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Federal Medicaid match matters to state’s healthcare providers

Introducing Becky-Pasternik-Ikard

Rebecca “Becky” Pasternik-Ikard is a lawyer, a nurse and a Medicaid program director who brings decades of experience to assist Phillips Murrah healthcare clients in copy with reimbursement, including negotiating payments, audits and appeals, and other regulatory issues related to governmental payments of providers.

In this article, Oklahoma City Attorney Rebecca Pasternik-Ikard answers questions about state and federal government’s role in funding Oklahoma’s Medicaid program.

What is the Federal Medical Assistance Percentage (FMAP)?

The Federal Medical Assistance Percentage is the federal government’s share of the expenditures for medical services and administrative costs for a state Medicaid program and is often called the “federal match.”

Why does it matter to Oklahoma’s healthcare providers?

FMAP matters because each state’s Medicaid program is funded jointly by state and federal dollars. Generally, states receiving a higher FMAP for medical services need fewer state dollars. But a state must have state dollars to leverage federal matching dollars. On a quarterly basis, a state submits to the federal government its Medicaid expenditures paid by state dollars seeking to “draw down” the federal matching dollars.

How often does the FMAP change?

The FMAP for medical services for all states is calculated annually by U.S. Department of Health and Human Services (HHS), based on a formula in the Social Security Act, and is effective from Oct. 1 through Sept. 30 of each year. The FMAP varies from state to state; it can be no lower than 50% and no higher than 83%. So, for every $1 states spend on Medicaid, states can “draw down” at least $1 from the federal government. However, the FMAP for a state’s Medicaid administrative costs is fixed, generally at 50% FMAP. States do receive enhanced FMAP for certain populations, services and a variety of administrative functions.

How does the FMAP specifically impact physicians, hospitals and other healthcare providers?

Fluctuations in the FMAP for medical services can have significant impact on all healthcare providers. Significant increases often allow a state to restore, increase or add benefits compensable under the Medicaid program, as well as adjust upward the rates paid to providers. Conversely, depending on a state’s ability to offset the loss of federal funds, a decrease in the FMAP can trigger the elimination or reduction in certain benefits provided to Medicaid enrollees, as well as a decrease in provider rates.

How is the FMAP for medical services calculated?

The FMAP is based on a rolling three-year average of the per capita income of each state as compared to the national average per capita income. However, there is a lag in the data used. For instance, for FY 2019 (effective Oct 1, 2018-Sept. 30, 2019) the FMAP calculation for states was based on state per capita personal income data for 2014, 2015 and 2016. Generally, what this means is that for states with lower per capita incomes relative to the national average, the federal government contributes more to the Medicaid program. Conversely, the federal government contributes less to the Medicaid program in those states with higher per capita incomes. However, the formula is not responsive quickly when a state experiences an economic downturn.

How does the FMAP work in Oklahoma?

With the exception of the FY 2014 FMAP of 64.02%, Oklahoma’s FMAP declined overall from 64.00% in FY 2013 to 58.57% in FY 2018. Oklahoma experienced the largest cumulative FMAP decrease in the nation over this period. This significant loss of federal dollars prompted the Oklahoma Health Care Authority (OHCA) to implement administrative and operational strategies to continue to operate the Medicaid program, resulting in physician and other provider rate reductions of 7.75% in July 2015 and 3% in January 2016. From FY 2018 to FY 2019, Oklahoma had the greatest FMAP increase of any state of 3.81%, from 58.57% ($1.43 in federal dollars for every state dollar spent in medical services) to 62.38% ($1.66 in federal dollars for every state dollar spent in medical services). This influx of federal matching dollars and OHCA’s management of its administrative and program budgets allowed OHCA to restore the last provider rate reduction of 3%. From FY 2019 to FY 2020, Oklahoma experienced another significant FMAP increase of 3.64% from 62.38% ($1.66 in federal dollars for every state dollar spent in medical services) to 66.02% ($1.94 in federal dollars for every state dollar spent in medical services). Once again, provider rates were increased. The good news is that, due to Oklahoma’s experience with shifting FMAPs, a Rate Preservation Fund of $29.4 million was created this year, to help offset future FMAP decreases and mitigate potential provider rate reductions.

Rebecca Pasternik-Ikard is an attorney at Phillips Murrah.

