Record-breaking $2.7 Billion Paid by Healthcare Providers in False Claims Act Cases
A couple of weeks ago, on February 22nd. the Department of Justice issued its annual statement regarding False Claims Act activity in FY 2023 (federal fiscal years run 10/1 to 9/30). “Settlements and judgments under the False Claims Act exceeded $2.68 billion in the fiscal year ending Sept. 30, 2023. The government and whistleblowers were party to 543 settlements and judgments, the highest number of settlements and judgments in a single year. Recoveries since 1986, when Congress substantially strengthened the civil False Claims Act, now total more than $75 billion.” The full statement is available here: https://www.justice.gov/opa/pr/false-claims-act-settlements-and-judgments-exceed-268-billion-fiscal-year-2023
Of the total $2.7 billion, $1.8 billion related to healthcare fraud. As a refresher, summarized, the False Claims Act as it applies to healthcare providers is as follows.
(a) Any person who (1) knowingly presents, or causes to be presented, to an officer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval; (2) knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid or approved by the Government; (3) conspires to defraud the Government by getting a false or fraudulent claim paid or approved by the Government;. . . or (7) knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the Government, is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, plus 3 times the amount of damages which the Government sustains because of the act of that person . . . . (b) For purposes of this section, the terms “knowing” and “knowingly” mean that a person, with respect to information (1) has actual knowledge of the information; (2) acts in deliberate ignorance of the truth or falsity of the information; or (3) acts in reckless disregard of the truth or falsity of the information, and no proof of specific intent to defraud is required.
A post I did last fall covers the fraud and abuse aspects of False Claims Act violations and provider risks. There are also, numerous historical posts on this site on the same subject (False Claims Act). https://rhislop3.com/2023/11/20/compliance-update-fraud-and-abuse/
When recoveries are made, the funds are returned to the program area where the abuse or fraudulent billing occurred (Medicare, Medicaid, Tri-Care, etc.). Typically, the cases are older than the year when the recovery took place. In 2023, the mix of cases includes, and is heavily influenced by, Medicare Advantage recoveries. Medicare Advantage is now the largest payer under Medicare, eclipsing fee-for-service. Below is the list of Medicare Advantage actions.
- Cigna agreed to pay $172 million to resolve allegations that it knowingly submitted and failed to withdraw inaccurate and untruthful diagnosis codes for its Medicare Advantage Plan enrollees to increase its payments from Medicare.
- Martin’s Point Healthcare agreed to pay $22.5 million to resolve allegations that it knowingly submitted inaccurate diagnosis codes for its Medicare Advantage Plan enrollees that were not supported by the patients’ medical records to increase reimbursements from Medicare.
- In addition to securing these settlements, the Justice Department continued to litigate a number of other cases involving the Medicare Advantage program, including actions against UnitedHealth Group, Independent Health Corporation, Elevance Health (formerly Anthem), and the Kaiser Permanente consortium.
Recoveries also occurred in cases which providers billed federal health care programs for medically unnecessary services and substandard care. The list of substandard care recoveries is below.
- Cornerstone Hospital Medical Center and related entities agreed to pay $21.6 million to resolve allegations that the former long-term acute care facility knowingly submitted claims for services performed by unlicensed and unauthorized students, and services that were not provided or effectively worthless.
- Smart Pharmacy, Inc. SP2 LLC, and Gregory Balotin agreed to pay at least $7.4 million to resolve allegations that they unnecessarily added the antipsychotic drug aripiprazole to topical compounded pain creams to boost federal reimbursement for the compounded creams and waived patient copayments. The government alleged that the defendants crushed aripiprazole pills approved for oral use and included them in compounded creams used topically for pain treatment, knowing that there was not an adequate clinical benefit.
- Saratoga Center for Rehabilitation and Skilled Nursing Care related entities, and operators and owners Leon Melohn, Alan “Ari” Schwartz, Jeffrey Vegh, and Jack Jaffa agreed to pay $7.1 million to resolve allegations that Saratoga Center delivered worthless services to residents, resulting in medication errors, unnecessary falls, and the development of pressure ulcers, and that the facility’s physical conditions deteriorated to such a degree that the facility did not consistently maintain hot water, have an adequate linen inventory, or dispose of solid waste.
Other cases involving recoveries concerning Opioid abuse in dispensing, kickbacks (improper incentives or fees paid for driving utilization under a federal payment program (Medicare, Medicaid, etc.), and other generalized fraud made up the balance of the healthcare recovery amounts for 2023.
For providers, the Cornerstone and Saratoga cases offer the most insight into False Claims Act jeopardy. The most common type of fraud/abuse risk I see is providers billing for substandard care services and/or, over-billing for care either not warranted or not substantiated by documentation and assessment. With education, routine claims monitoring activities, these risks can be minimized.
Friday Feature: Legal Battle Unfolds Over Nursing Home Negligence Amid Pandemic Era
TGIF! Within a busy econ news week, a little litigation matter slipped into my news stream. These cases are fascinating as we continue to see the pandemic litigation trickle forward and the novelty of claims arising from the pandemic period/Public Health Emergency period beginning to define the litigation playing field.
