Legal Insights and Perspectives for the Healthcare Industry

Law clerk Ariel Seiersen contributed to this article.

Continuing to look for ways to reduce the Medicare administrative law judge (ALJ) appeals backlog, CMS has explored enhancing the role of Qualified Independent Contractors (QICs) to resolve disputed claims earlier in the appeals process. Its main pilot in this area is the Telephone and Reopening Process Demonstration (Demonstration), which affords certain providers the ability to present their case to a representative of the QIC and have a live discussion about the merits of the appeal. While initially limited to durable medical equipment claims, CMS expanded the Demonstration to home health and hospice claims within the Part A East QIC jurisdiction. Following the expansion, C2C Innovative Solutions—the Part A East QIC—began offering telephone discussions and reopenings to hospice and home health providers within Medicare Administrative Contractor (MAC) jurisdictions J6 and J15, covering Alaska, American Samoa, Arizona, California, Colorado, Delaware, District of Columbia, Guam, Hawaii, Idaho, Iowa, Kansas, Maryland, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, New York, Northern Mariana Islands, North Dakota, Oregon, Pennsylvania, Puerto Rico, South Dakota, US Virgin Islands, Utah, Virginia, Washington, West Virginia, Wisconsin, and Wyoming. The Demonstration may provide home health and hospice companies with an effective new tool in the Medicare appeals process to help manage very long delays in the ALJ appeals process.

The US Department of Health and Human Services (HHS) Office of General Counsel (OGC) offered the healthcare industry the benefit of its legal analysis of the recent US Supreme Court opinion in Azar v. Allina Health Services (Allina) with respect to its impact on Medicare payment rules, sharing its Memorandum to the Principal Deputy Administrator & Director of the Center for Medicare dated October 31, 2019 (OGC Memo) with the public. The OGC recognized at the outset the primary directive of the decision –“The Supreme Court made clear that Congress has imposed more stringent procedural requirements for certain Medicare rules than the framework that otherwise would apply under the Administrative Procedure Act (APA).”

The OGC then offered its advice as to the legal implications associated with that directive. If HHS or CMS “issued guidance that, under Allina, should have been promulgated through notice-and-comment rulemaking, the Department's ability to bring enforcement actions predicated on violations of those payment policies is restricted.” This concept works in concert with elements of the Department of Justice's Brand memorandum, which was also referenced in the OGC Memo. The OGC Memo then attempted to draw a distinction between guidance documents that do not require notice-and-comment rulemaking versus those that do. According to the OGC Memo, the principal inquiry in distinguishing between the two is the closeness of the guidance to the relative statutory or regulatory terms.

The government watchdog agencies continue to focus their attention on Medicare oversight of hospice providers, with two recent reports from the US Government Accountability Office (GAO) and the HHS Office of Inspector General (OIG) focused in large part on ways to improve hospice surveys and nursing care oversight deficiencies. These reports, along with a portfolio of other OIG hospice reports, are giving way to renewed focus by the Centers for Medicare and Medicaid Services (CMS) on hospice surveys as well as by Congress, where legislation in the Senate (and soon the House) has focused on providing CMS with additional hospice survey tools. Proactive hospice providers will do more than take notice of these watchdog agency reports—they will also compare their practices with the critical findings in these OIG and GAO reports to prepare for what will likely be the future focus of Medicare hospice surveys, whether by state agency surveyors or accreditation organizations.

We invite you to join us on Wednesday, November 20, for our second installment of the Fast Break: Regulatory Sprint series. In a recent Health Law Scan post, we discussed the two proposed rules by the Office of the Inspector General (OIG) and the Centers for Medicare and Medicaid Services (CMS) that seek to alter the landscape of healthcare program integrity and fraud and abuse regulation, as part of what the US Department of Health and Human Services (HHS) calls the “Regulatory Sprint to Coordinated Care Initiative.”

Last month, we held Part 1 of the series, which highlighted CMS’s proposed rule on Stark Law Changes. This month, Katie McDermott, Matthew Hogan, and Jake Harper will discuss the OIG’s proposed rule on the Anti-kickback and beneficiary inducement Civil Money Penalty changes.

Register for the webinar now.