Medicaid, work and community engagement

This column was originally published in The Journal Record on November 27, 2019.


Introducing Becky-Pasternik-Ikard

Rebecca “Becky” Pasternik-Ikard is a lawyer, a nurse and a Medicaid program director who brings decades of experience to assist Phillips Murrah healthcare clients in copy with reimbursement, including negotiating payments, audits and appeals, and other regulatory issues related to governmental payments of providers.

By Phillips Murrah Of Counsel Attorney Becky Pasternik-Ikard

Physicians, hospitals and other health care providers continue to experience not only shrinking reimbursement rates, but also an increasingly formidable regulatory presence. A recent controversial Centers for Medicare and Medicaid Services policy reform permits states to require certain Medicaid beneficiaries to engage in meaningful work or in volunteer activities as a condition for continued eligibility.

This policy is a fundamental shift in Medicaid eligibility, eliciting criticism from the health care community that employment should not be a condition for coverage and access to medical treatment.

Although overall Medicaid enrollment has declined over the past two years, Medicaid enrollment has increased since the Affordable Care Act, driven primarily by newly eligible adults gaining coverage under Medicaid expansion, with the highest enrollment increases seen in Medicaid expansion states. This increase includes not only the Medicaid expansion population, but also those individuals who were currently eligible, but not enrolled. These people learned of coverage due to extensive outreach efforts by expansion states.

In its Jan. 11, 2018 State Medicaid Director letter entitled Opportunities to Promote Work and Community Engagement among Medicaid Beneficiaries, CMS announced the new policy and clarified that states could predicate continued Medicaid eligibility on participation in work requirements, including community service, caregiving, education, job training, and substance use disorder treatment. The basis for this policy is Section 1901 of the Social Security Act. Divisive reactions have opponents characterizing it as inconsistent with Medicaid’s objective of health coverage and an impermissible Medicaid enrollment reduction strategy.

Eighteen states have sought approval to implement work requirements. Although CMS has approved all requests submitted by Medicaid expansion states, the implementation of three, Arkansas, Kentucky and New Hampshire, has been interrupted or stopped due to legal challenge.

Kentucky, a Medicaid expansion state, received CMS approval the day after the new policy was announced. Kentucky had submitted a Section 1115 waiver authority request in 2017 incorporating work requirements. Shortly after Kentucky’s January 2018 approval, a legal challenge was filed. Kentucky’s implementation has been blocked twice by a federal district court judge and is under appeal. Kentucky Gov.-elect Andy Beshear has declared plans to rescind Medicaid work requirements.

In July 2017, Indiana submitted its request to CMS proposing work requirements for its Medicaid expansion enrollees. Although Indiana received CMS approval in February 2018, implementation did not begin until January 2019. In September 2019, a lawsuit was filed challenging Indiana’s program. Indiana has suspended its work requirements pending the outcome of the litigation.

In March 2018, CMS approved Arkansas’ June 2017 request to amend its Section 1115 waiver to implement work requirements. Implementation began in June 2018. In August 2018, a lawsuit was filed challenging Arkansas’ approval. A year after approval, the federal district court set it aside. The matter is under appeal.

In May 2018, New Hampshire became the fourth state to win approval for work requirements, with implementation scheduled in March, but it was postponed due to a lawsuit filed the same month. Consistent with the rulings for Kentucky and Arkansas, in July 2019, the same federal district court judge set aside the approval for New Hampshire.

State leadership and Medicaid programs nationwide await the outcome following the Oct. 11 oral arguments related to the appeals for Arkansas and Kentucky. Oklahoma, a non-expansion state, has a pending waiver request to impose work requirements on certain Medicaid beneficiaries. If approved, this would add barriers to access and continuity of care, which are likely to place additional administrative and financial burdens on hospitals, physicians and other health care providers.

Becky Pasternik-Ikard is the former CEO of the Oklahoma Health Care Authority and former state Medicaid director. She currently practices Of Counsel for Phillips Murrah law firm in Oklahoma City.

Avoiding costly violations to the Anti-Kickback Statute

In this article, Oklahoma City Healthcare Attorney Mary Holloway Richard discusses the “Anti-Kickback Statute” and potential, federal violations of the statute as it relates to providers in the healthcare industry.

