Tag: HHS

HHS launches innovative payment model for ambulance providers

Curtis Campbell, Class of 2019; Kim Harvey Looney, Partner at Waller

The United States Department of Health and Human Services (HHS) recently announced a new payment model for emergency ambulance services that will permit Medicare patients to be transported to healthcare facilities other than hospital emergency departments.

The Emergency Triage, Treat and Transport (ET3) model was announced on February 14 with the objective of allowing Medicare Fee-for-Service beneficiaries to receive the most appropriate level of care, while simultaneously reducing out-of-pocket costs. Under the model, HHS will allow ambulance suppliers and providers to transport Medicare beneficiaries to areas besides the emergency room, such as a doctor’s office or urgent-care facility, or use telemedicine, with the goal of reducing unnecessary trips to the hospital.

The ET3 model will run for five years and is expected to start in early 2020. This model was introduced to create a new set of incentives for emergency transport and care while ensuring patients get convenient and appropriate treatment in the correct setting. One concern with the existing model is that the payment system only pays ambulance providers when they take beneficiaries to the hospital emergency department, which HHS argues may lead to unnecessary emergency room visits or hospitalizations that may harm the patients.

The ET3 model will test two new payment models while still paying for emergency transport when a Medicare beneficiary is transported to a hospital emergency department or other destination covered under current regulations. The two new payment models are:

  • payment for treatment in place with a qualified healthcare practitioner, either on-the-scene or connected using telehealth; and,
  • payment for unscheduled, emergency transport of Medicare beneficiaries to alternative destinations, such as 24-hour care clinics.

The ET3 model will reward participating ambulance suppliers or providers by providing the opportunity to earn up to a 5% payment adjustment in later years of the model if they meet certain quality measures. The quality measurement strategy aims to avoid adding additional burdens to participants, while also seeking to minimize new reporting requirements. The model will be phased in with multiple application periods in order to maximize participation throughout the country. HHS anticipates it will start accepting applications from Medicare-enrolled ambulance suppliers and providers in Summer 2019.

The proposed ET3 model illustrates the willingness of HHS to develop and evaluate new cost-containment strategies while ensuring that Medicare patients receive the appropriate levels of care in the right settings.

The HHS press release announcing the program can be found here.

OIG advisory opinion approving smartphone initiative

By Clay Brewer, Class of 2020; Caitlyn W. Page, Partner at Waller

An advisory opinion issued recently by the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) provides some insight into the growing relationship between access to technology and access to patient care.

The OIG issued Advisory Opinion No. 19-02 permitting a pharmaceutical manufacturer’s proposal to loan limited capability smartphones to certain financially needy patients in order to assist these patients and their care providers track medication adherence data. In issuing this advisory the OIG provided valuable insight into how it interprets the “promotes access to care” exception to the Beneficiary Inducement Civil Monetary Penalty Statute (the “Beneficiary Inducement CMP”).

According to the requestor, the patient population for an undisclosed drug experiences a high amount of medication nonadherence or partial adherence, which results in higher utilization of healthcare services and increased costs to the healthcare system. In response to this issue, the drug’s manufacturer created a device that detects a signal sent by the drug upon ingestion, which in turn transmits the ingestion time to an app developed by the manufacturer through Bluetooth. However, because some patients do not have a smartphone, they are unable to use the app. As a result, the manufacturer proposed issuing a limited capability smartphone along with the drug to patients who do not have a smartphone and who have a household income below a specified percentage of the federal poverty level. Aside from the preloaded app, all other features of the smartphone would be disabled except the patient would still be able to make domestic telephone calls. The smartphones would be issued by a specialty pharmacy under contract with the manufacturer and each patient would only be permitted to such use the phone for a maximum of two 12-week administrations while receiving the medication.

