Hot Button Items for Georgia HME Suppliers in 2013 Daniel B. Brown, JD B ROWN, D RESEVIC, G...

Hot Button Items for Georgia HME Suppliers in 2013

Daniel B. Brown, JDBROWN, DRESEVIC, GUSTAFSON, IWREY, KALMOWITZ AND PENDLETON

THE HEALTH LAW PARTNERS, LLC 1530 Dunwoody Village Parkway, Suite 209

Atlanta, GA 30338 Phone: (770) [email protected]

GAMES Winter MeetingAtlanta, GeorgiaJanuary 31, 2013

© Daniel B. Brown 2013

mailto:[email protected]

Housekeeping

2

Disclaimer:

This program is educational and does not constitute, and may not be construed as, legal

advice to, or creating an attorney-client

relationship with, any person or entity.

AGENDA– 1. Round 2 Bid Pricing – 2. Who Can Set Up the PAP?

– Depends on who you ask– 3. Re-Supply

– Function Disfunction– 4. HIPAA Highlights

– Here we go again– 5. Sales and Use Taxes

– 5. Emerging Trends and Opportunities– ACO’s

3

Round 2 Pricing Announced

4

Race to the Bottom?

Reimbursement rates for bid items average45% lower than the current fee schedule.

5

How Bad is it?

OxygenEquip

& Supls

Wheelchairs

Scooters, & Acc.

Enteral Nutri-ents,

Equip & Supls

CPAP/RAD

& Related Supls &

Acc

Hosp. Beds & Acc

Wal-kers &

Acc

Support Surface

(Group 2 Matt-ress)

