This blog is the second post in a series discussing the Centers for Medicare and Medicaid Services’ Final Rule regarding the obligation to report and return Medicare overpayments. The first post discussed the basic requirement to report and return Medicare overpayments and two highlights of the rule—when an overpayment is “identified” and the 6-year lookback period. The first post can be viewed here. In this post, we discuss the impact of the rule on providers’ compliance initiatives (or lack thereof).
As we said in the first post, a provider must report and return overpayments within 60 days of identification of an overpayment or the date any corresponding cost report is due. “Identification” is defined as when a person has, or should have through the exercise of reasonable diligence, determined and quantified the amount of the overpayment. A person “should have determined” that the person received an overpayment if the person fails to exercise “reasonable diligence” and the person, in fact, received an overpayment. CMS believes that this definition provides an incentive for providers to exercise reasonable diligence in determining whether an overpayment exists. Otherwise, CMS believes that providers may avoid compliance efforts that might uncover overpayments.
So, if a provider received an overpayment, but failed to conduct “reasonable diligence,” the overpayment is deemed to be “identified” and clock starts to tick on the report and return requirement. CMS did not define “reasonable diligence” in the final rule. Importantly, however, CMS stated in its commentary that “reasonable diligence” includes proactive compliance efforts as well as the timely investigation of credible information regarding potential overpayments. In regard to proactive compliance efforts, CMS stated that undertaking no such efforts or minimal efforts to monitor claim accuracy could/would subject the provider to liability under the rule based on the failure to exercise “reasonable diligence.” In other words, if a provider received an overpayment, but had no actual knowledge of such overpayment, the provider may still be exposed to liability if the provider engaged in no or minimal compliance activities to monitor the accuracy of Medicare claims.
What does this mean for providers, particularly Delaware physicians? The final rule does not require the adoption of a compliance program. As in the past, CMS recognizes that compliance activities necessarily (and appropriately) vary based on the provider’s type and size. However, it is clear that CMS believes providers have a “clear duty” to engage in proactive compliance efforts. What remains unclear is whether the government and whistleblowers will attempt to bolster False Claims Act complaints by latching onto a provider’s failure to engage in any (or minimal) proactive compliance measures, even in the absence of actual knowledge of an overpayment.
Regardless of the False Claims Act implications of this Final Rule, what is clear is that the trajectory of the government’s scrutiny in guarding against Medicare fraud, waste, and abuse continues put the onus to identify and return overpayments on the providers who receive them. Proactive compliance measures remain the best way to avoid the enforcement radar. Delaware providers should consider the types of measures they should be taking to ensure the accuracy of their claims.
But what should Delaware providers do once a proactive compliance audit reveals an overpayment? In the next post in this series, we will discuss the process of investigation when a provider receives “credible information” regarding a potential overpayment.
On February 12, 2016, the Centers for Medicare and Medicaid Service (“CMS”) published a final rule regarding the Affordable Care Act’s requirement that providers report and return overpayments. It has been a long road to this point. Back in 2012, we wrote about CMS’ proposed rule, which introduced quite a bit of uncertainty in the process of investigating overpayments and ultimately reporting and returning those overpayments. After nearly four years, and after considering approximately 200 pieces of commentary from interested parties, CMS has finalized the rule, further outlining provider responsibilities under the Affordable Care Act’s requirement.
The Affordable Care Act was enacted on March 23, 2010 and established a requirement that a person who has received an overpayment must report and return the overpayment to the appropriate party and to notify that party of the reason for the overpayment. The Act requires that an overpayment be reported and returned by the latter of 60 days from the date on which the overpayment was identified or the day any corresponding cost report is due, if applicable. Importantly, the Act specified that any overpayment that was retained by a person after the deadline for reporting and returning an overpayment constituted an obligation under the Federal False Claims Act, which could lead to significant liability. This requirement became effective immediately on March 23, 2010, and for almost six years, providers have been under an obligation to report and return overpayments. Still, for those six years, a number of questions remained.
In this multi-part blog, we will discuss broad highlights from the Final Rule and some more in-depth takeaways. In this blog post, we discuss how the Final Rule defines when an overpayment is “identified” and the lookback period for reporting and returning overpayments.
