HealthBlawg

Health Law Basics Plus: Two-day seminar in Boston this week

Massachusetts Continuing Legal Education puts on its annual two-day extravaganza introduction to health law this week (November 4-5).  I'll be speaking on post-acute care, and there is an all-star panel of speakers filling out the entire two days.  If you are -- as they used to say  -- within the sound of my voice and have an interest, please come on down.  Bring your friends and neighbors.  You can find more information on topics, speakers and and registration on the MCLE Health Law Basics Plus page. 

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

Whither meaningful use of the certified, interoperable EHR?

Paul Roemer asks:

Have you ever been a part of a successful launch of a national IT system that: 

• required a hundred thousand or so implementations of a parochial system?
• has been designed by 400 vendors?
• had 400 applications based on their own standards?
• has had to transport different versions of health records in and out of hundreds of different regional health information networks?
• needed to be interoperable?
• could have resulted in someone's death if it failed?

Me neither.

The challenges are many, yet many health care systems already are, or soon will be, moving to implement pieces of this national system.  Are they motivated by the HITECH Act promise of up to $44,000 per physician for meaningful use of a certified EHR?  Perhaps, but that won't cover the cost.  The real value is in the ability to manage a patient's care effectively, efficiently and seamlessly across practice sites and, beyond that, to learn from population-level data. 

The federales already know this -- check out the recent All Things Considered piece on the Medicare claims database.  The aggregators of de-identified data putting it to secondary uses already know this, though their work may be made more complicated by the new HIPAA and Son of HIPPA rules out from HHS and FTC.  Some health systems know this, and are prepared to match the federales' incentive payments to docs who get on the bus (adding some Stark, fraud and abuse and tax issues to the already-heavy load of considerations).

Health care provider systems are ready to get with the program, but may need some guidance in negotiating the regulatory and operational minefields as they move to implement EHR systems. 

If you're part of a system looking for some ground-floor planning and strategic thinking on this thorny set of issues, please get in touch with Paul or me.

David Harlow
The Harlow Group LLC
Health Care Law and Consulting

David Harlow quoted on OIG Advisory Opinions in Part B Insider

I spoke last week with Torrey Kim, editor of Eli's Part B Insider, to offer some practical advice about seeking an OIG advisory opinion.  See the story on page 3 of the current issue.  The lead story in this issue touches on the FTC Red Flag rule, which interacts with HIPAA as well -- check it out, and see the HealthBlawger's take on HIPAA and the FTC Red Flag rule too.

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

Interoperable EHRs: elusive grail or within our grasp?

The indefatigable John Halamka makes a convincing case that "interoperability is implementable today with harmonized standards, appropriate security, and a service oriented architecture using the internet," and that the only thing barring the way to a fully interoperable national EHR system is resources, or incentives -- the technology is there.

(This conclusion begs the question: is GE's recently-announced foray into developing a new open standard for EHRs really necessary?  The $200 million committed seems to be a drop in the proverbial bucket; as a recovering public health official, I always tend to ask: How many childhood vaccines could you buy with that kind of money instead?)

So, what sort of incentives would move providers to climb on board the interoperable EHR express?  The federales have taken at least two approaches thus far:

First, the executive order giving hospitals a free pass for kicking in some dough when physicians in a position to refer business are buying EHR systems.  (Not exactly doing land-office business, even after the IRS cleared up a little issue -- the executive order created a Stark exception and fraud and abuse safe harbor but hadn't addressed issues raised by tax-exempt hospitals forking over big bucks for the benefit of for-profit medical groups.)

Second, a little MIPPA carrot-then-stick action on the electronic prescription front, with the potential promise of expanding the 2% incentives into other related arenas.

Will these incentives move a lot of docs online?  I'm not convinced.  Frankly, the hospital community is not exactly looking for ways to spend money these days.  I'd like to see the time limits on the executive order extended so that hospitals have a chance to rebound and fund some physician EHR infrastructure.  The MIPPA-type or RHQDAPU-type incentives will move docs, as other similar incentives have moved docs and hospitals to report on a million measures.

I'd like to see the federales make some bold moves -- which the Obama administration may be prepared to do -- and fund EHR infrastructure in the private sector.  Directly.  By writing some checks.  There's at least $700 million of public and private funds on the table, but more is needed. The benefits to be realized are great enough, both in terms of public health and in terms of cost savings to government and other payors (and by payors I mean ultimate payors -- those who pay health insurance premiums) that the short-term cost (which is not inconsequential) should be underwritten in the same sort of deficit spending kind of way that FDR used to fund the New Deal.

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

Contractual joint ventures: the OIG hangs tough

The OIG released an advisory opinion today finding that a proposed block leasing arrangement between two physician group practices -- one a practice providing cancer treatment services, including IMRT, the other a urology group -- whereby the urology group would bring the IMRT services in-house through a series of contracts, would be barred as an impermissible contractual joint venture, assuming the requisite intent (to exchange payment for referrals) were present. 

There has been very little advisory opinion activity related to the contractual joint venture special advisory bulletin issued by the OIG in 2003.  Only three advisory opinions before today's even mention the special advisory bulletin.  One of those, however, trod the same ground as today's advisory opinion.  The 2004 advisory opinion regarding pathology lab contractual joint ventures is essentially identical to the most recent opinion. 

