On March 18, 2014, the Senate Finance and House Ways and Means committees introduced a bill entitled “Improving Medicare Post-Acute Care Transformation Act of 2014” (IMPACT Act). This bill, should it be signed into law, will require post-acute care providers (e.g. skilled nursing facilities) to furnish standard assessment data in order to improve the efficiency of Medicare payments.

The current draft of the bill would require the assessment and reporting of patient data such as functional status, medical condition, and cognitive condition. The Act would also create systems to measure patient skin integrity, incidence of major falls, Medicare spending per beneficiary, and preventable hospital admissions/readmissions.

Once the bill becomes law, it will require skilled nursing facilities to begin quality reporting at the start of the 2019 fiscal year. Facilities that fail to report the necessary data under the Act would have 2 percentage points docked from their Medicare rates.

To view a copy of the current draft of the IMPACT Act, click here.

Avalere Health, a healthcare advisory company, recently released a report estimating that by 2015, about 75% of Medicaid enrollees in the United States will receive their benefits through one of several managed care organizations (MCOs). MCOs are private health insurance plans that contract with providers like Medicaid-certified nursing facilities.

States are moving away from traditional fee-for-service Medicaid programs and favoring MCOs for administering Medicaid programs due to efficiency and budget considerations. States moving in this direction believe that an MCO-run Medicaid program would improve the quality of Medicaid benefits and give the state more budget certainty. MCOs can coordinate care themselves and offer services not available under traditional state-run Medicaid programs.

If you have questions about Ohio’s move toward an MCO-run Medicaid program, contact one of DLM Legal’s experienced Healthcare Attorneys at info@dlmlegal.com or 216.635.0002.

On December 20, 2013, Ohio Governor John Kasich signed into law House Bill 126. Prior to this new law, R.C. 1337.12 and R.C. 1337.13 stated that the authority bestowed to an attorney-in-fact under a Durable Power of Attorney for Health Care (DPAHC) instrument would only take effect when a physician declared the principal to lack the capacity to make informed health care decisions.

Beginning on March 19, 2014, these statutes will permit a DPAHC to authorize the attorney-in-fact to have access to the principal’s medical information, including protected health information under the Health Insurance Portability and Accountability Act (HIPAA), immediately upon execution of the DPAHC. Thus House Bill 126 has removed the requirement that a physician must first declare the principle to lack capacity before the attorney-in-fact named in a DPAHC can have any authority.

House Bill 126 has also revised Section 1337 of the Ohio Revised Code to allow the appointment of a guardian for the estate and a guardian for the person through a DPAHC instrument.

If you have any questions or concerns about the Durable Power of Attorney for Health Care laws in Ohio, contact a DLM Legal Health Care attorney at info@dlmlegal.com or 216.635.0002.

Beginning October 1, 2013, Ohioans seeking to determine whether they are eligible for Medicaid coverage can visit benefits.ohio.gov instead of scheduling an in-person visit at their local Job and Family Services office.

The state hopes that this new online system will increase the speed and accuracy with which Medicaid eligibility is determined. Through this online system, individuals who are deemed ineligible for Medicaid benefits will then be directed to the federal government’s private health insurance exchange options, which go into effect on January 1, 2014.

At the end of August 2013, the Centers for Medicare and Medicaid Services (CMS) will issue reports to certified skilled nursing facilities via mail as part of its Program for Evaluating Payment Patterns Electronic Reporting (PEPPER) system. These reports will identify areas within a facility’s Medicare Part A payment system that are at risk for improper payment. The PEPPER reports will detail each facility’s Medicare Part A claim statistics for the areas CMS has determined as being at risk for improper payment.

Only facilities that have sufficient data to generate a PEPPER report will receive one. Facilities that do receive one should use the report to audit its own billing practices and work to improve their efficiency and accuracy in billing for Medicare Part A. CMS has noted that the PEPPER reports do not identify improper payments but rather only identify potential areas in the facility for improper payments.

The PEPPER reports will also compare the facility’s Medicare billing risks with the billing data of other facilities in the region. This statistic will provide further guidance in the facility’s assessment of its Medicare billing practices.

If you would like more information on the impact the PEPPER reports will have on your facility, contact one of DLM Legal’s health care attorneys at info@dlmlegal.com.

The United States House of Representatives recently proposed new legislation aimed at curbing Medicare costs. The legislation proposes to decrease skilled nursing facilities’ Medicare rate updates, introduce new post-acute payment systems, and institute readmissions penalties for skilled nursing facilities.

It is estimated that the Medicare Hospital Insurance Trust Fund will be bankrupt by 2026, and that the Supplemental Medical Insurance Trust Fund will increasingly strain the federal budget as Medicare spending is expected to grow from 3.6% in 2012 to 6.5% of GDP in 2087. With this in mind, the House Ways and Means Committee has introduced legislation aimed at reducing Medicare costs. Based upon proposals made by the Medicare Payment Advisory Commission, the proposals include creating bundling payments for a post-acute episode of care and creating site-neutral payments between inpatient rehabilitation facilities and skilled nursing facilities for some procedures.

One proposal is to require public disclosure for all Medicare payments via an online database with the belief that subjecting providers to such public scrutiny may deter some wasteful practices and overbilling.

