March 10, 2022


Is the “No Surprises Act” in effect?  I heard that a court enjoined it.  Is the No Surprises Act limited to Emergency Care?  Can you give me an example of how the Act works?  What recourse do I have if I do not agree with the amount that the insurer pays me under this Act?

The No Surprises Act and its implementing regulations (the “Act”) have been in effect since January 1, 2022.  The Act prohibits emergency department physicians and the facility from billing a patient an out-of-network fee for emergency care provided at any hospital Emergency Department and, if permitted by your state, any free-standing emergency department, regardless of whether the hospital or emergency department physicians participate in the patient’s insurance network.

The Act also prohibits balance billing a patient for non-emergency services provided in an in-network hospital by certain out-of-network physicians, including all traditional hospital-based physician specialties.  A physician can get a patient’s waiver of their rights under the No Surprises Act by using the notice and consent form provided by CMS for (1) certain non-emergency services and (2) post-stabilization services.  However, out-of-network physicians cannot obtain waivers for non-emergency services provided at an in-network hospital if they provide traditional hospital-based ancillary services (such as pathology), diagnostic services (including lab and x-ray); services provided by hospitalists, assistant surgeons, or intensivists; or if there are no in-network physicians on the hospital’s medical staff who can provide the care needed by the patient.  The waiver will also not apply to any emergent conditions that arise during a non-emergency service to which the patient provided his/her consent and waiver to be balance billed.

This section of the Act is best exemplified by one of the questions and answers provided by CMS’s Center for Consumer Information & Insurance Oversight:

Rhonda is a 50-year-old female with employer-sponsored health insurance who discovers a lump in her breast.  Her primary care provider orders a mammogram, which shows a suspicious mass. She is referred to the local in-network hospital’s outpatient department for a biopsy.  The biopsy is reviewed and found to be negative for malignant cells by a pathologist who happens to be out of network.

How much can the pathologist bill Rhonda under the rules of the No Surprises Act? 

Under the No Surprises Act, the pathologist is banned from billing Rhonda more than the in‑network cost-sharing amounts, as determined by her health plan.  The pathologist, as an ancillary service provider, is banned from obtaining consent from the individual to waive these balance billing protections.

In the past, the pathologist could bill the out-of-network patient his/her usual and customary charge.  The patient would submit the bill to her insurer and the insurer would pay the provider the out-of-network rate and the pathologist could then balance bill the patient for any amount not covered by insurance – NO MORE.  The No Surprises Act regulations also prohibits the pathologist from obtaining the patient’s consent to waive these rights (although, as described above, certain other specialties can obtain the patient’s waiver for (1) certain non-emergency services and (2) post-stabilization services).

As stated above, the pathologist cannot bill the patient more than the pathologist would bill the patient if the patient was in-panel.  The pathologist must then bill the insurance carrier.  If the pathologist is not happy with the amount paid by the insurer, the pathologist must negotiate with the plan for 30 business days.  If the pathologist is still not happy with the amount being offered by the plan, the pathologist must go to arbitration to determine the amount of payment.

However, on February 23, 2022, a federal court has enjoined the CMS provider/health plan arbitration process (but only the arbitration process – the rest of the No Surprises Act regulations are in full force and effect).  That arbitration process created a presumption that the amount that the provider should be paid is the “Qualified Payment Amount” (“QPA”), which is typically the median rate the insurer would have paid for the service if provided by an in-network provider or facility.

The regulations also limited the information that can be presented to the arbitrator and specifically prohibited the arbitrator from considering the provider’s usual and customary charges for an item or service, the amount the provider would have billed for the item or service in the absence of the Act, or the reimbursement rates for the item or service under Medicare or Medicaid.  Finally, the arbitration is “baseball-type” arbitration, which means that the arbitrator must pick one of the amounts proposed – the arbitrator does not have the discretion to split the difference or to choose an amount other than the amount proposed by the provider or by the health plan.

