NEWS AND VIEWS FOR PTs
A complimentary newsletter from
MAILLY INGLETT & BARMAK, LLC
Educators and Consultants to Physical Therapists
MARCH, 2010 - Volume 1, Issue 3 |
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| In This Issue |
New Jersey Law Requires Managed Care Plans to Honor Patient Assignment of Benfits and Pay Out-Of-Network Healthcare Providers Directly
New Jersey Paid Family Leave Act: An Overview
Empoyers Face Unlimited Punitive Damages Plus Expanded Areas of Liability for Whistleblowers
Recent Settlements with Health Care Providers Announced by U.S. Department of Justice
For Your Information - Q & A | |
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| New Jersey Law Requires Managed Care Plans to Honor Patient Assignment of Benefits and Pay Out-Of-Network Healthcare Providers Directly |
A patient receives physical therapy from an out-of-network PT practice, or individual PT. Horizon Blue Cross Blue Shield of New Jersey, Inc. ("Horizon"), is billed for the therapy. Unfortunately, Mary, who handles accounts receivable department for the PT, is behind on her collection efforts. By the time Mary catches up on her collection efforts, the patient has received hundreds of dollars of reimbursement directly from Horizon. Mary then contacts Horizon and follows up on the outstanding claims. Horizon tells her that the claims have been paid and the moneys sent directly to the patient. Mary complains about payment to the patient because the patient has signed an assignment of benefits thereby agreeing that the therapist can stand in the shoes of the patient and receive all of the same benefits that the patient is entitled to receive from Horizon, including receipt of payment for claims submitted. Horizon indicates that its subscriber agreement with the patient (Horizon refers to its patients as "subscribers") has an anti-assignment provision voiding any such provision without the express written permission of Horizon. Horizon cites Somerset Orthopedic Associates. V. Horizon Blue Cross of New Jersey, Inc., 345 N. J. Super. 410 (App. Div. 2001) (argued by David S. Barmak on behalf of Somerset Orthopedic Associates) as legal support for this position. Horizon explains that the primary way to motivate suppliers to participate in-network is to offer to send claim payments directly to in-network providers but not out-of-network providers. As fallacious as this seems to Mary, it is, nevertheless, Horizon's stated reason for this payment practice. Concerned and frustrated, Mary contacts the patient and asks if the patient has received payment from Horizon. "Yes, but I can't pay you." "Why?" "Because I thought the money was mine and I used it to pay towards my daughter's college tuition." (True story)
What can Mary, on behalf of the PT practice, do? From now until January 16, 2011, Mary can file a lawsuit against the patient for the billed charges, not just the paid amount, for the therapy provided or file criminal charges against the patient for theft and conversion of moneys that were due the practice. Mary cannot sue Horizon because there is no "privity of contract", i.e., no contractual relationship between the PT practice and Horizon - the practice is out-of-network which, by definition, means no provider contract.
Great news! On January 16, 2010, then-Acting New Jersey Governor Sweeney signed into law a requirement that managed care plans pay out-of-network providers directly for healthcare services rendered to a patient if the patient has assigned his or her health insurance benefits to the out-of-network provider. This new law, the "Assignment Law", will take effect on January 16, 2011. Mary now has a viable method to ensure that she doesn't have to chase patients for money when the supplier is out-of-network.
The Assignment Law applies to managed care plans that offer both in-network and out-of-network plans. These plans will be required to remit payment for covered healthcare services directly to the healthcare provider via a check payable to the healthcare provider, or in the alternative, to the healthcare provider and patient as joint payees, with a signature line for each of the payees. The payment by the managed care plan must be made in accordance with New Jersey's Prompt Pay Law ("clean claims" must be paid within thirty days). If the payment is made only to the patient instead of to the out-of-network provider, the claim will be considered unpaid which means that the payment will be considered overdue under the Prompt Pay Law and subject to an interest charge if not paid to the provider within the time frames specified in the Prompt Pay Law. |
| New Jersey Paid Family Leave Act: An Overview |
New Jersey has become only the second sate in the nation to mandate a paid family leave program for employees. The law was signed on May 2, 2008 and took effect on July 1, 2009.
