CMS Medicare Providers Can Submit Documents Electronically to CMS Contractors

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

Medicare providers can submit medical documents to most of the Centers for Medicare & Medicaid Services (CMS) review contractors electronically. This includes the Medicare Administrative Contractors (MACs), Recovery Audit Contractors (RACs) and will soon include several Zone Program Integrity Contractors (ZPICs).

CMS makes agreements with review contractors to identify and correct improper Medicare payments made to providers. Review contractors find the improper payments by selecting a small sample of claims and requesting medical documentation from the provider who submitted the claims. The review contractor then manually reviews the claims made against the medical documentation provided to verify the providers' compliance with Medicare's rules.

Medicare Providers Can Submit Medical Records to Many Review Contractors Electronically.

Currently, review contractors request medical documentation by sending a letter to the provider. These providers previously had two options for submitting the requested records:

1. Mail a hard copy of the records or
2. Fax the records.

Now, providers can submit medical records electronically to participating review contractors. CMS calls this new mechanism the Electronic Submission of Medical Documentation (esMD) program. For a chart illustrating how esMD words, click here.

Phase 1 of esMD Launched on September 15, 2011.

Phase 1 of the esMD program was initiated on September 15, 2011. During Phase 1 of esMD, Medicare providers still receive medical documentation requests via a letter in the mail. However, they have the option to electronically send medical records to the requesting review contractor.
During Phase 2 of esMD, providers will receive requests when their claims are selected for review electronically. CMS plans to initiate Phase 2 in the future but no specific date has been announced.

First Coast Service Options, Inc. Approved for Phase 1 of esMD.

Florida's Medicare Administrative Contractor (MAC), First Coast Service Options, Inc. (First Coast) has been approved by CMS to participate in Phase 1 of esMD. Florida Medicare providers who have been asked to submit records for review to First Coast can now submit them electronically.
Other review contractors who have been approved to participate in Phase 1 of esMD through May 2012 include:

• Region A Medicare Recovery Audit  (Diversified Collection Services, Inc. or "DCS")
• Region B Medicare Recovery Audit  (CGI Technologies and Solutions, Inc. or "CGI")
• Medicare Administrative J1 (Palmetto GBA)
• Medicare Administrative JF (J2 & J3) (Noridan)
• Medicare Administrative J4 (Trailblazer)
• Medicare Administrative J5 (Wisconsin Physicians Service or "WPS")
• Medicare Administrative J9 (First Coast Service Options Inc. "FCSO")
• Medicare Administrative J11 (Palmetto GBA)
• Medicare Administrative J12 (Novitas Solutions)
• Medicare Administrative J14 (NHIC, Corp. or "NHIC")
• Comprehensive Error Rate Testing (CERT) Contractor
• Program Error Rate Measurement (PERM) Contractor
• DME Medicare Administrative JA (NHIC, Corp. or "NHIC")
• DME Medicare Administrative JD (Noridian)
• Medicare Administrative J13 (National Government Services or "NGS")
• DME Medicare Administrative JB (National Government Services or "NGS")
• Medicare Administrative J10 (Cahaba)
• Region D Medicare Recovery Audit (Health Data Insights or "HDI")
• Medicare Administrative J15 (CGS Administrators, LLC or "CGS")
• DME Medicare Administrative JC (CGS Administrators, LLC or "CGS")
• Region C Medicare Recovery Auditor (Connolly).

Several of the ZPICs are planning on participating in the esMD program starting summer 2012. These include:

• ZPIC Zone 1 (SafeGuard Services LLC or "SGS")
• ZPIC Zone 7 (SafeGuard Services LLC or "SGS").

Providers Not Required to Submit Medical Records Electronically.

Medicare providers do not have to submit medical documentation electronically. The esMD program is completely voluntary.

If providers do want to participate in the esMD program, they must first find out if their review contractor accepst esMD transactions. Additionally, providers will have to obtain access to an esMD gateway. To obtain access to a gateway, providers can either build their own or hire a Health Information Handler (HIH) to construct the gateway system.

To find out which HIHs offer esMD gateway services to providers, click here.

To learn more about requirements for participating in the esMD program, click here.

Contact Health Law Attorneys Experienced with Medicare and Medicaid Audits.

The Health Law Firm's attorneys routinely represent physicians, medical groups, clinics, pharmacies, durable medical equipment (DME) suppliers, home health agencies, nursing homes and other healthcare providers in Medicaid and Medicare investigations, audits and recovery actions. They also represent health providers in preparing and submitting corrective action plans (CAPs), requests for reconsideration, and appeal hearings, including Medicare administrative hearings before an administrative law judge.

To contact The Health Law Firm, please call (407) 331-6620 or (850) 439-1001 and visit our website at http://www.thehealthlawfirm.com/.

