HealthBlawg

Red Flags Rule: The FTC piles on, because HIPAA, ARRA and overlapping state laws just weren't enough

Update 5/28/10:  Red Flags? Nah ... nothin' but blue skies.  The FTC delays implementation of the Red Flags Rule yet again, to December 31.

Update 11/3/09:  The FTC announced that implementation of the Red Flags Rule will be delayed once more, this time until June 1, 2010.  The announcement came on the heels of losing a court case to the American Bar Association -- the court ruled that the rule does not apply to lawyers -- and on the heels of a legislative attempt to bar its applicability to small health care, accounting and legal practices.  Stay tuned.  

Update 7/29/09:  The FTC announced today that implementation of the Red Flags Rule will be delayed once again, this time til November 1, 2009.  The agency promises to roll out additional information targeted at low-risk entities covered under the rule.  Thus far, nothing has changed with respect to the rule and its ultimate effect, so organizations subject to the rule should take the extra time to assess their compliance needs and implement their plans in advance of November 1.

After a couple of delays, the FTC Red Flags Rule will be effective August 1, 2009.  This rule requires "creditors" under certain "covered accounts" to maintain a heightened alertness to numerous categories of "red flags" that may indicate that the consumer who is the rightful account holder is the victim of identity theft.  If a red flag is triggered, the creditor must take steps to notify the consumer and correct any inappropriate information included the creditor's records.

As you probably already know, the FTC is extending its reach with this rule (among others) into the health care sector.  (Cf. the FTC's role in enforcing certain Son of HIPAA provisions.)  The AMA has all but dropped a draft complaint on the FTC's desk, citing assorted legal precedents in its correspondence with the FTC arguing that the Red Flags Rule should not apply to physician practices.  The FTC is unmoved -- except to the extent that it has been willing to delay the effective date twice (from November 2008 to May 2009 to August 2009).

At any rate, the August 1 effective date is around the corner, and affected health care entities need to develop and implement compliance plans now, if they haven't already.  (Even the AMA says so, and has published guidance and a sample policy for members.)

A few more general comments before stepping back and examining the language of the rule and its applicability to health care providers.

The federales are taking something of a common-sense approach here, recognizing that a compliance plan needs to be tailored to the specific entity, the nature of its "covered accounts" and its operations.  Bank of America, N.A. and Springfield Medical Associates, P.C. will have very different compliance plans, because their potential red flags and the potential risks are vastly different.

Affected health care providers need to understand that the Red Flag Rule requirements overlap with HIPAA and state privacy law requirements (and looming Son of HIPAA requirements in ARRA), but will not be satisfied by implementation of existing privacy policies and compliance plans.  Review of the intersection of existing policies and procedures with the new rule's requirements is the first order of business.

As with any other new regulatory scheme, preparing a compliance plan and putting it on the shelf won't cut it.  The rule calls for regular monitoring of the plan and issues that arise by a senior manager.  Furthermore, best practices would dictate the training of staff to deal with individual issues and, most importantly, with the affected consumers.

Even if not clearly subject to the Red Flags Rule, providers should undertake to comply, for a couple of interrelated reasons:

• Good patient PR.  Data security is top of mind these days.  Much of the effort required under the rule should be expended anyway simply to respond to market pressures calling for improved data security.
• Potential liability.  The creative trial attorney will seek to use the Red Flags Rule as establishing a standard of care for the stewardship of personal information.  The incensed jury will go along.  The health care provider caught in the middle between thieves and victims may be the only perceived deep pocket available.

OK, so what is a "creditor" and what is a "covered account?"

Any entity that accepts payment other than payment in full at the time of service is a creditor.  Health care providers that go the cash-on-the-barrelhead route aren't creditors; all others are creditors.

The FTC Guide defines covered accounts as follows: either

• a consumer account you offer your customers that’s primarily for personal, family, or household purposes that involves or is designed to permit multiple payments or transactions; or

• any other account that a financial institution or creditor offers or maintains for which there is a reasonably foreseeable risk to customers or to the safety and soundness of the financial institution or creditor from identity theft, including financial, operational, compliance, reputation, or litigation risks.” Examples include small business accounts, sole proprietorship accounts, or single transaction consumer accounts that may be vulnerable to identity theft. Unlike consumer accounts designed to permit multiple payments or transactions – they always are “covered accounts” under the Rule – other types of accounts are “covered accounts” only if the risk of identity theft is reasonably foreseeable.