Paid family leave provides employees with up to six weeks of partial wage replacement to care for newborn, adopted or seriously ill family members every year. This program is similar to New Jersey's existing Temporary Disability Insurance program. The paid leave benefit provided two-thirds of the employee's wages capped at $546 per week for 2009. The maximum benefit rate is adjusted every year. The paid family leave program does not require any employer to hold the employee's position open, but employers should be mindful of other state and federal laws that may provide employees with the right to reinstatement. Eligible employees will also be able to take the leave on an intermittent basis.
All full and part-time employees are eligible for paid family leave based on the amount of wages paid over a period of "base weeks." An employee qualifies for the program who earns either: $143 or more per week for 20 consecutive weeks, or $7,200 or more over the previous 52 calendar weeks. Businesses that have 50 or more employees are required to continue to comply with the unpaid leave provisions of the federal Family and Medical Leave Act and the New Jersey Family Leave Act. These laws require employees to work for the employer for a period of time before they become eligible for the unpaid leave. The Paid Family Leave Law will allow an eligible employee to take paid family leave almost immediately.
Important definitions:
Family Temporary Disability Leave provides up to six weeks of paid leave to: (1) bond with a newborn or adopted child, or (2) care for the serious health condition of a family member. An employer may require an employee to use up to two weeks of any paid sick, vacation or other paid time off in connection with a period of paid family leave. No employee may receive paid family leave benefits and simultaneously receive temporary disability income or unemployment compensation benefits.
Family members included in the program consist of the following: biological, adopted or foster children less than 19 years of age; a child over 19 years of age that is incapable of self care; a spouse; "domestic partners"; "civil union partners"; biological, foster, adopted parents or stepparents; or a legal guardian of the eligible employee when the employee was a child.
"Serious health condition" is defined as an illness, injury, impairment or physical or mental condition that requires: inpatient care in a hospital, hospice, or residential medical care facility; or continuing medical treatment or continuing supervision by a healthcare provider.
"Healthcare provider" is defined as any person licensed under federal, state or local law, or the laws of a foreign nation to provide health care services; or any other person who has been authorized to provide health care by a licensed healthcare provider.
For more detailed information on rules and procedures of the New Jersey Paid Family Leave Act, please contact us at info@maillyinglettbarmak.com. | |
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| Employers Face Unlimited Punitive Damages Plus Expanded Areas of Liability for Whistleblowers |
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The New Jersey legislature recently lifted the cap on punitive damages for whistleblowers by amending the Punitive Damages Act. All employers, owners and managers should be aware of this altered landscape of liability, one which can mean significant financial burdens to lawsuit losers.
CEPA Explained
Under the New Jersey Conscientious Employee Protection Act ("CEPA"), employers are forbidden to retaliate against an employee who (1) discloses or threatens to disclose a practice of the employer that the employee reasonably believes is in violation of a law or public policy; (2) provides information to a public body conducting an investigation into any violation of law by the employer; or (3) refuses to participate in any activity that the employee reasonably believes is a violation of a law.
The New Jersey Punitive Damages Act limits the amount of punitive damages a party is entitled to recover in a lawsuit. Prior to the amendment, the Act subjected employers in a CEPA action to five times the liability for compensatory damages or $350,000, whichever was greater. The amendment now allows CEPA actions to award unlimited punitive damages, a burden that can put firms out of business.
New Areas of Liability Especially for Health Care
The legislature also amended CEPA to increase the liability that employers face by expanding the areas in which the employer is prohibited from retaliating against an employer. CEPA now protects an employee who reports or threatens to report to a supervisor or a public body an activity, policy or practice of the employer, or another employer, with whom there is a business relationship that the employee reasonably believes:
- is in violation of a law, or a rule or regulation promulgated pursuant to law, including any violation involving deception of, or misrepresentation to, any shareholder, investor, client, patient, customer, employee, former employee, retiree or pensioner of the employer or any governmental entity or, in the case of an employee who is a licensed or certified health care professionals who reasonably believe a policy or practice of the employer constitutes improper quality of patient care. OR
- is fraudulent or criminal, including any activity, policy or practice of deception or misrepresentation which the employee reasonably believes may defraud any shareholder, investor, client, patient, customer, employee, former employee, retiree or pensioner of the employer or any governmental entity.