At the outset, the Final Rule applies only to Medicare Parts A and B. A separate rule applies to Medicare Parts C and D, but there is no rule with respect to Medicaid overpayments.
The Final Rule defines an “overpayment” to be any funds that a person has received or retained under Medicare Parts A and B to which the person, after applicable reconciliation, is not entitled. It does not matter how the overpayment occurred, even if by honest mistake.
One major highlight from the Final Rule is that providers have the ability to investigate whether an overpayment exists without starting the 60-day clock. As described above, the Act requires a person to report and return an overpayment by the latter of 60 days from the date on which the overpayment was identified or the date any corresponding cost report is due. The Final Rule has defined “identified” as when a person “has, or should have through the exercise of reasonable diligence,” determined and quantified the amount of the overpayment. A person “should have determined” that the person received an overpayment if the person fails to exercise reasonable diligence and the person in fact received an overpayment. This definition clarified confusion as to whether time spent investigating and quantifying a known (or suspected) overpayment would essentially toll the 60-day deadline. However, CMS makes clear the providers must still exercise “reasonable diligence,” which requires both proactive and reactive compliance measures. Reactive investigations must occur in a “timely manner,” which CMS considers to be “at most 6 months from receipt of credible information, except in extraordinary circumstances.” CMS’s commentary on proactive compliance measures will be discussed in a subsequent blog post.
The second major highlight of the Final Rule is the six-year lookback period. Under the rule, providers must report and return an overpayment if the provider identifies the overpayment within six years of the date the overpayment was received. The impact of this lookback period is that if a provider obtains credible information of a potential overpayment, the provider needs to conduct reasonable diligence to determine whether they have received an overpayment, which may extend back six years from the date the provider received the credible information. CMS even commented on the fact that various Medicare audits, including RAC audits, may be time limited (e.g., only the last 3 years), but they serve as credible information of a potential overpayment going back further. As part of reasonable diligence, providers need to determine whether they have received overpayments, based on the same issues identified in the Medicare audit, going back 6 years. This lookback period effectively expands the sometimes shorter audit authority of Medicare contractors, putting the onus on providers to complete the entire six year audit.
The text of the Final Rule may be viewed here.
In the next blog post, we will discuss some broader takeaways from the Final Rule and how providers can ensure they have appropriate and robust compliance programs in place to address the overarching concerns of these requirements.
Physicians often ask about sharing space or equipment with colleagues. For a number of reasons, regulatory compliance often makes the proposed arrangement impractical, if not impossible. However, a new Stark exception will, for the first time, permit space and equipment sharing without having to satisfy the sometimes onerous and impractical lease requirements.
The federal Ethics in Patient Referrals Act, more commonly known as “Stark,” prohibits physicians from referring patients for designated health services payable by Medicare to entities with which the physician has a financial relationship, unless the arrangement satisfies an exception. As a general matter, if an entity (which includes a physician or group practice) provides space or equipment to a referring physician, Stark is triggered and the physician is prohibited from referring patients for DHS to the entity. To avoid application of Stark, you need to structure the relationship between the parties to comply with an exception. When it comes to providing space or equipment, one historically looked to comply with the exceptions for leases of space or equipment. The problem with those exceptions is that they require the written lease agreement to provide for the exclusive use of the space or equipment during the lease term, and leases could not be on an “as needed” basis. Generally, the leasing entity and the physician could not “share” the same space or equipment during the lease term.
However, effective January 1, 2016, a new Stark exception permits physicians and hospitals or other physician groups to share “space, equipment, personnel, items, supplies or services” in non-exclusive “timeshare” arrangements. To satisfy the exception, the arrangement must satisfy nine specific conditions.
The arrangement must be in writing and signed by the parties, specifying the premises, equipment, personnel, items, supplies, and/or services covered by the arrangement. Importantly, the exception will only cover arrangements between a physician (or the physician’s group) and either a hospital or a different physician group. The premises, equipment, etc. covered by the arrangement must be used “predominantly” for the provision of evaluation and management services to patients, as CMS wished to avoid scenarios where arrangements were set up so the physician only used the premises, equipment, etc. for the purpose of delivering designated health services. If equipment is involved, it must be located in the same building where the evaluation and management services are furnished and may not be used to furnish DHS that is not incidental to those services. Advanced imaging equipment, radiation therapy equipment, and clinical or pathology laboratory equipment is generally excluded from the exception.
