Texas Society of Sleep Professionals The Sleep Profession After Health Care Reform

1. October 5, 2013 Brandy Schnautz Mann Jackson Walker L.L.P. bmann@jw.com Texas Society of Sleep ProfessionalsThe Sleep Profession After Health Care Reform

2. Health Care Reform • Patient Protection and Affordable Care Act– “PPACA,” “ACA,” or “Obamacare” • New federal laws and regulations • New compliance challenges for providers • Medicare reimbursement changes on the horizon • Push for new provider arrangements

3. Health Care Reform • PPACA, along with the accompanying Reconciliation Act, signed into law in March of 2010 • Upheld as constitutional by the U.S. Supreme Court on June 28, 2012 • Continuing efforts by opponents to repeal law or defund it

4. Goals • Some goals of Health Care Reform • Universal coverage for Americans • Link reimbursement to outcomes • Lower cost of health care • New models for health care delivery

5. Universal Coverage • Intention to increase Medicaid enrollment in states • Creation of exchanges to allow purchase of insurance • Federal subsidies for individuals to pay premiums • Tax credits to small business • Allowing adults may remain on parents’ insurance until age 26

6. Universal Coverage • Implications • More Medicaid/CHIP recipients will be accessing care • States can expand program to residents with incomes up to 138% of federal poverty level • How many? Congress predicts enrollment to grow by 7 million in 2014 to 12 million by 2020 • But NOT in Texas

7. Universal Coverage • Implications • More privately insured patients through exchanges? • Exchanges opened October 1, 2013 • Administration has not released figures • Some reports of enrollment in the single digits nationwide • Not just how many enroll, but what kind of people enroll will determine costs (e.g., young v. old, healthy v. sick)

8. Universal Coverage • Implications in Texas • No expansion of Medicaid • Those who would have qualified if Medicaid had expanded qualify for subsidies to purchase through exchange

9. Exchanges • Three models for exchanges • State operated exchanges • Federally operated exchanges • Default option • Texas • Partnership exchanges between state and feds

10. Exchanges • Current statistics (as of 09/30/13) • 18 states and D.C. will operate state-based exchanges • 7 states will participate in partnership exchanges • 26 states will use a federal exchange by default • State still has role through insurance regulation and state role in operating Medicaid • Texas

11. Focus on Outcomes • New focus on patient-centered care, with plans to reward providers (primarily hospitals now) through higher reimbursement for: • Quality of care • Outcome of care • Patient safety • Efficiency of care

12. Focus on Outcomes • But there is also a “stick,” such as: • CMS proposed rules and guidance to auditors discourage short inpatient stays • These tend to maximize billing of Medicare Part A • Short stays are those that span less than two midnights after admission, which CMS wants paid as outpatient under Part B • But, long observation stays sometimes used by hospitals to counter readmission payment penalties

13. Focus on Outcomes • Recent studies have shown that 2008 cut in payments for hospital-acquired infections did not affect infection rates • Cast doubt on policy of tying reimbursement to quality improvement efforts

14. Fraud and Compliance • Federal fraud and abuse laws and regulations amended by PPACA to decrease overpayments and fraudulent arrangements • False Claims Act • Self-disclosure • Program integrity • Compliance plans

15. Fraud and Compliance • Federal anti-kickback statute • Federal health care programs (e.g., Medicare, Medicaid) • Current law prohibits offer or receipt of anything of value to induce purchase of health care services paid for by federal health care programs • Safe harbors

16. Fraud and Compliance • Federal anti-kickback statute • Anti-kickback statute expanded to provide government with greater criminal and civil enforcement authority • State of mind • Intent to violate the statute not required • Knowledge that practice illegal sufficient to demonstrate violation

17. Fraud and Compliance • Federal anti-kickback statute • Violation of statute is now a false claim against the federal government in violation of the federal False Claims Act

18. Fraud and Compliance • Stark • Prohibits physicians from referring a patient for certain designed health services to an entity in which the physician (or close family member) has a financial interest • Exceptions apply • Unlike anti-kickback statute, intention to violate the law is not required

19. Fraud and Compliance • Stark • Civil penalties (not criminal) • Violation of Stark law may result in an overpayment

20. Fraud and Compliance • Overpayments • New 60-day rule: providers must disclose and return any overpayment within 60 days of the later of: • The date the overpayment is “identified” or • The date a cost report is due, if applicable or risk false claims liability

21. Fraud and Compliance • Federal False Claims Act • A person who knowingly submits a false claim to the federal government is liable for damages up to three times the amount of the false claim plus mandatory penalty amounts for each false claim • Retaining an overpayment beyond the 60-day deadline now creates false claim liability

22. Fraud and Compliance • Federal False Claims Act– qui tam actions • Allows private citizen (the “relator”) to bring claim on behalf of the federal government and share in the recovery • Health reform has revised definitions of “public disclosure” and “original source” to make it easier for relator to bring a case

23. Program Integrity • Program Integrity in Medicare • Shift away from “pay and chase” model to preventing improper payments • New measures allow for per-payment review of claims in addition to post-payment • Automated data analysis to identify trends • Billing trends analyzed, outliers identified, etc.

