CCH Medicare and Medicaid Reimbursement NetNews
 
 
 
CCH Health Care Reimbursement Integrated Library

HEADLINES
What's New in Medicare and Medicaid Answers Now
Monday, March 15, 2010

CCH® Reimbursement Integrated Library
The Reimbursement Integrated Library delivers the key performance indicators for maximizing reimbursement. The Library includes three invaluable titles:
  • Dennis Barry's Reimbursement Advisor - This monthly newsletter provides all the facts about reimbursement strategies to minimize the adverse effects of DRGs, RBRVs, APCs and capitation to optimize hospital reimbursement.
  • Receivables Report - This monthly newsletter includes actual profit-improvement examples from facilities nationwide, secrets for successfully challenging denials, tips for using automation to increase cash flow, and strategies your colleagues are using now to prepare for health care reform.
  • Hospital Accounts Receivable Analysis - This quarterly journal is a synopsis of statistical data related to hospital receivables.

For more details, contact your sales rep.

Reimbursement Integrated Library

Reimbursement Advisor

Dennis Barry’s Reimbursement Advisor

March 2010, Vol. 25, No. 7

In the March 2010 issue of Dennis Barry’s Reimbursement Advisor, authors examine new Provider Reimbursement Review Board rules, as well as new billing rules for noncovered procedures. Also in this issue are developments from the Centers of Medicare and Medicaid Services on physician enrollment requirements and access to cost report and other data.
  • New PRRB appeal rules: Early and continuing coordination, attention required to preserve appeals.
    The Centers for Medicare and Medicaid Services (CMS) made major changes to the rules governing provider appeals in May 2008 -- the first time in 30 years that significant changes have been made to rules governing appeals to the Provider Reimbursement Review Board (PRRB). Although most providers have not yet felt the full effect of these changes, the changes will substantially affect providers’ ability to preserve their rights to certain claims. In this article, the author examines the implications of these changes for health care provider organizations in pursuing individual and group appeals to the PRRB.

    Read IRN » (ip access user) » Read IntelliConnect »

    • April 2010 highlights --- Among the articles coming in the April issue:

    • The Obama administration’s proposed budget for the federal fiscal year beginning October 1, 2010,
    • An in-depth look at the electronic health record (EHR) incentive program and related reassignment challenges it poses for hospitals,
    • Freedom of choice issues for Medicaid providers and beneficiaries, and
    • New rules on mental health parity.

Read this month's Advisor on IRN. Subscribers only

Read this month's Advisor on IntelliConnect. Subscribers only

Not a subscriber? Subscribe today.
Receivables Report

Receivables Report

April 2010, Volume 25, No. 4

  • Streamline Aspects of Your Workday
    Want to speed up and simplify the process of learning about and applying complex guidelines? In this month’s issue, we review a product that can help you stop the exhausting practice of rifling through codebooks or multiple CD-ROM databases and streamline multiple aspects of your workday. Find out more about MediRegs in the April Receivables Report.

    Read IRN » (ip access user) » Read IntelliConnect »

    • Read this month's Advisor on IRN. Subscribers only

    Read this month's Advisor on IntelliConnect. Subscribers only

    Not a subscriber? Subscribe today.
    HARA

    Hospital Accounts Receivable Analysis

    2nd Quarter 2009, vol. 23, no. 3
    • GDRO Remains Under 50 Days.
      In second quarter 2009, hospitals again secured a gross days revenue outstanding (GDRO) average of fewer than 50 days, setting a high standard for the final two quarterly financial reporting periods of 2009. US hospitals responding to the HARA survey reported a second quarter GDRO average of 48.36 days, up slightly more than a half day from a 47.82-day GDRO average reported in first quarter 2009. Compare these figures with your own by reading the HARA Report.
      Read IRN » (ip access user) » Read IntelliConnect »

    Read this month's Advisor on IntelliConnect. Subscribers only

    Not a subscriber? Subscribe today.
    Headlines
    from Medicare and Medicaid Guide

    Court halts legislated Medicaid rate cuts

    In two separate cases, the Ninth Circuit Court of Appeals has upheld preliminary injunctions barring California Medicaid officials from implementing payment cuts required by state legislation. In both cases, the court held that the state laws were likely to violate federal Medicaid law because the legislature failed to consider the relationship between the new rates and the providers' costs and the effect of the cuts on the quality and availability of care to Medicaid beneficiaries.