Mary Holloway

Mary Richard is recognized as one of pioneers in health care law in Oklahoma. She has represented institutional and non-institutional providers of health services, as well as patients and their families.

What is the authority for the federal government to oversee providers’ relationships with durable medical equipment (DME) and device suppliers and drug companies, such as educational programs that would seem to benefit the patient? How active is that oversight?

The Anti-Kickback Statute (AKS) prohibits remuneration to induce referrals or use of products reimbursement by Medicare, Medicaid or other federal healthcare programs. The federal government, through its investigators and prosecutors, pursue civil remedies including fines for remuneration considered as kickbacks. Remuneration may be cash of in-kind contributions. Under the AKS both civil and criminal charges may result from an investigation by the federal government. Federal policy is designed to prevent relationships that purportedly “lead to excessive or unnecessary treatment,” drive up health care costs and inhibit free market competition. The kickback prohibition applies to all sources of referrals, even patients. For example, where the Medicare and Medicaid programs require patients to pay copays for services, you generally are required to collect that money from your patients. Routinely waiving these copays could implicate the AKS and you may not advertise that you will forgive copayments. However, providers are free to waive a copayment if the provider makes an individual determination that the patient cannot afford to pay or if reasonable collection efforts fail. In addition, providing free or discounted services to uninsured people is not prohibited. The beneficiary inducement statute (42 U.S.C. § 1320a-7a (a) (5)) also imposes civil monetary penalties on physicians who offer remuneration to Medicare and Medicaid beneficiaries to influence them to use their services.

Is the federal government even active in investigating and prosecuting under the AKS?

Yes. The Office of the Inspector General, counsel for the Department of Health and Human Services (HHS), estimated in 2018 that for every $1 spent on investigating health care fraud, $4 is recouped. The government has investigated, prosecuted and settled claims with many types of providers and continues to do so. The government does not need to prove patient harm or financial loss to the programs to show that a physician violated the Anti-Kickback Statute. A physician can be guilty of violating the AKS even if the physician actually rendered a medically necessary service. Taking money or gifts from drug or device companies or DME suppliers is not justified by arguing that providers would have prescribed that drug or ordered that wheelchair even without a kickback. An example of unlawful activities comes from the Covidien case. A supplier of vein ablation products in California and Florida, Covidien recently settled its claims with the federal government that it offered or provided free to medical practices, or at discounted rates, practice development assistance, lunch-and-learns, dinners with physicians, and market development support, such as vein screening activities designed to recruit new patients to the practices — all provided free of charge or at discounted rates. This virtually uncompensated support, according to the Department of Justice, was designed to induce the use of certain items or services, leading to excessive and unnecessary treatments and driving up health care costs for everyone.

Are there any clear guidelines for physicians and other providers?

HHS has published guidelines for providers, such as “A Roadmap for New Physicians-Avoiding Medicare and Medicaid Fraud and Abuse,” which I routinely provide to new physicians, advanced-practice nurses and other providers. Failure to follow the guidelines can be costly. For example, the outcome of the Covidien investigation was a civil settlement agreement for violation of the AKS in the amount of $17,477,947, with additional payments in excess of $2 million by the company to the states of California and Florida for claims paid by their Medicaid programs.

How are violations of the AKS usually discovered?

Violations of the AKS are often discovered through “qui tam” actions brought by employees of the practice group or those with knowledge of its practices known as “whistleblowers” or “relators.” To avoid vulnerability to qui tam actions providers are advised to adopt and implement robust compliance policies, including training providers and other personnel regarding behavior that may constitute risk under a federal regulatory analysis. It is also advisable to have operating agreements of the practice’s legal entity and written agreements reviewed by counsel in order to shift legal liability where possible.

 

Published: 4/19/19; by Paula Burkes
Original article: https://newsok.com/article/5629122/medical-practice-support-can-be-costly-to-suppliers-others

Attorney Mary Holloway Richard authors update to AHLA publication

Mary Holloway

Mary Richard is recognized as one of pioneers in healthcare law in Oklahoma. She has represented institutional and non-institutional providers of health services, as well as patients and their families.

Mary Holloway Richard, Phillips Murrah Healthcare Law Attorney, lent her expertise to an update of the American Health Lawyers Association‘s Institutional Review Boards publication.