Readers/followers know by now that my firm, H2 Healthcare (www.h2healthllc.com), has a strong compliance and litigation practice – among the best in the nation. We handle complex litigation matters, investigating and where required, providing expert witness support on actual harm and wrongful death cases. As a result, we pay close attention to cases involving wrongful death/harm and nursing homes, senior living, etc., encompassing the pandemic period.
This case includes an interesting twist as it does and does not, relate to COVID.
The case comes via the State of New York and the Supreme Court of Richmond County. The Plaintiff (estate) in the case was an elderly man that had resided in a nursing home (Richmond Center for Rehabilitation) for four years until his death in late 2020. During his residency, in 2020, he contracted COVID but did not die from it, instead living seven more months until his passing. He died from complications/and conditions including osteomyelitis, pressure ulcers, chronic C-Diff and sepsis.
The allegation is that “The defendant failed to maintain an infection control program before and during the COVID-19 pandemic designed to provide a safe, sanitary and comfortable environment in which residents vulnerable to infection reside and where healthcare provider[s] work [and] defendant failed to have an infection control program which investigated, controlled and took action to prevent infections in the facility.”
The Plaintiff also noted in their suit that Richmond Center had been cited by federal agencies and regulators 24 times in a four-year period, “including for failure to ensure that an infection prevention and control program was maintained to help prevent the development and transmission of communicable diseases and infections.”
The facility (Richmond) asked the Supreme Court for Richmond County to dismiss the gross negligence and wrongful death claims. Even though the resident’s death was not from COVID, Richmond argued that claims about its infection control policies and practices during the pandemic were covered by both New York’s Emergency Disaster Treatment Protection Act (EDTPA) and the federal Public Readiness and Emergency Preparedness (PREP) Act. These immunity-oriented provisions were designed to give providers protection against reprisal provided the care delivered during the Public Health Emergency was compliant with relevant recommended, infection control practices. Last year I wrote a post that covered the PREP Act and the implications of liability during COVID – https://rhislop3.com/2023/10/13/friday-feature-sr-living-health-care-and-covid-litigation/
Other courts have found that impacts on operations encompassing care, due to COVID outbreaks or other COVID-related limitations also would protect healthcare providers from such civil suits. In a Connecticut case last year, the state Supreme Court found that COVID-related understaffing that affected patients without COVID was still protected.
In this case, the ruling to dismiss was denied. The language framing the denial is here: Defendant RICHMOND CENTER FOR REHABILITATION AND SPECIALTY HEALTHCARE negligently breached its duties owed to plaintiff’s decedent by statute and common law; that as a result of the foregoing acts and/omissions, Plaintiff’s decedent VIBERT YEARWWOOD was subject to the negligence of the defendants, causing decedent VIBERT YEARWWOOD to be forced to undergo medical treatment, incur medical expenses, suffer permanent disfigurement, disability, pain and suffering, mental anguish, loss of enjoyment if life, loss of dignity and death.
Based upon the documentary evidence submitted by the defendant, defendant fails to meet its burden of proof to unambiguously or conclusively dispose of all of plaintiff’s factual allegations as a matter of law. Defendant’s motion to dismiss pursuant to CLR 32111(a)(1) is denied.
A link to the full decision is here: https://caselaw.findlaw.com/court/ny-supreme-court/115852489.html
The decision can be appealed (likely). What I/my firm will watch is how cases like this, and this one, proceed or not, under the auspices of the PREP Act. The test, I believe, is how far the court and various plaintiffs and defendants will go to narrow or expand, the concept of “willful misconduct”” which, in the PREP Act language, is an exclusion for liability protection. The applicable language is below. TGIF!
The Public Readiness and Emergency Preparedness Act (PREP Act) authorizes the Secretary of the Department of Health and Human Services (Secretary) to issue a PREP Act declaration. The declaration provides immunity from liability (except for willful misconduct) for claims:
- of loss caused, arising out of, relating to, or resulting from administration or use of countermeasures to diseases, threats and conditions
- determined by the Secretary to constitute a present, or credible risk of a future public health emergency
- to entities and individuals involved in the development, manufacture, testing, distribution, administration, and use of such countermeasures
A PREP Act declaration is specifically for the purpose of providing immunity from liability, and is different from, and not dependent on, other emergency declarations.
Unlocking the Potential: Overcoming Challenges for LTPAC Providers in ACO Participation
Yesterday, the American Health Care Association and the National Center for Assisted Living plus the National Assocation of ACOs released a white paper that includes a set of recommendations for CMS, designed to increase the participation of long term and post-acute care (LTPAC) providers in accountable care organizations (ACOs). The white paper is available here: AHCA NAACOS White Paper_Final_240222_111242
CMS has a goal of getting all Medicare beneficiaries involved in an ACO at some level, by 2030. Today, less than 2,000 SNFs participate in an ACO and fully 70% of all ACOs have no SNF engagement at all. Per the release, “current program policies in ACO models do not align well with LTPAC providers, including those that determine which patients ACOs are accountable for, setting financial benchmarks, and quality measures. But as one of the highest-cost and most complex patient populations, LTPAC presents a significant opportunity for improved resident outcomes and reduced costs to the Medicare program.”
