Kusserow on Compliance: Ninth Circuit reinstates unnecessary admissions whistleblower case

Federal Court established grounds for “medical necessity” fraud cases

A compliance high-risk area worthy of attention

On March 23, 2020, the Ninth Circuit reinstated a False Claims Act (ACA) “whistleblower” suit alleging a hospital and various physicians orchestrated medically unnecessary inpatient admissions resulting in the submission of more than $1.2 million in false claims to Medicare. This reversed the District Court ruling that FCA allegations failed because “subjective medical opinions…cannot be proved objectively false.”

The Circuit Court decision follows others that established the lack of “medical necessity” claims can proceed under the FCA. The qui tam relator in the case alleged that certain admissions to the hospital were not medically necessary and were in fact contraindicated by the patients’ medical records and the hospital’s admission criteria. As a result, the hospital allegedly submitted, or caused to be submitted, Medicare claims that falsely certified that patients’ hospitalizations were medically necessary. The relator was a nurse who reported 65 admissions that “failed to satisfy the hospital’s own admissions criteria” and noted that the admission rate from related nursing homes with was over 80 percent during the relevant time period. The nursing home operator had acquired fifty percent ownership in the hospital that resulted in a spike in admissions from those facilities. After repeatedly attempts to bring the issue to the attention of management, she was fired.

The Court held that a physician’s clinical opinion must be judged by the same standard as any other representation, including whether the physician: (1) knows the clinical opinion to be false; or (2) renders the opinion in reckless disregard of its truth or falsity. This means that a physician’s certification that inpatient hospitalization was “medically necessary” can be false or fraudulent as any opinion that is not honestly held. In short, a false certification of medical necessity can therefore give rise to FCA liability.

Compliance officers at any hospital should make this message known to the executive leadership and medical staff.

 

 

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on LinkedIn.

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Copyright © 2020 Strategic Management Services, LLC. Published with permission.

CMS final rule reduces hospital administrative burdens

 

CMS issued a final rule to reduce unnecessary burden for health care providers, allowing them to focus on their priority—patients. Included in the rule is the removal of Medicare regulations identified as unnecessary, obsolete, or excessively burdensome. The rule removes the requirements for a facility to:

 

  • Request or allow swing-bed patients to perform services for the facility.
  • Provide an ongoing activities program that is directed by a qualified professional because the patient’s activity needs are addressed in the nursing care plan.
  • Employ a qualified social worker on a full-time basis because of the hospital swing-bed and Critical Access Hospital (CAH) bed limit requirements for those with more than 120 beds.
  • Assist residents in obtaining routine and 24-hour emergency dental care because of the existing requirement for hospitals and CAHs to provide care in accordance with the needs of the patient.
  • For CAHs, to perform a review of all their policies and procedures.
  • To disclose the names of people with a financial interest in the CAH.
  • For Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs), to review the patient care policies and facility evaluation annually, changing the frequency to every two years.
  • For a hospital’s medical staff, to attempt to secure autopsies in all cases of unusual deaths and of medical-legal and educational interest.

 

Hospitals, CAHs, and Home Health Agencies (HHAs) under the rule will be required to:

 

  • Have new discharge planning requirements—as mandated by the IMPACT act for hospitals, HHAs, and CAHs—which require facilities to assist patients, their families, or the patient’s representative in selecting a post-acute care (PAC) services provider or supplier by using and sharing PAC data on quality measures and resource use measures.
  • Have revised language that now requires a hospital (or CAH) to discharge the patient, and also transfer or refer the patient where applicable, along with his or her necessary medical information (current course of illness and treatment, post-discharge goals of care, and treatment preferences), at the time of discharge, to not only the appropriate post-acute care service providers and suppliers, facilities, agencies, but also to other outpatient service providers and practitioners responsible for the patient’s follow-up or ancillary care.
  • Have revised compliance language for HHAs that now requires these facilities to send all necessary medical information (current course of illness and treatment, post-discharge goals of care, and treatment preferences), to the receiving facility or health care practitioner to ensure the safe and effective transition of care, and that the HHA must comply with requests made by the receiving facility or health care practitioner for additional clinical information necessary for treatment of the patient.
  • Send necessary medical information to the receiving facility or appropriate PAC provider (including the practitioner responsible for the patient’s follow-up care) after a patient is discharged from the hospital or transferred to another PAC provider or, for HHAs, another HHA.
  • In the case of hospitals, ensure and support patients’ rights to access their medical records in the form and format requested by the patient, if it is readily producible in such form and format.
  • Allow multi-hospital systems to have unified and integrated Quality Assessment and Performance Improvement (QAPI) programs and unified and integrated infection control and antibiotic stewardship programs for all their member hospitals.
  • Allow hospitals the flexibility to establish a medical staff policy describing the circumstances under which a pre-surgery/pre-procedure assessment for an outpatient could be utilized, instead of a comprehensive medical history and physical examination.
  • Additionally, CMS is moving to clarify the requirement to allow the use of non-physician practitioners and doctors of medicine/doctors of osteopathy (MD/DOs) to document progress notes of patients receiving services in psychiatric hospitals.

