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Michael Cook appointed to serve on Virginia’s Medicaid Policy Council

January 2, 2018 by  
Filed under Firm News

Healthcare Attorney(January 2, 2018):  Congratulations to our very own Michael Cook who has been appointed to serve on the Virginia Medicaid Policy Council for Health and Human Resources. In this role, The Council’s role is to provide recommendations on policy issues involving the programs operated by the Department of Health and Human Resources as part of the transition.

HHS Issues Final Rule to Address Record High Medicare Appeals Backlog

Medicare appeals backlog(January 20, 2017): The Medicare appeals backlog has reached its all-time worst. If you’re a healthcare provider or supplier waiting for a hearing before an Administrative Law Judge (ALJ) at the Office of Medicare Hearings and Medicare Appeals (OMHA) – the third level of the Medicare appeals process – you’ve likely been waiting years to have your case heard or, at least, you’re expecting such a wait. This wait time has persisted despite that ALJs are statutorily required to issue a decision within 90 days of receipt of a hearing request. The reasons for the backlog depend on who you ask: the American Hospital Association (AHA) and others have contended that the Recovery Audit Program is the “primary culprit in creating and sustaining” the backlog because Recovery Audit Contractors (RACs) “receive a cut of any improper payments they recover […] and can challenge claims going back as far as three years.”  The U.S. Department of Health and Human Services (HHS) agrees that the Recovery Audit Program has contributed to the backlog, but believes there are other reasons as well, like an increase in Medicare beneficiaries and a growing practice among some providers to appeal virtually every claim denial through ALJ review (coupled with only modest increases in funding for the agency, thereby limiting their ability to address the growing number of appeals and backlog).

I.  Statistical Overview of the Medicare Appeals Backlog:

In any event, the statistics are astounding:

  • The number of ALJ appeals filed grew 936%, from 41,733 to 432,534, between fiscal years (FY) 2010 and 2014.
  • By the end of FY2014, 767,422 appeals were pending at ALJ.
  • ALJ decisions are issued well after the 90-day statutory deadline: in FY2014, it took OMHA an average of 415 days to process an ALJ appeal; in FY2015, it took OMHA an average of 662 days to process an ALJ appeal; and in FY2016, it took OMHA an average of 877 days to process an ALJ appeal.

The backlog has been a significant source of frustration for healthcare providers and suppliers (and their representatives) stuck in the lingering appeals process – and not just because it takes so long to achieve a final judgment by the Secretary. The delay often has significant financial consequences because Medicare can statutorily recover the alleged overpayment shortly after a second level (reconsideration) appeal decision issues, despite that the appeals process is not over and despite that the first two levels of appeal are littered with problems (e.g., we see chronic misapplication of Medicare coverage and payment rules by appeals contractors at the first two levels of appeal).

II.  Order by the U.S. District Court:

Thanks to the efforts of AHA and other plaintiffs who sought relief in court, we may see the backlog resolve over the next few years. On 12/05/2016, the United States District Court for the District of Columbia ordered that the HHS Secretary reduce the backlog according to the following timeline:

  • 30% reduction from the current backlog of cases pending at the ALJ level by 12/31/2017;
  • 60% reduction by 12/31/2018;
  • 90% reduction by 12/31/2019; and
  • 100% reduction by 12/31/2020.

III.  Other HHS Efforts to Address the Medicare Appeals Backlog:

In an effort to meet these mandated backlog reduction timelines, HHS issued a final rule on 01/17/2017 titled “Medicare Program: Changes to the Medicare Claims and Entitlement, Medicare Advantage Organization Determination, and Medicare Prescription Drug Coverage Determination Appeals Procedures”. The final rule includes an assortment of initiatives to reduce the backlog which become effective 03/17/2017, including:

  • Giving select Medicare Appeals Council decisions precedential effect. The final rule provides that designated “Medicare Appeals Council decisions […] have precedential effect and are binding on all CMS components, on all HHS components that adjudicate matters under the jurisdiction of CMS, and on the Social Security Administration to the extent that components of the Social Security Administration adjudicate matters under the jurisdiction of CMS.” This is significant because, currently, even if the Medicare Appeals Council interprets a Medicare authority or provision in a specific way in a decision, that interpretation only applies to the case at hand (even though the decision represents the final decision of the Secretary). In other words, an Appellant can’t contend that the interpretation of a Medicare authority or provision in a previous Medicare Appeals Council matter is binding in their case as well, even if the facts and issues are very similar. HHS hopes the precedential nature of Medicare Appeals Council decisions as of 03/17/2017 will create consistency in the appeals process. It’s possible, though, that the discretion given to the Departmental Appeals Board (DAB) Chair to decide which cases have precedential effect may impact how effective this change will ultimately be.
  • Expanding the pool of adjudicators at OMHA to include attorney adjudicators. An attorney adjudicator is a licensed attorney employed by OMHA with knowledge of Medicare coverage and payment laws and guidance, and authorized to take the actions on requests for ALJ hearing and requests for reviews of QIC dismissals. HHS estimates that the expansion of the pool of adjudicators at OMHA could redirect approximately 24,500 appeals per year to attorney adjudicators who would be able to process these appeals at a lower cost than would be required if only ALJs were used to address the same workload.
  • Creating process efficiencies. These include, for example, allowing ALJs to vacate their own dismissals rather than requiring Appellants to appeal a dismissal to the Medicare Appeals Council and using telephone hearings for certain Appellants.

For more information on these and numerous other initiatives, please refer to the Federal Register. The hope is that the finalization of this rule and the Secretary’s accountability to the District Court – the Court retained jurisdiction of the case to review the quarterly status reports the Secretary is required to prepare and to rule on any challenges to unmet deadlines – will achieve the intended result: complete elimination of the backlog by 2020.

The Centers for Medicare and Medicaid Services (CMS) has taken steps in the past to improve the appeals process, and these steps have not always achieved the intended result. For example, with regard to appeals stemming from a post-payment review, CMS directed redetermination (first level) and reconsideration (second level) appeals contractors – effective August 2015 – to restrict their review on appeal to (in most cases) only the issues alleged by the reviewing contractor (i.e., the contractor that requested the records and issued the initial audit results). The purpose was to avoid a moving ball – where one Medicare contractor alleges one issue and the Appellant addresses it, but then another contractor alleges another issue, requiring the Appellant to then address a different issue with regard to the same claim. However, we have seen the redetermination and reconsideration appeals contractors repeatedly disregard this CMS directive and continue to try and add new denial reasons to the administrative record. We have also seen the initial auditing contractors increasingly allege more than one denial reason, throwing everything but the kitchen sink at providers and suppliers. It seems that Medicare is hoping for at least one denial reason to persist through the appeals process.

