Author: Brian Werfel

Brian S. Werfel, Esq. is a partner in Werfel & Werfel, PLLC, a New York based law firm specializing in Medicare issues related to the ambulance industry. Brian is a Medicare Consultant to the American Ambulance Association, and has authored numerous articles on Medicare reimbursement, most recently on issues such as the beneficiary signature requirement, repeat admissions and interrupted stays. He is a frequent lecturer on issues of ambulance coverage and reimbursement. Brian is co-author of the AAA’s Medicare Reference Manual for Ambulance, as well as the author of the AAA’s HIPAA Reference Manual. Brian is a graduate of the University of Pennsylvania and the Columbia School of Law. Prior to joining the firm in 2005, he specialized in mergers & acquisitions and commercial real estate at a prominent New York law firm. Werfel & Werfel, PLLC was founded by David M. Werfel, who has been the Medicare Consultant to the American Ambulance Association for over 20 years.

CMS Extends Temporary Moratorium (NJ, PA, TX)

Written by Brian Werfel on January 15, 2017. Posted in Medicare, Member Advisories, Member-Only, Reimbursement.

On January 9, 2017, the Centers for Medicare & Medicaid Services (CMS) issued a notice in the Federal Register extending the temporary moratoria on the enrollment of new Medicare Part B non-emergency ground ambulance providers and suppliers in the states of New Jersey, Pennsylvania, and Texas. The extended moratoria will run through July 29, 2017.

Section 6401(a) of the Affordable Care Act granted CMS the authority to impose temporary moratoria on the enrollment of new Medicare providers and suppliers to the extent doing so was necessary to combat fraud or abuse. On July 31, 2013, CMS used this new authority to impose a moratorium on the enrollment of new ambulance providers in Houston, Texas and the surrounding counties. On February 4, 2014, CMS imposed a second moratorium on newly enrolling ambulance providers in the Philadelphia metropolitan areas. These moratoria have been extended every six months thereafter.

However, on August 3, 2016, CMS announced changes to its existing moratoria on the enrollment of new ground ambulance suppliers. Specifically, CMS announced that the moratoria would be lifted for the enrollment of new emergency ambulance providers and supplier, but that it would expand the enrollment moratorium on non-emergency ambulance services to cover the entire states of New Jersey, Pennsylvania, and Texas. At the same time, CMS announced the creation of a new “waiver” program that would permit the enrollment of new non-emergency ambulance providers in these states under certain circumstances.

On or before July 29, 2017, CMS will need to make a determination on whether to extend or lift the enrollment moratorium.

Have a Medicare question? AAA members, send your inquiry to Brian Werfel, Esq. using our simple form!

Federal Judge Offers Hope for Reduction in ALJ Appeal Backlog

Written by Brian Werfel on December 29, 2016. Posted in Medicare, Reimbursement.

As our industry prepares to close the book on 2016 and turns its eye to 2017, I want to focus your attention on a recent federal court ruling that has the potential to significantly reduce the current backlog of appeals pending Administrative Law Judge (ALJ) hearings.

The Medicare regulations require ALJs to conduct a hearing and issue a written decision within 90 days of the filing of an appeal. However, the average time to process decisions has skyrocketed in recent years, from 94.9 days in FY 2009 to nearly 2.5 years in FY 2016. Those statistics come from the CMS Office of Medicare Hearings and Appeals (OMHA). On their face, those numbers may seem discouraging; however, the reality is far worse. Those numbers reflect the average time to render a decision on appeals filed by both beneficiaries and health care providers. However, the law requires the ALJs to give priority to appeals filed by beneficiaries. OMHA has indicated that it continues to decide these cases within approximately 90 days.

Of course, if the appeals filed by beneficiaries continue to be decided within 90 days, the pending appeals filed by health care providers must be delayed even further. In July 2016, OMHA indicated that there were approximately 750,000 claims currently awaiting ALJ hearings. This statement was made in the context of OMHA taking credit for increasing its capacity for processing appeals to approximately 77,000 claims a year. In other words, it is possible that the expected time for a hearing on an appeal filed today could be close to 10 years.

Enter the American Hospital Association. In May 2014, the AHA filed a lawsuit in the federal District Court for the District of Columbia seeking a writ of mandamus (lawyer-speak for “I would really appreciate it if you forced this government official to do his or her job”) to compel the Secretary of Health and Human Services to comply with statutorily imposed deadlines for ALJ decisions. In other words, the AHA was asking the court to force CMS to eliminate the ALJ backlog.

District Court Judge James E. Boasberg initially dismissed the case for lack of jurisdiction. The AHA then appealed to the Court of Appeals for the D.C. Circuit, which, in 2016, reversed the dismissal, and remanded the case back to the lower court for further proceedings. The Circuit Court specifically instructed the judge to determine whether “compelling equitable grounds” existed to justify the issuance of the writ.

CMS then moved to stay further proceedings until September 30, 2017. This is the close of the next full appropriations cycle, and CMS argued that this would give it time to pursue various administrative and legislative efforts to reduce the ALJ backlog. The court denied that request, finding that sufficient grounds existed to justify the writ of mandamus. The court then asked the parties to submit written suggestions on the form such mandamus relief should take. Both CMS and the AHA then submitted suggestions for how to deal with the issue.

The AHA proposed two possible avenues to reduce the backlog:

CMS should: (i) offer reasonable settlements to broad groups of Medicare providers and suppliers (similar to its periodic settlement offers to hospitals over the past few years), (ii) defer the obligation for providers and suppliers to repay outstanding overpayments, and toll the accumulation of interest, while their ALJ appeal was pending, and (iii) impose financial penalties on RACs that have high reversal rates; or
Set specific numeric targets for reducing the backlog over a four year period. These targets would be: (i) a 30% reduction in the backlog by December 31, 2017, (ii) a 60% reduction by December 31, 2018, (iii) a 90% reduction by December 31, 2019, and (iv) the elimination of the backlog by December 31, 2020. The AHA also recommended that, to the extent a backlog still existed on January 1, 2021, that any provider or supplier with an ALJ appeal pending for more than 1 year be granted summary judgment.

CMS objected to each of these requirements. Instead, CMS continued to argue that time should be allowed for its recent initiatives to have the desired impact. However, CMS indicated that the ultimate elimination of this backlog would require legislative action.

On December 6, 2016, Judge Boasberg issued his ruling. In his decision, he stated that, while he was sympathetic to the challenges faced by CMS, he found CMS’ argument somewhat less than persuasive. Moreover, he indicated that CMS’ plan was largely contingent on Congressional intervention, which was by no means a sure thing. However, the Judge indicated that he was hesitant to intrude upon CMS’ specific decision-making process. For that reason, he rejected the specific proposals offered by the AHA. Instead, he elected to adopt the AHA’s proposed timetable for reducing the backlog. The Judge did refuse to grant the AHA’s request that providers automatically be granted summary judgment if the backlog was not eliminated by 2021, agreeing with CMS that this might create some perverse incentives for providers and suppliers to file non-meritorious appeals. Instead, he indicated that, to the extent the backlog is not eliminated by that date, individual providers or suppliers would have the option of moving for default judgment or to seek their own writ of mandamus to compel an immediate hearing. Finally, the Judge ordered CMS to provide status reports every 90 days on its efforts to reduce the backlog.

In sum, a federal court has now ordered CMS to eliminate the current ALJ backlog over the next four years. It is likely that CMS will appeal this decision, and, therefore, this is unlikely to be the last time the courts weigh in on this issue. Moreover, even if the court order stands, it is unclear how CMS could significantly reduce the backlog without securing additional financial resources from Congress. One option might be to expand its settlement offers to additional provider groups. Another might be slow-down the pre- and postpayment audits that feed the appeals pipeline. However, these are purely speculative at this time.

Thus, the court’s decision is unlikely to have a meaningful impact on appeals in the near future. However, it is almost 2017, and I for one am choosing to be optimistic.

Best Wishes for a Happy and Healthy New Year!

Have an issue you would like to see discussed in a future Talking Medicare blog? Submit your question!

GAO Report on Revised Provider Enrollment Screening Process

Written by Brian Werfel on December 21, 2016. Posted in Medicaid, Medicare, Member Advisories, Member-Only.

In March 2011, the Centers for Medicare and Medicaid Services (CMS) implemented a revised process for processing the enrollment of new Medicare providers and suppliers. This revised process also applied to existing Medicare providers and suppliers that were revalidating their enrollment information. This new process included assigning all providers and suppliers to one of three risk categories—limited, moderate, and high—based on the perceived risk of fraud and abuse. The risk category then determines the applicable screening process used for providers within that risk category.

Please note that ambulance providers and suppliers were placed in the moderate risk category. This risk category includes a verification of the information provided by the provider on its enrollment application, a check of the provider’s state licensure, a check of any adverse legal actions against the provider, and a site visit of the provider.

On December 15, 2016, the Government Accountability Office (GAO) released a report on the initial results of this revised provider enrollment screening process.

