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Volume VI, No. 3 Spotlight: HIPAA Over the course of the next several years, the health care industry will need to be prepared to face an extraordinary new compliance burden in the area of health information use and disclosure. In 1996, Congress passed the Health Insurance Portability and Accountability Act ("HIPPA"), which among other things, set forth a statutory framework for the development of a comprehensive set of standards applicable to the transmission of health information. These so-called "Administration Simplification" provisions were enacted with the intent to "improve the efficiency and effectiveness of the healthcare system by encouraging the development of a health information system through the establishment of standards and requirements for the electronic transmission of certain health information." Pursuant to HIPPA's mandate to implement such health information standards, the Department of Health and Human Services ("DHHS") has published five (5) proposed regulations in this area since May of 1998 that will greatly impact "covered entities," including health care providers such as nursing homes, hospitals, licensed health care practitioners and ICF/MR's, as well as health care plans and clearinghouses. The five proposed regulations are as follows: electronic transactions and code sets (May, 1998), national standard health care provider identifier (May, 1998), national standard employer identifier (June, 1998), security and electronic signature standards (August, 1998), and standards for privacy of individually identifiable health information (November, 1999). Electronic Transactions and Code Sets. The first of these five regulations, relating to electronic transactions and code sets has now been finalized (the final rule was published on August 17, 2000). In comparison to the other regulations, most notably those relating to security and privacy, this particular regulation will likely pose much less of a compliance burden for health care providers. Nevertheless, it will require careful review and understanding, as well as requiring considerable start-up costs that will likely include computer software system conversion upgrade costs, automation costs, training costs and costs associated with implementation problems. In a nutshell, the Electronic Transaction Standards regulation requires health care providers, plans and clearinghouses to adopt a national set of standards and code sets with respect to eight (8) particular administrative and financial health care transactions, as it is estimated that today more than 400 different formats exist for health care claims. The intent of the regulation is to improve both the efficiency and the effectiveness of the health care system by eliminating numerous formats that are complicated and inconsistent. Under the regulation, the Secretary of the DHHS has adopted standards for health care providers, plans and clearinghouses concerning the following "standard" transactions: (1) health claims and equivalent encounter information; (2) enrollment and disenrollment in a health plan; (3) eligibility for a health plan; (4) health care payment and remittance advice; (5) health plan premium payments; (6) health claim status; (7) referral certification and authorization; and (8) coordination of benefits. All health care providers who transmit any health information in electronic form, except for health plans with annual receipts of $5 million or less, must comply with all the applicable requirements of the recently adopted Electronic Transactions regulation by October, 2002. Security and Privacy Standards. The DHHS is planning to publish final rules with respect to each Administrative Simplification regulation at some point this year. Two of these regulations, the Security and Privacy Standards, will significantly affect how health care entities maintain and transmit health information, and will present such entities with an onerous compliance obligation. For example, both regulations require health care entities to maintain specialized employment positions to oversee and ensure compliance, and to implement numerous policies, procedures and other safeguard measures to maintain data integrity, confidentiality and availability, as well as to prevent unauthorized access to the data. Like the Electronic Transactions regulation, nearly all covered entities will be given only two years to achieve compliance once the final rule is published. Not only will all covered entities incur a significant expense in order to achieve compliance within the two year time frame, but if anyone violates a standard or requirement after the mandatory date for compliance, the DHHS may impose a civil penalty of not more than $100 for each violation, up to