Fundamental in Healthcare Law Webinar Series - March 16, 2022

1. Fundamentals in Healthcare Law Curriculum
2021 – 2022 WEBINAR SERIES
PA R S O N S B E H L E . C O M
N AT I O N A L E X P E R T I S E . R E G I O N A L L AW F I R M .
Medicare Basics
Wednesday, March 16, 2022

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Legal Disclaimer
This webinar is based on available information as of March 16, 2022,
but everyone must understand that this webinar is not a substitute for
legal advice. This presentation is not intended and will not serve as a
substitute for legal counsel on these issues.

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Presenter
• J. Kevin West
208.562.4908
kwest@parsonsbehle.com

5. A. The Medicare Program

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History of the Medicare Program
• 1965 Social Security Act Amendments created:
 Medicare Part A (hospital insurance)
 Medicare Part B (medical insurance)
 Medicaid
• 1997 Medicare Part C begins
(Medicare Plus Choice  Medicare Advantage)
• 2003 Medicare Part D begins coverage for prescription drugs
• 2010 Affordable Care Act
• 2016 MACRA Reforms

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The Medicare program
Health and Human Services
Centers for Medicare & Medicaid Services
Medicare
administrative
contractors
Medicare Advantage
Companies
State Medicaid
Agencies
Prescription drug
contractors
Parts A&B
Part D
Part C

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Medicare Terminology
“PROVIDER”
“SUPPLIER”
an institutional healthcare provider which furnishes Part
A services (e.g., hospitals, nursing homes, home health)
Outpatient healthcare providers who furnish Part B
services (e.g., physicians, ambulatory surgery centers,
DME suppliers, dialysis)

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A/B MAC Jurisdictions as of October 2017

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Medicare Program – 3 key aspects
1. Eligibility: Who is covered?
2. Benefits: What is covered?
3. Payment: When and how much does Medicare pay?

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1. Who is eligible for Medicare?
85% of Medicare
population
• Receipt of SSDI for 24 consecutive months
• Persons with ALS (Lou Gehrig’s disease)
• Persons receiving treatment for end-stage renal
disease (3 month waiting period)
• Age 65 or older, and
• US citizens
• Legal alien admitted for permanent residence who
has resided in US for 5 years
• Has enough credits to be eligible for Social Security
15% of Medicare
population

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Medicare Enrollees
In 1967 – 19.5 million enrollees;
In 2000 – 39.5 million enrollees;
In 2003 – 40.4 million enrollees;
In 2010 – 47.2 million enrollees;
In 2020 – 62.6 million enrollees;
In 2040 – 83.8 million enrollees (est);
In 2060 – 94 million enrollees (est);
Ober, Kaler, Grimes & Shriver

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2. Benefits: Medicare “Parts”
Part A
• Covers physician services, outpatient
care, lab services, diagnostic testing
home health services
• Monthly premium is scaled depending
on income ($135 to $460/month)
• Deductible and (20%) co-pay
Part B
• Hospital coverage
• No premium, only deductible and co-pay
(if you paid Medicare taxes for at least 10
years)

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Medicare “Parts”
Part C
• “Medicare Advantage Plans”
• A private sector alternate coverage to
Part A and B
• Run by private companies (approved by
govt.)
• “Capitation”: Federal government pays a
set amount to the plan (instead of paying
directly for services)
• Private company assumes the risk as to
costs, but can offer lower premiums
22 million people enrolled as of 2020 (1/3 of all Medicare beneficiaries)

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Medicare “Parts”
Part D
Prescription Drug Coverage
• began in 2003
• Coverage is optional; monthly
premium and annual deductible
(except for indigent)
• provided by private insurance
companies

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Medicare Supplemental Insurance Policies
• “Medigap” policies designed to cover Medicare deductibles, co-pays
and services not covered by Medicare
• Regulated by the Federal government

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Coverage – what is not covered?
Medicare Parts A and B
• Cosmetic Surgery
• Services Furnished by Immediate Relatives
• Dental Services
• Flat Foot Conditions, Routine Foot Care
Ober, Kaler, Grimes & Shriver

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3. Payment
• Hospital services: payment based on Diagnosis-Related Group (DRG)
(i.e. the patient’s diagnosis, age, complications, co-morbidities)
Hospital receives an estimate of what services cost (regardless of actual
amount)
• Physician services: a complex evolving formula

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Physician Payment
• Each service assigned a value based on
1) physician work;
2) malpractice insurance costs; and
3) practice overhead, all of which are adjusted by geographic location
• MACRA Reforms in 2016: added quality measures to the physician
comp formula (payment adjusts up or down as much as 9%)

