Ohio Hospital Association

Compliance Update

October 11, 2002                                                                         www.ohanet.org

The OIG recently issued its work plan of projects for fiscal year 2003.  Identified in the hospital-focused activities are the usual DRG 3-day window and inpatient rehabilitation project, along with new projects studying critical access hospitals and hospital privileging activities.  Although the work plan offers little detail about the individual activities, hospital compliance officers should review the document, particularly when planning compliance-related education and auditing.  

OHA mailed Bulletin 02-021 to all member hospital CEOs and compliance officers.  The OHA Bulletin and the OIG Work Plan may be accessed from the OHA Web site at the Ohio Hospital Association Compliance Center.

The OIG has released for comment its draft compliance program guidance for pharmaceutical manufacturers.  Published in the Federal Register Oct. 3, interested parties have until Dec. 2, 2002 to submit comments and suggestions. 

Similar to compliance guidance for other segments of the health care industry, the OIG tracks the seven elements fundamental to an effective compliance program.  Specific to pharmaceutical manufacturers, the OIG identifies risk areas that include the integrity of payment data, kickbacks and drug samples.  Interestingly, the OIG mentions the voluntary marketing code of conduct recently adopted by the Pharmaceutical Research and Manufacturers of America (PhRMA) as a good “starting point,” but warns the PhRMA code will not protect a manufacturer from prosecution or liability. 

The OIG published for comment a proposed rule that would expand the existing Anti-Kickback Statute safe harbor for certain waivers of beneficiary co-payments and deductibles to Medicare SELECT beneficiaries.  Similar to a preferred provider network, Medicare SELECT plans may contract with particular providers to waive beneficiary cost-sharing amounts if certain quality, access and coverage conditions are met.  The proposed safe harbor would protect waivers of cost-sharing for Part A and Part B services by Medicare SELECT beneficiaries in accordance with an agreement between the plan and provider as long as the waivers are otherwise permitted under applicable Medicare laws, regulations and policies.  CMS and the OIG believe this expanded safe harbor will maximize the Medicare SELECT program’s chances for success. 

Comments on the proposed safe harbor are due on or before October 25, 2002 and should be sent to:

Department of Health and Human Services, Office of Inspector General
330 Independence Avenue, SW, Room 5246
Attention:  OIG-729-P
Washington, DC 20201 

To see the proposed rule, which was published in the September 25, 2002 Federal Register (67 Fed.Reg. 60202), click here. 

The OIG approved another municipal ambulance service’s practice of “insurance-only” billing for residents, routinely waiving co-payments and deductibles.  Although typically concerned about the potential abuse of such routine waivers, the OIG pointed to Medicare’s policy allowing state or local government providers to waive patient cost sharing amounts in CMS Carrier and Intermediary manuals.  (MCM Sec. 2309.4 and MIM Sec. 3153.3A.)  However, the OIG warns this policy does NOT apply to private subcontractors of a governmental provider.  Click here or contact OHA for a copy of OIG advisory opinion 02-15. 

The OIG examined an infusion company’s proposal to provide free safety equipment (helmets, cold packs, etc.) for hemophilia patients and free pagers and monthly pager service to parents of pediatric hemophilia patients in advisory opinion 02-14. Under the anti-kickback statute and the civil monetary penalties law, the “giveaways” represent improper remuneration.  The value of the pagers, and to the extent the value of the safety equipment, exceeds the policy exception for de minimus goods and services of $10 per item and $50 per patient in the aggregate per year.  No other statutory exception applies to the proposal.  The negative opinion can be viewed here.  Watch for an upcoming OHA Bulletin on a related pronouncement from the OIG entitled, “Special Advisory Bulletin on Offering Gifts and Other Inducements to Beneficiaries.” 

In advisory opinion 02-13, the OIG refused to bless a proposed arrangement under which a pharmaceutical manufacturer would establish a foundation to pay cost-sharing amounts for patients using the manufacturer’s anemia drug.  Even though the foundation would be tax-exempt and grants would go to patients based on financial need, the OIG believes such programs pose substantial risk of program and patient fraud and abuse.  Specifically, the OIG found the pharmaceutical manufacturer’s proposal:

ü       is squarely prohibited by statute;
ü       poses all the usual risks of fraud and abuse associated with kickbacks;
ü       represents a patient assistance program that could be very profitable to manufacturers; and
ü       there are non-abusive (but less profitable) alternatives such as providing free drugs to needy patients without billing       Medicare or Medicaid.

The OIG will not impose sanctions on a state university hospital authority that makes charitable contributions to an endowment fund for the benefit of the university’s medical school and its faculty.  Under the proposed arrangement, the hospital authority will grant $1.6 million to fund a cardiovascular program at which the university’s faculty physicians will practice. 