The federal court enjoined this arbitration process from going into effect.  However, the court did not provide any guidance as to how disputed fees are to be resolved while this case is on appeal, or how payment disputes are to be resolved until new regulations are promulgated.

February 3, 2022

What’s all this I hear about “appropriate use criteria” that Medicare will use to determine payment for outpatient imaging?

The Protecting Access to Medicare Act of 2014 (a/k/a “PAMA”) established a new program to increase the rate of appropriate advanced diagnostic imaging services provided to Medicare beneficiaries.  Examples of such advanced imaging services include:  CT, PET and MRI scans.  Under this program, at the time a practitioner orders an advanced diagnostic imaging service for a Medicare beneficiary, he/she, or clinical staff acting under his/her direction, will be required to consult a qualified Clinical Decision Support Mechanism.  CDSMs are electronic portals through which appropriate use criteria can be accessed.

The program won’t go into effect until January 1, 2023 or the January 1 after the current public health emergency ends, whichever is later.  And it only applies to services in a physician’s office, hospital outpatient department (including the emergency department), an ambulatory surgical center or an independent diagnostic testing facility and whose claims are paid under the physician fee schedule, hospital outpatient prospective payment system or ambulatory surgical center payment system.  So (at least for now) it does NOT apply in critical access hospitals.

For more information, check out the CMS website.

October 10, 2019

QUESTION:        The five medical staffs in our system are thinking about unifying.  Are there any particular steps we need to follow and any changes we need to make to our bylaws?


ANSWER:          In May 2014, CMS revised the Medicare Conditions of Participation to allow a multi-hospital system to have a unified and integrated Medical Staff.  There are several steps that must be taken in the integration process.  First, the system must ensure that there is nothing in the state hospital licensing statutes or regulations that would prohibit the medical staffs of separately licensed hospitals from integrating into a single staff.

Second, the Board (and there must be a single Board) must document in writing its decision to use  a unified medical staff model.  This decision would be conditioned on acceptance by the hospitals’ medical staffs to opt-in to an integrated medical staff model.

Third, the medical staff of each of the hospitals must take a separate vote to opt in or opt out of the unified medical staff.  The vote at each hospital must be governed by the respective medical staff bylaws in effect at the time.  Only voting members of the medical staff who hold privileges to practice on site at the hospital may participate in the vote.

Fourth, the unified medical staff will also want to adopt new medical staff bylaws and related policies.  The new bylaws should take into account the unique circumstances of each hospital, including any significant differences in the patient populations and the clinical services that are offered at each hospital.

Importantly, the new bylaws must also include a process by which the voting members of the medical staff who exercise clinical privileges at the hospital may vote to opt out of the unified medical staff in the future.

September 19, 2019

* * *
What is the significance of the CMS “Pathways to Success” program for ACOs in the Medicare Shared Savings Program?

* * *
ANSWER:            At the end of 2018, the Centers for Medicare & Medicaid Services (“CMS”) redesigned the Medicare Shared Savings Program.  Although the Medicare Shared Savings Program had been in operation since 2012, it had failed to generate the kinds of cost savings that CMS hoped to manifest.  “Pathways to Success” was intended to accelerate the process of transitioning Accountable Care Organizations (“ACOs”) to performance-based risk models.

Among other things, the Pathways to Success program implemented certain kinds of “risk tracks” that offer different mixtures of risk and reward.  Each risk track balances factors such as the potential for financial rewards (in the form of shared savings), the risk of financial penalties (in the form of shared losses), and the opportunity to qualify as an Advanced Alternative Payment Model (which provides certain benefits for individuals subject to the MIPS program).

There are many different variables that govern an ACO’s performance and opportunities under the Shared Savings Program, which means that a full discussion of the program details falls well outside the scope of this article.  The key takeaway to understand is that Pathways to Success was designed to accelerate ACOs to take on higher levels of financial risk and responsibility.  This is yet another example of the ongoing federal effort to promote population health while simultaneously combating the growth of health care expenditures.

