AHLA's Speaking of Health Law
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AHLA's Speaking of Health Law
Hot Topics Related to Medicare Reimbursement and Licensure
Sandy DiVarco, Partner, McDermott Will & Emery LLP, and Dan Hettich, Partner, King & Spalding LLP, discuss issues related to Medicare and the practice of law in this area. They cover Medicare reimbursement for hospitals, different licensure requirements, EMTALA, provider-based status and site-neutral care, the Advocate Christ case, and what it’s like as an attorney to practice in a niche area like Medicare law. Sandy and Dan, among others, were authors of AHLA’s Fundamentals of Health Law, Eighth Edition.
Watch the conversation here.
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Speaker 2:ALA's, popular Health Law Daily email newsletter is now a daily podcast exclusively for a HLA premium members. Get all your health law news from the major media outlets on this new podcast. To subscribe and add this private podcast, feed to your podcast app, go to American health law.org/daily podcast .
Speaker 3:Hello, my name is Sandy de Barco , and I'm a partner with McDermott Will and Emory in our health and life sciences group, resident in Chicago. And I am a partner , uh, focusing on a mix of regulatory matters and nonprofit healthcare transactions.
Speaker 4:And hello everyone. My name is Dan Ick . I'm a partner at King and Spalding in in their healthcare group. I'm resident in Washington DC um, and I focus my practice on Medicare reimbursement issues , um, within that gamut, advising clients on some of the complexities , uh, but also litigating , uh, some of those issues when we think the government isn't paying them the way the statute or, or its own regulations say they should be paid. Um , very happy to , uh, be joining you.
Speaker 3:Great. And I know both you and I contributed to the recent updates to the fundamentals of health law , um, a HLA publication. Um, and I know , uh, since my practice crosses a bit into Medicare, that there's just a lot to unpack there. So if you had two or three minutes, how would you explain Medicare to someone?
Speaker 4:Yeah, that's a tall task. Medicare obviously is, is very complex, but I think the nutshell is, is almost conveying that complexity that Medicare is the single biggest , uh, health insurer payer in in the nation. It covers , uh, nearly all Americans over age 65. And if you think of about who needs hospital services, particularly inpatient hospital services, it's mostly people over age , uh, 65. So it's incredibly important to, to hospitals, to the overall , um, healthcare industry , uh, across the country. In many ways, it sets the tone. And maybe to get a little bit more technical with , I think I used that one minute there, so I got two minutes left. I'll say it's divided into four parts. Um, and you know, this might come up in, in our conversation, Sandy, that Part A is focused on inpatient , uh, reimbursement, part B, Medicare Part B is, and this is like different parts of the statute, the Medicare statute, part B on outpatient, so physician and other outpatient services. Part C is really interesting. That's kind of where the managed care rules , uh, reside for , um, you know, these private insurance companies that that partner with Medicare to provide alternatives for Medicare beneficiaries. And then I think the newest entry was, is Part D, which is , uh, Medicare's kind of prescription pharmacy benefit , uh, section. And I think, you know, there's lawyers that probably focus on, on each of those parts. Um, so I don't know if that was two or three minutes, Andy , but that would , that would be the nutshell that, that I would give.
Speaker 3:That's great. And what are some hot topics right now in Medicare that you think people should be aware of?