NPWT Pumps

& Related Supplies

& Accesso

ries

41% 36% 41% 47% 44% 46% 63% 41%

6

Average % Decrease in Reimbursement from Current Reimbursement

Round 2 Pricing - CPAP

E0601CONTINUOUS AIRWAY PRESSURE (CPAP) DEVICE

RR $46.00

E0561HUMIDIFIER, NON-HEATED, USED WITH POSITIVE AIRWAY PRESSURE DEVICE

NU $70.00


RR $7.00


UE $52.50

E0562HUMIDIFIER, HEATED, USED WITH POSITIVE AIRWAY PRESSURE DEVICE

NU $151.07


RR $15.11


UE $113.30

Atlanta-Sandy Springs-Marietta, GA

7

Round 2 Pricing - CPAPAugusta-Richmond County, GA-SC

E0601CONTINUOUS AIRWAY PRESSURE (CPAP) DEVICE

RR $44.00

E0561 HUMIDIFIER, NON-HEATED NU $72.00

E0561 HUMIDIFIER, NON-HEATED, RR $7.20

E0561 HUMIDIFIER, NON-HEATED, UE $54.00

E0562 HUMIDIFIER, HEATED, NU$140.0

0

E0562 HUMIDIFIER, HEATED, RR $14.00

E0562 HUMIDIFIER, HEATED, UE$105.0

0

8

Round 2 Pricing - BiPAPAtlanta-Sandy Springs-Marietta, GA

E0470BI-LEVEL PRESSURE CAPABILITY, WITHOUT BACKUP

RR $118.78

E0471BI-LEVEL PRESSURE CAPABILITY, WITH BACK-UP

RR $308.70

E0472BI-LEVEL PRESSURE CAPABILITY, WITH BACKUP E. G. , TRACHEOSTOMY TUBE

RR $401.70


NU $70.00

9


Bid PriceA4604 TUBING NU $43.00A7027 ORAL/NASAL MASK NU $149.00

A7028ORAL CUSHION REPLACEMENT ONLY, EACH

NU $40.79

A7029NASAL PILLOWS ORAL/NASAL MASK, REPLACEMENT ONLY, PAIR

NU $17.39

A7030 FULL FACE MASK NU $100.00

A7031 FACE MASK INTERFACE, REPLACEMENT NU $39.82

A7032 CUSHION FOR NASAL MASK EACH NU $21.99

A7033PILLOW FOR USE ON NASAL CANNULA TYPE INTERFACE, PAIR

NU $16.31

A7034NASAL INTERFACE WITH OR WITHOUT HEAD STRAP

NU $63.57

A7035 HEADGEAR NU $20.58A7036 CHINSTRAP NU $11.01


10


A7037 TUBING NU $14.47

A7038 FILTER, NU $2.38

A7039 FILTER, NON DISPOSABLE, NU $6.38

A7044 ORAL INTERFACE EACH NU $81.00

A7045 EXHALATION PORT NU $12.00

A7045 EXHALATION PORT REPLACEMENT ONLY RR $1.20

A7045 EXHALATION PORT, REPLACEMENT ONLY UE $9.00

A7046 WATER CHAMBER FOR HUMIDIFIER, EACH NU $15.00


11

Round 2 Pricing - OxygenAtlanta-Sandy Springs-Marietta, GA

E1390 OXYGEN CONCENTRATOR, SINGLE DELIVERY PORT RR $98.59

E0424

STATIONARY COMPRESSED GASEOUS OXYGEN SYSTEM, RENTAL; INCLUDES CONTAINER, CONTENTS, REGULATOR, FLOWMETER, HUMIDIFIER, NEBULIZER, CANNULA OR MASK, AND TUBING

RR $98.59

E0439

STATIONARY LIQUID OXYGEN SYSTEM, RENTAL; INCLUDES CONTAINER, CONTENTS, REGULATOR, FLOWMETER, HUMIDIFIER, NEBULIZER, CANNULA OR MASK, & TUBING

RR $98.59

E1391

OXYGEN CONCENTRATOR, DUAL DELIVERY PORT, CAPABLE OF DELIVERING 85 PERCENT OR GREATER OXYGEN CONCENTRATION AT THE PRESCRIBED FLOW RATE, EACH

RR $98.59

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Round 2 Pricing - Oxygen

E0431PORTABLE GASEOUS OXYGEN SYSTEM, RENTAL; INCLUDES PORTABLE CONTAINER, REGULATOR, FLOWMETER, HUMIDIFIER, CANNULA OR MASK, AND TUBING

RR $20.00

E0434PORTABLE LIQUID OXYGEN SYSTEM, RENTAL; INCLUDES PORTABLE CONTAINER, SUPPLY RESERVOIR, HUMIDIFIER, FLOWMETER, REFILL ADAPTOR, CONTENTS GAUGE, CANNULA OR MASK, AND TUBING

RR $20.00


K0738

PORTABLE GASEOUS OXYGEN SYSTEM, RENTAL; HOME COMPRESSOR USED TO FILL PORTABLE OXYGEN CYLINDERS; INCLUDES PORTABLE CONTAINERS, REGULATOR, FLOWMETER, HUMIDIFIER, CANNULA OR MASK, AND TUBING

RR $43.99

E0433

PORTABLE LIQUID OXYGEN SYSTEM, RENTAL; HOME LIQUEFIER USED TO FILL PORTABLE LIQUID OXYGEN CONTAINERS, INCLUDES PORTABLE CONTAINERS, REGULATOR, FLOWMETER,

HUMIDIFIER, CANNULA OR MASK AND TUBING, WITH OR WITHOUT SUPPLY RESERVOIR AND CONTENTS GAUGE

RR $43.99

E1392 PORTABLE OXYGEN CONCENTRATOR, RENTAL RR $43.9913

Next Steps

Next steps:

• CMS will now begin the contracting process.• The Actual Contract Suppliers will be announced this Spring.• The suppliers and prices will go live on July 1, 2013.

14

Who Does this Effect?

Pretty soon, just about everybody

The Affordable Care Act of 2010 (ACA) specifies that all areas of the country be subject to either DMEPOS competitive bidding or payment rate adjustments using competitively bid rates by 2016.