The concept of an ACO at the core is a shared savings approach or more simplistically, a global payment program whereby, providers that participate within the ACO, are incentivized to become more efficient in care delivery and more effective in the care provided (improved outcomes). Assumptively, care provided that is more cost-effective and in turn, produces a better outcome, creates savings. The savings are then available to the ACO members as a “bonus”. As post-acute providers are typically, less expensive for certain kinds of care, opportunities exist to leverage these cost efficiencies in ACO models.
Post acute care has played an important role in the success of value-based care models, with significant savings and care improvements in ACO and episodic payment models generated by the post-acute care partnerships. In a review of 21 CMS Innovation Center models, 14 models (or 66 percent) had reductions in spending driven by post-acute care utilization.
One of the largest stumbling blocks in achieving greater post-acute participation in ACOs is the financial considerations which, generate payments on a direct and shared basis. Participating in a value-based care model requires accurate benchmarking, risk adjustments, and quality measures. Financial benchmarks, the spending targets for models, are currently sensitized by historical spending. Under current policy, the benchmarks are not likely appropriate for the long
term nursing home/assisted living population, as the historic data understates the actual cost of care in the facility. Risk adjustment models are also likely to under predict SNF patient costs for similar reasons.
In terms of quality, the number one issue that requires increased emphasis and definitional clarity is around care coordination and the opportunity to avoid unnecessary transitions, typically to higher levels of care. Historically, this challenge can only be overcome by participants being willing to practice across settings. Today, physician care for example, is more compartmentalized than ever. Intensivists don’t migrate between care settings and primary care physicians by virtue of current payment models, rarely see patients outside of an office or clinic setting. This fragmentation significantly contributes to care redundancy (repetition of tests), polypharmacy, and unnecessary care transitions (hospitalizations, ED transfers, rehospitalizations).
Another significant challenge for post-acute expansion in ACOs is information system interoperability. Few post-acute software systems have integration with hospital systems. Data set definitions, cross providers, don’t really exist. Full interoperability such that each provider can freely exchange data, review medical record information including medication lists, treatments, diagnostics, etc., does not yet, exist, even among affiliated providers in a health system. Again, this gap produces delays in care, repetition of care, polypharmacy, unnecessary care transitions, etc. Solving this issue is far from inexpensive and would require a funding commitment from the ACO partners.
The report concludes that opportunities exist for CMS to more meaningfully engage SNF providers in broader delivery system transformation efforts via adjustments to existing accountable care arrangements. Additional development of future models should include the needs of SNF populations as part of the process. More accountable care development and integration of provider types should provide SNF residents with improved care coordination, and more efficient, patient-centered care.
This past fall, November, I wrote a post on value-based care models that provides additional information on various models including Accountable Care Organizations, Bundled Payment Plans, etc. The post is here: https://rhislop3.com/2023/11/28/value-based-care-what-it-is-and-how-it-can-work-for-post-acute-providers/
Readers that want more information on interoperability and the HITECH Act (data sharing between providers), a post I did on that subject is available here: https://rhislop3.com/2018/06/27/interoperability-and-post-acute-implications/
Wednesday Feature: Navigating the Evolving Landscape – Enhancing Ethics and Compliance Programs for Risk Mitigation
Happy Hump Day! Long title for what is going to be, a rather brief post.
As followers and regular readers know, my firm (I am the co-founder and part owner) H2 Healthcare, LLC has a practice area uniquely concentrated on clinical compliance and complex litigation support. The practice area is headed by Diane Hislop, RN (yes, we are related – married). Within our organization, we have over 100 years of expertise in clinical and regulatory compliance, including risk management, a new virtual compliance program for providers, litigation expertise (expert witness), due diligence on M&A (claims audits), post-survey support (appeals, IDR, etc.), Medicare claims audit work for probes and claim denials, plus extensive tools and education to assist with compliance issues. Given the complexity and breadth of ethics (corporate) and compliance issues in healthcare, our work continues to transition to identifying more avenues to assist providers on prevention or a proactive basis.
In that vein, I spend a fair amount of time researching issues that relate to compliance. There are multiple posts on this site related to compliance issues from survey to litigation.
In my research work, I often dig through non-healthcare information to qualify how other industries and trends worldwide are likely to impact healthcare. For today, I grabbed a report from LRN on Ethics and Compliance Programs and their effectiveness. The report is available here: LRN-2024-Ethics-Compliance-Program-Effectiveness-Report_Global
According to the report, the US Department of Justice has articulated that updated, comprehensive risk analyses are the basis for an effective ethics and compliance program in the Criminal Fraud Division’s Evaluation of Corporate Compliance Programs (ECCP). The ECCP is a set of guidelines for DOJ prosecutors to use in evaluating the strength and effectiveness of
corporate E&C programs. The DOJ’s evaluation of corporate E&C programs is a major factor in determining whether to
bring charges, as well as the severity of any fines or penalties imposed because of corporate misconduct. There are three
fundamental topics in the ECCP:
- Is the corporation’s compliance program well designed?
- Is the program being applied earnestly and in good faith? In other words, is the program adequately resourced and to function effectively?
- Does the corporation’s compliance program work in practice?
For healthcare, providers should see the parallel. CMS and the DOJ have directly and forcefully reiterated their belief that billing impropriety and potential fraud are widespread. CMS’ recent initiative to audit five claims (Medicare) from every SNF provider is an indicator of how virulent claims enforcement activity is within the Federal government.