In its report, the GAO indicated that CMS applied its revised enrollment screening process to over 2.4 million newly enrolling and revalidating Medicare providers and suppliers from March 25, 2011 through December 31, 2015. Other relevant findings include:

The total number of enrolled Medicare providers and suppliers increased from 1.4 million in March 2011 to 1.9 million in December 2015, an increase of more than 30%.
CMS denied more than 6,000 applications for ineligible providers and suppliers. The most commonly cited reason for a denial was the failure of applicant to meet the provider/supplier type requirements. This included situations where the provider/supplier did not hold the required certification for that provider/supplier type.
CMS rejected 17,000 applications as incomplete. The GAO found that approximately 25% of the rejected applications were the result of the application being filed in error, either by the provider/supplier or the MAC. 21% of applications were rejected as being duplicates. Another 16% of rejections were the result of the provider/supplier failing to timely respond to the MAC’s request for additional information.
CMS screening of existing providers/suppliers resulted in more than 660,000 provider numbers being deactivated. This was typically (47%) the result of the provider failing to respond to the MAC’s request that they revalidate. Another 29% were the result of the provider/supplier voluntarily withdrawing from the Medicare program. Another 5% of deactivations were the result of the provider/supplier not submitting a claim to Medicare within the previous 12 months. The majority of these were likely individual practitioners (e.g., physicians) that either died, or who retired from professional practice, and who failed to inform the MAC at the time of retirement to request that their provider number be deactivated. This could also include organizational providers that were sold or otherwise no longer operational.
These were frequently the result of an individual practitioner (e.g., a physician) failing to deactivate his or her Medicare number upon their retirement, and their either not responding to a request to revalidate, or notifying the MAC of their retirement and agreeing to voluntarily withdraw
CMS revoked the billing privileges of 43,000 provider/suppliers. The most common reason cited (61%) was the failure of the provider/supplier to be professionally licensed. However, within the moderate risk category, which includes ambulance, 26% of all revocations were the result of a “CMS-approved revocation,” e.g., the result of some adverse legal action against the provider/supplier which was not properly disclosed to the MAC within 30 days.

CMS estimated that its revised screening procedures avoided $2.4 billion in Medicare payments to ineligible providers and suppliers over this period.

CMS also reported that it made several changes to its screening process over this period. This includes the implementation of a continuous license monitoring report in November 2013, and a continuous criminal monitoring report in July 2015. This also includes fingerprint-based criminal background checks for the owners and certain key employees of categorically high-risk providers and suppliers. In December 2015, CMS also began conducting site-visits for certain limited-risk providers and suppliers.

Despite the progress made by CMS, the GAO did find that certain program vulnerabilities still exist. For example, the GAO found that CMS had not established performance measures to monitor its ability to place providers and suppliers in the proper risk categories. The GAO recommended that CMS establish objectives and performance measures for assessing its progress in establishing better screening procedures for new enrollments and revalidations. CMS ultimately agreed with this recommendation.

Have a Medicare question? AAA members, send your inquiry to Brian Werfel, Esq. using our simple form!

2015 Medicare Data Shows Evident of Crackdown on Non-Emergency Transport

Written by Brian Werfel on November 29, 2016. Posted in Medicaid, Medicare, Reimbursement, Talking Medicare.

2015 Medicare Payment Data Offers Evidence of Nationwide Crackdown on Non-Emergency Ground Ambulance Transportation; Impact Varies Dramatically by Medicare Administrative Contractor

Every year, CMS releases data on aggregate Medicare payments for the preceding year. This file is referred to as the Physician/Supplier Procedure Master File (PSP Master File). This past month, CMS released the 2016 PSP Master File, which contains information on all Part B and DME claims processed through the Medicare Common Working File with 2015 dates of service.

In September’s blog post, I discussed the results of the first year of the prior authorization demonstration project for repetitive, scheduled non-emergency ground ambulance transports. During this first year, the project was limited to three states: New Jersey, Pennsylvania, and South Carolina. The data confirms that these three states saw a dramatic reduction in Medicare’s approved payments for dialysis transports.

This month, I will be discussing the national payment trends for non-emergency ground ambulance transports, and, in particular, Basic Life Support non-emergencies.

In 2015, Medicare paid approximately $990 million for BLS non-emergency transports. This is 13% less than what it paid for BLS non-emergency transports in 2014 ($1.14 billion). Please note that these figures only reflect payments for the base rate; when the payments for the associated mileage are included, the reduction is even more dramatic.

In actual terms, this means Medicare Administrative Contractors (MACs) approved nearly 1 million fewer BLS non-emergency transports in 2015 (5.86 million) than they approved in 2014 (6.81 million). Roughly 75% of this reduction can be directly attributed to the prior authorization program in the three states listed above. Note: the reduction in approved dialysis transports in New Jersey accounts for nearly half of the national decline). However, that leaves nearly 250,000 fewer approved transports in the remaining 47 states. This reduction was not the result of fewer claims being submitted in 2015; the number of submitted claims was actually higher in 2015 than 2014. Rather, the data shows that this reduction is the result of the MACs actively denying many more claims than in year’s past.

I believe these reductions are the direct result of a step-up in the enforcement activities of the MACs, which I also believe has the tacit, if not outright, approval of CMS.

To test this thesis, I looked at the state-by-state data to see if any trends could be found. What I found was that 28 states saw increases in the total number of approved BLS non-emergency transports in 2015, with 19 states seeing decreases. However, on its face, that number is somewhat deceiving. The states that saw increases tended: (1) to see either relatively small increases or (2) had relatively low utilization rates to begin with. The states that saw decreases tended to be larger states with higher utilization rates, and those decreases tended to be larger in percentage terms. For instance, California saw a 21.5% decrease in the number of approved BLS non-emergency transports. Ohio saw an 11.7% decrease.

Digging deeper, it becomes clear that a state’s overall change in payments for BLS non-emergencies is almost perfectly correlated with its change in payments for dialysis transports. In other words, to the extent the state saw an overall reduction in payments for BLS non-emergencies, that reduction – – in nearly all cases – – was the result of the total payments for dialysis decreasing by more than any offsetting increase in the total payments for non-dialysis transports.

These relative changes in dialysis were also highly correlated with the MAC that administers Medicare claims in that state. To the extent your state saw a reduction in dialysis payments, it is highly likely that neighboring states administered by the same MAC saw similar reductions in payments. The following charts will help illustrate this point:

As you can see, all three states within Cahaba’s jurisdiction saw a net increase in the total payments for dialysis. While the increases themselves were quite minor in Alabama and Tennessee, Georgia saw an 11.8% increase in total payments for dialysis. Similarly, both Florida and Puerto Rico saw significant increases in the approved payments for dialysis.

By contrast, every state in National Government Services’ (NGS’) jurisdiction with more than 1,000 paid dialysis transports in 2015 saw a net reduction in the total payments for dialysis. These reductions ranged from a relatively minor reduction of 1.17% in New York to a nearly two-thirds (64.58%) reduction in Minnesota.

This trend was present in all remaining jurisdictions, although the results were more mixed. For example, with the exception of South Carolina, the three remaining states administered by Palmetto all saw increases. Likewise, the majority of states administered by WPS saw decreases. This included Indiana, which has a sizeable dialysis population. Among WPS states, only Missouri saw a small (3.90%) increase.

California saw a 31.76% decrease in its payments for dialysis. The only other Noridian states with more than 1,000 paid dialysis trips were Hawaii and Washington, which both saw increases.

Novitas presents a more complicated picture, with several large states, such as Texas, seeing double-digit increases in payments for dialysis, while other large states saw sizeable decreases.

All in all, the data suggests that CMS and its contractors continue to pay close attention to the non-emergency side of our business, particularly BLS non-emergency transports. These transports have been under scrutiny for many years, as reports from the Office of Inspector General, the Government Accountability Office and other federal agencies have flagged this portion of our industry as being particularly prone to overutilization (and, in some cases, outright fraud). However, this heightened scrutiny is not being uniformly applied across-the-board. The data suggests that certain MACs have been far more aggressive in targeting these sorts of trips across their entire jurisdictions, while others seem content to target specific (typically large) states within their jurisdictions. This could serve as a template for how MACs will approach prior authorization in their jurisdictions.

‘Praemonitus, Praemunitus’

Latin Proverb, loosely translated to “forewarned is forearmed.”

CMS SMR Contractor Audit Error

Written by Brian Werfel on November 15, 2016. Posted in Medicaid, Medicare, Member Advisories, Member-Only.

Over the past week, we have learned that several ambulance suppliers have received letters from the CMS Supplemental Medical Review Contractor (SMRC), StrategicHealthSolutions, LLC. These letters indicate that the SMRC is conducting a medical review of their claims.

The letter contains a section that explains why the supplier has been selected for review. That section contains the following explanation:

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), signed into law on April 16, 2015, extended the therapy cap exception process through December 31, 2017, and modified the requirement for manual medical review for services over the $3,700 therapy thresholds. MACRA eliminated the requirement for manual medical review of all claims exceeding the therapy thresholds and instead allows a targeted review process. CMS has tasked the SMRC with performing post-payment medical review of Part B therapy claims for providers with a high percentage of patients receiving therapy beyond the threshold as compared to their peers for dates of service July 1, 2015 to the present.

Our firm contacted the SMRC on behalf of a number of affected providers. On November 14, 2016, StrategicHealthSolutions responded to our inquiry. The SMRC indicated that its review was intended to be limited to suppliers of physical therapy services. Accordingly, the SMRC confirmed that these audit letters were sent to ambulance suppliers in error.

The SMRC further indicated that ambulance suppliers that received this audit letter in error will be notified by telephone that they were selected in error. The SMRC will also be sending letters to affected ambulance suppliers notifying them of its error. These letters are expected to be mailed tomorrow, Tuesday, November 15, 2016.

If your organization received a letter from StrategicHealthSolutions, LLC, please know that this letter was sent in error. Your organization is not being audited by the Supplemental Medical Review Contractor. You can expect to receive a phone call and/or a letter in the next few days formally notifying you of the contractor’s error. That letter should formally withdraw the SMRC’s request for medical records.

If you received a letter from the SMRC, and have any further questions, please feel free to contact Brian S. Werfel, Esq., the AAA’s Medicare Consultant. He can be reached via email at bwerfel@aol.com.

CMS List of Medically Unlikely Edits for Ambulance Services

Written by Brian Werfel on November 15, 2016. Posted in Medicaid, Medicare, Member Advisories, Member-Only, Reimbursement.

On October 1, 2016, the Centers for Medicare and Medicaid Services (CMS) updated its list of Medically Unlikely Edits (MUEs). The MEU program is designed to reduce the paid claims error rate for Part B claims. The program operates by estimating the maximum number of units of service that a provider/supplier would report under most circumstances for a single beneficiary on a single date of service. A claim that submits units of service in excess of this threshold will typically be denied by the Medicare Administrative Contractor.

