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Elderly patients rely on the care and guidance provided to them by many of the hospice care centers throughout California. Although many hospice care services are provided by legitimate and patient-centric care service locations, there still remains a contingent of nefarious hospice operators that attempt to take advantage of the elderly population. A Los Angeles Times article written by Kim Christensen and Ben Poston on December 9, 2020, had noted that "regulators have cited hospices in California more often than anywhere else in the country for the most serious types of violations, four times as many as states such as Texas and Georgia, which also have large numbers of providers." In addition, The Times’ analysis revealed that Los Angeles County hospices discharged patients 80% more often than providers nationwide, highlighting a rate that federal authorities say is a red flag for Medicare fraud.

In one specific case of fraud, an investigation into Covina-based California Hospice Care was conducted by the United States Department of Health and Human Services, OIG; the Federal Bureau of Investigation; the California Bureau of Medi-Cal Fraud & Elder Abuse; and IRS Criminal Investigations Division. The case was prosecuted by Assistant United States Attorney Steven Arkow of the Major Frauds Section and Assistant United States Attorney Leon W. Weidman, Special Assistant to the United States Attorney. Federal prosecutors accused California Hospice Care of defrauding taxpayers out of $7.5 million in illegal payments in connection with many ineligible Medicare recipients. The hospice owner and two doctors were sentenced to prison, and several others were convicted or pleaded guilty in the scheme.

California Governor Gavin Newsom signed into law two pieces of legislation intended to improve hospice oversight in the state of California on October 4, 2021. The laws were partly derived from the U.S. Department of Health and Human Services, Office of Inspector General’s (“OIG”)Hospice Deficiencies Pose Risks to Medicare Beneficiaries” report and a Los Angeles Times investigation into alleged misconduct among California hospice providers.

The OIG’s report reflected that 723 California hospices were audited over a four year period between 2012 and 2016. 94% of those audited had at least one deficiency, but more significantly, 313 hospice facilities nationwide were designated as “poor performers.” The States of California and Texas reflected the largest number of poor performers at 45 and 39 facilities, respectively.

California legislators Senator Ben Allen and Assemblymember Jacqui Irwin proposed Senate Bill No. 664 and Assembly Bill No. 1280, respectively. Senate Bill No. 664 includes a moratorium on new hospice care licenses issued by the California Department of Public Health. Commencing on January 1, 2022, the Department will not issue any new licenses for hospice services unless the Department makes a written finding that an applicant has shown “demonstrable need for hospice services in the area where the applicant proposes to operate based on the concentration of all existing hospice services in that area.” The moratorium on new licenses will end either (i) 365 days from the date that the California State Auditor publishes a report on hospice licensure or (ii) when the provisions are repealed on January 1, 2027, whichever is sooner. Current licensure renewal will not be impacted by the moratorium.

The California State Auditor’s website will provide independently developed and verified information related to the California Department of Public Health’s (“Public Health”) and the Department of Health Care Services’ (“DHCS”) licensure and oversight of hospice care providers. The audit will include, but will not be limited to, the following activities: assessing the scope of hospice fraud and abuse in California and the impact of such fraud on the Medicare and Medi-Cal (i.e. Medicaid) programs, evaluating reporting of hospice abuse and neglect in California and, to the extent possible, assessing compliance with mandated reporting requirements, and evaluating the effectiveness and comprehensiveness of Public Health’s system to screen and license applicants for hospice licensure. Assembly Bill No. 1280 prohibits a hospice provider, employed hospice staff, or an agent for the hospice from paying referral sources for patient referrals to the hospice. Payment for these referrals includes “anything of value, including cash, gift cards, prepaid cards, or remuneration of any kind.” Further, to ensure that patients receive the right care that addresses their needs, only a registered nurse, licensed vocational nurse, medical social worker, chaplain, or counselor employed by the hospice can complete a patient’s “election of hospice, informed consent, completed signatures, and counsel on the election of hospice to a patient, patient’s family, or patient’s representative.”

California statutes under the California Code of Regulations, Title 28, Section 1300.68.2 View Document - California Code of Regulations ( relating to "Hospice Services," Section (b) outline the requirements which hospice services must follow to ensure compliant services.

