On November 17, 2023, The Centers for Medicare & Medicaid Services announced a final rule requiring skilled nursing facilities to publicly disclose additional ownership and management information. The new rule is specifically intended to require disclosure of private equity and real estate investment trust ownership, as well as those with management and financial control. The new rule will require SNFs that participate in Medicare and Medicaid to disclose specific ownership and financial data on initial enrollment, revalidation and reactivation, as well as during any change of ownership (CHOW).
In announcing the new rule, CMS’s Administrator said, “By strengthening our ability to examine nursing home ownership, including private equity and real estate investment trusts, we can improve transparency for the people we serve and their loved ones, researchers, and regulators, and enable better informed decisions about nursing home care.”
The CMS press release added, “Nursing homes frequently use other companies to provide major services or supports within a facility, but families currently have no way of knowing which different companies or firms provide care to their loved ones and how they might be connected to the owners of a nursing home. That will change under this rule.”
The rule expands the definition of “ownership” to include any party that: 1) exercises financial control over a SNF that leases or subleases property to the SNF, 2) has a 5 percent or greater stake in the value of SNF property, 3) provides administrative services, clinical consulting services, accounting or financial services, policies or procedures for any SNF operations, or 4) provides cash management services to a SNF.
The following individuals and entities will now have to be disclosed:
CMS will update its Form CMS-855A to allow SNFs to disclose the required information. Once the form is updated, CMS expects to initiate off-cycle revalidations of SNFs to obtain the information.
The final rule can be accessed at this link. https://www.govinfo.gov/content/pkg/FR-2023-11-17/pdf/2023-25408.pdf
CMS has also prepared a Fact Sheet, which can be found at this link. https://www.cms.gov/newsroom/fact-sheets/disclosures-ownership-and-additional-disclosable-parties-information-skilled-nursing-facilities-and-0
It has been a while since we posted on this blog. But an important False Claims Act case was settled this week. This is a case that health care providers should be aware of, especially any provider that could be accused of over-scheduling procedures.
The case was filed by a whistleblower against the University of Pittsburgh Medical Center, one of its physician groups and the head of its Department of Cardiothoracic Surgery. The original complaint was filed by a former colleague of the surgeon named in the complaint. However, after the whistleblower complaint was filed, the government partially intervened in the case. The government alleged that the defendants “regularly sacrificed patient health in order to increase surgical volume” and to “maximize profit.”
The facts alleged in the complaint were that a cardiothoracic surgeon regularly performed as many as three complex surgical procedures at the same time, failed to participate in all of the “key and critical” portions of his surgeries, and forced his patients to endure hours of medically unnecessary anesthesia time as he moved between operating rooms and attended to other patients or matters.
According to the government, those practices amounted to violations of the statutes and regulations which prohibit “teaching physicians” from billing government programs for “concurrent surgeries”. For that reason, the case was filed under the False Claims Act. The lawsuit contended that the surgeon falsely billed Medicare, Medicaid and other government programs for those procedures.
After a failed attempt to have the Court dismiss the lawsuit on legal grounds, the defendants elected to settle the case.
The key elements of the settlement included payment of $8.5 million to the government to resolve the claims against them. The Defendants also agreed to create and effectuate a Corrective Action Plan for the surgeon, and to submit to a year-long, third-party audit of the surgeon’s physician fee services billings to Medicare.
On June 18, 2014, the Office of Controlled Substances issued an emergency regulation imposing a number of conditions on prescribing extended release hydrocodone that is manufactured without an abuse deterrent formulation (ADF). The move is apparently Delaware’s reaction to the FDA’s approval last year of Zohydro ER, which approval has prompted concern among members of Congress and public health officials in a number of states. According to those officials, because Zohydro does not have an abuse resistant formulation, it can be crushed and inhaled or injected, making the full dose of hydrocodone available immediately, which some fear may lead to opioid addiction and overdose fatalities. In April a federal court blocked Massachusetts’ attempt to ban sales of Zohydro on the ground that the state could not ban the sale of a federally-approved drug.