For additional information on the CMS Medically Unlikely Edit Program, click here.

Effective October 1, 2016, claims for ambulance services will be subject to the following MUE edits:

HCPCS Code	MUE Threshold
A0425 (Ground Ambulance Mileage)	250
A0426 (Ground Ambulance, ALS Non-Emergency)	2
A0427 (Ground Ambulance, ALS Emergency)	2
A0428 (Ground Ambulance, BLS Non-Emergency)	4
A0429 (Ground Ambulance, BLS Emergency)	2
A0430 (Air Ambulance, Fixed Wing)	1
A0431 (Air Ambulance, Helicopter)	1
A0432 (Ground Ambulance, Paramedic Intercept)	1
A0433 (Ground Ambulance, ALS-2)	1
A0434 (Ground Ambulance, Specialty Care Transport)	2
A0435 (Air Ambulance, Fixed Wing Mileage)	999
A0436 (Air Ambulance, Helicopter Mileage)	300

AAA Posts 2015 National and State-Specific Medicare Data

Written by Brian Werfel on November 5, 2016. Posted in Medicare, Member Advisories, Member-Only.

The American Ambulance Association is pleased to announce the publication of its 2015 Medicare Data Payment Report. This report is based on the Physician/Supplier Procedure Summary Master File. This report contains information on all Part B and DME claims processed through the Medicare Common Working File and stored in the National Claims History Repository.

The report contains an overview of total Medicare spending nationwide in CY 2015, and then a separate breakdown of Medicare spending in each of the 50 states, the District of Columbia, and the various other U.S. Territories.

For each jurisdiction, the report contains two charts: the first reflects data for all ambulance services, while the second is limited solely to dialysis transports. Each chart lists total spending by procedure code (i.e., base rates and mileage). For comparison purposes, information is also provided on Medicare spending in CY 2014.

Findings Patterns Where None Exist

Written by Brian Werfel on October 28, 2016. Posted in Medicaid, Medicare, Reimbursement, Talking Medicare.

On August 16, 2016, the HHS Departmental Appeals Board (DAB) issued a decision related to CMS’ authority to revoke a Medicare supplier’s billing privileges. The DAB is the fourth and final level of administrative appeal within the Department of Health and Human Services.

Factual Background

The case involved John P. McDonough III, Ph.D., a clinical psychologist residing in Florida, and two of his affiliated medical practices, Geriatric Psychological Specialists and Geriatric Psychological Specialists II. In October 2014, First Coast Service Options, Inc., the Medicare Administrative Contractor for Florida, notified McDonough and both medical practices that their Medicare billing numbers were being revoked for alleged abuses of their billing privileges. Specifically, First Coast indicated that data analysis had revealed that the three suppliers had submitted a total of 420 claims for deceased beneficiaries over an approximately two-year period.

McDonough and his two medical practices appealed for a reconsideration of the revocation of their billing privileges, which was denied in February 2015. The suppliers then appealed for an ALJ hearing. The suppliers conceded that they submitted more than 200 claims for beneficiaries that were deceased on the date of service. However, they attributed these claims to data-entry errors and other clerical mistakes. The suppliers argued that these were simple billing errors, representing a small percentage of the tens of thousands of claims they submitted during this period of time. In December 2015, the ALJ issued his decision. While the ALJ seemingly accepted the suppliers’ explanation that these were billing errors, and that there was no intent on the part of the suppliers’ to submit false claims, the ALJ nevertheless upheld the revocation of their billing privileges. Citing previous DAB decisions, the ALJ held that the admitted submission of repeated claims for services to deceased beneficiaries due to “incorrect billing entries due to similar beneficiary names or Medicare numbers, and inadvertent typing errors” was not inconsistent with a finding that the suppliers’ had abused their billing privileges.

The suppliers’ then appealed to the DAB. In its decision, the DAB first noted that it has consistently rejected contentions that revocation required a finding that the supplier acted intentionally:

“The Board has long held that the regulation’s plain language does not require CMS to establish fraudulent or dishonest intent to revoke a supplier’s billing privileges under this section and that the regulatory language also does not provide any exception for inadvertent or accidental billing errors.”

The DAB then countered the suppliers’ argument that CMS never intended to revoke a supplier’s billing privileges for simple mistakes. They cited language from the June 27, 2008 final rule, where CMS stated revocation “is not intended to be used for isolated occurrences or accidental billing errors.” The DAB noted that CMS, in that same final rule, indicated that it would not consider the submission of three or more improper claims to be accidental. The DAB also noted that the relatively small percentage of erroneous claims was irrelevant, as the regulation does not require CMS to establish any particular error rate or percentage of improper claims.

The DAB held that since the record established that the suppliers’ had submitted more than 3 claims for deceased beneficiaries, CMS had met the requisite legal standard for revocation. Accordingly, the DAB upheld the revocation of the suppliers’ billing privileges.

Potential Impact on Ambulance Providers

The DAB’s decision effectively establishes a strict liability standard for revocations based on the submission of claims for deceased beneficiaries. The submission of three or more such claims over any designated period of time could constitute legal grounds for CMS to revoke a supplier’s Medicare billing privileges.

The implications of this decision should give every Medicare provider pause. However, given the nature of our operations, our industry needs to pay particular attention. The psychologist and therapists that were the subject of the above-referenced case saw patients on a scheduled basis, and spent many hours with each of their patients. This gave them ample time to obtain insurance information from each of their patients, and to confirm the accuracy of that information. Yet the suppliers’ still had more than 200 claims billed incorrectly.

EMS providers do not have that luxury. We frequently encounter patients on the street or at their home. Many of these patients do not have their insurance information on them at the time of transport. Even when the patient had this information on their person, under the stress of an emergency medical situation, the paramedic or EMT may not record this information accurately.

As a result, our billing offices spend a good portion of their time trying to verify a patient’s insurance. Unfortunately, some of the administrative “shortcuts” we have developed to address these problems create the potential to inadvertently submit claims for deceased patients. While there is nothing at present that suggests that CMS intends to expand the use of its revocation authority, we probably want to rethink these shortcuts.

An example you say?

Consider a transport of an elderly woman to the hospital in an emergency. The crew does not obtain the patient’s insurance information at the time of transport. However, they do obtain the hospital face sheet, which lists the patient’s social security number. To convert this social security number to a Medicare HIC#, we need to include a Medicare suffix. How would you go about doing that?

One option would be to ping the patient’s name, date of birth and SSN against an eligibility database. While effective, provider’s typically pay for these lookups.

Another option would be to simply guess what the applicable suffix might be, affix that to the SSN, and submit the claim. If it goes through, the provider guessed correctly. If it rejects as an invalid name and HIC# combination, the provider would know to try another suffix. So let’s assume the provider elects to use this option. Playing the percentages, the provider would likely add the “B” suffix, on the theory that, given her age, the woman likely qualified for Social Security Benefits (and therefore Medicare benefits) based on the work history of her spouse. But what if the provider was wrong, and the woman was the primary wage earner in her family? If that were the case, her suffix would likely be the “A.” Now imagine that her husband shared the same Social Security numerics, and that his suffix was the “B.” Further imagine that he has since passed, and the provider has now inadvertently submitted a claim for the dead husband.

Now imagine this happens three times in a year…

Another way we can inadvertently submit claims for dead patients is not using front-end verification. Many providers submit claims based off the insurance information they received at the time of transport (or from the hospital, nursing home, etc.), without any attempt to confirm its accuracy. These providers recognize that the insurance information will be correct more often than not. They are making the calculated decision that it is easier to deal with any issues after they have been identified by the payer. However, one reason an insurance can come back as invalid is because the crewmember recorded the HIC# incorrectly. For example, they may transpose a few digits (i.e., they wrote “1243” rather than “1234”). If the transposed HIC# relates to a deceased beneficiary, that would be captured by the data analytics used by the Medicare contractors.

The DAB’s decision is certainly troubling. However, I do not believe that our industry needs to overreact. Rather, I would encourage everyone to view the DAB’s decision as a starting point, and to re-examine their own billing and verification processes to see if there is anything they can do to reduce the likelihood of their organization every confronting this issue.

Have an issue you would like to see discussed in a future Talking Medicare blog? Please write to me at bwerfel@aol.com.

Prior Authorization Data Shows Dramatic Reductions in Spending on Dialysis Transports

Written by Brian Werfel on October 3, 2016. Posted in Medicare, Talking Medicare.

In May 2014, CMS announced the implementation of a three-year prior authorization demonstration project for repetitive scheduled non-emergency ambulance transports. CMS initially elected to limit this demonstration to three states: New Jersey, Pennsylvania, and South Carolina. These states were selected based on higher-than-average utilization rates and high rates of improper payment for these services. The Medicare Payment Advisory Commission (MedPAC) had previously singled out these states as having higher than average utilization of dialysis transports in a June 2013 report to Congress.

This demonstration project went into effect on December 15, 2014. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) subsequently expanded the demonstration project to five additional states and the District of Columbia on January 1, 2016, with a further expansion to all remaining states expected to occur at some time during 2017. However, national expansion is contingent upon CMS determining that the demonstration project has been effective in reducing Medicare expenditures without jeopardizing patient’s access to necessary medical care.

Every year, CMS also releases data on aggregate Medicare payments for the preceding year. This file is referred to as the Physician/Supplier Procedure Master File (PSP Master File). This past month, CMS released the 2016 PSP Master File, which contains information on all Part B and DME claims processed through the Medicare Common Working File with 2015 dates of service. I will be discussing this report in greater detail in next month’s blog.

This month, I want to focus on the impact the prior authorization project has had on total dialysis payments in the original three target states. Reproduced below is a chart tracking the total payments for dialysis transports in these three states between 2010 and 2015. Interestingly, these three states demonstrated very different trajectories prior to last year.