Any creditor with covered accounts must have a red flags rule compliance plan in place with policies and procedures for dealing with "red flags" -- i.e., signs that personal information may have been compromised.  The World Privacy Forum suggests that the following red flags are the ones most applicable in the health care context:

• A complaint or question from a patient based on the patient’s receipt of:
   o a bill for another individual
   o a bill for a product or service that the patient denies receiving
   o a bill from a health care provider that the patient never patronized or
   o a notice of insurance benefits (or Explanation of Benefits) for health services never received.
• Records showing medical treatment that is inconsistent with a physical examination or with a medical history as reported by the patient.
• A complaint or question from a patient about the receipt of a collection notice from a bill collector.
• A patient or insurance company report that coverage for legitimate hospital stays is denied because insurance benefits have been depleted or a lifetime cap has been reached.
• A complaint or question from a patient about information added to a credit report by a health care provider or insurer.
• A dispute of a bill by a patient who claims to be the victim of any type of identity theft.
• A patient who has an insurance number but never produces an insurance card or other physical documentation of insurance.
• A notice or inquiry from an insurance fraud investigator for a private insurance company or a law enforcement agency.

If a situation is flagged, a creditor must take steps to mitigate the risk of identity theft or continued identity theft.  Again, the World Privacy Forum notes:

There need to be uniform but appropriately flexible answers to these questions:

• What do we do when a patient claims fraud is in their files?
• What do we do when a patient says the bills are for services she did not receive?
• What do we do for patients and other impacted victims when we uncover a fraudulent operation?
• When we have a real case of medical identity theft, how can we work with patients to fix the records and limit future damages?
• What do we do when a provider has altered the patient records?
• How do we handle police reports and requests for investigation from victims?

The answers to these questions need to viewed not just from the provider’s perspective, but also from the victim’s perspective, which can differ substantially.

There are a number of useful resources available for health care providers seeking to take stock of their situation, establish Red Flags Rule compliance policies and procedures, and undertake staff training on the subject.  For example, the FTC, the AMA and the World Privacy Forum have all released valuable guidance documents (all linked to above) that would assist any organization with coming into compliance. 

As with any effort of this sort, it is often valuable to have someone outside the organization come in to review existing policies, procedures and workflow in order to highlight potential risks and opportunities for improvement.  The HealthBlawger and members of the HealthBlawger's virtual consulting network are available to come in and assess, plan and help implement compliance strategies for organizations large and small touched by the Red Flags Rule.

Whatever the size or nature of your business, please take a moment to consider how the Red Flags Rule may apply to its operations, and how it may relate to other regulatory schemes such as HIPAA and state laws.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

Grand Rounds Vol. 5, No. 37: The June Is Bustin' Out All Over Edition

June is bustin' out all over . . . .  Lord knows my nose knows it, thanks to all the pollen in the air these days.  Check out the classic movie rendition of this set piece (well worth the eight-minute investment), let your coffee and/or antihistamines kick in, and then let's dive into the past week's medblogging, loosely categorized into insights of patient bloggers, provider bloggers, bloggers I've met in real life (the number keeps growing), bloggers following the money trail through the health care thicket, and bloggers who are or should be dancing and/or shirtless (watch the whole movie clip . . . on second thought, let's leave it at dancing).

  

Last time I hosted Grand Rounds, we delved into the origins of Valentine's Day, so even though we're a couple weeks shy of the vernal equinox, since June is bustin' out all over, the historian in me feels the need to touch on an ur-Spring nugget or two before we get going.  Where do these celebrations of Spring come from?