In the opinion, the OIG observes that

the Special Advisory Bulletin describes an arrangement very similar to the Proposed Arrangement:

[A] health care provider in one line of business (hereafter referred to as the “Owner”) expands into a related health care business by contracting with an existing provider of a related item or service (hereafter referred to as the “Manager/Supplier”) to provide the new item or service to the Owner’s existing patient population, including federal health care program patients. The Manager/Supplier not only manages the new line of business, but may also supply it with inventory, employees, space, billing and other services. In other words, the Owner contracts out substantially the entire operation of the related line of business to the Manager/Supplier – otherwise a potential competitor – receiving in return the profits of the business as remuneration for its federal program referrals.

In these circumstances, the OIG is unimpressed by claims that each element of the arrangement fits into a safe harbor.  Also, significantly, the OIG notes that the analysis of the proposed arrangement requires not only a review of each component of payment running from the urologists to the other physician group, but an analysis of the remuneration running from the cancer care group to the urologists, equal to the difference between the federal program payments to the urology group for services and the contract prices paid by the urology group.

For all of these reasons, the proposed arrangement failed to gain the approbation of the OIG.

Providers with existing or proposed contractual arrangements anywhere the zip code of the arrangements described in these advisories would be well advised to review them carefully in light of this most recent opinion, which seems to reinvigorate a somnolent area of enforcement.

-- David Harlow

Medicare Physician Fee Schedule (2009 MPFS): Yes, there's a 5.7% cut, but it's packed with goodies like telehealth and gainsharing

Congress couldn't be bothered to stop grandstanding before July 4th long enough to undo the latest SGR-driven physician pay cut (over 10%). 

This week, CMS rolled out its 2009 MPFS with an SGR-mandated 5.7% cut in place, while at the same time advising physicians not to submit bills until Congress comes to its senses and undoes this year's 10% cut. 

If the proposed rule contained only this doom and gloom, there wouldn't be much to say about it.  However, CMS loves to stuff all sorts of goodies into these fee schedule rules, and the current proposed rule is no exception.  There are more measures to be added to the PQRI, but several other pieces are of greater interest:

First, physician practices will now be subject to IDTF rules.  The idea is to bring some standards to physician-office-based diagnostic testing.  This may bring a bit of dislocation as practices implement some new policies and procedures to assure compliance with standards, as well as work their way through the IDTF enrollment process.

Second, Medicare is proposing to cover telehealth -- telephone or email encounters for established patients (with payments on par with in-person visits).  A smattering of commercial insurers already do this, but this step, if finalized, will promote more efficient use of scarce primary care provider resources and will likely pave the way for further adoption in the private sector.

Third, CMS has issued its first generally applicable proposed gainsharing rule, presented as the new "Incentive Payment and Shared Savings Programs" subsection of the Stark rules. (See the commentary at 73 FR 38548-58 (7/7/08) and the regs at 8604-06; pages 48-58 and 104-06, respectively, of the 2009 MPFS rule.) 

Interestingly, there is no anti-kickback safe harbor promulgated to go along with the Stark exception, so any gainsharing program would still have to comply with AKS.  Since the OIG has issued about a dozen advisory rulings on the AKS issues raised by gainsharing, the CMS suggestion that one may now go out and gainshare so long as one complies with AKS appears, at first blush, to be less than thrilling. The fact that the federales saw the need to amend the Stark rules to allow for gainsharing also raises an interesting question about prosecutorial discretion with respect to gainsharing programs implemented under OIG advisories . . . .  In any event, the criteria set forth in this proposed reg dovetail with criteria set forth in the OIG gainsharing advisories.  Two differences of note: (1) the requirement that an outside clinical expert bless the plan (parallel to the specialty society blessings of best practices obtained by Goodroe for the gainsharing plans approved through the OIG process) and (2) the ability to run a gainsharing program for up to 3 years (vs. the 1-year limit in the OIG advisories).

I suppose we'll have to wait for a parallel amendment to the AKS regulations before providers can engage in gainsharing behavior willy-nilly.  CMS demonstrations such as the PHCD specifically waived both Stark and AKS.  CMS noted repeatedly in its commentary, however, that the new Stark exception covers a broader range of P4P initiaitives than just gainsharing, and some of them could fit within existing AKS safe harbors.  This is where the action will be, assuming final promulgation of the reg this fall.

Finally, CMS noted in the commentary that this draft was admittedly narrow, since it was difficult to draft a gainsharing rule of general applicability that could encompass all the sorts of things that providers might wish to do, and it is soliciting comments on a variety of specific points. 

The comment period is open through August 29 and a final regulation is expected by November 1, effective January 1, 2009.

-- David Harlow

(Updated 7/9/08)

OIG nixes test tube labeling service by lab seeking dialysis center business

The OIG released an advisory opinion last Friday finding that a lab's practice of labeling test tubes for free in order to get dialysis center business -- to be initiated because "all the other labs are doing it" -- could be considered an illegal kickback intended to induce referrals (though the OIG, of course, does not inquire into intent in the course of the advisory opinion process).

So were the owners of the lab that requested the opinion really planning to implement this approach, or was this simply a ruse to smoke out the competitors and get them to stop, thus leveling the playing field?  Only their lawyer knows for sure . . . .

-- David Harlow

David Harlow quoted on compliance with anti-kickback rules

I was interviewed for the current Part B Insider  article on anti-kickback compliance (p. 3 of the issue linked to here) in light of a recent OIG report on enforcement. Check it out.

As I tell folks over and over again: good business practices in other industries are often illegal in health care.

-- David Harlow