    The legislature used two methods to reduce the state payments. One statute reduced payment rates for adult day healthcare (ADHC) services by 5 percent. The other did not reduce rates directly; instead it cut the maximum hourly rate for which the state would reimburse counties for in-home support services (IHSS) from $12.10 to $10.10 per hour. Counties were free to continue paying the higher rate from their own funds.

    Direct rate cuts

    In the case where the state legislation imposed specific rate reductions, the court held that the state legislature was required to consider the effects of the rate changes on efficiency, economy, quality of care and beneficiaries' access to services because it was the body setting the rates. The record of the legislature's consideration of the bill established that its concern was resolving the state budget crisis and it had not addressed the effects of the cuts on any of the factors listed in the federal statute.

    The court rejected the contention that the legislation allowed the state Medicaid agency director to decide whether to implement the cuts and that the agency had met the requirements of Soc. Sec. Act §1902(a)(30)(A). First, the agency's own published notices indicated that the rate reductions were mandated by state legislation. Second, the agency's study of the costs of ADHC was not conducted until after it published the notice of the rate changes. Third, the agency compared the payments for ADHC to the costs of nursing facility care, but not to the costs to providers of furnishing ADHC to Medicaid beneficiaries.

    Indirect cuts

    In the case involving IHSS, the legislature did not change the Medicaid payment rates; these were set through collective bargaining between the union representing the IHSS workers and the county-created entity administering the program. The state legislation reduced only the maximum wage that the state would reimburse for county payments. Most counties were not affected because their rates did not exceed the new limit. State Medicaid officials contended that because neither the legislature nor the Medicaid agency set the rates, neither was obligated to use any process or procedure that might be required under Soc. Sec. Act §1902(a)(30)(A).

    The court rejected the state's argument, however. Although the statute did not reduce rates directly, the legislature injected itself into the rate-setting process by reducing the state's payments. Even if the rates were established by the counties through collective bargaining, the state agency was obligated to assure that the rates met the requirements of federal law. It was undisputed that the legislature did not consider whether the rates covered the providers' costs and the effects on efficiency, economy, quality of care and beneficiaries' access to services. In addition, the Medicaid officials were aware that reducing the state contribution would affect the availability of IHSS services. Although many of the providers were relatives who lived with the Medicaid beneficiaries they served, Medicaid officials were not excused from determining the providers' costs.

    In discussing the hardship to the state, the court noted that the law did not prohibit the agency from lowering its rates. Rather, federal law required that rates be established or changed using a process in which the providers' costs and the effects of the changes on efficiency, economy, quality of care and access were considered.

    California Pharmacists Association v. Maxwell-Jolly, 9th Cir., March 3, 2010, ¶303,301; Dominguez v. Schwarzenegger, 9th Cir., March 3, 2010, ¶303,302.

    Sebelius calls on insurance CEOs to justify premium hikes

    In a letter to the chief executive officers (CEOs) of UnitedHealth Group Inc., WellPoint Inc., Aetna Inc., Health Care Service Corporation and CIGNA HealthCare Inc., HHS Secretary Kathleen Sebelius has called for the executives to publicly justify their proposed health insurance premium increases. The letter comes shortly after a new analysis from Goldman Sachs found that competition in the insurance market is so weak, insurance companies can continue to raise rates even if it means losing customers. The analysis found that “price competition is down” and that “incumbent carriers seem more willing than ever to walk away from existing business.”