Attis was a Phrygian god, whose annual death and resurrection were mourned and celebrated at a Spring festival.  (On the other hand, the death and rebirth of the Sumerian Tammuz was a summer solstice thing rather than a vernal equinox thing.)  James Fraser, in The Golden Bough, wrote:

The annual death and revival of vegetation is a conception which readily presents itself to men in every stage of savagery and civilisation: and the vastness of the scale on which this ever-recurring decay and regeneration takes place, together with man's most intimate dependence on it for subsistence, combine to render it the most impressive annual occurrence in nature, at least within the temperate zones. It is no wonder that a phenomenon so important, so striking, and so universal should, by suggesting similar ideas, have given rise to similar rites in many lands.

What I best remember from The Golden Bough, though, is the tale of the king-for-a-year, who ascends the throne as a result of a cultic regicide, and ends his term the same way.  Great stuff.

For further reading linking The Golden Bough, The Holy Grail, Wagner's Parsifal, and T.S. Eliot's The Waste Land, check out Derrick Everett's article on The Waste Land.

I'm not certain that Rogers and Hammerstein had these themes in mind when writing Carousel.  Heck, who knows what they had in mind; they threw in a happy ending that wasn't in their source material (but hey, that's show business).  You, dear reader, certainly didn't have these themes in mind when you tuned in to today's edition of Grand Rounds.  Nevertheless, on with today's show.

Provider Bloggers

At Musings of a Distractible Mind, Dr. Rob discusses Atul Gawande's recent New Yorker piece on health care cost variations across the country (a good read, well worth the time), which focuses on McAllen, TX, a small border town that consumes far more than the average annual per capita amount of health care services.  Gawande loops in the Dartmouth Health Atlas folks, asks the hard questions about physician-owned facilities and financial incentives, and concludes that outfits like Geisinger, Intermountain, Kaiser Permanente and Mayo -- not-for-profit integrated delivery systems with salaried docs -- have the model we should strive to emulate systemwide.  Dr. Rob recounts his own experience with physician-owned facilities.  His conclusion is a folksy twist on Gawande's:

How do we fix it?  There are lots of good answers, and lots of dumb ones as well.  The bottom line is the bottom line, though.  How you pay docs will determine what happens.  It’s America, after all.  It’s what makes us great.  Right?

Right.  The thing is, guys, we've known this for at least forty years.

ACP Hospitalist reports on Sid Wolfe's new Public Citizen campaign to get hospitals to step up reporting of physician wrongdoing.  Bob Wachter, at Wachter's World, delves deeper into the problem, and says:

I’m proud to say that over the past five years, my hospital (UCSF Medical Center) has taken Leape’s challenge to heart, withdrawing clinical privileges (and filing accompanying NPDB reports) in several cases for behavior that, I’m quite confident, would have been tolerated a decade ago. This is progress. As Kissinger once said, “weakness is provocative.” As more hospitals take this tougher stance, I think we’ll see the boundaries of acceptable behavior shift everywhere. And patients will be safer for it.

Bongi, at other things amanzi, recalls a suboptimal experience in his training, when the "see one, do one, teach one" approach was reduced to "read an article about one, do one immediately afterwards."

At Providentia, Romeo Vitelli looks at the historical precursors to Jenny McCarthy and the current crop of anti-vaccinationists. 

Ken Cohn, a physician and consultant (who I know in real life [IRL]), recounts a (positive) experience in asking health care administrators to consider ethics in physician-hospital relationships.

I take a baby aspirin a day, and Doc Gurley says I should keep on doing so, because I'm better off puking up blood than having a heart attack.

Seizures and how they have been misunderstood (epilepsy vs. demonic possession) is the subject of this week's selection from Mind, Soul and Body.

Suddenly becoming a first responder at 35,000 feet? On Your Meds' Barbara Olson takes you there.  (The blog is part of Medscape, so free registration is required).

NurseAusmed recounts difficulties in handling patient communications and managing patient expectations at Nursing Handover.

How to Cope With Pain takes a page from a book offering guidance to those who have lost their spiritual way and turns the advice to use for those facing physical, rather than spiritual, pain.

Web 2.0 meets the health care establishment, and KevinMD [IRL] observes that since health care is largely a business, this should not be surprising.  For a window into social media use by health care provider organizations, check out healthsocmed.