Speaker 4:Yeah, I, I think there are several. Um, some are more, some my particular focus within that is on , uh, mostly part A, you know, inpatient hospital reimbursement. Um, and really, you know, you can kind of, as I alluded to with all the different parts, they're all different sorts of specializations within Medicare. Um, so I'll , I'll focus on, on hot topics in , in that area primarily. Um, one I think and actually does reach , uh, more broadly is this recent Supreme Court case , uh, called Loper Bright that folks might have heard of. I think HLA had a another podcast , um, dedicated to that, to that issue. Um, but that overturned Chevron deference. So a lot of what Medicare lawyers do is interpret statutes , um, and also look at the agency regulations that are supposed to implement the statutes. And historically under Chevron deference, you know, even if the agency's interpretation looked like not the best interpretation of the statute , um, it would still stand as long as it was reasonable. That's what Chevron said. Uh, but just last June, the Supreme Court said, no, courts decide what the best reading of the statute is, and , and that's what controls, and that overturned 40 years worth of, of precedent on the Chevron. Um, so that's very exciting in Medicare for, you know, administrative law in general, but in Medicare in particular. So I, I think that's one , uh, issue that , um, folks should be focused on. I think another one less , uh, optimistic, if you will, less favorable for hospitals and, and the healthcare industry is , um, some of the, you know, within this , um, period of, of budget tightening and , uh, focus on fiscal austerity, et cetera, I think some of the proposed , uh, cuts and reductions to Medicare, I think there's , um, a false dichotomy that folks think, you know , as long as you're not touching beneficiary benefits directly, you know, it's, it's fine. But there are many proposals currently being floated that would reduce hospital reimbursement, and that has, you know, perhaps indirect, but, but pretty quickly begins to affect beneficiary services. And there are several kind of big proposals that are out there about eliminating, for example, Medicare bed debt or substantially changing and reducing the way , uh, the government pays for , uh, hospitals that treat a disproportionate share of indigent patients. Um, things like that, that I think is, is very important , uh, for folks to be aware of. And, and again, to understand it's not just cutting payments to the hospitals eventually , uh, and pretty, pretty quickly. It , uh, it affects Medicare beneficiaries. Na , I know your chapter focused on , um, hospital , uh, regulations and, and operational issues. Um, if you had to explain how Medicare requirements impact operations at hospitals and, and the different licensure requirements, if, if those differ and, and how that all works together.
Speaker 3:It's sort of the, the other side of the coin of your practice area in many ways, which is, you know , you've got policy and payment , um, and how those regulations work and how all the different parts work together. And a significant part of my practice is working with hospital and health system clients on the conditions of participation or conditions for coverage and how those regulations are actually put into practice and what happens when things go awry , uh, with a survey or a patient care issue. I'm a nurse by training, worked in an intensive care unit at an academic medical center before law school. So I found myself to have an instant affinity for these types of operational issues. And while I left the bedside well before , uh, EMRs even took over, it's something still that I find just fascinating. So on the, the enforcement side, if you will, of Medicare, you know , if you're a hospital or another type of healthcare facility or provider, you need to follow the regulations that apply to you. Um, so using hospitals as an example, you're talking other part A providers, as you're saying sometimes part B , um, and they need to follow the conditions of participation. And that is a , you know , a set of 20 some requirements with some subparts that cover everything from how your governance is structured to how your medical staff is structured to life safety code, you know, and on and on patient rights, et cetera, all these sorts of things. And subparts. And if there is an issue, be it found on a survey or on a complaint that is raised by a patient or a staff member or something that appears in the press, for example, hospitals are subject to surveys , uh, that can go on. I, I described them as, you know, from the, the rafters to the floorboards , uh, because it could literally be someone, a surveyor popping up your ceiling tiles to check out your wiring for life safety code all the way down to your floorboards to make sure things are clean , uh, that your kitchen is run properly, that patients are not restrained unduly. It really runs the, the full spectrum of things you can imagine happening in the hospital context and the process to respond to that and to make sure that the ultimate , uh, penalty that can be imposed, which here would be termination of the hospital's provider agreement, is avoided at all costs. It's a very draconian remedy. It's not the type of remedy on the hospital side , uh, where there's really like an intermediary step , uh, for some other providers like skilled nursing providers. There's financial penalties and other things that come into play, but it's, it's really an interesting side on how all the policy pieces fall together and how providers actually have to operate under them , um, once they are, they're imposed.
Speaker 4:So I know there are instances, some recently , uh, pretty heavily covered in the press where state and federal requirements might, might differ or , um, might allege to differ. What's your advice to clients? I mean, well, first, you know , have you seen those , uh, situations? Can you describe some of them and then what's your advice to clients in how to reconcile that, that tension?
