ISDH Long Term Care Bed and Personnel Tracking System

by Katie Eller, IHCA Director of Education and Member Services

The ISDH has created a Long Term Care Bed and Personnel Tracking System that will be effective on
December 1, 2011. The ISDH has several purposes behind the implementation of tracking system. This system will be used to track available beds in long term care facilities and track key facility personnel.

The following are the purposes behind this system.

1. EMERGENCY PREPAREDNESS: The purpose behind the system is to improve state
emergency preparedness. In the case of emergencies, there is a need to know the location of
available beds in case there is a need for evacuation. This system is intended to provide reliable
current information on available nursing home beds.

The ISDH currently tracks the number of licensed and certified beds for each facility. That
information is recorded at the time of licensing and does not reflect the number of occupied beds.

The ISDH obtains a bed census at the time of a survey. Because surveys may not occur for up to
fifteen months apart, that data is not current and therefore not reliable in an emergency. It also
does not provide the detail as to type of available beds that is needed for appropriate placement
determinations.

In the mid-2000’s, the ISDH created an online system to track available hospital beds throughout
the State. That system, in partnership with the Indiana Department of Homeland Security, was
intended to provide improved information for emergency responders in emergency situations.That system was implemented and has been a valuable asset in emergency situations.

As a next preparedness step, the Centers for Medicare and Medicaid Services (CMS) included
the development of a bed tracking system for long term care facilities as one of its priorities to be
implemented by state survey agencies by July 2009. CMS developed a pilot tracking system for
that purpose but did not implement the system. In 2011, the ISDH therefore began development
of a state system.

The need for such a system can be readily demonstrated by recent emergency situations in
Indiana. In the summer of 2009, Indiana experienced significant flooding. One nursing home that
had to be totally evacuated had planned to evacuate to sister facilities. Those facilities were no
longer accessible because of the flood waters. The facility therefore needed to know where there
were nearby available beds. There was no ready source for current bed availability information
and local communications were out. Had this system existed, the ISDH could have provided the
information to local emergency responders through the state emergency communications system.

Another large facility had to evacuate nearly 200 residents. The nursing homes in the area were
at capacity so there was a need to find appropriate beds in surrounding counties. There again
was no ready source for current bed availability information. Because phone lines were
accessible, the ISDH wound up calling facilities to determine bed availability but that resulted in
delays in getting residents placed. The ISDH also learned that there was a need to know not only
the availability of a bed but the classification and purpose of the bed.

Earthquakes, tornadoes, and flooding are all realistic potential emergency situations in Indiana.
The ISDH believes that reliable bed tracking data is essential to improving the state’s emergency
preparedness and response capacity. This new bed tracking system has been designed to meet
those emergency preparedness needs.

2. FACILITY CLOSINGS AND ROUTINE PLACEMENTS: One of the challenges faced by families, facilities, and the State is the appropriate placement of residents. When families or State
Ombudsman are trying to find available beds in an area, they often spend lots of time calling
facilities trying to identify available beds. Even more critical is when a facility is closing and there
is a need to place a large number of residents. The bed tracking system is intended to be an
efficient resource to assist in the appropriate placement of residents.

3. DETERMINATION OF STATE OCCUPANCY RATES: The ISDH is required to determine
nursing home occupancy rates. The Indiana General Assembly adopted statutes that refer to
nursing home occupancy rates. For instance, Indiana Code 16-28-16 states that the ISDH may
not approve the certification of new or converted comprehensive beds for participation in the state
Medicaid program unless the statewide comprehensive care bed occupancy rate is more than
ninety-five percent as calculated annually on January 1 by the ISDH. Other legislative proposals
have referred to a monthly occupancy rate by county and the legislature has requested that the
ISDH be able to provide monthly occupancy rates.

In order to implement state statutory requirements, the ISDH must be able to determine accurate
nursing home occupancy rates. At the present time, the ISDH is unable to comply with the
statute because the ISDH does not have a data source that provides occupancy on a given date.
While the ISDH collects occupancy data at the time of licensing surveys, the data does not allow
for determination of an occupancy rate on a given date because surveys may occur up to fifteen
months apart for a given facility.

The bed tracking portion of the new system will allow the ISDH to track bed occupancies on a
monthly basis in fulfillment of state statutory requirements. The database will also allow for
further study of occupancy rates by various criteria as requested by legislative studies.

4. EDUCATION AND TRAINING: The ISDH periodically provides education and training on
healthcare quality of care issues. Examples include state leadership conferences as well as the
pressure ulcer and healthcare associated infection initiatives. As part of these initiatives, the
ISDH often provides resource materials or information on educational opportunities.

The ISDH does not currently have contact information for key healthcare providers related to
topics in their area of expertise and responsibility. The result is that healthcare quality
improvement information often does not reach the relevant healthcare providers.

For example, there has been interest in developing programs to improve care coordination.
While the ISDH tracks the name of the facility medical director, we do not necessarily have
contact information for those individuals. Furthermore, the ISDH does not have any contact
information for attending physicians. With improved contact information for key healthcare
providers, the goal of the ISDH is to use this information to improve dissemination of information
to appropriate sources and create improved partnerships towards quality improvement.

5. SURVEY EFFICIENCY: The ISDH is always looking for ways to improve survey efficiency.
When the ISDH begins a survey, surveyors spend time identifying beds and key facility staff.
With the new tracking system, surveyors will have a copy of the facility’s bed census and key
staff. Surveyors will simply verify the list with the facility at the time of entrance. Surveyors often
spend time trying to identify the key staff not a part of current reporting. For instance, many
health care facilities are required to have an Alzheimer’s Director. The ISDH does not currently
track that information so having the information in the system assist surveyors in identifying
required staff and thus reduce survey time.

6. IMPROVED ACCURACY OF PERSONNEL TRACKING: Healthcare rules require facilities to
provide the ISDH with a change of the facility’s administrator, director of nursing, and medical
director. An example of a regulatory reporting requirement is 42 CFR 483.75(p). The ISDH
frequently finds that information is out of date and has not been appropriately updated. The
system is intended to improve the accuracy of tracking.

The system will be housed and accessed through the same ISDH Gateway System as the new
Survey Report System that was implemented earlier in 2011. The facility should expect to receive
an email on or about November 30 requesting the facility to submit their monthly report. The email
will be sent to the same email address used in the Survey Report System. The facility should then
log in to the system and provide the requested information. The facility will then subsequently
receive a reminder each month via email to update their data.


What Information Will be Tracked

The following available bed information will be tracked on a monthly basis:

• Facility census on last day of month
• Total bed occupancy
• Subcategories of bed availability
• Bed availability: male and female
• Bed availability: Alzheimer's Unit
• Ventilator beds available

Facilities will be asked to provide contact information for the following individuals:

• Administrator(s)
• Director(s) of Nursing
• Medical Director(s)
• Attending Physicians
• Nurse Practitioners
• Physician Assistants
• Minimum Data Set (MDS) Coordinator
• Wound Care Specialist(s)
• Alzheimer's/Dementia Unit Director(s)
• Social Services Director(s)

For More Details
For more details about the tracking system and the facility’s responsibility, please review:

ISDH LTC Advisory Letter LTC-2011-02

ISDH LTC Advisory Letter LTC-2011-02 Attachment A

CMS Retracts Guidance on F322 - Feeding Tubes

by Zach Cattell, JD, IHCA General Counsel

Guidance issued by CMS this past September that was to be effective this November has been retracted. Survey & Certification Memorandum 11-37-NH is no longer valid and CMS is revising the guidance to incorporate information from the Quality Indicator Survey process. CMS anticipates releasing revised guidance during the first six months of 2012.


If you have any questions about this topic, please contact Zach Cattell at zcattell@ihca.org or 317-616-9001.

Physician Signatures Not Required for Clinical Labs Under Clinical Laboratory Fee Schedule

by Zach Cattell, JD, IHCA General Counsel

CMS released its final rule making Revisions to Payment Policies to the Physician Fee Schedule for CY 2012 and CMS has officially retracted the proposed physician or non physician practitioner signature requirement on clinical lab test requisition policy. CMS had proposed for January 1, 2011 implementation of a rule which would have required a physician’s or qualified non physician practitioner’s signature on all requisitions for clinical diagnostic laboratory tests paid for on the basis of the Clinical Laboratory Fee Schedule (CLFS). The American Health Care Association, along with State affiliates, fought the proposal. CMS had first delayed the implementation and then had indicated that it would eliminate the requirement. The release of the final rule confirms the elimination of the proposal.

The final rule states “After consideration of the public comments received, we are finalizing our proposal to retract the policy that was finalized in the CY 2011 PFS final rule with comment period, which required a physician's or NPP's signature on a requisition for clinical diagnostic laboratory tests paid under the CLFS (75 FR 73483) and to reinstate our prior policy that the signature of the physician or NPP is not required on a requisition for a clinical diagnostic laboratory test paid under the CLFS for Medicare purposes.”

If you have any questions or for additional information, please contact Zach Cattell at zcattell@ihca.org or 317-616-9001.

