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CMS Reports Aggressive Efforts Reduce Fraud by $15 Billion

Aggressive corrective actions aimed at reducing Medicare fee-for-service (FFS) improper payments have resulted in less healthcare fraud, waste, and abuse, as well as $15 billion in savings, according to the latest data from CMS.

The data released earlier today also revealed that the Medicare FFS improper payment rate declined to 6.27 percent in fiscal year (FY) 2020 from 7.25 percent in FY 2019. It was the fourth consecutive year that the Medicare FFS improper payment rate was below 10 percent, CMS reported.

Medicare FFS improper payments decreased the most in home healthcare. CMS reported $5.9 billion in savings attributed to fewer improper payments to home health agencies between FY 2016 and 2019.

The agency also saw a $1 billion reduction in estimated improper payments made to skilled nursing facilities in the last year.

Reductions in both the home health and skilled nursing facility improper payment rates can be attributed to CMS efforts to educate providers through the Targeted Probe and Educate program, as well as changes to the policy related to supporting information for physician certification and recertification for skilled nursing facility services, CMS stated.

Improper payments occur when reimbursements do not meet statutory, regulatory, administrative, or other legally application requirements, CMS explained. A common example is insufficient or missing documentation for a claim.

Without proper documentation or errors in the documentation, CMS cannot verify if its programs correctly reimbursed for the services rendered. As a result, CMS may over or underpay the provider for the claim.

Additionally, a smaller portion of improper payments should never have been made largely because of issues with medical necessity, coding, beneficiary eligibility, and other errors on the claim. These end up as losses to the government.

The agency has developed a five-pillar program integrity strategy for reducing improper payments.  The five components of CMS’ strategy are stopping bad actors who have defrauded federal healthcare programs; preventing fraud; mitigating emerging programmatic risks related to value-based payment programs; reducing provider burden; and leveraging new technology (e.g., artificial intelligence and machine learning).

CMS implemented the strategy in 2019. Since then, there has been a $3.17 billion reduction in Medicare FFS improper payments, according to the new data.

Compromise and Release Resignation Letter Bars FEHA Claim

Reinier Razon began working for Southern California Permanente Medical Group at its Kaiser Sunset location in January 2014, as a clinical laboratory scientist.

In 2016 Razon was involved in a dispute with Darren Wallace, the union steward assigned to the clinical laboratory scientists. According to Razon, Wallace assaulted him. Razon was treated two days later at the Kaiser emergency room for anxiety and diagnosed with “emotional stress reaction,” which he believed was due to his encounter with Wallace.

Razon filed a workers’ compensation claim for stress and anxiety arising from his encounter with Wallace. That claim was pending when he filed his lawsuit against SCPMG in April 2017, for disability discrimination, failure to accommodate and failure to engage in the interactive process in violation of the California Fair Employment and Housing Act.

In March 2018 Razon settled his workers’ compensation claim for $45,000, as reflected in a standard, preprinted compromise and release form. He also signed a separate voluntary resignation letter. The document states it “releases Kaiser from any and all claims, known or unknown, which may exist at the time of execution of this Agreement.” It specifically included “causes of action under Title VII of the Civil Rights Act of 1964 (race, color, religion, sex and national origin discrimination); the Americans with Disabilities Act; 29 USC section 62 (age discrimination). However, this list is expressly understood by the parities [sic] not to be all-inclusive.”

The trial court granted SCPMG’s motion for summary judgment and entered judgment in favor of SCPMG, ruling Razon’s civil FEHA lawsuit was barred by his written release of all claims relating to his employment with SCPMG. The court of appeal affirmed the dismissal in the unpublished case of Razon v. Southern California Permanente.

Razon argues the release set forth in his voluntary resignation letter is enforceable only if the letter was attached to the preprinted compromise and release form used to resolve his workers’ compensation claims. No authority cited by Razon established attachment as a requirement. To the contrary, the Supreme Court in Claxton Court (34 Cal.4th at pp. 370, 378) expressly recognized release of the non-workers’ compensation claims could be effected through a separate document, independent of the workers’ compensation preprinted form. That is exactly what occurred here

Razon argues the absence of any express reference to his FEHA claims in the release creates a triable issue of fact whether the lawsuit, pending at the time the release was executed, was included within its scope. The Supreme Court in Claxton expressly rejected the need for the specificity that Razon suggests.

In his declaration in opposition to the summary judgment, Razon insisted he did not intend by signing the letter to release his FEHA claims. That undisclosed intent, however, is irrelevant to the interpretation of the release. (Otay Land Co., LLC  v. U.E. Limited, L.P. (2017) 15 Cal.App.5th 806, 855).

