CMS Publishes Final Rule Limiting Recoupment of Provider and Supplier Overpayments
On September 16, 2009, the Centers for Medicare & Medicaid Services ("CMS") published in the Federal Register (74 Fed. Reg. 47458) a final rule that effective November 16, 2009 will limit recoupment of overpayments during appeals. Congress in the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 had required the prohibition on recoupment while providers are appealing overpayment determinations. Providers must file redetermination and reconsideration requests for the recoupment prohibition to apply. Providers will have 41 days to file a redetermination request or 60 days to file a reconsideration request before recoupment could commence. The final rule changes payment of interest by CMS to providers when overpayment determinations are reversed at the administrative law judge level or a higher level. Tom Dowdell

CMS Proposes New Prospective Payment System for Dialysis Services
CMS has proposed a new prospective payment system (“PPS”) for Medicare outpatient end stage renal disease (“ESRD”) dialysis services, beginning January 1, 2011. The rule proposes a bundled ESRD PPS to replace the current case-mix adjusted composite payment system. There will be a four-year transition period, with full implementation scheduled for January 1, 2014. ESRD facilities may make a one-time election to be excluded from the transition and accept payment entirely based on the payment amount under the ESRD PPS. For facilities that do not opt out, during the transition, payments will be made using a blend of ESRD PPS and the current payment system. For more information, click here. Lisa Thompson

FDA Commissioner Stresses Importance of Enforcement to Improve Compliance
On September 16, 2009, Food and Drug Administration (“FDA”) Commissioner, Margaret Hamburg, confirmed that the FDA will seek to improve compliance through its enforcement efforts. In a speech to the Regulatory Affairs Professionals Society annual conference in Philadelphia, Hamburg stressed that she has already taken steps to streamline the FDA’s enforcement capabilities and believes holding violators accountable will be a great deterrent to potential infringers. Hamburg believes the FDA needs to be strategic and send a message to companies that significant risks and violations will incur “meaningful penalties to send a strong message,” which will enhance the public’s confidence in FDA oversight, encourage compliance, and educate consumers about potential risks. Further, Hamburg provided that there is a need to improve regulatory standards overseas because the current system is inadequate. John Kelly

EPA Releases New Performance Standards and Guidelines for Medical Waste
On September 15, 2009, the Environmental Protection Agency (“EPA”) released final amendments to new source performance standards (“NSPS”) and emission guidelines in order to regulate the emissions released from hospital, medical and infectious waste incinerators (“HMIWI”). The final amendments will strengthen the emission limits for regulated pollutants, require annual inspections of emission control devices and implement procedures for test data submission. In addition, the new amendments will also institute additional stack testing requirements for existing and new sources of waste, provide additional monitoring requirements for these new sources and require a one-time visible emissions test for ash handling operations. The EPA imposed these new amendments as a part of the revisions to the September 1997 new performance standards. The EPA estimates the total nationwide cost for the 57 currently operating HMIWI to comply with the new amendments will be $15.5 million each year. As a result of these new regulations, the EPA believes that around 393,000 pounds of regulated pollutants will be reduced each year. For further information click here. India Brim

Department of Justice Reaches Settlements in Two Fraud and Abuse Cases
Two affiliated long-term care facilities in Philadelphia, Willowcrest Nursing Home and Willow Terrace at Germantown of the Albert Einstein Health Network, have reached a settlement with the Department of Justice (“DOJ”) in an agreement resolving the facilities’ potential civil liability under the False Claims Act. The facilities were accused of submitting claims to Medicaid for alleged sub-standard services to residents between August 2005 and October 2007. The terms of the settlement require the facilities to pay the United States $425,072 and hire a full-time physician assistant or nurse practitioner for at least three years, the first quality of care settlement in which this supplemental position has been required. To view the settlement agreement, click here.