The Times article indicated that Fraudsters stick to a familiar script, enticing or duping Medicare recipients into signing up for services they don’t need...t[T]hey send recruiters door to door and to churches, food banks, senior centers and apartment complexes, often misrepresenting hospice as an “extra” Medicare benefit that pays for nursing visits, hospital beds or other needs.

In conclusion, although many hospice service centers provide compliant and patient-centric services to their respective clients, diligence is necessary on the part of the beneficiary and family members alike to ensure their loved ones are receiving the appropriate care.

This article is provided for the educational and informational benefit of the reader and is not a recommendation for any medical care or legal advice. If you have any questions regarding actions pertaining to the aforementioned article, consultation with a licensed medical provider or an attorney is suggested.

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Many community clinics haven't been paid for COVID-19 vaccine administration

Alia Paavola - Tuesday, October 12th, 2021, Becker's Hospital CFO Report

Many community clinics haven't been reimbursed for administering COVID-19 shots since the vaccines obtained emergency use authorization, Kaiser Health News reported Oct. 11. In particular, community clinics in California said they haven't been paid for 1 million COVID-19 vaccine doses since January. The payment lapse has created a "massive cash flow problem" for some clinics and is worsening the ability to retain staff, the publication reported.

Clinics in Michigan and Mississippi also told KHN that they are awaiting payment. Under federal law, the government pays community health centers a set rate for patient visits. During the pandemic, many state Medicaid agencies said that if a patient receives a COVID-19 shot while getting a different service, the vaccine will be covered as part of that typical payment rate.

However, many clinics set up vaccination clinics, where getting the vaccine was the only service provided. This complicates the billing process, KHN reported. Some states have told these health clinics they can bill Medicaid separately for each dose administered in the event that no other service was provided. However, clinics in 13 states are waiting for CMS to approve proposals to pay clinics for these vaccinations. "We are continuing to work with states on their proposals," a CMS spokesperson told KHN, adding that if the payment formulas are approved, the clinics would be paid retroactively.

Barbara Ferrer, director of Los Angeles County Department of Public Health, wrote in a Sept. 22 letter to CMS that the payment delay is "untenable given these providers' financial restraints and tremendous outlay of resources during this historic pandemic response."

While the reimbursement for COVID-19 vaccine administration is delayed, many community health center leaders think that money will come in eventually. "I'm fairly confident that we will eventually get paid, but this is one of the downsides to being a community health center," Scott McFarland, CEO of Ukiah, Calif.-based MCHC Health Centers, told KHN. "It's just a timing issue, I guess."

The preceding article is not representative of AIA's position on any topic or discussion and is provided for the educational and/or informational benefit of AIA's readers.

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Updated: Aug 24, 2021

Is Your Healthcare Business Being Audited?

What Does It Mean and What Can We Do?

By Michael S. Koslow, MPM

As most businesses working within healthcare provider networks or as non-network providers know, complex and comprehensive audits can be both time consuming and labor intensive. Whenever choosing to do business with a government healthcare agency, its contracted delegated authorities (e.g. Medicare Administrative Contractor or “MACs”), State-supported Medicaid programs, or the litany of private insurance carriers, a business may be audited for a variety of reasons at any time. It’s a collaborative process.

A common thread involving each of these audits normally includes a mandated requirement for the auditing agency to notify that entity being audited that a suspected billing/claim anomaly has been identified through an internal claim review conducted by the government agencies or private insurer pre-pay and/or post pay reviews of submitted claims. Normally, specific identified submitted claims have been referenced in “edit pair” software (i.e. ClaimsXten™, FACETS®, etc.) programs as inconsistent with industry standard billing practices. Also, insurers may use proprietary business software that enables insurers to identify “high outliers” using Current Procedure Terminology or “CPT,” International Classification of Definitions “ICD,” or Healthcare Common Procedure Coding System “HCPCS” Codes to support submitted claims for payment and reimbursements.

Remember, being a statistical high outlier may be supported by your specialized profession, geographic location (e.g. rural treatments or unique treatments within a geographic area of 30 miles or so), or non-elective medically necessary justifications. In addition, the statistical analysis of the identified "unclean" claims usually corresponds to a designated number of claims as a part of the entire claim universe under review by an insurer within a particular period for specific billing codes. In addition, the universe of claims under review correspond to a designated “confidence level” which may be 90 or 95%.