Speaker 3:Right. I mean, it , it , there were always some issues in some states , uh, right, like a Florida or a Texas or a California where a state requirement may not have meshed exactly with the federal requirement. Um, but in the new administration, there's been a lot of changes, and I should back up, even before the new administration you mentioned LO or Bright , that sort of opened a whole new avenue sometimes for clients to say, you know, is this interpretation of this regulation is the interpretive guidance around some of these conditions of participation , um, actually things we could push back against in a way that definitely was not on anyone's radar before because of that deference that had been afforded to them. So those seeds were already planted before the new administration, but since the new administration came in with some of the executive orders that have come out, in particular, there have been conflicts almost immediately between state law and federal law , um, at least, and by law, I mean here, some of the executive orders not yet really put into legislation. So things like gender affirming care , um, some of the concerns around , uh, women's healthcare , for example, all of these things, conflict. I live in Illinois, we're a great example on the gender affirming care and , uh, women's healthcare procedure route, which is, you know, what state law and the Attorney General has said is the law of the land here in Illinois does not comport with the executive orders. Um, clients around the country are facing this to various degrees. I mean, we all see it in , uh, the media of all varieties out there every day , and our listservs on the health law side every day . And unfortunately, often I, I end up invoking the classic lawyer answer of, it depends, right ? There are definitely , um, some clients healthcare systems, for example, where they may have a certain cultural view on some of these items. And I , you know, I think things sort of fall into a variety of buckets. So a lot of the discussion ends up being, in many respects, less about the executive order and more about the risk balance of where an organization is comfortable or not in sticking with a certain position. And again, you see that in the news. You see the variety of responses that hospitals and healthcare systems have had to some of these executive orders all the way from, you know, very strident. We are not changing anything down to, you know, we have changed everything and everything in between. I think when the orders first came out, there was just a, a reaction of pulling back on a lot of things. But I think clients have been weighing some of the pros and cons and trying to determine the risks at this stage , uh, and identifying where they might be comfortable and not. I think as things move forward, obviously many of the executive orders have been stayed that has given clients some breathing room to really make up their minds and to think about what they might do if indeed, on a legislative basis, some of these become more permanent changes, will the conditions of participation change to hit some of these, these issues and concerns? Will they be shoehorned into existing conditions of participation like patient quality and safety? All that remains to be seen. Uh, but it's definitely something that is a case by case discussion based in part on the state, the location of the client, the culture of the client, their risk tolerance, and sort of where they feel like they wanna put their efforts and resources going forward.
Speaker 4:Stan , on some of those issues, are they , you know , potential changes, how many of them would you say would require new legislation and , and how much of it would just be the agency which is part of the executive branch? Could, I mean, presumably, I don't know if it would require notice and comment rulemaking, but could somewhat unilaterally , um, make those changes?
Speaker 3:Yeah, I think that it also, I think, falls in the spectrum. So the notice and comment, you know, there's been some mention about notice and comment, perhaps not applying all the time anymore in a traditional way that we all got used to right . Uh , working in this space. So that's sort of one issue. I , I do think,
Speaker 4:And that's the , that must the , uh, Richardson waiver .
Speaker 3:Yeah. Yeah. So I think there's a , um, a potential for there to be what I would call sort of interpretive changes or discretionary changes. Now, those I think are , again, are more likely to challenge to face challenges in our new post Loper Bright era to determine how are we really interpreting these things and not , um, and it may be the sorts of things where , uh, hospitals in this example, would wanna forge ahead to get some sort of judicial determination on how, how that's going to look. Now, none of that is going to make healthcare any more stable or make the resources of any of these providers, as you mentioned , uh, you know , who are potentially facing cuts both from Medicare and Medicaid, possibly feel any more stable. But it's definitely the sort of thing where, it reminds me of the CO era, not to bring that up again, but where things seem to be changing, you know, day to day , week to week . And some of the advice you gave was based on here's what we know today. Um, and, you know , we have the structure that Medicare provides as , as you advise clients, and then we're trying to drill it down to actual operation and implementation , um, on a daily basis.
Speaker 4:That makes sense. Sounds like , uh, interesting times and, and a bit fraught
Speaker 3:<laugh>, right? It it's like 2020 all over again in many respects. Um, now when you work in the Medicare space and you're focusing on, you know, the, the different parts and litigation and advising clients, you know, to me that sounds , uh, you know, like a regulatory geeks dream, but do you feel like you're sort of segmented away in your practice? Or are there things you, you also do on the side or, you know , what , what's, what's the story there?
