You should read this, everyone:

http://www.aispub.com/Bnow/071404c.html

__________________
http://www.studentdoctor.net/

i read about this a while ago...still, very interesting.

Old news, the latest is that the facts are not as stated, see below:

LARKIN COMMUNITY HOSPITAL WINS LANDMARK CASE

In a stunning victory over the Agency for Health Care Administration (AHCA) Larkin Community Hospital made history by winning an injunction against the agency.
The hearing was conducted on July 16th, 2004 before Circuit Judge JONATHAN E. SJOSTROM.
The AHCA provided the Department of Justice with what they termed “credible evidence” of unnecessary medical care provided at Larkin from 1997 to 1999. These allegations were the basis for a Federal Lawsuit against the Hospital which made headlines 2 weeks ago.
It turns out AHCA’s evidence does not exist.

Some excerpts from the proceedings:

THE JUDGE: Okay. What did the records that you sent -- that AHCA sent, what did they show?
MR. STIVERS (AHCA’S BUREAU CHIEF): Medical records.
THE JUDGE: Well, I know, but what did they show that you would contend is reliable evidence that circumstances giving rise allegations of fraud, willful misrepresentation or abuse, what did those medical records show that satisfies the 24 (a) standard?
MR. STIVERS (AHCA’S BUREAU CHIEF): (No response.)
THE JUDGE: Do you understand what I'm asking you?
MR. STIVERS (AHCA’S BUREAU CHIEF): I'm not sure I can get where I am to where you want me to be.
THE JUDGE: I just want to know what the 24 (a) reliable evidence is, that's it.
MR. NAM (AHCA’S ATTORNEY): MS. ******* (AHCA’s ASSISTANT BUREAU CHIEF) might know. I don't know, but somebody does.
MS. ******* (AHCA’S ASSISTANT BUREAU CHIEF): Okay. The reliable evidence…….Judge, I think -- I'm not sure…. that I would particularly feel competent to do that, simply because clinically I'm not sure I could explain it to you. I don't have those records and have not reviewed those records…
But I do know I was the one that signed that referral.
DR. JACK MICHEL: What I would like to point out here is this issue of the Medicaid audit is something that when we were talking to the federal government, they put a lot of weight into these findings. As a matter of fact, if you look at item 114, page 37 of the federal complaint, the federal complaint is relying on information that AHCA has submitted to them.
THE JUDGE: Where are you, what paragraph?
DR. JACK MICHEL: 114, and it's page 37, Your Honor. So basically what further I'm saying is what we have is this evidence from AHCA and this says that the United States anticipates that the reasonable opportunity for further investigation and discovery will establish that that information that they got from AHCA is correct.
My premise is the information that they got from AHCA in the first place is not correct.
DR. JACK MICHEL: I don't know what their contingency plan is for the fact that there's 500,000 people, Your Honor, in Miami-Dade County that don't have any health insurance coverage and I would like to know what their contingency plan is for them, but at least I
have got 25,000 that I'm taking care of.
MR. NAM (AHCA’S ATTORNEY): Objection, it's not Medicaid's job to take care of, I mean, you know, whatever the societal ills may be that result from a lack of insurance coverage for the population.
THE JUDGE: The objection is relevance? I'm going to overrule the objection. I mean, he can -- the question is public interest and it's relevant to public interest. You may disagree with it, but it's relevant to public interest.
MR. NAM (AHCA’S ATTORNEY): I believe that from the agency's perspective, that that is not the precedent that the agency would like to see established.
DR. JACK MICHEL: If you look at AHCA's own data on mine and my brother's admissions, you will see that their own data shows that most of the patients that we admitted to the hospital from 1993 through 1999, had severe conditions that required admissions to the hospital.
And I can present this as an exhibit so you can take a look at it, this is not only for Larkin
Hospital, because Larkin Hospital was not the only hospital we went to. We went to a number of different hospitals and every single hospital consistently, when they reported their data to AHCA, they agreed, and this is different coders at different hospitals, the way that it works in hospitals is there's somebody in the department that looks at the whole chart and decides what the severity of the illness is, it's independent and each hospital is independent, and you can see consistently throughout hospital to hospital, these people are really ill and they needed to go to the hospital. There is no question about it.
THE JUDGE: All right. Okay. Let me tell you what I think. It's a legal matter. The legal standard under 24 (a) is upon receipt of reliable evidence and this document (The Federal Lawsuit) is not evidence in any way. The definition of an unverified pleading is that it is allegations.
Essentially this is evidence that -- it's only evidence that somebody has decided to seek a civil remedy. Reliable evidence is an interesting standard. Fraud, willful misrepresentation or abuse, in my view, each contain a demanding element, which is essentially scienter, knowing wrongful conduct.
What hasn't been given to me is a particular transaction that occurred. The legal definition of fraud is knowing and intentional misrepresentation for purposes of inducing reliance, which does in fact induce reliance and causes harm.
We don't have a particular transaction that lets me know whether there is reliable evidence that such an event occurred attributable to these defendants.
The balance of harm in the public interest tips, in my view, heavily in favor of the
continuing practice of medicine by these people and they have shown what they need to show, the balance of harm tips in their favor. At this point, granted that you haven't had much time to marshal your evidence, regardless of what they should or shouldn't have done, they haven't had a lot of time in anticipation of today's hearing, but I am convinced, based on the showing today, that the injunction has to issue under 1.610.