You can also check out a recent Bloomberg Law article the presenters wrote on “OIG Proposed AKS Safe Harbors For Patient Incentives – Getting Patients Involved.”

Several lawyers from our healthcare industry team recently attended HLTH in Las Vegas. HLTH provided a showcase for innovative ideas, platforms, and programs embracing the concept of “patient-centered care.”

This year’s event offered particular focus on innovations addressing the social determinants of care, elements of daily life that create barriers to receiving health services. As one executive of a large hospital system mentioned, they were reframing the institution’s vision around “health” and not “healthcare.” From programs in states partnering with ride-share apps to ensure Medicaid beneficiaries made their appointments, to highly integrated medical record and patient communication platforms designed to meet patients in their own space, there were numerous examples of business opportunities and legal challenges.

In Part 2 of a two-part Morgan Lewis series for Bloomberg Law on the proposed Stark Law and anti-kickback statute (AKS) rules, Kathleen McDermott, Matt Hogan, and Jacob Harper examine the safe harbors and exceptions aimed at empowering patients to manage their healthcare. Noting that value-based care can only be achieved when patients no longer sit on the sidelines, the authors ask whether the proposed AKS safe harbors are bold enough, and conclude there may be more that the Office of the Inspector General and the Centers for Medicare & Medicaid Services could do.

Read the full Bloomberg Law article >>

The Office of the Inspector General and the Centers for Medicare and Medicaid Services recently published a pair of proposed rules aimed at encouraging the adoption of value-based payment and care. In Part 1 of a two-part Morgan Lewis series for Bloomberg Law, Al Shay, Donna Clark, and Banee Pachuca unpack the proposed Stark Law exceptions and anti-kickback statute safe harbors that share similarities but differ in design when it comes to protecting physician compensation arrangements that advance value-based care. Potential challenges presented by the proposed rules with respect to obtaining safe harbor protection, encouraging payor participation, and absorbing downside financial risk are also addressed.

In addition, Al and Donna will be joining Jake Harper to talk about the Stark Law changes in more detail during our October 30 Fast Break—make sure to register!

Read the full Bloomberg Law article >>

We invite you to join us on Wednesday, October 30, for Part 1 of our two-part Fast Break: Regulatory Sprint webinar. In a recent Health Law Scan post, we highlighted two rules proposed by the Office of the Inspector General (OIG) and the Centers for Medicare and Medicaid Services (CMS) that seek to alter the landscape of healthcare program integrity and fraud and abuse regulation, as part of what the US Department of Health and Human Services calls the “Regulatory Sprint to Coordinated Care Initiative.” In Part 1 of this Fast Break, Donna Clark, Albert Shay, and Jacob Harper will discuss the CMS’s proposed rule on Stark Law changes. Stay tuned for Part 2 when we discuss the OIG’s proposed rule on Anti-Kickback Statute and Civil Money Penalty changes.

Register for the webinar now.

Highlighting the US Department of Health and Human Services’ (HHS) efforts to transform the US healthcare system to a value-based model, the Office of the Inspector General (OIG) and the Centers for Medicare and Medicaid Services (CMS) have issued two proposed rules that seek to alter the landscape of healthcare program integrity and fraud and abuse regulation, as part of what HHS calls the “Regulatory Sprint to Coordinated Care Initiative.”

The HHS Regulatory Sprint identifies four lanes to better coordinate care:

  • Improving a patient’s ability to understand his/her treatment plans and be empowered to make decisions
  • Increasing providers’ alignment on end-to-end treatment
  • Providing incentives for providers to coordinate and collaborate care with their patients
  • Encouraging information sharing among providers, facilities, and other stakeholders in a manner that facilitates efficient care while preserving and protecting patient access to data

We hope you were able to join us for last month's Fast Break on the Physician Fee Schedule proposed rule. If not, you missed a great session featuring Eric Knickrehm discussing the important changes the proposed rule would have on Medicare Part B. 

Eric provided an overview of the most important aspects of the proposed rule, which was published on August 4, 2019. A number of these changes highlight CMS's increasing emphasis on preventive and low acuity care. For instance, CMS has continued to incentivize Transitional Care Management services and Chronic Care Management services to ensure that patients who were either recently hospitalized or are very likely to be hospitalized have effective care management to avoid further hospitalization.