New Jersey saw a sustained, dramatic increase in payments over that time, increasing from approximately $56 million in 2010 to more than $106 million in 2014, an increase of nearly 90% over a 5-year period. (Note: spending figures for 2014 and 2015 take into account the 10% reduction in payments for dialysis transports).

South Carolina saw a much more moderate increase over that same period, increasing from $51 million in 2010 to slightly more than $60 million in 2014, an increase of roughly 18%. By contrast, payments in Pennsylvania peaked in 2011 at $69.6 million, and have been in steady decline ever since.

While these states’ trajectories were different prior to 2015, the results for 2015 are fairly similar. Each state saw a significant reduction in the total expenditures for dialysis once the prior authorization project went into effect.

The fact that these states saw a reduction in overall spending on dialysis is not surprising (to me at least, I recognize this came as a shock to many providers in these states). These states were not selected at random; CMS selected these states based on its belief that they were particularly suspect to overutilization.

What I do find surprising is the relative sizes of the declines in these states. New Jersey and Pennsylvania both experienced a more than 80% reduction in payments for dialysis. By contrast, the reduction in South Carolina (approximately 25%) was far less dramatic.

Does this suggest that abuse was more prevalent in New Jersey and Pennsylvania? Perhaps. An ongoing federal Medicare Strike Force in the Philadelphia metropolitan area has resulted in a number of convictions against fraudulent providers in these states. However, the impact has not been limited to these alleged “bad actors.” Even those companies employing accepted best practices have seen significant reductions in their approved patient populations.

To me, the common factor seems to be the applicable Medicare contractor. New Jersey and Pennsylvania are both administered by Novitas Solutions, Inc., whereas South Carolina is administered by Palmetto GBA. While Medicare’s coverage standards are intended to be national, it seems reasonable to conclude that Novitas has taken a far harder stance on dialysis than Palmetto. Anecdotal evidence from the states that came went live with prior authorization in January 2016 seems to confirm this thesis, although we will not be able to know for sure until the 2016 Medicare payment data is released this time next year.

Those of you that have attended this year’s AAA Regional Conferences, or who participated on AAA webinars this past year have heard me say that the Medicare Administrative Contractor’s stance on dialysis is the most important factor in determining whether an ambulance provider needs to rethink its current approach to its repetitive patient population. To the extent the MAC takes a fairly lenient stance, providers will likely find that only a few “tweaks” are needed to align their existing practices with a prior authorization regime. AAA members in these states may even find it worthwhile to even considering expanding the spectrum of patients they accept for transport. If, however, the MAC takes a fairly restrictive stances (as Novitas has clearly done), providers will likely find it necessary to dramatically trim these populations, or to arrange for alternative sources of payment for these transports.

I also encourage AAA members to attend our panel discussion at this year’s Annual Conference & Tradeshow in exciting Las Vegas (November 7 – 9^th). I have the privilege of serving as the moderator for a panel consisting of several providers that are currently operating under the prior authorization project. These providers will talk about their experiences, and will be able to offer helpful tips on how to best navigate this major shift in Medicare’s coverage rules. (See full Conference Agenda)

Have an issue you would like to see discussed in a future Talking Medicare blog? Please write to me at bwerfel@aol.com.

CMS Issues Transmittal on Changes to Ambulance Staffing Requirements

Written by Brian Werfel on September 27, 2016. Posted in Member Advisories, Member-Only, News.

CMS Issues Transmittal on Changes to Ambulance Staffing Requirements; Clarifications to Service Level Definitions for Ground Ambulance Services

On September 12, 2016, the Centers for Medicare & Medicaid Services (CMS) issued Transmittal 226. This Transmittal incorporates the recent changes to the vehicle staffing requirements into the Medicare Online Manual System. The Transmittal is also intended to provide clarification on the definitions for certain levels of ground ambulance service. The changes made by this Transmittal go into effect on December 12, 2016.

Vehicle Staffing Requirements

In the CY 2016 Physician Fee Schedule final rule (November 16, 2015), CMS revised its regulations related to the staffing of ground ambulance services. Previously, the Medicare regulations at 42 C.F.R. 410.41 required that all ground ambulances be staffed by a minimum of two crewmembers, at least one of whom must be certified as an EMT-Basic and who must be legally authorized to operate all of the lifesaving and life-sustaining equipment on board the vehicle. For ALS vehicles, there was a further requirement that at least one of the two crewmembers must be certified as a paramedic or EMT and qualified to perform one or more ALS services.

In the 2016 final rule, CMS revised the regulation to further require that the ambulance supplier meet all applicable state and local laws related to the staffing of vehicles. CMS indicated that these changes are intended to address jurisdictions that impose more stringent requirements on ambulance providers (e.g., a requirement that both staff members be certified as EMTs). CMS further indicated that these changes were prompted, in part, by a report from the HHS Office of the Inspector General, which expressed concern over the fact that the current regulations do not set forth licensure or certification requirements for the second crew member.

In this Transmittal, CMS is updating Section 10.1.2 of Chapter 10 of the Medicare Benefit Policy Manual to reflect the changes to the underlying regulations. Specifically, the Manual Section now makes clear that BLS and ALS vehicles must meet the staffing requirements under state and local laws. For BLS vehicles, the new definition also clarifies that at least one of the crewmembers must be certified at a minimum at the EMT-Basic level by the state or local authority where the services are being furnished. For ALS vehicles, the new definition clarifies that at least one of the crewmembers must be certified as an EMT-Intermediate or EMT-Paramedic by the state or local authority where the services are being furnished.

Note: A number of AAA members have expressed concern with the reference to “EMT-Intermediate” in the paragraph defining the staffing requirements for ALS vehicles. These members note that their state may be moving away from the “EMT-I” designation, in favor of the “Advanced EMT,” “EMT-Enhanced,” or other similar designation. These members expressed concern that Medicare contractors may interpret this clarification literally, and therefore downgrade claims properly billed ALS based on the services provided by Advanced EMTs or other higher EMT certifications.

The AAA recognizes the concerns expressed by these members. It should be noted that the Manual changes being made by this Transmittal accurately reflect the current wording of the regulation. It should also be noted that these changes do not impact the definition of “Advanced Life Support (ALS) personnel” set forth in 42 C.F.R. §414.605. While that definition also makes reference to the EMT-Intermediate licensure, the definition makes clear that any individual trained to a higher level than the EMT-Basic licensure qualifies as an ALS crewmember.

Ground Ambulance Service Definitions

The Transmittal also makes a number of clarifications to the ground ambulance services definitions set forth in Section 30.1.1 of Chapter 10 of the Medicare Benefit Policy Manual. These changes are summarized below:

Basic Life Support (BLS) – CMS is revising the definition to align with the new minimum staffing requirements discussed above.
Basic Life Support (BLS) – Emergency – The current definition of the BLS emergency level of service reads as follows:

“When medically necessary, the provision of BLS services, as specified above, in the context of an emergency response. An emergency response is one that, at the time the ambulance provider or supplier is called, it responds immediately. An immediate response is one in which the ambulance provider/supplier begins as quickly as possible to take the steps necessary to respond to the call.”

CMS is removing the second and third sentences of the current definition. In their place, CMS is inserting a parenthetical referencing the definition of an “emergency response” later in this same section of the manual.

Advanced Life Support, Level 1 (ALS1) – CMS is revising the definition to align with the new minimum staffing requirements discussed above. It is also clarifying that the ALS assessment must be provided by ALS personnel.
Advanced Life Support Assessment – The existing definition in the CMS Manual ends with the following sentence: “An ALS assessment does not necessarily result in a determination that the patient requires an ALS level of service.” In recent years, a number of Medicare contractors have interpreted this sentence to mean that the provision of a valid ALS assessment would not necessarily entitle the ambulance supplier to bill for the ALS emergency base rate, unless the documentation clearly established the provision of an ALS intervention.

CMS is adding a sentence to the end of the definition that clarifies that an ambulance supplier would be permitted to bill for the ALS emergency base, even if the ALS assessment results in a determination that the patient would not require one or more ALS interventions. CMS further clarified that the ability to bill for an ALS emergency base rate is predicated on the ambulance transport otherwise meeting the medical necessity requirement.

Advanced Life Support, Level 1 (ALS1) – Emergency – Similar to the change to the definition of BLS emergency discussed above, CMS is removing the second and third sentences of the current definition, and replacing them with a parenthetical reference to the definition of an “emergency response.”
Advanced Life Support, Level 2 (ALS2) – CMS is rewording the definition, without making any substantive change. ALS-2 continues to be billable in situations involving a medically necessary transport of a patient, where the crew either: (1) provides one of the seven listed ALS-2 procedures (manual defibrillation/cardioversion, endotracheal intubation, etc.) or (2) the administration of three or more medications by IV push/bolus or continuous infusion. The changes largely relate to how you count, for purposes of determining whether you can bill ALS-2, multiple administrations of the same IV medication. Conceptually, CMS is indicating that a single “dose” requires a suitable quantity and amount of time between administrations, in accordance with standard medical protocols. CMS is further indicating that a deliberate attempt to administer a standard dose in increments would not qualify as ALS-2. In sum, to the extent a medication is administered in standard doses in accordance with pre-existing protocols, each separate administration would count separately towards the ALS-2 standard of three or more administrations; however, any attempt to cut the standard dose into multiple administrations would count as only a single administration for purposes of determining whether the ALS-2 standard was met.
Specialty Care Transport (SCT) – CMS is rewording the language in the “Application” section of this definition, without making any substantive change.
Paramedic Intercept (PI) – CMS is revising the definition to reflect the change in how a “rural area” is identified. The old definition included any area: (1) designed as rural by a state law or regulation or (2) any area outside a Metropolitan Statistical Area (MSA) or in New England, outside a New England County Metropolitan Area. Under the new definition, an area is considered rural to the extent it is designated as such by state law or regulation or to the extent it is located in a rural census tract of an MSA using the most recent version of the Goldsmith Modification.
Services in a Rural Area – CMS is eliminating the reference to New England County Metropolitan Areas, as these areas are no longer relevant to a determination of rural. Under the new definition, an area will be considered rural to the extent: (1) it is located outside a Metropolitan Statistical Area (MSA) or (2) is identified as rural using the most recent version of the Goldsmith Modification, even though the area falls within an MSA.
Emergency Response – CMS is adding language clarifying that the nature of an ambulance provider’s response (i.e., emergent or non-emergent) does not independently establish medical necessity for the ambulance transport.
Interfacility Transport – CMS is adding a new definition for the purposes of billing SCT, which establishes that the interfacility transportation requirement is met whenever the origin and destination are both one of the following: (1) a hospital or skilled nursing facility that participates in the Medicare program or (2) a hospital-based facility that meets Medicare’s requirements for provider-based status.