In preparing the third edition, the AHLA recognized the need to update the previous edition based upon changes in statutes and regulations and to incorporate new guidance reflecting expertise and current, in-depth experience with clinical research and IRB’s.

An important addition is the new chapter 17 “IRB Compliance and Internal Audits” authored by Richard.

Richard has recognized expertise in regulatory requirements and risk management in clinical research based upon involvement with both researchers and the IRB process for many years in the largest health system in the state.

The chapter brings to life a clinical research compliance plan by including the key elements and sample policies, procedures and other forms for use by researchers and research facilities, she said.

Richard advises clients regularly about FDA, HHS and OHRP requirements and lectures and writes on related topics, including regulatory requirements of the General Data Protection Regulation applicable in clinical research performed in the European Union.

For more information on the latest edition of the publication, click here.

GDPR in America: Businesses react to newly enforced EU Privacy Law

In this article, Oklahoma City healthcare attorney Mary Holloway Richard discusses GDPR, a newly enforced EU privacy law, and what it means for businesses in America.

Q: What is the General Data Protection Regulation (GDPR)?

oklahoma city health care attorney mary richard

Mary Richard is recognized as one of pioneers in Oklahoma healthcare law. She has represented institutional and non-institutional providers of health services, as well as patients and their families. She also has significant experience in representing providers in regulatory matters.

A: It’s a law regulating data protection and privacy for all individuals within the European Union (EU). It gives control to individuals over their personally identifiable information. It both standardizes the requirements throughout the EU and bolsters protections available to individuals amid well-publicized, costly data breaches in Europe. It’s a regulation rather than a directive, which means national governments within the EU don’t have to pass enabling legislation for these requirements to be effective. Rather, the regulation is directly binding on the members of the EU. The spirit of the General Data Protection Regulation also is embodied in recent legislation in the United Kingdom, providing consistency across Europe even though the U.K. withdrew from the EU effective in March. The regulation, passed two years ago, became effective May 22. Because of the length of time between passage and enforcement, there’s no transitional or grace period before compliance is required.

Q: How is this relevant to American businesses?

A: In certain circumstances, the GDPR also applies to organizations and other businesses based outside of the EU if they collect and/or process personally identifiable information located within the EU. For example, U.S. companies offering a website to market their products or services to individuals within the European Community or scientific concerns actively engaged in recruiting individuals within the European Community to be subjects in clinical trials are required to comply. It’s important for such commercial concerns to act quickly to determine if they are covered by the General Data Protection Regulation as processors of data or collectors of such data from individuals within the EU. Concerned about the potential burden of compliance on foreign businesses, some international websites have taken steps to block EU users on the effective date, thereby removing the need to comply and ensuring against potential liability under the regulation. USA Today’s international website redirected users to simplified sites limited in scope. Other U.S. newspapers with European editions made them temporarily unavailable to readers in the EU. In another example of responses by U.S. companies, Instapaper, a read-it-later app, temporarily shut off access to European users to allow sufficient time for compliance.

Q: What type of data is protected by the General Data Protection Regulation and how’s it protected?

A: Personally identifiable information is anything that allows a living person to be identified directly or indirectly. Such data elements include name, email and home addresses, medical information, bank or other financial information, computer IP address and photos. A data processing officer must be appointed by businesses involved in processing or collecting data who is similar to a compliance officer with special information technology proficiency in managing and securing personal and sensitive data as well as a local representative for the company. Individuals have the right to the portability (access) of their stored data, erasure of data in certain circumstances, the right to file complaints with the data processing authority and the right to contract automated decision-making made on a solely algorithmic basis. Data breaches must be reported in a manner similar to the Health Information Portability and Accountability Act of 1996 and its amendments (HIPAA).

Q: You mentioned HIPAA. Is informed consent required for American businesses engaged in business in Europe similar to that required for HIPAA?

A: Personally identifiable information may be lawfully processed under the General Data Protection Regulation with informed consent or with a legal basis for doing so which ranges from legitimate interests of the entity collecting the data or a third party performing a task under official authority in the public’s interest, in compliance with the controller’s legal obligation, in fulfillment of a contract with a data subject, and to protect vital interests of a data subject or another person. There are some similarities to the HIPAA informed consent and the various exceptions to the consent requirement including the requirements of clarity and the opportunity to withdraw consent. As with HIPAA, individuals must be apprised of their privacy rights and their ability to withdraw consent at any time under the General Data Protection Regulation.