To learn more about the Medicare Shared Savings Program, click here.


April 4, 2019

QUESTION:        Do the Medicare Conditions of Participation place any requirements on the use of standing orders?


ANSWER:            Yes, they do.  The Centers for Medicare & Medicaid Services (“CMS”) have established multiple requirements for compliant use of standing orders in the hospital setting.  For example, each standing order must be reviewed and approved by the hospital’s medical staff and nursing and pharmacy leadership prior to use.  CMS emphasizes that this should be a “multi-disciplinary collaborative effort.”  Crucially, each standing order must have clearly identified specific criteria that govern when it will be executed.  CMS is very clear:  “Under no circumstances may a hospital use standing orders in a manner that requires any staff not authorized to write patient orders to make clinical decisions outside of their scope of practice in order to initiate such orders.”

Note that there is some ambiguity in the term “standing order,” and CMS recognizes this.  Consequently, it is possible that some of your pre-printed and electronic order sets could fall outside the scope of this regulation.

As part of your compliance efforts, we recommend periodically reviewing your policies on standing orders, order sets, and protocols for patient orders to ensure compliance with the Conditions of Participation and with state law.  We also recommend periodic compliance audits of medical records to verify that your policies are being implemented appropriately.

September 20, 2018

QUESTION:        What are the responsibilities of our hospital’s Board of Directors (“Board”) with regard to oversight responsibilities of the Medical Staff?

ANSWER:            Although it is important to check your state laws and standards set forth by your accrediting organization, a good starting point would be to refer to the Medicare Conditions of Participation (“Medicare CoPs”) pertaining to the Board’s responsibilities, including its oversight responsibilities of the medical staff.  For instance, the Medicare CoPs place the ultimate responsibility for quality of care provided at a hospital and monitoring the care provided to patients on the Board.  Among others, the Medicare CoPs require the Board to define criteria for and appointing members to the medical staff, grant clinical privileges, ensure the existence and approval of medical staff bylaws, and approve various services in the hospital.  Ultimately, the Board holds the responsibility for the quality of patient care in the hospital.  The Board and medical staff engage to provide effective credentialing, privileging, and peer review and quality management processes.

Although responsibilities provided by the Medicare CoPs are extensive, do not forget to consult your applicable state laws as well as the standards of your accrediting organization, which may dictate further oversight responsibilities of the Board.

April 12, 2018

QUESTION:        Our hospital believes that it has received Medicare Part A and Part B reimbursement to which it is not entitled.  Must the hospital immediately return the money that it owes?

ANSWER:            While the hospital must refund overpayments of Medicare Part A and Part B reimbursement to which it is not entitled, you have 60 days from the date in which you identify the overpayment to refund the money.  However, even the federal government understands that you must be given a certain period of time to accurately identify whether an overpayment has occurred and to quantify the amount of that overpayment.

The Affordable Care Act’s overpayment rule for Medicare Parts A and B went into effect on March 23, 2010.  However, final regulations were not published until February 12, 2016 (the “Overpayment Rule”).  (See, 42 C.F.R. §401.301 to §401.305.)  We should note that the Overpayment Rule described in this response is limited to Medicare Part A and Part B claims.  There is a separate overpayment rule for Medicare Part C and Part D claims.

The Overpayment Rule requires providers to repay any overpayments of Medicare Part A and Part B payments within 60 days of the overpayment being “identified.”  However, the Overpayment Rule does not define exactly when an overpayment has been “identified,” which has caused a certain amount of confusion as to when the 60-day repayment period begins to run.