When a Capitated Payment Arrangement Makes Sense

Written by Brian Werfel on August 29, 2016. Posted in Medicare, Member-Only, Reimbursement, Talking Medicare.

Question

We operate a mid-sized ambulance services in the Midwest. Recently, one of our local hospitals entered into an agreement to become part of a large health system. We are increasingly being asked to transport patients from this local hospital to an affiliated facility in the neighboring city. These patients are being transported for consultations, medical tests, etc., and then being transported back to the local hospital. These transports become the financial responsibility of the health system, which has resulted in our monthly invoices to the hospital increasing nearly ten-fold over the past year. Recently, the hospital approached us with a proposal to move to a capitated payment arrangement. Are these arrangements permissible? And, if so, are there any “dos” and “don’ts” we should know about?

Answer

As the AAA’s Medicare Consultant, I am probably asked this question, or some variation of this question, several times a month. To me, these questions are a natural reaction by our industry to one of the larger tectonic shifts in health care over the past decade, namely the increasing footprint of national and regional hospital health care systems. According to the American Hospital Association, approximately 65% of hospitals nationwide were part of a larger health system in 2016. This is up from 51% in 1995. As these health systems have grown larger, ambulance providers are increasingly looking for alternatives to the traditional fee-for-service payment models.

Broadly defined, a “capitated payment” arrangement is any arrangement where the facility pays the ambulance provider a set amount to cover all or a portion of the transportation costs it incurs during a period of time, without regard to the specific volume of transports. A simple example would be a flat monthly fee for all transportation costs.

There is nothing in federal law that prohibits the use of capitated payment arrangements. The HHS Office of the Inspector General has signed off on capitated payment arrangements in numerous contexts, including the compensation paid to insurers under the Medicare Advantage Program (Medicare Part C). In fact, it could be argued that the Medicare Ambulance Fee Schedule includes some principles of capitation, e.g., it does not reimburse ambulance providers separately for certain ancillary services.

Therefore, capitated payment arrangements are something ambulance services can consider offering to their facility counterparties. However, you should aware that the normal prohibitions under the federal anti-kickback statute continue to apply. To the extent the OIG has a concern related to capitated payment arrangements, that concern would be that the capitated payment amount is used as a means of disguising an otherwise impermissible discount being offered to a potential referral source. In other words, the capitated payment must be structured in a way that avoids any improper remuneration to a potential referral source.

The arrangements do offer several advantages to both the ambulance provider and the facility. For the ambulance provider, the primary advantage is a stable, steady source of cash. However, there are other advantages, including the administrative benefits associated with submitting a simple monthly invoice, rather than a detailed invoice listing numerous transports. Many providers also find that a flat rate reduces tensions with the facilities, as they don’t have to engage in negotiations over why a particular transport is being billed to the facility. For the facility, the primary benefit is that it fixes their costs for transport during each measuring period. An ancillary benefit is that it offers a measure of insurance against unforeseen events (e.g., an MRI machine at hospital breaks down for an extended period of time, and as a result, the hospital is forced to incur the costs of sending patients to an affiliated facility for testing). Generally speaking, as the total volume of services rises, the benefits to moving away from a fee-for-service model also increases.

As noted above, capitated payment arrangements come in many forms, ranging from relatively simple to mind-numbingly complex. However, all arrangements share certain common features. The first is an estimate of the volume of services the facility would be purchasing from the ambulance service during any particular measuring period (hereinafter referred to as the “volume benchmark”). To the extent you are currently the facility’s vendor, this could be calculated based on past volume. This is then multiplied by the “price” of each service to arrive at the amount of the capitated payment. For example, if past history indicates that a facility pays for an average of 100 ambulance transports per month, and the parties agree to a rate of $200 per trip, then the monthly payment would be $20,000 per month. This monthly rate would stay the same regardless of whether the facility ends up responsible for 20 trips in the next month, or 200.

This brings us to one of the key features to a properly structured capitation agreement, i.e., both parties should have some degree of “risk” under the arrangement. In the example listed above, the facility runs the risk that the actual volume of services it would have otherwise been responsible for is less than the estimated 100. If so, it would have essentially paid more than $200 per transport. The ambulance provider bears the opposite risk, i.e., if the number of transports the facility would have paid for ends up being more than 100, it ends up receiving less than $200 per transport. As long as both parties bear risk, the arrangement is permissible.

If, however, one party bears no actual risk under the arrangement (e.g., because the monthly payment is based on an unreasonably low volume benchmark), the OIG could see the arrangement as a disguised way of rewarding the facility for other referrals. Thus, the key to any capitated arrangement is a good-faith estimate of the number of services involved. Please note that there is nothing wrong within incorporating language to adjust the monthly payment if the actual volume over any period of time is radically different than the volume benchmark. For example, I frequently include language that calls for the monthly payment to be recalculated if the actual volume is 20% more or less than the volume benchmark over any calendar quarter. These adjustments can be made prospectively (i.e., they only apply to future monthly payments) or they can be paid retroactively. To the extent you want to include an adjustment mechanism, the guiding principle is that any adjustment should be for the purpose of better estimating the volume benchmark.

Capitated payment arrangements may not be appropriate for all ambulance providers. However, as fee-for-service becomes an increasingly smaller portion of your facility partners’ operations, it may make sense to consider these arrangements.

Have an issue you would like to see discussed in a future Talking Medicare blog? Please write to me at bwerfel@aol.com.

AAA 2016 State Balanced Billing & Direct Pay Survey Results Released

Written by Brian Werfel on August 11, 2016. Posted in Finance, Medicare, Member-Only, Reimbursement.

Just Released!

View the AAA 2016 State Balanced Billing Survey Results

View the AAA 2016 State Direct Pay Survey Results

The AAA is providing its members with the results of two important surveys conducted of state laws impacting ambulance services. The first chart entitled “2016 State Balance Billing Survey” shows whether a state restricts balancing billing of patients. The second entitled “2016 State Direct Pay Survey” lists whether a state has a law requiring an insurer to send payment directly to a non-contracted ambulance service or a law allowing the insurer do send payment to the patient. We thank AAA Medicare Consultant Brian Werfel for compiling the data and members of the AAA Medicare Regulatory Committee and the AAA membership to which Brian reached out for their assistance.

A Preliminary Estimate of 2017 Medicare Rates

Written by Brian Werfel on July 27, 2016. Posted in Finance, Medicare, Member-Only, Talking Medicare.

On July 15, 2016, the Bureau of Labor Statistics released its monthly report on inflation. This release includes the change in the Consumer Price Index for all urban consumers (CPI-U) for June 2016. As a result, it is now possible to make a preliminary estimate of the Ambulance Inflation Factor (AIF) for calendar year 2017. The AIF is main factor that determines the increase (or decrease) in Medicare’s payment for ambulance services.

Calculating the 2017 AIF

The AIF is calculated by measuring the increase in the consumer price index for all urban consumers (CPI-U) for the 12-month period ending with June of the previous year. For 2017, this means the 12-month period ending on June 30, 2016. Starting in calendar year 2011, the change in the CPI-U is reduced by a so-called “productivity adjustment”, which is equal to the 10-year moving average of changes in the economy-wide private nonfarm business multi-factor productivity index (MFP). The resulting AIF is then applied to the conversion factor used to calculate Medicare payments under the Ambulance Fee Schedule.

The formula used to calculate the change in the CPI-U is limited to positive increases. Therefore, even if the change in the CPI-U was negative over a 12-month period (a rarity in the post-war era), the change in the CPI-U cannot be negative. However, when the MFP reduction is applied, the statute does permit a negative AIF for any calendar year. That is precisely what occurred in 2016, where the change in the CPI-U was 0.1% and the MFP was 0.5%. As a result, the industry saw an overall reduction in its Medicare rates of 0.4%.

Fortunately, it seems unlikely that we will see a negative AIF in 2017. For the 12-month period ending in June 2016, the Bureau of Labor Statistics (BLS) currently calculates the change in the CPI-U to be exactly 1.00%.

CMS has yet to release its estimate for the MFP in calendar year 2017. However, assuming CMS’ projections for the MFP are similar to last year’s projections, the 2017 MFP is likely to be in the 0.5% range.

Therefore, at this time, my best guess is that the 2017 Ambulance Inflation Factor will be a positive 0.5%.

Please note that this estimate assumes the Bureau of Labor Statistics does not subsequently revise its inflation estimates. Please note further that this projection is based on the MFP being similar to last year. To the extent either of these numbers changes in the coming months (up or down), my estimate of the 2017 AIF would need to be adjusted accordingly. Ultimately, the 2017 AIF will be finalized by CMS by Transmittal, which typically occurs in the early part of the 4^th quarter.