Certain, Not Discretionary Relief Plus Attorneys' Fees
The CEPA amendments also require Courts to provide certain relief as opposed to the previous discretionary standard for employees who have been found to have experienced retaliation by their employers as outlined above. Such relief includes injunctions, reinstatement to the same or equivalent position, reinstatement of full fringe benefits and seniority rights, compensation for all lost wages, benefits and other remuneration and the payment by the employer of reasonable costs and attorney's fees. In addition, the Court may also assess a civil fine of not more than $10,000 for the first violation of the Act and not more than $20,000 for each subsequent violation AND unlimited punitive damages.
In awarding possible punitive damages, the Court will take into account not only the amount of compensatory damages awarded to the employee, but also the amount of all damages caused to shareholders, investors, clients, patients, customers, employees, former employees, retirees or pensioners of the employer, or to the public or any governmental entity, by the activities, policies or practices of the employer which the employee disclosed, threatened to disclose, provided testimony regarding, objected to, or refused to participate in.
Employers need to seriously assess the potential liability that these amendments to both CEPA and the Punitive Damages Act add. The ideal way to minimize potential risk is to develop and establish an anti-retaliation policy and procedure that clearly prohibits the types of retaliatory behavior prohibited under CEPA. A hotline or some other type of anonymous reporting system should also be established to provide employees with a "safe" option for reporting possible violations of the prohibited behavior.
All of the changes to this law represent a potential bonanza for whistleblowers who "reasonably believe". Employers should waste little time implementing the procedures discussed earlier, and if you have questions, now is the time to seek counsel before these landmines are triggered.
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| Recent Settlements with Health Care Providers Announced by U.S. Department of Justice |
The Kerlan-Jobe Orthopaedic Clinic, a sports medicine clinic with offices across the Los Angeles, California area, has agreed to pay the United States $3 million to settle allegations that it received illegal kickbacks from HealthSouth Corporation, the Justice Department recently announced.
The settlement resolves allegations that HealthSouth paid kickbacks to Kerlan-Jobe in the form of stock option grants, donations to the Kerlan-Jobe Foundation, loan forgiveness on an equipment lease and a disproportionately high ownership interest in a jointly owned ambulatory surgery center. In exchange for the illegal kickbacks, Kerlan-Jobe allegedly referred patients to HealthSouth facilities.
As a condition of continued participation in government healthcare programs, Kerlan-Jobe was required to enter into a Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services to address Kerlan-Jobe's financial relationships with referral recipients.
This settlement follows a December 2007 settlement between the United States and HealthSouth in which HealthSouth paid the United States approximately $14.7 million to resolve HealthSouth's liability for improper financial relationships with Kerlan-Jobe and an Alabama sports medicine clinic, which HealthSouth's then-new management self-reported to the government.
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| For Your Information - Q & A |
Question:
Is it mandatory to have sign-in sheet for Medicare. A lot of my medicare patients are elderly and never sign in or choose not to sign in, or sign in and forget the time. I am just wondering about this in relation to a medicare audit, do they look for this is an audit? Thanks.
Response:
There is no requirement under the Medicare regulations for providers or suppliers to have a sign-in sheet, however it is a good practice to use one anyways. In addition, if an inquiry is made by the NJ Board of Physical Therapy Examiners they would likely request such a sheet as well. Such additional documentation can be of great value in verifying the presence of a patient on a given day and time should an accusation of wrong-doing be level against a provider, by any individual or entity, such as a Medicare contractor.
Question:
Do you know where in the CMS Manuals is the reference that states you can't bill Medicare patients for deductibles or co-insurance prior to submitting the claim to Medicare and receiving the EOB that states the patient owes that amount? I can't find it. Thanks if you can help.