Furthermore, as is the hallmark of many Stark exceptions, the arrangement may not be conditioned on the referral of patients by the physician to the hospital or physician organization and the arrangement must be commercially reasonable in the absence of referrals between the parties. Compensation must be set in advance and at fair market value. Compensation may not be on a “per click” or other similar basis and cannot be based on a percentage of revenue raised, earned, billed or collected. Essentially, the exception only permits compensation based on a flat fee or based on time, such as per hour or per day. The arrangement must not violate the federal anti-kickback statute or any federal or state law or regulation governing billing or claims submission.
Finally, the arrangement cannot convey a possessory leasehold interest in the space or equipment that is the subject of the arrangement. In other words, if it is a true lease, as opposed to a timeshare, licensing-type arrangement, the parties must comply with the original Stark space or equipment lease exceptions.
The new exception gives physicians and hospitals options outside of the traditional lease exceptions, and those interested in timeshare arrangements should discuss compliance with counsel. In addition, those providers with arrangements currently structured under the space or equipment lease exceptions should review the arrangements with counsel and consider whether they may be restructured under the new timeshare exception to better suit the purpose of the relationship.
The new exception may be found at 42 CFR § 411.357(y).
Most dentists have never had the need to consider Medicare enrollment, based on the fact that Medicare Part B covers a small amount of dental services (for example, services that are an integral part of a covered procedure and for extractions done in preparation for radiation treatment for neoplastic diseases involving the jaw). But for the many dentists who treat Medicare patients with Part D prescription drug plans, June 1, 2015 marks an important deadline.
Last May, the Centers for Medicare and Medicaid Services (“CMS”) published a final rule that requires dentists to either enroll in or opt out of Medicare in order to prescribe Medicare covered medication to qualifying patients with Part D prescription drug plans. If a dentist does not enroll or opt out, but prescribes such medication to his or her patient, the Part D sponsor or its pharmaceutical benefit manager must deny the pharmacy claim for the drug. The Part D sponsor or its pharmaceutical benefit manager must also deny requests for reimbursement from patients for a drug prescribed by a dentist that has not enrolled in or opted out of Medicare. CMS has directed dentists to either enroll in or opt out of Medicare by June 1, 2015 in order to ensure sufficient processing time for their patients’ prescription drug claims and to prevent claims from being denied by Part D plans.
While dentists are not billing or receiving payment for prescription drugs, the practical concern is how pharmacies and patients will react. It is possible that a pharmacy will refuse a prescription, knowing it will be denied payment, or make the patient pay out of pocket. Patients, then, will suffer a similar denial for reimbursement from the drug plan. Unfortunately, all fingers will point back to the dentist who prescribed the necessary medication, but who did not enroll in or opt out of Medicare.
When examining the options CMS has provided, “opting out” may seem like the simple solution. However, opting out is not quite as simple as informing Medicare that you are choosing not to enroll. To become an “opt-out provider,” the dentist must file an affidavit with the regional Medicare Administrative Contractor and enter into private contracts with each patient. These contracts must meet specific requirements.
On the other hand, dentists may enroll as a “full” provider or as only an “ordering/referring” provider. Enrolling as an “ordering/referring provider” will enable patients to receive coverage for prescription drugs and will also allow colleagues to whom you refer Medicare Part B covered services to receive Medicare reimbursement. Each of these options has different requirements and forms.
The ADA voiced opposition to the rule, noting that this new requirement will affect the majority of dental practices. Delaware dentists should consider their enrollment options and, if prescribing medication to Medicare beneficiaries covered by a Part D plan, submit an enrollment application or opt-out affidavit by June 1, 2015.
