Tag Archives: Medical Necessity

OIG Opines that Charities Allowed to Help with Patients’ Insurance Obligations

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financial hardshipBy: Jacqueline Bain

In the healthcare business, giving a patient a break on a health insurance copay is often viewed as suspicious. The reasoning for the suspicion is that the financial incentive may give one provider a competitive advantage over another, or persuade a patient to seek services that might not be medically necessary.  Moreover, any person who interferes with a patient’s obligations under his/her health insurance contract may be viewed as tortuously interfering with that contract. However, in an advisory opinion issued on December 28, 2016, the OIG opined that, in certain instances, a non-profit, tax-exempt, charitable organization could provide financial assistance with an individual’s co-payment, health insurance premiums and insurance deductibles when a patient exhibits a financial need.

The party requesting the advisory opinion was a non-profit, tax-exempt, charitable organization that did not provide any healthcare services and served one specified disease. The non-profit, tax-exempt, charitable organization is governed by an independent board of directors with no direct or indirect link to any donor. Donors to the non-profit, tax-exempt, charitable organization may be referral sources or persons in a position to financially gain from increased usage of their services, but may not earmark funds and or have any control over where their donation is directed. Continue reading →

ASAM & Cigna to Collaborate on Performance Measures in Addiction Treatment

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cigna asamBy: Karina Gonzalez

ASAM and announced a collaborative effort with  Brandeis University to test and validate three ASAM performance measures for addictions treatment. ASAM hopes that this project will provide measure testing of performance measures that will be accepted and adopted in the treatment of patients with addiction.

Three measures will be tested using two years of de-identified Cigna claims data  for  substance abuse.  The measures to be  tested in the study will be: use of pharmacotherapy for individuals with alcohol use disorders; pharmacotherapy for individuals with opioid use disorders and follow-up after withdrawal.  This is expected to be a six month project. Continue reading →

Addiction Treatment Attack by Payers Grows

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money viseBy: Jeff Cohen

Addiction treatment providers continue to react to an assault by payers to run them “out of town.”  The first round of attacks (in the Fall of 2014) focused on the practice of copay and deductible write offs.  The phrase cooked up by lawyers for Cigna, “fee forgiveness,” wound its way into the courts system in Texas in a case (Cigna v. Humble Surgical Hospital, Civ. Action No. 4:13-CV-3291, U.S. Dist. Ct., S.D. Tex., Houston Division) against a surgery center, where Cigna argued that the practice of a physician owned hospital in waiving “patient responsibility” relieved the insurer from paying ANYTHING for services needed by patients and provided to them.  Though the case did not involve addiction treatment providers, it gave addiction treatment lawyers a look into what was going to come.  The same argument made in the Texas case was the initial attack by Cigna in a broad attack of the addiction treatment industry, especially in Florida.

As addiction treatment providers fielded Cigna’s “fee forgiveness” attack in the context of “audits,” providers held firm to the belief that justice would prevail and that they would soon restore a growing need for cash flow.  “If we just show them that we’re doing the right thing,” providers thought, “surely they will loosen up the purse strings.”  After all, this was a patient population in terrific need of help, with certain [untested] protection by federal law (the Mental Health Parity Act). Continue reading →

Audit Decisions Leading to Absurd Outcomes

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healthcare businessBy: Karina Gonzalez

Commercial plans continue their audit activity in 2016 demanding many changes and adjustments yet giving little in return. The 2015 audits have not been completed for the majority of substance abuse providers in South Florida, yet the commercial plans have arbitrarily stopped paying new claims even though it takes them at least 6 months to complete a post payment audit.  If and when a provider finally gets an audit result, payors are imposing requirements that just are impossible to meet.

Payors do not appear to be paying attention to the public health crisis of substance abuse addiction and the ever growing need for treatment.   The assumption is being made by the payors that all providers in this space are over utilizing services and engaged in fraudulent practices, despite the reality that  many providers are doing just the contrary.    Continue reading →

Medical Necessity and Payment: Who Decides?

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medical necessity kpgBy: Karina Gonzalez

There is nothing readily understood about the term medical necessity.  In healthcare it is the “overarching criterion for payment”.  There is no payment for services or supplies if there is no medical necessity to support it.   Today, every provider at some time is faced with a denial because of lack of medical necessity.  Physician providers will usually hear that payors do not get in the way of the physician-patient relationship.  Payors typically state that they never tell a physician how to practice medicine and a denial based on lack of medical necessity is for purposes of payment only.  However, what provider, on a routine basis, will continue to order care and services which medically unacceptable and not supported for payment purposes?

The definition of medical necessity varies from one commercial plan to another. Federal law such as Medicare has its definition and so does state law under programs such as Medicaid.  Various medical associations such as the AMA also define medical necessity.

Generally, medical necessity refers to services or supplies which are required for the treatment of an illness, injury, diseased condition or impairment and which is consistent with a patient’s diagnosis or symptoms and are in accordance with generally accepted standards of medical practice.  Services or supplies must not be ordered only as a convenience to the patient or provider. Of course care and services which are investigational or unproven are not considered medically necessary. Continue reading →

Compounding Pharmacy Shells Out $3.775 Mil to Settle False Claims Suit

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bonus calculationA Jacksonville compounding pharmacy has agreed to pay $3.775 million to settle false claims allegations that it defrauded TRICARE. MediMix Specialty Pharmacy billed TRICARE for compounding pain prescriptions that came from an improper referral source. MediMix’s top-prescriber over a period of five years was also married to one of MediMix’s senior vice presidents. MediMix itself was one of TRICARE’s top billers for compounded pain medications.

Since the federal law limiting physician self-referrals, 42 U.S.C. 1395nn (more commonly called the “Stark law”) does not apply to TRICARE, the government proceeded under a law entitled Administrative Remedies for Fraud, Abuse, and Conflict of Interest, 32 C.F.R. 199.9, which is applicable for claims submitted to CHAMPUS and TRICARE. This law is much more broad than the Stark law. While the Stark law contains specific exceptions, this law does not. Continue reading →

Medical Director Supervision Restrictions

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so 2014By: Karina Gonzalez

Medical Directors are used in an administrative capacity to oversee all medical services and care, specifically referring to substance abuse programs and services.  Increasingly, commercial healthcare plans are targeting their role in addictions treatment facilities and denying payment of claims based on audit findings that Medical Directors in Florida may be responsible for far too many treatment facilities and too many patients.

Does Florida have any specific requirements or published guidance on the number of treatment facilities or number of patients for which responsibility falls to the Medical Directors in addictions treatment?

Florida’s Administrative Code directed to substance abuse programs and services does not have any directive which talks about a restriction on the number of facilities or patients recommended for oversight by a Medical Director.  It specifies that addictions receiving facilities, detoxification, intensive inpatient treatment, residential treatment, day or night treatment with host homes and medication and methadone maintenance treatment must designate a Medical Director who oversees all medical services. This Medical Director must hold a current license in the state of Florida.  Continue reading →

Standing Orders in Drug Treatment Programs: How to Avoid Waving a Red Flag

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so 2014By: Karina P. Gonzalez

Medical necessity is the driving force for the payment of any service, but is especially worth noting when discussing laboratory testing. Standing Orders for urine drug testing in residential treatment settings are not prohibited, per se, but this practice must be built upon detailed policies and procedures that are precisely followed and are directed to individual patient needs.

The following conditions may help to determine whether Standing Orders are appropriate in a residential treatment setting: Continue reading →