    In her letter, Secretary Sebelius requests that the executives post on their websites the justification for any individual or small group rate increases implemented or proposed in 2010, and that they continue to post such a justification in connection with any future increases. At a minimum, she asks that they include:

    estimates on medical cost and utilization increases, the assumptions driving these estimates, and the basis for those assumptions;

    if their premiums increase more than estimated medical costs, a description of what accounts for those differences;

    the number of people who will be receiving premium increases, as well as the number of people who will be receiving different levels of premium increases, further broken down by characteristics including plan type, age, and sex;

    enrollment changes in their different plans since the past year;

    the number of people on whose experience the rate increase is calculated;

    any premium rating variation including rating variation by age and health status;

    an affordability plan explaining what the company is doing to improve the affordability of health care, and the estimated financial impact of the company's affordability initiatives;

    an explanation of any cost containment or quality improvement efforts made that affect the increase;

    the expected medical loss ratio resulting from any premium increase; and

    information on the percentage of premium revenues spent on medical claims, disease management, quality initiatives, administrative costs, profits, and executive salaries broken down at least by market type.

    HHS News Release, March 8, 2010.

    OIG reports $4 billion in penalties, 1,000 suits filed in FY 2009

    The HHS Inspector General and Deputy Inspector General for Investigations at the Office of Inspector General (OIG) testified that fiscal year (FY) 2009 investigations into healthcare fraud, waste, and abuse resulted in: (1) $4 billion in settlements, court-ordered fines, penalties, and restitution; (2) 671 criminal actions, 515 of which involved health care fraud; (3) over 362 civil actions, 355 of which involved healthcare fraud; (4) almost $500 million in receivables through recommended disallowances; and (5) the exclusion of over 2,500 providers from federal healthcare programs.

    The Office of Inspector General (OIG) receives fraud referrals through, among other things: the OIG Hotline, which received approximately 5,000 healthcare fraud complaints in FY 2009; official qui tam notifications from the Department of Justice; and correspondence from the public.

    Medicare Fraud Strike Force

    As of January 10, 2010, the Medicare Fraud Strike Force, an antifraud effort in geographic areas at high risk for Medicare fraud, charged over 500 defendants, obtained over 270 convictions, resulting in the sentencing of over 200 defendants, and secured over $240 million in court-ordered restitutions, fines, and penalties.

    One of the OIG's special agents in Miami, Florida testified on the efforts of its local Medicare Fraud Strike Force, and specifically described the five steps the Strike Force team follows during individual investigations: (1) analyze and evaluate claims data to identify aberrant billing patterns; (2) obtain Medicare enrollment applications, which identify the registered owners, their financial information, and the authorized medical billing representatives; (3) identify the medical biller who electronically submitted patient information to a Medicare claims contractor for processing and reimbursement (investigators interview the medical biller to determine her or his level of complicity, and identify who provided the billing information); (4) identify and obtain bank information, including the true owner of the fraudulent provider's bank account; and (5) identify the true owner of the clinic or durable medical equipment company, and attempt to interview her or him in furtherance of the investigation.

    Testimony of OIG Inspector General, Deputy Inspector General, and Special Agent, March 4, 2010, ¶53,409; ¶53,410; and ¶53,411, respectively.

    Hospice reimbursement calculation by HHS found invalid

    A hospice care provider successfully argued that 42 C.F.R. §418.309(b)(1), which provides the method of calculating the cap on hospice reimbursements, was invalid because it was contrary to Congress' statutory mandate under 42 U.S.C. §1395d(a)(4) and (d)(1), providing that terminally ill beneficiaries are entitled to hospice benefits for as long as they continue to elect care.

    Hospice reimbursements are subject to a statutory cap pursuant to 42 U.S.C. §1395f(i)(2)(A), and the Secretary took the per patient cap and multiplied it by the number of beneficiaries who have elected to receive hospice care from the provider during the fiscal year (FY). The statute went on to require a reduction in the “proportion of hospice care that each such individual was provided in a previous or subsequent accounting year or under a plan of care established by another hospice program.” The Secretary thereby calculated the number of beneficiaries by counting only those beneficiaries that had not, in a previous year, elected hospice benefits. The hospice, which had a large number of patients who first elected in one year but continued to receive services during the following year, was denied reimbursement for the services provided in the second year. The Secretary demanded that the hospice repay nearly $800,000 in payments from FY 2006, and over $1 million from FY 2007. The hospice filed suit claiming that the regulation was invalid and contrary to Congress' statutory mandate, and that this amounted to an unlawful taking.

