NEWS AND VIEWS FOR PTs
A complimentary newsletter from
MAILLY INGLETT & BARMAK, LLC
Educators and Consultants to Physical Therapists
JUNE, 2010 - Volume 1, Issue 6 |
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| Red Flag Rule Implementation Delayed
for the 4th Time |
Enforcement of the Federal Trade Commission's (FTC) red flags rule has been pushed back to December 31, 2010 giving health care providers another six months to establish a program for finding and preventing identity theft - unless Congress or a court exempts them from coverage.
Many groups representing various constituencies have fought implementation through their national associations stating that Congress intended the rule to apply to banks, credit card companies and mortgage lenders and that the FTC does not have the statutory authority to apply the rule to health care providers.
The rule, which implements the Fair and Accurate Credit Transactions Act of 2003, defines a creditor as any "entity that regularly extends, renews or continues credit".
Legislation in both the Senate and the House has been introduced that would limit how the red flags rule applies to health care providers.
The FTC has urged Congress to act quickly to pass legislation that will resolve any questions as to which entities are covered by the rule. Jon Leibowitz, FTC Chairman has stated that if Congress passes legislation limiting the scope of the red flags rule with an effective date earlier than December 31, 2010 the commission will begin enforcement as of that effective date.
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| Patient Protection and Affordable Care Act (Healthcare Reform Act of 2010) Includes Significant Change to the
Federal Anti-Kickback Statute |
A violation of the Federal Anti-Kickback Statute no longer requires intent: that is, actual knowledge of violating the statute and specific intent to violate the statute under a change dictated by the Patient Protection and Affordable Care Act of 2010.
This is a very significant change to the statute where previously "intent" was a critical component. In addition, a violation of the federal anti-kickback statute is now expressly recognized as resulting in the submission of false claims and a violation of the federal false claims act. The federal false claims act is the basis for qui tam or whistleblower lawsuits brought on behalf of the federal government.
This change in the federal anti-kickback statute is a serious reduction of the level of proof needed to successfully prove a violation of the statute. Health care providers and suppliers must reevaluate all business relationships with actual or perceived referral sources to ensure that there is full substantiation of compliance with this statute.
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| For Your Information - Q & A |
Question:
If a Medicare recipient is receiving homecare via an agency, which includes physical therapy, can they also receive private physical therapy services by a PT in private practice with the location noted as home at the same time? Are these services appropriate to be billed to Medicare?
Answer:
No, if a Medicare beneficiary has not been discharged from a home health episode all services must be billed by, and will only be paid to the Home Health agency. The same is true for services rendered while a patient is a receiving services during a Part A stay in a SNF, due to CMS consolidated billing rules. Moreover, CMS has explicitly made it our responsibility to verify eligibility for these services, which is obviously a sound practice management strategy.
See below:
Source: Transmittal B-03-021, DATE: MARCH 13, 2003
Independent Therapists and DME Suppliers - Billing For Therapy Services Or Supplies That May Be Part Of A Home Health Stay
Before you provide therapy services to a Medicare beneficiary, you need to be certain whether or not a home health episode of care exists for that beneficiary, and whether or not an actual home health discharge date exists. This article provides information that will help you determine whether Medicare will pay separately for your service or whether payment for the services are consolidated into Medicare's payment to a home health agency (HHA). Claims consolidated in the HHA's payment will continue to be denied and you will not receive payment! Medicare adjusts claims for services already consolidated into the HHA's payment and will recover your payment for these services. You will receive a remittance advice on any denied claim which will read as follows: reason code B15: "Payment adjusted because this procedure/service is not paid separately", and remark code N70: "Home health consolidated billing and payment applies."
To help you determine whether the beneficiary is in a home health episode of care, CMS will, in the future, make home health inquiry information available to you electronically, through the Eligibility Benefit Inquiry/Response (270/271) Transaction System. Until and unless you have access to this system, it is your responsibility to simply ask the beneficiary (or his/her authorized representative) if he/she is presently under a home health plan of care. Payment for the services denied by Medicare may be sought from the beneficiary, but you should advise them of their obligation for payment prior to delivering the service. Remember, you are responsible for determining if the beneficiary you wish to serve is eligible to receive additional Medicare payment for your services. Services provided to a beneficiary who is not eligible to receive those services because they are already in a home health plan of care, are not payable.
Are we supposed to collect sales tax for things like theraband and shoulder pulleys?
Answer:
As with all questions of this nature, the only reliable source to answer this question is that agency with responsibility enforcing the laws and regulations associated with the issue. In this case, that agency would be the NJ Division of Taxation. This agency has published information addressing this question, however, which we have linked below.
As you will note in this highlighted information; many of the items that Physical Therapists routinely sell to patients would likely be exempted from the collection of sales tax, but this can only be determined on an item-by-item basis. Unfortunately, your example of "theraband and shoulder pulleys" may allow some room for interpretation, as they might be considered "exercise equipment" and thus taxable.