Judicial oversight is the difference this time around and could be the key to reducing the backlog. We’ll be monitoring HHS’s progress closely and hoping for expeditious relief for our current and future clients, and healthcare providers and suppliers everywhere.

Lorraine Ater, JDHealthcare Lawyer is a health law attorney with the firm Liles Parker.  She is also a Certified Medical Compliance Officer (CMCO) and a Certified Medical Reimbursement Specialist (CMRS).  Lorraine represents healthcare providers and suppliers around the country in connection with Medicare audits and appeals.  Liles Parker is a boutique health law firm with offices in Washington, DC; across the State of Texas; and in Baton Rouge, LA.  Need assistance?  For a free consultation, please call: (202) 298-8750.



AHA v. Burwell, 2016 U.S. Dist. LEXIS 126840 (D.D.C. Sept. 19, 2016).

AHA v. Burwell, 2016 U.S. Dist. LEXIS 167291, 2016 WL 7076983 (D.D.C. Dec. 5, 2016).

Federal Register, Volume 82, Number 10, Pages 4974-5140, “Medicare Program: Changes to the Medicare Claims and Entitlement, Medicare Advantage Organization Determination, and Medicare Prescription Drug Coverage Determination Appeals Procedures” (01/17/2017). Available at

HHS, “FACT SHEET: HHS Issues Final Rule to Improve the Medicare Appeals Process”.

HHS, OMHA, “Average Processing Time By Fiscal Year” (11/18/2016). Available at

2014 HCFAC Report — $27.8 Billion Recovered for Medicare

Fraud(March 23, 2015):  Last week, the Department of Justice (DOJ) and Department of Health and Human Services (HHS) announced that they had recovered more than $27.8 billion to the Medicare Trust Fund due to the efforts of the Health Care Fraud and Abuse Control Program (HCFAC). As set out in the 2014 HCFAC Report, in Fiscal Year 2014, the government’s health care fraud prevention and enforcement efforts recovered $3.3 billion in taxpayer dollars from individuals and companies that attempted to defraud federal health programs. In particular, the agencies recovered $7.70 for every dollar spent to fight health care related fraud and abuse. This figure represented the third highest dollar amount on record and represents about $2 more than the average return on investment in the HCFAC program since its creation in 1997.

As HHS Secretary Sylvia M. Burwell noted:

“[e]liminating fraud, waste and abuse is a top priority” for HHS. “These impressive recoveries for the American taxpayer demonstrate our continued commitment to this goal and highlight our efforts to prosecute the most egregious instances of health care fraud and prevent future fraud and abuse. New enrollment screening techniques and computer analytics are preventing fraud before money ever goes out the door. And together with the continued support of Congress and our partners at the Department of Justice, we’ve cracked down on tens of thousands of health care providers suspected of Medicare fraud – all of which are helping to extend the life of the Medicare Trust Fund.”  

DOJ Attorney General Eric Holder expanded upon Secretary Burwell’s comments:

“As the innovative and collaborative work of the [HCFAC] proceeds, more taxpayer money is being recovered, more criminals are facing justice, and more fraud is being punished, prevented, and deterred… [t]he extraordinary return on investment we’ve obtained speaks to the skill, the tenacity, and the inspiring success of the hardworking men and women fighting on behalf of the American people. And with these outstanding results, we are sending the unmistakable message that we will not waver in our mission to pursue fraud, to protect vulnerable communities, and to preserve the public trust.”

The DOJ and HHS have been operating under a two-pronged strategy to fight waste, fraud and abuse in the federal health care programs. Under new powers granted by the Affordable Care Act (ACA), these agencies have moved away from the traditional “pay and chase” methods for targeting fraudsters. Instead, they are not working towards preventing health care fraud and abuse in the first place. Furthermore, the Health Care Fraud Prevention and Enforcement Action Team (HEAT), a joint operation run by the HHS Office of the Inspector General (OIG) and DOJ, is changing how the federal government combats certain types of health care fraud. HEAT units are investigating potential fraud cases using real-time data analysis instead of a prolonged subpoena and account analyses. This new approach has resulted in significantly shorter periods of time between fraud identification, arrest, and prosecution.

Government agencies have also utilized the federal False Claims Act (FCA) as another vital tool to combat waste, fraud and abuse. According to the 2014 HCFAC Report, since January 2009, DOJ has recovered more than $15.2 billion in settlements and judgments from civil cases involving health care fraud and false claims against federal health care programs like Medicare and Medicaid.  As detailed on the 2014 HCFAC Report, in the past year, the DOJ obtained $2.3 billion in cases involving health care fraud.

Moreover, the Centers for Medicare & Medicaid Services (CMS) has adopted its own set of preventive measures to combat waste, fraud and abuse in the health care programs. From the outset, CMS has implemented vital safeguards to prevent illegitimate providers from enrolling in and billing the Medicare program. The ACA also requires CMS to revalidate all existing 1.5 million Medicare suppliers and providers under new and updated screening requirements. This has led to the deactivation of at least 470,000 enrollments and revocation of nearly 28,000 enrollments to prevent certain providers from re-enrolling and billing the Medicare program. CMS also issued a regulation that requires prescribers of Medicare Part D drugs to enroll in Medicare and undergo screening. Another ongoing preventative measure has been CMS’ ongoing moratoria on the enrollment of new home health or ambulance service providers in six health care fraud “hot spots”: Miami, Chicago, Dallas, Houston, Detroit and Philadelphia (which includes some counties in New Jersey). CMS believes that this extension will allow it to continue its actions to suspend payments or remove providers from the program before allowing new providers into potentially over-supplied markets.

The HCFAC annual report is available at We applaud the government’s efforts to combat waste, fraud and abuse in the federal health care programs. As these latest updates demonstrate, Medicare and Medicaid fraud prevention efforts will continue to expand. With this, providers should also be aware that there will likely be an increase in the number of FCA cases that are filed.   FCA cases have become increasingly important as the Justice Department looks to stop the rising tide of fraud and abuse in the nation’s healthcare system. Thus, health care providers and suppliers should ensure that their compliance programs are effective to identifying and deterring potential violations of the FCA and other laws.

Saltaformaggio, RobertRobert Saltaformaggio, Esq., serves as an Associate at Liles Parker, Attorneys & Counselors at Law.  Liles Parker attorneys represent health care providers around the country in connection with Medicaid audits by federal and state agencies and CMS-engaged specialty contractors.  The firm also represents providers in connection with HIPAA Omnibus Rule risk assessments, privacy breach matters, State Licensure Board inquiries and regulatory compliance reviews.  For a free consultation, call Robert at:  1 (800) 475-1906

The FY 2016 Budget Proposes Medicare Appeals Process Reforms

Medicare appeals process changes are on the horizon.

