MHA's Executive Briefing

Experts discuss FTC rule’s implications for hospitals

During a conference call Oct. 7 for American Hospital Association members, experts discussed how hospitals may be affected by the Federal Trade Commission’s “red flags” rule. The rule requires financial institutions and certain creditors to implement a program to detect and respond to warning signs that might indicate potential identity theft.

Speakers included representatives from the FTC and Hogan & Hartson, AHA’s outside counsel on privacy-related issues. Lawrence Hughes, AHA assistant general counsel, said, “The general advice on the call from the FTC to hospitals is to make a good-faith effort to implement a policy to detect and respond to red flags. The rule allows flexibility to tailor your program to the size and complexity of the hospital’s operations.”

The primary focus of hospitals’ compliance efforts are likely to involve systematizing procedures into a consolidated written format and obtaining board approval of the initial written policy. AHA members can access a recording and FTC slide presentation from the call at www.aha.org/redflags. The Web site will be updated as new resources become available.

[ via AHA News Now ]

Work plan lists nine new audits for hospitals

The OIG released its 2009 work plan October 1, listing audits and reviews with an emphasis on quality of care related to payment.

Click here to read more.

[ via Healthcare Auditing Weekly ]

OIG: Physician referrals to MRI providers may present conflict of interest

In 2005, doctors who ordered the most magnetic resonance imaging services for their patients were more likely to have a medical practice or other business relationship with the provider that performed the service, according to a new Department of Health and Human Services Office of Inspector General report. The analysis of physicians reimbursed by Medicare for MRI services found that 25% of the payments went to physicians with a connection to the performer of the service, and that just 5% of those physicians (the most frequent users of MRI) accounted for 55% of the MRIs ordered.

In 2005, Medicare paid for approximately 2.6 million MRI services under the Medicare physician fee schedule. The report concludes, “As more services are performed in these settings, doctors are increasingly in a position to order services from parties with which they have a medical practice or other business relationship. In these circumstances, doctors may have conflicts of interest, financial or otherwise.”

[ via AHA News Now ]

IRS: Written policies lacking on tax-exempt bond compliance

Many 501(c)(3) organizations do not have written policies to ensure their tax-exempt bonds comply with federal tax requirements, according to a new report from the Internal Revenue Service. The agency surveyed a sample of 207 organizations with outstanding bonds in 2005.

While nearly all reported having written procedures or guidelines to comply with tax requirements, further analysis of their responses suggested only 49% had written specific procedures or implemented an ad hoc process to monitor compliance, the agency said. The report concludes, “The IRS believes that it is important for 501(c)(3) organizations to have procedures that can be understood and implemented over time even through changes of responsible officials. The appropriate procedures may vary substantially, depending on the various complexities of the issue.”

[ via AHA News Now ]

Stark Law changes effective October 2008

CMS posted new Stark Law regulations on July 31, revising and expanding the prohibition on physician referrals for designated health services to entities with which they have financial relationships.

The new rules are part of the inpatient prospective payment systems rate regulations for fiscal year 2009. Some of the final rules will be effective October 1, while the remaining rules will not be effective until 2009.

The changes mostly further restrict physicians’ abilities to maintain investment interests and compensation arrangements with entities to which they make DHS referrals, according to a report from Indianapolis law firm Krieg Devault.

Revised congressional guidance on lobbyist contribution disclosure released

Congressional officials on July 16 released revised guidance on the Honest Leadership and Open Government Act of 2007 to clarify reporting requirements for lobbyists regarding certain “honorary” contributions. The guidance states that “honorary” contributions reimbursed by a lobbyist’s employer should not be reported on the lobbyist’s individual LD-203 contributions report. Instead, only the lobbyist’s employer should report the contribution on its organizational contributions report.

The clarification specifically applies to reportable contributions made “in honor or recognition of” covered officials, including to entities named for a covered official, “established, financed, maintained, or controlled” by a covered official, or “designated by” a covered official. It also applies to contributions and payments to presidential library foundations and presidential inaugural committees. It does not apply to contributions to any federal candidate or office holder, leadership political action committee or political party committee.

The guidance also states that “designated by” a covered official includes, for example, a covered official’s directing a charitable contribution in lieu of an honoraria, as well as a payment that is directed to an entity by a covered official who also is on the board of that entity. It does not include a contribution following “a mere statement of support or solicitation” without some further role by the covered official. Semi-annual contributions reports are required under the 2007 law.