a total not to exceed $25,000 in any calendar year for all violations of an identical requirement or prohibition. In addition, for more egregious violations, the offender could face criminal penalties ranging from fines of $50,000 to $250,000 and/or imprisonment. Therefore, because compliance with these regulations is mandatory and because the final rules are imminent, it is most important that nursing homes begin to think about the task of achieving compliance, and once all of the regulations have been finalized, committing themselves to implementing all appropriate policies, procedures, measures and other requirements necessary to ensure compliance. The recently published rule regarding electronic transactions, as well as the security and privacy proposed regulations, are available and may be downloaded at http://aspe.hhs.gov/admnsimp/. Roth, Rolf & Goffman Co., L.P.A., in conjunction with the Ohio Health Care Association, is presently developing a manual to assist with achieving compliance with the Security and Privacy Standards. The manual will be made available soon after each of these regulations are finalized. Date of Compliance: Important Change. HCFA's Chicago Office has changed its policy regarding the effective date of compliance following a survey when a facility receives a deficiency. For all surveys conducted after 9/22/00, where deficiencies are found in a quality of care area that constitute immediate jeopardy, actual harm or substandard quality of care, the state survey agencies have been directed to use the date of revisit as the effective date of compliance. This is a significant change in policy with serious consequences for nursing homes. Many more homes will now incur significantly larger civil monetary penalties, and will lose their nurse aide training (if the daily fines exceed $5,000). For example, assume a facility with an exit date of November 1 received a citation under tag F324 with a scope/severity of "G" and a fine of $350 a day. The facility submitted a plan of correction with an alleged compliance date of November 10 and was revisited and found in compliance on November 25. Under the prior policy, the surveyors had the discretion to accept November 10 as the date of compliance, and thus limit the facility's fines to $3500 (and it would keep its nurse aide training). Under the current policy, the date of compliance is mandated to be the revisit date, and thus the fines in this example would be $8750, and nurse aide training would be lost. Thus, the facility in this example would need to obtain an immediate revisit to demonstrate its compliance, and to stop the fines from continuing to accrue. Note, however, that if the "G" citation had been found in any area other than quality of care, then the new policy would not apply. RR&G is currently following up with HCFA's central office to verify that it agrees with the Chicago office's policy since it seems to contradict recent pronouncements in the revised State Operations Manual (SOM). We will keep our clients notified of what we find out through our email news list. Restraints: New Guidance. New guidance regarding restraints went into effect on October 10, 2000. In the revised guidance to surveyors of long-term care facilities, HCFA underscores that all restraints must meet strict criteria for medical necessity. HCFA, however, takes the very questionable position that nursing facilities and not physicians are responsible for determining the appropriateness of medical necessity determinations. The new interpretive guidelines state: "While there must be a physician's order reflecting the presence of a medical symptom, HCFA will hold the facility ultimately accountable for the appropriateness of that determination. The physician's order alone is not sufficient to warrant the use of the restraint." When faced with "requirements" like this one, it is important that providers keep in mind that the State Operations Manual and the guidance to surveyors is not law - it is merely internal agency guidance. Thus, if you receive what you perceive as an unfair restraint citation for following a physician's order, you may have the ability to rectify the situation through appeal. You can link to the guidance from HCFA's web site: www.hcfa.gov/pubforms/transmit/R20SOM.pdf. Immediate Jeopardy: New Guidance. Effective September 25, 2000, HCFA adopted new guidelines regarding the determination of immediate jeopardy. The guidelines replace former Appendix Q to the State Operations Manual, and contain the following statements:
We suggest that facilities review the new guidance, especially the "triggers", which list specific factual instances for which surveyors should consider immediate jeopardy. You can link to the guidelines at www.hcfa.gov/pubforms/transmit/R19SOM.pdf.