(February 27, 2015):  On February 2, 2015, President Obama released his fiscal year 2016 budget proposal. This latest proposal affects a significant number of Federal health care programs and includes over $1 trillion allocated to the U.S. Department of Health and Human Services (HHS). More than 85 percent of HHS’s budget is devoted to programs that fall under the purview of the Centers for Medicare & Medicaid Services (CMS).  The administration’s primary health care focus is expanding access to care and providing higher quality of care. It attempts to accomplish this goal through a series of budget increases coupled with a greater emphasis on efficient practices. For example, the budget proposes several reforms to the Medicare program that purport to save roughly $423.1 billion over the next 10 years.  Medicare appeals process reforms are among the changes impacted by the 2016 budget.  As discussed later in this article, the RAC audit changes that are anticipated will likely result in an increased likelihood that your health care company may be in the proverbial crosshairs.

I.  Administration Goals:

The FY 21016 budget continues to prioritize cutting waste, fraud, and abuse in the Medicare and Medicaid programs. As outlined in HHS’ budget brief, the President’s proposal includes $201 million in investments in program integrity for FY 2016 and $4.6 billion over ten years. These investments include continuing to fund the full Health Care Fraud and Abuse Control (HCFAC) discretionary cap adjustment, increasing mandatory Medicaid Integrity Program funding, and providing more funding to recovery auditors to undertake more corrective actions that will help reduce improper payments. In total, program integrity investments are estimated to yield roughly $21.7 billion in savings to Medicare and Medicaid over ten years. In addition, the Budget supports efforts to monitor and prevent fraud, waste and abuse in the private health insurance market including the Health Insurance Marketplace

II.  Medicare Appeals Process Reforms:

Health care providers should pay particular attention to the budget proposals that affect the Medicare appeals process, an area that has caused significant frustration over the last several years: Medicare and Medicaid contractors and appeals. In December 2013, the Office of Medicare Hearings and Appeals (OMHA) declared that it would stop assigning administrative law judge (ALJ) appeals. The Medicare appeals system had become severely backlogged with pending appeals, due in large part to a significant increase in Recovery Audit Contractor (RAC) reviews of claims. CMS tried to alleviate this backlog through a RAC Audit “Pause”. This pause would allow RACs to complete their remaining claim audits and allow CMS to continue to refine and improve the RAC audit  Audit Program. Nevertheless, frustration with the arduous Medicare appeals process led three hospitals and the nation’s largest hospital association to sue HHS. In a subsequent effort to address the backlog and resulting delays, CMS presented a global settlement offer to hospitals to resolve certain backlogged claims on during Labor Day 2014.

As part of its ongoing efforts to improve the efficiency of the Medicare appeals system – and to reduce the backlog of appeals awaiting adjudication at OMHA – HHS proposes additional funding, administrative actions, and legislative proposals. For example,

  • $36 million is allocated for CMS to engage in discussion with providers to resolve disputes and additional funding for greater participation in ALJ Hearings at OMHA;
  • $270 million is allocated for OMHA, of which $140 million is in budget authority and $130 million is from legislative proposals. This figure constitutes a $53 million increase from FY 2015.

The Budget also expands adjudicatory capacity in new field offices in order to address the backlog for a number of appeals and maintain the quality and accuracy of its decisions. It also includes a package of legislative proposals that provide new authority and additional funding to address the backlog.  A summary of the Medicare appeals process reforms is as follows:

  • Provide OMHA and Departmental Appeals Board (DAB) Authority to Use Recovery Audit Contractor Collections – this would allow program recoveries to fully fund related appeals at OMHA and the DAB;
  • Establish a Refundable Filing Fee – a refundable, per claim filing fee for providers, suppliers, and State Medicaid agencies, including those acting as a representative of a beneficiary, at each level of Medicare appeal, would be instituted. This filing fee would allow HHS to invest in the appeals system in hopes of improving responsiveness and efficiency. Notably, these fees would be returned to appellants who receive a fully favorable appeal determination;
  • Establish Magistrate Adjudication for Claims with Amount in Controversy Below New ALJ Amount in Controversy Threshold – appealed claims below the federal district court amount in controversy threshold ($1,460 in CY 2015 and updated annually) would be heard by attorney adjudicators. This would allow ALJs to hear claims that are more complex and/or include higher dollar amounts.
  • Expedite Procedures for Claims with No Material Fact in Dispute – OMHA could issue decisions without holding a hearing if there is no material fact in dispute;
  • Increase Minimum Amount in Controversy for Administrative Law Judge Adjudication of Claims to Equal Amount Required for Judicial Review – the minimum amount in controversy required for adjudication by an ALJ would be increased to the Federal Court amount in controversy requirement ($1,460 in 2015). Appeals not reaching the minimum amount in controversy will be adjudicated by a Medicare magistrate;
  • Remand Appeals to the Redetermination Level with the Introduction of New Evidence – appeals where new documentary evidence is submitted at the second level of appeal or above would be remanded down to the first level of review. This could incentivize appellants to include all evidence early in the appeals process and ensure the same record is review and considered at subsequent levels of appeal; and
  • Sample and Consolidate Similar Claims for Administrative Efficiency – the Secretary HHS could adjudicate appeals through the use of sampling and extrapolation techniques. Additionally, the Secretary would be authorized to consolidate appeals into a single administrative appeal at all levels of the Medicare appeals process. Parties who are appealing claims included within an extrapolated overpayment, or consolidated previously, will be required to file one appeal request for any such claims in dispute.

III.  Final Remarks:

HHS insists that these proposal will allow OMHA to alleviate the ongoing backlog of appealed claims within the Medicare appeals system. However, these measures are not addressing one of the most significant problems with the entire process – the contractors themselves. No where in the budgetary proposals has HHS identified measures that would address the problem areas that RACs are historically known to create. For example, RACs are still reimbursed on a contingency fee arrangement. This arrangement create adverse incentives whereby RACs pursue (and generally deny) as many claims as possible. Yet, the contractors are not punished for adverse results that may be later overturned at any one of the appeals levels, in particular at the ALJ stage.

Has your hospital, practice, Home Health Agency, Hospice, DME Company, or PT / OT / ST Clinic been audited by a RAC or Zone Program Integrity Program (ZPIC)? Liles Parker regularly counsels health care providers on how best to proactively prepare for an audit and mitigate audit risks. As long as RACs are incentivized to pursue as many claims as possible, the likelihood of an audit of your practice is not “if” but “when.” If you have any questions or concerns regarding any ongoing – or future – RAC or ZPIC audit, please do not hesitate to give us a call at 1 (800) 475-1906.