Thank you for your continued support and loyalty to Larkin Community Hospital the only physician owned and operated hospital in South Florida

Managing Editor
Nina Youngstrom
Editorial Assistant
Eve *******
Executive Editor
James Gutman
Volume 13, Number 27 • August 2, 2004
Published by Atlantic Information Services, Inc., Washington, DC • 800-521-4323 • www.AISHealth.com
2 CMS Rule Requires Joint
Liability, MD Access in
Reassignment Pacts
3 Pilot Program Will Evaluate
Background Checks for LTC
Workers
4 Feds Say Virginia Man
Posed as Radiation Safety
Officer for Years
5 Inside Health Care
Research Compliance
7 News Briefs
Contents
Judge: State Lacks ‘Reliable Evidence’ of
Fraud Against Hospital Facing Federal Suit
A Florida judge in late July reinstated Medicaid payments to Larkin Community
Hospital in Miami, saying the state lacked “reliable evidence” of fraud. Larkin says this
undermines the Justice Department’s false claims lawsuit against the hospital because
it relies at least in part on the same evidence (RMC 7/12/04, p. 1).
The state Agency for Health Care Administration (AHCA) suspended Medicaid
payments to Larkin in early July, so the 130-bed acute-care hospital filed a lawsuit
against the state, citing a lack of credible proof of fraud. The hospital sought an injunction
against AHCA so that it would resume Medicaid payments. The hospital won. In a
July 19 letter, AHCA reinstated Larkin’s Medicaid payments.
“The federal [false claims] investigation is based upon evidence supplied by
AHCA….However, during a four-hour civil hearing on July 16, 2004, before Circuit
Judge Jonathan E. Sjostrom, AHCA was unable to produce reliable evidence to support
the allegations,” Larkin said in a press release. The false claims lawsuit specifically cites
AHCA information to support its allegations.
AHCA disagrees with the judge’s decision and is now determining its next move,
says spokeswoman Jessica Cary. “We feel there was evidence of fraud....We are frustrated
we are unable to suspend payments” while delving further into suspicions
about Larkin’s Medicaid billing.
Weekly News and Analysis for Cost-Effective Compliance With Medicare & HIPAA
CMS: Medical-Necessity Problems Grow
With Three-Day Stays Before SNF Admissions
A misapplication of a Medicare payment policy is causing medically unnecessary
three-day hospital stays for patients headed to nursing homes, and the apparent prevalence
has attracted the attention of Medicare auditors at CMS and some quality improvement
organizations (QIOs).
Although Medicare doesn’t cover custodial care, it pays for medically necessary
“skilled care” in a skilled nursing facility for up to 100 days under certain circumstances.
CMS says skilled care is warranted when patients need skilled nursing or rehabilitation
staff to manage, observe and evaluate their care (e.g., changing sterile
dressings and physical therapy). Medicare payment kicks in for SNF skilled care only if
the patient has a “qualifying” three-day acute-care inpatient stay. And that’s where
compliance may go awry. Physicians sometimes hospitalize patients for three days to
try to justify a subsequent SNF admission, regardless of medical necessity, experts say.
For example, if a patient has syncope, faints, and is brought to the emergency department,
the physician should probably put the patient in observation to figure out
what’s going on. If the patient is obviously declining, it’s time for a safer environment,
which may mean moving to a nursing home. “What you should not do is admit the
person to the hospital because you think that’s the only way to get” Medicare coverage
continued on p. 5
PUBLISHER'S NOTE:
RMC will not be published
next week. The next issue
will be dated Aug. 16.
2 Report on Medicare Compliance August 2, 2004
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Managing Editor, Nina Youngstrom; Editorial Assistant, Eve *******;
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Federal prosecutors filed the false claims suit June
29 against the hospital; its former owner, James Desnick,
M.D.; its current owner, Jack Michel, M.D.; Michel’s
medical group, Oracle Health Systems; his brother;
George Michel, M.D., who works at the medical group; a
host of Florida nursing homes, retirement facilities and
assisted living facilities; and others. Allegations pertain
to conduct from 1997 to 1999.
The lawsuit alleges that in 1997, Desnick and Michel
forged a series of contracts to disguise the hospital’s
payments to Oracle Health Systems physicians. Larkin
paid inflated fees to Oracle physicians for various services,
the suit alleges, such as staffing the emergency
room, operating the radiology department and medical
directorships. When Jack Michel bought the hospital,
prosecutors contend, he switched schemes. The hospital
allegedly stopped paying physicians kickbacks for patient
referrals in favor of billing Medicare for medically
unnecessary services.
All the defendants deny the allegations.
At a hearing on the Medicaid issue, Craig Brand, a
lawyer for the hospital, called AHCA’s actions “malicious,”
according to a transcript. With no prior notice,
AHCA turned off the Medicaid spigot when it had another
option — suspending the hospital itself — which
at least would have triggered an appeal, Brand contended.
