Webinar gives tips on navigating physician peer review process

Hospitals and compliance officers should know the reporting requirements of the Health Care Quality Improvement Act (HCQIA) (42 U.S.C §11101 et seq.) and be “very strict” in complying with the four standards to obtain immunity from damages. In a Health Care Compliance Association webinar entitled, Physician Peer Review: 10 Steps to Navigating the Process, Theresamarie Mantese and Fatima M. Bolyea, health care attorneys at Mantese Honigman, PC, gave practical tips on dealing with the process of physician peer review.

Federal and state reporting requirements

HCQIA (42 U.S.C. §11133) requires health care entities to report the following “reportable events” to the applicable state board of medical examiners: (1) a professional review action that adversely affects the clinical privileges of a physician for a period longer than 30 days; (2) the surrender of clinical privileges while the physician is under an investigation by the entity relating to possible incompetence or improper professional conduct, or in return for not conducting such an investigation or proceeding; or (3) in the case of a professional society, a professional review action by the professional society that adversely affects the membership of a physician in the society.

Mantese noted that it is important to know both federal and state requirements, since state requirements can be more stringent. For example, in Michigan reporting requirements are triggered when a disciplinary action affects a health professional’s privileges for more than 15 days.

Compliance officers must also clearly define “investigation” so that they know when reporting requirements are triggered. While the NPDB Guidebook defines “investigation” broadly, a general review of physicians for overall performance in relation to each other is not an investigation.

Immunity from damages

HCQIA (42 U.S.C. §11112(a)) provides that hospitals and other participants are immune from damages if the professional review action was taken: (1) in the reasonable belief that the action was in the furtherance of quality health care; (2) after a reasonable effort to obtain the facts of the matter; (3) after adequate notice and hearing procedures; and (4) in the reasonable belief that the action was warranted by the facts. Compliance officers should, said Mantese, be “very strict” is attempting to comply with these standards. She said the third prong is where the most litigation happens and one of physicians’ strongest arguments in challenging a professional review action.

HCQIA immunity applies to money damages only, not to equitable relief such as reinstatement or the striking of a report. Mantese said, however, that if immunity applies, a request for equitable relief usually fails, too.

Notices

Under 42 U.S.C. §11112(b), the hospital is required to give the physician notice of a proposed action. If the notice is deficient, the physician should challenge it. Mantese encouraged compliance officers to have a template of a notice to ensure that the fundamental features are included. She emphasized that each notice should be compliant, even if the same information is repeated across notices; several notices cannot be taken together to create completeness.

Hospital policies

The presenters emphasized the importance of adequate hospital policies and bylaws, including the appeal rights of physicians after a peer review hearing. For example, the bylaws are critical in determining what records the physician can obtain from the hospital. A fair hearing plan is also a good idea in case the physician claims that the hospital arbitrarily denied a request for documents. According to Mantese, hospitals should consider providing the physician with as much information as possible—the more information the physician has about an issue, the less likely he or she is to bring litigation, and the case is more likely to be dismissed if litigation does ensue.

Peer review hearing

If the physician requests a hearing on a timely basis, then a hearing must be held (as determined by the health care entity) before: (1) an arbitrator mutually acceptable to the physician and health care entity; (2) a hearing officer who is appointed by the entity and who is not in direct economic competition with the physician; or (3) a panel of individuals who are appointed by the entity are not in direct competition with the physician involved. A panel usually consists of other physicians on staff at the hospital.

During the hearing, the physician has the following rights: (1) representation by an attorney; (2) a record of the proceedings; (3) the ability to call, examine, and cross-examine witnesses; (4) to present relevant evidence regardless of its admissibility in a court of law; and (5) the ability to submit a written statement at the close of the hearing.

A question that usually emerges is whether the panel members are in direct economic competition with the physician. If the physician raises this issue and the hospital has a number of people to serve on the panel, it should simply replace that person.

The presenters strongly recommended having a court reporter at the hearing. Because a common point of contention is which party will cover the costs, they recommended splitting the cost between the provider and the physician. Mantese also emphasized that hearing “exhibits are very, very important.” One person should maintain control of the exhibits during the hearing, and no one should leave until all are marked and accounted for.

Post-hearing

After the hearing the parties should submit a brief written statement with proposed findings of fact. Pursuant to HCQIA, upon completion of the hearing, the physician involved has the right to receive (1) the written recommendation of the arbitrator, officer, or panel, including a statement of the basis for the recommendations; and (2) a written decision of the health care entity, including a statement of the basis for the decision.

Mental health services provider enters into $4M FCA settlement

A provider of in-home mental health services and two of its leaders agreed to pay a total of $4.5 million to settle allegations that they violated the federal False Claims Act (FCA) and the Minnesota False Claims Act by billing Medicaid for services that violated clinical supervision requirements. Under the agreement, Complementary Support Services (CSS) and related entities will pay $4 million, its president will pay $400,000, and an executive will pay $120,000.