Saltaformaggio, RobertRobert Saltaformaggio, Esq., serves as an Associate at Liles Parker, Attorneys & Counselors at Law.  Liles Parker attorneys represent health care providers around the country in connection with Medicare and Medicaid audits by ZPICs, RACs and specialty contractors. The firm also represents health care providers in connection with HIPAA Omnibus Rule risk assessments, privacy breach matters, State Licensure Board inquiries and regulatory compliance reviews.  For a free consultation, call Robert at:  1 (800) 475-1906

Fed Up Over Burdensome RAC Appeals Process, Hospitals Sue HHS

RAC Appeals(May 28, 2014)  Frustrated by an arduous Medicare administrative appeals process, three hospitals have joined with one of the nation’s largest hospital associations in a federal lawsuit against The Department of Health and Human Services (HHS). The lawsuit seeks to compel HHS to meet the statutory deadlines for administrative review of Recovery Audit Contractor (RAC) claims denials for Medicare reimbursements.  The plaintiffs include The American Hospital Association, the Baxter Regional Medical Center in Mountain Home, Arkansas, Covenant Health, located in Knoxville, Tennessee, and the Rutland (Vermont) Medical Center.  Their complaint contends that “[l]engthy, systematic delays in the Medicare appeals process” are far exceeding the statutory timeframes.  As a result of the delays caused by the filing of an overwhelming number of RAC appeals by hospitals, all Medicare providers are being severely harmed.

I.     The Medicare Appeals Process:

In order to receive payment for their services, Medicare providers submit claims to HHS. These claims are then processed through the Centers for Medicare & Medicaid Services (CMS) and its Medicare Administrative Contractors (MACs). If a claim is denied, it is generally denied through a post-payment review process. Increasingly however, claims are also being denied before reimbursement occurs.

Under the post-payment review process, third party contractors will commonly scrutinize a provider’s medical judgment. Through this practice, these contractors are generally overturning original payment decisions by claiming that certain services were not medically reasonable or necessary. Providers must then pay back the funds previously reimbursed even if a later review determines that the contractor’s determination was incorrect.

Medicare providers can contest payment denials (whether pre-payment or post-payment) through a four-level appeals process within HHS.[1] Each level is governed by specific timeframes in which a decision must be rendered following receipt of the appeal. At the third level of the appeals process, providers have a right to have their claims reviewed by an Administrative Law Judge (ALJ) within the HHS Office of Medicare Hearings and Appeals (OMHA)[2]. ALJs are statutorily required to hold a hearing and render a decision within ninety (90) days from a provider’s filing of its appeal with OMHA.[3]

III.     RACs Appeals Have Created a Massive Backlog in the Medicare Appeals Process:

Over the past few years, extraordinary delays in the Medicare administrative appeals process have effectively obstructed providers from challenging payment denials.  In fact, it is taking much longer than 90 days for ALJs to even docket new requests for an ALJ hearing, let alone render a decision.  Currently, there is a 20 to 24-week delay for a claim to get docketed.  This delay has allowed over 460,000 claim appeals to sit idly in the appeals process by the end of 2013. When a decision is finally rendered, the average time is 16 months after the appeal has been filed.  Over the last decade, HHS, through CMS, has implemented and expanded its Recovery Audit Program. Recovery Audit Contractors (RACs) are tasked with identifying and correcting improper payments through the detection and collection of overpayments made on claims of health care services provided to Medicare beneficiaries.

However, RACs have become increasingly aggressive with their pre-payment and post-payment review and are incentivized to do so.  RACs are paid based on the amount of Medicare reimbursement they recover from providers for “improper” payments. Aggressive and widespread auditing activity by the RACs predictably has affected the number of hospital claim appeals. In fiscal year 2009, the last full fiscal year before the permanent RAC program was instituted, there were 35,831 appeals filed with OMHA for ALJ review. In fiscal year 2013, after the RAC program had been fully implemented, 384,651 appeals were filed—more than a tenfold increase in only four years.[4]

To add to this problem, OMHA announced in December 2013 a moratorium on assignment of provider appeals to ALJs for at least the next two years.  This moratorium will only further exacerbate the problem as new appeals are filed and old ones never get heard. There are 15,000 new appeals filed each week and as of February 12, 2014, there are over 480,000 claim appeals awaiting assignment with OMHA.  As a result, some providers could wait up to five years to get decisions on routine payments because of a massive backlog in the appeals process that has been created by the aggressive post-payment review program known as recovery auditing.

IV.     Impact of the Backlog in the Medicare Appeals Process:

In their complaint, the hospitals contend that they are suffering financially from HHS’ refusal to render appeals in its statutorily-mandated manner. A denial at the pre-payment process means that a hospital never receives payment for the value of the services provided. A post-payment denial reflects that a hospital must repay the amount initially reimbursed before an appeal may ever be considered by an independent arbiter.

This deprivation of funds has created “a profound problem.” These funds could be used to render better patient care or to sustain the hospital’s infrastructure necessary to provide acceptable patient care.  For example, the complaint indicates that “[t]he delays in the appeals process have had a crippling effect on Baxter’s cash flow. Funds tied up in appeals are funds that cannot be used to meet Baxter’s essential needs.”

Covenant claims that it has “considered whether, in light of the severe ALJ delay, it is financially prudent” for it “to continue to offer the full scope of rehabilitative services to the entire population of patients it currently serves.” Plaintiff Rutland has also had to “implement a number of cost-cutting measures” due to the delays in order to accommodate its cash flow problems.

VI.     Final Remarks Regarding RAC Appeals and ZPIC Appeals:

The stakes are high for hospitals and other Medicare providers due to this onerous delay in the RAC appeals process. Billions of Medicare reimbursements hang in the balance and may otherwise not be able to be used to provide adequate patient care.

Has your hospital, practice, Home Health Agency, Hospice, DME Company, or PT / OT / ST Clinic been audited by a RAC or Zone Program Integrity Program (ZPIC)?  Just because there is a severe delay in the appeals process does not mean that RACs will not continue to target providers in pre-payment and post-payment audits.  It may only be a matter of time before your practice is negatively burdened by a RAC audit.  Despite your best efforts to follow Medicare’s directives, your organization may still be placed on prepayment review or subjected to a full-blown post-payment audit.  Should you receive a request for records from a RAC or ZPIC, being prepared (in advance of receiving an audit letter) can greatly assist your efforts to show that the care and treatment services you are providing do, in fact, qualify for coverage and payment.  If you have any questions or concerns regarding any ongoing – or future – RAC or ZPIC audit, please do not hesitate to give us a call. We would be more than happy to assist you with your compliance needs.