This way, the hospital has no appeal rights, he
said.
To get the injunction, the hospital had to prove that
(1) there’s a substantial threat of irreparable injury if it’s
not granted; (2) the threat outweighs the harm caused to
AHCA; (3) there’s a very good chance the hospital will
succeed in its lawsuit against AHCA; and (4) granting
the injunction won’t disserve the public.
In making its arguments, Brand said that without
government funds, Larkin will shut down. That would
harm the community it serves, which includes many
Medicare and Medicaid beneficiaries and a lot of uninsured
and psychiatric patients, he said. It’s the only hospital
in the area where all employees speak both English
and Spanish, Brand noted.
As for the alleged fraud, David Nam, an AHCA
attorney, told the court that after conducting peer review,
AHA determined that “Larkin Community Hospital was
receiving questionable referrals from the entities that
these gentlemen, the Michel brothers, represent and are
engaged in…,” which he pointed out was “laid out with
a great deal of specificity in the complaint that the Department
of Justice filed.”
The judge pushed AHCA to explain how Larkin’s
medical records provided evidence “giving rise to allegations
of fraud, willful misrepresentation or abuse.” In
response, AHCA Bureau Chief Ed Stivers said, “I’m not
sure I can get [from] where I am to where you want me
to be.” Nam added that “I don’t know, but somebody
does,” and ***** *******, AHCA’s assistant bureau
chief, asserted, “Judge, I think — I’m not sure…that I
would particularly feel competent to do that, simply
because clinically I’m not sure I could explain it to you. I
don’t have those records and have not reviewed those
records….But I do know I was the one that signed that
referral.”
Contact AHCA’s legal counsel’s office at (850) 922-
5873 and Larkin’s Barbie Litke at (305) 284-7701. ✧
CMS Rule Requires Joint Liability,
MD Access in Reassignment Pacts
CMS on July 27 proposed program integrity standards
for “reassignment” of Medicare payments by
physicians to outside entities, such as staffing companies
and hospitals. They pretty much reiterate CMS’s February
manual instructions on reassignment, issued three
months after Congress resurrected reassignment in the
Medicare Prescription Drug, Improvement and Modernization
Act (MMA) of 2003. CMS requires physician
access to claims submitted on their behalf and “joint and
EDITORIAL ADVISORY BOARD: MICHAEL BELL, Esq., Mintz Levin Cohn Ferris Glovsky and Popeo, TONY CAPULLO, Professional Provider Services, **** R. DeMURO, Esq., CPA,
MBA, Latham & Watkins, JOHN J. FOLEY, CPA, Parente Consulting, EDWARD GAINES, Esq., Healthcare Business Resources, PAT MARION, CFE, Compliance Concepts, Inc.,
CAROLYN MCELROY, Esq., Mintz Levin Cohn Ferris Glovsky and Popeo, WALTER METZ, CPA, MS, Brookhaven Memorial Hospital Medical Center, DAVID B. ORBUCH, Allina Hospitals
& Clinics, Minneapolis, MARK PASTIN, PhD, Council of Ethical Organizations, ANDREW RUSKIN, Esq.,Vinson & ****** L.L.P. DAVID SCHIMEL, National Health Resources, CARRIE
VALIANT, Esq., Epstein, Becker & Green, L. STEPHAN VINCZE, J.D., Vice President, Ethics and Compliance Officer, TAP Pharmaceutical Products Inc.
3 August 2, 2004 Report on Medicare Compliance
several liability,” which means both physicians and the
entities are responsible for returning overpayments to
CMS.
The program integrity measures, which were included
in the proposed 2005 physician fee schedule
regulation, must appear in the contracts between physicians
and the entities to which they reassign.
The regulation says, “Given the myriad relationships
and financial arrangements potentially permitted
by [MMA], the purpose of joint and several liability is to
encourage both parties to the contractual arrangement to
exercise oversight of billings submitted to the Medicare
program by holding them each fully accountable. Since
physician or nonphysician practitioners will be subject to
liability for claims that are submitted to the Medicare
program by entities to which they have reassigned payments,
it follows that a physician or nonphysician practitioners
should have access to the billings submitted on
their behalf.”
CMS also reminded parties that they must comply
with all Medicare laws and regulations. Other than this,
CMS didn’t say much, preferring to watch how the renewed
reassignment opportunities take shape and
where Medicare vulnerabilities emerge.
Additional Program Safeguards May Be Coming
In the fee schedule regulation, which will be published
in the Aug. 5 Federal Register, CMS says additional
program safeguards may be forthcoming. “We are soliciting
public comment on potential program vulnerabilities
and on possible additional program integrity
safeguards to guard against such vulnerabilities. We
intend to monitor reassignment arrangements for potential
program abuse,” the rule states.
In 1996, out of fear of overbilling, CMS banned independent
contractors from reassigning payment to a contracting
entity when the entity didn’t own or lease the
facility where services were performed. MMA lets physicians
reassign Medicare payments to any staffing company,
hospital or other entity as long as there’s a
contractual relationship (RMC 4/1/04, p. 4) — even if the
physician is an independent contractor, not an employee,