The Preamble to the Overpayment Rule recognized that the “identification” process will take time.  CMS appears to want to afford providers a certain amount of flexibility and recognizes that part of the identification process is quantifying the amount of the overpayment, which requires a reasonable and diligent investigation.  At the same time, CMS expects providers to use “reasonable diligence” and stated that “a total of 8 months (6 months for timely investigation and 2 months for reporting and retaining) is a reasonable amount of time, absent extraordinary circumstances affecting the provider, supplier or the community.”  However, it should be noted that while this time period was discussed in the Preamble, CMS did not include it in the final Overpayment Rule.

The Overpayment Rule also makes it clear that the repayment period is six years from the date that the overpayment is received.  So, you should see if similar overpayments were made at any time during this six-year look-back period.  The Overpayment Rule then provides that a Self-Disclosure to either the OIG’s Self-Disclosure Protocol or the Stark Self-Referral Disclosure Protocol (“SRDP”) is an exception to the 60-day repayment obligation.  The Overpayment Rule states that if a provider makes a Self-Disclosure to either the OIG or CMS, then no overpayment is due the government until the Self-Disclosure has been resolved (despite the fact that it typically takes years to resolve a Self-Disclosure).

What is important to keep in mind is that once an overpayment has been identified, the hospital must act.  If the hospital knows, or should know, that it has received an overpayment, but fails to repay the overpayment within the 60-day period required by the Overpayment Rule, the hospital could be alleged to violate the False Claims Act.

March 22, 2018

QUESTION:        A patient is asking the hospital staff to allow him to use medical marijuana that he obtained in compliance with state law.  Should we let him?

ANSWER:            This is a tough question especially in light of the recent, increased, legal acceptance on a state level of both medical and recreational marijuana.  The patient in the question is claiming that he obtained the medical marijuana in compliance with state law.  In such a situation, you should ask yourself a number of questions.  First, does your state law protect facilities or staff that permit medical marijuana use?  For example, Maine law states that hospitals and staff members will not be liable for facilitating the use of medical marijuana by certified, admitted patients, as long as the marijuana is not smoked or vaped.  Second, does your state law require a hospital to accommodate a patient’s use of medical marijuana?  Minnesota has a law on the books that says, in part, “no [health care] facility shall unreasonably limit a patient’s access to or use of medical cannabis to the extent that use is authorized by the patient.”

Even if the answer to these first two questions is “yes,” you have to ask yourself if you are willing to accept the legal risk under federal law.  Marijuana is a Schedule 1 controlled substance under the federal Controlled Substance Act.  Regardless of state laws to the contrary, it is still a violation of federal law to manufacture, possess or prescribe marijuana for either medical or recreational purposes.  The Medicare Conditions of Participation (“COPs”) for hospitals state “drugs and biologicals must be controlled and distributed in accordance with applicable standards of practice, consistent with Federal and State law.”  The COPs do not anticipate that Schedule 1 controlled substances will be stored or distributed in hospitals.  The applicable regulations and the Interpretive Guidelines to the COPs only refer to Schedule 2-5 substances.

Some hospitals have accepted the risk and permit patients to bring their own medical marijuana into the hospital for administration.  At least one of those hospitals has put the following safeguards in place:

  • Hospital staff (such as nurses and pharmacists) are not permitted to assist with dispensing or administering medical marijuana. The drug must be self-administered.
  • The hospital is required to verify that the patient is registered with the state’s medical marijuana program.
  • The hospital must provide a safe for the storage of medical marijuana in the patient’s room. Hospital employees do not access the safe or handle the medical marijuana at any time.
  • The medical marijuana must be in liquid or capsule form, and must have been provided by an in-state dispensary.

That being said, such safeguards do not protect you from CMS disapproval or sanctions.  Although it is a fascinating topic with numerous legal issues to consider, the fact is that marijuana continues to be a Schedule 1 drug under federal law.  Consequently, there is risk that CMS could take action based on the COPs.

September 7, 2017

QUESTION:        I heard that CMS is planning to cancel its upcoming episode payment models.  Is this true?

