Can Pay-Per-Lead Internet Healthcare Advertising Be Kosher?

The Office of the Inspector General (OIG) of the Department of Health and Human Services (HHS) issued an advisory opinion yesterday concerning an Internet advertiser’s proposal to extend its “pay per call” or “pay per lead” advertising business to the chiropractic industry. While the opinion did not take account of California state law, the OIG’s analysis is that arrangement did not violate the federal Anti-Kickback Statute (AKS). The AKS generally prohibits healthcare providers from paying (or getting paid) to encourage referrals. The OIG’s reasoning emphasized that, in this case, the advertiser was not a healthcare provider and had no affiliation with the healthcare industry; Medicare and Medicaid beneficiaries were not targeted by the advertising; payment for the referral was made without regard to whether the prospect actually generated reimbursement revenue; and the referral was not to a particular chiropractor but instead to all subscribers within a geographic area.

In recent years, Internet marketing has already become a significant area of interest for many healthcare providers. The importance of the Internet as a marketing tool in healthcare practice is certain to increase. While this opinion does not address the totality of legal issues for California providers, it is an instructive starting point as to issues to consider.

Federal Court Blocks Medicare Spending Cuts

Robert Pear reports in the New York Times that U.S. District Judge Henry Kennedy, Jr. has blocked the Bush administration’s effort to cut Medicare spending by paying for only the “least expensive treatments for particular conditions.” The case involved drugs used to treat chronic obstructive pulmonary disease (COPD). The Center for Medicare and Medicaid Services (CMS) and its delegated contractors had limited payments for an inhalation drug, DuoNeb. Judge Kennedy ruled that “Congress sets Medicare payment rates and never intended to give officials broad discretion to alter them.” He expressed concern that the government’s position would give the Secretary of Health and Human Services (HHS) “enormous discretion” to determine the amount paid for each and every item and service covered by Medicare.

The ruling is a rebuff to CMS’ and the Medicare contractors’ attempts to adopt regulations permitting them to weigh cost in denying coverage. Assuming the decision stands, healthcare providers should consider this a victory by affirming clinical efficacy as the critical question, not cost.

Does Baseball Hold the Answer to Improving America’s Healthcare?

Today’s New York Times includes an op-ed from Oakland A’s general manager Billy Beane, Newt Gingrich, and John Kerry proposing that the key to improving American healthcare (first in cost, but supposedly worst than most of the industrialized world in “quality”) is to follow the example of baseball. Not free agency or skyrocketing compensation, but use of statistics:

In the past decade, baseball has experienced a data-driven information revolution. Numbers-crunchers now routinely use statistics to put better teams on the field for less money. Our overpriced, underperforming health care system needs a similar revolution.

Data-driven baseball has produced surprising results. Michael Lewis writes in “Moneyball” that the Oakland A’s have won games and division titles at one-sixth the cost of the most profligate teams. This season, the New York Yankees, Detroit Tigers and New York Mets — the three teams with the highest payrolls, a combined $486 million — are watching the playoffs on television, while the Tampa Bay Rays, a franchise that uses a data-driven approach and has the second-lowest payroll in baseball at $44 million, are in the World Series (a sad reality for one of us).

Remarkably, a doctor today can get more data on the starting third baseman on his fantasy baseball team than on the effectiveness of life-and-death medical procedures. Studies have shown that most health care is not based on clinical studies of what works best and what does not — be it a test, treatment, drug or technology. Instead, most care is based on informed opinion, personal observation or tradition.
. . .
America’s health care system behaves like a hidebound, tradition-based ball club that chases after aging sluggers and plays by the old rules: we pay too much and get too little in return.

One interesting the op-ed notes: “Starbucks pays more for health care than it does for coffee.”

No one disputes the value of increasing the systemic use of comparative evidence in healthcare. That seems to be happening already with increasing regularity, as reports of new clinical studies on the efficacy of this or that treatment (stent placement, arthroscopic surgery, etc.) are released. The question is how much to allow the process to happen naturally, and how much and how government should intervene. The authors’ proposal for a new public-private “institute for evidence-based medicine” sounds like an invitation for more bureaucracy to do work already being undertaken in academia and the private sector. On the other hand, their proposal to increase Medicare reimbursements and some liability protections for doctors who follow the recommended clinical best practices sounds like a winner.

Medicare’s Muddled Policy on Infusion Therapy

Laura Landro reports in the Wall Street Journal on the shortsighted policy of the Medicare Program with respect to home- and office-based infusion services. (“As Home IVs Grow, Medicare Patients Miss Out,” October 15, 2008.) Many infusion therapies, ranging from antibiotics (vancomycin) to cancer drugs to treatments for neuropathy, can be administered at home or in physician offices with the assistance of a nurse to insert the intravenous line. Private health insurers readily pay the full cost of home or office infusion therapy because of the savings in avoiding the expense of hospitalization and the risk of hospital-based bacterial infection. For patients, the big benefit is convenience.