and the physician services are not provided on the
entity’s premises.
But to guard against payment abuses, Congress said
the reassignment contract between the physician and
entity must contain program integrity safeguards as
specified by the HHS secretary.
Washington, D.C., attorney Lena Robins says it’s
good CMS isn’t rushing to judgment about reassignment
by enacting detailed anti-fraud measures. “It’s a positive
that they are taking a step back and seeing how [reassignment]
is implemented,” she says.
Three-Step Process Involved
Reassignment and enrollment are also linked inextricably,
Robins says. In the CMS transmittal, CMS requires
staffing companies and other entities to enroll in Medicare
directly if they want to accept physician reassignment.
It’s really a three-step process, Robins explains:
The staffing company obtains its own Medicare provider
number, and the independent contractor physicians get
their own provider numbers and then reassigns to the
entity using the 855R form.
This arrangement allows the entity to submit claims
for servicess performed by the physician, who can either
be an employee or independent contractor, Robins says.
“You can’t reassign until you enroll,” she says, a fact that
often leads to confusion because the reassignment and
enrollment rules are separate. This is compounded by
the fact that the carriers often have disparate enrollment
practices, so it remains to be seen how they will implement
the new reassignment revision, she says.
Contact Robins at lrobins@foley.com. ✧
Pilot Program Will Evaluate
Background Checks for LTC Workers
A new CMS pilot program will evaluate the background-
check programs that long-term care (LTC) facilities
have in place for their new workers as a way to
combat abuse and neglect.
The pilot comes on the heels of recent revelations of
uncredentialed providers holding health care jobs, which
is a big compliance risk in both quality-of-care and payment
arenas (see story, this page).
The program, mandated by the Medicare Prescription
Drug, Improvement and Modernization Act (MMA)
of 2003, sets aside $25 million to fund the pilots and
evaluate the results, CMS says. The pilots will run in up
to 10 states until the end of fiscal 2007.
The pilot programs will help identify “best practices”
for providers — including nursing homes, home
health agencies, hospices, LTC hospitals, intermediate
care facilities for persons with mental retardation, and
other LTC facilities — to determine whether a job seeker
has any kind of criminal history or other disqualifying
personal history that could make him or her unsuitable
to work with patients.
Some experts say credentialing failures are intensifying,
and they attribute it partly to short-staffed facilities
and shortages of certain kinds of clinicians.
Background checks are a staple of all compliance
programs, and are one of the seven elements of an effective
program (RMC 7/12/04, p, 3). Hospitals are expected
to run employee, physician and contractor names
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4 Report on Medicare Compliance August 2, 2004
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HIPAA Security Compliance Guide (with quarterly updates and newsletters).
through the HHS Office of Inspector General Medicare
sanctions database and Healthcare Integrity and Protection
databank and the General Services Administration’s
(GSA) debarment database, and to conduct other criminal
background and licensure checks. Physician names
are also run through the National Practitioner Data
Bank. (RMC 12/19/02, p. 4)
Licensing Failures Can Lead to False Claims
If providers bill Medicare for services that aren’t
furnished as charged because the clinician isn’t licensed
or qualified to perform the services, the government can
allege false claims, as it has against nursing homes for
inadequate care in the past.
Checks conducted by LTC facilities as part of the
pilot programs will include a review of state registries
such as the Nurse Aide Registry, and a search of state
and criminal-history records. CMS is working with the
Department of Justice (DOJ) on the program, it said.
All states are eligible to apply for the pilot program
grant funds and may use the money to implement a
comprehensive background-check program, or to improve
upon an existing one, CMS said. At least one state
must also include patient-abuse prevention training for
managers and employees of LTC facilities and providers
as part of the program. CMS said it hopes to announce
the pilot participants in this fall. States can download
application forms, which are due by Sept. 30, at
www.hhs.gov/Medicaid/survey-cert/bcp.asp.
Contact the CMS Public Affairs Office at (202) 690-
6145. Questions about the background check program
can be e-mailed to backgroundchecks@hhs.gov. ✧
Feds Say Virginia Man Posed as
Radiation Safety Officer for Years
For nearly 15 years, Perry Beale duped administrators
at more than 50 hospitals in Virginia, Maryland,
West Virginia, North Carolina and Pennsylvania, with a
falsified resume, college transcripts and faked credentials
as a radiation safety officer (RSO), federal prosecutors
allege.
On July 22, Beale was charged with 38 counts of
mail fraud by U.S. Attorney for the Western District of
Virginia John Brownlee. Federal prosecutors charge that
