Regulations

Civil Money Penalties for Nursing Homes

On March 18, 2011, the U.S. Centers for Medicare and Medicaid Services (CMS) and the Department of Health and Human Services (HHS) issued this regulation, implementing section 6111 of the Affordable Care Act. Section 6111 gives CMS authority to impose and collect civil monetary penalties (CMPs) against nursing homes. The penalties are reserved for nursing homes that fail to comply with federal participation requirements outlined in section 6111. Although penalties for noncompliance existed before the Affordable Care Act was promulgated, this regulation revises and expands CMS's authority to impose and collect CMPs. The final rule is effective January 1, 2012.

For additional information about this new regulation, please visit the Office of the Federal Register website.

Changes to Hospital Outpatient Prospective Payment System (OPPS), the Ambulatory Surgical Center Payment System, and Hospital Reimbursements for Graduate Medical Education (GME)

This regulation was adopted to correct technical and typographic errors identified in a final rule published November 24, 2010, titled "Medicare Program: Hospital Outpatient Prospective Payment System and CY 2011 Payment Rates; Ambulatory Surgical Center Payment System and CY 2011 Payment Rates; Payments to Hospitals for Graduate Medical Education Costs; Physician Self-Referral Rules and Related Changes to Provider Agreement Regulations; Payment for Certified Registered Nurse Anesthetist Services Furnished in Rural Hospitals and Critical Access Hospitals." The errors were found in the preamble and addenda B, AA and BB of the November 2010 final rule. The new regulation also incorporates changes to the Medicare Physician Fee Schedule (MPFS) for CY 2011, which appeared in a January 11, 2011, CY 2011 MPFS correction notice. The corrections are effective January 1, 2011, as if they were initially included in the November final rule.

More information about the November final rule can be found here. A detailed summary of the corrected errors can be found on the Office of the Federal Registrar website.

CMS Releases Long-Awaited Proposed Rule on Accountable Care Organizations

On March 31, 2011, the Centers for Medicare & Medicaid Services (CMS) and Health and Human Services (HHS) unveiled the long-awaited federal rule on accountable care organizations. This proposed rule would implement section 3022 of the Affordable Care Act, which allows service providers and suppliers to continue receiving traditional Medicare fee-for-service payments under Parts A and B, and to be eligible for additional payments based on meeting specified quality and savings requirements.

To view the proposed rule, please visit the Office of the Federal Register website.

See the recent proposed enforcement policy for the application of the antitrust laws to healthcare collaborations among otherwise independent providers and provider groups that seek to participate as accountable care organizations (ACOs) under the Medicare Shared Savings Program.

Medicare and Medicaid Programs; Requirements for Long-Term Care Facilities; Notice of Facility Closure

Issued by the U.S. Department of Health and Human Services (HHS)on February 18, 2011, this regulation implements section 6113 of the Patient Protection and Affordable Care Act (PPACA). The interim final rule amends existing legislation by introducing new notice requirements associated with long-term care (LTC) facility and skilled nursing facility (SNF) closures. Its purpose is twofold: to protect resident health and safety, and to facilitate a "smooth transition" in the event of a facility's closure.

New requirements under this regulation include:

  • who the administrator of a facility must notify about a closure;
  • what minimum content is required in the written notice of closure, such as a detailed closure plan outlining how the facility will transfer residents; and
  • when an administrator must provide written notification, which depends on whether the secretary of HHS terminates the facility's participation in the Medicare or Medicaid program, or whether the facility is closing for another reason.

The regulation also extends liability to facility administrators. For example, an administrator may be subject to a civil monetary penalty of up to $100,000 if he or she fails to comply with its requirements. This regulation is effective on March 23, 2011.