Sources Include:

Centers for Medicare & Medicaid Services. "Electronic Submission of Medical Documentation." Centers for Medicare & Medicaid Services. (Apr. 9, 2012). From:
http://www.cms.gov/Research-Statistics-Data-and-Systems/Computer-Data-and-Systems/ESMD/index.html?redirect=/esmd

About the Author:  George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  http://www.thehealthlawfirm.com/  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

CMS Update on Electronic Funds Transfer (EFT) for all Existing Medicare Providers

The following information was released by the Centers for Medicare & Medicaid Services (CMS) on May 30, 2012, updating the original new flash from December 16, 2011:

Existing regulations at 42 CFR 424.510(e)(1)(2) require that at the time of enrollment, enrollment change request, or revalidation, providers and suppliers that expect to receive payment from Medicare for services provided must also agree to receive Medicare payments through Electronic Funds Transfer (EFT). Section 1104 of the Affordable Care Act further expands Section 1862(a) of the Social Security Act by mandating federal payments to providers and suppliers only by electronic means.

As part of CMS's revalidation efforts, all suppliers and providers who are not currently receiving EFT payments are required to submit the CMS-588 EFT form with the Provider Enrollment Revalidation application, or at the time any change is being made to the provider enrollment record by the provider or supplier, or delegated official.

For more information about provider enrollment revalidation, click here to review the MLN Matters Special Edition Article SE1126, "Further Details on the Revalidation of Provider Enrollment Information."

For the reference source and further information, click here.

Contact Health Law Attorneys Experienced in Handling Medicare and Medicaid Fraud Cases.

The Health Law Firm's attorneys routinely represent physicians, medical groups, clinics, pharmacies, durable medical equipment (DME) suppliers, home health agencies, nursing homes and other healthcare providers in Medicare and Medicaid investigations, audits and recovery actions. They also represent them in preparing and submitting corrective action plans (CAPs), requests for reconsideration, and appeal hearings, including Medicare administrative hearings before an administrative law judge.

To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at http://www.thehealthlawfirm.com/.

Jury Convicts South Florida Doctors of Medicare Fraud

By George F. Indest III, J.D., M.P.A., LL.M., Board Certified by The Florida Bar in Health Law

A federal jury convicted two South Florida doctors, one Miami-area therapist, and two other individuals for their involvement in a Medicare fraud scheme. The scheme allegedly involved more than $205 million in fraudulent billings by American Therapeutic Corporation (ATC), a corporation which provided mental health care services. The jury reached a decision on June 1, 2012.

To see the Department of Justice press release, click here.

The two doctors and the therapist were each found guilty of one count of conspiracy to commit health care fraud. The other two individuals were each found guilty of one count of health care kickbacks. Sentencing has not yet been scheduled. The maximum penalty for each conspiracy count and each count of health care fraud is ten years in prison plus a fine. The maximum penalty for each count of health care kickbacks is five years in prison plus a fine.

Doctors, Therapist, and Others at ATC Allegedly Created False Documents for Medicare Reimbursements.

One of the federal indictments charged more than 14 separate defendants with criminal violations. To see this indictment click here.

Allegedly, ATC billed Medicare for hundreds of millions of dollars in services, for thousands of patients who were not qualified. The charges alleged fraudulent documents were created by the doctors and others associated with ATC. The doctors allegedly would sign patient documents without having seen or treated the patients.

ATC operated partial hospitalization programs (PHPs) throughout Florida and would allegedly bill Medicare for PHP treatments for patients in the names of the doctors. Included in these submissions to Medicare were claims for patients who were allegedly ineligible for PHP treatments. ATC allegedly did not provide legitimate PHP treatment, but illegally changed patient medical records to justify claims that were submitted.

Contact Health Law Attorneys Experienced in Handling Medicare and Medicaid Fraud Cases.

The Health Law Firm's attorneys routinely represent physicians, medical groups, clinics, pharmacies, durable medical equipment (DME) suppliers, home health agencies, nursing homes and other healthcare providers in Medicare and Medicaid investigations, audits and recovery actions. They also represent them in preparing and submitting corrective action plans (CAPs), requests for reconsideration, and appeal hearings, including Medicare administrative hearings before an administrative law judge.

To contact The Health Law Firm please call (407) 331-6620 or (850) 439-1001 and visit our website at http://www.thehealthlawfirm.com/.

Sources Include:

U.S. Department of Justice, Office of Public Affairs. "Doctors, Therapist, and Recruiters from Miami-Area Mental Health Care Corporation Convicted for Participating in $205 Million Medicare Fraud Scheme." FBI. (June 01, 2012). Press Release. From:
http://www.fbi.gov/miami/press-releases/2012/doctors-therapist-and-recruiters-from-miami-area-mental-health-care-corporation-convicted-for-participating-in-205-million-medicare-fraud-scheme

Weaver, Jay. "Two South Florida Doctors, 3 Others Convicted on Medicare Fraud Charge." Miami Herald. (June 01, 2012). From
http://www.miamiherald.com/2012/06/01/2827660/miami-medicare-fraud-jurors-tell.html#storylink=misearch/

About the Author:  George F. Indest III, J.D., M.P.A., LL.M., is Board Certified by The Florida Bar in Health Law.  He is the President and Managing Partner of The Health Law Firm, which has a national practice.  Its main office is in the Orlando, Florida, area.  http://www.thehealthlawfirm.com/  The Health Law Firm, 1101 Douglas Ave., Altamonte Springs, FL 32714, Phone:  (407) 331-6620.