CMS Issues Guidance to States for an Independent Informal Dispute Resolution Process for Long Term Care Facilities

by Zach Cattell, JD, IHCA General Counsel

Section 6111 of the Patient Protection and Affordable Care Act (ACA), in part, formed the basis for the establishment of a new Independent Informal Dispute Resolution (IIDR) process within the Civil Money Penalty scheme. Per Federal Regulations at 42 CFR 488.431, the new IIDR process has specific timelines and requirements for facilities to meet in order to take advantage IIDR. On October 14, 2011, CMS issued Survey & Certification Memorandum 12-02-NH (click here for a copy) that provides further guidance on the new IIDR process.

The new IIDR process is an option for facilities to elect if the facility is the subject of a Civil Money Penalty (CMP) that is subject to being collected and placed in an escrow account. CMS is phasing in the CMS collection and escrow provisions of the ACA and attendant regulations and will only be applying the CMP collection and escrow authority on the most serious deficiencies. Until further notice from CMS only those deficiencies that cite actual harm or immediate jeopardy (G or above) will be subject to the CMP collection and escrow and only those deficiencies will trigger the opportunity for IIDR. Any CMPs imposed for D, E and F deficiencies will be collected under the current process and are not subject to the new IIDR process.

Federal funding is available to States, through the State Survey Agency, for development of the IIDR process. The Indiana State Department of Health (ISDH) recently issued an alert indicating that the department is in the process of developing a new IIDR process according to the CMS guidance. The new IIDR process must:

1. Offer a facility the opportunity for IIDR within 30 calendar days of notice of imposition of CMP that will be collected and placed into escrow. A facility has 10 calendar days to request IIDR after receiving notice.

2. Be completed within 60 calendar days of receipt of the facility request for IIDR. “Completed” IIDR means that (a) a final decision has been rendered, (b) a written report has been generated, and (c) the ISDH has provided written notice to the facility of the decision.

3. Generate a written record of the decision before the CMP is collected. Such written record must include (a) each disputed deficiency/survey finding, (b) a summary of the IIDR recommendation with rationale for the result, (c) documents submitted by the facility, and (d) comments submitted to the IIDR by the Ombudsman and/or residents and their representatives.

4. Notify the Ombudsman, resident and resident’s representative of the opportunity to submit comments to the IIDR entity prior to the completion of the IIDR process.

5. Be administered by an entity that does not have a conflict of interest with the ISDH (State Survey Agency) and that has specific understanding of Medicare and Medicaid program requirements.

CMS indicates that for States to receive Federal funds for IIDR in FY 2012, States must have a process and estimated budget submitted to CMS by November 30, 2011. Furthermore, the new IIDR process is set to begin on January 1, 2012. It is unclear at this time whether the ISDH will meet either deadline. Given that Indiana law regarding state agencies contracting for services requires a fairly lengthy procurement process, it does not seem likely that the ISDH process will be finalized and ready by January 1, 2012. For deficiencies that are subject to the new IIDR process, States may not charge facilities for the IIDR process. For situations that do not require the new IIDR (deficiencies that do not require escrowing of CMP), the State may develop and charge for its own resolution process.

IHCA will continue to monitor the development of Indiana’s IIDR process. For additional information please contact Zach Cattell at zcattell@ihca.org or 317-616-9001.

Changes in Interpretive Guidelines for the Use of Feeding Tubes

by David Bufford, Hall Render, IHCA Associate Member

CMS released a Survey & Certification letter in September announcing revisions to surveyor guidance related to the use of feeding tubes in facilities, effective November 30, 2011. The revisions include the deletion of tag F-321, which addressed not utilizing a feeding tube unless it was unavoidable, and rolled the interpretive guidance for that tag into tag F-322.

The guidance for tag F-322 has been revised to provide clarification to nursing home surveyors when determining compliance with the regulatory requirements for feeding tubes. The actual federal regulation at issue, 42 CFR 483.25(g), has not changed. The guidance now better reflects the intent of the regulation to ensure the feeding tube is utilized only after an adequate assessment determines that the resident's clinical condition makes the intervention medically necessary. The feeding tube must be utilized in accordance with current clinical standards of practice and services are provided to prevent complications to the extent possible. Additionally, the facility must provide services to restore normal eating skills, to the extent possible.

The new guidance will address identify the key elements for tag F-322 that determine the level of severity. Severity Level 1 is not applicable to this tag.

CMS Provides Guidance for Nursing Facility Gardens

by David Bufford, Hall Render, IHCA Associate Member

CMS released a Survey & Certification letter in September providing guidance for nursing homes that desire to utilize on-site gardens to provide fresh produce for residents. After numerous inquiries from facilities, CMS confirmed that residents can benefit from home-grown foods as long as food-borne illness dangers are mitigated to the greatest extent possible.

The facility should follow safe food handling practices once foods are harvested and brought into the kitchen for preparation. Additionally, the facility must have in place policies and procedures for maintaining the garden. Such actions will permit the facility to remain in compliance with 42 CFR 483.35(i), Sanitary Conditions, and the related survey tag, F371.

In the event of an outbreak of a food-borne illness, surveyors will request the facility’s policies and procedures related to the garden if the facility’s main food source has been ruled out as the cause. The facility must immediately report any outbreak of a food-borne illness, regardless of the cause, to the local health department. The facility must also comply with any local or state requirements related to growing food on-site.

Medicaid RAC Rule Finalized

Section 6411 of the Patient Protection and Affordable Care Act (PPACA) expanded Federal efforts in the auditing and health care fraud arena by requiring that the Recovery Audit Contractor (RAC) program, which had previously only applied to Medicare, be applied to Medicaid as well. The Medicaid RAC programs will be operated by each individual State, but will be jointly funded by the State and the Federal government.
On September 16, 2001, the Centers for Medicare and Medicaid Services finalized the rule that will implement the health care fraud and abuse program. The Final Rule "provides guidance to States related to Federal/State funding of State start-up, operation and maintenance costs of Medicaid Recovery Audit Contractors (Medicaid RACs) and the payment methodology for State payments to Medicaid RACs." While the framework for the Medicaid RAC program was established in the corresponding proposed rule, the Final Rule sets forth the following important points:

· States may exclude Medicaid managed care claims from review by Medicaid RACs

· States must coordinate the recovery audit efforts of their Medicaid RACs with other auditing entities

· States must set limits on the number and frequency of medical records to be reviewed by the Medicaid RACs subject to requests for exceptions made by the RACs

· RACs must not review claims that are older than 3 years from the date of the claim, unless it receives approval from the State

· RACs should not audit claims that have already been audited or that are currently being audited by another entity

· If a provider appeals a Medicaid RAC overpayment determination and the determination is reversed, at any level, then the Medicaid RAC must return its contingency within a reasonable timeframe as prescribed by the State

· States must adequately incentivize the detection of underpayments and States must notify providers of underpayments that are identified by the Medicaid RACs

· States must provide appeal rights under State law or administrative procedures to Medicaid providers that seek review of an adverse Medicaid RAC determination

The Final Rule becomes effective on January 1, 2012.

"Long-Term Care Providers Must Not Adopt Residents’ Racial Preferences"

by Laurie E. Martin, Hoover Hull LLP


Long-term care providers may violate federal anti-discrimination law if they have a policy of honoring their resident’s racial preferences in assigning health care providers. A recent opinion from the U.S. Court of Appeals for the Seventh Circuit, Chaney v. Plainfield Health Care Center, 612 F.3d 908 (7th Cir. 2010), found that a provider’s policy of acceding to the racial biases of its residents was an unlawful employment practice that, along with racial animosity from the plaintiff’s co-workers, created a hostile workplace in violation of Title VII of the Civil Rights Act of 1964.

Certain Plainfield residents refused assistance from black CNAs. Plainfield had a policy of honoring its resident’s racial preferences, citing state and federal laws granting residents the right to choose providers, to privacy, and to bodily autonomy. Accordingly, African American plaintiff Brenda Chaney’s daily assignment sheets stated in writing that one of her residents “Prefers No Black CNAs.”

Over the course of three months, co-workers referred to Chaney in derogatory racial terms on multiple occasions. She reported the comments to management, and the comments eventually stopped, but Plainfield’s racial preference policy remained in place.

Chaney was later terminated for using profanity in front of a resident, although Plainfield later claimed other reasons led to her discharge. The court cautioned that a shifting justification for an employment decision can be circumstantial evidence of an unlawful motive. Rudin v. Lincoln Land Cmty. Coll., 420 F.3d 712, 723-34 (7th Cir. 2005).

The Seventh Circuit reversed summary judgment for Plainfield, finding that although Plainfield had acted to stop the racial epithets, it had actually encouraged a racially charged environment through its daily written assignment sheets reminding Chaney and her co-workers that certain residents preferred no black CNAs.

Chaney, 612 F.3d at 913-15. The court explained that, unlike gender, race is never a legitimate reason – a bona fide occupational qualification – for accommodating patients’ privacy interests. “Just as the law tolerates same-sex restrooms or same-sex dressing rooms, but not white-only rooms, to accommodate privacy needs, Title VII allows an employer to respect a preference for same-sex health providers, but not same-race providers.” Id. at 913.