DWC Corrects Outpatient/Ambulatory Fee Schedule

On October 7, the Division of Workers’ Compensation’s Administrative Director issued an order adjusting the Hospital Outpatient Departments and Ambulatory Surgical Centers Fee Schedule portion of the Official Medical Fee Schedule to conform to changes in the Medicare system, effective for services rendered on or after October 1, 2020.

Subsequently, on October 21, 2020, the Centers for Medicare and Medicaid Services (CMS) issued a corrected Addendum A and corrected Addendum B to supersede the previous documents.

The Administrative Director has issued an order dated November 5, 2020, to adopt CMS’ corrected Addendum A and Addendum B for Hospital Outpatient Departments/Ambulatory Surgical Centers services rendered on or after October 1, 2020. The order makes the following changes:

— Incorporates by reference CMS’ HOPPS addendum A found in the October 2020 CORRECTION Addendum A (ZIP) – updated 10/21/2020 file, in place of the original file, for services rendered on or after October 1, 2020
— Incorporates by reference CMS’ HOPPS addendum B found in the October 2020 CORRECTION Addendum B (ZIP) – updated 10/21/2020 file, in place of the original file, for services rendered on or after October 1, 2020
— Corrects a clerical error in the reference to the Integrated Outpatient Code Editor provisions relating to Comprehensive APC (J1 and J2) Status Indicator.

The Administrative Director update order dated October 7, 2020 remains in effect for services rendered on or after October 1, 2020, except as modified by Administrative Director order dated November 5, 2020. The Orders and regulations can be found at the DWC OMFS web page.

CDC Research Grant to Study Industrial Robots for Better Safety

The Centers for Disease Control and Prevention (CDC) has awarded $1.5 million over three years to the University of Illinois at Chicago and Worcester Polytechnic Institute to fund projects aimed at reducing workers’ exposures to hazards through the development and use of collaborative robots, or co-robots.

CDC’s National Institute for Occupational Safety and Health (NIOSH) partnered with the National Science Foundation (NSF) to fund studies of co-robots in the workplace through NSF’s National Robotics Initiative. The Initiative supports research in the U.S. that will accelerate the development and use of co-robots, an emerging robotic technology that complements, not replaces, human workers. Co-robots work alongside people or other robots and can help improve worker safety.

The future of work includes a workplace where robots work in tandem with, or are even worn by, human workers,” said NIOSH Director John Howard, M.D. “This important research will help guide the development and use of co-robots that can help minimize health and safety risks to workers.”

In healthcare, remote-controlled nursing robots have the potential to reduce workload and the risk of infection, especially in quarantine and intensive care environments. Researchers at Worcester Polytechnic Institute will develop a more intuitive interface to make it easier for nurses to operate robots from a distance. Researchers also will investigate best practices for integrating robots into current nursing education.

In manufacturing, lifting heavy objects can lead to costly and disabling work-related musculoskeletal disorders. Wearable robots, which provide mechanical assistance to the user’s joints, have the potential to reduce injuries from heavy lifting. Researchers at the University of Illinois at Chicago will develop and investigate the effectiveness of a personalized wearable robot worn on the lower body that senses the wearer’s physical effort and responds accordingly using soft-wearable electronics.

Through its Center for Occupational Robotics Research, NIOSH is proactively working across industrial sectors to guide the development and use of occupational robots that enhance workers’ safety, health, and well-being. The Center’s research looks at traditional industrial robots that work in robotic cells and cages away from human workers as well as at emerging robotic technologies such as co-robots; wearable robotics or powered exoskeletons; remotely controlled or autonomous vehicles and drones; and future robots that increasingly use advanced artificial intelligence.

NIOSH is the federal institute that conducts research and makes recommendations for preventing work-related injuries, illnesses and deaths. Additional information on NIOSH grant opportunities via the NIOSH Extramural Research and Training Programs can be found https://www.cdc.gov/niosh/oep/ here.

Remote Workers Less Likely to Take Sick Time When Sick

A new survey finds 66 percent of Americans working remotely believe that taking sick days for anything less severe than COVID-19 would be looked down upon by their employer.

Moreover, three out of four respondents said that since getting coworkers sick is off the table, the bar for symptom severity warranting taking time off has been raised. The OnePoll survey reveals two in three Americans (67%) are much less inclined to take off from work when they are sick now. In fact, seven in 10 have even worked while feeling ill since they started working from home.

The poll, commissioned by ColdCalm, also examined the circumstances under which workers would actually take time off for sickness now that they perform their duties without ever leaving the house.

The survey of 2,000 Americans finds 63 percent feel a sore throat alone simply won’t cut it in 2020. Workers say they would need to actually lose their voice before they felt justified taking time off. Results also revealed that sometimes remote employees have been so desperate for an illness-related respite that half have taken undocumented time off and hoped that it went unnoticed.