Healthcare LawyerRobert W. Liles, Esq., serves as Managing Partner at Liles Parker, Attorneys & Counselors at Law.  Liles Parker attorneys represent health care providers and suppliers around the country in connection with Medicare audits by ZPICs, RACs and other CMS program integrity contractors.  The firm also represents health care providers in HIPAA Omnibus Rule risk assessments, privacy breach matters, State Medical Board inquiries and regulatory compliance reviews.  For a free consultation, call Robert at:  1 (800) 475-1906.

[1] See 42 U.S.C. § 1395ff.

[2] Id. §§ 1395ff(b)(1)(E), 1395ff(d)(1)(A).

[3] Id.; 42 C.F.R. § 405.1016(a).

[4] Important Notice Regarding Adjudication Timeframes, Office of Medicare Hearings and Appeals, U.S. Department of Health & Human Services, available at Timeframes2 (last visited May 27, 2014).


The OIG Strategic Plan for 2014-2018 Has Been Issued

The OIG Strategic Plan has been issued. (December 3, 2013): The U.S. Department of Health & Human Services (HHS) Office of Inspector General (OIG) spends a significant amount of resources to fight health care fraud and abuse.  The OIG is also tasked with promoting efficiency, economy, and effectiveness in HHS programs and operations.  Recently, the agency outlined how it will continue to meet its vision, goals, and priorities so that it can better achieve its mission in its OIG Strategic Plan, 2014-2018.  The OIG Strategic Plan sets forth four broad goals: (1) Fight Fraud, Waste, and Abuse; (2) Promote Quality, Safety, and Value; (3) Secure the Future; and (4) Advance Excellence and Innovation.  Health care providers should pay particular attention to areas in your organization that concern fraud, waste, and abuse.  Providers should also assess OIG’s priorities and strategies and implement compliance-focused protections and self-audits so that your activities comply with all health care laws and regulations. 

I.    Overview of the OIG and the Purpose of the OIG Strategic Plan:

The OIG provides independent and objective oversight of more than 300 HHS programs.  The OIG carries out its mission to protect the integrity of these programs and the health and welfare of the people served by those programs through a nationwide network of audits, investigations, and evaluations conducted by numerous offices and components. In FY 2012, OIG’s work resulted in savings and recoveries of misspent funds estimated at $15.4 billion.  A key partner, the Health Care Fraud and Abuse Control program, returned more than $7 for every $1 invested.  These results are increasingly important as the federal government seeks to improve the effectiveness and efficiency of its anti-fraud operations. 

The OIG Strategic Plan outlines the agency’s vision and priorities that guide the agency so that it can carry out its mission to “protect the integrity of Department of Health and Human Services programs and operations and the health and welfare of the people they serve.”  Along with the four primary goals outlined in the plan, the OIG Strategic Plan describes three major priorities for each goal and the OIG’s strategies for accomplishing each priority.

II. The OIG Strategic Plan is Designed to Help the Agency Fight Fraud, Waste, and Abuse:

In order to fight fraud, waste and abuse, the OIG has identified the following priorities:

  •  Identify, investigate, and taken action when needed;
  • Hold wrongdoers accountable and maximize recovery of public funds; and
  • Prevent and deter fraud, waste, and abuse.

The OIG will pursue several strategies to further these priorities.  It will build on successful enforcement models, such as the Medicare Fraud Strike Force teams, to enhance its enforcement results with other HHS programs.  Specifically, the agency will focus on key areas that include Medicare and Medicaid program integrity and waste in HHS programs.  The OIG will also continue to pursue appropriate means to hold fraud perpetrators accountable and to recover stolen or misspent HHS funds.  Accordingly, it will focus on identifying and recovering improper payments and utilizing exclusions and referrals for debarment to protect HHS programs and beneficiaries.  Finally, the OIG will apply lessons it has learned about fraud vulnerabilities and effective prevention to HHS’ new and evolving health programs.  The OIG will promote compliance with Federal requirements and resolving compliance, advising HHS on key safeguards to prevent fraud, waste, and abuse, and assessing whether providers and suppliers, grantees, and others are qualified to participate in Government programs

III.  The OIG Strategic Plan is also Aimed at Promoting Quality, Safety, and Value:

For its second goal of promoting quality, safety, and value, the OIG indicates the following priorities:

  •  Foster high quality of care;
  • Promote public safety; and
  • Maximize value by improving efficiency and effectiveness.

The Strategic Plan indicates that the OIG will expand its work efforts directed to quality of care.  The agency will focus on promoting quality of care in nursing facilities and home- and community-based settings, access to and use of preventative care, and quality improvement programs.  The OIG will also continue to prioritize fraud investigations that have public safety as well as financial implications and to look for comprehensive solutions.  In particular, the agency will continue to focus investigative efforts related to prescriptions drug fraud cases.  Mirroring other federal government initiatives, the OIG will maximize value by assessing the effectiveness of federal programs that intend to achieve value through care coordination and those that deliver and pay for beneficiary care in new ways.

IV.  The OIG Strategic Plan is Intended to “Secure the Future”:

The OIG’s third goal of “securing the future” emphasizes the following:

  • Foster sound financial stewardship and reduction of improper payments (misspent funds);
  • Support a high-performing health care system; and
  • Promote the secure and effective use of data and technology.

The agency will continue its efforts to address program and operational vulnerabilities that affect the long-term health and viability of HHS programs.  Over the next few years, the OIG will continue to prioritize work on billing and payment errors by providers, effective program administration and contract oversight, and inefficiencies that result in wasteful spending.  Furthermore, as HHS manages its transition to payments based on value rather than volume, OIG plans to conduct reviews and recommend changes to maximize overall value, protect program integrity, and foster value and high performance.  Finally, the OIG recognizes that data and technology will drive improvements in health care and human services through lower costs. Key areas of the OIG’s focus will include the accuracy and completeness of program data (e.g., Medicaid data), the privacy and security of personally identifiable information (PII), and the security and integrity of electronic health records (EHR).

V.   The OIG Strategic Plan is Intended to Advance Excellence and Innovation:

Finally, OIG wants to advance excellence and innovation in its organization and workforce through:

  • Recruiting, retaining, and empowering a diverse work force;
  • Leveraging leading-edge tools and technology; and
  • Promoting leadership, vision, and expertise.

The OIG’s final goal primarily deals with the agency’s plan related to its internal operations over the next five years.  The agency knows that to identify, understand, and address the challenges facing HHS, it will look to invest in its workforce by recruiting and retaining talented employees and by maintaining workforce excellence and the highest standards of professional conduct.  It will also seek to use the best data, analytic tools, and technologies available to maximize the impact of its work.