Medicare Prohibits Waiver of Co-pays and Deductibles; Professional Courtesy Deemed 'Unlawful'

The heavily regulated health care environment of today makes it difficult to practice the time-honored tradition of professional courtesy. Professional courtesy originally referred to the provision of health care to physician colleagues or their families free of charge or at a reduced rate. Many argue, rightfully so, that the Hippocratic Oath even requires this for the patient who is a physician and his or her family. More recently the scope of professional courtesy has been extended to include patients who may face financial hardship, and physicians commonly forgive or waive co-payments to facilitate patient access to necessary medical care.

Because of the government's aggressive approach to ensure that all claims are billed correctly, the once common practice of professional courtesy is now considered illegal. According to the Department of Health and Human Services (HHS), Office of Inspector General (OIG), "It is unlawful to routinely waive co-payments, deductibles, coinsurances or other patient responsibility payments." (67 Fed. Reg. 72,896 (Dec. 9, 2002)). This applies to health care and services paid by Medicare, TRICARE/CHAMPUS, and any other program paid partially or in full with federal funds. It also includes professional courtesy, as well as "take what insurance pays" (TWIP) policies.

Although we know of no prior instance of the OIG or Department of Justice prosecuting a physician’s extension of professional courtesy, arrangements for free or discounted care implicate fraud and abuse laws, including the Federal False Claims Act, and the Federal Anti-Kickback Statute. There have also been private insurance fraud actions based on illegally waiving co-pays and providing discounts that were not extended to the insurer, as well as Federal actions for these violations and using waivers and discounts to induce Medicare patients to use other health care services.

Physicians must be extra cautious in bestowing professional courtesy, including discounts and waivers, so that they are not punished for genuinely good deeds. While there may be situations where it is defensible to not charge for services to health care professionals, the physician should assure that this professional courtesy is not linked to referrals, either in reality or in appearance.

Waiving Co-Pays
Some physicians commonly reduce the cost of care for patients by waiving the co-pay. However, waiving a co-payment has been interpreted as a fraudulent misrepresentation of physician charges against all types of payers. For example, under traditional Medicare, physicians are paid eighty percent (80%) of the "allowable amount" or the "actual charge," whichever is less. In the instance where Medicare allows $100, the program pays $80 and the co-payment amount is $20. By the physician accepting "what insurance pays" as the only payment, this is viewed as the physician's having an actual charge of $80, so the resulting payment from Medicare should be only $64. Therefore, by Medicare's rules. the physician has overcharged Medicare.

Discounts
In the health care industry, a discount is a reduction in the normal charge based on a specific amount of money or a percentage of the charge. To comply with government and insurance policies, the discount must apply to the total bill, not just the part that is paid by the patient. For example, if a patient owes a 20% co-pay on a $25 charge ($5) and the physician applies a discount of $5, then the patient must pay $4 and the insurance company will pay $16.
In addition, private insurance plans and some federal programs have a "most favored nation" clause in their contracts with physicians. This entitles the plan to pay the lowest charge the physician bills to anyone. Any pattern of discounts could result in a reduction in the physician’s allowable reimbursement schedule to the discounted amount.

"Kickbacks" and Inducements to Refer Patients
The federal government and some states have specific laws governing financial transactions between health care providers, including the Medicare Fraud and Abuse laws and the Stark I and Stark II. These laws prohibit any incentives that influence physicians to refer patients. For example, a physician who only extended professional courtesy to other health care providers who referred him or her patients would violate the law.

These laws have been interpreted very broadly by the courts. Any payment or inducement that might have a tendency to affect referral decisions is prohibited, even if it has other valid purposes. Professional courtesy based on being on the same hospital staff would raise the same issues, although the link to referrals is more tenuous. Giving professional courtesy to all physicians without conditions would be more defensible, but if the government could show that a disproportionate number of physicians receiving the courtesy were also referring physicians, the court would probably rule that this was a prohibited inducement.

Penalties
In the past, if physicians violated the terms of their contracts with private insurers, the insurer could refuse to pay the claim and/or deselect the physician from the plan. The insurer could also sue the physician for fraud. However, under the Health Insurance Portability and Accountability Act of 1996 (HIPAA)\ it is now a federal crime to defraud private insurance companies. Violations can result in fines and criminal prosecution.

The federal government can also refuse to pay the claim and can ban the physician from participation in Medicare and Medicaid. In addition, when the physician files a claim for services that were provided in ways that violate the federal regulations, that claim violates the False Claims Act (FCA). Violations of the FCA are punishable by a $5000 per claim fine and imprisonment.

For more information on waiving co-pays and deductibles, health care discounts, professional courtesy and other billing issues, please visit our website at www.TheHealthLawFirm.com.