Risk Management Inservice. RR&G is offering inservices to our clients on the topic of effective risk management in light of today's increasingly litigious environment. This inservice will help your organization to reinforce its risk management protocols and defenses, and better prepare you to avoid lawsuits. If you are interested in such an inservice, then please contact Carol Rolf or Aric Martin at (216) 514-1100 or Inservice@LTClawyers.com. Drug Diversion. Some Ohio nursing homes are confused regarding what constitutes drug diversion, and what should be done when drug diversion is suspected. By law, drug diversion includes (1) the loss of a "dangerous drug" (defined below); or (2) the theft of a dangerous drug. The terms "loss" and "theft" should be interpreted broadly. For instance, a dangerous drug could be simply stolen from a nursing facility, or a nurse could administer a dangerous drug to him/herself instead of administering it to the resident for which it is intended. Both of these examples constitute "theft" of the drug. For the purposes of Ohio law, the term "dangerous drug" basically includes any drug that requires a prescription to dispense. A subcategory of dangerous drugs is "controlled substances," which have been declared as such by the federal Drug Enforcement Administration. Controlled substances tend to be drugs subject to abuse, such as narcotics. Generally speaking, under Ohio law, all controlled substances (e.g. Valium) are dangerous drugs, but not all dangerous drugs (e.g. antibiotics) are controlled substances. It is important to note that "drug diversion" does not include the intentional destruction of drugs that have expired, been damaged or contaminated, etc. Such destruction should be carried out by the pharmacist in charge (discussed below), in accordance with the State Pharmacy Board's rules pertaining to drug destruction. If drugs are either stolen or missing in a nursing facility, the incident should be immediately reported to the pharmacist in charge of the pharmacy that dispensed the drugs. In most nursing facilities, this pharmacist will be associated with an outside independent pharmacy. In other cases, the nursing facility itself will have its own "institutional pharmacy," which is directed by a particular pharmacist. Upon notification, the pharmacist may as appropriate (1) notify the Ohio State Board of Pharmacy of the drug diversion, using the Board's specified forms and procedures; and (2) notify the federal Drug Enforcement Administration, using specific DEA forms and procedures. Additionally, in all cases where the theft of drugs is a possibility, the nursing facility should immediately notify the local law enforcement agency, so that an investigation may commence while "the trail is hot." Once the required notifications have been made to the Ohio State Board of Pharmacy, the Drug Enforcement Administration (if applicable) and local law enforcement, the nursing facility should be prepared to cooperate with these entities in their subsequent investigation of the drug diversion. Depending upon the particular circumstances of the diversion, other notification requirements may apply, such as notifying the resident's family and/or physician. For example, if, as a result of the drug diversion, the resident does not receive the proper amount of medication and the resident is harmed, experiences a significant change in condition, or requires an alteration in treatment, then the nursing home must immediately consult with the resident's physician and if known, the resident's legal representative or an interested family member. It is also important from a survey and enforcement standpoint that all suspected incidents of drug diversion be properly documented and investigated. In addition, if the diversion is caused by the conduct of a registered or licensed nurse, and such nurse has been terminated for his/her actions, then, if the nursing home is the employer of that nurse, it is required to report the incident to the Ohio State Board of Nursing. Another consideration is reimbursement. It is generally illegal to bill Medicare, Medicaid or a private payor for items or services that were not actually provided. If a nursing facility discovers a drug diversion, it should investigate whether the drugs that were diverted have been billed to any government or private payor. If billing has occurred, the nursing facility or independent pharmacy, as applicable, should process a refund. In cases where the drugs were reimbursed through a mechanism other than fee-for-service (e.g. cost reports), the nursing facility should consult its reimbursement advisor for advice on how to proceed. It is important for nursing homes to implement a written policy and procedure addressing drug diversion, and to educate and train staff members on this policy. The failure to act promptly and properly following an incident of drug diversion could potentially expose a nursing facility to both government sanctions and liability for any harm done to its residents. Admission Agreement Arbitration Clause. In an effort to assist the long-term care industry in defending itself against frivolous lawsuits, our firm released two documents to the industry in June of this year. The first was a position paper entitled, Long-Term Care Litigation & the Insurance Crisis, in which we set forth specific suggestions on steps that the industry can proactively take to protect itself. The second was a sample arbitration clause for facilities to consider for their admission agreements. We have provided a modified version of that arbitration clause to the Ohio Health Care Association, which will distribute it to its members. If you do not receive a copy of this Revised sample clause, and you would like to review it, please feel free to contact us. We will be happy to provide you with a copy. Ohio Dept. of Jobs & Family Services. The Ohio Department of Human Services (ODHS) and the Ohio Bureau of Employment Services merged on July 1, 2000. The new agency is called the Ohio Department of Job and Family Services (ODJFS), and will assume all duties of the two former agencies. State Passes Important New Law. Governor Taft signed House Bill 403 into law on May 27, 2000. The law creates an online consumer guide of long-term care facilities, establishes a Technical Assistance Program, refines facility reimbursement rules under Medicaid, and contains several other miscellaneous provisions relating to long-term care.