The OIG concluded that the Beneficiary Inducements CMP would be implicated by this proposal because patients would be receiving the ability to make domestic phone calls, which constitutes remuneration. Additionally, because the patient’s prescribing practitioner would complete the paperwork for the patient to obtain the smartphone, the patient would likely have the impression that he or she must continue receiving care from a particular provider in order to maintain use of the smartphone. The patient may also feel obligated to obtain the drug from the specialty pharmacy issuing the smartphones even if the drug is available at other pharmacies.  The OIG, however, found that the proposal would fall under the “promotes access to care” exception to the Beneficiary Inducements CMP for a number of reasons, most notably because the OIG concluded that there is unlikely to be any possibility of disrupting clinical decision making since the patient only receives a smartphone if he or she falls below a certain income and does not currently have a smartphone device to download the app.

The OIG also concluded the proposal poses a low risk of imposing additional costs upon federal healthcare programs because:

  • there would be no incentive to issue a smartphone to an individual who already has one;
  • there is no advertising of the proposal which would cause individuals to seek treatment for the purposes of receiving a smartphone; and,
  • the smartphone’s limited capabilities and a maximum of two 12-week time periods would limit a patient’s effort to retain the smartphone.

Lastly, the OIG determined that the federal Anti-Kickback Statute could be implicated by this proposal if the requisite intent were present; however, it would not pursue administrative sanctions against the manufacturer because the proposed program contained a number of safeguards, including the fact that the loaner smartphone would be available only on a temporary basis, would only be used by individuals who otherwise would not be able to use the medication, and there would be no advertising of the smartphone so individual patients would not go to a certain provider seeking the medication for the purposes of receiving a smartphone.

While the OIG expressly stated that this opinion is narrowed to the specific facts that the Requestor presented and should not be relied upon for other possible initiatives, this advisory opinion provides useful guidance regarding the OIG’s view on the intersection of technology and the Anti-Kickback Statute and Beneficiary Inducements CMP.

Requesting EMTALA waivers during a natural disaster

By Seth Carver, Class of 2020; Andrew F. Solinger, Associate at Waller

With the start of hurricane season, and the recent destruction caused by Hurricane Florence on the Carolinas and beyond, hospitals must review and update their policies and procedures to ensure that proper care can be provided to patients following surges caused by natural disasters and emergencies.

Following large natural disasters such as Hurricane Florence, and other mass casualty events such as terrorist attacks or public health emergencies, hospitals are likely to experience significant surges of patients that will test and push the limits of hospitals’ capacities.  In the face of these mass casualty events, hospitals must quickly and effectively choose which patients will be treated and which will not.

This decision is likely to cause friction with a hospital’s obligations under The Emergency Medical Treatment and Active Labor Act (“EMTALA”), which requires hospitals to properly screen and stabilize all patients that present to an emergency department for care.  Because of this tension between a hospital’s ethical and legal obligations to treat patients and the realities of responding to natural disasters and other mass casualty events, hospitals must understand the requisite responsibilities under EMTALA during such disasters as well as ways in which they can protect themselves from liability for potential, but unavoidable, violations of EMTALA.

EMTALA prohibits all Medicare-participating hospitals from denying emergency medical service to individuals, regardless of ability to pay.  It also requires hospitals to provide an appropriate medical screening to determine if a medical condition exists.  If such a condition exists, the hospital is required to provide stabilizing treatment before transferring or discharging the patient.

Natural disasters do not by themselves absolve hospitals of this requirement under EMTALA.  However, it is foreseeable that hospitals in the path of a natural disaster will need to transfer patients to other facilities without conducting medical screening exams or stabilizing treatment.  An option which has been used in the past to transfer these patients without violating the requirements under EMTALA is a Section 1135 waiver. These waivers are short-term releases from the normal EMTALA requirements in the wake of declared natural disasters.  HHS has issued these waivers in previous natural disasters, including Hurricanes Katrina, Rita, Gustav, Ike and Dean, the Iowa floods of 2008, and the Minnesota floods of 2009.

When utilizing Section 1135 waivers, in order to lawfully transfer patients without conducting such medical screening exams, or if needed stabilizing treatments, all of the following conditions must apply:

  • The President declares an emergency or disaster under the Stafford Act or the National Emergencies Act;
  • The Secretary of HHS declares that a public health emergency (PHE) exists;
  • The Secretary of HHS authorizes EMTALA waivers under Section 1135 of the Social Security Act;
  • Unless EMTALA waivers are granted for an entire geographic area, the hospital in question applies for a waiver from HHS;
  • The hospital has actually activated its emergency operations plan; and
  • The state has activated its emergency operations plan or pandemic plan for the area that covers the hospital.