The nexus between poor care, complaints, and ultimate claim recovery activity is more proximal today than ever. CMS has stated that a large percentage of claims, 15%, are paid improperly. The number one cause? Documentation for care and services provided is insufficient to support the claim. While improper payments include underbilling, that is never a trigger for audits or enforcement. More here: https://rhislop3.com/2023/06/01/snfs-get-ready-claims-audits-start-soon/
As in the attached report, and the message for today for providers is get your compliance programs into high gear. Integrate them with your QAPI and Resident Satisfaction programs to cross inform all functions, including survey work. Audits are required and providers should know, self-audits are not the standard by any means – outside audits are basically, required.
Happy Hump Day! I’ll post more on this topic soon. Suffice to say, a really good Ethics and Compliance Program is not a burden and shouldn’t be. It can be highly effective in maintaining billing integrity while enhancing, revenue integrity. It can and should, have a backbone of QAPI and staff education is important. Developing a culture of quality is also important and arguably, the most important factor, starting from the very top of the organization – Board and C-Suite.
There are a bunch of goodies, topically relevant, on this site. Here are a few of my faves!
- https://rhislop3.com/2023/09/07/five-quality-and-compliance-tips/
- https://rhislop3.com/2018/11/16/the-real-impacts-of-poor-quality-inadequate-compliance-and-weak-risk-management/
- https://rhislop3.com/2018/11/29/follow-up-real-impacts-of-poor-quality-and-lax-compliance/
- https://rhislop3.com/2019/06/14/the-connection-between-quality-and-revenue/
Unveiling the Allegations: Lawsuit Claims Advocate Aurora Health’s Monopoly on Health System is Hiking Prices in Wisconsin
Late last week, I ran across a number of news posts regarding a proposed class action lawsuit against the hospital/health system giant Advocate Aurora, alleging that the organization used its market mass to limit competition and in return, impose excessively high prices on commercial health plans and their insureds. The suit was filed in Wisconsin (where the allegations center), the U.S. District Court – Eastern District (basically, Milwaukee centered). The complaint is available here: bcFq
A quick confession for readers/followers: I spent twenty plus years as a CEO of a large (WI largest, top 50 nationwide) senior housing and post-acute system in the Milwaukee market. The company I was leading at the time, did a lot of business with then, Aurora, including acquiring a two-retirement community holding from them. We were in some ways, competitors, and, in some ways, partners.
I got into a bit of a beef with their corporate leadership on a similar matter involving high prices. At the time, the organization I was leading had a self-funded health plan and we built our own network. To try to provide clarity and transparency to our staff, we provided data and an incentive, for the staff to use certain providers (hospitals typically) versus others, based on price. Aurora being the priciest in some cases, was unhappy as staff still could use their hospitals, but at a higher cost share. When I saw the news about the class action claim and then grabbed the claim and read it, well, memories quickly returned.
Since my time, Aurora merged with Advocate Health (Illinois, Chicago area) and recently (2022), merged with Atrium Health (North Carolina) creating a 67-hospital system called Advocate Health. As a result, Advocate became the fifth-largest U.S. nonprofit system.
The core of the complaint, taken from the actual filing is below. Note, I have emboldened language that caught my eye, in light of my experience with them on the health insurance end. AAH is Advocate Aurora Health.
For the past several years, AAH has engaged in anticompetitive methods to restrain
trade and abuse its market dominance for the purpose of foreclosing competition and extracting
unreasonably high prices from Wisconsin commercial health plans and their members.1 These
abuses include unlawfully forcing commercial health plans to include in their networks all of
AAH’s overpriced facilities even if they would rather include only some, and aggressively
blocking commercial health plans from directing their members to higher value care at non-AAH
facilities. AAH has gone to extraordinary lengths to suppress innovative insurance products, such
as tiered plans, that would reduce costs for commercial health plans and their members alike. And
it has used a combination of acquisitions, referral restraints, non-competes, and gag clauses to
suppress competition from other healthcare providers and expand its monopoly over acute
inpatient hospital services into other, separate markets.
The lawsuit alleges that without intervention, the Advocate Aurora will continue to use “anticompetitive contracting and negotiating tactics to raise prices on Wisconsin commercial health plans and their members and use those funds for aggressive acquisitions and executive compensation.” The suit further seeks to compensate the Plaintiffs (health plan participants) for their share of costs related to having to use Advocate Aurora facilities at higher prices. Advocate Aurora claims the suit has no merit and that the claims of Plaintiffs are baseless.
The suit against Advocate Aurora Health highlights an issue that I have written and spoken about for years – the need for price transparency and quality transparency. Consumers of healthcare in the U.S. have, even with government interventions and mandates, incredible difficulty accessing current, real time pricing and quality data. Unlike most consumer options for purchasing everything from products to services (cars, trips, restaurants, etc.) where competitive scores, reviews, data on reliability and warranty, and critically, pricing are a browser click away, healthcare is nowhere close to transparent on these elements.
While the allegations against Advocate Aurora are just that, allegations, the lawsuit serves as another conversation prompt about competition, quality data, and pricing in healthcare. As the trial unfolds, additional information should provide more light on the transparency issues and hopefully, prompt some additional movement on hugely needed reform.