New Regulation: Medicare Program: Hospital Outpatient Prospective Payment System and CY 2011 Payment Rates; Ambulatory Surgical Center Payment System and CY 2011 Payment Rates; Payments to Hospitals for Graduate Medical Education Costs; Physician Self-Referral Rules and Related Changes to Provider Agreement Regulations; Payment for Certified Registered Nurse Anesthetist Services Furnished in Rural Hospitals and Critical Access Hospitals; Final Rule [dated November 24, 2010]

Summary: This regulation, issued on November 24, 2010, outlines several changes to the Medicare program regarding the following: (1) the hospital outpatient prospective payment system, (2) the ambulatory surgical center payment system, (3) payments to hospitals for graduate medical education (GME) costs and indirect medical education (IME) costs, (4) rules governing physician self-referrals and related provider agreements in hospitals where physicians have investment interests or in hospitals owned by physicians, and (4) payments for certified registered nurse anesthetist services in rural and critical access areas. Changes to the hospital and ambulatory surgical centers payments systems will be to the amounts and factors used to determine payment rates. For both GME and IME hospital payments this regulation implements new provisions under the Patient Protection and Affordable Care Act. With respect to physician self-referrals, this regulation introduces new limitations. And as to anesthesia services there will be changes to the effective date of when hospitals can begin receiving reasonable cost payments for these services.

Amendment to the Interim Final Rules for Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan Under the PPACA [dated November 17, 2010]

  • Summary: This regulation, issued on November 15, 2010, amends an earlier regulation published in June that outlined rules governing whether group health plans and health insurance coverage in both the individual and group markets can maintain "grandfathered" health plan status. The grandfathered status allows plans to retain an exemption from some new requirements under the Patient Protection and Affordable Care Act. Under the amended regulation, a group health plan may now switch insurance companies and maintain its grandfathered plan status as long as it adheres to other requirements outlined in this and the original regulation. This amendment affords employers more flexibility in shopping for health plans that offer coverage at a lower cost. Additional information regarding this provision is available at: http://www.hhs.gov/news/press/2010pres/06/20100614e.html.

Correction of Final IPPS for ACHs (Acute Care Hospitals) and LTCH (Long-Term Care Hospital) PPS and FY 2011 Rates [dated October 1, 2010]

Changes to the Hospital Outpatient Prospective Payment System (OPPS) and CY 2010 Payment Rates [dated August 03, 2010]

  • Summary: This regulation was adopted in order to correct technical errors that were identified in two documents regarding hospital outpatient prospective payment: a final rule and its subsequent correction document. The final rule containing errors is titled "Medicare Program: Changes to the Hospital Outpatient Prospective Payment System and CY 2010 Payment Rates; Changes to the Ambulatory Surgical Center Payment System and CY 2010 Payment Rates." The subsequent correction document also containing errors is titled "Medicare Program: Changes to the Hospital Outpatient Prospective Payment System and CY 2010 Payment Rates; Changes to the Ambulatory Surgical Center Payment System and CY 2010 Payment Rates"
  • Errors were made with regard to the rates for "office-based" surgical procedures and the covered ancillary radiology procedures
  • The correct payment amounts for both types of procedures are found in Addenda AA and BB to the May 11, 2010 CY 2010 Medicare Physicians Fee Schedule (MPFS) correction document, which were reprinted to reflect the changes that impacted multiple codes. See also http://www.cms.gov/ASCPayment

Group Health Plans and Health Insurance Issuers Relating to Coverage of Preventive Services under PPACA [dated July 19, 2010]

  • Summary: This regulation outlines requirements for group health plans and health insurance coverage in the group and individual markets for two areas: (1) expansion of coverage of recommended preventive services, and (2) restrictions on or prohibition of the implementation of cost-sharing mechanisms by the insurers (i.e. coinsurance, deductibles and copayments). These requirements generally become effective for plan years (policy years in the individual market) beginning on or after September 23, 2010. A list of recommendations and guidelines for insurers with respect to preventative services is available at: http://www.HealthCare.gov/center/regulations/prevention.html

Interim Final Rules for Group Health Plans and Health Insurance Issuers Relating to Internal Claims and Appeals and External Review Processes Under the PPACA [dated July 23, 2010]

  • Summary: This regulation outlines the requirements for the following processes of group health plans and health insurance coverage in the group and individual market: (1) internal claims and appeals, and (2) the external review processes. These updated processes become effective for plan years (policy years in the individual market) beginning on or after September 23, 2010. Key provisions of this regulation include: how insurers can comply with the new internal claims and appeals process, guidance for external review processes and whether insurers must follow state or federal procedures, and notice requirements for appeals processes. This regulation is not applicable to grandfathered group health plans.