Additionally, a Las Vegas pain management center and five of it’s health care professionals have reached a settlement with the DOJ to pay the United States $167,096 in relation to a civil complaint alleging that the professionals submitted claims to Medicare for procedures that were not considered covered services under Medicare policies. To view the settlement agreement, click here. John Kelly

First Circuit Rejects Failure to Stabilize EMTALA Claim Without Transfer
The First Circuit, in addressing a claim under the Emergency Medical Treatment and Active Labor Act (“EMTALA”), held that a hospital’s failure to stabilize a patient’s emergency medical condition did not permit such a claim where the patient was not ultimately transferred. Alvarez-Torres v. Ryder Mem’l Hosp. 1st Cir., No. 08-2351 (Sept. 4, 2009). The First Circuit Court of Appeals affirmed an order for summary judgment, stating that “a hospital cannot violate the duty to stabilize unless it transfers a patient” as indicated by the “statutory definition of ‘to stabilize.’” The court, quoting 42 U.S.C. §§ 1395dd(b)(1)(A) and 1395dd(e)(3)(A), defined “to stabilize” as “to provide such medical treatment of the condition as may be necessary to assure, within reasonable medical probability, that no material deterioration of the condition is likely to result from or occur during the transfer of the individual from a facility.” [emphasis in original]. Because the plaintiff was never moved from the hospital facilities, the court recognized that no transfer took place, thus making its failure to stabilize the patient immaterial for the purposes of the plaintiff’s EMTALA claim. The First Circuit also rejected the plaintiff’s argument that a transfer “does not require a patient to physically leave the hospital, but only for a physician to enter an order of transfer.” Mark Faccenda

Federal Court Holds Against Hospital in Graduate Medical Education Case
A federal district court in Michigan held in a September 10, 2009 opinion that a hospital is not entitled to certain graduate medical education ("GME") payments for resident training in a non-hospital site because the hospital did not have a written agreement with such non-hospital site. Covenant Medical Center v. Sebelius, Case No. 07-15108 (E.D. Mich.). During the time period in question, fiscal years 1999 through 2001, the Medicare regulations provided that for a hospital to claim resident training time in a non-hospital site for GME payment purposes, the hospital must have a written agreement with the non-hospital site that provides that the hospital will incur the cost of the residents' salaries and fringe benefits while the residents are training in the non-hospital site and the hospital is providing reasonable compensation to the non-hospital site for supervisory teaching activities. This regulation has since been amended. The hospital challenged the regulation on three grounds: (i) the written agreement requirement is invalid as a matter of law; (ii) the regulation does not apply to related parties; and (iii) the hospital substantially satisfied the written agreement requirement. The court rejected all three arguments. First, the court determined that the written agreement requirement is not arbitrary, capricious or manifestly contrary to the Medicare Act. The court explained that "[t]he written agreement regulation is a reasonable way in which the Secretary may verify, as it is statutorily required to do so, that a hospital is actually incurring the costs for which it seeks reimbursement." Second, the court denied the hospital's argument that because the hospital and the non-hospital site are "related parties" under the Medicare regulations, the written agreement requirement does not apply. The court explained that "[s]imply because [the hospital and the non-hospital site] are 'related parties' does not assure the Secretary that the hospital is financially responsible for paying 'all or substantially all' of the training costs at the non-hospital settings." Third, the court dismissed the hospital's claim that it complied with the written agreement requirement by demonstrating that it incurred all or substantially all of the costs associated with training residents in the non-hospital site. The court stated the "t]he purpose of requiring an 'agreement' as opposed to a collection of documents is so the intermediary and Secretary do not have to comb through hundreds of pages to find out whether a hospital incurred all or substantially all of the costs of a training program." Tom Dowdell

New York Enacts Law Requiring Hospitals to Report Nurse Staffing Ratios
On September 17, 2009, New York Governor David Paterson signed the “Nursing Care Quality Protection Act” into law, which will require hospitals to report a variety of information about nurse staffing levels. Under the new law, hospitals will be required to report the number of registered nurses providing direct care, the ratio of patients per registered nurse providing direct care, as well as the number of licensed practical nurses providing direct care. The information must be expressed “in terms of total hours of nursing care per patient, including adjustment for case mix and acuity, and as a percentage of patient care staff,” and must “be broken down in terms of the total patient care staff, each unit, and each shift.” In addition, hospitals will be required to report the number of unlicensed personnel “utilized to provide direct patient care,” and the methods used for determining and adjusting staffing levels. To read the text of the Nursing Care Quality Protection Act, click here. Peter Leininger

UPCOMING EVENTS

September 23, 2009: Glenn Jones, John Kelly and Rick Robinson will present via teleconference the second in a two part series on Crisis Management entitled, "The Government Strikes: Responding to Searches and Investigations". For more information and to register click here.

October 27, 2009: Glenn Jones will moderate the Enforcement and Compliance Roundtable at the American Bar Association Health Law Section's 7th Annual Washington Healthcare Summit. For more information, please click here.