15

More Information

For More Information of the Final Bid Prices for All Bid Items, see:

http://www.dmecompetitivebid.com/palmetto/cbicrd2.nsf/DocsCat/Single%20Payment%20Amounts

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MARKET PRICE PROGRAM PROPOSAL

• AAHomecare’s Proposal to Replace Competitive Bidding with a Market Pricing Program

• Goal is to:• Create a Medicare DME Market Based on

Competition and Market Prices; and

• Maintain Access to Quality DME Services17

Market Pricing Program– Competitive Bid Alternative

Market Pricing Program Operation

• Small, County-Sized Bid Areas• Two Product Categories Bid per Bid Area• Eight other products derive their price from

auctions in similar geographies• Bids are binding and require cash deposits• Bid Price Based on “Clearing Price” rather

than “Median Price”18


MPP Chances of Success

• Need to Show Evidence that MPP Won’t Cost Medicare More than Competitive Bidding.

19


The CMS Office of the Actuary estimates that Competitive Bidding will save the Medicare Part B Trust Fund $25.7 billion between 2013 and 2022. Beneficiaries are expected to save an estimated $17.1 billion during the same 10 year period in reduced co-pays.

CPAP Staff

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Must You Be a Licensed Respiratory Care Professional to Set-Up Pap in Your Location?

Medicare PAP - Respiratory Therapy Laws

Why it’s Important

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•It’s a State Law Misdemeanor to Practice Respiratory Therapy Without a License. See, Rules of the Georgia Board of Respiratory Care, Chap. 360-13-.11


Why it’s Important

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It’s also a False Claim Act Violation to Bill Medicare For Services Performed by Unqualified Persons.


Really, Really Important

23

UNITED STATES ATTORNEY’S OFFICE RECOVERS$578,820 FROM LOUISVILLE COMPANY IN

INDIANA HEALTH CARE FRAUD CASE

Wednesday, October 19, 2011

JEFFERSONVILLE – Joseph H. Hogsett, United States Attorney, announced today that civil claims against Premier Home Care, a durable medical equipment provider operating in southern Indiana, as well as central and southeastern Kentucky, have been resolved. Premier has agreed to pay $578,820 to the United States and $21,180 to the State of Indiana, more than twice the estimated damages resulting from the fraudulent acts.


Indiana RT Law & Pap Set-Up

24

In 2008, a former employee of Premier filed a sealed complaint or “whistleblower” lawsuit against Premier under the civil False Claims Act in the New Albany Division of the United States District Court for the Southern District of Indiana. The complaint alleged that Premier violated the False

Claims Act by falsely certifying that it was in compliance with state licensure requirements when it used unlicensed personnel to set-up continuous positive airway pressure (“CPAP”) and bi-level positive airway pressure (“BiPAP”) respiratory machines, both of which provide respiratory ventilation to patients and otherwise help patients breathe. The complaint also alleged that Premier’s claims for payment to the Medicare and Medicare programs were false because the services were rendered by unqualified personnel.


Setting up Pap in Georgia

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Georgia Statute

QUESTION: May polysomnographic technologists set-up, instruct, plan and perform PAP Care Services? Yes. Under Georgia law , O.C.G.A.§ 43-34-45 (the “PSG Amendment”), polysomnographic technologists are permitted to perform polysomnography as long as (i) the activity of polysomnography is performed on patients suffering from a sleep or wake disorder, and (ii) the technologist’s activities are supervised by a Georgia licensed physician. See, O.C.G.A. § 43-34-45.

26

Georgia Statute

The PSG Amendment defines “Polysomnography” to mean, in part, “therapeutic and diagnostic use of low-flow oxygen, the use of positive airway pressure including continuous positive air pressure (CPAP) and bi-level modalities, adaptive servo-ventilation, and maintenance of nasal and oral airways that do not extend into the trachea.” See, O.C.G.A. § 43-34-45(a)(1).

Therefore, by statute, polysomnographic technologists may use PAP to treat, manage, control, educate and care for patients without first obtaining certification as a respiratory care therapist as long as the patient suffers from a sleep or wake disorder and a Georgia physician delegates and supervises the activity. See, O.C.G.A. § 43-34-45(b), O.C.G.A. § 43-34-151(b)(9).