The new prescription requirements in Delaware are aimed at minimizing use of Zohydro and, for those who are prescribed the drug, minimizing the likelihood of abuse. Effective as of June 18th, practitioners must do (and document) the following prior to prescribing extended release hydrocodone that is manufactured without ADF:
The prescription must be filled within seven days and must not exceed 30 days in duration.
The emergency regulation also requires a practitioner to schedule “periodic” follow up visits with a patient prescribed hydrocodone not manufactured with ADF to evaluate and document whether to continue treatment or if there is an available alternative, whether to refer the patient for pain management or substance abuse consultation, and whether to implement a plan for discontinuing the hydrocodone if the patient has failed to adhere to the Controlled Substance Treatment Agreement.
Practitioners considering prescribing extended release hydrocodone that is manufactured without an ADF, such as Zohydro, should review the full text of the emergency regulation at http://dpr.delaware.gov/boards/controlledsubstances/documents/Emergency_Rule.pdf
Balick & Balick is prepared to assist practitioners with putting procedures in place to meet the requirements of the emergency regulation.
On February 14, Governor Markell signed into law House Bill No. 154, amending Titles 16 and 24 of the Delaware Code, as another action to help curb prescription drug abuse and diversion in Delaware. The law creates a new criminal offense and imposes penalties for diverting prescription drugs from a patient in a facility. More specifically, the law includes in the definition of “abuse” medication diversion “by knowingly, or intentionally, interrupting, obstructing, or altering the delivery or administration, of a prescription drug to a patient or resident” so long as the drug was prescribed or ordered by a healthcare provider for the patient or resident and where the diversion occurred without a prescription or order of a healthcare provider.
The law allows for a safe harbor of sorts, providing that a person is justified in diverting the prescription drug if the person is a healthcare provider who acted in good faith within the scope of his/her practice and/or employment, or if the person was acting in good faith while rendering emergency care at the scene of an emergency of accident. This safe harbor may raise issues about the scope of practice of particular health care providers and the existence of written and/or verbal orders to stop the administration of a drug.
If a person knowingly causes medication diversion of a patient or resident, the person shall be guilty of a class G felony. If the person is a healthcare professional, he/she shall be guilty of a class F felony. Delaware healthcare providers who work in facilities should clarify their scope of practice and employment related to the interruption of prescription medications, even if only temporarily.
After a delay of several months, the Department of Health and Human Services, Office of Inspector General (“OIG”) released its Fiscal Year 2014 Work plan on January 31, 2014. After combing through Work Plan, we noticed new areas of OIG focus, which it believes may be ripe for fraud, waste, and abuse. The Delaware healthcare community—from physician practices to institutional providers—can stand to gain a great deal of insight by understanding the OIG’s focus and trends for the new year. Most importantly, the Work Plan can help providers identify potential areas of compliance risk before an issue arises. We have identified a few key OIG initiatives below.
The entire OIG Work Plan can be viewed at http://oig.hhs.gov/reports-and-publications/workplan/index.asp. All providers should consider potential areas of compliance risk that affect their organization and act upon those risks when necessary.
Practitioners who have established in-office dispensing as a convenience to patients, as well as the patients who look to their doctor to dispense medications, are going to see those systems impacted by a recent bill signed by the Governor. In yet another measure intended to address the prescription drug abuse epidemic in Delaware, Senate Bill 119 was signed into law on July 3, 2013 to limit the in-office dispensing of controlled substances.
The law provides that any practitioner permitted to dispense controlled substances shall only be permitted to dispense the amount deemed medically necessary for a 72 hour supply. The synopsis of the bill indicates that this represents an “emergency supply,” though those words do not appear in the statute. Therefore, there is some indication that the General Assembly does not believe practitioners should be dispensing controlled substances from their offices as a matter of course, but only in cases of emergencies. The dispensing practitioners are also explicitly subject to the reporting requirements of the Delaware Prescription Monitoring Program.
It is clear that lawmakers want to monitor who is dispensing, when that person is dispensing, and how much that person is dispensing. It is important to note, however, that the law only limits dispensing, and does not impact the prescribing of controlled substances.
