parts A and B.

On October 6, 2008, CMS announced the names of the new national RACs. The new RACs are:

Diversified Collection Services, in Region A, initially working in Maine, New Hampshire, Vermont, Massachusetts, Rhode Island and New York.
CGI Technologies and Solutions, in Region B, initially working in Michigan, Indiana and Minnesota.
Connolly Consulting Associates, in Region C, initially working in South Carolina, Florida, Colorado and New Mexico.
HealthDataInsights, in Region D, initially working in Montana, Wyoming, North Dakota, South Dakota, Utah and Arizona.

Additional states will be added to each RAC region in 2009.

The RACs will be paid on a contingency fee basis on both the overpayments and underpayments they find. Contingency Fees are as follows:

Region A - 12.45%
Region B - 12.50%
Region C - 9.00%
Region D - 9.49%

FTC Delays Enforcement of the 'Red Flag's' Rule Until November 1, 2009

Ilana Sable — Tue, 04 Aug 2009 13:48:40 -0500

On July 29, 2009, the Federal Trade Commission ("FTC") announced that it would redouble its efforts to educate small business (including most health care providers) about compliance with the "Red Flags" Rule by providing additional resources and guidance to clarify whether businesses are covered by the Rule, and what they must do to comply. In the spirit of this effort, the FTC has decided to further delay enforcement of the Rule until November 1, 2009.

I suspect that many health care providers subject to the Red Flag's Rule would not have been in compliance on the original August 1, 2009 enforcement date, and therefore still need to put together a compliance program. The good news is that compliance is relatively easy and will take very little time to complete. I recommend reviewing the FTC's newly added Red Flag's Rule: "Frequently Asked Questions" section to determine if your business is subject to compliance under the Rule. If so, see the FTC's compliance template (pdf) for businesses at low risk for identity theft. It is short, straightforward and simple to use.

Accreditation Requirement for Office-Based Surgery Practices in New York State

Ilana Sable — Mon, 20 Jul 2009 16:46:30 -0500

Under the Office-Based Surgery Law, enacted in 2007, all New York State medical practices that perform invasive procedures and surgery requiring more than mild sedation were required to obtain accreditation by a nationally recognized body designated by the Commissioner of Health no later than July 14, 2009.

Currently, accreditation is available through the following agencies:
• Accreditation Association for Ambulatory Health Care (AAAHC)
• American Association for Accreditation of Ambulatory Surgery Facilities, Inc. (AAAASF)
• The Joint Commission (TJC)

For those practices that did not receive accreditation by the July 14, 2009 deadline (even if an accreditation application was filed prior to the deadline), procedures involving moderate or deep sedation or liposuction involving the removal of 500 cc of fat or more cannot be performed until the accrediting agency has conducted an inspection and found the practice to be in compliance with the accrediting agencies office-based surgery standards. Unaccredited medical practices that perform office-based surgeries falling under the scope of the Office-Based Surgery Law after July 14, 2009 should bear in mind that they are at risk of being found guilty of professional misconduct.

For an up-to-date list of accredited Office-Based Surgery practices in New York State, please visit the NYS Department of Health website.

Guidance on Preparing for Implementation of the Red Flags Rule

Ilana Sable — Tue, 23 Jun 2009 11:58:59 -0500

The FTC has posted a compliance template (pdf) for businesses at low risk for identity theft, such as most health care providers. The template allows business owners to design their own Identity Theft Prevention Program in accordance with the FTC Red Flags Rule, and consists of two relatively easy to use parts.

Part A helps users determine if their business is at low risk, and Part B helps users design a written Identity Theft Prevention Program if their business is in a low risk category.

However, like any other compliance regulation, the purpose of the Red Flags Rule is not to inflict more paperwork on affected businesses; its purpose is to foster meaningful use of effective identity theft prevention programs. At minimum, health care providers must actually adhere to the programs that they develop, and train their employees accordingly.

Remember, the implementation date for the Red Flags Rule is August 1, 2009!

One Step Closer to a National EHR Certification System

Ilana Sable — Wed, 17 Jun 2009 16:45:29 -0500

As noted in a previous post, only providers using nationally certified EHR systems will be eligible for the financial incentives available under the ARRA. Currently, there are no nationally certified EHR systems, and no certification criteria has been named.

The Certification Commission for Healthcare Information Technology (“CCHIT”), a recognized certification body for electronic health records (“EHR”), has submitted its proposed EHR certification criteria(pdf), which maps the requirements of an ARRA qualified EHR, to the HIT Standards Committee for review and approval. CCHIT anticipates feedback on the proposed certification criteria by August 26, 2009, and will begin accepting applications from EHR vendors shortly after receiving the anticipated “green light.”

CCHIT has already named many EHR vendors as “CCHIT Certified 08,” but this certification does not have any connection to the national certification required under the ARRA, and does not guarantee eligibility for the financial incentives.

A Primer on the FTC Red Flags Rule

Ilana Sable — Mon, 01 Jun 2009 11:17:00 -0500

The “Red Flags” Rule, enforced by the Federal Trade Commission (“FTC”), requires many businesses and organizations to implement a written Identity Theft Prevention Program designed to detect the warning signs – or “red flags” – of identity theft in their day-to-day operations, take steps to prevent the crime, and mitigate the damage it inflicts.

The Red Flags Rule applies to financial institutions and creditors. The determination of whether your business or organization is covered by the Red Flags Rule is not based on your industry or sector, but rather on whether your activities fall within the relevant definitions.

The definition of “creditor” is broad and includes businesses or organizations that regularly defer payment for goods or services or provide goods or services and bill customers later. Health care providers are among the entities that may fall within this definition, depending on how and when they collect payment for their services.

For instance, health care providers become third party creditors, like credit card companies, when they extend their services (give value) to patients and then wait to receive payment from their patients’ health insurance carriers. While the health care provider is waiting to receive payment, he or she has “credited” the service to the patient with the expectation of reimbursement from the insurer at some future time.

Another example is health care providers who offer payment plans to their patients. This is often the case with very expensive, and frequently uninsured, dental work, where the health care provider offers the patient a payment plan that the patient pays off over the course of the treatment. Again, the health care provider credits the patient with the service and waits for full reimbursement from the patient.

On April 30, 2009, the FTC announced that it is postponing implementation of its Red Flags Rule until August 1, 2009. For more information of the Red Flags rule – and how it applied to your practice – please see the FTC’s guide on Fighting Fraud with the Red Flags Rule: A How-To Guide for Business (pdf).