Once the Secretary of HHS authorizes § 1135 waivers a hospital may submit a request to operate under that authority by sending an email to the CMS regional office in their service area.

The request should contain the following:[i]

  • Provider Name/Type;
  • Full Address (including county/city/town/state) CCN (Medicare provider number);
  • Contact person and his or her contact information for follow-up questions;
  • A brief summary of why the waiver is needed.  For example: “Critical Access Hospital (CAH) is the sole community provider without reasonable transfer options at this point during the specified emergent event (e.g. flooding, tornado, fires, or flu outbreak)” or “CAH needs a waiver to exceed its bed limit by X number of beds for Y days/weeks” (be specific);
  • Consideration – Type of relief you are seeking or regulatory requirements or regulatory reference that the requestor is seeking to be waived;
  • There is no specific form or format that is required to submit the information but it is helpful to clearly state the scope of the issue and the impact;
  • If a waiver is requested, the information should come directly from the impacted provider to the appropriate Regional Office mailbox with a copy to the appropriate State Agency for Health Care Administration to make sure the waiver request does not conflict with any State requirements and all concerns are addressed timely.

The waiver request is then reviewed by a cross-regional waiver validation team.  In reviewing waiver requests CMS makes the following inquiries: [ii]

  • Is the hospital within the defined emergency area?
  • Is there an actual need?
  • What is the expected duration?
  • Can this be resolved within current regulations?
  • Will regulatory relief requested actually address stated need?
  • Should we consider an individual or blanket waiver?

If granted, Section 1135 waivers generally last for up to 72 hours after both the emergency is declared and the hospital’s emergency plan is activated.  In some instances, the waiver will terminate prior to 72 hours if the HHS Secretary determines that the waiver is no longer necessary. It is important to note that this waiver does not allow for hospitals to selectively only treat patients with insurance and to transfer away all uninsured or underinsured patients.  If utilizing the waiver to transfer such patients, hospitals must not discriminate on

In order for hospitals to remain compliant with all EMTLA regulations during natural disasters and emergencies, it is important to review and revise EMTLA policies so that they reflect the proper steps in utilizing Section 1135 waivers.  Natural disasters and other mass casualty events impose large challenges for hospitals regarding treatment requirements. However, with active preparation and well-written emergency policies hospitals can limit violations of government regulations and ease the decision making of hospital personnel.

Federal government tightening enforcement for hospice, post-acute care providers

By Curtis Campbell, Class of 2019; Jessie C. Neil, Partner at Waller; J. Logan Wilson, Associate at Waller

The Department of Health and Human Services’ Office of Inspector General (OIG) recently announced that it had found several vulnerabilities in the Medicare hospice program while examining practices between 2006 and 2016.

The number of beneficiaries in the program expanded 53 percent between these dates, growing from 930,000 beneficiaries in 2006 to 1.4 million beneficiaries in 2016. However, spending in the same period grew 81 percent, increasing from $9.2 billion in 2006 to $16.7 billion in 2016. The number of hospices also increased 43 percent, growing from 3,062 in 2006 to 4,374 in 2016.

Beneficiaries of the program forgo curative care for terminal illnesses and instead receive palliative care. Palliative care can be provided in a variety of settings, including the patient’s home, a nursing facility, a hospital or a hospice inpatient unit. Medicare pays hospices for each day a beneficiary receives care, regardless of the quantity or quality of services. Medicare pays a different daily rate for four (4) different levels of hospice care: routine home care, general inpatient care, continuous home care and inpatient respite care.

While conducting its examination, OIG concluded that hospices did not always provide necessary services to beneficiaries. In some cases, hospices did not manage patients’ symptoms or medications effectively, leaving them in pain for many days. Additionally, OIG found that hospices often did a poor job care planning, that hundreds of hospices only offered routine home care, that many hospices did not offer services on the weekend, and that many beneficiaries did not see a physician. Some beneficiaries and their families and caregivers also did not receive critical information needed to make informed decisions about the care the beneficiary received.