    The requirements provided in §1395f(i)(2)(C)clearly and unambiguously mandate that the number of beneficiaries be reduced to express the possibility that an individual received care in another year or at another hospital and thereby reduced by that fraction. Each hospice patient's benefit cap should be allocated across the years of service, and not lumped into one year.

    Moreover, the Secretary's motion for summary judgment with regard to the hospice's taking claim was granted. The Secretary argued that the hospice had no property interest because although it partook in the Medicare program where compensation is determined by government statute or regulation, there is “no legal compulsion to provide the services, and therefore, no entitlement.” The hospice failed to cite authority or present evidence that supports the argument that a taking occurred.

    Hospice of New Mexico, LLC v. Sebelius, D. N.M., March 5, 2010, ¶303,305.

    Part D integrity efforts limited, vulnerabilities identified

    On March 3, 2010, Robert Vito, Regional Inspector General for Evaluations and Inspections, Office of Inspector General (OIG), HHS, testified before the Senate Committee on Homeland Security and Governmental Affairs regarding oversight of the Medicare prescription drug program. Mr. Vito testified that, overall, OIG reviews of the Part D program indicate that CMS' program integrity efforts have been limited in scope and may not be sufficient to protect the program from fraud, waste, and abuse. Vito identified the following vulnerabilities:

    CMS relied largely on complaints to identify potential fraud and not all of these complaints were investigated in a timely way or resulted in significant data analysis.

    Medicare Drug Integrity Contractors (MEDICs) have relied mainly on external sources to identify fraud. Limited data access has also hindered MEDICs' fraud detection efforts. MEDICs were not given CMS approval to conduct compliance plan audits.

    OIG's 2006 review found that while all plan sponsors had compliance plans, these plans did not fully address all of CMS' requirements and in some cases, contained only the broad outlines of a fraud and abuse plan and did not include descriptions of specific compliance and anti-fraud processes.

    Because CMS has not finalized any audits of PDP sponsors' compliance plans, OIG does not know whether this key anti-fraud component is working at the plan level and what improvements plan sponsors can make to improve program safeguards.

    In October 2008 report, OIG found that 24 of 86 sponsors of stand-alone plans did not identify any potential fraud and abuse incidents. For the 62 plan sponsors that identified fraud incidents, the number of incidents identified ranged from 1 to over 6,000. Ninety percent of all incidents were associated with only seven plan sponsors. Not all plan sponsors that identified potential fraud and abuse incidents conducted inquires, initiated corrective actions, or made referrals for further investigation.

    The majority of Part D sponsors' bids in 2006 and 2007 overestimated the cost of providing the benefit. CMS' Part D audit processes do not sufficiently ensure accountabilty.

    Vito provided three recommendations to the committee that OIG believes will improve the oversight and integrity of the Medicare Part D program. Specifically, CMS should: (1) implement a comprehensive program integrity plan that includes mechanisms to ensure oversight and accountability; (2) ensure that MEDICs conduct more rigorous oversight, including data analysis, to detect potential fraud, waste, and abuse; and (3) ensure that plan sponsors are implementing effective compliance plans.

    OIG Testimony, March 3, 2010, ¶53,408.

    HHS Secretary compelled to produce administrative record

    The Secretary must produce the administrative record for a determination on a hospital's claim that the HHS decision on an overpayment was arbitrary and capricious, according to the U.S. District Court for the District of Columbia. The hospital was required to repay approximately $5 million dollars to the Medicare program in a dispute over the number of full-time equivalent residents the hospital may count for costs related to graduate medical education training.

    The District Court stated its task is not simply to determine whether the Secretary reached the correct result in denying the hospital's request for reimbursement it must also assess whether the Secretary examined the relevant data and articulated a satisfactory explanation for its actions, including a rational connection between the facts found and the choice made. The court said that, Administrative Procedure Act, an agency's actions may not be arbitrary and capricious, which means that the agency must adequately explain its decision. Without the administrative record, the court would be unable to evaluate the agency's rationale at the time of the decision.