Friday Feature: Litigation, Arbitration, and COVID
TGIF! I live and have an office in Illinois, though my part of the state differs dramatically from the Illinois most people recognize. I live and work in a small town (Galena) in an area known as the driftless region. The driftless region is “original” terra-firma, where the glaciers did not touch. This area is in the far northwest corner of the state, Mississippi river country (Tri-State area – Iowa, Wisconsin, Illinois).
The prior context is important for this post as the focus is on a litigation event, a case involving a wrongful death claim, due to COVID. The case and the decision, that is a bit baffling and troublesome for SNFs, is in Illinois. The court involved in the decision is the 4th Circuit, Appellate Court, located in Springfield, the State’s capitol city.
The core of the case involves an elderly woman and her daughter. The elderly woman died after being hospitalized due to COVID. The daughter filed a negligence and wanton disregard suit against the nursing home where her mother lived. The suit alleges violations of the Illinois Wrongful Death Act and the Survival Act. The Wrongful Death Act can be viewed here: https://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2059&ChapterID=57&Print=True The Survival Act basically provides surviving members of someone who died allegedly via a wrongful death event the right to pursue a claim on behalf of the deceased.
The facility and its ownership group filed a motion to compel arbitration for the claim as the resident, by virtue of the daughter/POA, signed an admission agreement containing a provision for arbitration in the event of a dispute between the parties, such as in this case – alleged negligence.
Initially, the circuit court in the county where the suit was filed, agreed with the SNF, sending the case to arbitration. On appeal, the Appellate Court ruled that the arbitration clause was not binding to the daughter/POA as she was not directly, a party to the agreement, merely a representative singing the agreement on behalf of the resident. The language the decision is as follows: “While it is true that (daughter/POA) signed the admission and arbitration agreements, she did so only in a representative capacity for (the resident). There is nothing in the record to show that any arbitration agreement was ever formed between defendants and decedent’s next of kin in an individual capacity.”
A justice in dissent wrote the following: “(Daughter/POA) does not dispute the arbitration agreement contains a broad delegation clause. As such, all matters of arbitrability, including what claims are bound by the arbitration agreement… are questions for the arbitrator to decide.”
Cases like this are emerging all over the nation and likewise, decisions are similarly coming forward that begin to shed light on ultimately, how COVID wrongful death litigation may resolve. The difficulty for SNFs such as in this case, (is) the law was never quite clear about arbitration clauses, state statutes/laws, and litigation for events such as COVID infections. Generally, across the nation, the view on culpability for COVID infection, including complications thereto, has been a matter of no specific fault. As additional light comes forward on infection prevention and mitigation measures via the CDC (including vaccination) being basically, useless and ineffective in stopping the spread of COVID, arguments around a facility being negligent in preventing COVID infections, if common measures (thought relevant at the time) were in-use, should be moot.
For SNFs, my takeaways are not much different than I have always advised regarding arbitration clauses in admission agreements.
- The arbitration clause is a last stand measure, but it is not a preventative measure. Arbitration is also expensive, so the goal is to deliver exceptional care, be engaged with residents and families, be transparent about negative outcomes and why (they happen, even with best practice interventions in-place) and communicate, communicate, communicate.
- Be exceptionally clear about the legal relationships among surrogates. Know the applicable state laws regarding POAs and their duties/responsibilities and make certain that those professing POA status are, and that the ward (resident) is in fact, incapable of acting. Don’t have the wrong person under the wrong authority, sign documents or consent to treatment, etc.
- Have a really knowledgeable attorney with experience, review facility admission and legal paperwork, frequently – no less than annually. Provide proper training to staff involved in the admission process, on who can sign what and how agreements should be handled. Agreements must be simple and need to be properly crafted to produce readability and references backed by policies or law, for the signer to properly understand the Agreement. Arbitration clauses, poorly done, are more problem than they are worth. Prevention is always about prior, proper, preparation.
TGIF!
Rising Tide of Audits: Brace Yourself for Increased Scrutiny on Skilled Nursing Providers in 2024
In 2023, regulators re-instituted audits of facilities for inappropriate diagnoses of schizophrenia (justification for anti-psychotic use), plus a five-claim audit of every nursing home. The purpose of the audit was to address a long-standing concern that inappropriate coding was driving higher Medicare reimbursement under PDPM, despite documentation in patient records, not substantiating the level of care required or provided. More on the five claim audits from 2023 is available via previous posts, below.
- https://rhislop3.com/2023/06/01/snfs-get-ready-claims-audits-start-soon/
- https://rhislop3.com/2023/08/24/snf-claims-audits-so-far-messy/
To date, Medicare/CMS has not shared much detail about what it has found as a result of the five claim audits. Anecdotally, I am hearing that the process has been rather messy, inconsistent, and providers are still uncertain as to how the audit contractors are determining their communicate results.
CMS came under scrutiny last summer. The Government Accountability Office (GAO) said CMS needed to improve its process of recouping overpayments via state Medicaid programs citing “lenient” processes that let states opt out of the federal auditing program. For providers, this means that Medicaid payments now are likely to be subject to audits in 2024.
