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Since 1976, our litigators have effectively and efficiently represented clients in federal and state courts in business litigation, municipal law, employment law, personal injury and a variety of complex litigation.

Since 1976, our litigators have effectively and efficiently represented clients in federal and state courts in business litigation, municipal law, employment law, personal injury and a variety of complex litigation.

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Since 1976, our litigators have effectively and efficiently represented clients in federal and state courts in business litigation, municipal law, employment law, personal injury and a variety of complex litigation.

HEALTHCARE LAW NEWS - VOLUME 79

IMPORTANT WHISTLEBLOWER CASE – ANESTHESIOLOGY

A federal court in Missouri affirmed that a party’s reasonable interpretation of any ambiguity in a billing regulation cannot provide the wrongful intent necessary for a claim of fraud under the Federal Claims Act (FCA).  This is so where there is no authoritative contrary interpretation of a statute or regulation.

In this case, an anesthesiology group in Kansas City, Missouri followed the “medical direction” model where Medicare reimburses for anesthesiology services at the second-highest rate available when an anesthesiologist is directing a CRNA in 2-4 cases concurrently, and that all conditions of the “seven steps” regulations set forth in 42 CFR § 4.1446(d) and 415.110(a)(1) are met.  Here, the third step of the seven steps was at issue.  This step requires that the anesthesiologist “personally participate” in most aspects of the anesthesia plan including emergence.

The term “emergence” is not defined by the Medicare regulations, and the American Society of Anesthesiologists also provides no definition.  State and national anesthesiology organizations generally do not define the term stating that emergence is a process.  For billing purposes, the Kansas City anesthesiologists defined emergence to include the patient’s recovery in the recovery room.  The qui tam relater claimed that emergence occurs in the operating room.

Finally, it is important to understand that the federal court here held that the Kansas City anesthesiologists’ interpretation of the Medicare regulation was a reasonable interpretation of an ambiguous regulation.

Given that qui tam relaters are searching every day for any way in which they can claim that a healthcare provider violated some small regulation, footnote or interpretation, every victory here is important for providers in trying to reestablish a rule of reasonability.

MEDICARE RAC APPEAL CIRCUS CONTINUES

CMS proudly announced that it has settled Medicare appeals with nearly 2,000 hospitals for about 300,000 back logged claims as of June 1st.  These settlements were made by administrative agreements by acute care or clinical access hospitals that agreed to resolve their pending overdue appeals in exchange for a partial payment of 68% of the net payable amount.  To some, it appears CMS extorts 1/3 of the amount due in return for CMS’ own violation of the law that requires the resolution of appeals within 90 days.

NEARLY HALF OF HEALTH LAW PLANS FEATURE VERY NARROW PHYSICIAN NETWORKS

A McKinsey & Company study indicates that nearly 30% of healthcare plans sold by the ACA insurance exchanges enrolled only 10% - 25% of the plans regions physicians, and over 10% covered fewer than 10% of the physicians in the plans regions.  These results indicate an even narrower physician profile than had been reported earlier.  Coupled with narrow network hospital choice limitations, consumers will need to make sure that the hospitals and physicians treating them are within this extremely narrow network.  How consumers and medical extremist will do so remains to be seen since these narrow network plans generally are not designed to pay out-of-network cost to any significant extent.

As we have previously indicated, these extreme narrow networks will likely face new regulations in the next few years as the outcomes from these extreme narrow networks become obvious to the public and to legislators.

CMS TINKERS WITH ACO INVESTMENT MODEL

The primary change to the ACO Investment Model is the adjustment of eligibility criteria by removing the 10,000 or fewer limit for assigned beneficiary eligibility for rural ACOs.  We are still reviewing the proposal to determine what “rural” will mean under this change.  (It appears that census tracks with rural urban commuting area codes (RUCA) 4-10 are considered rural.  However, the rules have yet to be made specific with regard to other eligibly areas).

The second change is the opening of a 2015/2016 application round for the investment model.  Previously, it was unclear when ACOs joining the Medicare shared service program could enter or reenter the program.

WHO’S YOUR DATA?

The U.S. Supreme Court indicated that it would hear a case in its next term (think October) regarding who owns and has control of certain data collected or maintained by a self-funded insurer.  This is a Vermont case involving Liberty Mutual Insurance Company.  Vermont claims that it needs certain data from Liberty including claims, member eligibility and, apparently specific patient use data to help it “improve the cost and effectiveness of healthcare."

Liberty Mutual argues that ERISA protects both Liberty Mutual and its TPA from having to handover the information to the State.  Under ACA, healthcare data bases are encouraged by the states with the thought that such information will allow the states to begin utilizing “big data” analysis and improve healthcare outcomes.

Currently, at least 12 states have similar database laws to Vermont’s.  Liberty, and presumably other self-funded plans not only object on the basis of customer privacy, which primarily applies to anyone other than Liberty, but also to the administrative burden.  Since the lower court found that ERISA preempts the state law requiring the provision of the information, the Supreme Court’s decision in this case could be far reaching.


This newsletter is edited by Paul Wallace of Jones ∙ Wallace, LLC, a member of the American Bar Association Healthcare Law Section and the American Health Lawyers Association who has been representing physicians and healthcare practices for over 25 years.  Mr. Wallace assists physicians in health practices in contract items, federal legal compliance, creation of practice entities, estate and wealth planning and similar issues.  Please feel free to call if you have any questions on this newsletter or legal matters at (812) 402-1600 or pwallace@joneswallace.com.