The “look-back” periods for claims review normally is restricted to a one to two-year period from the date the claim was submitted for payment to the insurer. There are some exceptions which may extend the look-back period to five or more years in the event the audit is believed to have indications of acts of fraud. Typically, insurers have a limited period to conduct administrative reviews to 30 days under the provisions of the federal Prompt Pay Act (31 U.S.C. 39). Most States have enacted supplemental rules and laws that affirm the timely payment of “clean” claims (or those with no identifiable aberrancies) ( In California the supplement can be found in California Ins. Code § 10123.13 and Health & Safety Code § 1371.35.

Regardless of whether the submitter of the claim is a large business or a relatively small business, the adverse impact to the daily operations of a business can be equally as disruptive. The time and effort expended by the business to research, review, compare submitted claim data with existing National (NCD) and Local Coverage Determinations (LCD), now referenced as “Articles,” unique insurer medical guidelines, policies, and directives, is a considerable undertaking by any business. Businesses that submit millions of monthly claims (i.e. behavioral health or Durable Medical Equipment “DME” commodities, etc.) or those that may submit hundreds of monthly claims both have limited resources and staff that they can dedicate to the necessary reviews of audit-identified claims, copying of both hard-copy and/or electronic claims, and then ensuring that the requested claim(s) data is forwarded to the correct location and in the proper format to avoid unnecessary delays to the audit process.

Particular attention needs to be made with regards to ensuring that the unclean claims under audit are definitively those identified by corresponding insurer-provided or designated reference numbers. Something to keep in mind are two-fold: (1) the response date with requested documents/data is negotiable in most cases, but you must respond to the auditing agency notification correspondence within the designated time frame (usually 30 days from the date of the notification letter); and (2) review or have an expert review your alleged unclean claims for correct medical coding according to established/documented medical policy/coding guidelines. The guidelines and policies change from time to time and; therefore, must coincide with the policies in effect at the time of claim submission for payment.

On occasion, billing errors or insufficiencies may be resolved through the submission of a corrected claim (you may have a specific period that limits how long you have to submit a corrected claim) or, if applicable, a negotiated settlement of the outstanding identified and supported overpayment. Federal rules associated with several federal healthcare agencies may require 100% repayment of any insurer data supported identified overpayment sums. If there is an unreconcilable impasse between an insurer and a provider, the provider may be relegated to seeking relief of addressing alleged identified overpayments through either the agency’s/ insurers’ grievance and/or appeals processes (grievance and appeal actions are distinctly different). It is extremely imperative that the time allotted for the submission of any appeal be known as a provider may inadvertently and unintentionally waive their respective appeal rights if not submitted to the insurer within the designated period. Repayment programs are also a consideration for paying back overpayments over an agreed upon period.

Although there are appeal rights, there is no guarantee that you will prevail at any level of the appeal process (Redetermination, Reconsideration, or Administrative Law Judge review). In some cases, you may believe you have supported your case from a policy, coding, and/or medical configuration management perspective for medically necessary treatments, yet the backlog for Administrative Hearings with an Administrative Law Judge can extend to well over three years! Still, formulating a well-prepared response and comprehensive data analysis as a part of any healthcare business audit is both prudent and logical when presenting your case before an auditor, compliance officer, or claims review specialist.

Medical practitioners and business owners within the healthcare industry have been passionate about their professions and the overall benefits to patients and beneficiaries alike. This article was written to provide a practical perspective that considers the possible emotional impact when a audit is requested on any business, but focuses on the pragmatic factors involved in the audit processes and how to address them with sound guidance.

In conclusion, coordinating with auditors, investigators, and claims review specialists within the government and insurer groups is a time sensitive collaborative process.

If you have any questions about an audit, overpayment review or demand, compliance review, or Healthcare Efficiency Data Information Set (HEDIS®)-type review, it is highly recommended that you confer with an attorney specializing in healthcare matters and an experienced healthcare investigator to provide you with options, next steps, and process compliance.

*This article is provided for educational purposes only and is not offered as, and should not be relied on as, legal advice. Any individual reading this information should consult an attorney for their particular situation.*

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