 

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2019 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: Increased CMS Spotlight on Nursing Facilities

CMS and states visit nursing homes on a regular basis with “survey” or “inspection” teams to determine if the nursing homes are providing the quality of care that is required by Medicare and Medicaid, as well as to identify deficiencies in meeting CMS safety requirements. When deficiencies are identified, they must be corrected, and, if serious ones are not corrected, it may lead to termination from participation in Medicare and Medicaid.

Most facilities correct their problems within a reasonable period. However, some have significantly more problems that the norm with a pattern of serious problems persisting over three or more years. Although some facilities institute enough improvement that they are in substantial compliance on one survey, significant problems often resurface by the time of the next survey. Such facilities are referred to by CMS as a “yo-yo” or “in and out” compliance history. These facilities rarely address underlying systemic problems that are giving rise to repeated cycles of serious deficiencies. To address this problem CMS created the “Special Focus Facility” (SFF) initiative that is a listing of problematic nursing homes that have had a history of serious quality issues and are included in a special program to stimulate improvements in their quality of care.

Those on the SFF list are visited in person by survey teams twice as frequently as other nursing homes (about twice per year). The longer the problems persist, the more stringent the enforcement actions, including imposition of civil monetary penalties (“fines”) or termination from Medicare and Medicaid.  Within about 18 to 24 months after a facility is identified by CMS as an SFF nursing home, CMS expects: (1) improvement & graduation off the SFF; (2) termination from participation in Medicare/Medicaid programs; or (3) extension of time on SFF because of some progress or change of ownership. For more information check the CMS website that posts SFF Nursing Homes in five (5) categories:

  1. newly added to the SFF;
  2. failing to show significant improvement since being posted on the SFF;
  3. showing significant improvement by the most recent survey, and CMS is monitoring;
  4. graduating off the SFF because they not only improved, but they sustained significant improvement for about 12 months (through two standard surveys); and
  5. terminated by CMS from participation in Medicare and Medicaid within, or voluntarily chose not to continue such participation.

To assist in improving Nursing Home quality, CMS began rating all nursing homes using a Five-Star Quality Rating System that can be found at https://www.medicare.gov/NHCompare.

 

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2019 Strategic Management Services, LLC. Published with permission.

Kusserow on Compliance: Meeting nursing home compliance program legal mandates

The November 28, 2019 deadline approaches for skilled nursing facilities and nursing homes to adopt and implement an effective compliance and ethics program as a condition of participation in the Medicare and Medicaid programs. At that time, state survey agencies will begin assessing facility compliance with implementation of an effective compliance and ethics program. Yet, the OIG continues to find major problems with that health care sector. The OIG recently reported that posthospital extended care services or Medicare beneficiary coverage must be preceded by an inpatient stay in a hospital for not less than three consecutive calendar days. The OIG found that CMS improperly paid 65 of the 99 skilled nursing facility (SNF) claims sampled by the OIG.  Projecting from its sample, the OIG estimated that CMS improperly paid $84 million for SNF services over a two-year period.

Those nursing homes that followed the OIG guidance will have little problem in meeting the new mandate, but those who did not have only months to come into compliance. Organizations trying to catch up should consider having a compliance expert perform a gap analysis to identify elements needed for the compliance program and how be able to evidence program effectiveness. A gap analysis should provide a “road map” and step-by-step plan for bringing a facility into compliance with the mandates. Those that have already implemented a compliance program should consider having an effectiveness evaluation conducted by experts to verify that the program will meet mandated standards.

For more information about meeting the standards of these new mandates, Tom Herrmann may be reached at thermmann@strategicm.com or at (703) 535-1410.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

Connect with Richard Kusserow on Google+ or LinkedIn.

Subscribe to the Kusserow on Compliance Newsletter

Copyright © 2019 Strategic Management Services, LLC. Published with permission.