Unfortunately, however, Medicare takes a dim view of infusion therapy, possibly as a result of suspected fraud and abuse in the area. Medicare Part B (physician services) and Part D (drug coverage) often cover the cost of the drug itself, but not the services, supplies, and equipment needed to administer the drug, which can amount to half of the actual cost. To get full coverage, Medicare beneficiaries need to seek hospital or nursing facility admission, where they can qualify Medicare Part A provides full coverage. (The article reports that some hospitals are actually making up the shortfall to free up beds for sicker patients.)

In recent years, a number of our clients have made the logical decision to discontinue the provision of infusion services and refer Medicare patients needing infusion therapy to hospitals as a result of this nonsensical policy. When the anticipated cost of full coverage for home-based infusion therapy ($1.5 billion over ten years) is balanced against the savings from shifting infusion patients out of hospitals (est. $7.4 billions), Medicare seems to be pushing expenses up by favoring hospitals (Part A) over physicians (Part B). Federal legislation introduced last month would finally allow physicians to be paid for the costs associated with infusion therapy. For physicians and Medicare beneficiaries alike, relief on this issue is long overdue.

OIG 2009 Work Plan: DME Enforcement

Durable Medical Equipment (“DME”) suppliers should review the Department of Health & Human Services’ Office of Inspector General (“OIG”) 2009 Work Plan. The DME enforcement agenda, according to the Work Plan, includes:

• DME Payments for Beneficiaries Receiving Home Health Services
• DME Claims With Modifiers
• Continuous Positive Airway Pressure Devices
• Part B Services in Nursing Homes: Enteral Nutrition Therapy
• Medicare Part B Payments for Home Blood-Glucose-Testing Supplies
• Duplicate Payments to DME Suppliers With Multiple NPI #’s
• Appropriateness of Reimbursement for Pressure-Reducing Support Surfaces
• Comparison of Prices for the Negative Pressure Wound Therapy Pump
• Power Wheelchairs
• Repair and Servicing of Capped Rental DME
• Appropriateness of DME Categorization

Recommended Action: DME suppliers should pay particular attention to relevant compliance issues that made it into the OIG Work Plan. Their inclusion signals a heightened risk of scrutinty by the Medicare Program.

OIG Releases 2009 Work Plan – Highlights for Physicians

The Department of Health & Human Services’ Office of Inspector General (“OIG”) is the arm of the Medicare Program charged with criminal fraud investigations of suspected fraud and abuse. Every October, OIG releases its “work plan” for the coming year. The work plan provides useful information about the enforcement agenda of OIG, including high risk areas for potential audits and investigations.

OIG’s 2009 Work Plan highlights several areas of which physicians should take note for compliance purposes, including:

• Place of Service Errors
• E&M Services During Global Surgery Periods
• Outpatient Physical Therapy Services Provided by Independent Therapists
• Medicare Payments for Colonoscopy Services
• Physicians’ “Incident to” Services Performed by Nonphysicians
• Appropriateness of Medicare Payments for Polysomnography (Sleep Studies)
• Long-Distance Physician Claims Requiring a Face-to-Face Visit
• Geographic Areas With a High Density of Independent Diagnostic Testing Facilities (“IDTF’s”)
• Patterns Related to High Utilization of Ultrasound Services
• Medicare Payments for Chiropractic Services Billed With the Acute Treatment Modifier
• Physician Reassignment of Benefits
• Medicare Payments for Unlisted Procedure Codes
• Laboratory Test Unbundling by Clinical Laboratories
• Medicare Billings With Modifier G

Recommended Action: Providers should pay particular attention to relevant compliance issues that made the OIG Work Plan. The inclusion of imaging facilities (IDTF’s), physical therapy, and sleep studies — all of which have already been subject to scrutiny — signals continued heightened risk of potential future enforcement actions in these areas. Providers in these areas should review to ensure they are in strict compliance with Medicare requirements.

Clinician e-Prescribing Guidelines Released at CMS Conference

In recent months, the Center for Medicare and Medicaid Services (CMS) has been publicizing its support for e-prescribing, i.e. electronically generating and transmitting prescriptions via computer in lieu of traditional paper. CMS has even announced its intention to pay financial incentives (2%) to encourage providers to begin “e-prescribing” in 2009.

To support CMS efforts, a consortium calling itself the “eHealth Initiative,” in collaboration with
the American Medical Association and various other physician groups, has issued a guide to assist providers in transition from paper to e-prescribing. Their “Clinician’s Guide to Electronic Prescribing” was released last week at the CMS National e-Prescribing Conference in Boston and is available online here.

Recommended Action:
Transitioning to e-prescribing is not going to be without cost and effort, but there are significant potential advantages and options to minimize expenses. Beyond the 2% bonus that CMS will be paying to early adopters, e-prescribing holds out the potential for greater safety (e.g. appropriate dosing, drug interaction, and allergy verification), fewer errors in physician-pharmacy communications (e.g. from illegible handwriting or medication errors), less risk of patient abuse, and less need for front-office personnel to administer and relay prescriptions. Physicians dissuaded by the anticipated software expense should explore several free web-based options for e-prescribing, including the National ePrescribing Patient Safety Initiative (NEPSI).