Beale falsely and fraudulently portrayed himself as a
medical physicist and radiation safety officer who was
qualified to inspect and certify mammography facilities
and nuclear medicine departments. He provided those
services at dozens of hospitals and medical centers,
mostly in the Washington, D.C., area, including George
Washington University Ambulatory Care Center. A
medical physicist is certified to inspect mammography
equipment, which is subject to Food and Drug Administration-
mandated routine testing.
Inspections Covered Range of Facilities
According to the complaint, from 1990 through Nov.
15, 2002, Beale allegedly inspected various hospitals,
medical facilities and medical equipment and provided
the necessary federal and state certifications confirming
that the hospitals, medical facilities and equipment were
functioning in a safe and efficacious manner and in accordance
with applicable federal standards. He also
allegedly inspected X-*** machines, fluoroscopy machines,
nuclear medicine devices and mammography
machines, as well as sealed sources of radioactive material
used to calibrate nuclear medicine devices, federal
prosecutors said. He was paid via the mail, which is why
prosecutors could allege mail fraud.
Beale did not qualify as an RSO under the regulations
of the Nuclear Regulatory Commission, prosecutors
say, nor did he qualify as a medical physicist under
the FDA’s standards. In order to work, he allegedly submitted
a fraudulent certificate purportedly issued by the
American Board of Radiology, and fraudulent undergraduate
college records from Elon College that falsely
represented that he successfully completed requirements
for an undergraduate or graduate-level physics course
✔ A Guide to Auditing and Monitoring HIPAA
Privacy Compliance, how-to-do-it guidance on
installing effective HIPAA auditing and
monitoring systems. Includes practical templates,
tools and documents on a companion CD.
✔ HIPAA Security Compliance Guide (looseleaf
with quarterly updates) — Comprehensive 13-
chapter service written by top health care security
experts. Includes summaries of the regulations,
plus sample policies, procedures, forms and other
compliance tools.
✔ HIPAA Patient Privacy Compliance Guide
(looseleaf with quarterly updates) — More than 1,000
pages of easy-to-understand explanations and “howto”
forms, policies and checklists written by experts.
✔ Report on Patient Privacy (monthly newsletter)
— 12 pages of practical guidance on the confidentiality
of patient information and complex issues in
your HIPAA privacy compliance.
Visit the AIS MarketPlace at
www.AISHealth.com
More HIPAA Resources From AIS
5 August 2, 2004 Report on Medicare Compliance
Stays Before SNI Admits Probed
continued from p. 1
for nursing home time, says Carolyn Coffey, vice president
of the Hospital Payment Monitoring Program
(HPMP) for MetaStar, the QIO for Wisconsin. “The three
days is beside the point” because syncope would not
justify an acute-care admission. Instead, the physician/
hospital discharge planners should refer the patient to
the nursing home for custodial care — even though
Medicare won’t pay for it. That’s not pleasant to hear,
but it’s the rule.
Medicare watchdogs are increasingly concerned
about this snafu. “The requirement for the three-day
inpatient stay appears to be causing the medically unnecessary
admission in order to [attempt to] qualify for
the SNF reimbursement,” a CMS official tells RMC.
In fact, a recent Wisconsin study found that half of
all three-day hospital stays preceding nursing home
admissions lacked medical necessity (according to
InterQual inpatient criteria followed by physician review).
The study was done by MetaStar for HPMP,
which is CMS’s main vehicle for reducing inpatient payment
errors. HPMP is carried out by QIOs in the 50
states . The study also found that 65% of these cases met
observation-status criteria.
needed to satisfy requirements. The feds allege that he
fraudulently stated on his resume that he had received a
master of science degree in radiological technology,
nuclear medicine and radiological physics from the University
of Virginia.
One compliance expert, Kimble Carter, an attorney
with the South Carolina Department of Mental Health,
says it’s vital for hospitals to “verify educational credentials
and get copies of transcripts.” Because an employee
can falsify the information, “providers should be in direct
contact with institutions.” Carter also suggests
checking licenses and conducting annual verifications on
current employees (see story, p. 4).
In a statement, FDA said its evaluation showed
Beale’s activities “posed no health risk to mammography
patients.”
Beale turned himself in to federal authorities and
has been released by the U.S. District Court in
Harrisonberg, Va., on a $25,000 bond. He waived his
right to a grand jury and informed the judge in open
court that he intends to plead guilty to all 38 counts
charged by the feds, Brownlee said in a statement.
Beale’s attorney did not return calls for comments.
Contact the U.S. Attorney’s Office for the Western
District of Virginia at (540) 857-2250. Carter may be
reached at (803) 898-8314. ✧
Visit the “Compliance” channel on www.AISHealth.com to access a wide range of free compliance resources.