    The hospital's tort claims against two fiscal intermediaries (FIs) are barred because the FIs are “officers or employees of the government” and the tort claims arise under the Medicare Act. Under 42 U.S.C. §405(h), the federal courts have no subject matter jurisdiction when a claim is “inextricably intertwined” with a claim for Medicare benefits. Accordingly, the Secretary's motion to dismiss the tort actions for lack of subject matter jurisdiction was granted and the hospital's motion to compel production of the administrative record was granted.

    Swedish American Hospital v. Sebelius, D. D.C., March 5, 2010, ¶303,304.
    Decisions and Developments
    CMS Manuals

    July 2010 update to the standard file for reason codes for the fiscal intermediary shared system

    Medicare General Information, Eligibility, and Entitlement Manual, Pub. 100-01, Transmittal No. 62, March 5, 2010, ¶158,845.

    Implementation of version D.0 of the national council for prescription drug program flat file implementation by durable medical equipment Medicare administrative contractors, common electronic data interchange contractor and the shared system maintainer

    One-Time Notification Manual, Pub. 100-20, Transmittal No. 645, March 5, 2010, ¶158,846.

    Testing of the Health Insurance Portability and Accountability Act version 5010 changes by the VMS shared system maintainer

    One-Time Notification Manual, Pub. 100-20, Transmittal No. 646, March 5, 2010, ¶158,847.

    Point of origin for admission codes discontinued by the national uniform billing committee also to be discontinued by the fiscal intermediary standard system effective July 1, 2010

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1929, March 9, 2010, ¶158,848.

    Common work file submission of codes to the Part A contractors and shared systems and the systems ability to override the claim level edit for certain Medicare secondary payer claims

    One-Time Notification Manual, Pub. 100-20, Transmittal No. 641, Feb. 19, 2010, ¶158,834.

    Transluminal angioplasty of the carotid artery concurrent with stenting

    Medicare National Coverage Determinations Manual, Pub. 100-03, Transmittal No. 115, March 5, 2010, ¶158,837.

    Instructions for downloading the Medicare ZIP Code file for July 2010

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1919, Feb. 19, 2010, ¶158,832.

    Modifications to gap-filling requirements for the Health Insurance Portability Accountability Act (HIPAA) 837 version 5010 Coordination of Benefits (COB) claims transactions and National Council for Prescription Drug Programs (NCPDP) version D.0 claim files

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1920, Feb. 19, 2010, ¶158,833.

    Technical correction to an earlier transmittal on outpatient intravenous insulin treatment not being reasonable and necessary and not covered

    Medicare National Coverage Determinations Manual, Pub. 100-03, Transmittal No. 117, March 9, 2010, ¶158,849;
    and Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1930, March 9, 2010, ¶158,850.

    April 2010 update to the integrated outpatient code editor

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1927, March 5, 2010, ¶158,841.

    Expansion of the number of international classification of diseases ninth revision codes allowed on institutional claims for services billed after January 1, 2011

    One-Time Notification Manual, Pub. 100-20, Transmittal No. 648, March 5, 2010, ¶158,844.

    Conditions for coverage of cardiac rehabilitation programs

    Medicare National Coverage Determinations Manual, Pub. 100-03, Transmittal No. 116, March 5, 2010, ¶158,838.

    Percutaneous transluminal angioplasty (PTA) of the carotid artery concurrent with stenting approved as FDA post-approval study

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1925, March 5, 2010, ¶158,839.

    Correction to processing of non-covered revenue codes

    Medicare Claims Processing Manual, Pub. 100-04, Transmittal No. 1928, March 3, 2010, ¶158,842.

