IRS Levy Against Medicare Payments Increases to 100% Effective October 16, 2015

The Internal Revenue Code was amended in April 2015 as part of the Medicare Access and CHIP Reauthorization Act of 2015 to increase allowable IRS levies against federal payments, such as Medicare receivables, from 30% to 100% effective October 16, 2015.

CMS has issued MLM Matters –  MLM number MM9285, to explain these changes.


Department of Justice Issues Guidance on Corporate Investigations and Executive Accountability

On September 9, 2015, Sally Quillar Yates, Deputy Attorney General of the Department of Justice (DOJ) issued a memo entitled “Individual Accountability for Corporate Wrongdoing” to address the issue of incentivizing executives, as individuals, to follow appropriate compliance protocols by emphasizing potential individual liability.

The memo stresses the importance and the difficulty of enforcing personal liability on corporations for criminal and civil violations. I believe this is especially appropriate to the “larger” entities and integrated delivery systems involved in healthcare, because private practice providers have always been more directly confronted with the personal liability issues.

The memo outlines six steps to be taken in the coordination of civil and criminal investigations, most of which you would assume would already occur. However, the memo enforces and emphasizes the importance of the process.

The six steps outlined in the memo can be reviewed in the attached link.

Blue Cross of Northeastern Pennsylvania Denied Peer Review Protection

The Pennsylvania Superior Court has decided the Pennsylvania Peer Review Protection Act does not apply to alleged peer review activity conducted by Blue Cross of Northeastern Pennsylvania, because Blue Cross is not a professional healthcare provider as defined in the Pennsylvania Peer Review Act.  Blue Cross argued it should have been protected because it’s activities were conducted by a peer review committee, but the Court pointed out that the “definition of peer review requires that it be initiated by a professional healthcare provider… and a review committee cannot be conducting peer review unless their review is being performed by a professional healthcare provider”.

The Opinion can be found at Anne Marie Venosh v. Jack Henzes, M.D., Cindy Anderson, PA-C, Scranton Orthopedic Specialists, P.C. and Moses Taylor Hospital.

CMS Stark Proposals Allow “Holdover” Arrangements and Signature Window

In July 2015, CMS released proposals to provide several new Stark Law exceptions and to clarify issues regarding existing exceptions.  The full text of these proposal and CMS comments and explanations is available at:

Perhaps the most noteworthy of the lesser proposals were clarifications that:

  • “hold over arrangements” are permitted to satisfy the appropriate exception indefinitely as long as the agreement was in place for the term of at least a year and otherwise complied with the exception requirements and
  • a proposal to modify the current regulations to allow parties 90 days to obtain required signatures, regardless of whether the failure to obtain the signature in the first place was inadvertent.

CMS Limits Scope of Review for MACs

CMS issued a special edition MLN Matters meant to be effective August 1, 2015.  The guidance reflects CMS instructions to Medicare Administrative Contractors (MACs) and Qualified Independent Contractors (QICs) regarding the scope of review for redeterminations and reconsiderations of certain claims.

CMS acknowledges its concern that MACs and QICs were using their discretion to conduct appeals to develop new issues.  CMS states:

In some cases where the original denial reason is cured, this expanded review of additional evidence or issues results in an unfavorable appeal decision for a different reason.

CMS has instructed MACs and QICs to limit their review to the reason or reasons the claim or line item at issue was initially denied.

CMS Clarifies Written Agreement Requirement

CMS has acknowledged that arrangements among providers to satisfy the Stark exceptions need not be created in a single document.  Although a single written document memorializing the key facts of an arrangement could provide the surest and most straightforward means of establishing compliance with the applicable exception, there is no requirement under the physician self-referral law that an arrangement be documented in a single formal contract.  Depending on the facts and circumstances of the arrangement and the available documentation, a collection of documents, including contemporaneous documents evidencing the course of conduct between the parties, may satisfy the writing requirement of the leasing exceptions and other exceptions that require that an arrangement be set out in writing in any or all of the following exceptions.