Question:
Scenario: Patient doesn't pay co-pays. Their insurance contract specifically states that patient is responsible for co-pays at the time of visit. Patient makes excuses and forgets check book etc... and before you know it, months have gone by.
What can we do or where do we go to report such behavior? What recourse do we have? We continue to see the patient. The patient clearly is not upholding their part of the insurance contract. I think we are still under obligation to continue to treat a patient who has neglected to pay co-pays even though he/she has been asked for the co-pays and is clearly aware of the co-pay policy and their insurance requirements. However, what options do we have when this continues and they don't pay?
A few clarifications:
- There is no legal or ethical obligation for us to treat patients for free.
- There is a legal obligation for us to discuss financial arrangements with patients prior to delivery of our services.
- There is a legal obligation for us to collect patient copays, coinsurance and deductibles from patients who have such financial responsibilities in their insurance contracts.
- We have the ability to waive such patient financial responsibilities, provided such waivers are due to financial hardship and are not done routinely.
With all of the above being the case, our options include:
- Discontinuing care due to non-payment of fees.
- Development of an alternative payment arrangement, if there is financial hardship.
- Waiver of the patient obligation if there is financial hardship.
Obviously; assuring that payment obligations are made clear to the patient at the outset of treatment is not only critical to assuring compliance with the law, it is essential to the financial viability of a practice. Please also consider reviewing our White paper on this subject, which can be assessed here:
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| Possible Area of Focus for the U.S. Office of the Inspector General (OIG) Relative to Physical Therapy Claims |
We wish to call your attention to the Semiannual Report to Congress of the U.S. Office of the Inspector General (OIG), which we have linked below. By way of background, such reports are routinely provided by the OIG, on both and annual and semiannual basis, along with other periodic reports on an ad hoc basis. This particular report can be accessed here: http://oig.hhs.gov/publications/docs/semiannual/2010/semiannual_spring2010.pdf
We have included one particular case from this report to illustrate an issue that could very well become a major area of focus for the OIG relative to Medicare PT claims.
From page 42 of the report:
Georgia- Dr. Randy Lentz and physical therapist Scott Bowlin were sentenced after their guilty pleas to conspiracy to commit health care fraud. Lentz was sentenced to 34 months' incarceration and ordered to pay $248,755 in restitution, and Bowlin was sentenced to 19 months' incarceration and ordered to pay $19,839 in restitution. Lentz owned and operated a gym in Jesup which was in financial difficulty. To keep the gym in operation, Lentz and Bowlin devised a scheme to bill Medicare and Medicaid for physical therapy services that were not provided; their alleged patients were simply working out in the gym. The investigation involved OIG, the FBI, and the Georgia MFCU.
This case illustrates the critical distinction that we, and reviewers of our care, must make between "exercise" and "therapeutic exercise". Failure to make this distinction can clearly have disastrous consequences, as this case perfectly illustrates. While there certainly may be many other issues associated with this case, including possible fee-splitting and improper ownership, this issue of whether patients are "simply working out" may represent the single greatest threat to our practices and profession. It is also why we must be effective advocates of fair reimbursement for legitimate PT services, and simultaneously advocate against the provision and reimbursement of illegitimate services.
What is also of note in this case is that the way in which this investigation began. According to an earlier press report, "FBI agents and U.S. Department of Health and Human Services authorities began investigating Lentz and Bowlin in July 2005 after a tip to the department's fraud hot line." (Source: http://www.allbusiness.com/crime-law/criminal-offenses-conspiracy/13635044-1.html) In other words, one never knows who is watching and reporting. |
| Safe Harbors Can Shield Health Care Providers From
Federal Anti-Kickback Law | |
The principle purpose of the Federal Anti-Kickback Law is to protect patients and the federal health care programs from fraud and abuse by eliminating the corrupting influence of money on health care decisions. The law as written is very broad and over the years health care providers have argued that some relatively minor and some cases even beneficial commercial arrangements are prohibited by this federal regulation.
Concerns raised by many though the years has led Congress to authorize the Department of Health & Human Services to issue regulations designating "safe harbors" for various payment and business practices such as but not limited to space rental, equipment rental, personal services and management contracts. These types of safe harbor arrangements while potentially prohibited by the law will not face criminal and civil prosecution.
Without safe harbor status violation of the Federal Anti-Kickback law could be punishable by up to five years in prison, criminal fines up to $25,000, administrative civil penalties up to $50,000 and exclusion from participation in federal health care programs.
Failure to comply with a safe harbor provision does not mean that a business arrangement is per se illegal. Compliance with safe harbors is voluntary and arrangements that do not comply with a safe harbor must be examined on a case by case basis for compliance with anti-kickback statute.
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Mailly Inglett & Barmak, LLC |
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Ken Mailly, PT, MPA, NJ Lic. # NJ40QAOO335900
Ken is a graduate of the State University of New York at Downstate Medical Center, and completed 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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