    Implementation of common edits and enhancement software

    One-Time Notification Manual, Pub. 100-20, Transmittal No. 647, March 5, 2010, ¶158,843.
    DAB Decisions

    Clinical social worker requirements

    A clinical social worker was properly denied enrollment in the Medicare program because she did not hold a master's or doctor's degree in social work as required by 42 C.F.R. §410.73. After the social worker's application for enrollment was denied, she requested on reconsideration that the degree requirement be waived. She held a master's degree in human development and possessed significant work history, training, and had been licensed in Minnesota for nearly 20 years. Pursuant to 42 C.F.R. §424.530(a)(1), however, CMS has the authority to deny an enrollment application when Medicare enrollment requirements are not met. Both Soc. Sec. Act §1861(hh)(1)(A) and 42 C.F.R. §410.73 require that a clinical social worker possess a master's or doctor's degree in social work, and the Secretary has no discretion to accept another degree in lieu of a social work degree.

    Daly-McIntee v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-09-767, Dec. No. CR2073, Feb. 26, 2010, ¶122,087.

    Effective date of participation

    A plastic surgery center's effective date of participation in Medicare was properly based on the date when the center filed an enrollment application approved by a CMS contractor. Under 42 C.F.R. §424.520(d), the effective date of enrollment is the later of either: (1) the date when the provider filed an application for enrollment that was subsequently approved by a Medicare contractor charged with reviewing the application on behalf of CMS; or (2) the date when the provider first began providing services at a new practice location. The center argued that it was entitled to an earlier enrollment date because it treated patients in good faith prior to the designated enrollment date and, therefore, it was entitled to compensation for the services rendered. This argument, however, was no basis for changing the enrollment date to an earlier date. The center failed to show that it filed an acceptable application earlier than the date determined by the CMS contractor. Further, the regulations governing enrollment did not allow enrollment to be made retroactive to a date that was earlier than the date of application nor did they allow for reimbursement of claims that were generated prior to the effective date of enrollment.

    Blue Plastic Surgery Center, LLC v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-10-103, Dec. No. CR2075, Feb. 23, 2010, ¶122,089.

    Reconsideration of dehydration decision

    A request to reopen and reconsider a Departmental Appeals Board (DAB) Appellate Division decision against a skilled nursing facility (SNF), which had affirmed civil money penalties for placing a resident with severe dehydration in immediate jeopardy, was denied. The SNF argued that a scholarly article and its medical director’s statement regarding dehydration in elderly people were not considered, but this supplemental material was received and considered. The appellate division decision and the administrative law judge’s (ALJ) decision both took into account the complexity of dehydration in fragile, elderly people with many medical complications and concluded that, although such residents deserve a heightened duty of care, the SNF failed to provide even an ordinary level of care.

    The SNF also argued that the DAB should reopen the case based on nonbinding remarks in a federal appeals court opinion, Grace Healthcare of Benton v. DHHS, (¶303,254). The Grace opinion suggested that all findings of immediate jeopardy that are appealed should either be upheld or reversed because if such findings remain unreviewed they could have a material adverse impact on an SNF, which could be sued for damages in private litigation. The Grace situation was different, however, because it involved six regulations and three residents, whereas here, the ALJ resolved all disputes about one SNF resident and established the likelihood of serious harm, even though she did not address the application of every cited regulation to the facts she found. The Grace opinion did not state that the DAB is empowered to expunge, or order the removal of, findings from administrative records, and it did not require reopening and reconsidering the opinion. The SNF was given a 60-day extension to seek judicial review. The Appellate Division decision (see ¶122,066), which affirmed the Civil Remedies Division decision (see ¶121,926), was not reopened.

    Golden Living Center - Frankfort v. CMS, HHS Departmental Appeals Board, Appellate Division, Doc. No. A-10-33, Dec. No. 2296, Ruling No. 2010-2, Feb. 22, 2010, ¶122,086.

    Revocation of billing privileges

    CMS properly revoked a physician's billing privileges as of the date that the state board suspended his license to practice medicine because the physician did not meet the conditions required for enrollment under 42 C.F.R. §424.535(a)(1) on that date. Failure to report the suspension of his license as an adverse legal action also justified revocation under 42 C.F.R. §424.535(a)(9). Although the physician's license had been reinstated and he had returned to compliance before CMS revoked his billing privileges, the administrative law judge (ALJ) had no authority to override or set aside the agency's exercise of discretion. Similarly, the ALJ had no authority to consider the physician's evidence of mitigating circumstances surrounding his failure to report because CMS had not adopted regulations that required it to consider them. Because the facts were undisputed, the law required the ALJ to uphold the agency's action.