Inside Health Care Research Compliance is excerpted from the new AIS/NCURA Report on Research
Compliance. Visit www.ReportOnResearchCompliance.com for more information, or call (800) 521-4323.
◆ Under a proposed rule published on July 6, the
Office of Human Research Protections (OHRP)
will require all Institutional Review Boards (IRBs)
overseeing research sponsored or supported by
HHS to register with the office. IRBs would have
to provide answers to questions about the nature of
their operations and the research they oversee. The
OHRP proposal expands upon existing registration
requirements that started in 2000. The purpose of
the proposed rule is to strengthen OHRP’s ability to
monitor and provide assistance to IRBs.
◆ The Association for the Accreditation of Human
Research Protection Programs has released a
new evaluation tool to assess institutional compliance
with federal regulations governing the
protection of human subjects involved in research.
AAHRPP inspectors assessing institutions
undergoing accreditation use the tool. But it also
can serve as a tool for self-assessment. It is mapped
to both the accrediting agency’s standards and federal
regulations. The tool is available on AAHRPP’s
Web site at www.aahrpp.org.
◆ OHRP has published a report of its May inspection
of the Weill Medical College of Cornell University
that resulted in a temporary restriction on
the institution’s “federalwide assurance,” which
allows the medical school to conduct research.
Among its findings, OHRP noted weaknesses in
some informed consent documents, policies and
procedures, record retention, and the way the
institution’s IRB handled review of a clinical trial
involving children. To review the OHRP determination
letter, visit www.hhs.gov/ohrp/detrm_letrs/
YR04/may04c.pdf.
INSIDE HEALTH CARE RESEARCH COMPLIANCE
continued
6 Report on Medicare Compliance August 2, 2004
into the guidelines, and therefore the variances must be
identified, justified and documented in the medical
record,” Rice says.
(3) Skilled vs. unskilled care: There have been several
patient-status code changes over the years that further
differentiate between “skilled” and “unskilled” care
and by type of facility (Medicare/Medicaid approved,
Medicaid approved only vs. Medicare approved only).
“Providers are not always up to date on the patientstatus
code changes and may not have mechanisms in
place to determine if a SNF, nursing home, home health
or hospice is skilled/unskilled or Medicare/Medicaid
approved,” Rice says. In the recent inpatient prospective
payment system regulation, CMS indicated providers
could use the Nursing Home Compare database for
assistance. This database indicates whether care is Medicare
and Medicaid approved and if it’s skilled. There are
different patient-status codes for placement in nursing
homes depending on skill level and Medicare/Medicaid
certification: 03, 04, 30, 51, 61, 64.
(4) Physician professional E/M services: Placement
of the patient can also affect how a physician bills for his
or her evaluation and management services, according
to Rice. “There are limitations in professional E/M billing
by physicians depending on where the patient is
placed and whether or not the admission and discharge
occur on the same calendar date,” she says. Distinguishing
between medically necessary and unnecessary prenursing
home admissions is also important. On the
appropriate side, for example, if a patient receives a total
knee replacement and is in the hospital for three-to-four
days and then needs to go to a nursing home for rehab,
“Medicare will cover it for up to 100 days,” she notes.
Lots of Pressure on Hospitals
Compliance is also complicated by the fact that hospitals
are under pressure to admit patients to facilitate
SNF coverage. “There are a lot of dynamics here,”
Coffey says. “The nursing home doesn’t want to take the
patient unless they can get coverage, and the family
doesn’t want to pay if they think Medicare should cover
it. We need to help hospitals learn how to communicate
with families and encourage meetings with the hospital
and dialogues with hospital and nursing homes.” That’s
what the QIO did, she says. “Hospitals had to let them
know they would not fraudulently admit patients just
because it was not convenient to nursing homes to admit
them.”
Also, systemic changes to the UR department are
critical. For example, “UR people should be available
around the clock to help admitting physicians evaluate
the cases,” Coffey says. “Physicians need support to
make decisions about questions like what is covered.”
Hospitals in the MetaStar study made assorted UR
MetaStar determined that utilization review (UR)
restructuring and physician education went a long way
toward reducing improper three-day hospital stays before
nursing home admissions, Coffey says. After these
improvements were implemented, only 26% of prenursing
home hospital stays failed to meet inpatient
criteria, she says. Of those, 95% met observation criteria,
for an overall improvement of 48%.
“What’s really important is that a dialogue occurs
between hospital administrators, physicians and UR
nurses,” Coffey says. “Physicians just want to take care
of people, and we have to help them figure out the best
way to use resources to take care of this particular patient.
