The International Law Firm of Fulbright & Jaworski - Health Care
Mark Faccenda, Nancy J. Locke, Laura Ann Gabrysch, Selina Coleman and John E. Kelly
March 5, 2010
President Obama Signs Legislation Temporarily Delaying 21% Reduction in Physician Medicare Reimbursement
President Obama signed the Temporary Extension Act of 2010 into law on March 2, 2010, which extends current Medicare reimbursement rates for physicians through March 31, 2010. The Senate approved the legislation (H.R. 4691) by a 78-19 vote earlier in the day. The Department of Defense Appropriations Act of 2010 extended the physician fee update to the single conversion factor at 0% through February 28, 2010. Subsequently, the Centers for Medicare and Medicaid Services (“CMS”) agreed to hold claims for ten days past the March 1, 2010 deadline, at which time reimbursement for physician services under Medicare would have been reduced by 21% in accordance with the sustainable growth rate (“SGR”) formula used in the calculation of such payments. The Senate is also currently considering an amendment to legislation passed by the House of Representatives, H.R. 4213, which would extend current physician reimbursement levels through September 30, 2010. The full text of H.R. 4691 may be found here. The full text of H.R. 4213 and the proposed amendment thereto may be found here and here, respectively. Mark Faccenda
MMSEA Section 111 Medicare Mandatory Reporting Changes
CMS has issued alerts and a revised User Guide (version 3.0) that reflect several changes and clarifications to the Medicare mandatory reporting obligations and process for liability insurers, no-fault insurance, self-insured and workers' compensation. As previously reported, the start date for reporting has been moved from the second quarter of 2010 to the first quarter of 2011. CMS has further advised that those reports will now be retroactive for settlements, judgments and other one-time payments (“TPOCs”) occurring on or after October 1, 2010 (rather than January 1, 2010). For claims where the responsible reporting entity (“RRE”) has accepted responsibility for ongoing medical expenses (“ORM”), the retroactive date has been moved to those that existed on or after January 1, 2010. Additionally, the guidelines now state that an insurance deductible will be reported by the carrier, along with what the carrier pays to the claimant, even if the insured paid its deductible directly to the claimant, but that self-insured retentions (“SIRs”) still must be reported by the insured. The new User Guide also clarifies certain issues regarding foreign entity reporting, valid ICD-9 Codes, TPOC date determination, multiple query submissions received within a month, injured party representatives, and certain technical aspects related to reporting fields, among others. CMS further indicated that it will issue additional Section 111 guidelines relating to risk management write-offs, clinical trials and foreign insurers. Issues that still remain under consideration by CMS include several related to group settlements and defining incident dates for mass tort, product liability and exposure claims. For additional information, please contact Nancy Locke, Yvonne Puig or Mark Faccenda. Nancy Locke
IRS Pays Pending Medical Resident Refunds Prior to the End of FICA
The IRS has made an administrative decision to pay pending medical resident refund claims for periods prior to April 1, 2005, which is the effective date of new regulations which ended the FICA student exception for medical residents. In the 1990s, many institutions and individual taxpayers filed claims for refunds for FICA taxes paid on medical residents, claiming that the residents were students that qualified for the student exception from FICA taxes. The IRS vigorously opposed such efforts and held the refund claims in suspense. In 2004, the IRS proposed regulations that barred most medical residents from qualifying for the student exception for FICA. These regulations became effective April 1, 2005.
The timing for the IRS determination is two-fold. First, the Eighth Circuit (the court which ruled against the IRS in 1998 and opened the floodgate for refund claims) last year upheld the validity of the new regulations. Second, the statute of limitations for filing refund claims for periods prior to April 1, 2005 is now closed. Thus, the IRS’s decision to pay pending claims will not encourage new claims. For more information, click here. Laura Gabrysch
Nursing-Home Chains Settle Kickback Allegations With Justice Department
Last week, the Justice Department settled with two nursing-home chains accused of participating in a kickback scheme. For $14 million, Mariner Health Care, SavaSeniorCare Administrative Services, and three of their principals resolved allegations of kickbacks solicited from Omnicare, the nation’s largest long-term-care pharmacy. According to the government, the defendants conspired to have Omnicare pay $50 million in exchange for 15 years of using Omnicare’s services. Two of the principals and SavaSeniorCare have denied liability and owe no money towards the settlement. Omnicare previously settled these allegations, among others, for $98 million. To read more, click here or here. Selina Spinos and John Kelly
March 10, 2010, 1:00 - 3:00 PM EST: John Kelly will speak about compliance and the Foreign Corrupt Practices Act during a Health Ethics Trust ("HET") Audio Conference. For more information and details on attendance, click here.
March 24-25, 2010: John Kelly will be a speaker at the ACI's 10th Annual Forum on Fraud and Abuse in the Sale and Marketing of Drugs in New York City at The Helmsley Park Lane Hotel. He will be participating in a panel discussing how to conduct an internal investigation and effectively respond to the government. ACI has agreed to provide Fulbright clients with a generous discount. If you wish to attend this event and receive the discount, please contact Dana Rossi here. For additional information, click here.
Nancy J. Locke
Laura Ann Gabrysch
John E. Kelly