Last year, spring, I posted the RAC audit elements list for providers. The list is available here, and the SNF elements are highlighted. RAC approved_issues_list_04_12_2023
One of the risk areas for providers in terms of Medicaid is the move to state agency implementation of PDGM methodology for Medicaid reimbursement. For many providers, Medicare is not as big of a risk area due to low to in some cases, almost no Medicare cases. Rural SNFs for example, may see scant few Medicare claims for SNF care, perhaps only a handful each year. Medicaid, however, may represent the bulk of their census days (payer mix). PDGM brings forth an increased data set for auditors to identify claim anomalies.
Medicare post-acute providers (all Medicare providers) are required to have an Ethics and Compliance program. Meeting the requirement for SNFs and post-acute providers requires the following elements to be in-place.
- Written policies, procedures and standards of conduct.
- Designation of a compliance officer and compliance committee.
- Conducting effective training and education programs, ongoing. New employees must be trained and existing employees, need reminder training annually. If a compliance issue arises, training may be an element to remediation plans.
- Developing effective lines of communication for reporting suspected compliance breeches. This includes a reporting system that is anonymous and secure.
- Enforcing standards through well‐publicized disciplinary guidelines that specify how, if an issue arises, investigation will occur, and accountability will be handled.
- Conducting internal monitoring and auditing tasks to assure compliance. This is the primary job, along with education, of the compliance officer.
- Responding promptly to detected violations and how corrective action will occur and be monitored.
The Federal Condition of Participation pertaining to the Ethics and Compliance requirements is available here; ComplianceandEthics 483.85
My approach to the compliance tasks and meeting the requirements is to not separate processes or focus on paper compliance. I look at compliance as an integral operating process that SNFs can utilize to accomplish a number of tasks (requirements) collectively. In other words, the code lays out the elements required but not the HOW. The how can be accomplished a number of different ways and creativity, can be an SNFs best friend.
Below is the approach I advise SNFs to consider. For more information or tools, etc., comment to this post or drop me a message at rhislop@h2healthllc.com. I’m happy to work with SNFs to implement a virtual compliance program that meets all requirements and yet, saves the SNF significant dollars in terms of separate needs for example, for a designated employee as a compliance officer (e.g., compliance officer comp. easily $100k per year, versus a robust virtual program at $5 K to $10K per year).
- Integrate compliance as an element of QAPI. Use tools such as Triple Check, Clinical Review, monthly QAPI meeting dashboards with specific monitoring requirements, to identify risk areas.
- Use QAPI plans as elements of correction action for compliance. Also, use formularies and algorithms/pathways as tools to minimize billing vs. documentation risks.
- Staff education should include compliance requirements but moreover, should incorporate the QAPI approach, not compliance as a separate condition, per se.
- Utilize patient/resident satisfaction programs as a means of reporting. Don’t have these in-place? Pretty easy to develop an email, website link, and toll-free number to collect information, including complaints or reports or compliance violations.
- Audits, and absolutely, for effective compliance, require an external agency that is expert on Medicare SNF claims, PDPM, MDS/RAI, to include,
- Claims sampled randomly testing Medicare level/PDPM billed against the MDs and against clinical documentation.
- MDS audits that look specifically at what was coded/developed vs. what was billed.
- Claims audits based on risks identified via QAPI process (falls, wounds, mediation errors, etc.).
- Audits should achieve a number of different performance improvement conditions.
- Surety in claims processing. If RAC audits occur, the compliance audit processes conducted by the SNF provide security and procedural responses that minimize RAC implications.
- Claims accuracy and potential, opportunities for additional revenue – revenue integrity and maximization opportunities.
- Education for staff on documentation, coding, etc.
- Data to inform QA and survey/certification preparation.
- Litigation risk reduction.
- Liability insurance benefits in the form of renewals and premium savings. Providers that have robust QAPI and Compliance programs are better risks and today, receive preferential pricing and terms.
Providers/organizations that are looking to improve their Ethics and Compliance programs, save money and increase QAPI, claims, and performance improvement, go ahead and comment to this post or drop me a note at rhislop@h2healthllc.com. I can definitely help!
Unraveling the Puzzle: Tackling Fragmented Healthcare for Better Patient Outcomes
An issue that I have been interested in for most of my career is coordinated care, especially in terms of older adults who utilize the most care resources and typically, have multiple providers (physicians in particular). Fragmented, uncoordinated care is the primary driver of over-treatment or inefficient treatment. The outcomes of over-treatment include polypharmacy, test redundancy, unnecessary diagnostics, and rehospitalization/readmissions.