Finally, the court disagreed that an Indiana regulation which gives residents a right to “choose a personal attending physician and other providers of services,” (410 Ind. Admin. Code 16.2-3.1-3(n)(1)), required Plainfield to instruct its employees to accede to the racial preferences of its residents. The court suggested that the regulation may require Plainfield to allow the resident reasonable access to a white aide if she wished to employ one at her own expense, but that it did not trump Plainfield’s duty to its employees to abstain from race-based work assignments. Title VII contains no good faith defense permitting an employer to ignore federal mandates in favor of allegedly conflicting state law. Id. at 914.

The Court suggested several actions a long-term care provider could take to confront a hostile resident without exposing itself to hostile workplace liability:

• Warn residents before admission of the facility’s non-discrimination policy and secure the resident’s consent in writing.

• Attempt to reform the resident’s behavior after admission.

• Assign staff based on race-neutral criteria that minimize the risk of conflict.

• Advise employees that they can ask for protection from racially harassing residents.

Id. at 915 (citing Patrick Gavin & JoAnne Lax, When Residents and Family Harass Staff: The Tightrope between Regualtory Compliance, Risk Management and Employment Liability, LONG TERM CARE AND THE LAW 16-18 (Feb. 27, 2008) (American Health Lawyers Association, Seminar Materials.)

Employers can also seek to avoid liability under Title VII by enacting and consistently enforcing the following helpful practices:
• Establish a clear and effective anti-harassment policy

• Respond promptly to any complaints of harassment from employees.

• Provide clear and comprehensive reasons for discharge at termination.

• Seek clarification from the Indiana State Department of Health or legal counsel if a state regulation appears to require actions inconsistent with federal law.

Laurie E. Martin is an associate with Hoover Hull LLP. She represents employers, including long term care facilities and hospitals, in state and federal court and before administrative agencies on all employment and employee-benefit related matters including compliance with the Family and Medical Leave Act (FMLA), Title VII of the Civil Rights Act, the Employee Retirement Income Security Act of 1974 (ERISA), the Americans with Disabilities Act (ADA), Genetic Information Nondiscrimination Act (GINA), wage and hour disputes, wrongful discharge and blacklisting. Visit www.hooverhull.com or contact Laurie E. Martin directly at 317-822-4400, ext. 136, to discuss your employment-related needs.

An Update on Reporting of Crimes in Long Term Care Facilities

by Zach Cattell, J.D., IHCA General Counsel

On August 12th, 2011, the Centers for Medicare and Medicaid Services (“CMS”) released an update to the June 17th, 2011, Survey and Certification Memorandum 11-30-NH (the “Memorandum”) that provides guidance to State Survey Agencies (“SSA”), the Indiana State Department of Health (“ISDH”) in Indiana, regarding the reporting of reasonable suspicions of crimes in long term care facilities (“LTC”) (click here for the updated Memorandum: Updated S&C 11-30-NH).

The Memorandum was published due to the passage of the Elder Justice Act that, in part, requires certain covered individuals to report reasonable suspicions of crimes in that occur in LTCs to the ISDH and a local law enforcement agency. The revised memorandum includes a Questions and Answers document, at pages 13-18, and guidance on the content of required notice regarding anti-retaliation provisions.

In addition, on August 31st, 2011, the ISDH released guidance of its own in the form of ISDH Program Advisory LTC-2011-01 (the “ISDH Program Advisory”). This ISDH Program Advisory provides additional guidance for facilities, as well as sample forms and an implementation timeline that facilities should follow.
CMS Questions and Answers

The additional CMS guidance provides, unfortunately, only a few new pieces of information. For the most part the Questions and Answers reiterate information that was already communicated in the original Memorandum. That being said, the following are new guidance from CMS:
• Reporting a reasonable suspicion of a crime does not require “first-hand knowledge” of the events giving rise to the reasonable suspicion.

• Continuing Care Retirement Communities must comply with the reporting requirements and, specifically, notices that are required to be posted must be so posted in the SNF/NF portion of the community and not in each building or unit of the entire community.

• To promote a culture of safety, and to encourage reporting of reasonable suspicions of crimes, it is not recommended that facilities require covered individuals report to the facility when a report of a reasonable suspicion of a crime is made. Anti-retaliation provisions of the reporting requirement reinforce this premise.

     However, this guidance must be balanced with the requirement for facilities to ensure that all alleged violations involving mistreatment, abuse, neglect, injuries of unknown origin and misappropriation of resident property are immediately reported to the administrator and other officials in accordance with current law.

• The 2-hour and 24-hour reporting requirements for reports of reasonable suspicions of crimes (2-hours when events results in serious bodily injury, and 24-hours for all other reports) are based on actual (clock) time, and not business hours.

• Incidents such as falls, bruising/injuries of unknown origin, resident-on-resident abuse, and other events, may be subject to the crimes reporting requirement, but are case specific. Each of these events would be reportable as an incident, but whether there is a reasonable suspicion of a crime depends on the surrounding circumstances.

Indiana State Department of Health Guidance

The ISDH released ISDH Program Advisory LTC-2011-01, which includes several helpful attachments. The ISDH Program Advisory hits many similar points that the CMS Memorandum discusses, but gives specific guidance on the reporting process and contact information for submitting reports to the ISDH, gives recommendations for implementation of the reporting requirements, includes templates for required and recommended postings, a revised Incident Report Form, and an ISDH Q&A document.

The ISDH materials may be located on the LTC Incident Reporting website at http://www.in.gov/isdh/23638.htm (documents are at the bottom of the page under “Program Guidance and Advisory Letters”). Most notably, the ISDH recognizes that the reporting requirements is current law and is in effect. However, the ISDH sets out an implementation timetable in the form of a checklist (see Implementation Checklist for Facilities) that does provide for some additional time for facilities to get up to speed with the law.

Recommendations

LTC facilities should immediately develop policies and procedures implementing the crimes reporting requirements. According to CMS, the law is in effect and should be enforced by State and Federal Surveyors.

Training of covered individuals (owners, operators, employees, managers, agents or contractors of the facility) regarding their individual duty under the requirement is critical. Each facility will want to be sure that each covered individual understands his/her responsibility, how to make a report, how to join a group report if a group report is being made, that the individual is are not to be retaliated against for making a report to the ISDH or local law enforcement and if retaliation occurs how the individual can make a report regarding such retaliation.

LTC facilities need to reach out to their local law enforcement agency, either the county sheriff or city/town police, as applicable, regarding communication of reports. Establishing a relationship with local law enforcement for purposes of reporting reasonable suspicions and understanding what constitutes a crime in the local jurisdiction are key components to implementation.

If you have any questions about the crime reporting requirements, please contact Zach Cattell at 317-636-4341 or zcattell@ihca.org.

IHCA congratulates American Senior Communities on deficiency-free survey

The Indiana Health Care Association (IHCA) would like to congratulate one of its members, American Senior Communities, on one of its facilities, American Village, becoming the first and only nursing home in the state to receive a deficiency-free survey by the Indiana State Department of Health using tough new federal criteria.

Indiana is one of more than a dozen states now using the federally mandated Quality Indicator Survey, initiated in January. The new two-stage survey process requires in-depth investigation, interviews with residents, staff and others and a review of residents’ medical records. It is far more comprehensive than previous surveys, making American Village’s deficiency-free status a significant achievement.

“Congratulations to American Village for all of its hard work and recognition,” said Scott Tittle, President of IHCA. “We are very proud of our members’ commitment to high quality care, and that one of our members is leading the way in QIS.”

American Village, 2026 East 54th Street, is a full-continuum campus offering a wide variety of premiere senior living options.

Indiana owned and operated, American Senior Communities is the largest provider of retirement living and senior healthcare in Indiana, serving fellow Hoosiers for over a decade. American Senior Communities operates over 25 locations in the Greater Indianapolis area and 57 across the state. For more information about American Village and American Senior Communities visit http://www.americansrcommunities.com/.

American Senior Communities is one of the IHCA’s 221 member facilities that care for more than 25,000 of Indiana's geriatric and developmentally disabled citizens, the majority of whom are low-income Medicaid recipients. IHCA is Indiana's largest trade association and advocate representing proprietary, not-for-profit and hospital-based nursing home and assisted living communities, adult foster care and adult day services. For more information on IHCA, visit http://www.ihca.org/.

Memo from AHCA President & CEO Governor Mark Parkinson: "We Must Fight On"

Friday’s news of the final PPS rule dealt us a severe and unnecessary blow. Severe because of the impact it will have on our members, their employees and most importantly, our residents. Unnecessary because AHCA put forth a solution that would have satisfied the goals of the government without threatening our profession.

How could this happen? Here is the CMS line of thinking: CMS intended to spend $31 billion on post-acute care in Fiscal Year 2011; CMS now believes it will end up spending $35 billion in FY 2011. So, for FY 2012, it is reducing spending back to $31 billion. Further, CMS claims that a large part, if not all, of the reason for the $4 billion overpayment was the profession’s behavior. CMS thinks we up coded, gamed the system, or whatever you want to call it. As a result, CMS just doesn’t see the big deal about immediately reducing payments by nearly $4 billion.