Nearly half of respondents believe that COVID has made other illnesses look “minor” in comparison. Forty-five percent said the pandemic has made them more vigilant about avoiding illnesses, and 72 percent are more likely to take medication at the first signs of symptoms.

Even though the physical stress of commuting is eliminated for those working from home, their ability to handle their responsibilities can still be impacted by sickness. Among those Americans who worked from home while sick, 52 percent say their performance “decreased considerably” during their illness. Nearly six in 10 (57%) feel that working remotely through their illness actually enhanced their credibility with coworkers.

Proactive measures like taking a homeopathic medicine, drinking lots of fluids to stay hydrated, and getting plenty of rest at the first sign of illness can mean the difference between having something that can be manageably worked through as opposed to one that knocks you off your feet for a few days.

Amazon Launches Game Changing Online Pharmacy

A little over two years after its $753 million acquisition of the prescription medicine delivery service Pillpack, Amazon has finally launched Amazon Pharmacy, its online and mobile prescription medication ordering and fulfillment service.

The launch of the new Pharmacy service within Amazon is a blow to other discount prescription services like the publicly traded GoodRx and companies like RxSaver and delivery services like ExactCare Pharmacy.

The competition from Amazon was likely one reason why GoodRx began offering telemedicine services as a point of differentiation and to move up the value chain. It will be interesting to see if Amazon will also move to providing virtual care for more than its employees.

Last year, the company rolled out Amazon Care for its workers in Seattle as part of a pilot service that provided both in-person and telemedicine services.

Using a secure pharmacy profile, Amazon customers can add their insurance information, manage prescriptions and choose payment options all through Amazon’s service. And in another small push towards wider healthcare services, and not just selling items, users are provided with “self-service help” tools on Amazon’s portal, and they also have the option to speak to pharmacists either via over the phone, for advice: “Friendly and knowledgeable pharmacists are available 24/7 to answer questions about medications.”

After launching its own line of over-the-counter drugs in 2019, this is arguably Amazon’s broadest push into the healthcare business to-date, one that could open up very large, new revenue opportunities for the company, especially as the ongoing COVID-19 pandemic pushes consumers both toward more remote care, and using online channels for all their shopping needs.

While Amazon Pharmacy looks to be a US-only launch for now, it’s a global opportunity. Online pharmacy services are projected to hit revenues of $131 billion by 2025 worldwide. Prescription drugs, meanwhile, have been estimated to be a $904 billion industry this year, growing to nearly $1.3 trillion by 2025.

Amazon is also letting customers compare prices with their insurance co-pay, without insurance or with the savings available through the Prime prescription savings plan to choose the lowest option. Amazon is also staffing a pharmacy service accessible at all hours so that customers can answer questions about their medications.

In August, Amazon launched its fitness tracker, Halo. The personal health and wellness monitoring and advice service includes a $64.99 wrist tracker and an application suite for monitoring health.

Pfizer Starts COVID Vaccine Pilot Delivery Program

Pfizer has launched a pilot delivery program for its experimental COVID-19 vaccine in four U.S. states, as the U.S. drugmaker seeks to address distribution challenges facing its ultra-cold storage requirements.

Pfizer’s vaccine, which was shown to be more than 90% effective in preventing COVID-19 based on initial data, must be shipped and stored at -70 degrees Celsius (minus 94°F), significantly below the standard for vaccines of 2-8 degrees Celsius (36-46°F).

“We are hopeful that results from this vaccine delivery pilot will serve as the model for other U.S. states and international governments, as they prepare to implement effective COVID-19 vaccine programs,” Pfizer said in a statement on Monday.

It picked Rhode Island, Texas, New Mexico, and Tennessee for the program after taking into account their differences in overall size, diversity of populations, immunization infrastructure, and need to reach individuals in varied urban and rural settings.

The four states will not receive vaccine doses earlier than other states by virtue of the pilot, nor will they receive any differential consideration, Pfizer said.

The company expects to have enough safety data on the vaccine from the ongoing large scale late-stage trials by the third week of November before proceeding to apply for emergency use authorization (EUA).

Pfizer and its partner BioNTech SE 22UAy.F have a $1.95 billion deal to supply 100 million doses of the vaccine to the U.S. government, which has an option to acquire up to an additional 500 million doses.

Earlier on Monday, rival Moderna Inc MRNA.O said its experimental vaccine was 94.5% effective in preventing COVID-19 based on interim data from a late-stage trial, boosting hopes that vaccines against the disease may be ready for use soon.

Both the Pfizer and Moderna vaccines use a new technology called synthetic messenger RNA to activate the immune system against the virus.