In 2017, I did a presentation (with a number of colleagues) at a Leading Age Annual Meeting on care coordination. The primary focus of the presentation then was on post-acute patients in skilled facilities, principally for a short stay for rehabilitation. The presentation focused on achieving high quality outcomes and shorter, more efficient stays via the implementation of coordinated care processes, algorithms, and interdisciplinary care teams. That presentation is here: https://rhislop3.files.wordpress.com/2023/05/care-coordination-updated.pptx
Yesterday, in my reading “pile” (virtual as it typically is), I am across a JAMA Viewpoint article from JAMA Internal Medicine on the difference between care coordination, care continuity, and care fragmentation. The article approaches analysis of these subjects via physician care yet, the applicability of concepts is highly similar to what I (and my group) spoke about at our Leading Age session in New Orleans. The JAMA article is available here: jamainternal_kern_2024_vp_230019_1706170677.62898
For years, what I have been working on in various capacities, I have labeled care coordination and continuity. The article really sharpens the issues and defines the problem as care fragmentation – a problem that produces errors in treatment, over-treatment (unnecessary tests, drugs, visits), and avoidable hospitalizations. Per the article: “Health care in the US is characterized by fragmentation, with many patients seeing multiple physicians. Indeed, 35% of Medicare beneficiaries saw 5 or more physicians in 2019.1 Having multiple physicians may be appropriate, but it may also lead to medical errors, unnecessary visits, avoidable hospitalizations, and suboptimal care if all of the physicians do not have complete information about the patient and each other’s care plans. Even after widespread dissemination of electronic health records, 34% of primary care physicians in a national study reported that they do not always or most of time receive useful information from specialists about the patients they referred.”
What I found interesting is that the article concludes that improving continuity (fewer physicians or fewer outlets for care for a patient) would necessarily, decrease the number of physicians involved in a person’s care. For an older adult, this is problematic as often, each key comorbidity comes with a treating physician specializing in that disease state (cardiologists, urologists, orthopods, etc.). In short, coordinated care which is the outcome of reduced or eliminated care fragmentation can’t really be achieved until care fragmentation is solved. A conundrum for sure.
“Similarly, there is no consensus on whose responsibility it is to design, fund, implement, or participate in interventions to address fragmented care. National dialogue and more federally funded research on this issue are urgently needed. Patients are experiencing avoidable harm from fragmented care, and they deserve better.”
While I generally agree with the statement above from the article, there are steps or interventions that could significantly reduce care fragmentation and move the system forward, toward a more coordinated approach.
- Achieve the full standards of the HITECH Act and interoperability. More here: https://rhislop3.com/2018/06/27/interoperability-and-post-acute-implications/
- Achieve claim standardization that was the significant goal of HIPAA. One standardized claim for all Medicare, Medicaid, and hopefully, commercial insurance products would reduce coding and documentation errors as well as documentation duplicity to support multiple claims.
- Return to bundled payments and move forward, additional value-based care initiatives.
- Simplify encounter-based coding systems such as Meaningful Measures which, bears little value for patient care. The more time a physician has with a patient that is not redundant, bureaucratic driven paperwork, the more time is spent on coordination.
- Increase primary care physicians via controls on medical school costs or subsidization for education for primary care. The U.S. has a shortage of primary care physicians and thus, more care is being handled by extenders.
Iowa Lawsuit = More Bad News for Assisted Living
In January of 2022, a resident with dementia wandered out of her Assisted Living Memory Care facility in Iowa and ultimately, froze to death. The State of Iowa investigation uncovered that the resident wandered outside of the building at 9:30 p.m. the previous night. Her absence went unnoticed for eight hours plus even though the alarm system for the facility used to deter or prevent wandering, worked and did provide, multiple warnings. The complaint, filed a little over a week ago, is available here: lynne-stewart-death-petition
Per the complaint, the resident was admitted with diagnoses of Alzheimer’s disease, major depressive disorder and anxiety disorder. She was admitted to the facility in March of 2019 and transferred to a Memory Care unit (same facility) in August of 2019. The core Plaintiff argument is that the resident was a known wanderer and that the alarm systems the facility used consistently malfunctioned (false alerts) and as a result, staff became desensitized to the repetitive alarms and warnings.
- The outside door alarm that was not loud enough to be heard in common areas where staff members were working.
- Alerts also did not appear on iPads due to malfunctions previously known to the facility.
- Alerts did appear on office computers, but no staff members were assigned to monitor the computers during the 10 p.m. to 6 a.m. shift.
- Per State investigation, the facility’s executive director received multiple text message alerts when door alarms were triggered, but she slept through those alerts.
- The on-call registered nurse received a similar series of text alerts but failed to respond, stating that mechanical defects caused the alarms in the resident’s room to constantly trigger.
This suit is but one of many either known pending or already filed, alleging Assisted Living facilities of providing an inadequate level of care, inadequate levels of staffing, insufficient training for staff to care for residents with more advanced cognitive and physical conditions, and as in this case, insufficient investments in equipment and tools necessary to support staff in their care duties.
Not too coincidental, the Senate Special Committee on Aging is conducting a hearing today on staffing, resident care and safety, and pricing involving representatives from Brookdale, Atria Senior Living, and Sunrise Senior Living – the three largest Assisted Living organizations in the U.S. More here, courtesy of McKnight’s: https://www.mcknightsseniorliving.com/home/news/us-senate-launches-investigation-of-assisted-living-after-lay-media-reports-about-safety-staffing-pricing/
The impetus for the scrutiny on Assisted Living facilities is a series of news/media stories in the Washington Post (stories of deaths due to wandering) and the New York Times and Kaiser Health News regarding Assisted Living costs and pricing. In a series of posts, I covered these stories and the policy and industry ramifications.