VI.  Final Remarks:

Overall, the OIG Strategic Plan seeks to embody the OIG’s guiding principles as it strives to ensure that Federal dollars are used appropriately and that HHS programs well serve the people who use them.  As such, this new plan outlines the agency’s priorities very broadly and largely reiterates past plans and priorities.  Nevertheless, this new Strategic Plan somewhat focuses on the OIG’s mission of fighting health care fraud and assessing and protecting program integrity as new health care payment and delivery systems evolve.

In fact, Healthcare providers are becoming all too familiar with the countless auditing organizations used by the government to combat fraud in health care related expenditures, including RACs, MICs, and ZPICs.  If the federal government believes that these entities are based on a good return for its investment in preventing or curbing fraudulent activities, stricter oversight and auditing programs are likely to increase.  The OIG may also look to enhance its exclusion capability by pursuing exclusion efforts of individual health care providers and smaller entities as opposed to larger provider entities.

Healthcare AttorneyRobert W. Liles serves as Managing Partner at Liles Parker, Attorneys & Counselors at Law.  He represented physician practices, home health agencies, hospices, DME companies and other health care providers in Medicare, Medicaid and private payor audits.  Robert also represents health care professionals in connection with State Licensure Board complaints and investigations.  For a free consultation, call: 1 (800) 475-1906.


Medicare Recognizes Same Sex Marriage and Allows Couples Care in the Same SNF

Medicare recognizes same sex marriage and allows couples to be in the same SNF.(August 29, 2013):  Today, the Department of Health and Human Services (HHS) released its first response to the recent Supreme Court ruling, United States v. Windsor,which held that Section 3 of the Defense of Marriage Act (DOMA) to be unconstitutional. Section 3 had federally defined marriage as a “union between one man and one woman as husband and wife.” Prior to this ruling, same sex marriage couples were barred from receiving federal marriage benefits, including those benefits provided through Medicare. Now, Medicare recognizes same sex marriage and couples can be cared for in the same skilled nursing facility.  The Press Release clarifies that all beneficiaries in private “Medicare Advantage Plans” (approximately 13 million people) must have access to equal coverage when it comes to care in a skilled nursing facility where their spouse is located. The guidance specifically clarifies that this guarantee of coverage applies equally to couples who are in a legally-recognized same sex marriage, regardless of which state they reside in,  As Secretary Kathleen Sebelius wrote:

“HHS is working swiftly to implement the Supreme Court’s decision and maximize federal recognition of same-sex spouses in HHS programs,” said HHS Secretary Kathleen Sebelius.  “Today’s announcement is the first of many steps that we will be taking over the coming months to clarify the effects of the Supreme Court’s decision and to ensure that gay and lesbian married couples are treated equally under the law.”  

This clarification is important for both Medicare-covered same sex marriage couples and the skilled nursing facility where they are receiving treatment.  As you will recall, Medicare beneficiaries who choose to be covered by a “Medicare Advantage Plan” are eligible to receive care in the same skilled nursing facility as the one where their spouse receives care.  This assumes, of course, that both spouses have met all of the medical necessity and coverage requirements to receive be treated at a skilled nursing facility, and that the specific skilled nursing facility at issue is a participating provider in the beneficiaries’ Medicare Advantage Plan.  As Marilyn Tavenner, Administrator for the Centers for Medicare and Medicaid Services (CMS) wrote:

“Today, Medicare is ensuring that all beneficiaries will have equal access to coverage in a nursing home where their spouse lives, regardless of their sexual orientation.”

“Prior to this, a beneficiary in a same-sex marriage enrolled in a Medicare Advantage plan did not have equal access to such coverage and, as a result, could have faced time away from his or her spouse or higher costs because of the way that marriage was defined for this purpose.”

As the government’s Press Release reflects, the Supreme Court’s rejection of DOMA, along with the impact of  United States v. Windsor  and similar rulings, will likely continue to result in further clarifications of one’s eligibility for benefits previously reserved for only traditional, married couples.

Healthcare LawRobert Saltaformaggio is a rising Associate at Liles Parker, Attorneys & Counselors at Law.  Liles Parker is a boutique health law firm with offices in Washington, DC, Houston, DC, McAllen, DC and Baton Rouge, LA.  Our attorneys represent Skilled Nursing Facilities and Long-Term Care Facilities around the country in a full-range of health law statutory and regulatory matters and cases.   For a free consultation on these and other health law issues, give us a call.  We can reached at: 1 (800) 475-1906. 

Top Ten Health Care Compliance Risks for 2011

Compliance Risk(December 31, 2010):  In case you missed it, Congress, President Obama and the healthcare regulators had a banner year with respect to regulatory activism in 2010.  Over the next several weeks we will be releasing a series of articles on our website addressing the compliance risk areas facing your organise dramatic changes and the compliance risks they present for your practice, clinic or health care business in 2011:


Compliance Risk Number 1:  Increased “HEAT” Activity and Enforcement:

Perhaps the greatest risk to consider in 2011 is the increase in targeted health care fraud enforcement efforts by the government’s Health Care Fraud Prevention and Enforcement Action Team (HEAT).  These teams are comprised of top level law enforcement and professional staff from the U.S. Department of Justice (DOJ), the Department of Health and Human Services (HHS), and their various operating divisions.  HEAT team initiatives have been extraordinarily successful in coordinating multi-agency efforts to both prevent health care fraud and enforce current anti-fraud initiatives.

As DOJ noted in September 2010, over the previous Fiscal Year, DOJ (including its 94 U.S. Attorneys’ Offices), HHS’ Office of Inspector General (HHS-OIG), and the Centers for Medicare and Medicaid Services (CMS), jointly accomplished the following:

  • Filed charges against more than 800 defendants.
  • Obtained 583 criminal convictions.
  • Opened 886 new civil health care fraud matters.
  • Obtained 337 civil administrative actions against parties committing health care fraud.
  • Through these efforts, more than $2.5 billion was recovered as a result of the criminal, civil and administrative actions handled by these joint agencies. 

President Obama’s FY 2011 budget request includes an additional $60.2 million in funding for the HEAT program.These funds will be used to establish additional teams and further fund existing investigations. Now, more than ever, it is imperative that you ensure that your Compliance Plan is both up-to-date and fully implemented.  Medicare providers are obligated to adhere to statutory and regulatory requirements and the government’s HEAT teams are aggressively investigating providers who fail to comply with the law.

