Health Care Compliance Update: June 2008

Hot Topics• Recovery Audit Contractors• Medicaid Enforcement• OIG’s revised self-disclosure requirements• Electronic medical records/Health information technology• Quality of care• Hospital acquired conditions or “Never events”

Health Care Compliance LetterVolume 11-10, May 13, 2008

Fraud and Abuse

FCA claim fails against hospital qualified for AMC exception. A group of pediatric cardiologists, a medical school, and a pediatric hospital did not submit false claims to the Medicaid program by violating the prohibition on physician self referral under the Stark law (Social Security Act §1877) because they qualified for the academic medical center exception. U.S. ex rel. Villafane v. Solinger, W.D. Ky., April 8, 2008, Health Care Compliance Reporter ¶800,487.

Tax-exempt Organizations

Revised Form 990 takes disclosure to new levels. Filers of the new IRS Form 990 will find “triggers” in many questions on the core form directing them to give more detailed explanations on various schedules, John Salbego, tax senior manager, Reznick Group, told exempt organizations at a forum on the new form sponsored by Arent Fox LLP and the Reznick Group on May 1, 2008, in Washington, D.C. Answering “no” to any of the questions could raise a red flag for the IRS, Joseph A. Rieser, partner, Arent Fox, added. CCH Washington Bureau, May 1, 2008.

IRS examines 2006 nonprofit hospital survey respondents. Some tax-exempt hospitals that responded to a 2006 Internal Revenue Service (IRS) survey about their charitable activities are under examination, according to Stephen Clarke, tax law specialist with the IRS Exempt Organizations (EO) Division. CCH Washington Bureau, April 25, 2008.

Medicare and Medicaid

CMS focuses on hospital quality in FY 2009 IPPS proposed rule. CMS continued to demonstrate its commitment to improving the quality of care provided to Medicare beneficiaries in the nation’s hospitals by including in the fiscal year 2009 inpatient prospective payment system Proposed rule several provisions that would strengthen the connection between quality and payment for hospital services by tying reimbursement to improved quality reporting. CMS Press Release, April 14, 2008; Proposed rule, 73 FR 23528, April 30, 2008.

On the Front Lines

Compliance begins at the top: 20 questions and answers about compliance

by Mark D. Olson, Esq., Contributing Editor

A company’s “culture” comes directly from its executive suite. The actions of individuals at the top define conduct expected or permitted throughout the organization. If employees look to senior leadership and see excessive personal use of the company’s money, nobody should be surprised when others working for the company bend the rules.

Volume 11- 11, May 27, 2008

Medicare

Former HHS Secretary urges Congress to overhaul Medicare. Rather than relying on states to expand health care coverage through pilot programs, the federal government should work to fix the Medicare system, former HHS Secretary Tommy Thompson said at a Senate Finance Committee hearing on May 6, 2008. CCH Washington Bureau, May 6, 2008.

Health Information Technology

Legal health records’ accuracy, authenticity crucial, experts say When creating, correcting, and adding to a patient’s health record, it is crucial for legal purposes to make sure the information is accurate and authentic and that the original record is maintained, according to experts who spoke during a recent American Health Information Management Association webinar on defining and maintaining the legal health record. CCH Washington Bureau, May 5, 2008.

Senators agree to strengthen health IT bill privacy provisions. Senators working to protect the privacy and security of personal health information have reached an agreement that will advance negotiations over provisions in the Wired for Health Care Quality Act ("Wired Act"), a bill sponsored by Senators Edward Kennedy (D-Mass.) and Michael Enzi (R-Wyo.) to help establish a national health information technology system. U.S. Senator Patrick Leahy Press Release, May 14, 2008.

Trends

Court finds no initial duty to disclose physician impairment. A hospital and physician group that wrote referral letters on behalf of an anesthesiologist had no duty to disclose to a future employer their investigation into the anesthesiologist’s on-duty use of narcotics, according to a recent decision by the fifth circuit court of appeals. The court found, however, that the hospital and physician group had a duty to avoid affirmative misrepresentations in the referral letters. Kadlec Medical Center v. Lakeview Anesthesia Associates, 5th Cir., May 8, 2008, Health Care Compliance Reporter ¶800,503.

Anti-kickback

OIG rejects free labeling services arrangement. The Office of Inspector General (OIG) has declined to approve a laboratory’s proposal to provide certain services at no cost to dialysis facilities because the arrangement could potentially generate prohibited remuneration and subject the laboratory to administrative sanctions under the anti-kickback statute, according to a recent advisory opinion. OIG Advisory Opinion, No. 08-06, May 2, 2008, Health Care Compliance Reporter ¶500,185.

Fraud and Abuse

Drug distributor settles reporting violation claims. McKesson Corporation, a national distributor of branded and generic prescription medications, has agreed to pay $13.25 million to resolve allegations that it violated federal reporting provisions related to the sale of certain prescription medications regulated by the Drug Enforcement Administration. DOJ Press Release, May 2, 2008.

Dermatologist found guilty of Medicare fraud. A federal jury in Miami convicted a dermatologist of conspiracy to defraud the U.S. government, conspiracy to cause the submission of false claims to Medicare, conspiracy to solicit and receive kickbacks, and conspiracy to commit health care fraud. U.S. Attorney, Southern District of Florida Press Release, April 30, 2008.

On the Front Lines

Medicare mark-up prohibition on diagnostic tests: Navigating compliance and coding implications

by Charles I. Artz, Esq. and Michael D. Miscoe, CPC, CHCC, Contributing Editors

Medicare providers have long been able to report comprehensive diagnostic services when either the technical or professional component of the service was “purchased” from an outside provider or entity. An issue, however, has arisen regarding the circumstances in which this is permissible and the fee that Medicare may be charged for the purchased component of the test. CMS recently published new rules related to purchased diagnostic services.

Journal of Health Care Compliance

The July/August 2008 issue of the Journal of Health Care Compliance will be mailed to subscribers on July 14, 2008, and will be available electronically on July 14, 2008.

Health Care Compliance Professional’s Manual

The June quarterly update of the Health Care Compliance Professional’s Manual mailed to subscribers on June 10, 2008, and became available electronically June 12, 2008.

Endorsed by the Health Care Compliance Association, and written by experienced compliance practitioners, the Manual provides expert insights on legislative and regulatory matters, offers guidance on applying the laws and regulations, and spells out practical compliance solutions that professionals can put to work right away. This quarterly update includes the following new and revised chapters:

• New Chapter on The 2008-2010 Implementation of the Deficit Reduction Act, written by Brian G. Flood, JD, CIG, CHC, AHFI, CFS.

• Revised Chapter on Equal Employment and Labor Standards Laws, edited by William P. Schurgin, JD.

• Revised Chapter on Corporate Integrity Agreements and Certification of Compliance Agreements, edited by Shawn Y. DeGroot, CHC, CCEP.

HIPAA Compliance Portfolio

HIPAA Privacy Guide

The next quarterly update of the HIPAA Privacy Guide mails June 18 2008, and will be available electronically June 23, 2008.

HIPAA Security Guide

The next quarterly update of the CCH HIPAA Security Guide mails July 16, 2008, and will be available electronically July 21, 2008.