24. Program Integrity • Program Integrity in Medicare • Payment suspension based credible allegation of fraud unless “good cause” exists not to (e.g., beneficiary access threatened) • Initial period of 180 days with one-time 180-day extension to complete investigation

25. Program Integrity • Program Integrity in Medicare • Enrollment moratoria on home health and ambulance providers in specific geographic regions • Provider screening heightened at enrollment • Connection with excluded providers • ZPICs and RAC reviews continue

26. Program Integrity • Revocation and deactivation of billing numbers • Revocation can result from non-compliance with participation requirements, conduct • Must re-enroll • Deactivation • No claims in 12 months • Failure to report changes or revalidate information with CMS

27. Self-Disclosure • Self-Disclosure of overpayments • OIG’s Self Disclosure Protocol • CMS’ Self-Referral Disclosure Protocol • Department of Justice • Repayment to carrier without disclosure submission • Small amounts based on errors and overpayments

28. Self-Disclosure • Self-Disclosure of overpayments • OIG’s Self Disclosure Protocol • Revised 2013 • For CMP liability not simple overpayments (minimum settlement amount $10,000 for non AKS violations, $50,000 for AKS violations) • Must estimate damages • Use for reporting employee's excluded status • Suspends 60-day overpayment period

29. Self-Disclosure • Self-Disclosure of overpayments • CMS’ Voluntary Self-Referral Disclosure Protocol • New • For potential Stark violations • Must provide financial analysis of violation disclosed • Suspends 60-day overpayment period

30. Self-Disclosure • Self-Disclosure of overpayments • Department of Justice • Has authority to resolve liability to the government under common law theories of payment by mistake or unjust enrichment • May release provider from civil or administrative monetary claim under the False Claims Act

31. Fraud and Compliance • Compliance plans are now a condition of enrollment for providers • Model plans by OIG available for some provider types

32. Fraud and Compliance • Compliance plan elements • Code of conduct and standards and procedures • Oversight / compliance officer or committee • Education and training • Reporting mechanism

33. Fraud and Compliance • Compliance plan elements (cont.) • Monitoring and auditing • Enforcement and discipline • Response and prevention • If your plan doesn’t identify any issues, it’s probably not effective • Plan should always be evolving

34. New Models • Goal to encourage integration to cut costs • “Accountable Care Organization” model • Still an evolving model • Composed of various providers – some similarity to past models such as HMOs • Offer of increased reimbursement for meeting performance measures • But also less popular threat of penalties for not meeting measures

35. ACOs • Two payment models • One-sided model allows providers have the opportunity to share in any savings above 2% without any financial risk throughout the three years • Two-sided model requires providers to assume some financial risk but allows them to share in any savings that occur (no 2% benchmark)

36. ACOs • Quality measures • Patient / caregiver experience • Care coordination • Patient safety • Preventative health • At-risk population / frail elderly health

37. ACOs • CMS reports results of Pioneer ACOs • 40% earned bonuses • Saved Medicare a gross $87.6 million (before bonus distributions) • Cut growth in Medicare spending by 0.5% • However • 9 of 32 members dropped out of program • No reporting on net gain / loss for participants

38. ACOs • Obstacles • High start-up costs • High annual expenses • Integration issues – e.g., EHR compatibility • Patient behavior • Provider uncertainty

39. Health Reform and Sleep Providers • Neither PPACA or regulations specifically target sleep profession or services • But CMS has shown willingness to target specific groups and services – e.g., HHAs • Particularly true if CMS identifies patterns it doesn’t like – e.g., increase in services, diagnoses; geographic trends • No need to panic, but no provider group is immune from CMS scrutiny

40. Health Reform and Sleep Providers • What to do now: • Develop a compliance plan and use it • Don’t be afraid to uncover problems • Revisit it at least annually • Staff training

41. Health Reform and Sleep Providers • What to do now: • Audit for overpayments and take action on those identified • Seek legal counsel for anything other than minor payment issues and before self-disclosing

42. Health Reform and Sleep Providers • What to do now: • Beware the disgruntled employee • More motivation than ever for qui tam relators • Person may be primarily motivated by desire to be heard

43. Health Reform and Sleep Providers • What to do now: • Do not ignore revalidation requests or other communication from Medicare or Medicaid • Keep provider enrollment data up-to-date • E.g., addresses, ownership structure changes

44. Health Reform and Sleep Providers • What to do now: • Check staff, contractors, vendors, etc., for exclusion from federal health care programs, felonies barring participation, etc. • At beginning of relationship and periodically thereafter and keep documentation

45. Health Reform and Sleep Providers • New patients? • Texans have access to federal exchange, so there will be more potential patients with insurance • No Medicaid expansion

46. Health Reform and Sleep Providers • Join an ACO? • Jury is out on whether and how this model will develop • Issue of business risk rather than legal compliance • But note that participation in an ACO brings additional legal challenges

47. October 5, 2013 Brandy Schnautz Mann Jackson Walker L.L.P. bmann@jw.com Texas Society of Sleep ProfessionalsThe Sleep Profession After Health Care Reform