Of course, it is a big deal. Most of us find it insulting that SNFs are accused of incorrectly providing inappropriate care. Many of you have not experienced an increase of the magnitude claimed by CMS. We are all concerned that the CMS rule will over-correct for a flawed payment system and result in the government actually spending less than $31 billion in the sector next year. And none of this accounts for the challenges we face with increased costs, drastic Medicaid cuts and the looming threats of additional cuts.

Despite Friday’s result, we must fight on. We cannot allow the impact of this blow to stop us. Our need to work hard, strategically and as a united front has never been greater.


I have directed AHCA staff to take all possible steps to minimize the impact of the rule. Every idea is on the table, and we will thoroughly examine each option, including our legal and legislative options.

Further, we must make certain that this is the last hit that we take this year. Unfortunately, there are still three serious risks that we face. They are:

1. Attempts on the Hill to claw back any unintended payments we received this year.

2. Specific attempts to cut skilled Medicare rates because of persistent arguments that our margins are too high.

3. General cuts to both Medicaid and Medicare that would impact the sector, like cuts in provider taxes and the blended Medicaid rate proposal.

As we develop specific strategies, we will share more information with the membership. At the time, there are at least two ways that you can help us accomplish our goals. First, please continue your political support and activity. Over the last 60 days, our members’ response to our requests for involvement has been stunning. You have sent over 100,000 emails and letters. We have lobbied virtually every Congressional office. This culminated in significant bipartisan support for our balanced approach on the Hill.

The need to exert our political pressure has not diminished just because the final rule has been announced. We need political pressure now, more than ever.

Second, we need examples from members of the economic impact of this rule. CMS states in its rule that it does not believe we will lay people off, freeze wages, stop construction of new buildings or renovations of older ones. We need real world examples of what you have to do to absorb these drastic cuts. Please send those examples to Julie Painter in AHCA Member Services so that we can ensure policy makers understand the effect of this action.

If we let this rule deflate us, it will have beaten us twice. We can’t let that happen. We can’t give up.

It has been said that adversity doesn't build character, it reveals it. How will we react in the face of adversity? Will we give up, walk away and sulk? Or will we channel our disappointment and frustration into an energy to rise up and fight on?

AHCA is ready to rise to the occasion, and with your help, I have no doubt that we can succeed.

CMS Issues Final Rule on Medicare Payments to SNFs

The Centers for Medicare & Medicaid Services (CMS) issued its Skilled Nursing Facility Prospective Payment System (SNF PPS) Final Rule for FY 2012 this afternoon. The American Health Care Association (AHCA) is conducting an in-depth analysis of the final rule, but AHCA's initial review shows cause for concern and extreme disappointment. The rule ignores a unified message from members, caregivers, lawmakers and stakeholders to find a responsible solution to Medicare payments.

Similar to what was first proposed by CMS in late April, the agency will cut Medicare payments by 11.1 percent starting October 1, totaling $3.87 billion. As you know, these reductions are an attempt to return the Medicare system back to budget neutrality for CMS after implementing RUG-IV and MDS 3.0.
CMS also implemented modifications to group therapy and to Change of Therapy (COT) and End of Therapy (EOT) Other Medicare Required Assessments (OMRAs), virtually without any modification from the proposed rule.

Unfortunately, CMS has disregarded AHCA's sound and reasonable approach to implement modest reductions to SNF payments over multiple years. AHCA's proposal would have protected long term care for seniors, while also achieving the government's goal of a budget-neutral payment system. CMS' action also failed to acknowledge the tens of thousands of letters, emails, and phone calls all of you made to let the agency know how damaging such a drastic proposal would be to the profession and the economy.

These are only the initial findings, and the AHCA team is combing through the 300 plus page final rule. But AHCA have already issued a strongly-worded statement demonstrating its disappointment with CMS for issuing such irresponsible public policy. In the coming days, AHCA will provide an overview and let you know what this means for the Association and the profession. But one thing is certain - AHCA will continue to work with CMS and lawmakers on Capitol Hill to implement regulations and policies that are fair to all involved.

Please keep watch for more detailed information very soon. If you have any questions, please contact Elise Smith, esmith@ahca.org, or Bill Hartung, whartung@ahca.org.

Accountable Care Organizations

By Ellen Ferringer, CPA, CAPPM, Katz, Sapper & Miller, IHCA Associate Member
The face of healthcare is changing. "Accountable care organization" is becoming a common term in the industry. What exactly is an accountable care organization? On March 23, 2010, President Barack Obama signed into law the Patient Protection and Affordable Care Act, which empowers the Secretary of Health and Human Services to create a shared savings program to promote accountability of patient care through Accountable Care Organizations (ACO). As defined by the Centers for Medicare and Medicaid Services (CMS), an ACO is an "organization of healthcare providers that agrees to be accountable for quality, cost and overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program who are assigned to it.” Ultimately, Medicare is trying to create an incentive program to reduce its costs while increasing the quality of care provided to patients.

The regulations regarding ACOs are still in proposed form and 427 pages in length. At a very high level, these proposed regulations provide the following requirements of ACOs:

• Provide care for at least 5,000 Medicare beneficiaries (based on their primary care physician)

• Participate in the program for three years, beginning Jan. 1, 2012

• Self-report 65 quality measures to the CMS

• Meet various anti-trust regulations

Under the proposed rule, Medicare would continue to pay healthcare providers for specific services under the Medicare payment systems. The ACO would then receive a share of the cost savings based on their Medicare patient population spending compared to benchmarks determined by CMS. The concept is that by better coordinating patient care between the primary care physicians and the specialists, there will be more information sharing and quality of service will increase, thus reducing costs.

Currently, many physician groups and hospitals are weighing the pros and cons of forming an ACO. Included in this mix are also long-term care facilities. Since they play an important role in keeping hospital readmissions down, long-term care facilities appear to be a perfect partner to hospitals and physicians. CMS estimates there will be 75 to 150 ACOs formed by Jan. 1, 2012. Even with this relatively small number, a huge change in patient care is expected as a result of this Act.

Ellen Ferringer is a director in Katz, Sapper & Miller’s Healthcare Resources Group. For more information, contact Ellen at 317.580.2013 or eferringer@ksmcpa.com.

DOL Issues Bulletin Offering Temporary Solution For Minors Operating Lifts

AHCA/NCAL has been working with the U. S. Department of Labor, Wage and Hour Division (WHD), and State Executives Patti Cullen (MN), Tom Moore (WI), and Shelly Peterson (ND) to obtain clarification to the Child Labor Regulations, Orders and Statements of Interpretation: Final Rule, released on May 20, 2010 that essentially prohibits individuals under 18 years of age from using mechanical lifts in healthcare facilities. View the July 2010 Fact Sheet # 52—The Employment of Youth in the Health Care Industry here.

After a year of discussion, WHD has finally released a Field Assistance Bulletin 2011-3, which states: "While continuing its review of this issue … WHD will exercise its enforcement discretion, and not assert child labor violations involving 16- and 17-year-olds who assist a trained adult worker [someone 18 or older] in the operation of floor-based vertical powered patient/resident lift devices, ceiling-mounted vertical powered patient/resident lift devices, and powered sit-to-stand patient/resident lift devices (lifting devices);" as long as the following conditions are met:

• The child has completed at least the 75 clock hours (if not more) of nurse aide training required under OBRA.
• The child is assisting in the use of the lifting device as a junior member of at least a two-person team that is headed by someone 18 or older.
• As a junior member, the child can set up, move, position, and secure the lifting device. The child may assist a trained adult employee in attaching slings to and unattaching slings from the lifting device prior to and after the lift is completed. The child also may assist an adult in operating the controls. The child may act as a spotter/observer and may position items such as a chair, bed, etc., for the person being lifted.
• As a junior member, the child may not independently engage in "hands on" physical contact with the patient during the lifting process; but instead can only assist in these "hands on" activities when assisting a trained adult.
• The child is not injured while operating or assisting.
• The employer has provided to each child who will assist in the operation of a lifting device a copy of this bulletin.

Reporting of Crimes in Long Term Care Facilities

by Zach Cattell, J.D., IHCA General Counsel

On June 17th, 2011, the Centers for Medicare and Medicaid Services (“CMS”) released Survey and Certification Memorandum 11-30-NH (the “Memorandum”) (for a copy click: S&C 11-30-NH) that provides guidance to State Survey Agencies (“SSA”), the Indiana State Department of Health (“ISDH”) in Indiana, regarding the reporting of reasonable suspicions of crimes in long term care facilities (“LTC”), also known as the “Section 1150B requirements.” The requirement for covered individuals to report suspicions of crimes in LTCs to the SSA and at least one law enforcement agency, as well as requirements on LTCs to notify covered individuals of their duty to report, all stem from the Elder Justice Act that was part of the Patient Protection and Affordable Care Act of 2010.

Summary of the Memorandum

1. Scope and Applicability

The Memorandum has been long expected by the LTC industry and by SSAs and serves as the only official guidance from CMS on the suspicion of crimes reporting requirement. CMS acknowledges that there are “no CMS regulations that apply specifically to section 1150B [the reporting requirements]” and the Memorandum serves to explain the requirements of the new law so that it is implemented without any delay that may be caused due to the rule-making process. CMS notes further guidance will be released that addresses implementation of the Civil Monetary Penalty component of the Section 1150B requirements.