Compliance Risk Number 2:  Zone Program Integrity Contractor (ZPIC) / Program SafeGuard Contractor (PSC) / Recovery Audit Contractor (RAC) Audits of Medicare Claims:

As you already know, private contractor reviews of Medicare claims are big business – one ZPIC was awarded a five-year contract worth over $100 million.  In 2011, we  should expect to see:

  • The number of ZPIC / PSC / RAC audits of Physician Practices, Home Health Agencies, Hospice Companies, DME Suppliers and Chiropractic Clinics will greatly increase in 2011.

  • The reliance of both contractors and the government on data mining will continue to grow.  Providers targeted will likely be based on utilization rates, prescribing practices and billing / coding profiles.

  • An increase in the number of Administrative Law Judge (ALJ) hearings in where ZPIC representatives choose to attend the hearing as a “participant.”  In these hearings, the ZPIC representative will likely aggressively oppose any arguments in support of payment that you present.

Are you ready for an unannounced / unanticipated site visit or audit?  When is the last time that you have conducted an internal review of your billing / coding practices?  Are you aware of the hidden dangers when conducting these reviews?  In 2011, your Compliance Officer may very well be your most important non-clinical staff member.  Physicians and other providers should work with their Compliance Officer to better prepare for the unexpected audit or investigation.

Compliance Risk Number 3: Electronic Medical Records:

Unfortunately, some early adopters of Electronic Medical Records (EMR) software are now having to respond to “cloning” and / or “carry over” concerns raised by ZPICs and Program SafeGuard Contractors (PSCs).  In a number of cases, these audits appear to be the result (at least in part) of inadequately designed software programs which generate progress notes and other types of medical records that do not adequately require the provider to document individualized observations.  Instead, the information gathered is often sparse and similar for each of the patients treated.  Take care before converting your practice or clinic to an EMR system.  Include your Compliance Officer in the selection and review process.

Compliance Risk Number 4:  Physician Quality Reporting Initiative (PQRI) Issues:

Under the Health Care Reform legislation passed last March. PQRI was changed from a voluntary “bonus” program to one in which penalties will be assessed if a provider does not properly participate.  As of 2015, the penalty will be 1.5% and will increase to 2.0% in 2016 and subsequent years. Additionally, questions about the use of PQRI date in “Program Integrity” targeting remain unanswered.  Once again, it is essential that your Compliance Officer provide guidance to your staff regarding this program and its potential impact.

Compliance Risk Number 5:  Medicaid Integrity Contractors (MICs)  and Medicaid Recovery Audit Contractors (MDRACs):

In recent months, we have seen a marked increase in the number of MIC inquiries and audits initiated in southern States.  Notably, the information and documentation requested has often been substantial.  Medicaid providers must now also contend with MDRACs.  As a result of health care reform, MDRACs are now mandatory in every State and are may initiate reviews and audits as soon as March 2011.   Compliance Officers should review their current risk areas and ensure that Medicaid coding and billing activities are actively monitored to better ensure statutory / regulatory adherance.

Compliance Risk Number 6:  HIPAA / HITECH Privacy Violations:

Failure to comply with HIPAA can result in civil and / or criminal penalties. (42 USC § 1320d-5).

  • Civil Penalties – A large retail drug store company was recently fined $2.25 million for failure to properly dispose of protected information.

  • Criminal Penalties – Earlier this year, a physician in Los Angeles, CA, was sentenced to four months in prison after admitting he improperly accessed individual health information.

As of mid-2010, there had been 93 breaches affecting 500 or more individuals.  The total number of individuals whose information was disclosed as a result of these breaches was estimated at over 2.5 million.  Out of the 93 breaches, 87 involved breach of hard copy or electronic protected health information (about 1/4 involved paper records and 3/4 involved electronic records. The vast majority of the 93 breaches involved theft or loss of the records.  Many of these thefts could have been avoided with appropriate security.  The government is serious about privacy and your practice, and in 2011 you will likely see increased HIPAA / HITECH enforcement.  Your clinic or health care business must take appropriate steps to prevent improper disclosures of health information.

Compliance Risk Number 7:  Increased Number of Qui Tams Based on Overpayments:

Section 6402 of the recent Health Care Reform legislation requires that all Medicare providers, (a) return and report any Medicare overpayment, and (b) explain, in writing, the reason for the overpayment.

This law creates a minefield for physicians and other Medicare providers.  First, providers have only 60 days to comply with the reporting and refund requirement from the date on which the overpayment was identified or, if applicable, the date any corresponding cost report is due, whichever is later.  Of course, the legislation does not actually explain what it means to “identify” an overpayment.

From a “risk” standpoint, this change is enormous.  Disgruntled employees try to file a Qui Tam  (“whistleblower”) lawsuit based on a provider’s failure to return one or more Medicare overpayments to the program in a timely fashion.  While the government may ultimately choose not to intervene in a False Claims Act case based on such allegations, a provider could spend a significant amount defending the case.  Providers should ensure that billing personnel understand the importance of returning any overpayments identified as quickly as possible.

Compliance Risk Number 8:  Third-Party Payor Actions:

Third-party (non-Federal)  payors are participating in Health Care Fraud Working Group meetings with DOJ and other Federal agents.  Over the last year, we have seen an increase in the number of “copycat” audits initiated by third-party payor “Special Investigative Units” (SIUs).  Once the government has announced the results of a significant audit, the third-party payor considers the services at issue and reviews whether it may have also been wrongly billed for such services.  If so, their SIU opens a new investigation against the provider.

Compliance Risk Number 9:  Employee Screening:

With the expansion of the permissive exclusion authorities, more and more individuals will ultimately be excluded from Medicare.  As we have seen, HHS-OIG is actively reviewing whether Medicare providers have employed individuals who have been excluded.  In one recent case, HHS-OIG announced that it had assessed significant civil monetary penalties against a health care provider that employed seven individuals who the provider “knew or should have known” had been excluded from participation in Federal health care programs. These individuals were alleged to have furnished items and services for which the provider was paid by Federal health care programs.  All providers should periodically screen their staff against the HHS-OIG and GSA databases to ensure that their employees have not been excluded from participation in Federal Health Benefits Programs.

Compliance Risk Number 10:  Payment Suspension Actions:

Last, but not least, we expect the number of payment suspension actions to increase in 2011.  In late 2010, Medicare contractors recommended to CMS that this extraordinary step be taken against providers in connection with a wide variety of alleged infractions.  Reasons given for suspending a provider’s Medicare number included, but were not limited to: (1) the provider failed to properly notify Medicare of a change in location, (2) the provider allegedly engaged in improper billing practices, and (3) the provider failed to fully cooperate during a site visit.

As each of these compliance risks reflect, health care providers are expected to fully comply with a wide myriad of Medicare and Medicaid statutory and regulatory requirements.  Moreover, the failure to meet these obligations can subject a provider to penalties ranging from suspension from the program to criminal prosecution.  Providers must take compliance seriously if they hope to thrive in 2011.