  • Office and equipment leases
  • Bona fide employment agreements
  • Personal service agreements
  • Electronic health records

The full text of these proposal and CMS comments and explanations is available at:

CMS Proposes New Stark Exceptions: Timeshare Lease

In July 2015, CMS released proposals to provide several new Stark Law exceptions and to clarify issues regarding existing exceptions.  Over the next few days, I will post comment on what I consider the most significant new exceptions and clarifications.  The full text of these proposal and CMS comments and explanations is available at:

New Timeshare Exception

CMS acknowledges that arrangements for the use of another provider’s premises, equipment, personnel, items, supplies or services by physicians who, for various legitimate reasons, do not require or are not interested in a traditional office space lease arrangement could be appropriate.  Under timeshare arrangements, a hospital or local physician practice may ask a specialist from a neighboring community to provide the services in space owned by the hospital or practice on a limited or as-needed basis.  CMS believes timeshare arrangements that include the use of office space can be structured in a way that does not pose a risk of program or patient abuse.

Therefore, CMS has proposed a new exception at 42 C.F.R. § 411.357(y) that would protect timeshare arrangements that meet certain criteria, including:

  1. The arrangement is set out in writing, signed by the parties, and specifies the premises, equipment, personnel, items, supplies and services covered by the arrangement;
  2. The arrangement is between a hospital or physician organization (licensor) and a physician (licensee) for the use of the licensor’s premises, equipment, personnel, items, supplies, or services;
  3. The licensed premises, equipment, personnel, items, supplies, and services are used predominantly to furnish evaluation and management services to patients of the licensee;
  4. The equipment covered by the arrangement, if any is: (i) located in the office suite where the physician performs evaluation and management services, (ii) used only to furnish DHS that is incidental to the physician’s evaluation and management services and furnished at the time of such evaluation and management services, and (iii) not advanced imaging equipment, radiation therapy equipment, or clinical or pathology laboratory equipment (other than equipment used to perform CLIA-waived laboratory tests).
  5. The arrangement is not conditioned on the licensee’s referral of patients to the licensor;
  6. The compensation over the term of the arrangement is set in advance, consistent with fair market value, and not determined in a manner that takes into account (directly or indirectly) the volume or value of referrals or other business generated between the parties;
  7. The arrangement would be commercially reasonable even if no referrals were made between the parties;
  8. The arrangement does not violate the anti-kickback statute (section 1128B(b) of the Act) or any federal or state law or regulation governing billing or claims submission; and

The proposed exception would apply only to timeshare arrangements where the licensor is a hospital or physician organization; it would not protect arrangements where the licensor is another type of DHS entity.

CMS Proposes New Stark Exception: Recruitment of Non-Physician Practitioners

In July 2015, CMS released proposals to provide several new Stark Law exceptions and to clarify issues regarding existing exceptions.  Over the next few days, I will post comments on what I consider the most significant new exceptions and clarifications.  The full text of these proposals and CMS comments and explanations are available at:

New Recruitment of Non-Physician Practitioners Exception

CMS has proposed to establish a new exception as 42 C.F.R. § 411.357(x) to permit remuneration from a hospital, a federally qualified health center (FQHC), or a rural health center (RHC) to a physician to assist the physician in employing a non-physician practitioner in the geographic area served by the hospital, FQHC, or RHC providing the remuneration.

  1. The proposed exception would apply only where the non-physician practitioner is a bona fide employee of the physician receiving the remuneration from the hospital (or of the physician’s practice) and the purpose of the employment is primarily to provide primary care services to patients of the physician practice.  CMS believes employment is greater proof a sincere commitment then just an independent contractor relationship.
  2. Primary care services includes general family practice, general internal medicine, pediatrics, geriatrics, and obstetrics and gynecology patient care services.
  3. “Non-physician practitioner” is defined for purposes of this exception, to include only physician assistants, nurse practitioners, clinical nurse specialists, and certified nurse midwives.
  4. There is a 2-year limit on the assistance which is intended to prevent ongoing payment to the physician that could serve as a reward for past referrals or an inducement to continue making referrals to the hospital, FQHC, or RHC, and the amount is proposed to not exceed 50% of actual salary, signing bonus and benefits or the amount equal to the excess of these costs over actual NPP receipts.