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Medicare Advantage
• Administered by private insurance companies
• Must provide all Medicare benefits, but may provide additional
benefits
• More restrictive provider networks
• Provider rights differ from those with traditional Medicare

21. B. Medicare Audits and Investigations

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Medicare Audits and Investigations
• Healthcare providers who participate in the Medicare Program
must accept significant regulatory and oversight burdens
• Audits and investigations are common

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Types of Audits
Government
Federal
Coding & Billing
MAC
RAC
CERT
ZPIC
Medicare Suspension
and Revocation
OCR HIPAA
Meaningful Use PQRS MIPS
OSHA
ADA/Civil Rights
Quality Improvement
Organization (QIO)
State
Medicaid
State Licensure Board
Non-Government
Commercial
Insurance
Medical Review
Special Investigations Unit (SIU)
Revocation/Termination Actions
Managed Care
Organizations
Medicare Advantage
Revocation/Termination Actions
Medicaid Managed Care

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Types of Audits
Government
Federal
Coding & Billing
MAC
RAC
CERT
ZPIC
Medicare Suspension
and Revocation
OCR HIPAA
Meaningful Use PQRS MIPS
OSHA
ADA/Civil Rights
Quality Improvement
Organization (QIO)
State
Medicaid
State Licensure
Board

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Impact of EHR
• Has caused decrease in quality of medical records
• Not being used properly
• More time consuming to do it right
• Higher risk of cloning
• Use of “medical scribes”
- How to document use of scribes

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War Stories – Strange but True
• “I feel your pain”
• Big Brother is watching
• Who are those guys in orange vests hiding in the bushes?
• Everything but the kitchen sink

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War Stories – Strange but True
• A 40-hour day
• “I see dead people”
• Photocopier medical records

28. C. Suspension, revocation, exclusion,
preclusion and other horrors

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• The Federal government has an array of administrative sanctions it
may use against health care providers
• Providers often have limited due process rights in challenging these
sanctions.

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Suspension
• CMS may place reimbursements in a suspense account while a
provider is being audited/investigated
• Purpose is to accrue funds which the government can apply (offset)
to an overpayment
• Typically lasts 6 months, but can be extended
• Requires only “credible evidence of fraud”
• A provider can submit a rebuttal, but has no other appeal rights

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Revocation
• A sanction by which a provider’s Medicare participation status is
revoked
• Providers have appeal rights, but judges give great deference to
CMS

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Reasons for Revocation
1. Failure to comply with Medicare enrollment requirements
2. Certain criminal convictions (felonies)
3. Providing false information on Medicare enrollment application
4. On-site review shows provider is not operational
5. Misuse of billing number
6. Abuse of billing privileges
 Billing for services where the beneficiary is deceased
 A pattern or practice of submitting claims that do not meet CMS
requirements

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Reasons for Revocation
7. Failure to provide CMS contractors with access to medical records
8. Improper prescribing practices
9. Failure to pay a debt owed to CMS
10.“Affiliation” that poses an undue risk to the Medicare program

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Exclusion
• Provider is barred from participating in Medicare program
• Grounds for exclusion:
Permissive exclusion
Mandatory exclusion
• Provider is listed on OIG databank
• Period of exclusion: from 1 to 10 years

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Grounds for Exclusion
A. Mandatory
1. Conviction related to the Medicare program
2. Conviction related to patient abuse
3. Felony conviction related to health care fraud
4. Felony conviction related to controlled substances

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Grounds for Exclusion
B. Permissive Exclusion
1. Any conviction related to fraud
2. Any conviction related to obstructing an investigation
3. Misdemeanor conviction related to controlled substances
4. License revocation or suspension
5. Failure to grant access to CMS

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Preclusion
• Beginning April 1, 2019, all providers who are excluded or revoked
by Medicare are placed on the “Preclusion List”
• Providers on the Preclusion List cannot receive reimbursement from
Medicare Advantage Plans

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The Domino Effect of Medicare Sanctions
• Providers who are excluded or revoked by Medicare may be –
Precluded from Medicare Advantage
Barred from Medicaid
Barred from commercial insurance plans
Disciplined by state licensure boards

39. D. “Opting Out” of Medicare

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Opting Out
• Provider sends notice to Medicare
• Opt out period is two years; you can renew for successive two-year
periods
• Must notify patients in writing that Medicare cannot be billed for any
part of charges
• “Private Contract” between doctor and each patient must be signed

41. Questions?

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Thank You
• J. Kevin West
208.562.4908
kwest@parsonsbehle.com