Impact on the Medicare Ambulance Fee Schedule

Assuming all other factors remained the same, calculating your 2017 Medicare rates would be a relatively simple exercise, i.e., you would simply add 0.5% to your 2016 rates. However, as part of its 2017 Physician Fee Schedule Proposed Rule (issued on July 15, 2016), CMS proposed extensive changes to the GPCIs. These changes can be viewed by going to the Physician Fee Schedule page on the CMS website and clicking the link for the “CY 2017 PFS Proposed Rule GPCI Public Use Files” (located in the Downloads section). You would then need to open the file for “CY 2017 Proposed Addendum E.”

If the PE GPCI in your area is proposed to increase, you can expect your 2017 Medicare rates to increase by slightly more than 0.5%. If the PE GPCI in your area is proposed to decrease, you can expect your 2017 Medicare rates to increase by slightly less than 0.5%.

If you are looking for a more precise calculation of your rates, you will need to use the following formulas:

Ground Ambulance Services

Medicare Allowable = (UBR x .7 x GPCI) + (UBR x .3)

Air Ambulance Services

Medicare Allowable = (UBR x .5 x GPCI) + (UBR x .5)

In this formula, the “UBR” stands for the unadjusted base rate for each HCPCS code. These are calculated by multiplying the national conversation factor by the relative value unit assigned to each base rate. To save some time, estimates for the 2017 unadjusted base rates are reproduced below:

Base Rate (HCPCS Code)	2017 Unadjusted Base Rate
BLS non-Emergency (A0428)	$221.84
BLS emergency (A0429)	$354.95
ALS non-emergency (A0426)	$266.21
ALS emergency (A0427)	$421.51
ALS-2 (A0433)	$610.08
Specialty Care Transport (A0434)	$721.00
Paramedic Intercept (A0432)	$388.23
Fixed Wing (A0430)	$3,010.52
Rotary Wing (A0431)	$3,500.17

Plugging these UBRs into the above formulas will result in adjusted base rates for each level of ground and air ambulance service. The final step would be to apply the current adjustments for urban (2%), rural (3%) and super-rural (22.6% over the corresponding rural rate).

2017 Projected Rates for Mileage:

At this time, I am estimating the following rates for Medicare mileage:

Base Rate (HCPCS Code)	2017 Unadjusted Base Rate
Ground Mileage – Urban	$7.28
Ground Mileage – Rural Miles 1 – 17	$11.02
Ground Mileage – Rural Miles 18+	$7.35
Fixed Wing Mileage – Urban	$8.54
Fixed Wing Mileage – Rural	$12.81
Rotary Wing Mileage – Urban	$22.79
Rotary Wing Mileage – Rural	$34.19

Please keep in mind that a number of assumptions went into these projections. The Bureau of Labor Statistics can revise its inflation figures in the coming months. CMS may announce an MFP projection that differs from what we expect. CMS may also announce that it is electing not to finalize its proposed changes to the GPCI (highly unlikely). If any of these assumptions was to change, these projections would need to be revised. Therefore, I would suggest that you view these as rough estimates at best. The AAA will update members as more information becomes available in the coming months.

Have an issue you would like to see discussed in a future Talking Medicare blog? Please write to me at bwerfel@aol.com.

2016 Medicaid Crossover Study

Written by Brian Werfel on July 22, 2016. Posted in Medicaid, Reimbursement.

The AAA is pleased to announce the release of its Medicaid Crossover Survey 2016. A companion to its recently released 2016 Medicaid Rate Survey, the 2016 Medicaid Crossover Survey focuses on each state’s treatment of Medicare crossover amounts (i.e., copayment’s and deductibles).

The survey notes whether a state will pay the full crossover amount, will make a payment only to the extent Medicare’s payment was less than the amount Medicaid would have paid as a primary, or will not make a payment under any circumstances.

We hope members will find this tool useful in comparing their state’s Medicaid reimbursement to neighboring states, and hope it will assist in their efforts to ensure fair and equitable compensation for their services.

The AAA also wants to thank all members that participated in the survey. Without your help, these sort of projects would be impossible.

Supreme Court Clarifies Liability of Federal Contractors

Written by Brian Werfel on July 1, 2016. Posted in Judicial.

Supreme Court issues a decision clarifying under Implied False Certification Theory

On June 16, 2016, the Supreme Court issued a decision that clarifies the liability of federal contractors, including health care providers that participate in the Medicare or Medicaid programs, under the False Claims Act for implied frauds. Writing for a unanimous court, Justice Clarence Thomas held in Universal Services v. United States ex rel. Escobar that the so-called “implied false certification theory” can serve as the basis for False Claims Act liability in situations where a federal contractor has submitted claims for payment, and where the contractor makes specific representations regarding the services it has provided but fails to disclose the contractor’s non-compliance with one or more material requirements that make those representations otherwise misleading. The Court further held that liability under the False Claims Act does not turn on whether the noncompliance related to a requirement that had been expressly designated as a condition for payment.

The case involved Universal Health Services, Inc., and its subsidiary Arbour Counseling Services. Arbour operated a mental health facility in Lawrence, Massachusetts. For the period from 2004 through 2009, Arbour provided mental health counseling services to Yarushka Rivera, a Massachusetts Medicaid beneficiary. In May 2009, Rivera had an adverse reaction to a medication that a purported doctor at Arbour had prescribed after diagnosing her as suffering from bipolar disorder. In October 2009, Rivera had a seizure and died. At the time of her death, she was 17 years old.

Following Rivera’s death, a counselor employed by Arbour indicated to Rivera’s mother and stepfather that only a handful of Arbour employees were actually licensed mental health professionals. Further investigation revealed that only 1 of the 5 professionals that had treated Rivera was properly licensed. The practitioner that diagnosed Rivera as bipolar had identified herself as a Ph.D; however, it turns out that her degree was from an unaccredited Internet college, and that the State of Massachusetts had rejected her application to be licensed as a psychologist. The individual that prescribed the medication that ultimately led to Rivera’s death held herself out to be a psychiatrist, when in fact she was a nurse who lacked the authority to prescribe medications. 21 other Arbour employees were found to have lacked the proper licensures to provide counseling services.

In 2011, the mother and stepfather filed a qui tam alleging that Universal Health had violated the False Claims Act under an implied false certification theory of liability. Specifically, they alleged that Universal Health had made representations that its services were provided by specific types of professionals, but failed to disclose the numerous violations of the Massachusetts Medicaid Program’s regulations pertaining to staff qualifications and licensing.

The federal district court granted Universal Health’s motion to dismiss the complaint. While local precedent had previously embraced the implied false certification theory of liability, the district court held that liability could not be established because none of the regulations Arbour was alleged to have violated constituted a condition of payment. The First Circuit Court of Appeals reversed the lower court.

The Supreme Court agreed to hear the case to resolve the disagreement among the Circuit Courts over the validity of the implied false certification theory of liability. In his decision, Justice Thomas noted that the Seventh Circuit had expressly rejected the theory. Other Circuit Courts had accepted the theory, but limited its application to cases where the defendant failed to disclose violations of expressly designated conditions of payment. Finally, some Circuit Courts had held that the condition of payment need not be expressly designated as such to establish False Claims Act Liability.

The Court first held, in no uncertain terms, that the implied false certification theory can, under certain circumstances, provide a basis for liability under the False Claims Act. The Court emphasized that common-law fraud has long encompassed certain misrepresentations by omission. To establish False Claims Act liability, the Court determined that two conditions must be satisfied: (1) the claim must not merely request payment, but must also make specific representations about the goods or services provided and (2) the parties’ failure to disclose its noncompliance with material statutory, regulatory, or contractual requirements must render those representations misleading.

The Court then turned to Universal Health’s contention that, even if one accepts the implied certification theory, its application must be limited to misrepresentations about express conditions of payment. Justice Thomas rejected this interpretation, noting that nothing in the statute suggested that an express condition of payment was relevant to determining whether a claim was false or fraudulent. However, the Court failed to adopt the expansive ruling offered by the federal government, namely that any omission made in connection with a request for payment could trigger False Claims Act liability. Instead, the Court adopted a relatively narrow view of those omissions that could establish liability, focusing primarily on the concept of “materiality.” Essentially, the Court held that the omission would only trigger liability if its proper disclosure was outcome determinative. In other words, the omission would be considered material if its proper disclosure would have likely resulted in the claim being denied.

A number of commentators have suggested that the Court’s ruling expands the scope of potential False Claims Act liability. This is undoubtedly true for contractors (including health care providers) that operate within the Seventh Circuit’s jurisdiction (Illinois, Indiana, and Wisconsin), which previously rejected the implied false certification theory. However, the impact of the Court’s ruling on other parts of the country will be more nuanced. In some important respects, the creation of the new materiality requirement may limit the instances in which the government can establish False Claims Act Liability.

To see how this decision could be applied to the EMS industry, consider the following hypotheticals:

An ambulance provider submits a claim to Medicaid for a medically necessary transport; however, it is known at the time that the claim is submitted that the EMT that drove the ambulance had allowed his state EMT certification to lapse.
An ambulance provider submits a claim to Medicare for a medically necessary transport. The patient had previously been transported by the same ambulance provider, and the ambulance provider had obtained a valid lifetime signature authorization signed by the patient. The ambulance provider checked the appropriate box on the electronic claim for to indicate that they had a valid signature for the patient on file. However, during the interim period between the two transports, a legal guardian had been assigned to handle the patient’s affairs. The legal guardian took the unusual step of notifying the ambulance that she had been appointed the patient’s guardian, and expressly revoked the prior lifetime signature authorization. The guardian further indicated that she preferred to make future decisions regarding payment authorization on a case-by-case basis.

The first hypothetical is a close parallel to the facts of the actual case before the Court. Applying the Court’s reasoning, False Claims Act liability would hinge on whether the omission of the fact that the EMT’s certification had lapsed was material. In other words, if the court feels that the State Medicaid Program would have likely rejected the claim had the lapse in certification been properly disclosed, then liability under the False Claims Act liability might exist. If, however, the State was likely to have treated the lapse as a minor technical violation but not something worthy of denying the claim, then False Claims Act liability would not exist. Note: in the actual case, the State of Massachusetts investigated Arbour’s misconduct, and decided the appropriate action was a nominal fine, and not the recoupment of its Medicaid payments.