Senate Bill 183. Under S.B. 183, which became effective October 5, 2000, county homes, state-operated developmental centers and other facilities operated by the state must develop exposure control plans incorporating the use of needleless systems, sharps with injury protection devices and other devices. Affected providers may link to the new law at http://legislature.state.oh.us/bills.cfm?ID=123_SB_183.
Advance Directives Modifications. ODJFS has promulgated a revised rule regarding advance directives in nursing facilities, effective July 1, 2000. The changes include the following:
Adult Care Facilities. ODH's revised licensure rules for Adult Care Facilities (ACFs) became effective on October 15, 2000. The revisions addressed increased protections for mentally ill persons. Some notable revisions are noted below.
Equal Opportunity Compliance Surveys. The U.S. Department of Labor, Office of Federal Contract Compliance Programs (OFCCP) has begun distributing "equal opportunity surveys" to federal contractors and subcontractors. The surveys ask for information concerning federal contracts, employee compensation, race and gender data concerning hiring and retention, and disclosure of existing affirmative action policies. According to OFCCP, healthcare providers who participate only in Medicare/Medicaid programs are not considered federal contractors and have no responsibility to fill out the survey. If Medicare/Medicaid providers receive the survey, they should mark the box on the surveys that states "not a government contractor" and return it to OFCCP. However, healthcare providers who have contracts with the Veteran's Administration are considered government contractors and are required to complete the surveys, and have an Affirmative Action program in place. Family Medical Leave Act Concerns. The Family Medical Leave Act (FMLA) provides employees the right to take up to 12 weeks of family or medical leave. The 6th Circuit Court of Appeals (Ohio, Michigan, Kentucky, and Tennessee) has recently ruled that employers must give notice to their employees that their "employer-granted" medical or family leave time counts towards their federally mandated FMLA time. According to Department of Labor regulations, it is the employer's responsibility to designate medical or family leave, paid or unpaid, as FMLA-qualifying, and to give notice of the designation to employee. The Court of Appeals held that if an employer fails to give notice that the employee's medical leave counts towards their FMLA allotted time, then the employee may be entitled to FMLA leave time in addition to employer-granted time. Changes in Bed Size or Location. HCFA revised its policy, effective June 1, 2000, regarding distinct part changes to include a reduction in the notice time from 120 to 45 days. Another change that was made in the policy, but went unnoticed by many, is that any changes in Medicaid bed location or in the number of Medicaid beds in a facility is also subject to the notice requirements contained in HCFA Transmittal 16 for the State Operations Manual. You can link the transmittal at the following web address: www.hcfa.gov/pubforms/transmit/R16SOM.pdf. Midnight Rule. In the PPS/Consolidated Billing Update to the Final Rule published in the Federal Register on July 31, 2000, HCFA revised the regulations so that the "midnight rule" applies to all residents leaving the facility. This means that a beneficiary's status as a SNF "resident" for consolidated billing purposes ends upon departure, unless the beneficiary returns to the SNF by midnight of the day of departure. The prior rule had stated that if the beneficiary returned to the SNF within 24 hours that he/she would remain a "resident" for billing purposes. Coverage of M+C Disenrollments. Beginning October 1, 2000, HCFA began implementing a policy of covering SNF care for beneficiaries involuntarily disenrolling from M+C plans as a result of a M+C plan termination when they do not have a 3-day prospective payment system hospital stay before SNF admission. If HCFA does not cover these claims, beneficiaries will be liable to pay them. Link to the transmittal at www.hcfa.gov/pubforms/transmit/A0049.pdf. Each year, OSHA compiles a list of the most hazardous workplaces, based on reported lost workdays due to employee injuries and illnesses. Normally, the agency inspects a maximum of 4,200 of these targeted sites. But this year OSHA has informed its compliance officers that "this year, there is no limit on the number of inspections for nursing homes." Initially, inspections will target facilities that employ at least 40 workers and that have a lost workday injury and illness rate of 14 or more cases per 100. Our attorneys actively work to help educate and update the long-term care industry. Some upcoming and recent seminars at which we have presented or will present are listed below.
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