The reporting law applies to all LTC facilities that received at least $10,000 in annual federal funds during the preceding year. The Memorandum specifies that the reporting obligation applies to Nursing Facilities, Skilled Nursing Facilities, hospices that provide services in long-term care facilities and ICFs/MR. Based on the Memorandum it does not appear that CMS has interpreted Section 1150B to apply to assisted living facilities receiving Medicaid waiver funds. Under the new law, a covered long term care facility must:

1. Determine each year whether it received at least $10,000 in Federal funds in the preceding year;

2. Annually notify all covered individuals of the individual’s reporting obligation (covered individuals are owners, operators, employees, managers, agents or contractors of the facility);

3. Post a notice in appropriate and conspicuous locations for employees that details employees’ rights, including information on how to file a complaint with the SSA if an employee is retaliated against for making a report to the SSA pursuant to the reporting requirement;

4. Not retaliate against a covered individual who lawfully reports a reasonable suspicion of a crime under Section 1150B.

The Memorandum then goes on to discuss functions that will be executed by “[a] facility that effectively implements section 1150B,” which are:

1. Coordination with State and local law enforcement to determine what actions are considered crimes;

2. Review existing facility policies and procedures to ensure compliance with existing CMS and State requirements for reporting incidents and complaints (i.e. policies and procedures in place for reporting of abuse, neglect or misappropriation of resident property); and

3. Develop and maintain policies and procedures to ensure compliance with Section 1150B.

Civil Monetary Penalty and exclusion sanctions may apply to individuals who fail to comply with the reporting requirements, to LTC facilities that retaliate against an employee who makes a lawful report, and LTC facilities are ineligible to receive Federal funds for any period they employ an excluded individual due to certain violations of the new law.

2. Covered Individual Reporting

Covered individuals (owners, operators, employees, managers, agents or contractors of the facility) are required to report reasonable suspicions of crimes to the SSA and at least one local law enforcement agency. The required reporting time period depends on whether the reasonable suspicion was based on events that result in serious bodily injury; these suspicions must be reported immediately and no later than 2 hours after the suspicion was formed. All other events giving rise to a reasonable suspicion of a crime must be reported no later than 24 hours after the suspicion was formed.

While each covered individual has the right and duty to report to the SSA and at least one local law enforcement agency, multiple covered individuals may file a single report that includes information about the suspected crime from each covered individual. Each covered individual that joins a multiple-person report should be specifically identified. A multiple-person report may be further supplemented with additional information should additional covered individuals become aware of the incident or events giving rise to a reasonable suspicion of a crime. Thought the multiple-person reporting mechanism may be instituted by a facility, a facility may not prohibit an individual from directly reporting to the SSA or a local law enforcement agency.

3. Survey Agency Actions Based on Reports Received

The Memorandum also provides SSAs with guidance on distinguishing between types of allegations that it may receive from covered individual reports. The allegation categories specified by CMS are (1) Events Giving Rise to a Suspected Crime; (2) Allegations of Individual Failure to Report; and (3) Allegations of Facility Failure to Comply with Section 1150B. In each case, if an SSA receives a report that falls into any of the above three categories, the SSA must assess the reported information and investigate based upon existing CMS policies and procedures for addressing complaints or incidents. Any deficiency citations issued will be ones that are currently specified in existing CMS regulations and guidance.

For example, the Memorandum states that an allegation that a covered individual did not report or were not informed of their duty to report could lead to a F226 tag (failure to develop and/or implement policies and procedures for reporting abuse/neglect) or an F493 tag (failure to develop and/or implement policies and procedures regarding management and operation of the facility).

Association Actions and Next Steps
IHCA and the AHCA have been actively engaged in analysis of the Memorandum, and IHCA has engaged the ISDH to develop further State-specific guidance regarding implementation of the Memorandum in Indiana. While the Memorandum answers several questions that had arisen since passage of the law, open questions regarding what constitutes “reasonable suspicion” and “crime” still need to be addressed in order that LTC facilities are given proper guidance to comply with this very broad law.

AHCA has also released a sample reporting form (click here for a copy) and a sample policy and procedure (click here for a copy) that facilities may use as the basis for their own individualized reporting form and policy and procedure. In addition, the IHCA is considering appropriate steps to take with law enforcement leadership in Indiana to help further define the reporting requirement.

Conclusion

The Memorandum expressly states that SSAs are to focus on “(a) the events giving rise to the reports made under this [the Section 1150B] requirement and (b) the LTC facility’s responsibilities under existing CMS conditions and requirements to report incidents, prevent abuse or neglect, provide quality care and a safe environment, train staff, and similar duties of direct relevance to safety and quality of care.” The IHCA recommends that LTC facilities immediately develop stand alone policies and procedures addressing the Section 1150B requirements, and examine existing policies and procedures addressing the existing CMS requirements and incorporate the new Section 1150B reporting requirements into those policies and procedures.

The above guidance is not intended to be specific legal advice and facilities should seek independent legal counsel when developing facility-specific policies.

The IHCA is able to assist facilities find legal counsel. Please contact Zach Cattell at zcattell@ihca.org or 317-616-9001.

Bed-Hold Policies: What is required of Indiana’s Long Term Care Facilities?

by Zach Cattell, J.D., IHCA General Counsel

IHCA continues to field questions from members regarding facility-level impacts of the decision by the Indiana Office of Medicaid Policy and Planning (“OMPP”) to eliminate reimbursement for bed-hold days. The elimination of reimbursement for bed-holds was effective February 1, 2011, (for a copy of this bulletin, click here) and the Indiana Medicaid State Plan will be amended in the coming months to finalize elimination of reimbursement. OMPP has also posted, and periodically updated, a news summary on IndianaMedicaid.com that discusses the impact of the reimbursement change on Indiana’s long term care facilities and their residents (Click here for the news summary).

More recently, requirements for long term care facilities to maintain updated bed-hold policies were discussed during a panel presentation at the 2011 IHCA Convention & Expo in May. In addition to the above OMPP-issued materials, the IHCA offers the following points for long term care facilities when developing bed-hold policies.

• Facilities must have a bed-hold policy that states whether or not the facility allows a resident to pay to hold a bed during a leave of absence

     o Though facilities are not required to allow a resident to pay to hold a bed, facilities must still have a policy that states whether or not payment for holding a bed is permitted by the facility

• The duration of the bed-hold period must be clearly stated in the facility policy

• Bed-hold policies should state that Indiana Medicaid does not reimburse for bed-holds

• Payment by residents for bed-holds must follow applicable Medicare and Medicaid guidelines regarding billing for non-covered services

• Charges for bed-holds should be set at fair market value and must be equally applied to all residents regardless of payor source

     o Facilities may be at risk for Anti-Kickback violations related to improper inducements to government program beneficiaries if charges for bed-holds are not fair market value and equal application of those charges are not maintained. However, an exception to the Anti-Kickback statute may apply in certain circumstances for bed-hold charges that are unable to be collected. This exception depends on certain elements regarding facility advertisements, other relevant services and financial need of the resident.

• If a resident on leave is expected to return to the facility, regardless of whether they have paid to hold a bed, the facility is not required to discharge the resident

• If a resident is discharged from a facility, however, the facility must permit the resident to return to the first available semi-private bed when (i) the resident continues to qualify for Medicaid, (ii) the resident requires nursing-level care and (iii) the facility is able to provide appropriate care for the resident.

     o A resident may be discharged from the facility for many reasons including, but not limited to, the resident’s failure to pay for a bed-hold or when the bed-hold period expires. Facilities must follow applicable regulations and procedures when discharging a resident.

The IHCA encourages facilities to carefully review their bed-hold policies to ensure compliance with current law and regulation. The above guidance is not intended to be specific legal advice and facilities should seek independent legal counsel when developing facility-specific policies. The IHCA is able to assist facilities find legal counsel. Please contact Zach Cattell at zcattell@ihca.org or 317-616-9001.
IHCA thanks Randy Fearnow and Susan Ziel of Krieg DeVault, LLP for contributions to this article.

"Employee Screening Choices- Know What to Look For"

by Gregory Dupree, USIS, IHCA Associate Member

Enter “Background Check” into any internet search engine and you will be inundated with companies offering their services. Just remember that the Best Price does not always mean Best Value. You should always consider the reputation of the company you are considering as well as the options offered so that you are better prepared to make an informed choice. You should look for companies that offer:

Multiple Automated Searches- these search options should be far-reaching with the ability to “Deep Dive” for information that is not easily retrieved during casual searches such as Education and Employment records. Social media searches such as Face book and Twitter should also be considered.

Multiple Screening Options- there is no “one size fits all” package when it comes to Background Investigations. You should be able to make your selection based on need (ala carte) not just on what is offered. That way you don’t end up paying for what isn’t necessary. The best way to do this is to classify employee positions based on internal security levels. The higher the security level, the more extensive your Investigation should be.

In-Person Interviews- this is the best (and sometimes most expensive) option for getting the most complete and accurate picture of an individual. You should always have this option available to you especially for high profile positions. A dynamic Face to Face interview always has the potential to garner unsolicited but important information.