The second hypothetical is a bit more complex. There is no question that the failure to disclose that the lifetime signature had been revoked was an omission. It could also be argued that its omission was misleading, i.e., by not disclosing that the lifetime signature had been revoked, the provider was suggesting that it had the patient’s affirmative consent to the submission of the claim, when in fact it did not. The question is whether the omission was material to Medicare’s decision to pay the claim. On the one hand, the Medicare regulations do make compliance with the patient signature requirement an express condition for payment. One the other hand, Medicare permits that requirement to be satisfied in multiple ways, several of which do not require the patient’s affirmative consent. In the hypothetical, the patient had a legal guardian, which strongly suggests that he or she would have been incapable of signing at the time of transport anyway. Wat if the ambulance provider subsequently obtained a valid form of secondary verification? What if the ambulance provider subsequently obtained verbal consent from the legal guardian to the submission of the claim? Would Medicare be likely to deny the claim on the basis of not complying with the strict documentation standards of the signature requirement, even though the patient (through his or her guardian) has no objection to the submission of the claim?

Only time will tell how future courts interpret this material standard. Stay tuned.

AAA 2016 State Medicaid Ambulance Rate Survey Results Released

Written by Brian Werfel on June 30, 2016. Posted in Medicaid, Reimbursement, Talking Medicare.

Just Released!

View the AAA 2016 State Medicaid Rate Survey Results

Normally this blog focuses on an area of Medicare reimbursement or compliance. However, this month I want to talk about Medicare’s companion program, Medicaid.

When you talk to ambulance providers around the country about their State’s Medicaid Program, a universal truth emerges: no one believes their Medicaid Program fairly reimburses them for their services. This statement is not particularly controversial. The Government Accountability Office has on several occasions looked at the relationship between our industry’s costs and Medicare’s payment, and has consistently determined that Medicare fails to adequately reimburse us for our costs. Given that Medicaid payments are usually some fraction of what Medicare pays, there is really no debate that our industry loses money transporting Medicaid patients.

What I find more interesting is the sheer number of people that are convinced – – and I mean absolutely convinced – – that their state has the lowest Medicaid rates in the country. Call it a reverse Lake Wobegon effect. Of course, not everyone can be right. Only one state can have the lowest ambulance rates (answer below). Conversely, only one state can hold the honor of having the highest rates. But how to settle these questions?

Well, the AAA has the answer. On behalf of the AAA, I am pleased to announce the release of the American Ambulance Association’s 2016 State Medicaid Rate Survey. This survey sets forth the fee-for-service Medicaid rates for all 50 states. For each state, the Survey lists the rate paid for each of the following procedure codes:

A0428 – BLS Non-Emergency
A0429 – BLS Emergency
A0426 – ALS Non-Emergency
A0427 – ALS Emergency
A0433 – ALS-2
A0434 – SCT
A0225 – Neonate Transport
A0998 – Treatment, No Transport
A0425 – Mileage
A0422 – Oxygen
A0382/A0398 – BLS/ALS Routine Disposable Supplies
A0420 – Wait Time
A0424 – Extra Attendant

While I can promise that we have taken steps to verify the information on this Survey, neither the AAA nor myself can guarantee its accuracy. The rates set out in this survey are based on publicly available information provided by the various State Medicaid agencies, and may not reflect changes to a state’s reimbursement policy that have not been made publicly available. They will also reflect any emergency budgetary measures or other temporary reductions imposed by a state. That said, our goal is to make this as accurate as possible. Therefore, if you believe the rates for your state are inaccurate, I would ask you to please email me at bwerfel@aol.com, and to provide me with updated information.

I can feel some of you thinking at this point: “This is all fine and good, but how does this actually help me?” Fair question. At a minimum, it will probably make some of you feel better that your state is not actually the lowest. Others may be fairly surprised to find that their state, which they believed to be at or near the bottom, is actually closer to the middle of the road. Many of your states are expanding their managed Medicaid programs, and you find yourself trying to determine whether it makes sense to contract with the MCO (or its transportation broker). Many of these transportation brokers service multiple states, and may be offering rates based on their rates offered by the State Medicaid agency in the state in which they are headquartered (I know it will come as a shock that many of the new MCOs seem unaware that coverage rules differ in each state). We are also aware of instances in which a state association has used past rate surveys as part of a comprehensive strategy to lobby their state legislature for a rate increase, e.g., by demonstrating that the current rates paid by the state are far lower than the rates paid in neighboring states.

Regardless of whether (or how) you intend to use this Survey, I encourage all AAA members to check it out.

Answer: New Jersey has the lowest payment for both emergency and non-emergency transport, at a listed rate of $58.00, plus $1.50 per mile (for the first 15 miles, $2.00 for each mile thereafter). For sake of comparison, a taxi from Newark Airport to midtown Manhattan (a distance of 17 miles) will typically run around $70.00 (plus tip).

Have an issue you would like to see discussed in a future Talking Medicare blog? Submit a question today!

Understanding the GAO’s Recent Report on Medicare Prepayment and Postpayment Reviews

Written by Brian Werfel on June 1, 2016. Posted in Reimbursement, Talking Medicare.

On May 13, 2016, the Government Accountability Office (GAO) publicly released a report on the comparative effectiveness of the various audit programs used by the Centers for Medicare and Medicaid Services (CMS) and its various contractors. This report was requested by Senator Orrin Hatch, the Chairman of the Senate Finance Committee, who had asked the GAO to examine: (1) the differences between prepayment and postpayment reviews and the extent to which CMS contractors utilize each, (2) the extent to which contractors focus their reviews on particular types of claims, and (3) CMS’ cost per review, and the amount of improper payments identified by contractors for each dollar they are paid.

To briefly summarize the GAO’s findings:

The Recovery Audit Contractors (RACs) generally limited themselves to conducting postpayment reviews. The GAO attributed this to the fact that the RACs were paid contingency fees based on recovered overpayments, i.e., because prepayment reviews result in a claim never being paid in the first place, there is no “overpayment” to be recovered, and, therefore, no contingency fees to be paid. The GAO did note that from 2012 to 2014, CMS conducted a demonstration project in which the RACs conducted prepayment reviews (and were paid contingency fees based on the dollar amount of denied claims), which CMS considered to be a success.
The Medicare Administrative Contractors (MACs) generally limited themselves to conducting prepayment reviews.
Each contractor also tended to specialize in certain types of claims. For example, the GAO noted that during 2013 and 2014, the RACs tended to focus primarily on inpatient hospital claims. The GAO found that the MACs tended to focus on physician and durable medical equipment claims. Note: the GAO included claims for ambulance services within the larger category of “physician” claims.
The RACs identified a total of $4.5 billion in improper payments during 2013 and 2014. For their work, the RACs were paid contingency fees totaling $312 million, a return of approximately $14 in improper payments for every dollar paid to the RACs.
CMS lacked reliable data on the costs and effectiveness of its MACs program integrity reviews.

The GAO made two specific recommendations. First, it recommended that CMS seek legislation that would permit its RACs to conduct prepayment claims reviews. Second, it recommended that CMS develop written guidance on how its MACs should calculate the savings attributable to prepayment claims reviews. CMS disagreed with the first recommendation, believing it unnecessary in light of other programs intended to move CMS away from “pay and chase”, including prior authorization and enhanced provider enrollment screening. CMS agreed with the second recommendation.

Focus on the RACs

For the years 2013 – 2014, the GAO found that the RACs focused primarily on hospital inpatient claims. For example, the GAO found that 78% of the FY 2013 claims reviewed by the RACs were hospital inpatient claims. While this number declined to 47% in FY 2014, that decline was largely attributable to CMS, under its own authority and subsequent legislation, prohibiting the RACs from reviewing certain inpatient stays during the first part of FY 2014. If you look only at postpayment reviews, the numbers were even higher, 87% in FY 2013 and 64% in FY 2014.

So why were the RACs focused on hospital inpatient claims, largely to the exclusion of other types of claims? The GAO believes the answer lies in how the RACs are compensated for their work. Recall that the RACs are paid contingency fees (of between 9% – 17.5%) based on the amount of the recovered overpayments. Given this fee structure, the GAO believed it was logical for the RACs to focus on claims with higher average dollar amounts per claim. The following chart shows the average amount of the improper payment identified by the RACs on a per-claim basis:

As you can see, the average overpayment for an inpatient hospital claim was more than $3,000 in FY 2013, compared with slightly more than $300 for a physician (or ambulance) claim. Assuming a 10% contingency fee, this means the RAC could expect to receive $300 for each inpatient hospital claim it reviewed, compared with $30 for a physician claim. Given these financial incentives, the RACs decision to focus on inpatient hospital claims makes sense.

Focus on the MACs

In contrast to the RACs, the Medicare Administrative Contractors focused their program integrity activities almost exclusively on prepayment reviews. The following chart shows the breakdown of MAC reviews by provider type:

As you can see, the MAC largely focused on physician and DME claims, with physician claims (including ambulance claims) accounting for 49% of MAC reviews in FY 2013 and 55% of MAC reviews in FY 2014.

The efficacy of these reviews is unclear. This is largely due to the failure by CMS to collect consistent data on the savings from prepayment claims denials. At least 3 MACs failed to provide data on the specific funds they spent on prepayment and postpayment reviews. Instead, these MACs reported their costs as part of their broader claims processing activities. MAC also used different methods for calculating the savings from prepayment reviews. For example, 2 MACs used the billed amounts by providers to calculate total savings from denied claims, despite the Medicare allowables being significantly lower than the amounts normally billed by providers. 9 MACs used the total Medicare allowable, without differentiating between Medicare’s payment and the payments made by secondary insurers and/or patients. The remaining 5 MACs compared denied claims to similar claims that were paid to estimate what Medicare saved on claims denied as part of prepayment reviews.