On March 25, the Department of Health and Human Services Office of Inspector General (“OIG”) released Advisory Opinion 15-04 in which it concluded that an exclusive arrangement between a laboratory (“Requestor Lab”) and physician practices could generate prohibited remuneration under the anti-kickback statute. Furthermore, the OIG concluded that the proposed arrangement could violate the prohibition on charging Federal health care programs substantially in excess of usual charges, for which a provider may be excluded from participation in Federal health care programs.
The Requestor Lab proposed to enter into agreements with physician practices to provide all laboratory services for the practices’ patients and waive all the fees where Requestor Lab is out-of-network. According to the Requestor Lab, some physician practices desire to work with a single laboratory “for ease of communication and consistency in the reporting of test results.” For example, different laboratories utilize different methods of reporting test results and require different interfaces for reporting tests to the lab. However, some patients’ insurers require the use of a specific lab and will not reimburse any other lab under out-of-network benefits (“Exclusive Plans”).
Under the proposed arrangement, where a test is ordered for an Exclusive Plan patient, the Requestor Lab would not charge the patient, physician practice, or secondary insurer for the test. The laboratory would bill all other patients not under an Exclusive Plan, including Federal health care program beneficiaries. The Requestor Lab stated that neither the physician nor the practice would receive any financial benefit from the laboratory’s provision of services at no charge to the patients with Exclusive Plans. The physicians would not draw the samples, and thus could not bill for the blood draw or the testing. The Requestor Lab would provide a free limited-use EMR interface for submitting orders and receiving results, which the OIG had previously determined is not remuneration under the anti-kickback statute.
The OIG concluded that the proposed arrangement could potentially generate prohibited remuneration under the anti-kickback statute. Even though the Requestor Lab certified that physicians and physician practices would receive no financial benefit, the OIG concluded that a combination of factors would amount to remuneration to the physicians in exchange for their referrals for services to the Requestor Lab. The OIG found that the Requestor Lab would reduce administrative and possibly financial burdens (e.g., electronic record interface fees) associated with using multiple laboratories, and, as such, the OIG could not conclude that there was no possibility that the laboratory was not offering remuneration to induce the referral of Federal health care program business.
In addition to the anti-kickback statute analysis, the OIG noted that it has the authority to exclude providers from participation in Federal health care programs that it concludes have submitted or caused to be submitted bills or requests for payment to Medicare or Medicaid containing charges for items or services furnished “substantially in excess” of usual charges, unless good cause is shown. The OIG concluded that the proposed arrangement could result in a two-tiered pricing structure, where a substantial number of patients (those insured by Exclusive Plans) would receive services for free, regardless of financial need, and where other patients, including Federal health care program beneficiaries, would be charged. The OIG noted that the only reason for the proposed arrangement was to remove the obstacle that prevented the physician practices from referring all laboratory business to the laboratory. While the OIG could not conclude whether the laboratory would violate the substantially in excess provision, it opined that the risk was too high to grant the arrangement prospective immunity under the advisory opinion.
Advisory Opinion 15-04 continues the OIG’s long-standing skepticism of physician-laboratory arrangements.
On February 25, the US Supreme Court released its decision in North Carolina State Board of Dental Examiners v. Federal Trade Commission, reaffirming the rule that state professional licensing boards controlled by active market participants that are not “actively supervised” by the State do not enjoy state-action immunity from antitrust enforcement. As a result, both regulators and regulated health care professionals may find a need to reevaluate state licensing board activity.
Like most states, including Delaware, the North Carolina legislature created a board—the State Board of Dental Examiners—to regulate the “practice of dentistry.” By state law, a majority of the Board was comprised of practicing dentists. In 2003, North Carolina dentists started to complain to the Board about nondentists offering teeth whitening services at lower costs. The Board appointed a dentist member to lead an investigation into nondentists offering these services. The investigation led the Board to issue cease-and-desist letters to these nondentists, warning that the unlicensed practice of dentistry was a crime and either strongly implying or expressly stating that teeth whitening constituted “the practice of dentistry.” The Board also convinced the North Carolina Board of Cosmetic Art Examiners to warn cosmetologists against providing such services and even wrote letters to shopping mall operators to advise them to remove teeth whitening kiosks because that activity violated the North Carolina Dental Practice Act. The Act did not specify that teeth whitening constituted the practice of dentistry. As intended, nondentists ceased offering teeth whitening services in North Carolina.
