The International Law Firm of Fulbright & Jaworski - Health Care
Anne P. McNamara, Cori Annapolen Goldberg, Mark Faccenda, India Brim and Selina Coleman
July 2, 2010
On June 28, 2010, Senator Charles Grassley (R-Iowa) sent a letter to 16 leading pharmaceutical companies seeking information by July 20 on their False Claims Act (“FCA”) compliance programs, and more specifically, on how the companies ensure that employees who file complaints will not face retaliation. Senator Grassley is the ranking member on the Senate Finance Committee.
CMS Announces New Clinical Trial Policy and Risk Management Write-Off Policy Regarding MMSEA §111 Reporting Guidelines
On June 10, 2010, the Centers for Medicare and Medicaid Services (“CMS”) announced a policy alert regarding clinical trials. Specifically, the policy addresses the application to sponsors of clinical trials of the Medicare secondary payer (“MSP”) reporting requirements under § 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (“MMSEA”). The new clinical policy states that “[w]hen payments are made by sponsors of clinical trials for complications or injuries arising out of the trials, such payments are considered to be payments by liability insurance (including self-insurance) and must be reported.” The new policy appears to clarify that a trial sponsor’s obligation under the MSP reporting requirements attaches when a payment is made for treatment of injuries or complications experienced in a clinical trial, and not when the promise to pay for such treatment is made in connection with an informed consent form or clinical trial agreement, an issue which has been the subject of debate for more than five years.
On June 25, 2010, CMS issued its proposed Physician Fee Schedule for calendar year (“CY”) 2011. The proposed rule contains a 6.1% reduction in physician reimbursement rates in addition to the 21% reduction already set forth under sustainable growth rate (“SGR”) requirements. The recently adopted Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 maintains through November 30, 2010 physician reimbursement rates at a 2.2% increase over previous levels; however, without further legislative remedy, the reductions proposed by CMS and mandated by SGR could be implemented at that point.
CMS Issues Guidance on Outpatient Three-Day Payment Window
On June 25, 2010, CMS issued guidance explaining how hospitals should bill for outpatient services provided within three days of an inpatient admission. When services are provided in hospital outpatient departments on either the day of or during the three days prior to an inpatient admission, this is known as the three-day payment window. The recently passed Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 sought to clarify Medicare’s payment policy for these three-day payment windows. The new guidance and legislative changes carry significant revenue implications, and may also affect the national recovery audit contractor (“RAC”) program. The new policy is effective for services furnished on or after June 25, 2010.
CMS Claims 32 Percent Savings on DMEPOS Under Competitive Bidding Program
CMS announced that in the first round of the Competitive Bidding Program Medicare beneficiaries will realize an average savings of 32 percent for certain durable medical equipment, prosthetics, orthotics and supplies (“DMEPOS”). The Competitive Bidding program will begin on January 1, 2011, in the following nine areas: Charlotte, Cincinnati, Cleveland, Dallas, Kansas City, Miami, Orlando, Pittsburgh, and Riverside. CMS predicts that the Competitive Bidding program will save the government more than $17 billion over the next ten years. In order to take advantage of the savings, Medicare beneficiaries may have to select a new Medicare contract supplier. Nonetheless, CMS will notify beneficiaries if they must change their supplier. Suppliers who wished to participate in the program submitted bids last year, and CMS will announce the winning contractors in September. Those suppliers who have gross revenues of $3.5 million or less will comprise around 48 percent of the suppliers who will be awarded contracts. Those suppliers who are not awarded contracts may reapply for Round Two in 2011. For addition information, click here. India Brim
CMS delayed the automatic rejection of claims submitted by providers who are not enrolled in the agency's PECOS database on July, 1, 2020. In an interim final rule, available here, CMS required physicians who order or refer covered services to revalidate their enrollment by July 6. Although CMS later announced that providers would have until January 3, 2011, to revalidate by enrolling online in the Provider Enrollment, Chain and Ownership System (“PECOS”), automatic rejection of claims based on orders from unenrolled physicians was slated to begin next week. The new rule will still take effect on July 6, but CMS explained that it will delay automatically rejecting claims from providers not in the database. CMS did not set a date to begin rejecting these claims – for now, submitted claims will continue to be reviewed and paid as before. According to CMS, this deferral reflects its efforts “to ensure that Medicare beneficiaries continue to receive the health care services and items they need.” To read CMS’s press release, click here. Selina Spinos
July 14-15, 2010: John Kelly will be a speaker at the ACI conference regarding Off-Label Communications, held at The Union League in Philadelphia, PA. He will be moderating a panel discussion entitled "Spotlight on Enforcement: New Trends Triggering Off-Label Investigations." ACI has agreed to provide Fulbright clients with a $200 discount. To receive the discount, please enter use the code 839L10.S when registering. For additional details regarding the event, please click here.
Anne P. McNamara
Cori Annapolen Goldberg