Health Care Reform Insurance Web Portal Requirements [dated May 05, 2010]

  • Summary: This regulation outlines the requirements for state insurance websites ("Web Portals") that must be made public by July 1, 2010 to individuals and small business in all 50 states and the District of Columbia. Currently, each web portal at minimum must contain the following information (to the extent practicable):
    • Health insurance coverage offered by health insurance issuers
    • Medicaid coverage
    • Children's Health Insurance Program (CHIP) coverage
    • State health benefits high risk pool coverage
    • Coverage under the high risk pool
    • Coverage for small businesses and their employees (small group market)
    Over time, the required content for the web portals will increase in accordance with future federal mandates. For example, beginning October 1, 2010 the web portals must also contain benefit and pricing information regarding the following: premiums, cost sharing options, coverage limitations, types of services covered, and exclusions.

Early Retiree Reinsurance Program [dated May 05, 2010]

  • Summary: This regulation was adopted to offset the inadequate employer insurance coverage of employees in the early retiree age group (and their eligible spouses, surviving spouses and dependents of the retirees). Five billion dollars ($5,000,000,000) of federal funding was set aside for this temporary reinsurance program to help cover a portion of the insurance costs to participating employers that provide employment-based health insurance to employees in this retiree group. Reimbursement is available for claims between $15,000 and $90,000 (the amounts are "indexed for plan years starting on or after October 1, 2011"). Funds are awarded on a first come, first served basis, and nearly 3,000 employers and other sponsors have already been approved for participation. This program began no later than 90 days after the enactment of the statute, which was June 21, 2010 and will end by January 1, 2014. Additional information regarding this provision is available at: http://www.errp.gov/

Group Health Plans and Health Insurance Issuers Relating to Dependent Coverage of Children to Age 26 Under the PPACA; Interim Final Rule and Proposed Rule [dated May 13, 2010]

  • Summary: This regulation outlines the requirements for dependent coverage of children until the attainment of 26 years of age by their parents' group health plans and health insurance issuers in the group and individual markets. This regulation also contains information regarding whether this provision preempts existing state laws that have different age limitations. Eligible dependents may be enrolled no earlier than the first day of the first plan year (policy years in the individual market) beginning on or after September 23, 2010.

CMS Issued Stark Self-Disclosure Protocol

  • Summary: On September 23, 2010, the Center for Medicare and Medicaid Services (CMS) announced a disclosure protocol pertaining to Stark Law self-referrals in accordance with Section 6409 of the Patient Protection and Affordable Care Act (PPACA). The purpose of the Medicare self-referral disclosure protocol (SRDP) is to create a mechanism that affords both health care providers and suppliers the opportunity to disclose either real or potential violations of the Stark law. In the event of a violation, a provider's or supplier's submission of this information to CMS may potentially result in a reduction in the amount due for the self-referral violations. For additional information regarding the SRDP, please go to the following website: http://www.cms.gov/PhysicianSelfReferral/65_Self_Referral_Disclosure_Protocol.asp

For additional information on any of the issues referenced on this page, please contact C. Mitchell Goldman, David E. Loder or the Duane Morris attorney with whom you are regularly in contact.

This article is for general information and does not include full legal analysis of the matters presented. It should not be construed or relied upon as legal advice or legal opinion on any specific facts or circumstances. The description of the results of any specific case or transaction contained herein does not mean or suggest that similar results can or could be obtained in any other matter. Each legal matter should be considered to be unique and subject to varying results. The invitation to contact the authors or attorneys in our firm is not a solicitation to provide professional services and should not be construed as a statement as to any availability to perform legal services in any jurisdiction in which such attorney is not permitted to practice.

Duane Morris LLP, a full-service law firm with more than 700 attorneys in 24 offices in the United States and internationally, offers innovative solutions to the legal and business challenges presented by today's evolving global markets. Duane Morris LLP, a full-service law firm with more than 700 attorneys in 24 offices in the United States and internationally, offers innovative solutions to the legal and business challenges presented by today's evolving global markets. The Duane Morris Institute provides training workshops for HR professionals, in-house counsel, benefits administrators and senior managers.