January 2018 Takeaways
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Enforcement and regulatory concerns
for hospitals in 2018
by Arthur J. Fried, Melissa L. Jampol,
and Chelsea E. Ott (page 23)
» Hospitals must be prepared to respond to a changing
regulatory and enforcement environment in 2018,
especially with respect to electronic health records (EHR),
billing and coding, and OPPS and IPPS.
» Hospitals need to ensure that they have effective processes
in place for employees to make complaints as well as to
ensure that the complaints are thoroughly investigated and
resolved objectively and decisively.
» With a continued emphasis by regulators on improper
billing, hospitals should implement effective controls and
monitor and audit their billing and provider arrangements to
prevent improper billing, particularly of federal healthcare
» In the event hospitals discover potential overpayments,
they should seriously evaluate the repayment and
self‑disclosure requirements of federal and state law.
» Hospitals are training providers on the technical
infrastructure, effective use of the EHR, and regulatory
incentives, but they must be wary that an EHR system
itself can cause false claims, or lead to false claims, if not
A review of 2017 enforcement actions
by Jeremy Burnette, Sidney Welch,
and Laura Little (page 32)
» Physicians are increasingly being investigated and held
personally liable for False Claims Act (FCA) violations
alongside corporate entities in the post‑Yates Memo era.
» Many 2017 FCA settlements are related to billing for
services that were medically unnecessary or never
performed, suggesting medical record documentation is
increasingly critical to defending FCA liability.
» Providing and billing for substandard or different care than
that required by federal healthcare programs can create
» Physicians should expect law enforcement to investigate
and pursue them, alongside corporations, for violations of
the federal Stark Law and Anti‑Kickback Statute.
» To defend against FCA liability, physicians should perform
regular exclusion checks, claims audits, and due diligence
before starting new ventures or contracting with healthcare
Ordering and billing observation
services: A simple service with
by Ronald Hirsch (page 40)
» Observation is a service provided to outpatients and not
» Observation hour counting begins with the order for
» Observation hour counting ends with the end of medically
necessary hospital services.
» Hours must be carved out from observation counting in two
» Although observation is paid as a single payment,
compliant hour counting is still required.
When culture is the issue
by Susan Walberg (page 46)
» Compliance investigations often serve to identify culture
» If left unchecked, culture issues frequently escalate into
actual compliance risks.
» Patterns of vague complaints may indicate a culture
» Neutral parties, such as compliance professionals, are best
suited to help resolve culture issues.
» Harassment, retaliation, or hostile work environment
complaints are red flags.
Post-acute care compliance issues,
Part 1: Long-term care
by Todd Selby and Robert W. Markette, Jr.
» Long‑term care (LTC) facilities are required to implement
annual, facility‑wide, and community‑based assessments
to determine what resources are necessary for day‑to‑day
and emergency care for their residents.
» The Quality Assurance and Performance Improvement
(QAPI) Requirement of Participation requires all LTC
facilities to develop, implement, and maintain an effective,
comprehensive, data‑driven QAPI program that focuses on
systems of care, outcomes of care, and quality of life.
» CMS released a revised version of the State Operations
Manual, which provides valuable insight on how state
surveyors will interpret and conduct surveys under the new
Requirements of Participation (RoPs).
» CMS also revised the Survey Protocol for LTC facilities to
combine the best aspects of the current traditional survey
process and the Quality Indicator Survey.
» LTC facilities must track the results of interventions
to ensure that desired improvements are realized and
Research: Institutional Review Boards
and the Common Rule
by Urton Anderson, Ralph B. Kimbrough, Jr.,
and Sean Liao (page 58)
» Challenges ahead for adopters of Common Rule revisions
encompass new definitions, new interpretations, and new
» Offices of Research Integrity face structural changes due
» External IRB reviews are on the rise, requiring greater
» Costs and workloads of IRB reviews will most likely
» IRB reviews will have to be tailored by institutional size and
Compensation and compliance:
Five common sense steps
by Jen Johnson (page 66)
» Understand if the service is needed (absent referrals)
to help establish that the arrangement is commercially
» Confirm that the value or volume of referrals is not
considered as a basis for compensation.
» Ensure the transaction or compensation terms are clearly
outlined, set in advance, and agreed upon in writing.
» Properly document the supporting evidence for establishing
the compensation is at fair market value.
» Monitor the arrangement to ensure the services are still
necessary and being performed in accordance with the
Justified wastage: Appropriately
applying the – J W modifier
by Dena Knippen (page 69)
» The – JW modifier is required for reimbursement of
» Use the smallest package size available for the prescribed
» Documentation must be included in the patient medical
» Claims must reflect administered and discarded amounts
» Review internal processes to ensure receipt of proper
Assessing your HIPAA risk:
Don’t forget the paper
by Jason Throckmorton (page 72)
» Paper records should be stored and/or destroyed properly.
» NIS T recommends using a cross‑cut shredder.
» A business associate agreement (BAA) is needed with a
document destruction vendor.
» Obtain a certificate of destruction to show proof of
» Reduction of risk is important.
Certifying Medicaid program data,
Part 2: Pre-data submission diligence
by Jay Davis (page 74)
» Accurate, complete, and truthful certified data submissions
are essential to state monitoring and administration of
major Medicaid program requirements and activities.
» The Compliance department should establish a diligent‑
review audit protocol to test and validate the accuracy and
completeness of the submission before the data is certified.
» Encounter data submissions are integral to Medicaid
program administration, are subject to close regulatory
scrutiny, and merit special attention in the pre‑submission
review and testing process.
» Overutilization and underutilization affect the accuracy,
completeness, and utility of encounter data for Medicaid
program oversight and integrity, and they may indicate or
identify provider fraud, waste, and abuse.
» Data certifications play an integral role in furthering
Medicaid program integrity when supported by well‑
conceived pre‑submission review and testing protocols.