We need to help them know there is a continuum
of care they can offer that [facilitates] taking care of patients
in the least restrictive, least expensive setting.”
Compliance comes down to accepting the fact that
Medicare covers acute care, not custodial care, says Rick
Schuch, M.D., MetaStar’s HPMP medical director.
Whether the patient should be admitted to the hospital
or observation usually is clear-cut, and there are not
additional documentation demands associated with the
three-day qualifying stay, he says.
Here are the billing and medical-necessity issues
that hospitals must tackle to improve compliance in this
arena, says Cheryl Rice, compliance coding and reimbursement
analyst at Catholic Healthcare Partners in
Cincinnati:
(1) Meeting the consecutive three-calendar-day requirement:
Time spent in observation, the emergency
room or other outpatient treatment areas doesn’t count
toward the three-day requirement, she says. The “countable”
calendar days start from the date of inpatient admission
and extend until the day before discharge; the
day of discharge doesn’t count. “Some hospitals are
inappropriately backdating admissions to the time when
the patient was put in observation. This backdating creates
a false day that staff may be counting toward the
three-day requirements for SNF coverage. If hospitals
are audited and challenged on the admission backdating,
any subsequent placement in a SNF can be inadvertently
impacted as well.” Hospitals should train staff on
this issue and implement electronic edits, Rice says, to
flag backdated accounts.
(2) Establishing medical necessity: Does the patient
meet the medical criteria for an inpatient admission or
outpatient observation? Factors making it harder to decide
patient placement include (a) unclear or conflicting
instructions and requirements from Medicare contractors,
QIOs and insurers; (b) lack of clear physician documentation
stating admission orders; and (c) the fact that
“clinical criteria like Interqual are guidelines, and some
cases can present with variances that do not cleanly fit
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7 August 2, 2004 Report on Medicare Compliance
changes. They reorganized UR departments, did additional
education on admission criteria, created laminated
documents that doctors and UR staff could refer to in the
ER, targeted ER physicians for education, designated a
dedicated lead UR nurse instead of one person wearing
multiple hats, and empowered UR committees to review
cases they let fall by the wayside.
Also, Schuch visited hospitals and spoke with physicians
directly to make sure they understood the Medicare
rules. “I insisted that any meetings we have in the
hospitals include doctors, because the doctors are the
ones who admit patients,” says Schuch. “We kept the
focus very simple” — matching the patient’s specific
symptoms to the service setting, with the focus on physician-
driven admission decisions.
Origin of Myth Dates Back to ‘80s
So what’s the origin of the myth that patients bound
for nursing homes must be admitted to an acute-care
hospital bed for three days first?
CMS became concerned in the late 1980s about
mounting Medicare bills for relatively healthy senior
citizens who were acutely ill or injured and required a
major procedure followed by a long stay in an acute-care
hospital bed for rehabilitative care (e.g., hip replacement).
CMS decided it would be cheaper for patients to
receive rehabilitative care in a SNF, and so a new Medicare
regulation was born: potentially 100 nursing home
rehabilitative days for patients sick enough to warrant a
Copyright © 2004 by Atlantic Information Services, Inc. All rights reserved. Reproduction by any means — including photocopy,
FAX or electronic delivery — is a violation of federal copyright law punishable by fines of up to $150,000 per violation.
three-day hospital stay. “It was a bureaucratic proxy for
[determining] severity of illness,” Schuch says. Unfortunately,
some hospitals interpreted that to mean beneficiaries
bound for custodial care must somehow land
themselves in an acute-care hospital bed for three days,
regardless of medical necessity. “The legend was born,”
he says.
As a result, many hospital stays are contrived just to
get people into nursing homes. But Medicare provides
no custodial care benefit, so the admission is never justified
unless the patient is sick independently of the need
for custodial care.
To alleviate the unintended consequences, CMS
came up with both the Payment Error Prevention Program
(PEPP) and its successor, HPMP, to reduce inpatient
payment errors, about five years ago, and the
minimum data set (MDS) about four years ago, Schuch
says.
MDS — a survey that nursing homes must complete
for all incoming residents — classifies patient clinical
problems and disabilities, Schuch says.
“It’s a uniform way of discussing patients. It normalizes
clinical measurement,” he says. MDS is then
used to determine if Medicare will consider payment for
SNF –based rehabilitative services.
Contact Coffey at ccoffey@metastar.com, Rice
at clrice@health-partners.com and Schuch at
drrick@mwt.net. ✧
◆ HHS shed some light on the application of the
HIPAA privacy rule to law enforcement in a new
answer on the Office for Civil Rights HIPAA Web
site. The privacy rule is balanced to protect an