The anonymous author of Notes of an Anesthesoboist says it's hard for women doctors to make friends . . . perhaps they should introduce themselves as drug pushers instead?

John Crippen wants to, but the NHS Blog Doctor just can't look away from the kids pushed onto TV talent shows by 21st century stage mothers.

Paul Levy [IRL] goes another round with SEIU Local 1199 at Running a Hospital.

At UDM Solutions, David Siwicki provides a clinical perspective on deciding whether to prescribe opioids for chronic pain patients who use marijuana.

Nancy Brown offers sound advice on talking to teens about alcohol at Healthline's Teen Health 411.

Follow the Money

DrRich, at the Covert Rationing Blog, always follows the money, and this week the trail leads to the following unlikely destination: the American College of Surgeons encouraging malpractice suits -- against overseas surgeons offering services to medical tourists.

Big Pharma also always follows the money, and David Williams, at the Health Business Blog, remains perplexed over Pharma's failure to engage with the public via twitter.  (GSK has already responded to David's post, but in a way that doesn't exactly undercut his point.)  For a window into Pharma's engagement with social media, look no further than Shwen Gwee, who organized the Social Pharmer unconference in conjunction with the HealthCamp Boston unconference I co-organized in late April.  Speaking of social media, feel free to follow me on twitter: @healthblawg.  

Last week, I took a look at the proposed Medicare Inpatient Prospective Payment System (IPPS) updates for FFY 2010.  Among other things in the rule (including payments cut to the bone), I was surprised to see tucked away in there a tacit acknowledgement that the whole "no pay for never events" thing isn't really saving anybody that much money.

Lots of hospitals are touting new private rooms these days.  Seems to help patient care (lower infection rates, better sleep, more privacy), but despite the benefits, Jeffrey Seguritan at nuts for healthcare observes that the private room is being pushed by the AIA, and wonders whether health care dollars really ought to be spent these days on capital projects such as these.  (My brief response: these days, they really aren't, given the tight financial markets).

In a medblogosphere first, The Happy Hospitalist has publicly described an entry in the $10 million X Prize competition:

How do you [reduce health care costs dramatically]?  Here's my theory.  You can do more to affect health care costs by getting 10,000 people to change their lifestyle habits than you can by getting a few hundred docs to change how they document and collect data and prescribe some pills.

So here's what you do.  You bribe the public.  People are inherently lazy, but they respond well to piles of money.

For a fuller introduction to the X Prize competition: Scott Shreve [IRL] posted his twitterview on the X Prize with Bertalan Mesko (@berci) at Crossover Health.  Learn more about it there.

The big HITECH Act pot of money that everyone in health IT is itching to get their hands on is going to have some strings attached: chief among them are going to be definitions of "meaningful use" and "certified EHR."  Them that are likely to be certifying -- CCHIT -- have been the target of some possibly well-deserved pot-shots, and the gloves have come off.  See Gilles Frydman's [almost met IRL at the Health 2.0 conference in Boston a month or so ago] framing of the debate at e-patients.net and John Moore's [IRL] take at Chilmark Research.  

Health technology research and development yielded two bits of news this week: FDA approval of a handheld ultrasound unit, via Vijay Sadasivam's scan man's notes, and Ves Dimov's post at Clinical Cases and Images on the Rovio - a WiFi-enabled mobile webcam, which may be more attractive to medical users given the recent study that found patient satisfaction, physician satisfaction and diagnostic agreement (measured both between face-to-face and virtual vists, and between two face-to-face visits) to be similar for face-to-face and virtual visits.  (Yesterday's Boston Globe took a closer look at this study, virtual visits in general, and American Well in particular.)    

The health IT crowd is working on interoperability and portability of health information.  Google Health is one of the platforms that may enable folks to reach this holy grail.  Brian Dolan at mobihealthnews says that Google Wave, an open-source tool for communication and collaboration, looks like a killer tool for enabling Google Health to do more in terms of provider-provider and patient-provider collaboration.

Evan Falchuk's observation at See First on prevention: it ain't cheap; treatment of preventable disease is more expensive than the savings from avoided disease and complications, so we need to be talking about more than cost-effectiveness.  [Supposed to meet IRL soon.]