27

Georgia Statute

QUESTION: Assuming there is physician supervision, may polysomnographic technologists perform polysomnography on sleep disordered patients outside the sleep lab setting? RESPONSE: YES. Pursuant to the PSG Amendment, polysomnographic technologists may perform polysomnography anywhere in the state of Georgia as long as (i) there exists physician supervision of the technologist and (ii) the polysomnography services are performed on patients suffering from sleep or wake disorders or as part of tests performed on patients suspected to have sleep or wake disorders.

.

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Georgia Respiratory Care Committee

The Respiratory Care Board takes a DIFFERENT POSITION about a PSG Tech’s authority.

29


At a meeting on August 5-6, 2010, the Respiratory Care Advisory Committee (“Committee”) of the Georgia Composite Medical Board (“Board”) discussed whether a polysomnographic technologist could instruct patients in the use of their home CPAP machines.

The Board stated that the Committee’s

answer was no: “a technologist would have to hold a Respiratory Care license” to instruct a patient on PAP.

30


At a meeting on January 6-7, 2011, the Respiratory Care Advisory Committee of the Board discussed whether a polysomnographic technologist “who has completed an accredited program “ could set-up PAP in the Sleep Lab.

The Minutes say that the Committee’s

answer was YES. But this permission only goes to techs who finish an “accredited program” who provides the service only in the sleep lab.

31

Problem – Who is the RAC Auditor Going to Believe?

Honest, officer, the Respiratory Therapy Board is, well, just

wrong.

32

Medicare Perception of DME Suppliers

33

Inherent Regulatory Bias Against DME in Medicare

Enrollment Bias

High Risk

Moderate Risk

Low Risk

CMS is adopting a three-tiered screening system for enrolling Medicare providers and suppliers based on perceived potential for fraud and abuse.

34

High Risk

Moderate Risk

Low Risk

Newly Enrolling DME Suppliers

Existing DME Suppliers

Regulatory Bias - Enrollment

35

High Risk

Moderate Risk

Low Risk

• Pre-enrollment Fingerprinting• Pre-enrollment criminal

background checks• Site visit every 3 years

Applicable to: owners, authorized or delegated officials of newly Enrolling DME Suppliers

Unscheduled or unannounced site visits


36

37

DME Supplier Standards and Fraud Safeguards

- 42 CFR § 424.57

• Supplier Must Be Accredited

• Supplier Must Post a $50,000 Bond


CMS excludes DME Suppliers from Taking Advantage of Certain Waivers of the Stark and Anti-Kickback Laws being offered to participants in Accountable Care Organizations

Regulatory Bias - Waivers of Fraud and Abuse Laws in Accountable Care Organizations

CMS says that and DME providers are excluded because “they have historically posed a greater risk of program abuse.”

38

Resupply Issues

39

Resupply Issues

Medicare Covers Recurring Supplies

40

HCPCS Code

Accessory Maximum Number of Items

A4604 Tubing with integrated heating 1 per 3 monthsA7027 Combination oral/nasal mask 1 per 3 monthsA7028 Oral cushion for combination oral/nasal mas 2 per 1 monthA7029 Nasal pillows for combination oral/nasal mask - replacement 2 per1 monthA7030 Full face mask 1 per 3 monthsA7031 Cushion for use on nasal mask interface - replacement 1 per 1 monthA7032 Replacement Cushion for Nasal Application Device 2 per 1 monthA7033 Replacement Pillows for Nasal Application Device 2 per 1 monthA7034 Nasal Interface (Mask or Canula Type) used with PAP Device,

with or without Head Strap1 per 3 months

A7035 Headgear used with Positive Airway Pressure Device 1 per 6 monthsA7036 Chinstrap used with Positive Airway Pressure Device 1 per 6 monthsA7037 Tubing used with Positive Airway Pressure Device 1 per 3 monthsA7038 Filter - Disposable - used with Positive Airway Pressure 2 per 1 monthA7039 Filter – Non-Disposable - used with PAP 1 per 6 monthsA7046 Humidifier chamber - replacement 1 per 6 months

Resupply

When Can the Supplier Ship New Supplies

• Automatic Shipments Prohibited

• Mandatory beneficiary contact no sooner than 14 calendar days prior to the delivery/shipping date

• Delivery must occur no sooner than 10 calendar days prior to the end of the usage for the current period.