A final thought to consider is that existing staff should periodically be re-investigated (check with HR about this). Even the smallest life changing event can sometimes alter a currents employee’s character. Remember, hiring and maintaining a good staff requires eternal vigilance.

Gregory O. DuPree is a Program Manager for Health Care and Pharma Solutions for USIS, the largest Background Investigations Company in the United States. He has over 15 years experience in conducting Federal and Commercial Investigations. Greg can be reached at: Gregory.dupree@usis.com. USIS is an Associate member of IHCA and conducts Investigations, Audits and Site Visits in the Federal, Health Care and Pharma arena.

Indiana Medicaid Estate Recovery – Indiana Ready to Get More Aggressive?

by Sean Fahey and Todd Selby, Hall Render Killian Heath & Lyman, P.C., IHCA Associate Member

Recently, the Indiana State Department of Administration, on behalf of Indiana's Family and Social Services Administration (FSSA), posted a Request for Proposals to contract with multiple attorneys for Indiana Medicaid estate recovery. The Request for Proposals is at http://www.in.gov/idoa/proc/bids/rfp-11-84/. It appears Indiana plans to get much more aggressive in Medicaid estate recovery, including opening probate estates. Contracts are scheduled to be awarded September 19, 2011.

The FSSA wants the attorneys selected to perform a broad range of responsibilities including preparing petitions to open probate estates as creditors, filing claims in probate estates, filing liens on real property, and pursuing non-probate assets. Indiana reportedly recovered over $9,700,000 from recipients in 2007.

The Indiana Medicaid estate recovery statute is found at I.C. Sec. 12-15-9-1. Indiana's Medicaid estate recovery laws allow FSSA to collect from probate estate assets, as well as from the non-probate estate assets of a deceased recipient. There can be no estate recovery while a surviving spouse or minor is living. Indiana also has lien laws that allow Medicaid to place liens on real estate owned by a Medicaid recipient. Also, in the event it does not file a lien on real estate held by a recipient, Medicaid can within five (5) months of the date of death open an estate administration, file its claim and force the sale of the real property to pay its claim.

During the 2010-11 Indiana legislative session, FSSA attempted to exempt Medicaid estate claims from I.C. Sec. 29-1-7-15.1(b), which provides that real estate in an decedent's estate cannot be sold to pay claims if an estate is not opened within five (5) months after death. Indiana attorneys testified against this provision and it was removed from legislation passed in the 2010-11 Indiana legislative session. However, the legislature referred this issue to the 2011 summer Probate Code Study Commission to study “how the probate code should be amended to permit the sale of real estate located in Indiana to satisfy a claim by ... [Medicaid, the U.S., or a state or subdivision of the state] against a decedent regardless of whether letters testamentary or of administration are issued within five (5) months of the decedent’s death.” Section 22, Senate Enrolled Act 331.

Long term care facilities should keep Indiana's renewed estate recovery focus in mind as they consider collecting their receivables that are due from deceased residents. Facilities will want to ensure that they have settled payment issues before a resident dies, as Medicaid will be more active in opening estates and asserting their priority claim.

If you have questions about this matter, please contact Todd J. Selby at (317) 977-1440 or Sean Fahey at (317) 977-1472 at Hall Render Killian Heath & Lyman, P.C.

Repaying Medicaid Overpayments – New Procedures and Requirements

A significant change in how the State of Indiana (the “State”) recoups alleged overpayment of Medicaid funds from providers takes effect on July 1, 2011.  The new law, which was part of the Budget Bill (HEA 1001), will dramatically change the procedure for all Medicaid providers when contesting a recoupment attempt by the State for allegedly overpaid Medicaid funds.  The statute, codified at IC 12-15-13-3.5 and -4, addresses the new recoupment procedures for non-institutional providers and institutional providers and will be administered by the Family and Social Services Administration through the Office of Medicaid Policy and Planning.
The Current Law (soon to be expiring)

Under current law, which is only effective through the end of June 2011, when a Medicaid provider is notified by the State that an overpayment may have occurred, the provider has three options when contesting the notice of overpayment.  The provider can:

• Pay the money back within 60 days with interest;
• Pay the money back within 60 days and request a hearing; or
• Not pay the money back and request a hearing.

If the provider chose the third option and lost the appeal the provider is required pay interest on the amount from the date of the notice of overpayment.  Many providers chose to exercise their rights under this third option.

The New Law

As applied to Indiana’s comprehensive care facilities, the new Medicaid overpayment statute provides a preliminary administrative reconsideration process during which the State and facility discuss draft audit findings that may lead to the State issuing a final recalculated Medicaid rate in order to recoup alleged overpayments from the facility.  It is critical that facilities take action at each step in the new process to protect their rights.  Failure to act may result in waiver or surrender of appeal rights.

Under the new law, a facility that receives draft audit findings from the State can provide comments to the State and then the State will issue a preliminary recalculated rate for the facility.  Once the facility receives this preliminary recalculated rate, the facility has 45 days to request administrative reconsideration of the preliminary rate.  A facility that receives a preliminary recalculated rate must request administrative reconsideration or the facility will not be permitted to appeal the final determination of the State.

Once the State and the facility conclude the reconsideration hearing, and if the State believes an overpayment has occurred, the State will notify the facility in writing that the State believes an overpayment has occurred and is issuing a final recalculated Medicaid rate.  The final recalculated Medicaid rate will be implemented retroactively upon the next payment cycle.

If a facility disagrees with the final recalculated rate the facility may file an appeal with the State no later than 60 days after issuance of the notice of final recalculated Medicaid rate.  If, after the appeal and hearings, the State determines that no overpayment has been made, then the State must pay back to the facility the amount of the overpayment, any interest paid by the facility to the State, and interest on the overpayment amount and interest paid by the provider.

Conclusion

With this significant change to the procedure that the State must utilize to recoup alleged overpayment to providers, there are bound to be problems that occur.  It is possible that this new statute, with the reconsideration process, will provide for a more transparent approach to settling alleged overpayments of Medicaid funds.  However, the reconsideration process in the new law is not yet tested and all Medicaid providers should take great care in handling each step of the process, which will help in any subsequent appeal pursued by a provider.

Please contact Zach Cattell at zcattell@ihca.org or 317-616-9001 with comments, questions or for more information.

ISDH Online Survey Report System Now Live

The Indiana State Department of Health (ISDH) Survey Report System is now operational. The Survey Report System is first being introduced to comprehensive care facilities (nursing homes) and residential care facilities (licensed assisted living). The system will later be expanded to other health care facilities, agencies, and centers.

The ISDH Survey Report System will be used by the ISDH to send health care facilities the "Survey Report Form 2567" along with survey letters and documents issued by the ISDH as part of the licensing and certification process. Here are some of the things that the system will accomplish.

- The system will eliminate the need for mailing surveys and documents.

- The system will enable the health care facility to immediately view and print survey reports and survey related documents through the online system.

- The system will allow health care facilities to complete and submit the Plan of Correction (POC) online and upload supporting documents as part of the Plan of Correction.

- The survey report with its plan of correction will be posted online on the ISDH Consumer Report.

- The online system increases the efficiency of the survey process allowing for quicker responses.

The ISDH Survey Report System was implemented on March 1, 2011. All future surveys for comprehensive care facilities (nursing homes) and residential care facilities (licensed assisted living) will utilize the new system. Upon entry into the facility, surveyors will confirm email addresses and provide facilities with access information. All survey reports and survey-related documents will be posted to the Survey Report System and facilities must submit their plan of correction, if required, through the system.

The ISDH created a Survey Report System User's Manual. The User's Manual is designed to assist health care facilities in utilizing the Survey Report System. The Manual provides a step by step explanation of the system using screenshots.

Facilities will access the ISDH Survey Report System through the ISDH State Health Gateway. Instructions for accessing the State Health Gateway are included in the User's Manual and will be provided to facilities when surveyors begin a survey. The system will require a username and password which will be provided to the facilities by surveyors at the time of the facility's first survey after implementation of the system.

In ISDH LTC Newsletter Issue # 11-04, the ISDH requested facilities to complete a registration form providing the ISDH with the facility email address that they wish to use for this system. Any facilities that have not yet completed the registration form are encouraged to do so. The online registration form is found at www.in.gov/isdh/25053.htm.

The registration is solely to ensure that the ISDH has the email address that the facility wishes to use for survey notifications. The ISDH needs every nursing home to provide the facility email address to which they wish survey document notifications to be sent. A facility may, but is not required to, select a second email address for notifications to be sent. Some facilities may want to use the second email notification address for their corporate office or owners. At the time of entry into a facility, surveyors will confirm these email addresses and provide the facility with the username and password needed to access the system.

If the Indiana comprehensive care facility (nursing home) and residential care facility (licensed assisted living) has not already done so, the facility should complete the following action items:

1. Review the Survey Report System User's Manual.
2. Identify (or create) a facility email address for ISDH survey notifications.
3. Determine an additional office or individual entity that the facility would like to receive ISDH survey notifications.
4. Complete the online registration form at www.in.gov/isdh/25053.htm providing the ISDH with information needed to register your facility into the Survey Report System.