    George E. Smith, M.D. v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-09-752, Dec. No. CR2074, Feb. 26, 2010, ¶122,088.

    Untimely hearing request

    A skilled nursing facility's (SNF) hearing request was dismissed because it failed to file the request within 60 days of its receipt of a notice letter imposing a denial of payment for new admissions (DPNA). In the notice letter, the state department advised the SNF that CMS was imposing a DPNA and also warned the SNF that the state department would recommend termination of the SNF's provider agreement if it did not achieve substantial compliance by a certain date. The notice letter also indicated that, to be granted a hearing, the SNF must file a written request for a hearing within 60 days from the receipt of the notice letter. The SNF did not request a hearing within 60 days of receiving the notice. CMS later advised the SNF in a separate notice letter that the SNF's provider agreement would be terminated because the SNF did not attain substantial compliance with participation requirements, and that the SNF had a right to appeal the noncompliance findings that resulted in the imposition of the remedy of termination. The SNF subsequently requested a hearing on the imposition of the DPNA, but referred to CMS' notice letter instead of the state agency's notice letter. Under Soc. Sec. Act §205(b) and 42 C.F.R. §498.40(a), the provider was required to file its hearing request within 60 days from the receipt of the state agency's notice letter in order to contest the DPNA. Given its failure to do so and the absence of any good cause that would justify extending the time for filing, the hearing request was dismissed.

    Waterfront Terrace v. CMS, HHS Departmental Appeals Board, Civil Remedies Division, Doc. No. C-09-746, Dec. No. CR2076, Feb. 24, 2010, ¶122,090.
    Medicaid: State News

    Criteria for waiver services

    The South Dakota Medicaid agency properly denied a beneficiary's request for home- and community-based services (HCBS) under a waiver because the beneficiary did not meet the criteria of the waiver program. The waiver was limited to individuals with “mental retardation or related conditions” who would require services in an intermediate care facility for individuals with mental retardation (ICF/MR) without the waiver services. CMS regulations at 42 C.F.R. §435.1010 define “related conditions” as conditions that result in “impairment of general intellectual functioning or adaptive behavior similar to that of mentally retarded persons” and require similar services or treatment. The beneficiary's impairments resulted from spinal muscular atrophy, a hereditary disease affecting physical development but not mental or intellectual functioning. Unlike individuals with mental retardation, the beneficiary had no behavioral problems; she could recognize her physical needs, communicate them and direct the assistance she received from caregivers. Therefore, the administrative determination that the beneficiary did not meet the waiver criteria was not clearly erroneous.

    Snelling v. South Dakota Department of Social Services, S.D., March 3, 2010, ¶303,303.

    Missouri state plan

    CMS found that Missouri's state Medicaid plan does not provide the full benefit package to its beneficiaries and the state must either submit (1) a plan for bringing the plan into compliance or (2) a hearing request within 30 days. The state plan did not provide for home health services for beneficiaries who are not “confined to the home,” as required under federal requirements. CMS informed the state that it needed to change the requirement to comply with federal requirements, or a portion of the state's federal financial participation for home health services would be withheld. The state has 30 days to either submit a plan or request a hearing, the issue on appeal being whether the state's homebound requirement is consistent with federal requirements. If no response is received within 30 days, a notice of withholding of federal funds will be issued.

    Notice, 75 FR 10289, March 5, 2010, ¶262,675.
    OIG Reports

    Adverse or never events

    In an Office of Inspector General (OIG) report to Congress regarding the incidence of “never events” among Medicare beneficiaries, OIG evaluated the processes that CMS uses to identify such events and deny or recoup payment. Five screening methods were useful for identifying events termed “adverse events” or “never events” that harmed patients in a health care setting. The term “never events” refers to a list of serious events that should never occur such as, surgery on the wrong patient. The report found the five screen methods were most useful in identifying never events that harmed patients and that shortcomings in two screening methods had implications for Medicare payments and federal initiatives to identify, track, and monitor never events. It was recommended CMS that and the Agency for Healthcare Research and Quality (AHRQ): (1) explore opportunities to identify never events when conducting medical record reviews for other purposes; (2) ensure that hospitals code claims accurately and completely to allow for identification of hospital-acquired conditions; and (3) provide interpretive guidelines for state survey agencies to assess hospital compliance with tracking and monitoring never events. AHRQ should inform patient safety organizations (PSOs) that internal hospital incident reporting may be insufficient to provide needed information about never events to PSOs.