• Need a valid refill request from the beneficiary

41

PAP Resupply

Purpose of the Refill Request

42

• To ensure that the refilled item remains reasonable and necessary

• To confirm that existing supplies are approaching exhaustion

• To confirm any changes/modifications

• To confirm that the quantity of supplies does not exceed a beneficiary's expected utilization.

Resupply

Valid Refill Request

• Can be a written record of a phone conversation with the beneficiary or his representative

• The refill request must occur and be documented before shipment. Retrospective attestation statement by the supplier or beneficiary will not suffice.

• The refill record must include: patient’s name, a description of each item that is being requested, date of refill request and quantity of each item that the beneficiary still has remaining.

43

Resupply

Hand Count the Items Remaining?

By “quantity of each item that the beneficiary still has remaining,” the CGS DME MAC Supplier Manual says:

INDICATE THE NUMBER OF DAY’S OF SUPPLY LEFT OR THE NUMBER OF ITEMS IN THE BENEFICIARIES’

POSSESSION.

“The documentation must indicate the number of supplies the beneficiary has remaining . . .. The quantity may be the number of days the beneficiary has remaining or the actual amounts they have remaining.”

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Resupply New “Functionality” Guidance

45

Document BOTH:

1.Quantity of Items on Hand, and

2.Condition of the Items.

Resupply

New “Functionality” Guidance

46

• June 2011 – Initiate a Change to the Program Integrity Manual

• August 2, 2011 – Effective Date of Change

• June 2012 – DME MAC Bulletin with Documentation Guidance Published

• August 2012 – FAQ’s on Refill Requirements Published by the DME MAC’s

Resupply New “Functionality” Guidance

47

The 2012 FAQ’s: The Guidance is Intentionally Vague to Accommodate Various Situations

Bottom Line Guidance: “When the item becomes unusable for reasons such as damage, wear, soiling or contamination that is unable to be removed with recommended cleaning, etc., the item can be considered as nonfunctional and may be replaced.”

Document “the functional condition of the item(s) being refilled in sufficient detail to demonstrate the cause of the dysfunction that necessitates replacement (refill).” CGS MAC Supplier Manual

PAP Resupply “Functionality” Guidance under

the FAQ’s

48

Q: What about the patient who never cleans his equipment?

A: OK to refill if the item if it is no longer functional.

Q: Must the Supplier physically inspect the item?

A: Depends on the problem reported.

Q: What about replacing a Mask due to air leaks?

A: Depends on whether the leak is due to a functioning mask that is improperly fit or due to the failure of the

mask to function.

PAP Resupply – What’s Ahead.

49

According to the OIG’s 2013 Work Plan, CMS will compare the PAP replacement schedules with those of Medicaid, VA, and Federal Employees Health Benefits programs. They will also identify savings that might be achieved by adopting alternative schedules to avoid wasteful spending.

The OIG is Reviewing the Frequency of the PAP Resupply Schedule

New HIPAA Rules

50

On January 25, 2013, the Office of Civil Rights of the US Dept. of Health and Human Services issued a 563-page

Omnibus HIPAA Overhaul.

The new rule requires that all Covered Entities enter into new Business Associate Agreements which contain certain new provisions. These new provisions require, among other items, that business associates (and subcontractors): (i) comply with the HIPAA Security Rule with regard to electronic PHI, and (ii) report breaches of unsecured PHI to covered entities.

New HIPAA Rules

51

Effective Date: The Final Rule goes into effect on March 26, 2013, and has a general compliance deadline of September 23, 2013. Extended time through September 2014 for some of the business associate agreement changes.

Notice of Privacy Practices. Requires Certain Changes in Notice

of Privacy Practices and other items.

New HIPAA RulesCompliance Action Steps

52

• GAP Analysis. Assess existing policies and procedures for compliance gaps.

• Policy/Procedure Revisions. Numerous policies and procedures will need to be revised to incorporate these changes in law. .

