Legal Issues Physicians Need to Know About in 2013

As various provisions set forth by the Affordable Care Act (ACA) are implemented, the following items represent five areas that providers should keep a pulse on.

1. HIPAA and the HITECH Act: This includes not only the provisions in the laws themselves, but just as importantly the Privacy, Security, and Breach Notification Rules. On January 2, 2013, HHS' Office for Civil Rights announced another settlement - this time it was the first HIPAA breach settlement of the Security Rule involving less than 500 patients. The $50,000 fine was assessed against Hospice of North Idaho. Importantly, violations and settlements can be based on technical violations (i.e. not adhering to the regulatory requirements such as risk assessments, encryption, and business associate agreements) or actual breaches where notification to HHS is required. OCR settlements in 2012 ranged from $100,000 to over $1 million. Additional OCR guidance, Mobile Devices: Know the RISKS. Take the STEPS. PROTECT and SECURE Health Information is available for providers through the HHS website.

2. Quality of Care and Readmission Rates: In what has been dubbed a “nationwide competition” between hospitals and their performance of adhering to certain standards of care and patients’ ratings, feedback has been quantified by CMS. In December 2012, Medicare disclosed a report of 3,000 hospitals and the bonuses and penalties that are tied to nearly $1 billion in provider reimbursement. In turn, these revised payments begin January 2013. The maximum amount any hospital could gain or lose was 1 percent of its Medicare payments. All in all, CMS rewarded 1,557 hospitals and penalized 1,427 others. A component of the Hospital Value Based Purchasing Program, it reflects the government’s initiative to shift away from quantity-based payments to quality-based payments. Because of the shift towards physicians being employed by hospitals or other joint-venture structures, it is important that doctors strive to meet these performance standards.

Meeting these standards can also impact reimbursement for certain conditions that have a high readmission rate. In FY2013, CMS will reduce payments to hospitals for excessive rehospitalizations within a 30-day period related to congestive heart failure, acute myocardial infarction and pneumonia. Additional conditions will be added by 2015. Again, these are part of the healthcare reform law.

3. Recovery Audits: Nationwide adherence to the Recovery Audit Contractor (RAC) Program has been effective since 2010. Significantly, Recovery Auditor (RA) overpayment identification has increased exponentially between 2010 and 2012. While other types of auditors such as ZPICs, MACs, and MICs should also be considered, here are some recent items to note for the RA program:

a. Reviews can either be automated (by computer) or complex (reviewed in person);

b. In March 2012, CMS - changed the number of medical record requests for auditors);

c. In August 2012, adoption of the pre-review program and establishment of a website that runs through December 2014 were unveiled. The goal is to lower the claim submission error rate; and

d. Evaluation & Management Code 99215 will be audited in 15 states and open the doors to office visit billing. Hence, providers should be as vigilant in their offices as they are at the hospital when documenting the patient’s condition.

4. Fiscal Cliff Bill Contractor Provision: On Wednesday, January 4, 2013 President Obama signed the fiscal cliff bill, which included a subtle provision, “Removing Obstacles to Collection of Overpayments.” Previously, the statute of limitations was three years for non-fraudulent Medicare overpayments. Now, Medicare contractors have five years to collect, thereby enabling them to recoup overpayments estimated at nearly $500 million from hospitals and physicians dating back to 2007.

5. Kathleen Sebelius, Secretary of Health and Human Services, v. Auburn Regional Medical Center, et al.: On January 4, 2013, The U.S. Supreme Court heard oral arguments on whether a provider has a right to file an appeal after the deadline due to the federal government furnishing incorrect payment information. “Equitable tolling” enables courts to waive a deadline in extraordinary circumstances. At issue is whether or not this concept applies to a health professional’s ability to appeal a claim after the 180-day deadline. As an American Medical Association article indicated, “[t]he case comes down to fairness and assuring that Medicare program decisions are subject to court oversight, said Maureen Mudron, deputy general counsel for the American Hospital Association.” Ultimately, “[t]he availability of equitable tolling encourages CMS to craft more evenhanded rules so that providers have the opportunity to obtain relief from the agency’s errors.”

Rachel V. Rose, JD, MBA, is a Houston-based attorney advising on federal and state compliance and areas of liability associated with a variety of healthcare legal and regulatory issues including: HIPAA, the HITECH Act, the False Claims Act, Medicare issues, women’s health, as well as corporate and security regulations. She can be reached here.