Patient Bloggers

For some reason, diabetics are very well-represented among Grand Rounds' usual suspects.  This week, they're turning into media critics as well, following President Obama's nomination of Sonia Sotomayor to the Supremes.  Amy Tenderich [who I also almost met IRL at Health 2.0] touched on the media frenzy regarding the nominee's Type 1 diabetes at The Diabetes Mine, as did Six Until Me's Kerri Morrone Sparling.  Not to leave Type 2 diabetes unattended, Rachel Baumgartel offers tips for the newly diagnosed Type 2 diabetic at Diabetes Daily.  (For those who care to immerse themselves in The Politics of the Sotomayor Nomination, the good folks at SCOTUSblog say come on in, the water is fine.)  For a taste of the difficulties faced by some diabetics traveling through airports with needles and curious liquids, head on over to Tim Brown's post at Shoot Up or Put Up. 

At Getting Closer to Myself, Leslie offers her reflections as a twentysomething with auto-immune disease, specifically a feeling of how she can't go home again to an idealized summer retreat.

Barbara Kivowitz describes a good day at In Sickness and In Health, and invites all of us to do the same.

Bloggers Who Are or Should Be Dancing

Val Jones [IRL] is pretty pleased with her high-deductible health plan (HDHP) - cash-only PCP combo.  I hope her husband is dancing after the office procedure scheduled on a dime last weekend . . . and I hope Dr. Val has all the releases for those photos stashed away somewhere.  It's a good solution for those with no chronic conditions, young kids, or other sources of regular interactions with the medical-industrial complex.  And no less a luminary than Clay Christensen says we're 5-6 years away from the tipping point (to mix metaphors) on HSA/HDHP combos, at which time we're likely to see a significant change in the economics of healthcare (with or without significant movement in DC).  For one example of where this may play out, see my recent post on retail health clinics.

No dancing for you if you're susceptible to one of the side effects of Cipro and its relatives (fluoroquinolones): tendon rupture.  There's a black-box warning regarding this, but many clinicians and patients are unaware, says Paul Auerbach at Healthline's Medicine for the Outdoors.

InsureBlog's Bob Vineyard shares good news for Cuba's pre-op transsexual population: coverage is here.  Surely cause for someone (patients, if not bloggers) to dance.

Well, that's the last dance . . . for this week.  See you around the medblogosphere, and next week at the next edition of Grand Rounds. 

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

David Harlow quoted in Medicare Compliance Alert on pre-employment background checks

Take some advice from the HealthBlawger in screening new employees.  Check out some specifics in the current edition of DecisionHealth's Medicare Compliance Alert, offered in point-counterpoint format with tips from my friend Bill Mandell.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

No ambulance diversion rule takes effect in Massachusetts

Massachusetts' no diversion rule took effect today.  This is a change long prepared for, but not likely felt immediately in area hospitals -- after all, New Year's Day is not a big day for elective surgeries and hospital discharges, and some of the key changes needed in hospitals in order to accommodate the new rule involve reworking of scheduling and workflows in these two arenas.

As it happens, I rang in the New Year with friends, including Catherine Bromberg, external communications director for the Massachusetts Hospital Association, who took some time out of her day to share MHA's member hospitals' collective experience with preparations for the new initiative with one of our local network affiliates.  Jonathan Epstein, one of the state's regional EMS directors, was also featured.  See the diversion story in text and video.  For details and links to the policy, see my earlier post on the no diversion policy and my conversation with Alasdair Conn, MD, ED chief at Mass General.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

Swapping arrangements, other issues, addressed in OIG supplemental compliance program guidance for nursing facilities

A recurring issue I see in my practice, regarding nursing facility contracts with suppliers and providers (e.g. clinical labs and ambulance services), has been addressed yet again by the OIG.  This time, it's in the OIG Supplemental Compliance Program Guidance for Nursing Facilities published on September 30 (supplementing prior guidance issued in 2000.  The issue is referred to as "swapping" -- swapping discounts on services paid for by a nursing facility (e.g., a service covered by consolidated billing requirements under Medicare Part A and therefore considered to be an "out of pocket" expense for the nursing facility) in exchange for referrals of services paid for by a governmental payor directly (e.g., a service paid directly by Medicare Part B).