Delaware pharmacists have recently been reminded of their “corresponding responsibility” under Delaware and federal law. Regulations provide that while “the responsibility for the proper prescribing and dispensing of controlled substances is upon the prescribing practitioner… a corresponding responsibility rests with the pharmacist who fills the prescription.” 21 CFR § 1306.04; Delaware Controlled Substances Act Regulation 4.3.1
This responsibility can create tension between prescribing practitioners and pharmacists, who are at times obligated to confirm the validity and appropriateness of a controlled substance prescription. Many prescribing practitioners are reporting receiving frequent calls from pharmacists, who are asking questions about the reasons certain controlled substances have been prescribed.
Earlier this week, the federal government sent a significant remainder to the health care community that pharmacists and pharmacies can and will be held accountable for the failure to comply with these regulations. On June 11, 2013, the Walgreen Company (the nation’s largest pharmacy operator) agreed to pay $80 million to resolve DEA charges that several Walgreens pharmacies did not properly control oversight and handling of narcotic painkillers, particularly oxycodone. The $80 million settlement is the largest ever paid by a pharmacy chain.
According to the DEA, six Florida Walgreens pharmacies were responsible for “an unprecedented number” of record keeping and dispensing violations under the federal Controlled Substances Act, allowing prescription painkillers to be diverted for abuse or to the black market. The DEA alleged that the retail pharmacies knew or should have known that the prescriptions were not for legitimate medical use.
Delaware pharmacists and prescribers are partners in guarding against prescription drug diversion and misuse. As with any good partnership, open communication will benefit the partnership.
On April 1st, the Department of Health and Social Services (“DHSS”), through the Office of Health Facilities Licensing and Certification, published proposed regulations governing accreditation standards and safety and sanitation standards that, if implemented, would apply to all medical offices, dentist offices and podiatry offices where certain invasive procedures are performed. Physicians, dentists, and podiatrists who perform even minor medical procedures in their offices while utilizing “any level of anesthesia” should carefully review the regulations, as the Delaware health care community will undoubtedly be surprised by the proposed new requirements that may soon apply to these practices.
Anyone interested in these regulations may submit comments and concerns to the DHSS in writing on or before April 30th. We feel there is a great deal to be concerned about.
The regulations were drafted as a result of House Bill 47 and House Bill 144, which require the DHSS to establish standards with respect to safety and sanitary conditions and to establish standards for a facility accreditation program, respectively. While these bills provide a framework for the DHSS’s regulations, the agency’s proposed regulations seem to go further than the General Assembly intended. The regulations would apply to “medical facilities” that perform “invasive medical procedures” utilizing “any level of anesthesia.” (Any facility already licensed pursuant to Title 16 such as ASCs, freestanding emergency centers, or freestanding birthing centers are exempt). A “medical facility” explicitly includes the office of a physician, dentist, podiatrist, group practice or clinic. “Invasive medical procedures” are defined broadly, including any procedure structurally altering the human body by the incision or destruction of tissues. “Any level of anesthesia” shall include local anesthesia, nitrous oxide inhalation, minimal or moderate intravenous, intramuscular or rectal sedation, deep sedation, general anesthesia, or major conduction blockade.
These regulations have potentially far-reaching applicability in the Delaware medical community. Even health care practices that perform such procedures on an infrequent or limited basis, will be bound by these regulations. Any health care practice meeting these definitions would be required to be accredited by an outside accrediting agency within six months of the effective date of the regulations. The regulations propose standards with respect to safety and sanitary conditions and they attempt to define the accreditation process for such facilities. However, to our knowledge no accrediting agency or company has yet been approved. The cost and timing of the accreditation process remains unknown. However, anyone who has been through an accreditation process will certainly appreciate the unlikelihood of completing that process within the timeframe provided.
Beyond the challenges of accreditation, the regulations prompt unanswered questions, and may produce potentially troubling application of the law. One significant concern is that the proposed regulations would make physician/dentist/podiatrist quality of care a basis for discipline. In other words, as currently written, these proposed regulations would give the DHSS the right to impose discipline for quality of care concerns that are unrelated to the types of environmental concerns, such as environmental safety and sanitary concerns, that prompted the General Assembly to enact these laws. For example, the proposed regulations define certain predicate events (“adverse events”) that impose a duty to self-report to the DHSS. Some of these “adverse events” are clearly aimed at physician/dentist/podiatrist behavior, as opposed to safety and sanitary conditions. Facilities subject to these regulations would have to report any suspected abuse, neglect, or mistreatment, the admission of the patient to another facility due to complications, and serious cardiovascular events.