Robert W. Liles Healthcare AttorneyRobert W. Liles, J.D., represents healthcare providers and suppliers around the country in connection with Medicare and Private payor audits.  Liles Parker attorneys have extensive experience working on compliance related matters and defending providers in connection with allegations of one or more alleged violations of regulatory requirements. Should you have questions regarding these and other issues, give us a call for a free consultation.  We can be reached at 1 (800) 475-1906.

Provider Exclusion Screening / OIG Screening Practices are a Significant Risk

Provider Exclusion Screening(December 11, 2010):  Has your practice conducted exclusion screening / OIG screening on all of you employees?Earlier this week, HHS-OIG announced that it had assessed significant civil monetary penalties against a health care provider that employed seven individuals who the provider “knew or should have known” had been excluded from participation in Federal health care programs. These individuals were alleged to have furnished items and services for which the provider was paid by Federal health care programs.  The provider paid $376,432 to resolve these allegations. As Lewis Morris, Chief Counsel to the Office of Inspector General stated:

“Providers self-disclosing such violations will ultimately pay lower settlement amounts. . . But in cases initiated by the government — such as this one — providers will, as a matter of course, be required to pay more to resolve the matter.”

As Mr. Morris further noted:

“This case illustrates yet again that OIG will pursue CMPs when providers have employed an excluded person for the furnishing of items or services paid for by Federal health care programs,”

Notably, this matter was referred to HHS-OIG for investigation by the State Medicaid Fraud Control Unit (MFCU).

I.  Lessons to be Learned When Performing Exclusion Screening / OIG Screening:

This case illustrates a number of important lessons for all health care providers who participate in Federal Health Benefits Program, regardless of size. These lessons include:

OIG Screening employees is easy and quick: It takes very little effort for a provider to screen current and prospective employees against HHS-OIG list of excluded parties and GSA’ s list of parties who have been debarred from participation in Federal contracts. Notably, the failure to screen employees can be quite costly.

No mention of actual fraud or overpayment was mentioned in this case — Nevertheless, the employment of excluded individuals was found to be quite serious by HHS-OIG:   HHS-OIG won’t hesitate to pursue civil monetary penalties against a provider who employs excluded individuals, despite the fact that no mention is made of any wrongful billings. Regular screenings of your employees should be made to ensure that none of your employees have been excluded from participation.

The government is serious about self-disclosing problems: HHS-OIG’s Chief Counsel went out of his way to point out that provider’s who self-disclose will ultimately pay a lower amount of damages to the government. While we recognize the government’s preference in this regard, should you identify a problem, you should contact legal counsel before making a self-disclosure. HHS-OIG’s voluntary disclosure protocol has a number of requirements that should be fully assessed prior to deciding to make a disclosure under the program. To be clear, if you owe money to the government, you must pay it back. The issue to be resolved is how to go about returning any monies to which you are not entitled. Depending on the circumstances, a provider may be better off working with their Medicare Administrative Contractor to resolve a problem. In other cases, HHS-OIG’s protocol may be the best option. Every situation is different and should be carefully assessed before action is taken.

Federal and State law enforcement teams are coordinating their actions and findings: Notably, these violations were first identified by a State MFCU who then contacted HHS-OIG. Similarly, we are seeing State Medical Boards advising ZPICs of actions they are taking against licensed health care providers. In several cases, the State Medical Board found that the provider was either not providing adequate supervision over subordinate Nurse Practitioners and Physician Assistants. The ZPIC has then used this as a basis to argue that the claims did not qualify for Medicare coverage.

In summary, health care providers should continually be reviewing their compliance efforts to ensure that basic mistakes such as the ones in this case (failure to properly screen employees) do not occur.

Our attorneys represent health care providers around the country in connection with compliance issues.   Please feel free to contact us for a complimentary consultation.  We can be reached at: 1 (800) 475-1906.

Health Care Reform- The Independent Payment Advisory Board (IPAB) And Its Implications on Health Care Providers

IPAB(September 14, 2010): As one of the most controversial provisions in the recently enacted health care reform legislation, Congress created the IPAB – a board that is independent from Congress and the United States Department of Health and Human Services (“HHS”) as a mechanism to control Medicare – and potentially all – health care expenditures. Specifically, beginning January 2015, for any year in which the Chief Actuary of the Centers for Medicare and Medicaid Services (“Chief Actuary”) projects that the increase in per capita Medicare expenditures will exceed a defined target level, the IPAB is to develop a detailed proposal to scale back Medicare expenditures for that year. With limited exceptions, unlike the Medicare Payment Advisory Committee, these “recommendations” become binding unless Congress affirmatively acts in an expedited fashion and with a super majority vote to prevent them from becoming law. Additionally, the IPAB is to make non-binding recommendations on controlling expenditures for non-Federal health care programs.

The IPAB provision was developed because the administration and certain members of Congress were concerned that Congress did not have the political will to impose fiscal discipline upon itself. The IPAB has the potential to be a significant player in controlling health care costs overall. However, because some believe that it usurps Congress’ authority, it is also extremely controversial. Complicating the process is the fact that certain provider classes, such as hospitals, are exempted from cost reductions in the IPAB process during the early years, thus placing greater pressure to reduce expenditures for other provider and payor classes. This provision, coupled with a number of incentives in the health reform legislation to change the manner in which providers deliver care, will place strong incentives for the health care community to develop new methods to constrain cost increases without adversely affecting care. These include such mechanisms as coordinating care through such vehicles as Accountable Care Organizations and Medical Homes, bundling of services, and enhanced methods of disease management for high cost patients, as well the use of electronic medical records and more frequent use of email between practitioners and their patients.

Health care entities seeking advice on strategies for adapting to the new health care reform legislation should contact Michael Cook at (202) 298-8750. Also, Mr. Cook has authored a more detailed article on the IPAB and its likely impact on health care entities that is scheduled to be published in October issue of the American Health Lawyers Association Journal on Health and Life Sciences Law. Once that article is published, this website will include an abstract and a link to the article. Additionally, Mr. Cook will be presenting at the Healthcare Reform: Dealing with Hurdles and Building up Success Conference, sponsored by GTCbio, on November 8 and 9, 2010, in Washington, DC.

Questions About the IPAB? Call Michael Cook, Healthcare AttorneyLiles Parker attorneys represent health care providers in connection with a wide variety of health care projects.  Michael Cook has extensive experience as a health lawyer and is a nationally-recognized attorney.  For more information, please contact Mr. Cook.  He can be e-mailed at:  Alternatively, call Mr. Cook for a complimentary consultation at: 1 (800) 475-1906.

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