The OIG has addressed swapping directly in the past, in Advisory Opinion 99-2, regarding an ambulance service swapping arrangement, and in subsequent correspondence relating AO 99-2 to clinical labs' relationships with nursing facilities.

A bright line test for discounts (at least in the ambulance arena) was proposed a couple years back, but later withdrawn.

This week's issuance makes a couple of key points:

(1) Size of discount doesn't matter; linkage to swapping matters.

(2) Below-cost or below-market deals are suspect.

(3) Discounts tied to "exclusives" or to implicit or explicit swap agreements are suspect.

So here's the latest on swapping, from 73 FR 56832 at 56844 (September 30, 2008):

Nursing facilities often obtain discounts from suppliers and providers on items and services that the nursing facilities purchase for their own account. In negotiating arrangements with suppliers and providers, a nursing facility should be careful that there is no link or connection, explicit or implicit, between discounts offered or solicited for business that the nursing facility pays for and the nursing facility’s referral of business billable by the supplier or provider directly to Medicare or another Federal health care program. For example, nursing facilities should not engage in ‘‘swapping’’ arrangements by accepting a low price from a supplier or provider on an item or service covered by the nursing facility’s Part A per diem payment in exchange for the nursing facility referring to the supplier or provider other Federal health care program business, such as Part B business excluded from consolidated billing, that the supplier or provider can bill directly to a Federal health care program. Such ‘‘swapping’’ arrangements implicate the anti-kickback statute and are not protected by the discount safe harbor. Nursing facility arrangements with clinical laboratories, DME suppliers, and ambulance providers are some examples of arrangements that may be prone to ‘‘swapping’’ problems. As we have previously explained in other guidance,the size of a discount is not determinative of an anti-kickback statute violation. Rather, the appropriate question to ask is whether the discount is tied or linked, directly or indirectly, to referrals of other Federal health care program business. When evaluating whether an improper connection exists between a discount offered to a nursing facility and referrals of Federal health care program business billed by a supplier or provider, suspect arrangements include below-cost arrangements or arrangements at prices lower than the prices offered by the supplier or provider to other customers with similar volumes of business, but without Federal health care program referrals. Other suspect practices include, but are not limited to, discounts that are coupled with exclusive provider agreements and discounts or other pricing schemes made in conjunction with explicit or implicit agreements to refer other facility business. In sum, if any direct or indirect link exists between a price offered by a supplier or provider to a nursing facility for items or services that the nursing facility pays for out-of-pocket and referrals of Federal business for which the supplier or provider can bill a Federal health care program, the anti-kickback statute is implicated.

(Emphasis supplied.)  Unfortunately, the new guidance offers little in the way of practical guidance.  Perhaps future rulemaking will succeed in creating a safe harbor for discounts of up to a specified level.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

Ambulance diversions to be banned in MA

As reported in the Boston Globe earlier this month,

The state has ordered Massachusetts hospitals to stop turning away ambulances when their emergency rooms are overcrowded, a decades-old practice that can delay treatment and has upset patients denied care at their usual hospitals.

As of January 1, 2009, no more so-called "diversions" of ambulances away from hospitals with backed-up emergency departments will be permitted in Massachusetts.  This policy shift, announced in a July 3 Department of Public Health circular letter regarding changes to hospital diversion policies, adopts the current thinking of a number of national health care organizations, but is apparently the first statewide policy of its kind in the nation.  (The only exception to the policy is a "Code Black," i.e., closed to all patients due to an internal emergency such as fire, chemical contamination, flood, etc.)