The deadline for filing the first semi-annual report, covering January 1 – June 30, is July 30. No extensions will be given.

Questions about the new filing requirements and the revised guidance can be directed to American Hospital Association’s assistant general counsel, Lawrence Hughes, at (202) 626-2346. The revised guidance is available online.

[ via AHA News Now ]

House panel passes amended FCA bill

The House Judiciary Committee on July 16 voted to send legislation (H.R. 4854) amending the False Claims Act to the full House for a vote, but not before making certain amendments. In a letter sent this morning to the Committee’s chairman and ranking member, the American Hospital Association expressed strong opposition to the bill, asserting that it would force hospitals to divert funds needed for patient care to defend against frivolous lawsuits.

AHA is particularly concerned over a provision that would expand the FCA to include a new penalty for retaining an overpayment that the defendant did not ask for and, for legitimate reasons, had yet to return to the government payer. In the letter, AHA said this provision fails to account for existing means in federal law, regulation and practice by which health care providers reconcile overpayments and underpayments on a regular basis.

“This legislation goes far beyond the original scope of the law and is not in the best interests of hospitals and patients,” AHA Executive Vice President Rick Pollack said in the letter. The approved version sets a statute of limitations of eight years for filing qui tam suits; would require government relators to have actual knowledge of an overpayment in order to file a qui tam suit; precludes government employees from filing qui tam suits in cases the Department of Justice declines to pursue; and exempts city, county and local governments from prosecution also in cases the DOJ declines to pursue. Many public hospitals are considered local units of government for tax purposes.

The bill is similar to S. 2041, which passed the Senate Judiciary Committee in April.

[ via AHA News Now ]

OIG issues advisory opinion on patient gift cards

A health system’s proposal to provide $10 gift cards to patients whose service expectations were not met would not constitute prohibited remuneration, the Department of Health and Human Services’ Office of Inspector General concluded in an advisory opinion released July 7. The health system proposed to offer patients who experience service shortfalls, such as a 30-minute delay in service, gift cards for certain local vendors through a gift certificate service.

The cards would not be redeemable for cash or health care items or services, and the health system would track the cards to ensure the same patient did not receive multiple cards totaling more than $50 in value in one year.

[ via AHA News Now ]

AHA urges CMS to clarify interpretive guidelines

The American Hospital Association on April 11 urged the Centers for Medicare & Medicaid Services to clarify language in a recent letter to state survey directors that appears to limit the use of standing orders and protocols. The letter contained interpretive guidelines for regulatory changes to the hospital conditions of participation in Medicare, including language implying that all protocols and standing orders require a physician’s order prior to initiation for each patient.

In a letter to CMS, the AHA said the language “likely will lead to patient harm, is counter to accepted standards of care and will impede hospitals’ progress on quality improvement initiatives.” The AHA urged CMS to immediately clarify the interpretive guidelines to reflect the intent of the CoP, which is to require that standing orders and medical staff orders for drugs and biologicals be written in the patient’s chart and later signed by a practitioner responsible for the care of the patient.

Senate poised to mark up bill that would expand FCA provisions

The Senate Judiciary Committee is preparing to mark up proposed legislation (S. 2041) that would significantly expand provisions of the False Claims Act. The FCA allows both the government and individuals (or whistleblowers) to sue on behalf of the federal government in cases of fraud.

The proposed bill would expand the FCA to include claims that do not involve truly false or fraudulent behavior or any actual financial loss to the federal government; convert private business disputes into false claims if the defendant is at any time a recipient of federal money; strip defendants of the ability to challenge sham “whistleblower” lawsuits that are based on information already available in the public domain; and extend the statute of limitations from six to 10 years. Of particular concern for hospitals and other providers is that the bill would allow courts to award plaintiffs up to triple the amount of actual damages and exact penalties for overpayments from the federal government that were mistakenly paid to or received by providers.

Tom Nickels, American Hospital Association senior vice president for federal relations, said, “Despite the best efforts of providers and their employees to comply with billing requirements and regulations, overpayments may occur. This proposed legislation would undermine the policies and procedures that providers and payors have developed to catch and correct these mistakes, and would be harmful to hospitals if implemented in its current form.” The legislation, the False Claims Act Correction Act of 2007, is sponsored by Sens. Charles Grassley (R-IA) and Patrick Leahy (D-VT).

AHA is working to address hospitals’ concerns with the bill. For more information on the proposed amendments to the FCA, visit www.aha.org.