Recently, at least one facility experienced a problem receiving their survey report. The survey system had a glitch that resulted in the facility not receiving their survey report until days before their plan of correction was required. A quick response and resolution was required to avoid a negative outcome for the facility.

Should your facility experience any problems or if you have any questions, please contact any one of the following attorneys who have significant experience in handling licensure and survey issues for LTC facilities:

Lori McLaughlin at lmclaughlin@kdlegal.com or (219) 227-6075

Randall R. Fearnow at rfearnow@kdlegal.com or (317) 238-6279

David E. Jose at Djose@kdlegal.com or (317) 238-6211

Melinda R. Shapiro at mshapiro@kdlegal.com or (317) 238-6226

Susan E. Ziel at sziel@kdlegal.com or (317) 238-6244

AHCA Hosts Webinar on ACOs and Post-Acute Care Providers

CMS recently published its proposed rules for accountable care organizations (ACO) in accordance with the Federal health reform legislation which is often referred to as the Affordable Care Act. Under the Act, CMS' has introduced the ACO model in furtherance of its "triple aim" of better care for individuals, better health for populations and lower growth in health care expenditures.

Although most ACO discussions typically concern hospitals and physicians, post-acute care providers are also another important part of the health care continuum that will likely be impacted. On May 18th, in order to broaden these discussions, the American Health Care Association (AHCA) hosted an informative webinar on May 18th which reviewed the proposed ACO rules and the impact and related roles that post acute care providers will have under this proposed model of care.

To request additional information regarding the impact that ACOs will likely have on post acute care providers please contact Susan E. Ziel at sziel@kdlegal.com or (317) 238-6244. For a copy of the AHCA materials, click here.

OIG Cites Improper Use of Anti-Psychotic Drugs in Nursing Facilities

Health and Human Services' Office of Inspector General (OIG) published a report on May 4, 2011 which concerns the improper use of anti-psychotic drugs in long term care. The OIG's review of medical records for elderly nursing home residents during a six-month period revealed that 14% of the 2.1 million elderly nursing home residents had at least one claim for anti-psychotic medications. Of those 14%, the OIG cited that approximately 22% were not administered in compliance with CMS standards. The OIG also questioned at least 50% of these claims to be erroneous, either because the medications were not medically necessary or because their use was associated with off-label uses.

The OIG report communicated numerous recommendations to CMS in order to (1) ensure accurate coverage and reimbursement decisions; (2) improve survey and certification procedures to prevent and detect unnecessary anti-psychotic drug use; and (3) correct all erroneous claims and related payments identified in the OIG report.

According to CMS data, more than 20% of nursing facility residents have a psychiatric diagnosis and as many as one-third of patients admitted to nursing facilities were already taking these medications prior to admission. All of these factors reflect the importance of facility standards and related safeguards governing the care of residents who require anti-psychotic medications as part of their treatment regimen.
To access a copy of the OIG report, go to http://oig.hhs.gov/oei/reports/oei-07-08-00150.asp.

If you would like additional information, please contact Susan E. Ziel at sziel@kdlegal.com or (317) 238-6244.

Regulatory Committee Continues Evaluation of the Health Facility Administrators

The Regulatory Occupations Evaluation Committee (ROEC) met again on May 25, 2011 to continue its evaluation of the Health Facility Administrators Board (HFAB), which issues professional licenses to Indiana Health Facility and Residential Care Administrators. ROEC was formed due to a law passed by the Indiana General Assembly in 2010 that required an evaluation of the need for and function of every professional licensing agency administered by the State of Indiana.

At the most recent ROEC meeting, the committee discussed what the committee’s final report to the Indiana Legislature should contain. Though no agreement was reached on the content of the final report, the following concepts were discussed to be included in the final report:

• Recommend that all license types should be retained as personal accountability is maintained by licensure and there is the potential for consumer harm without licensure

• Recommend that a study of the AIT program be conducted to examine barriers that may exist that reduce the number of available candidates for licensure and evaluate consistency of curriculum for AIT programs

• Recommend that all licensed administrators be required by law to report change of employment to the licensure board (for purposes of obtaining additional data about high turnover, which may correlate to poor performance)

• Recommend that the HFA/RCA licensure program be transferred from the Indiana Professional Licensing Agency (IPLA) to the Indiana State Department of Health (ISDH)

The above recommendations are not yet final and ROEC will meet again next month to hear testimony from the ISDH about the fourth potential recommendation that would move the licensure program from the IPLA to the ISDH. The IHCA will continue to keep a close watch on the ROEC’s progress.

Please contact Zach Cattell at zcattell@ihca.org or 317-616-9001 with any questions or comments.

Regulatory Committee Continues Evaluation of the Health Facility Administrators

The Regulatory Occupations Evaluation Committee (ROEC) met on April 20, 2011 to continue its evaluation of the Health Facility Administrators Board (HFAB), which issues professional licenses to Indiana Health Facility and Residential Care Administrators. ROEC was formed due to a law passed by the Indiana General Assembly in 2010 that required an evaluation of the need for and function of every professional licensing agency administered by the State of Indiana.

At the most recent ROEC meeting, the committee received testimony and recommendations from the Chair of the HFAB, Shelly Rauch who also is a licensed administrator. After discussing with the ROEC members the process by which the HFAB evaluates administrator's performance via CEU audits and examination of Immediate Jeopardy/Sub-standard Quality Care findings from state and federal facility surveys, Mrs. Rauch made several recommendations to the ROEC to improve the HFAB's oversight of Indiana's administrators. The recommendations included:

• Designate a compliance officer to the HFAB who would identify and act upon issues identified in state and federal facility surveys 
• Create a compliance fund, funded by an add-on to the HFA licensure fee, in order to provide the HFAB additional resources to provide education, licensee retraining and to fund the recommended compliance officer 
•  The HFAB is only allocated $15,143 per year to operate even though it generates nearly $80,000 in licensure fees each year
• Require all administrators to report any change of employment to the HFAB in order to monitor excessive employment changes which may indicate poor performance. 
• Study the regulatory structure regarding the Administrator in Training program to remove barriers of entry into the profession.

After receiving the recommendations, the ROEC members engaged in limited discussion, most of which focused upon the link between state and federal facility surveys and administrator performance. Several questions were asked regarding the role of the Indiana State Department of Health in evaluating administrators and whether that department should be more involved.

The next step in the ROEC's evaluation of the HFAB will the writing of a report containing final recommendations of the ROEC as to what changes, if any, should be made to the HFAB in order to further protect Indiana consumers. This final report will be forwarded by the ROEC to the legislature's Health Finance Commission for their review during the summer of 2011.

OIG Releases Unfavorable Opinion on Proposed LTC Pharmacy Joint Venture

The Department of Health & Human Services Office of Inspector General [OIG] issued Advisory Opinion 11-3 on April 7, 2011, concerning formation of a new long-term care pharmacy. OIG concluded that the Proposed Arrangement, described below, could potentially generate prohibited remuneration under the Anti-Kickback Statute, and OIG could impose administrative sanctions on the Requestor, depending on the parties' intent.

Requestor is an existing long-term care pharmacy that provides pharmaceutical products and services primarily to various LTC facilities [LTC Facilities]. Under the Proposed Arrangement, one of Requestor's employees, a pharmacist serving as Requestor's director of business integration and a consultant pharmacist to LTC Facilities, would form a new long-term care pharmacy [Newco] that he would co-own with one or more owners of the LTC Facilities. Dividends or distributions would be paid in proportion to ownership.

Newco would engage in the exact same business as the Requestor. Under the Proposed Arrangement, Newco and the Requestor would enter into a management agreement under which the Requestor would provide all personnel and day-to-day services necessary for Newco to serve its LTC Facility customers. Newco would not have any employees, and would store its entire inventory either with its LTC Facility customers or at the Requestor's facility. The Requestor would make all decisions associated with Newco's operations and Newco's agreements with LTC Facility customers. In exchange for these services, Newco would pay Requestor a management fee based on fair market value. The pharmaceutical products and services that Newco would provide to its LTC Facility customers would include items and services covered and reimbursed by Federal health care programs.

OIG cited its longstanding concerns about certain problematic joint venture arrangements between those in a position to refer business, such as the LTC Facilities here, and those furnishing items or services for which Medicare or Medicaid pays, especially when all or most of the business of the joint venture is derived from one or more of the joint venturers. OIG noted that the Proposed Arrangement is very similar to suspect joint venture arrangements described in its Special Advisory Bulletin "Contractual Joint Ventures", in which a health care provider in one line of business contracts out substantially the entire operation of a related line of business to an existing provider of the related service, and in return receives the profits of the business as remuneration for its federal program referrals. The financial risk of the Proposed Arrangement is minimal, because LTC Facility owners would control the amount of business they refer to Newco.

OIG concluded that it was unable to exclude the possibility that the Proposed Arrangement is designed to permit the Requestor to do indirectly what it cannot do directly - to pay the LTC Facility owners a share of the profits from their pharmaceutical products and services referrals. There is a significant risk that the Proposed Arrangement would be an improper joint venture that would be used as a vehicle to reward the LTC Facility owners for their referrals.