OIG also identified issues with hospices inappropriately billing costs and higher-than-appropriate levels of care to Medicare worth hundreds of millions of dollars. OIG noted several fraudulent activities, including enrolling beneficiaries who are not eligible for hospice care and billing for services that were never provided.

Furthermore, OIG found that the current payment system incentivizes hospices to minimize patient services and seek beneficiaries who have uncomplicated needs. The Centers for Medicare & Medicaid Services (CMS) has made some changes to the payment system, but the underlying structure remains unchanged.

As a result, OIG made several recommendations to CMS about how to improve the hospice program, including:

  • Strengthening the survey process to better ensure that hospices provide beneficiaries with needed services and quality care;
  • Seeking statutory authority to establish remedies for hospices with poor performance;
  • Developing and disseminating additional information on hospices to help beneficiaries and their families and caregivers make informed choices about their care;
  • Educating beneficiaries and their families and caregivers about the hospice benefit;
  • Promoting physician involvement and accountability to ensure that beneficiaries get appropriate care;
  • Strengthening oversight of hospices to reduce inappropriate billing; and
  • Taking steps to tie payment to beneficiary care needs and quality of care to ensure that services rendered adequately serve beneficiaries’ needs, seeking statutory authority if needed.

OIG is telegraphing its intent to focus enforcement efforts around hospice care in particular and post-acute care in general. Companies with a proactive compliance program will wisely adapt their processes to reflect these new government priorities.

Between a rock and a hard place: medical-device stakeholders disappointed by cancelled CMS rulemaking

By Emmie Futrell, Class of 2018; Denise D. Burke, Partner at Waller

Another attempt at bridging the gaping lag between FDA approval for medical devices and CMS’s Medicare coverage determinations has been struck down, after a nine-month standstill.

CMS’s proposed rulemaking included a promising new program called EXCITE, or expedited coverage of innovative technology. The proposed rulemaking had not been made public in substance, and the reasons for its cancellation are still unclear.

CMS officials confirmed that EXCITE was intended to improve access to innovative medical-device technologies for Medicare patients.

Members of the medical-device industry, however, believe that EXCITE was patterned after a 2016 industry proposal that had been presented to CMS to correct the backlog.

The 2016 proposal, known as PACER, or the provisional accelerated coverage to encourage research initiative, suggested that CMS grant provisional coverage under Medicare for FDA-approved devices. This would ensure that patients could access innovative technology, while CMS could gather the information necessary for its own approval process.

The provisional coverage would also alleviate pressure on device sponsors, who would not suffer from having to bankroll expensive and highly specific clinical tests before devices are even on the market.

EXCITE is not CMS’s first attempt to reduce the backlog between FDA and Medicare approval for medical devices.

This backlog, which can sometimes last years, results from the independent statutory mandates that tie the hands of the respective agencies. FDA must ensure that the drugs and devices it approves are “safe and effective,” while CMS can only approve products for Medicare coverage if the products are “reasonable and necessary.” This coverage determination requires CMS to evaluate the necessity of devices for typical Medicare patients, which are generally more medically complex than those of patients in FDA clinical trials.

In 2011, the Department of Health and Human Services attempted to address the lag between FDA and Medicare approval by initiating a parallel review program. This program focused on increasing communication between CMS, the FDA and device manufacturers, including providing medical-device stakeholders and manufacturers with detailed information about the study data that each agency would require in the approval process.

It was believed that this would speed the review process by allowing manufacturers to tailor their studies to encapsulate necessary data for each agency.   Lack of resources, however, largely doomed this program before it was effectively launched. Critics have condemned the program, which only resulted in two approvals by CMS.

CMS’s cancellation of the EXCITE program is a strong indication that, for at least the immediate future, medical-device manufacturers will continue to suffer from the bottleneck between the FDA and CMS and experience lengthy delays between FDA approval and CMS reimbursement.