ANSWER:            Yes.  In mid-August, CMS issued a proposed rule that would cancel its upcoming episode payment models (“EPMs”) and cardiac rehabilitation incentive payment model.  The rule also proposed revisions to the existing Comprehensive Care for Joint Replacement model (“CJR program”).  This proposal marks a significant change of course for the agency’s regulatory agenda, given that CMS had previously expressed an intent only to delay these models, not cancel them outright.

The upcoming EPMs would have affected Medicare beneficiaries undergoing services related to acute myocardial infarctions, coronary artery bypass grafts, and surgical hip/femur fracture treatment.  The rule has not been finalized, so the ultimate fate of these payment models remains uncertain.  CMS will continue to accept comments (as part of the standard notice and comment rulemaking process) on this proposal until October 16, 2017.

If the proposed rule is finalized, it will also give hospitals participating in the CJR program a one-time opportunity to exit the program.  This is likely the beginning of a future trend away from mandatory payment models (such as the CJR program) in favor of voluntary value-based payment programs.

We continue to recommend that you build flexibility into your planning processes to account for this uncertainty in CMS’s rulemaking activities.

The proposed rule is available here.

June 15, 2017

QUESTION:        What’s this I hear about the penalties for EMTALA violations being doubled?  Haven’t we suffered enough?

ANSWER:            I agree about the suffering, but sorry, that’s not going to affect the doubling of the EMTALA civil monetary penalties.

As difficult as EMTALA can be, until a few months ago, it had actually been years since the federal government issued a new EMTALA regulation, guideline or bulletin.  But that’s not a complaint; EMTALA compliance is difficult enough with the existing rules, let alone any new ones.

So it’s interesting that the Office of Inspector General (the “OIG”) came out in December 2016 with some new regulations.  The OIG revised its regulations concerning penalties, including civil monetary penalties (“CMPs”), that it can impose for EMTALA violations.  These new rules were released in the OIG’s Final Rule concerning Medicare and State Health Care Programs; Fraud and Abuse; and Revisions to the OIG’s CMP Rules.

These new OIG regulations didn’t create new EMTALA responsibilities to be carried out.  Instead, they simply addressed the OIG’s penalty rules.  The most eye-popping of these concern the amount of the CMPs, now adjusted per inflation.

By the Act itself, which went into force in 1986, the OIG can fine hospitals with 100 beds or more and physicians up to $50,000 per EMTALA violation.  Hospitals under 100 beds can be fined $25,000 per violation.

Noting that those figures have never been adjusted for inflation over the past 30-plus years, the OIG adjusted.  Now, hospitals with 100 beds or more and physicians can be fined up to $103,139 per violation.  Hospitals under 100 beds can be fined up to $51,570 per EMTALA violation.

The OIG did not revise the EMTALA-stated penalty amounts themselves; the EMTALA regulations still describe CMPs for $50,000 and $25,000.  This is an inflation-adjusted increase detailed in another HHS-published document regarding CMPs.  (A $50,000 penalty doesn’t get you as much in 2017 as it did back in 1986.)

The OIG has not suddenly become “penalty hungry” when it comes to hospitals, on-call physicians, and other EMTALA matters.  The OIG suggested these clarifications in proposed regulations it issued back in May 2014.  Both the Affordable Care Act and the Medicare Prescription Drug, Improvement and Modernization Act enhanced the OIG’s authority to impose CMPs and to exclude individuals from participating in federal health care programs.  This was the OIG taking advantage of those two statutes to clean up and clarify its EMTALA penalty rules.

As the new CMPs basically double the penalty amount, it’s also important to understand that the OIG’s CMPs apply to each EMTALA violation, and a hospital or a physician can violate EMTALA more than once in the care of a single patient.  It’s not uncommon for an EMTALA wrongdoing to include multiple violations.  With CMPs of now roughly $100,000 per EMTALA violation, a hospital can find itself with the potential for some pretty stiff fines.