• Business Associate Agreement. Review and update BA agreements, and identify a plan for transitioning existing agreements onto that form.

• Notice of Privacy Practices. NPPs need to be reviewed and updated.

Other Forms. Other forms, such as requests for access, may need to be created or updated.

• Training. Covered entities and business associates will need to train workforce on the new requirements

Taxes

53

New Tax on Device Manufacturers

54

The New Tax May Apply to the Manufacture and Wholesale Sale of DME depending on the facts and circumstances. The IRS says that sale of Capped Rental Items to patients does not automatically fit into the “retail sale” exemption for payment of the tax.

The ACA imposes a New Excise Tax on Manufacturers of Medical Devices Effective

This Year.

Georgia Sales and Use Tax on DME

55

Generally, Georgia exempts the levy of sales and use tax on a supplier’s purchase of DME and dispensing of DME if title and possession of the item will be permanently transferred (or leased) to a natural person to whom a prescription for the equipment is issued.

See, GA Dept of Revenue Rule 560-12-2-.30 Drugs, Durable Medical Equipment, Prosthetic Devices, and Other Medical Items.

Georgia Sales and Use Tax on DME

56

However, the tax will apply if a health care provider uses the device as part of the provider’s service (such as a sleep lab using PAP for the overnight titration test).

See, GA Dept of Revenue Rule 560-12-2-.30 Drugs, Durable Medical Equipment, Prosthetic Devices, and Other Medical Items.

57

EMERGING TRENDS IN HEALTH CARE DELIVERY

Accountable Care Organizations– Aligning DME in ACO’s

Riding the ACO Wave

58

• ACO’s are separate legal entities

• Providers and Suppliers that provide Services to the ASO get Paid on a Fee for Service Basis under Part A or Part B

• ACO’s oversee the overall care of the Medicare beneficiaries assigned to them

Accountable Care Organizations

59


Accountable Care Organizations

60


• ACO’s drive adoption of procedures that lower cost and drive better outcomes

• The Organization Must Take remedial measures if participants fail to use or comply with protocols

• If successful, ACO participants get paid some of the “Shared Savings” set aside in Medicare

• DME Suppliers are Not Included in the List of Entities eligible to form an ACO.

• However, CMS encourages DME’s to affiliate and participate with ACO’s as part coordinating a patient’s coordinated care.

Accountable Care OrganizationsWho Can Play?

76 Fed. Reg. (November 2, 2011)

61


• Develop a Strategy to Show that Your Equipment, Supplies and Services Will Decrease Hospital Stays or Decrease the Cost of the Patient’s Disease Management.

• Pitch these Services to ACO Decision Makers so that they include you as a preferred provider of ancillary services. 62


Accountable Care OrganizationsWhat can DME’s Do?

• Getting Paid – It’s unlikely that you, the DME Supplier, could share directly in the Medicare shared savings paid to the ACO. However, it may be possible to work out a fee arrangement with the ACO itself if savings accrue and your DME helped to achieve the savings.

ACO Opportunities

63


Of course, you’d get the new business from the ACO in any event.

• The ACO Rules WAIVE certain Fraud and Abuse Rules, such as the Stark and Anti-Kickback Law

• BUT, CMS prohibits DME’s to benefit from the waivers in cases of “pre-participation” ACO’s. CMS says that and DME providers are excluded because “they have historically posed a greater risk of program abuse.”

64


Accountable Care OrganizationsFraud and Abuse Waivers

ACO arrangements other than “Pre-Participation’ Arrangements may permit Fraud and Abuse Waivers in ACO arrangements with ACO’s.

65


Accountable Care OrganizationsFraud and Abuse Waivers

Contact

Daniel B. Brown, Esq.BROWN, DRESEVIC, GUSTAFSON, IWREY, KALMOWITZ AND PENDLETON

THE HEALTH LAW PARTNERS, LLC 1530 Dunwoody Village Parkway

Suite 209 Atlanta, GA 30338

Phone: (770) [email protected]

66Presentation Power Point is copyrighted © 2013 Daniel B. Brown

mailto:[email protected]

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