Why have diversions been necessary in the past?  If an emergency room is overcrowded, then the theory has been that more patients should not be brought in by ambulance; instead, they should be transported to the nearest hospital with available appropriate resources.  The key question is: Why are emergency departments overcrowded?  To answer that question, it is vital to look not at the ED but upstairs, to the rest of the hospital.  A study published by Eugene Litvak in Academic Emergency Medicine back in 2001 found that scheduling of elective surgeries to suit the schedules of surgeons, rather than to maximize the utilization of hospital resources by all users, which results in elective surgeries bunched up rather than smoothed out over the whole week, leads to more hours on diversion.  Litvak's insight is that unless you adjust supply (add beds) or demand (limit admissions), you need to manage the peaks and valleys so as to allow higher average hospital census.  Failure to manage patient flow variability means that on some days hospital beds -- and in particular certain ICU beds -- are full, thus ensuring that the ED will go on diversion.  This problem has been exacerbated over recent years as standby capacity has been squeezed out of the health care system by a variety of economic factors.

Yesterday I caught up with Alasdair Conn, MD, Chief of Emergency Services at Massachusetts General Hospital, to discuss the new Massachusetts policy.

He observed that the acute care hospital system in Massachusetts has lost about 1/3 of its beds over the past 15 years or so, and has gone from an average occupancy rate of 75% to effectively 100%.  Litvak's work has led to changes in policy at Boston Medical Center -- surgeons are given more block time in the OR if they agree to spread it out over more days of the week; Conn says the scheduling at MGH has essentially gone to 6 days a week for elective surgeries, with further experimentation around scheduling as well, designed to alleviate the pressures that lead to diversions.

One of the more striking things Conn shared with me is that the average length of stay (ALOS) at MGH is 5.8 days; a reduction of ALOS to 5.7 days would effectively yield an additional twelve inpatient beds.  Furthermore, a reduction of ALOS to 5.5 days would yield the equivalent of 36 new beds -- just about the number of daily admissions to the hospital through the ED.

Other interesting points from our conversation:

• MGH (alone among Massachusetts hospitals) has seen a significant increase in young adult ED visits in recent months, likely as a result of folks newly insured under the Massachusetts universal health care law (and having difficulty finding PCPs) seeking ED care for services that they may have previously deferred.  MGH, by the way, works to connect such patients with PCPs wherever possible.  Limited service clinics (e.g., Minute Clinics) offer another safety valve for some of this volume.
  
• Massachusetts ran a two-week no-diversion experiment earlier this year, and it worked.  With the advance notice given by the state, hospitals have had a chance to implement some operational changes to help make the no-diversion policy work.  All bets are off, however, if we have a bad flu season this year.
  

All eyes will be on Massachusetts in January to see if the latest experiment in the People's Republic will succeed.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

OIG advisory opinion OK's certain ambulance service support for county expenses

Last week, the OIG posted an October 12 advisory opinion regarding private ambulance service support for county expenses incurred in connection with prehospital care and transportation provided under exclusive contracts with the ambulance services providing the support.

Most municipalities no longer ask for -- and most ambulance services no longer offer -- vehicle donations and other goodies in return for exclusive contracts.  This advisory opinion serves to remind us that while freebies not closely related to the contract in question are a no-no, some closely-related financial supports are, in fact, permitted.

In this case, partial reimbursement for administrative and dispatch expenses, and free care for uninsured -- all related to the county inmates whose transport was the subject of the contract (and which was billed to third parties) -- were found by the OIG to be permissible.

The grounds for this decision were as follows:

• The arrangement was part of a comprehensive municipal program to secure transport services
• Payments for administrative and dispatch expenses will not cover their full cost
• Even though payments will vary with volume, the payment will not induce referrals, as most volume is 911 volume
• The arrangement in this case is with providers that have been contracting with the county  government for over 25 years
• The remuneration in this case would inure to the public benefit
• The arrangement was developed by the county government
• "Importantly, there is no ancillary or unrelated remuneration offered or paid by the Ambulance Services to the County . . . .  We might have reached a different result if the Ambulance Services had offered the County . . .  some remuneration not directly related to the provision of the emergency medical transports covered by the contracts including, by way of example, free or reduced cost equipment for . . . County agencies."

Expect a proliferation of carefully-constructed support programs in the wake of this advisory.