According to Acting U.S. Attorney Gregory G. Brooker and Minnesota Attorney General Lori Swanson, CSS provided in-home mental health services to children and adults through two Medicaid programs that restrict reimbursement to time spent providing face-to-face services with the patient and prohibit reimbursement for a therapist’s time completing paperwork. Both programs also require a licensed therapist such as a social worker or psychologist to clinically supervise patient care to ensure that the services are appropriate and medically necessary.

Between 2007 and 2016, however, CSS failed to submit claims that reflected signature by licensed professionals serving as clinical supervisors. Instead, CSS’ president “batch signed” progress notes that formed the basis for billing Medicaid. In addition, CSS employees routinely added an extra billable unit for paperwork time for each client visit.

Local news reported that this case reflected a longstanding gap in Minnesota’s oversight of mental health services because CSS, like 200 other agencies, was unlicensed and not subject to routine regulatory oversight. In the wake of these allegations, the state began reviewing its oversight of mental health agencies.

As a part of the settlement, CSS is permanently excluded from participating in federal and state health care programs. The president agreed to an exclusion of at least eight years, and the executive agreed to an exclusion of at least five years.

EpiPen® misclassification cost $1.27B over 10 years, says OIG

If the EpiPen® had been classified as brand name instead of generic for purposes of the Medicaid Drug Rebate Program, CMS would have saved $1.27 billion from 2006 to 2016, the HHS Office of Inspector General (OIG) found. This estimate is far greater than the $465 million settlement that the federal government and EpiPen’s manufacturer, Mylan Inc., entered into in October 2016 concerning the classification of the drug under the Program (see Mylan settles EpiPen Medicaid rebate dispute for $465M, Health Law Daily, October 11, 2016).

“The fact that the EpiPen overpayment is so much more than anyone publicly discussed should worry every taxpayer,” said Sen. Charles Grassley (R-Iowa). Grassley reported that CMS recently provided records showing that Mylan was made aware of the misclassification years ago but failed to act (see Federal EpiPen® spending up 463 percent, Mylan misclassified drug as generic, Health Law Daily, October 6, 2016). At the time Sen. Elizabeth Warren (D-Mass) opposed the settlement, calling it “shamefully weak” (see Warren: EpiPen® Medicaid rebate settlement shows ‘crime does pay,’ Health Law Daily, October 26, 2016).

Manufacturers generally owe a higher rebate amount for brand-name drugs than generic under the Medicaid Drug Rebate Program. The basic rebate amount for a generic drug is based on a percentage (currently 13 percent) of its average manufacturer price (AMP) (see 42 C.F.R. Sec. 447.509). The basic rebate amount for a brand-name drug is based on the greater of (1) a fixed percentage (currently 23.1 percent) of the drug’s AMP; or (2) the different between the drug’s AMP and best price. In addition to the rebate amount, manufacturers of brand-name drugs (and, beginning in 2017, manufacturers of generic drugs) pay an inflation-related rebate amount if a drug’s price has increased more than the rate of inflation.

The EpiPen controversy led Grassley to request that the OIG review the Medicaid Drug Rebate Program (see HHS Inspector General to investigate Medicaid Drug Rebate Program, Health Law Daily, December 12, 2016).

ACA changes contributed to slow in health care expenditures, study finds

Despite conventional wisdom that the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) has done little to address high growth in health care costs, national health expenditures have grown at historically low rates in recent years, according to a brief by the Urban Institute and Robert Wood Johnson Foundation. The slower growth is related in part to the recession and slow economic recovery, but changes associated with the ACA also seem to have contributed. Analysts predict that these factors will likely cause the slower growth rates to persist into the future.

In February 2017 CMS estimated that national health expenditures grew 4.3 percent annually from 2010 to 2015, lower than its original forecast of 6.5 percent (see CMS actuary releases 2016-2025 health care expenditure projections, Health Law Daily, February 16, 2017). Current estimates of growth in each component of spending for 2010 to 2015 are lower than the original forecast—from 5.8 percent to 4.5 percent for Medicare, from 9.9 percent to 6.5 percent for Medicaid, and from 6.6 percent to 4.4 percent for private insurance.

The report attributed the slower growth to the 2007 to 2009 economic recession and slow recovery, unexpectedly low inflation, increased employer offerings of high-deductible insurance plans, cost-containment efforts within state Medicaid programs, and Medicare policies unrelated to the ACA. The ACA probably also contributed to low spending growth—for example, Medicare payment reductions to hospitals and other providers, the reduction in Medicare Advantage payments, and the managed competition structure of the marketplaces, which were reflected in the 2010 forecast.

Other ACA-related factors not in the original forecast that might have helped slow spending growth include adjustments to ACA Medicare payments, which reduced the number of Medicare hospital days, outpatient visits, skilled nursing facility days, and advanced imaging procedures between 2010 and 2014. Lower Medicare payment rates might also have had spillover effects on other payers. In addition, Medicare policies such as financial penalties for hospital readmissions could have changed provider practice patterns for patients of other payers.