Speaker 4:Yeah, I , I get that question from, from folks particularly, you know, some , um, law students or, or young associates that are contemplating a , a career in healthcare law or with our practice. And , um, I tell them honestly, you know, I don't find it , um, stifling , uh, at all. And I think while, I mean first 'cause Medicare, as we kind of already alluded to, and if you, you know, pick up this giant book , uh, you'll, you'll see it's, it's amazingly very amazingly complex. There's always a new something else to learn, a new challenge. Um, but beyond that, you know, although Medicare is kind of the common theme in my practice and, and many other , uh, attorneys practice within that arena, so that's the common thread, but I get to help my clients in all different aspects of , um, kind of bring all the tools to bear within that arena of Medicare reimbursement. So, for example, I already mentioned one of the things I do a lot of is, is litigate. Um, and I enjoy that , uh, a lot, the brief writing, the oral argument , uh, et cetera. But then also, you know, you can litigate when you think the laws on your side, the statute of regulation, but sometimes it's not. It's just, you know, the argument isn't there. And then I've, I've done some lobbying work. We have a , a team here at King and Sping, as most law firms do, that focus on government relations. Um, they know who the players are, who the committees are, but they need a subject matter expert when really the , the argument is just a statute needs to be changed. It doesn't make sense. It's, it's hurting hospitals or beneficiaries without, you know, any, any reason. Um, so I've gotten to do that type of work, which is a lot of fun in , in a different way. Um, also some false Claims Act defense. Obviously, there are attorneys that dedicate their careers to , uh, false Claims Act defense. I'm brought in more when the allegation has to do with some technical Medicare reimbursement issue. You can imagine it's so complicated that, you know, a creative whistleblower can find some potential or alleged , um, variation from, from what, you know, some manual said on page 10,004. Uh, and that's where a subject matter expert like, like me might come in to explain how it really works. Um, and then sometimes, and then of course, there's no more, you know, very traditional regulatory practice of just helping your clients , um, deal with all of these , uh, complex rules. Um, sometimes, again, one of the things I like a lot about healthcare practice in general, but Medicare work that I do is in , in many instances, you see a pretty, kind of what I started off, it's not just hospital reimbursement. You see the effect on beneficiaries in the community often pretty directly. Um, I had one client that , um, Medicare will only pay for, will only establish it gets complicated , um, a payment system for hospitals that have new residency training programs, new programs, training physicians. Um, and so this hospital found out the government didn't think its program was new. Um, it was hoping to start a really robust program with, you know, over a hundred residents that would be transformative. But it was told, you know, it , it wasn't new and, and they wouldn't qualify. And we were able to litigate both litigate and lobby on that issue and finally get a change. And now that hospital has, you know, 150 residents , uh, it's really been transformative. Um, so, you know, for, for all those reasons, I find it, you know, very fulfilling actually. And, you know, and , and the opposite of stifling and helping my clients figure that out and navigate that process. And as I said, bringing all those tools of, you know, litigating, lobbying, advocacy, educating to bear is really quite , um, quite fulfilling.
Speaker 3:I, I always think back to when I was a young lawyer and I would tell people, oh, I'm a healthcare lawyer. The automatic assumption, maybe it was my nursing background or more generally was, oh, you're a med medical malpractice defense lawyer,
Speaker 4:<laugh>,
Speaker 3:Right ? Like , no offense to them, but like, there's just a lot more to the, the , the practice than, than that sort of personal injury type perspective. It is, you know , uh, almost a , a self perpetuating thing. There are so many changes in regulation over time , um, and it's amazing to be able to keep up with them and to get some of those wins feels great.
Speaker 4:Yes, yes. That , that's one nice thing about litigating you get eventually, it might take a while, sometimes a long while, but eventually you get an answer and , and hopefully it's a favorable one, but even if it's not, I've, I've, I've lost cases too , obviously, and the ones that really stick is when, you know, you feel like a judge didn't dig in or, or didn't really understand. In most cases, that's not the case, though, in most cases. You know, the , I I feel like the system works well. The judges dig in, they understand that they might disagree, and that you can live with, you know , reasonable people can disagree. It's, it's more when , like you didn't, you didn't really follow it or that it becomes more, more galling . But , um, then you alluded to already several regulatory challenges, particularly in, in today's environment. Other others that you would highlight, maybe , maybe more traditional ones , um, that your hospital clients are, are facing, you know, in, in this time period in particular.