Another target of the legislation is skilled nursing facility readmission policies. The Medicare Payment Advisory Commission indicates that nearly 14 percent of individuals on Medicare discharged from a hospital to a skilled nursing facility are readmitted to the hospital for conditions that could potentially have been avoided. In an attempt to curb these incidences and lower costs, the proposed legislation would establish a skilled nursing facility readmissions program similar to that already in place for hospitals with the aim of holding nursing homes accountable for hospital readmissions. Reimbursement penalties would be instituted against skilled nursing facilities if they exceed a threshold for admissions to a hospital for certain conditions within a particular timeframe. According to the U.S. Department of Health and Human Services (HHS) 2014 budget proposal, such a policy could save $2.2 billion over ten years.

The Committee is accepting comments on the draft legislation through August 30.

On June 6, 2013, Ohio Attorney General Mike DeWine announced that he would begin installing covert surveillance cameras in residents’ rooms at nursing homes state-wide to investigate allegations of abuse. Since then, DeWine’s office has already used “spy cams” in one investigation that resulted in a Zanesville nursing home being shut down.

DeWine’s position is that if the resident consents to the Attorney General’s installation of a camera, then the camera’s presence is completely legal. By no means should a nursing home ever attempt to impede an Attorney General investigation. There is no clear legal prohibition against the use of surveillance cameras in nursing facilities, but facility administrators should be aware that the Ohio Attorney general is engaging in such practice. Thus, until further notice – whether through judicial or legislative action – DeWine’s office may continue to use spy cams in nursing homes around the state.

The installation of spy cams in a nursing home by a private citizen, however, is a different matter. Both state and federal law confers to nursing home residents various rights of privacy that would be undermined by the presence of a surveillance camera broadcasting images of residents to an off-site, third party location. Until the Ohio legislature or Congress gives private citizens the right to install a spy cam at a nursing home in Ohio, all facilities should have in place a “no surveillance camera” policy of some kind. Such a policy is necessary to uphold the state and federal privacy rights to which nursing home residents are entitled.

For guidance in writing your facility’s policy on surveillance cameras, contact a DLM Legal attorney.

In a recent decision in Strausberg v. Laurel Healthcare, the Supreme Court of New Mexico held that state courts cannot treat nursing home arbitration agreements differently than other contracts. Prior to this ruling, a New Mexico Court of Appeals held that because potential residents are “at their most vulnerable” when signing an arbitration agreement to enter a nursing home, the nursing home should always have the burden of proving the agreement is conscionable and thus enforceable. Typically, however, only the party challenging a contract or agreement has the burden of showing it is unconscionable and thus unenforceable.

The New Mexico Supreme Court cited the Federal Arbitration Act (FAA) as preempting the state appellate court ruling. Under the FAA, arbitration agreements must be enforced unless they are shown by the party challenging them to be invalid under basic contract law principles. Consequently, the Supreme Court remanded the case back to the appellate court where the resident, as the challenger, would have the burden of showing the nursing home’s arbitration agreement is invalid on a contract law theory.

Similarly, in Ohio, a nursing home resident seeking to invalidate an arbitration agreement would have the burden of proving the agreement does not comply with state common law. Unconscionability represents the primary state common law grounds for revocation of an arbitration agreement. Ohio courts have established several guidelines for determining whether an arbitration agreement is unconscionable and thus unenforceable.

If you or your company have concerns about whether a certain arbitration agreement is enforceable, feel free to contact DLM Legal for more information at 216.635.0002 or info@dlmlegal.com.

On July 9, 2013, the Centers for Medicare and Medicaid (CMS) issued a new rule requiring nursing and skilled nursing facilities to implement written agreements clearly defining their relationships with hospice providers. CMS adopted this rule, located at 42 CFR § 483.75(t), in order to improve the efficiency and quality of hospice care provided to nursing home residents. The specifics of the rule are aimed at avoiding conflicting services while fostering coordination between nursing homes and hospices.

Under the new rule, a nursing home that provides hospice services through one or more Medicare-certified hospices must have a written agreement with each hospice that is signed by an authorized representative of the hospice and an authorized representative of the nursing home. The agreement must be executed prior to furnishing hospice care to any nursing home resident and include the following:

• A listing of the services the hospice will provide
• The hospice’s responsibilities for determining an appropriate plan of care
• A listing of the services the nursing home will provide
• A description of the communication process between the home and the hospice
• A provision stating that the hospice assumes responsibility for determining the appropriate course of hospice care
• A statement that the nursing home has the responsibilities of furnishing 24-hour room and board care, meeting the resident’s personal care and nursing needs in coordination with a hospice representative, and ensuring that the level of care provided is appropriately based on the individual resident’s needs
• A delineation of the hospice’s specific responsibilities (e.g. counseling, pain medication plans)
• A provision requiring the nursing facility to immediately report to the hospice administrator all alleged violations involving mistreatment of a resident
• A delineation of the responsibilities of the hospice and the nursing home to provide bereavement services to the nursing home’s staff

A provision requiring the nursing home to notify the hospice immediately of the following:

• Significant changes in the resident’s physical or emotional status
• Clinical complications that suggest a need to alter the resident’s plan of care
• A need to transfer the resident from the facility for any condition
• The resident’s death