Harry Nelson is a partner in Fenton & Nelson, LLP. Fenton & Nelson counsels physicians and other healthcare providers on regulatory compliance and business matters. For additional information, please contact him at harry@fentonnelson.com

©Harry Nelson 2008

Study questions efficacy of arthroscopic knee surgery

The New York Times reports on a new study in the New England Journal of Medicine that reflects negative scientific data for arthroscopic surgery for knee osteoarthritis. The study compared two groups of patients with arthritic knees; one group received arthroscopic surgery, physical therapy and medications, while the other received only physical therapy and medications. According to the study, over the subsequent two years, no difference in symptom was discerned.

Recommended Action: Arthroscopic surgery as a treatment of knee osteoarthritis and insurance reimbursement for the surgery are expected to decline as a result of the study. As with all procedures, providers who elect to continue performing the procedure should protect themselves by ensuring that patients are informed in making the decision to undergo surgery.

Harry Nelson is a partner in Fenton & Nelson, LLP. Fenton & Nelson counsels healthcare providers on business and regulatory compliance issues. For additional information, please contact him at harry@fentonnelson.com

©Harry Nelson 2008

Who’s Auditing the Medicare Auditors?

ProPublica reporter Sharona Coutts follows up on the New York Times’ disclosure of a report from the Office of the Inspector General (OIG), Medicare’s criminal investigative arm, that Center for Medicare and Medicaid Services (CMS) officials supposedly pressured Medicare’s private auditors to ignore government accounting rules in a way that hid billions of dollars of fraud and grossly overstated Medicare’s success in detecting fraud. One of the private contractors now under scrutiny, AdvanceMed, played a curious role, performing audits for the Medicare Recovery Audit Contractor (RAC) program during its early test phase, while simultaneously serving as a validation auditor to confirm the success of the auditors during CMS’ consideration of whether to expand the RAC program nationally, as CMS ultimately did in 2006.

Some members of Congress are seething over the discovery of the falsity of prior claims of Medicare success in thwarting billions of dollars of fraud; Congressman Pete Stark called Medicare as “incompetent” and accused CMS of “cook[ing] the books” in order “[t]o look better to the public[.]” In the words of Senator Charles Grassley, “If heads don’t roll, you can’t change the culture of this organization.”

One of the issues to be investigated is whether AdvanceMed exerted improper lobbying pressure on CMS through its parent corporation, Computer Sciences Corporation, a major government contractor. Among the cited examples of manipulative handling of the data, auditors were instructed not to compare invoices from DME suppliers with physician records.

Recommended Action:
The suggestion of corruption—by the Medicare Program itself— highlights the need for thorough review of all Medicare auditors, including the RAC Program, for which PRG Schultz is the contractor in California. The various Medicare recovery auditors receive contingency fees for identifying and recovering supposed overpayments, incentivizing them both to invalidate provider claims and to overstate their success as a means of proving their effectiveness. Similar contingent compensation structures exist for the recovery audits performed by Palmetto (and its predecessor, NHIC, the former administrative contractor) and Safeguard, LLC, a subsidiary of EDS that acts as the “safeguard” (i.e. fraud-and-abuse prevention) contractor. As many providers have learned through direct experience, recovery auditors frequently employ unqualified personnel who review data inconsistently and incompetently, forcing providers to appeal to undo inaccurate results. This disclosure highlights the need for providers to call attention to abuse by the Medicare contractors themselves.

Harry Nelson is a partner in Fenton & Nelson, LLP. Fenton & Nelson counsels healthcare providers on compliance with– and represents providers in disputes against– the Medicare Program. For additional information, please contact him at harry@fentonnelson.com

©Harry Nelson 2008

Medicare Weighs Restrictions on CT Angiograms

Alex Berenson and Reed Abselson report in the The New York Times on the increasing use of computed tomography (CT) angiograms in recent years. The use of CT angiogram, fueled by patient demand, is expected to rise substantially, despite questionable evidence of its benefit in most cases.

The article notes that CT angiogram can identify dangerous coronary plaque deposits that indicate a pressing need for surgery. In the future, CT angiograms may improve the treatment of heart disease if scanners can identify plaques that are likely to rupture. However, many cardiologists question the diagnostic value of routine use of the technology in light of the inability to determine which plaque-narrowed arteries actually pose a threat, coupled with the cost and cancer risk from radiation.

Medicare has considered restricting access to CT angiogram, but to date has not acted. In 2007, the Centers for Medicare and Medicaid Services (CMS) proposed requiring more studies before paying for CT angiograms but backed down in response to pressure from cardiologists who support CT angiograms.

Recommended Action: Although Medicare has deferred on this issue, in light of Medicare’s growing expressions of concern over future demand for and utilization of diagnostic imaging in general and CT angiogram in particular, restriction on reimbursement is likely in the future. Cardiologists, like all providers, need to stay abreast of Medicare reimbursement policy and to balance competing considerations (beyond patient demands) when recommending diagnostic imaging tests.

Harry Nelson is a partner in Fenton & Nelson, LLP. Fento & Nelson advises cardiologists and other providers on risk management and compliance matters. For additional information, please contact him at harry@fentonnelson.com

©Harry Nelson 2008