CMS Webinars Clarify WCMSA Appeal Process

This year, CMS has been quite active announcing several updates to its Medicare Secondary Payer Recovery Portal and holding a recent webinar on redetermination requests. CMS trends regarding post-settlement Total Payment Obligation to Claimant (TPOC) beneficiary recovery have been causing some challenges for workers’ compensation carriers from another angle. CMS will also be holding a webinar on the NGHP Beneficiary Recovery Process on December 9th.

In September, CMS and the Commercial Repayment Center (CRC) held a webinar session to address “redetermination” requests as part of the administrative appeals process regarding conditional payment disputes of non-group health plans (NGHP). CMS reviewed the five levels of the administrative appeals process before the CRC discussed the various appeals available to primary payers in the administrative appeals process.

The CRC outlined the specific arguments it will accept as part of a redetermination request as follows:

— Termination of Ongoing Responsibility for Medicals (ORM) due to benefits exhaustion;
— Termination of ORM due to settlement or other claim resolution;
— Benefits denied/revoked by applicable plan;
— Non-covered services;
— Unrelated services; and
— Duplicative primary payment.

As part of this session, the CRC emphasized adherence to established appeal timelines and other related requirements is critical. On this point, the CRC advised redeterminations must be received within 120 days from the date a Medicare demand letter is received by the named debtor, which CRC noted is presumed to be five days after the date of demand.

CMS’s trend of having the BCRC pursue the claimant post-settlement is currently causing some challenges and frustration particularly in workers’ compensation settlements.

Specifically, the BCRC is increasingly opening conditional payment recovery cases upon receipt of TPOC information and issuing final demands with the claimant named the debtor. This occurs even in situations where the parties have previously worked with the CRC to resolve conditional payment cases related to ORM.

When this happens, the carrier cannot interact with the BCRC on the claim without having a separate Proof of Representation (POR) executed by the claimant. This, in turn, complicates the workers’ compensation carrier’s ability to ensure that Medicare’s recovery is resolved if they cannot secure a POR from the claimant post-settlement.

To prevent this, workers’ compensation carriers wishing to ensure conditional payment exposure is fully resolved may need to consider securing a POR from the claimant as part of the settlement process to avoid having to chase the claimant post-settlement for this required authorization.

CMS has recently announced that it is holding a Non-Group Health Plan (NGHP) Beneficiary Recovery Process Webinar on December 9, 2020, at 1:00 p.m. ET. CMS indicates that its primary intended audience is “attorneys who represent beneficiaries and other beneficiary representatives.”

Huntington Park Clinic Owners Face $2.5M Fraud Charges

Ashot Mamikonyan and Lorraine Watson, the final two of nine defendants charged in an extensive fraud scheme involving All Care One Community Health Center in Huntington Park have been arraigned.

All Care One Community Health Center was located at 7300 Santa Fe Avenue in Huntington Park, California. Its NPI number is 1467752626.

In July, charges were filed against the defendants, all of whom worked for, owned, or were officers at All Care One. The group is alleged to have committed fraud amounting to over $2.5 million from California’s Family Planning, Access, Care, and Treatment (FPACT) program from 2014 to 2016.

From 2014 to 2016, All Care One was paid more than $5 million for FPACT claims. It is estimated that more than half of the $5 million was the result of fraudulent claims.

The alleged scheme involved sending staff to low income areas in Los Angeles to solicit people to provide their patient identifying information and a urine sample in exchange for a kickback. The personal information and urine were brought back to All Care One where medical assistants were instructed to falsify charts for these individuals, and then doctors, nurse practitioners, and midwives signed off on the charts as though they provided medical services related to family planning or sexually transmitted diseases.

All Care One marketers also allegedly offered kickbacks to lure individuals into the clinic for treatment, and many of these patients were treated by an unlicensed doctor.

In addition to Mamikonyan and Watson, felony charges have also been filed against seven other individuals involved in the scheme: Gevork George Ter-Mkrtchyan, Syuzan Harutyunyan, Karim A. Soliman, Guadalupe Morena Moreno, Jessica Villa, Maria D. Vasquez, and Anna Marie Soto. This group includes All Care One’s former owner, officers and employees.

Additionally, Mamikonyan was charged with the unlicensed practice of medicine, Harutyunyan was charged with aiding and abetting the unlicensed practice of medicine, and Moreno was charged with paying and receiving kickbacks.

November 9, 2020 – News Podcast


Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: App-based Rideshare Companies Win Exemption from AB5. Comp Policy Rates Cannot be Altered by Oral Prior Assurances. Fraudulent Drug Treatment Program Owners Plead Guilty. Owner of Janitorial Service Faces $2.5M Fraud Charges. DME Company Resolves Fraud Claims for $566K. Memorial Health Services Resolves $31.5M Overbilling Dispute. DWC Posts 2019 Audit Report. WCIRB Publishes 2020 Geo Study. Benefit Rates Set to Increase in 2021. 1 in 5 California Comp Spine Surgeries Require Readmission.