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It’s going to be a busy regulatory year for health care. Here are some of the regulatory items the Department of Health and Human Services plans to tackle, according to its regulatory calendar for 2001 published in the Nov. 30 Federal Register.
Medicaid Upper Payment Limit Rule. Perhaps the most controversial regulation to be published by the agency during 2001 will be a final rule on a Medicaid upper payment limit for hospitals, skilled nursing facilities, and other health care providers, which the Health Care Financing Administration (HCFA) hopes to publish in February.
• Stark II. HHS plans to finalize its long-awaited rule on physician self-referrals, or the so-called Stark II regulations, within the next six months. Officially, the law prohibiting referrals for designated health services went into effect Jan. 1, 1995, but the regulations spelling out the details have just not been finalized.
Hospital and doctor groups have been lobbying to remove a ban on various compensation arrangements under Stark II, arguing that it inhibits business activities essential to integrated health care organizations. Instead of having regulators try to directly supervise financial arrangements banned by the law, Rep. Pete Stark (D-CA), the bill’s namesake, has suggested a more effective enforcement mechanism may be to simply hold physicians legally and financial responsible for any services they provide in covered situations.
• Risk-Sharing. The HHS Inspector General plans to issue a final rule in March establishing an exception to the federal anti-kickback statute related to risk-sharing arrangements. According to the HHS regulatory agenda, the final rule will "set forth an exception from liability for remuneration between an eligible organization and an individual or entity providing items or services in accordance with a written agreement between these parties."
As such, remuneration would be permitted if a written agreement places the individual or entity at "substantial financial risk" for the cost or utilization of the items or services that the individual or entity is contracted to provide.
• Ambulance Restocking. The Inspector General also intends to issue a final rule in March creating a safe harbor to the anti-kickback law to address ambulance restocking arrangements between municipal and nonprofit ambulance companies and hospitals.
• Durable Medical Equipment. HCFA intends to issue a proposed rule requiring medical equipment suppliers to purchase surety bonds to do business with Medicare. This is intended to ensure that participating suppliers are legitimate and financially stable.
• Medicare + Choice. The inspector general intends to issue a proposed rule establishing civil monetary penalties for Medicare+Choice organizations and Medicaid managed care organizations. The rule would apply to organizations engaged in "certain abusive practices," including failure to provide medically necessary care and discriminatory enrollment practices (otherwise known as "cherry-picking").
HCFA’s take on the topic is that some states are taking advantage of the flexibility of existing federal regulations used to set maximum rates that can be paid under Medicaid. In turn, that permits county- and city-owned hospitals to claim higher federally matched Medicaid reimbursement rates than should have been allowed.
• End Stage Renal Disease. In April, HCFA plans to release a proposed rule revising the conditions of participation for end-stage renal disease facilities.
• Part B Changes. A final rule establishing the criteria for determining the "inherent reasonableness" of Part B Medicare physician services is to be published in August.