    OIG Report, OEI-0608-00221, March 1, 2010, ¶53,407.

    MA marketing

    To examine the compensation of sales agents in selected Medicare Advantage (MA) plans and determine whether the sales agents were qualified, the Office of Inspector General (OIG) examined compensation, testing, and licensure data from a random sample of sales agents. OIG also compared complaints from 2008 and 2009 to determine whether the type and number of complaints changed after the implementation of sales agent marketing regulations in September 2008. OIG found: (1) all five plans sponsors using independent sales agents had compensation practices that resulted in inappropriate financial incentives; (2) five of six selected plan sponsors did not ensure that all sales agents were qualified under CMS regulations; and (3) the type and number of sales agent marketing complaints remained unchanged after the sales agent marketing regulations were implemented. OIG recommends that CMS: take action on the specific instances of noncompliance; audit plan sponsors and include an assessment of vulnerabilities; issue additional regulations concerning field marketing organization payments and requiring sponsors to contact all new enrollees to ensure that they understand plan rules; and issue guidance clarifying that plan sponsors should immediately terminate unlicensed sales agents.

    OIG Report, No. OEI-05-09-00070, March 1, 2010, ¶53,406.

    Review of Medicaid services to incarcerated juveniles in the state of Georgia for federal fiscal years 2003 and 2004

    OIG Report, No. A-04-06-00026, May 7, 2009, ¶53,412.
    Search CCH Health Care
    Advanced Search
    Subscribe to NetNews

    Receive the NetNews newsletters via e-mail and to stay up-to-date on all the latest developments.

    About This Newsletter

    To access the CCH® Internet Research Network™ (IRN) full text documents you must be a subscriber to the Medicare and Medicaid Guide and the Reimbursement Integrated Library IRN products.*

    Links within news stories display full text documents including legislation, regulations, court decisions, rulings and government reports.

    The first time you click on a link you will be taken to the IRN login page, where you will need to enter your ID and password. Subsequent links will take you directly to the desired document.

    Want to Subscribe?

    If you aren't a subscriber to the Medicare and Medicaid Guide or the Reimbursement Integrated Library, call 800-449-9525 or let us contact you to receieve a free trial to allow you to click on the links within the news stories and see the full text documents.

    2008 Master Medicare Guide
    CCH® Medicare and Medicaid Guide
    Comprehensive, full-text reporting of federal Medicare and Medicaid law and regulation provisions, court cases, administrative decisions and reports and summary reporting of state Medicaid programs. Coverage and explanations.

    For more details, contact your sales rep.

    2008 Medicare Explained
    You are subscribed to CCH® NetNews, sponsored by CCH. To unsubscribe or manage your newsletter preferences, go to Click Here. To subscribe, go to http://health.CCH.com/thenews.

    To unsubscribe via postal mail, please contact us at: CCH, Attn: Business Compliance Marketing, 2700 Lake Cook Rd., Riverwoods, IL 60015. Please include the email address you have been contacted with.

    Wolters Kluwer Law & Business is the leading provider of information covering Medicare & Medicaid, Healthcare Compliance, Food, Drug & Cosmetic Law, and Home Health. For more information about our products and services, go to http://health.cch.com/ or call 800-449-9525. This newsletter is copyrighted by CCH and may be redistributed only for non-commercial purposes and only in its entirety, specifically including the CCH headers, this paragraph and the CCH copyright line. No other redistribution or re-purposing, including but not limited to use on a web site, intranet or extranet, is permitted without prior written permission of CCH.