In 2010, the Federal Trade Commission “FTC”) filed an administrative complaint charging the Board with violating Federal antitrust law. Essentially, the FTC alleged that the Board’s resolute action to exclude nondentists from the market for teeth whitening services was anticompetitive and an unfair method of competition. An Administrative Law Judge (“ALJ”) rejected the Board’s argument that the Board was immune from antitrust enforcement under the state action immunity doctrine. Ultimately, the case was decided on the merits in favor of the FTC, and the FTC ordered the Board to stop sending cease and desist letters and to issue notices to all earlier recipients explaining the Board’s proper scope of authority. The Board filed a petition for review to the Fourth Circuit, which subsequently affirmed the FTC’s decision. The Supreme Court granted certiorari on the issue of whether the Board enjoyed state action immunity.
The Supreme Court restated the standard for state action immunity set forth in Parker v. Brown, which provides that antitrust laws confer immunity on the anticompetitive conduct of States that are acting in their sovereign capacity. The Board argued that its members were conferred with the power of the State by virtue of the State creating the Board to regulate the practice of dentistry. The Court disagreed that creation of the Board was enough. Where a nonsovereign actor is controlled by active market participants, such as the Board, the actor will only enjoy Parker immunity if: (1) the action is clearly articulated and affirmatively expressed as state policy; and (2) the policy is “actively supervised” by the State. The second requirement was at the heart of the parties’ arguments.
In its holding, the Court made clear that where a State empowers a licensing board run by a majority of members that practice the profession they regulate, “the need for supervision is manifest.” Where a board is essentially controlled by active market participants, there is a risk that private interests may lead to anticompetitive regulation. The Board did not claim that the State of North Carolina exercised any supervision over its conduct regarding teeth whitening. The Court held that because there was no active supervision of the Board’s actions, the Board was not immune to antitrust laws.
In its decision, the Court established the parameters for what a State must do in order for its agencies controlled by active market participants to enjoy immunity from antitrust laws. At the very least, the inquiry is whether the State provides “realistic assurance” that an agency’s anticompetitive conduct promotes state policy, rather than the actor’s self-interest. The Court stated that to satisfy the requirement, a “supervisor,” who may not be an active market participant, must look at a board’s decision and review its substance, and act on the power, if necessary, to veto or modify decisions to ensure such decisions achieve state policy.
The Court’s decision in North Carolina State Board of Dental Examiners v. Federal Trade Commission should prompt states to review the composition and conduct of their licensing boards. Where a board is controlled by a majority of individuals who practice the profession they seek to regulate, states should seek to actively supervise the board decisions if immunity is desired.
On November 1, the Delaware Department of Health and Social Services (“DHSS”) promulgated new regulations governing the licensure and operation of free standing surgical centers (“FSSCs”), more commonly referred to as ambulatory surgery centers. The comprehensive regulatory changes became effective November 11 and raise a number of new issues for owners and potential investors of FSSCs.
Most significant of these new changes is that any modification of ownership and control (“MOC”) of a facility will result in the current license being “void,” requiring the facility to seek licensure as a new applicant. Importantly, the regulation explicitly states that the FSSC must then meet the current design and construction standards recognized by DHSS. “MOC” is defined by the regulations to be “a change of ownership or transfer of responsibility for the FSSC’s operation” and will occur “whenever the ultimate legal authority for the responsibility of the FSSC’s operation is transferred.” The regulation includes a number of examples of an MOC, including the transfer of a majority interest to a new owner.
In responding to comments on this new requirement, DHSS stated that it “follows a protocol to ensure the continuity of operations during the transition.” Licensees have not been apprised of exactly what this “protocol” is or how it actually works. What is troubling is that the FSSC license is “void” upon an MOC; this carries rather strong connotations. Reapplication for a license following an MOC is apparently not just about approving ownership, but reapproving the operation and physical environment of a currently operational facility, regardless of the history of quality care and excellent patient outcomes. Before going forward with an ownership change, the facility should reach out to DHSS to understand the protocol, the time frame for approval, and the impact on the viability of the facility that relies on ongoing relationships with providers.