individual’s privacy, while allowing important lawenforcement
functions to continue, OCR says. The
new question and answer demonstrates this balance
by explaining how the rule permits covered
entities to disclose protected health information to
law-enforcement officials under various circumstances,
and provides a summary of the permissible
disclosures to law enforcement under various sections
of the privacy rule, including 45 CFR
§§164.512(f), 164.502(j), 164.512(j), 164.512(b),
164.512(c), and 164.512(k). This answer can be
viewed at the “What’s New” column on the OCR
Web site, www.hhs.gov/ocr/hipaa/.
◆ A Louisiana woman who allegedly bilked Medicare
out of more than $1 million was sentenced
to 40 months in prison July 22 for health care
fraud. Anna Malveaux was the owner, manager
and CEO of two physical rehabilitation clinics,
Veaux’s Healthcare Services and Distinguished
Healthcare Service, Inc. Federal prosecutors allege
that Malveaux submitted claims to Medicare using
the clinic’s provider number and a physician’s provider
number. On the claims, she stated the services
were rendered “incident to” a physician’s supervision.
But, federal prosecutors said, the physician
was not involved in rendering or supervising the
services being provided at the clinics and was unaware
that his provider number was being used by
Malveaux so that she could obtain a higher reimbursement
rate. The incidents took place between
January 2000 and June 2001. She pleaded guilty to
the charges in January 2003, federal prosecutors
said. In addition to her sentence, Malveaux was
ordered to pay $1,211,300 in restitution and will
spend three years in supervised release after she
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has served her sentence. Call the U.S. Attorney’s
Office in Lafayette, La., at (337) 262-6618.
◆ A Florida company has agreed to pay $1.38
million to settle allegations that it double-billed
and submitted false claims for medical equipment
sales, state and federal prosecutors said.
State and federal investigators found that Doctor’s
Choice Medical Equipment of Largo, Inc. improperly
billed the Medicare and Medicaid programs
for durable medical items, such as nebulizer supplies
and wheelchairs, from January 1994 to December
1998. The company double-billed for some
items and billed the programs for others that were
never ordered or supplied, prosecutors allege. The
company was sold to new owners in 1999. The new
owners discovered the allegedly improper billing
and alerted the government. An employee of
Doctor’s Choice also came forward and disclosed
other improprieties, state prosecutors said. As a
whistle-blower, she will receive $54,000 of the
settlement. Contact the Florida Attorney General’s
Office at (850) 414-3300.
◆ Keystone Health Plan East, of Philadelphia,
has agreed to pay more than $1 million to resolve
civil claims by the U.S. government involving
1996 rates charged by the company. Federal
prosecutors allege that the method used to develop
the rates that Keystone charged to the Federal Employees
Health Benefits Program (FEHBP) was not
in compliance with Office of Personnel Management
regulatory and contractual requirements.
Specifically, federal prosecutors say the company
failed to give FEHBP the most favorable rates that
it gave to a similarly situated commercial customer.
Contact the U.S. Attorney’s Office for the District of
Columbia at (202) 514-6933.
◆ Certificate of Need (CON) programs do not
best serve citizens’ health care needs and
should be reconsidered, says a joint report from
the Department of Justice (DOJ) and Federal Trade
Commission (FTC). The report, “Improving Health
Care: A Dose of Competition,” was released July 23.
To view the report and transcripts of the hearings,
visit DOJ’s Antitrust Division page at
www.usdoj.gov/atr or the Federal Trade Commission
Web site at www.ftc.gov/opa/2004/07/
healthcarerpt.htm.
◆ CORRECTION: According to the National Uniform
Billing Committee, the correct answer to the
eighth question on the Medicare post-acute transfer
payment policy quiz in the June 28 issue of RMC is
A (discharge to home, patient discharge status code
01). The answer sheet, which appears on page 4,
says the answer on the coding for a patient discharged
home but returning to the hospital daily
for outpatient psychiatric services is C. Contact
NUBC Chairman George Arges at garges@aha.org
or member Liz Carnevale at ecarnevale@snch.org.
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I'd be surprised if any med students read all the above posts word for word...

__________________
Finally beat Super Mario Bros within 7 mins.

Hey, JMichel!! Did you think I'd forgotten about you? I've got the memory of an elephant, my friend. So, what do you have to say about this?

Federal Bureau of Investigation Miami Field Division Press Release - Department of Justice

I'm now a 2nd year resident in a prestigious anesthesiology program. Ross delivered for me in spite of the likes of you. You're an embarassment to Ross. A liar and a cheat is always a liar and a cheat. A leopard can't change its spots. I can only still hope that Ross has the good sense to distance themselves as far as they can away from you and Larkin Hospital.

-Skip Intro, MD
PGY-2

__________________
http://www.studentdoctor.net/