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Everything you have come to rely on under “Kusserow’s Corner” has now been moved to Kusserow on Compliance. Please visit us on Tuesdays and Thursdays for insight from industry leader and former HHS OIG Inspector General, Richard Kusserow. You can sign up for the Kusserow on Compliance Newsletter here.


Father Daughter Duo to Pay $1.65M for Kickback Scheme Involving Sham Employees

Tracy Nemerofsky and her father, Stephen Nemerofsky, will pay $1.65 million to settle allegations of illegal patient referrals, according to the Department of Justice (DOJ). The two were accused of paying spouses of physicians for fake marketing jobs in order to induce patient referrals to the Nemerofskys’ home health business, A Plus. The scheme allegedly began in 2006, with its success resulting in Tracy’s salary of $685,000 in 2010 due to the increased revenue.

The DOJ noted that the home health market is heavily saturated in southern Florida, so the duo hired at least seven physicians’ spouses and one physician’s boyfriend to perform “marketing duties” for A Plus. In reality, the DOJ alleged that there were few, if any, duties and the jobs were a reward for Medicare patient referrals by the physicians. Low numbers of referrals by two physicians led to their spouses’ termination from A Plus by Tracy Nemerofsky.

“Kickback schemes undermine the integrity of our public health care programs,” said U.S. Attorney Wilfredo A. Ferrer for the Southern District of Florida. “The settlement announced today holds A Plus accountable for its submission of false claims, including restoring funds paid as a result of the false claims to Medicare.” The case began after William Guthrie, the former director of development at A Plus, brought a qui tam case against the business. The United States intervened in the case. Guthrie’s share of the settlement has not been calculated.


How Do You Expand Birth Control Access? Illinois Medicaid Program Would Pay Doctors More

Adding another layer of complexity to the current battle over birth control coverage in the United States, Illinois Governor Pat Quinn is seeking to improve access to birth control, particularly long-term birth control, for the state’s Medicaid beneficiaries. Currently the state’s Medicaid plan pays for 94 percent of the state’s births to teenage mothers and 54 percent of all deliveries. In 2012, average Medicaid costs per birth and the child’s first year of life was $18,500; those with low birth weights cost $302,000.

The Illinois Department of Healthcare and Family Services (HFS) has published its “Illinois Family Planning Action Plan” with a stated goal of “increasing access to family planning services for women and men in the Medicaid Program by providing comprehensive and continuous coverage to ensure that every pregnancy is a planned pregnancy”. HFS is accepting comments through September 15, 2014. The action plan provides for the following:


Action #1: Payments and operational policies reflect the value HFS places on providing the most effective form of contraception and will:

  • Double the provider reimbursement rate for intrauterine device insertion from $44 to $88;
  • Double the provider reimbursement rate for vasectomy service from $204 to $408;
  • Increase 340B medical providers’ dispensing fee for all long acting reversible contraceptives (LARC) from $20 to $35. Increase 340B medical providers’ dispensing fee for all hormonal contraceptives from $20 to $35 (three-month month supply required, except in extenuating circumstances);
  • Allow medical provider reimbursement (with modifier 25) for two services on the same day when one is a LARC procedure AND includes an initial or established annual exam or problem visit. Continue current practice allowing FQHCs to bill for one encounter rate;
  • Allow FQHCs to bill fee-for-service for permanent, non-surgical sterilization kits (Essure), consistent with LARC policy;
  • Investigate allowing hospitals to bill for LARC device insertion immediately postpartum.

Action #2: Health plans and providers in the Medicaid Program make all forms of family planning available to Medicaid clients in a convenient and seamless manner and will:

  • Communicate to all health plans and providers HFS’ commitment that clients receive evidence-based counseling and education on all FDA-approved contraceptives, from most-effective method to least-effective method [Informational Notice was sent to all Medical Assistance Providers on 6/26/14];
  • Communicate to all health plans and providers that cost sharing (co-pays/deductibles/co-insurance), step therapy failure requirements and prior authorization are not acceptable in the provision of family planning services [This was reflected in new and updated health plan contracts with most managed care entities];
  • Require annual submission of all health plans’ family planning policies to HFS, including referral policies by those plans with Right of Conscience objections to providing contraception;
  • Continue working with the LARC pharmaceutical industry to help ensure Medicaid providers have LARC inventory on the shelf for same day-insertion, with ongoing training, quality assurance and notice of any policy improvements;
  • Institute more effective communication regarding timely physician and FQHC reimbursements for current fee-for-service payments as well as contractual requirements for health plan payments.

The proposal has already drawn criticism from the Catholic church, who would be required under the plan to inform the state how they refer women elsewhere for services they do not provide. The Illinois Catholic Health Association, which represents 18 percent of hospitals in Illinois is worried that the plan will force Catholic hospitals from participating in the Medicaid program. The state of Illinois has previously ended contracts with Catholic groups for foster care when they referred gay couples to other agencies.

Trillions? Trillions! CMS Actuary Projects 2013 Spending at $2.9T

Health spending growth remained slow in 2013, with faster growth on the horizon due to the Patient Protection and Affordable Care Act’s (ACA) (P.L. 111-148) coverage expansion, economic growth and an aging population according to the CMS Office of the Actuary in a report published by Health Affairs on September 3, 2014. Sequestration, sluggish economic recovery and increases in private health insurance cost-sharing requirements attributed to the slow growth of 3.6 percent for health spending in 2013. Overall, in 2013 health care expenditures sponsored or paid for by the government (federal, state, and local) are expected to have reached $1.3 trillion, which is a 3.2 percent growth, as compared to 3.9 percent growth, or $1.6 trillion seen in spending by business, households and private sources.

Despite the slow growth in 2013, during the study’s full projection period of 2013 to 2023, national health expenditures are projected to increase at an average rate of 5.8 percent a year, which is 1.1 percentage point greater than the average annual growth rate in nominal gross domestic product. This is still slower than the growth rate from 1990 to 2008, which grew 2.0 percentage points faster than the gross domestic product growth. The 2023 projection for government financed health care costs is $2.5 trillion.

In 2013 Medicare spending growth slowed, decelerating from 4.8 percent to 3.3 percent. This is attributed to budget sequestration requirements and other payment adjustments. Growth in spending is projected to increase in 2014, due in large part to the additional nine million Americans who gained insurance through private health insurance plans and Medicaid. Looking ahead to 2015, the national health spending growth is expected to slow to 4.9 percent, due to “significant decelerations in Medicare and Medicaid spending.” Reduced payments to Medicare Advantage, or Medicare Part C plans, will contribute to the deceleration.

Total hospital spending growth is expected to slow from 4.9 percent in 2012 to 4.1 percent in 2013, which equals $918.8 billion. More drastically, Medicare hospital spending has slowed from 4.5 percent to 2.5 percent over the same time frame. The ACA has led to increased use of hospital services which should result in growth acceleration of 4.5 percent in 2014.