If you would like additional information, please contact Susan E. Ziel at sziel@kdlegal.com or (317) 238-6244 or Anne O'Brien at aobrien@kdlegal.com or (312) 423-9310.

CMS Postpones Launch of National Recovery Audit Contractor Program for State Medicaid Claims

For the past few years, CMS has used private Recovery Audit Contractors (RACs) to recover overpayments from providers participating in the Medicare program. After passage of the health care reform act, however, CMS's authority to hire RAC auditors was expanded to include audits of state Medicaid claims as well. By law, all state Medicaid programs were supposed to have RAC audit programs in place by April 1, 2011. The states must also institute an appeals process for providers disputing the RAC auditors' findings. Not surprisingly, given the states' budgetary strains and operational hurdles, the vast majority of states were not able to comply with this timeframe. CMS recently announced that the implementation deadline will be pushed back to a later date. CMS will announce the new deadline by a final rule to be published later this year.

If you would like additional information, please contact Mark W. Bina at mbina@kdlegal.com or (312) 423-9305.

Annual Assisted Living Regulatory Review

The National Center for Assisted Living released its annual state by state regulatory review for 2011. Even though most states were preoccupied with budget issues in 2010, state policymakers continued developing and refining assisted living/residential care regulations. At least 18 states recently reported making statutory, regulatory, or policy changes impacting assisted living/residentialcare communities. At least six states made major changes including Idaho, Kentucky, Oregon, Pennsylvania, South Carolina, and Texas.

Focal points of state assisted living policy development in 2010 include life safety, disclosure of information, alzheimer’s/ dementia standards, medication management, background checks, and regulatory enforcement. Other areas of change include move-in/move-out requirements, resident assessment, protection from exploitation, staff training, and tuberculosis testing standards.

For a complete copy of the report along with state by state reviews, click here. For additional information, please contact Lori McLaughlin at lmclaughlin@kdlegal.com or 219-227-6075.

CMS to Begin Using New Risk-Based Screening System for Enrolling Providers/Suppliers

In follow-up to its February 2, 2011 final rule, CMS will implement a risk-based screening system for newly enrolling and revalidating providers and suppliers in the Medicare program on March 25, 2011. Under this new system, as required by PPACA, all providers and suppliers will be assigned to one of three screening categories—limited, moderate, and high. These categories represent the level of risk for fraud, waste, and abuse to the Medicare program for the particular category of provider/supplier, and determine the degree of screening to be performed by the Medicare Administrative Contractor (MAC) that will process the enrollment applications.

Providers/suppliers in the “limited” screening category will include, but not be limited to, physicians, ASCs, hospitals, and SNFs. Providers/suppliers in the “moderate” screening category will include ambulance service suppliers, community mental health centers, hospices, IDTFs, and physical therapists enrolling as individuals or as group practices. “High” risk providers/suppliers include newly-enrolling DMEPOS suppliers and newly-enrolling home health agencies.

The enrollment screening procedures used by the MACs will vary depending upon the three categories described above. Screening procedures for the “limited” screening category will essentially be the same as those currently in use, including licensure verification and database checks, such as NPI and Social Security number verification. For the “moderate” screening category, screening procedures will include all current screening measures, as well as a site visit. For the “high” screening category, screening procedures will include all current screening measures, a site visit and, in the future, a fingerprint-based criminal background check of law enforcement repositories.

For additional information, please contact Leeanne R. Coons at lcoons@kdlegal.com.

HHS Proposed Rule To Modify Prohibition on Payment of FFP for Data Mining

To increase effectiveness of State Medicaid Fraud Control Units (MFCU) in eliminating Medicaid fraud, on Thursday, March 17, 2011, the Office of Inspector General issued a proposed rule to permit Federal Financial Participation (FFP) for data mining activities. For purposes of the proposed rule, data mining refers to electronically sorting Medicaid claims through statistical models and intelligent technologies to uncover patterns and relationships contained within the Medicaid claims activity and history to identify aberrant utilization and billing practices that are potentially fraudulent.

Under the proposed rule, the conditions under which an MFCU may claim FFP in costs of data mining include the following: (1) The MFCU describes the duration of the data mining activity and the amount of staff time to be expended; (2) the MFCU identifies the methods of cooperation between the MFCU and Medicaid agency, and between the MFCU and review contractors selected by the CMS Medicaid Integrity Group; and (3) MFCU employees engaged in data mining receive specialized training in data mining techniques.

HHS is soliciting public comments on this proposed rule until 5 p.m. on May 16, 2011.

CMS To Issue Guidance for Implementation of Reporting Requirements of the EJA

A letter dated March 11, 2011 from the Director of The Center for Medicare and Medicaid Services (CMS) establishes that CMS will issue further guidance on necessary procedures for implementation of reporting requirements contained in the Elder Justice Act of 2009 (EJA). The EJA, as part of the PPACA, adds new provisions and specific Federal nursing home requirements by amending various sections of the Social Security Act (SSA). The primary objective of the EJA is to detect, prevent and prosecute elder abuse, neglect, and exploitation.

The reporting crimes requirement of the EJA requires each individual owner, operator, employee, manager, agent, or contractor of long term nursing homes receiving at least $10,000 in annual federal long term care funding, to report to the Secretary of HHS and local law enforcement entities any reasonable suspicion of crimes occurring in such facility. Reports of reasonable suspicion of a crime must be made to the Secretary and at least one local law enforcement entity within two hours of suspicion if there is serious bodily injury, and within twenty-four hours of suspicion if no serious bodily injury has occurred.

The EJA also requires compliance with enhanced prohibitions against retaliation for reporting suspected criminal acts. A facility is prohibited from retaliating, discriminating, or filing a complaint or a report against an employee who makes a report, causes a report to be made or takes steps in furtherance of making a report according to the EJA’s requirements. Failure of a covered individual to report a suspected crime results in a civil money penalty of up to $200,000, and may cause exclusion from participation in any Federal health care program. If failure to report results in further injury to a victim of the crime, the civil money penalty increases to $300,000.

New CMS Civil Monetary Penalty Rules Require LTC Facilities to "Pay First and Appeal Later"

Last week CMS published new federal regulations for nursing homes that will significantly change the way the government imposes and collects civil monetary penalties (“CMPs”). The regulations implement changes first mandated by Section 6111 of the health care reform law and become effective on January 1, 2012. Some of the key provisions of the regulations include:

• Mandatory Upfront Payment of CMPs. Currently facilities may appeal a CMP imposition of remedies notice and need not pay the CMP until after all administrative appeals have been exhausted. Under the new regulations, facilities must pay the CMPs before the appeal is finally resolved and within certain specific deadlines.

CMS will hold all CMPs in an escrow account pending the facility's appeal. If the facility wins the appeal, CMS will return the CMP to the provider with interest once the decision is final. Additionally, CMS may extend the time period for payments of the CMP into escrow if it finds immediate payment would create a “substantial and undue financial hardship on the facility.” If the facility does not timely pay the disputed CMP into escrow after receiving a demand, CMS may setoff the CMP amount from sums later due the facility.

• CMPs Reduced 50% For Self-Reporting and Correction of Deficiencies. The new regulations also encourage facilities to self-report deficiencies by giving a 50% CMP reduction incentive if certain conditions are met. This reduction does not apply to Intermediate Jeopardy tags or non-compliance showing a pattern of harm, widespread harm to residents, or non-compliance resulting in a resident’s death. Additionally, the 50% reduction is not available for any deficiency existing in a previous survey.

To qualify for the 50% reduction, the facility must:

• Self-report the non-compliance to the State or CMS before it is identified by surveyors or before the government receives a complaint.
• Correct the deficiency within a certain number of days of identifying the non-compliance or when the CMP is imposed.
• Waive its right to a hearing regarding the deficiency and penalty.

• Opportunity for Independent IDR Process. If CMPs are assessed and are eligible for payment to the escrow fund, the facility has the opportunity to request a new “independent” IDR process. This IDR is a new alternative to the current State IDR process. CMS calls this IDR “independent” because it would be run by a separate State agency that must be approved by CMS.

CMS has announced additional guidance interpreting these regulations will soon be published in the State Operations Manual. Although these revised rules do not go into effect until January 1, 2012, facilities should prepare now for the significant changes this new long term care law will have on existing CMP appeals strategies. For additional information on these new regulations or other issues affecting Long Term Care facilities, please contact Mark Bina at mbina@kdlegal.com or 312-423-9305.

SNF Claims Incorrectly Denied

CMS announced that when the 2011 Annual Update of Healthcare Common Procedure Code System (HCPCS) Codes for Skilled Nursing Facility Consolidated Billing was implemented in January 2011, a few codes were not included in the claims processing system edits. A correction was implemented on Monday, March 14, 2011. Providers who submitted claims for these services before Monday, March 14, 2011 may have had claims incorrectly denied. Providers who believe they received an incorrect denial should contact their Medicare Carrier or Medicare Administrative Contractor to have the claims reopened and reprocessed. Claims submitted after March 14, 2011 should process correctly. For a copy of the CMS notice and a listing of the claims click here.

For additional information, please contact Lori McLaughlin at lmclaughlin@kdlegal.com or 219-227-6075.