-- David Harlow

CMS proposes that ambulance service beneficiary signature requirement be relaxed

Ambulance services may have a little extra paperwork to do (CMS estimate: just 5 minutes per run, though that starts to adds up . . .), but then won't be dinged if they fail to get a beneficiary or representative signature in advance of an emergency transport.  The description of the proposed rule change is to be published in the July 12 Federal Register, as one of the many bonus add-ins to the publication of the 2008 Medicare physician fee schedule. 

Big headache ahead for ambulance services: one thing to get in lieu of the patient signature is a signature from the receiving hospital. 

If finalized, the rule will take effect October 1. 

-- David Harlow

OIG issues the Compendium of Unimplemented OIG Recommendations

Read the full Compendium.  Or just take a look at the priority recommendations.  There's something for everyone. 

The OIG scopes out its "priority" recommendations as being "comprised of both monetary and non-monetary recommendations, representing various time frames. The list comprises three categories: savings, integrity and efficiency, and quality of care." 

The quantified "priority" unimplemented OIG recommendations would save over $6bln if implemented.

The OIG announcement follows: 

The "Compendium of Unimplemented Office of Inspector General Recommendations" combines the "Red Book" (unimplemented monetary recommendations) and the "Orange Book" (unimplemented nonmonetary recommendations) into one publication. The "Red Book" focused on significant Office of Inspector General (OIG) cost-saving recommendations that had not been fully implemented. The "Orange Book" focused on unimplemented recommendations to improve HHS programs. Full implementation of the recommendations in this compendium could achieve substantial savings and increase the effectiveness of the Department’s programs.

Each narrative contains a background summary, findings, recommendation(s), status, report number(s), and report issue date(s). In the case of monetary recommendations, there is also an estimate of the savings that may be achieved by implementing the recommendations. The estimated value of each monetary recommendation is based on the specifics of each review and not extrapolated beyond the scope of the original review. The actual savings to be achieved depends on the specific legislative, regulatory, or administrative actions. However, the estimates provide a general indication of the magnitude of savings possible.

-- David Harlow

Can you say "interfacility"? SCT rule gets changed again

CMS has addressed the definition of specialty care transport (SCT) yet again in the recent final rule mostly devoted to the 2007 Medicare physician fee schedule (on display November 1, 2006, to be published December 1, 2006, effective January 1, 2007).  (See pp. 501-510 of the display copy of the rule, which includes a history of many of the definitions and guidance documents relating to SCT.)  SCT is the highest level of service provided by ground ambulance, as defined by CMS -- it includes interfacility ambulance services which may be provided only by a paramedic with additional training or a more highly-trained professional (e.g., nurse or physician).

The defintion of SCT in the regs (42 CFR 414.605) reads as follows:

Specialty care transport (SCT) means interfacility transportation of a critically injured or ill beneficiary by a ground ambulance vehicle, including medically necessary supplies and services, at a level of service beyond the scope of the EMT–Paramedic. SCT is necessary when a beneficiary's condition requires ongoing care that must be furnished by one or more health professionals in an appropriate specialty area, for example, nursing, emergency medicine, respiratory care, cardiovascular care, or a paramedic with additional training.

CMS and its public have struggled with the definition of interfacility (hospital-to-hospital? hospital-to-acute care hospital?) for over five years, and CMS included another stab at it in the draft version of the 2007 physician fee schedule rule.

Based on the comments received (including a suggestion to reconvene the negotiated rulemaking workgroup to decide what "critical care" means), CMS, in a measured tone that -- to my reading -- thinly veiled its exasperation, decided to withdraw its proposed clarification at the regulatory level, and to expand its "guidance" on the issue. 

The current CMS view goes beyond prior guidance: the word "interfacility" for SCT purposes now explicitly includes Medicare-certified SNF-to-hospital (AND hospital-to-SNF) ambulance runs (assuming clinical appropriateness/need for SCT-level service); this has already been permitted by liberal carriers, and CMS expects this will remain a small fraction of the total SCT volume.  "Hospital" is defined broadly to include anything that would be considered a "hospital-based facility" under CMS "provider-based" rules, 42 CFR 413.65.

Here's to a definition that should stick.

-- David Harlow