In advisory opinion 02-11, the OIG finds that the grant “is as straightforward as it is problematic:  it is a substantial donation by a hospital to a major referral source.”  Yet, the OIG recognizes “that the relationships among components of academic medical centers are often organizationally and financially complex” and will not impose sanctions on the parties due to built-in safeguards and the parties’ common mission to train physicians and to provide quality medical care. 

In advisory opinion 02-10, the OIG considered arrangements involving discounts of dialysis equipment and supplies and found that they could generate prohibited remuneration if the intent to induce or reward referrals was present.   

The OIG found little risk of program fraud or abuse through a discount program that applies a uniform discount based on aggregate annual purchases.   However, in a rare negative opinion, the OIG refused to approve a discount based on total annual purchases of certain items if the buyer purchases a minimum quantity of one or more certain items (a bundled discount program.)  The OIG warned that “bundled discounts are problematic because they may potentially shift costs among reimbursement systems, distort the true cost of items, lead to overutilization, and make it difficult for federal health care programs to determine proper reimbursement levels.” 

OHA Compliance Telephone Briefing Series Underway It’s not too late to register for the 2002 OHA Compliance Briefing Series!  The series features seven sessions on targeted topics for hospital compliance officers and others.  The one-hour sessions take place via teleconference, and fees are paid per phone line — so many hospitals use the briefings to train staff.  Contact OHA’s Center for Education (614/221-7614) for more information.  October’s session featured a discussion of the compliance issues involving the pharmaceutical industry led by John Green of Porter, Wright, Morris & Arthur.  Remaining topics for 2002 include:

ü       November 12, 11:00 a.m., “The Changing EMTALA Landscape: Off Campus Facilities and Other Considerations,” Gretchen McBeath, Bricker & Eckler, Columbus

ü       December 10, 11:00 a.m., “PPS Transfer/Discharge Investigations,” Gary Eiland, Vinson & Elkins, Houston

And Don’t Forget the 2002 Coding and Reimbursement Telephone Briefing Series!  Join OHA and nationally recognized billing consultant Duane Abbey, Ph.D. for the 2002 Coding and Reimbursement Telephone Briefing Series.  Each session runs from 9:00 a.m. until 11:00 a.m. and features a different hot topic each month.  Contact the OHA Center for Education for details.

ü       October 17, 9:00 a.m., “Conducting Coding, Billing, Reimbursement Audits”

ü       November 21, 9:00 a.m., “ED and EMTALA Compliance”

ü       December 19, 9:00 a.m., “DME Coding, Billing & Reimbursement”  

Charge Description Master and APCs: 2002 and Beyond and Outpatient Documentation: Essentials for APCs.  Don’t miss these full-day companion seminars October 24 and 25 at the Holiday Inn Columbus East.  National coding and reimbursement expert Andrea Clark, RRA, CCS, CPHC will lead participants through HCPCS coding and documentation essentials.  Register for one or both days by contacting the OHA Center of Education.

Mark Your Calendar for the Annual OHA/AdminaStar Medicare Billing Seminars in November.  Held at four locations around the state (Cuyahoga Falls, Perrysburg, Cincinnati and Columbus, OHA and AdminaStar will once again team up for a comprehensive review of Medicare claims processing.  Included will be updates on hospital policy and payment initiatives, Medicare secondary payer issues, and customer service operations and activities.  This annual session is a must for patient accounts managers and billers.  Contact the OHA Center for Education to find out when the program is coming your way!

Centers for Medicare and Medicaid Services (CMS) Open Door Forum (http://cms.hhs.gov/opendoor/). CMS has launched an “open door” initiative, in an attempt to be responsive to provider needs.  CMS describes the sessions as “a series of public listening sessions in Washington and, with our regional offices, around the country to hear what it is like to work under the rules we develop and to listen to the various individual suggestions for improvement.” The next hospital open door forum is scheduled for Nov. 4 at 10:00 a.m., and all hospital representatives are invited to participate.  In addition to monthly conference calls, CMS publishes a newsletter on its Web site.  In September, over 816 telephone lines were connected to CMS open door calls.

“Now don’t get me wrong.  My position on the sin of Medicare waste, fraud and abuse has not changed.  As a watchdog of the taxpayer dollar, I firmly believe in asking health care providers to account for the money they receive from the government.  Taxpayer dollars must be spent responsibly.  However, when honest providers are unable to get straight answers from the government, frustration and inefficiency can result.  The outcome is a health care program that is not serving beneficiaries or taxpayers as well as it could.”

-Senator Chuck Grassley (R-Iowa) in remarks on
Medicare Appeals, Regulatory and Contracting Improvements
legislation, (Cong. Rec. S9840), October 2, 2002)