- https://rhislop3.com/2023/12/18/washington-post-and-assisted-living-not-so-good-news/
- https://rhislop3.com/2024/01/12/friday-feature-regulatory-shake-up-20-states-revamp-assisted-living-laws-in-2022-2023/
- https://rhislop3.com/2023/04/04/litigation-risk-and-assisted-living-facilities/
Long time readers and followers of this site will recall that news stories on Assisted Living and inadequate care, staffing concerns, etc. are not new. PBS Frontline did a focused report in 2013 on Emeritus Senior Living (primarily), covering similar content and issues as recently covered by the Washington Post and the New York Times. I wrote two pieces on the PBS/Emeritus story back in 2013.
- https://rhislop3.com/2013/07/29/emerituspbs-and-a-window-on-assisted-living/
- https://rhislop3.com/2013/08/06/assisted-living-pbs-and-the-lessons-learned/
As I look back at the posts from 2013 and the PBS story and compare the same to the news current and of course, the story today, the same theme or core concern remains. Back in 2013 I called this concern basically, “appropriateness”. This is fundamentally an issue of whether a resident and his/her unique care needs, can appropriately be managed in an Assisted Living setting or, by the provider operating the Assisted Living. Not all facilities, in all states or areas, are the same, even though, a certain level of homogeneity exists via state licensing requirements. In other words, some facilities specialize and (may) have invested in tools and staff adequate to care for more cognitively or physically impaired resident while some, may not be suited to handle a more complex resident.
As providers make or break financially, based on occupancy levels, denying residency or transferring residents ill-suited to a facility’s capabilities for care, creates a risk-reward tug of war. Many executives and administrators receive incentives based on occupancy levels. Many families are often emotionally challenged by the question of their loved one’s real needs (perhaps) for a more institutionalized or structured environment. Costs may be an issue.
The issues are multi-factorial for providers and residents/families and not easily solved. I do, however, know one thing after my decades in healthcare, senior living, etc., – more regulation won’t solve the problem alone and certainly, not without all stakeholders buying into a commonsense series of definitions and controls.
Wednesday Feature: Neglected, Uninspected – Senate Aging Committee Report on SNF Surveys
Happy Hump Day!
Yesterday I wrote about the OIG’s (Department of Health and Human Services) report and focus on CMS’ oversight of state survey agencies. The impetus behind this focus no doubt comes from the U.S. Senate Special Committee on Aging’s investigation into nursing home survey activities at the state level. The report is available here: UNINSPECTED & NEGLECTED – FINAL REPORT (1)
From the report (and notice, how the information dovetails with the OIG report I posted yesterday).
Every year, the federal government spends tens of billions of dollars on nursing home care, but
Congress appropriates less than 80 cents per resident per day to nursing home oversight. This
investigation shows how these inadequate investments for much of the last decade has put older
adults and people with disabilities at risk.
Nearly a third of the Nation’s 15,000 nursing homes are behind on comprehensive annual
inspections, including one in nine that have not received an annual inspection in two years or
more. Infrequent annual inspections have led more residents and families to file complaints.
However, advocates shared stories of nursing home residents waiting months for complaints to be
investigated, even when abuse, neglect, and serious health deficiencies were reported.
More than half the Nation’s state inspection agencies said such delays are directly linked to
underfunding for—and understaffing—within these critical state offices. The investigation found
that 32 agencies have vacancy rates of 20 percent or higher among nursing home inspectors, and
nine of those agencies have vacancy rates of 50 percent or higher. More than 80 percent of States
pointed to noncompetitive salaries as a barrier to recruiting and retaining inspectors.
The report is a worthwhile read/review, primarily because it highlights a broken system. The fix is not more regulation, more funding, or more attention to surveys. The fix is a fundamental revamp of what compliance with best practices means, how it can be achieved, how the same can be monitored, and how violations of proper care delivery, should be handled.
The current process focuses significantly on paper compliance. The rules or code is inches thick and ripe with interpretations. It is 863 pages long. The current State Operations Manual (the survey guide with the SNF Federal Conditions of Participation) is available here: Appendix PP State Operations Manual
There are multiple reasons why the care in SNFs has not significantly improved or deteriorated over the decades that I have been involved (one way or another) in the industry. The rules have grown significantly, and the costs associated with compliance have as well. Unfortunately, reimbursement (revenue) necessary to comply has not. One needs only to look at the quixotic venture CMS/DHHS is on regarding staffing levels and the resultant mandate or rule. While all research reports that higher staffing levels don’t directly correlate to improved care, the mandate moves ahead, despite clear data illustrating that compliance will be nearly impossible industry-wide and the expense associated, potentially devastating to many facilities. Rural facilities will be most at-risk of collapse. Abt-Associates-CMS-NH-Staffing-Study_Final-Report_-Apndx_June_2023
I have written and spoken on compliance and survey activity for SNFs for decades. On the Presentations page, readers can find some content on seminars or webinars that I have done on this subject. I have been a vocal proponent for wholesale change to the survey and certification process and to creating a provision (minimally) for deemed status for SNFs (private accreditation versus state survey reviews). I have also been a vocal proponent for faster removal/closure of consistently poor performing facilities and reward/oversight minimalization for consistently excellent facilities. Drawing a COVID analogy, a risk-focused or focused intervention approach. The current process just doesn’t work, and hasn’t for decades.
About: Reg’s Blog: Post-Acute, Senior Healthcare, and General Healthcare Issues
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