What kind of discipline would the DHSS be able to impose? Under the proposed regulations, the DHSS would have authority to impose any order it “deems necessary to protect the public health,” including the authority to close a facility, even prior to a hearing. This is the most troubling aspect of the proposed regulations. It may seem unimaginable that the DHSS would unilaterally close an entire health care practice, but as currently written, these proposed regulations allow that to happen. Patients of a medical practice need to be seen for a variety of services, including evaluation and management. Concerns related to the performance of minimally invasive procedures should not be a basis for shuttering an entire practice.
Now is the time to act. It is imperative for Delaware health care providers to review the regulations and consider how they may affect their practices if finalized. If no one voices concern, these regulations are likely to be finalized. Again, comments must be submitted to DHSS by Tuesday, April 30. Feel free to contact us to share your concerns.
The regulations may be viewed in their entirety at: http://regulations.delaware.gov/register/april2013/proposed/16%20DE%20Reg%201033%2004-01-13.htm
Pending in the Delaware Senate is a bill already passed unanimously in Delaware’s House of Representatives clarifying the law on immunity with regard to the process to detain or not detain a person for an involuntary mental health evaluation. House Bill #9 provides that immunity to civil damages and criminal penalties extends to peace officers, medical doctors, credentialed mental health screeners, and the facility in which the medical doctor or credentialed mental health screener practices, only for harm resulting from the mental health assessment, resulting clinical decision, and involuntary hold necessary until the person is presented to a designated psychiatric treatment facility, as required by the statute, and only if the peace officer, medical doctor, etc., did not intentionally inflict harm or engage in willful or wanton misconduct in connection with those activities. Once an individual is detained in a psychiatric facility for purposes of the statutorily required examination by a psychiatrist, neither the examining psychiatrist nor facility is immune from ordinary negligence claims. The proposed legislation is based on the recommendations of the HJR 17 Study Group created to review Delaware’s civil mental health laws. The text of the bill is available at http://legis.delaware.gov/LIS/LIS147.NSF/vwLegislation/HB+9?open.
Many health care providers are familiar with the costly exercise of fighting a Recovery Audit Contractor’s (“RAC”) determination of an overpayment through the administrative appeal process. But where providers take on the expense, the statistics on appeal are largely favorable. For fiscal year 2011, 43.4% of RAC determinations were reversed in the providers’ favor. The problem is that of the 903,372 claims identified as overpayments by RACs, only 56,620 claims were appealed at any level. Of those 56,620 claims, the 24,458 claims overturned during the appeal process translate to $37.9 million, or $1,550 per case. The low appeal rate is likely due to frustration, costs of appeal, and other high-priority issues, such as patient care. For hospitals, the biggest fight has centered on the RACs’ intense focus on inpatient care. In the first quarter of 2012, the claims most frequently identified by RACs as overpaid related to the provision of service on an inpatient basis when, according to the RAC, only outpatient service was necessary, despite the fact that the services were largely conceded to be reasonable and medically necessary. Reports indicate that when hospitals pursue appeals of these RAC determinations, they are successful 75% of the time. But the biggest problem is that where the RAC correctly determines that an inpatient admission was not warranted, hospitals are not being paid under Part B for outpatient care. In other words, while the only problem cited by the RAC is the setting where services were provided, claims for the services are being denied in their entirety, and hospitals are receiving no reimbursement for the underlying reasonable and medically necessary services provided. This issue is now at the center of a lawsuit filed by the American Hospital Association (“AHA”) and several hospitals against the Secretary of Health and Human Services. The AHA argues that the Social Security Act requires CMS to reimburse hospitals for reasonable and medically necessary services, and that by allowing the RACs to claw back the entire payment for the inpatient services under Part A and then denying payment under Part B, CMS is running afoul of federal law. The AHA seeks an order declaring the practice to deny all payment invalid and an order that the hospitals be paid in full for the reasonable and medically necessary services that CMS concedes were provided to beneficiaries. The complaint can be viewed at the AHA’s website: www.aha.org.