Response:
There is no such prohibition in the Medicare statue and regulations, which is why you can't find it. The amount that may be collected is regulated, but not really when it may collected. You should also know that Medicare beneficiaries are generally told not to pay the provider or supplier until having received a Medicare Summary Notice (referred to as an EOB for other payers) specifying their financial responsibility. One other notable provision related to this is not really a strict prohibition, but might be described as a "strong recommendation" ( emphasis added) for those accepting assignment, which includes most PTPPs: 30.3.3 - Physician's Rights to Collect From Enrollee on Assigned Claim Submitted to Carriers
C. Physician Should Not Bill Enrollee After the Claim is Submitted
After the provider (including physicians and suppliers) has accepted assignment he/she should not bill the enrollee or try to collect from him/her any additional part of the bill until he/she receives the carrier's Medicare Summary Notice (MSN). Where the provider (including physicians and suppliers) collects any substantial part of his/her bill from the enrollee after submitting his/her claim, such collection is likely to be an overcollection, and a violation of the assignment agreement.
As previously noted and referenced above, the amounts collected by PTs will be very problematic if they are not corrected.
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Mailly Inglett & Barmak, LLC | |
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Ken Mailly, PT, NJ Lic. # NJ40QAOO335900
Ken is a graduate of the State University of New York at Downstate Medical Center, and is completing his Master's in Public Administration at Seton Hall University, with a concentration in Health Care Policy and Management. He is also certified as an Ergonomic Specialist.
In addition to his graduate studies, with well over 2,500 hours of continuing physical therapy education, Ken has amassed an extremely diverse and extensive knowledge of the clinical practice of physical therapy, rehabilitation, and practice management. Ken's primary clinical focus is in orthopedics, chronic soft tissue disorders, and management of patients with bleeding disorders.
Along with this clinical knowledge base, Ken has devoted the last 10 years to the study of regulation, legislation, and reimbursement for physical therapy & rehabilitation services. He has served as an expert witness, on behalf of both plaintiffs and defendants, in numerous malpractice cases. He has also been consulted on state, federal, and third party payer inquiries regarding physical therapy and rehabilitation billing, regulatory, and legal issues.
Ken is a partner in Mailly & Inglett Consulting. His focus is on compliance with professional standards, state and federal regulations, as well as practice management strategies.
Barry G. Inglett, PT, CHT, Cert. MDT, NJ Lic # NJ40QA00146200
Barry is a graduate of Columbia University, a Certified Hand Therapist and a Credentialed McKenzie Therapist. He is a physical therapist and co-owner of Wayne Physical Therapy & Spine Center, a private practice established in 1977. Barry is also a partner in Mailly & Inglett Consulting, working with both physical therapists and Payers.
Barry is a guest lecturer for UMDNJ's Physical Therapy Program as well as a clinical instructor for several colleges including Columbia University, New York University, Temple University, Stockton State College, Kean College and the University of Medicine and Dentistry's Physical Therapy Program. He is also an instructor for HMW (Human Mechanical Wellness) Seminars, specializing in mechanically oriented treatment programs for the spine and extremities.
Barry has been retained by numerous insurance companies as well as the New Jersey Attorney General's Office offering expert witness testimony in physical therapy practice. He has been involved in utilization review and reimbursement issues in physical therapy for over 20 years. Barry also instituted, and was retained as the lead expert, in the largest PT fraud case in NJ history (Cobo v. MTF). He also served as a physical therapy consultant from 1997-2005 for Horizon Healthcare running the NJ Plus pre-certification program. Barry has served on the New Jersey Board of Physical Therapy for the past eight years and has also served as the Chairman of the Board of Physical Therapy.
David S. Barmak, Esq.
David S. Barmak, Esq. received a JD from Cornell University and a BA from Duke University. The Law Offices Of David S. Barmak, LLC was established in 1984. David is licensed to practice law and has clients in the states of New York, New Jersey, Pennsylvania and Connecticut.
David's legal focus is in the areas of corporate compliance, risk management, human resources and operational legal affairs.
David has a strong background in operations, having served as both the Associate Administrator and General Counsel for a large New York Certified Home Health Agency, initiating and directing a New York Licensed Home Care Services Agency as well as owning and operating a Durable Medical Equipment company. David also provides defense of enterprises, directors, officers and other professionals accused of misconduct.
For more information, please contact us:
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| © Copyright, 2010. Mailly Inglett & Barmak, LLC. All rights reserved. No portion of these materials may be reproduced by any means without the advance permission of the author. | |
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