Impact on Ambulance Providers and Suppliers

The key finding in this report is the GAO’s belief that prepayment reviews are generally more cost-effective in preventing improper Medicare payments. The GAO believes this is because prepayment reviews “limit the need to recover overpayments through the “pay and chase” process, which requires administrative resources and is not always successful.”

While the GAO and CMS are in agreement that Medicare should move away from postpayment reviews, they appear to disagree on how, exactly, to implement that transition. The GAO’s report makes clear its belief that CMS should devote greater resources to prepayment reviews, with the GAO specifically recommending that CMS seek legislative authority to empower its RACs to take a greater role in conducting prepayment reviews. By contrast, CMS appears to favor prior authorization programs.

Only time will tell which of these views gains prominence. In the meantime, ambulance providers and suppliers should expect to see the RACs take an increasing interest in our industry.

Have an issue you would like to see discussed in a future Talking Medicare blog? Submit your question!

Indian Health Service Issues Final Rule on Payments to Non-Contracted Providers

Written by Brian Werfel on May 18, 2016. Posted in Government Affairs, Medicare, Member Advisories, Talking Medicare.

On March 21, 2016, the Indian Health Service (IHS), an agency with the Department of Health and Human Services, issued a final rule with comment period titled “Payment for Physician and Other Health Care Professional Services Purchased by Indian Health Programs and Medicare Charges Associated with Non-Hospital-Based Care.” This final rule will change the way the Indian Health Service pays for Purchased/Referred Care (PRC), formerly known as Contract Health Services (CHS). The provisions of this final rule will become effective on May 20, 2016.

Under current regulations, payment for PRC services is based on rates established by arms-length negotiations between the physician or other health care provider (including ambulance providers and suppliers) and the IHS, Tribe, Tribal Organization or urban Indian organizations (collectively referred to hereinafter as I/T/U programs). In the absence of an agreement, the health care provider is generally paid its full billed charges.

Provisions of Final Rule

The final rule amends the regulations at 42 C.F.R. 136.1 e. seq. to provide that payment for PRC services will now be based on Medicare payment methodologies. Specifically, payments would generally be set at the lowest of: (1) the amount provided for such service under the applicable Medicare fee schedule or Medicare waiver, (2) the amount negotiated with a specific provider or its agent, or the amount negotiated by a repricing agent, if applicable, or (3) the rate for such service paid by the health care provider’s or supplier’s “Most Favored Customer” (MFC). For these purposes, IHS has indicated that the MFC rate will be evidenced by commercial price lists or paid invoices and other related pricing and discount data.

While the previous paragraph sets forth the general rate-setting regime, a number of important exceptions will apply. First, any negotiated rate between the parties must be equal to or better than the provider’s or supplier’s MFC rate. The AAA is interpreting this requirement to require the provider or supplier to offer better (i.e. lower pricing) to the I/T/U program than it offers to any nongovernmental entities, including insurance plans. However, IHS indicated that this restriction would not apply to the extent the I/T/U program determines that the negotiated rate is otherwise fair and reasonable, and is otherwise in the best interests of the I/T/U (as determined by the I/T/U). Second, in the event that no agreement exists, and the Medicare Fee Schedule amount is greater than the provider’s or supplier’s MFC rate (i.e. the provider or supplier has voluntarily elected to accept a rate lower than the corresponding Medicare allowable from at least one nongovernmental entity), then the rate may not exceed the MFC rate, but may be lower than the MFC rate.

The final rule can be viewed in its entirety here.

CMS Releases Medicare Provider Utilization and Payment Data for CY 2014 for Ambulance Suppliers, Physicians and Other Part B Organizations

Written by Brian Werfel on May 17, 2016. Posted in Government Affairs, Medicare, Member Advisories, Reimbursement, Talking Medicare.

On May 5, 2016, CMS publicly released the “Medicare Provider Utilization and Payment Data: Physician and Other Supplier Public Use File,” which provides information on the services and procedures provided to Medicare beneficiaries by ambulance suppliers, physicians and other healthcare provider groups. The data file is based on calendar year 2014 data. This release follows on last year’s release of payment data for calendar year 2012.

The database lists all individual and organizations providers by National Provider Identifier (NPI), and provides information on utilization, total payments and submitted charges. It can also be searched by Healthcare Common Procedure Coding System (HCPCS) code and place of service.

The Public Use File can be obtained here. Please note that you will need to download the desired file and then import it into an appropriate database or statistical software program. CMS is indicating that Microsoft Excel is not sufficient for these purposes, and that importing it into Excel may result in an incomplete loading of data.

A number of news organizations have already created searchable databases that will allow you to search the CY 2012-2013 data by physician/organizational name, provider specialty, city, state, etc. It is expected that these news organizations will be updating their websites to incorporate the CY 2014 data in the coming weeks. The searchable database created by the Wall Street Journal can be accessed here.

HHS Office of Civil Rights Announces Phase 2 HIPAA Audit Review Program

Written by Brian Werfel on April 25, 2016. Posted in Medicaid, Medicare, Regulatory, Reimbursement, Talking Medicare.

On March 21, 2016, the Office for Civil Rights of the Department of Health and Human Services announced Phase 2 of its HIPAA Audit Program. The Health Information Technology for Economic and Clinical Health Act (HITECH) required HHS to perform periodic audits of covered entities and business associates to assess their compliance with the HIPAA Privacy, Security and Breach Notification Rules. These rules are enforced by the HHS Office for Civil Rights (OCR).

Background on Phase 1

In 2011, OCR implemented a pilot audit program to assess the controls and processes covered entities have adopted to meet their HIPAA obligations. The pilot audit program was conducted in three phases. OCR first developed a set of audit protocols that it would use to evaluate covered entities’ compliance. This protocol was then tested using a limited number of audits. The final step involved using the revised audit protocols on a larger number of covered entities. Ultimately, 115 covered entities were selected for review, and all audits were concluded by December 31, 2012.

Phase 2

Phase 2 of the HIPAA Audit Program will focus on the policies and procedures adopted and employed by entities to meet the requirements of the Privacy, Security, and Breach Notification Rules. OCR has indicated that these audits will be conducted primary through desk audits (i.e., document submissions), although by a limited number of on-site audits will also be conducted.

Unlike Phase 1, which focused exclusively on covered entities, OCR is indicating that Phase 2 will involve audits of both covered entities and their business associates.

As with the initial pilot audit program, Phase 2 will consist of several stages. The first stage involves verification of a covered entity’s or business associate’s address and contact information. A sample address verification letter can be viewed by clicking here. OCR has indicated that emails will be sent to entities requesting accurate contact information for the entity. OCR will then transmit a “pre-audit questionnaire” to the entity. These questionnaires will be used to gather data about the size, type, and operations of potential auditees. Based on this data, OCR will create potential audit subject pools.

Note: OCR has indicated that if an entity fails to respond to OCR’s request to validate its contact information and/or fails to return the pre-audit questionnaire, OCR will use publicly available information about the entity to create its audit subject pool. As a result, an entity that fails to respond may still be selected for audit and/or compliance review. OCR is specifically reminding entities to check their email “junk” or “spam” folders for any communications from OCR.

Once OCR has developed its audit subject pools, it will randomly select auditees from these pools. Auditees will then be notified by OCR of their participation. OCR has indicated that the first set of audits will focus on covered entities, with a subsequent round of audits focused on business associates. These audits will focus on compliance with specific requirements of the Privacy, Security, or Breach Notification Rules. Auditees will be notified of the scope of their audit in a document request letter. Both of these rounds will be desk audits. OCR indicated that all desk audits will be completed by the end of December 2016.

A third round of on-site audits will take place after the completion of the desk audits, and will examine a broader scope of requirements under HIPAA. OCR further indicated that desk auditees may also be subject to on-site audits.

If an entity is selected for audit, OCR will notify them by email. The email will introduce the OCR audit team, explain the audit process, and discuss OCR’s expectations in greater detail. The email notification letter will also include initial requests for documentation. OCR has indicated that it will expect entities to respond to these documentation requests within ten (10) business days. Documents will be submitted through a new secure online portal. Once received, OCR’s auditors will review the submitted information and inform the entity of its draft findings. The entity will then have ten (10) business days to respond with written comments, if any. OCR will then review the entity’s comments and issue a final audit report within thirty (30) business days.

OCR has indicated that the audits are primarily intended as a compliance improvement activity. OCR will use aggregated data to better understand compliance with respect to particular aspects of the HIPAA rules. The goal being to understand what types of technical assistance and/or corrective actions would be most helpful. In other words, OCR is indicating that the goal of these audits is to improve its understanding of the state of compliance, and not to penalize specific companies for violations. However, OCR indicated that should an audit reveal a serious compliance issue, OCR may initiate a further compliance review of the company.

OCR indicated that it will not post a list of the audited entities, nor will its findings be available in a format that would clearly identify the audited entity. However, OCR noted that audit notification letters and other information regarding these audits may be discoverable under the Freedom of Information Act (FOIA).

Additional information from OCR regarding the Phase 2 HIPAA Audit Program can be obtained by clicking here.

Author: Brian Werfel

Best Wishes for a Happy and Healthy New Year!

2015 Medicare Payment Data Offers Evidence of Nationwide Crackdown on Non-Emergency Ground Ambulance Transportation; Impact Varies Dramatically by Medicare Administrative Contractor

Factual Background

Potential Impact on Ambulance Providers

CMS Issues Transmittal on Changes to Ambulance Staffing Requirements; Clarifications to Service Level Definitions for Ground Ambulance Services

Vehicle Staffing Requirements

Ground Ambulance Service Definitions

Question

Answer

Just Released!

Just Released!

Focus on the RACs

Focus on the MACs

Impact on Ambulance Providers and Suppliers

Background on Phase 1

Phase 2

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