Also of significance is the rule that licenses will be issued for specific hours of operation and FSSCs may not operate beyond those hours. In addition, if a prospective licensee or a currently licensed FSSC wishes to accommodate patient stays of 23 hours and 59 minutes, it must request approval in writing from the local government having jurisdiction.
Multiple commenters inquired whether the new regulations would impact a 1995 Delaware Attorney General’s opinion that exempted single specialty diagnostic endoscopy and pain management centers from licensure as FSSCs. While DHSS would not amend the regulations to specifically exempt these facilities, it did recognize that the Attorney General’s Office opinion was still in effect.
Finally, in one brief sentence, the new regulations provide that a license is subject, at any time, to revision or revocation by the State. Unlike regulations that govern licensure of other types of facilities and health care providers, this regulation does not tie the revision or revocation to any specific reason (such as violation of the regulations) or detail any process due to the licensee to challenge such a decision. The State Administrative Procedures Act does not apply to DHSS in regard to process for case decisions or judicial review of such decisions.
FSSC prospective licensees, current licensees, and potential investors in these facilities should review the new regulations carefully. The former regulations were wholly rewritten, and in addition to the above, the new regulations set forth requirements relating to the governing body, administration and personnel, medical staff, and nursing services, among other things. Current licensees should be aware that they are not grandfathered under the prior regulations, and will be subject to compliance with all new regulatory requirements.
The regulations can be reviewed here.
Each year, the Office of Inspector General (“OIG”) at the Department of Health and Human Services announces the agency’s new and continuing initiatives to combat health care fraud and abuse. The annual OIG Work Plan helps health care providers understand new, and some recurring, areas that the OIG believes are key in the fight to protect the federal fisc. We have previously discussed such key initiatives to help Delaware providers identify and focus on potential areas of compliance risk before issues arise (2012, 2013, 2014).
The OIG released its FY 2015 Work Plan on October 31, and our review has revealed some key initiatives:
We have previously discussed in a number of forums the success achieved by providers in appealing Medicare claim audits and denials to the Administrative Law Judge (“ALJ”) level of the statutory appeal process. Because of the success in overturning claim decisions, more and more providers have exercised their rights to appeal claim determinations or audits resulting in alleged overpayments. The number of appeal requests submitted to the Office of Medicare Hearings and Appeals (“OMHA”) increased from approximately 1,250 per week in 2012 to 15,000 per week in 2014. This incredible increase has caused a log jam, where the average processing time for an appeal request is now 464 days and providers are awaiting ALJ hearings in over 1 million appeals.
The OMHA simply cannot keep up. This backlog resulted in a Center for Medicare Advocacy class action suit filed in August, seeking declaratory, injunctive, and mandamus relief to compel the federal Department of Health and Human Services to meet the 90-day statutory deadline for reviewing appeals of claim denials. The American Hospital Association filed a similar lawsuit.
At the end of last year, faced with a backlog of pending appeals involving over 460,000 claims for services and entitlement, the OMHA suspended the assignment of new provider appeals to ALJs for at least 24 months. Many in the healthcare industry point to increasing RAC audit denials as the reason for the strain on the appeal system. The American Hospital Association reported that there was a 30-fold increase in RAC denials since 2010. Hospital appeals have seen a corresponding increase from around 17 per hospital in 2010 to more than 300 per hospital in 2013. According to the American Hospital Association, hospitals won nearly 70% of the claims for which the appeals process was completed.
In an effort to reduce the pending appeals, CMS has offered an “administrative agreement” to acute care hospitals and critical access hospitals that agree to waive their right to an appeal in exchange for a partial payment of 68% of the net payment amount.
CMS also announced two new initiatives it hopes will reduce the backlog: the Settlement Conference Facilitation Pilot and the Statistical Sampling Initiative.
The Settlement Conference Facilitation Pilot adopts an alternative dispute resolution process in order to negotiate settlements, rather than litigate the claims dispute through the administrative appeal process. There are a number of criteria that must be met to be eligible, including the fact that it is only available to Part B claims and appeals filed in 2013 but not currently assigned to an ALJ. This may be a viable alternative for physicians with Part B claims currently stalled in the process.