Q: Are there exceptions or limitations to an individual’s right of access to information?

A: Limitations to disclosure and the individual’s right of access to protected data exist for overriding interests such as national security. Further, in recognition of the importance of providing health care across country boundaries and clinical research to fight disease, the General Data Protection Regulation doesn’t apply to statistical and scientific analyses. A recognition of the need to maintain the integrity of clinical research resulted in the limitation of the erasure right of the individual. The strengthened data protections of the General Data Protection Regulation are limited in the face of requirements of good science although companies engaging in clinical research, including patient recruitment in the EU, will need to evaluate their data compliance plans considering the requirements of the newly enforced law. In addition, the General Data Protection Regulation doesn’t apply to data related to employer-employee relationships.

 

Published: 7/20/18; by Paula Burkes
Original article: https://newsok.com/article/5601938/qa-with-mary-holloway-richard-u.s.-businesses-react-to-newly-enforced-eu-privacy-law

Oklahoma Medicaid plans offer solution for high cost of prescription drugs

In this article, Oklahoma City healthcare attorney Mary Holloway Richard discusses steps Oklahoma has taken to lower prescription drug costs for consumers.

oklahoma city health care attorney mary richard

Mary Richard is recognized as one of pioneers in Oklahoma healthcare law. She has represented institutional and non-institutional providers of health services, as well as patients and their families. She also has significant experience in representing providers in regulatory matters.

Q: Oklahoma recently has been recognized by Secretary Alex Azar, of the U.S. Department of Health and Human Services, for innovations in its Medicaid prescription drug program designed to lower drug costs to the state. How was the state able to accomplish this feat?

A: Medicaid is a federal program that’s administered by the states. In Oklahoma, it’s administered by the Oklahoma Health Care Authority. So, while the state receives some federal funding, a good portion of Medicaid funds are supplied by the state. In order to reduce costs related to prescription drugs, Oklahoma applied to the Centers for Medicare & Medicaid Services (CMS) and was granted an amendment to the Oklahoma State Plan that facilitates prescription drug cost savings. The plan links the payment of a drug to its effectiveness and outcomes. This is essentially what we refer to as “value-based” prescription drug purchasing. CMS reports that “(t)he state plan amendment proposal submitted by Oklahoma will be the first state plan amendment permitting a state to pursue CMS-authorized supplemental rebate agreements involving value-based purchasing arrangements with drug manufacturers.” This program is part of the Trump administration’s “American Patients First” blueprint, designed to address rising drug prices.

Q: How will the amendment work in Oklahoma?

A: The amendment to the state plan, as approved by CMS, now allows Oklahoma to negotiate and enter into valued-based contracts with drug manufacturers. This means that, through identifying the most effective medications, the state can tailor its negotiations with manufacturers to drugs that have demonstrated the most success in treating patients, thereby achieving cost savings and efficiencies in treatment. Negotiating value-based contracts will supplement Oklahoma’s ability to control drug prices under its current participation in the Sovereign States Drug Consortium. The Consortium negotiates supplemental rebates on behalf of states. Oklahoma is free to accept or reject rebate offers.

Q: Are there other cost saving initiatives related to decreasing prescription drug costs?

A: Currently, certain drugs have a preferred status if they’re listed on the Medicaid State Supplemental Rebate Agreement. Almost every state Medicaid plan, including Oklahoma’s, gives the state the authority to negotiate supplemental rebate agreements with drug manufacturers. These agreements allow for rebates to be given to the state by manufacturers as least as large as those provided in the Medicaid national drug rebate agreement. Importantly, two other parts of the Trump administration’s plan to decrease drug costs include giving Medicare insurance plans greater ability to negotiate for the Medicare Program (Part B and prescription drugs) and to make drug prices transparent for consumers. The latter part of the president’s plan would require drugmakers to disclose list prices in public advertising.

 

Published: 7/10/18; by Paula Burkes
Original article: https://newsok.com/article/5600913/oklahoma-medicaid-plans-offer-solution-for-costly-prescription-drugs