New Jersey Opens Up Visitations to Nursing Homes, OIG Alleges Significant Overpayments to Hospitals, and New Federal Rules, Including to HIPAA Part II

For more information about this blog post, please contact Khaled J. KleleRyan M. MageeLabinot Alexander BerlajolliBrianna J. Santolli, or Daniel J. Parziale.

New Jersey Department of Health Allows Visitations to Long-Term Care Facilities

The Department of Health recently issued an executive directive that permits parents, a family member, legal guardians and support persons of pediatric, developmentally disabled and intellectually disabled residents of long-term care facilities to arrange for by-appointment indoor visits with their loved ones. Facilities can only allow visits if there have been no new probable or confirmed coronavirus cases recorded across a 28-day period, which is two incubation periods for COVID-19. The guidance also provides a multi-step screening process before visitors can enter the facilities. 

OIG Finds Hospitals Overbilled Medicare By Approximately $1 Billion

The Office of the Inspector General (“OIG”) recently published a report finding that during fiscal years 2016 and 2017, hospitals overbilled Medicare by an estimated $1 billion using statistical sampling. The OIG started with over 224,175 claims that contained a severe malnutrition diagnosis code during fiscal year 2016 and 2017, and then narrowed its audit to only 200 claims. Of the 200 claims reviewed by the OIG, hospitals were found to have correctly used a severe malnutrition diagnosis code on 27 of the claims and the remaining 173 claims were found to have been incorrect. The OIG found that the aforementioned 173 incorrectly billed claims resulted in an overpayment of $914,128. Extrapolating that data to the entire 224,175 claims, the OIG estimated there were over $1 billion in overpayments to hospitals.  This is particularly troubling considering that Medicare just announced that it will resume audits by August 3, 2020.

HHS Modifies Substance Use Disorder Privacy Regulations

The Department of Health and Human Services’ Substance Abuse and Mental Health Services Administration released a final rule, effective August 14, 2020, modifying privacy provisions related to records for patients with substance use disorder (“SUD”) under 42 CFR Part 2. Among other things, SUD patients may now consent to disclosure of their Part 2 treatment records to a practice without identifying a specific person in the practice, and non-opioid treatment programs and non-central registry providers are now eligible to query a central registry to determine whether their patients are receiving opioid treatment. The changes will allow health care providers – with patient consent – to more easily conduct activities such as quality improvement, claims management, patient safety, training, and program integrity efforts. For additional information, review the HHS’ fact sheet regarding the revised rule.

CMS Proposed Rule On End-Stage Renal Disease

The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to update payment policies and rates under the End-Stage Renal Disease (ESRD) Prospective Payment System for renal dialysis services furnished to beneficiaries on or after January 1, 2021. Specifically, the rule proposes a $16.26 pay increase that would bring the 2021 end-stage renal disease payment base rate to $255.59. The rule also proposes updates to the acute kidney injury (AKI) dialysis payment rate for renal dialysis services furnished by ESRD facilities to individuals with AKI. Additionally, the rule makes changes to the eligibility criteria for transitional add-on payment adjustments for new and innovative equipment and supplies (TPNIES) and expands TPNIES to include new and innovative capital-related assets that are home dialysis machines.  Products from two manufacturers that include a dialyzer and a cartridge for a home dialysis machine are being considered for add-on payment adjustments in 2021. Finally, the rule proposes a five percent cap on any year-over-year decrease in a dialysis facility's wage index. The wage index is applied to the labor-related share of the payment rate to reflect differing wage levels in areas where dialysis facilities operate. The cap would be phased in over two years. Comments are due by September 4, 2020.

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