The Statistical Sampling Initiative is available to claim appeals currently assigned to one or more ALJs or filed during a specific time period. The Initiative is designed to streamline the appeal process for providers with a large number of claims. A statistician will select a sample and the ALJ will make a decision based on the sample. After a decision is reached, a CMS contractor will extrapolate the result of the sample to all of the claims at issue.
These programs will not work immediately, and the 24-month delay remains until OMHA can handle the backlog. This delay can have a noticeable impact on providers with solid defenses that claims were payable under the Medicare program. While we strongly encourage an appeal through all levels of the statutory process, providers may face waiting years from when CMS recoups alleged overpayments to when an appeal is fully adjudicated and any potential funds are returned to the provider. There is no doubt that the audit appeal process should be overhauled. Likewise, the RAC program should be modified to avoid erroneous denials that tie up providers’ funds for long periods of time.
In the meantime, providers should focus on internal compliance efforts to prepare for that next audit.
Back in February, the Delaware Department of Health and Social Services published a final rule setting forth standards for never before regulated Delaware health care facilities: medical and dental offices.
Pain management physicians, podiatrists, and dentists that perform “invasive medical procedures” in their respective offices are now required to comply with new patient care, medical record, infection control, patient rights, and physical/environmental standards never before applicable to medical or dental offices. Many Delaware providers may not realize that these regulations could apply to their practices.
An “invasive medical procedure” is defined as any medical procedure, including dental or podiatric procedures, in which the accepted standard of care requires anesthesia, major conduction anesthesia or sedation. As you can see, whether the procedure is actually “invasive” does not factor into the meaning of the term at all. For example, manipulation under anesthesia is not “invasive” in any sense, but the standard of care does require anesthesia. Finally, “anesthesia” is defined broadly to include anxiolysis, conscious sedation, deep sedation, major conduction anesthesia, minimal sedation, moderate sedation or general anesthesia. The definition of “anesthesia” explicitly excludes (1) local anesthesia, (2) the administration of less than 50% nitrous oxide in oxygen with no sedative or analgesic medications by any route, or (3) a single, oral sedative or analgesic medication administration in doses appropriate for the unsupervised treatment of insomnia, anxiety, or pain.
One of the more strenuous requirements for these offices is accreditation. The regulations, per statutory direction, require any medical or dental office where invasive medical procedures are performed to be accredited by one of five different accrediting organizations. The accreditation process can be lengthy and can pose considerable costs. One accreditation organization that has been contacted reported that the minimum survey fee is roughly $4,300, with an application fee of $775. This of course does not take into account the costs on a medical or dental practice for the staff time and effort necessary to help complete the accreditation process. One accreditation organization reported that the accreditation process can take 4-6 months from the submission of an application.
More problematic, however, is that accreditation organizations are not simply certifying Delaware facilities’ compliance with the Delaware regulations; they impose their own requirements. For example, one accreditation organization requires a facility to have a governing body that is fully and legally responsible for the performance of the organization, which must satisfy a long list of specific governance requirements. One such governance requirement is to establish a system of financial management and accountability and formulate long-range plans in accordance with the goals of the organization. Other requirements govern the actual administration of the organization. Many of the additional requirements not contemplated by Delaware law are entirely foreign to small medical and dental practices that are not accustomed to being treated like larger, formalized entities.
What is clear from correspondence with the Delaware Office of Health Facilities Licensing and Certification is that the standards, including accreditation, are ready to be enforced. There are formalized complaint procedures contained in the regulations, and facilities are subject to sanctions, up to an order of closure or order to cease invasive medical procedures, for violations of the regulations.
All such facilities in operation as of July 5, 2011 were required to submit proof of accreditation or the application for accreditation by August 14, 2014. The deadline has passed, so immediate steps must be taken to achieve compliance. As for facilities that become operational after July 5, 2011, proof of accreditation must be submitted within 12 months of the first day of operation. Compliance with the remaining requirements of the regulations must be achieved immediately.