Speaker 3:Yeah, I do feel like tala is what, what's old is new again. Mm-hmm <affirmative> . Um , and you know , some of that is related to some of the shifts in the post-ops environment and, and some of it is just the nature of healthcare right now with Ed overcrowding Problems with Borders, you know, the M tal m Tal L is the Emergency Medical Treatment and Labor Act. Um, it requires hospitals that are enrolled with Medicare, that have emergency departments, just to simplify it , um, to provide a medical screening exam and stabilizing treatment to anyone who presents for that care. Um, it was founded as a very simple premise, which is that if someone seeks care in an emergency department for an emergency and they are, you know , a pregnant person, or they are an elderly person, or they have a behavioral health issue, that if they are uninsured, that they should not be turned away because that's obviously very detrimental. Um, there's a series of situations that led to the passage of EMTALA many, many decades ago now that involved, and this sounds terrible, but hospitals basically taking patients in their hospital gowns and leaving them on the street because they didn't have coverage and they didn't want to care for them and not be reimbursed. Um, so the simple premise one would think it has grown into this very byzantine area of regulation with case law attached on top. Um, and it's just become an incredibly fraught thing. And I feel like it comes in waves. And some of my clients now are in the midst of a wave of having issues about what do we do when this happens or that happens, or with, you know, patients who are perhaps homeless and who are coming to the ED five times a day because they're cold or they are hungry. Um, and, you know, how do they balance their responsibilities without missing an issue that perhaps one of those individuals actually does need care. Tala is one where, you know, again, I feel like what's old is new again, it's back , um, and it's not gonna be going away. And hopefully at some point there will be some better refinement of the regulatory scheme there to make sure that that what underlies the regulation, the good rationale behind it, is maintained while perhaps making it a little simpler for hospitals to actually comply with. Um, and then the other big thing that is, you know , sort of coming up in wave stress right now are ties into what you look at from the reimbursement side, which is provider based status and site neutral care. Mm-hmm <affirmative> . Um , and how that operationalizes, so there's the payment implications, but also the implications of how do we follow all these rules to make sure that the locations we have comply and that we are sure that we're billing properly or assigning them correctly for other purposes outside of reimbursement. If it's a site neutral world, is it a three 40 B or other implication? So those sorts of questions, you know , come up all the time. Um, and, you know , I feel like, again, are , are sort of in waves now as hospitals and health systems figure out where they're gonna go in a post pandemic environment. You know , I feel like from day to day we read the stories about we need more beds to , we need more outpatient care to , we need more care in the home. And it's just all very unsettled. Then at some point , um, there's gonna have to be some alignments on, you know , where do you really need the , the sites of care? How are they going to be paid for, you know, in a way that when you apply the , the structure of A, B, C, D and whatever other letters they come up with down the road, like is gonna make sense and be rational.
Speaker 4:Mm-hmm <affirmative> . Yeah, those sound , um, really consequential , uh, issues. Like I said, everything old is, is new Again. It made me think, Sandy , when you were speaking , um, one item I forgot. Uh , when you asked me at the outset of, you know, important hot topics , um, there is , uh, a Medicare Supreme court, a Medicare case pending in front of the Supreme Court that I , I should have mentioned, obviously , uh, hot topic, we don't, there's aren't , there's not too many Medicare cases that get all the way to the Supreme Court. Um, and it's an important one, again, consistent with that theme of, of ultimately, you know, like, like Antala and some of these other issues affecting patients. Uh, the issue, it's a case called Advocate Christ. It was argued , uh, back in November , uh, should be decided probably any day at this point. The Supreme Court has, I think, decided seven of, I mean, four of the seven November cases already. Uh, so one of the three cases yet to be decided is this advocate Christ. And the issue there again, hospital reimbursement hospitals get , uh, increased reimbursement if they treat a disproportionate share of indigent patients. The idea being kind of, as you alluded to a little bit in the EMIC circumstance, that indigent patients tend to be more expensive than average. They treat, they tend to have more comorbidities, less, less healthcare . Um, other, other issues besides , um, medical issues, physical issues of homelessness, et cetera , et cetera. And , uh, one of the proxies for measuring whether, how many indigent patients a hospital treats is, how many of a hospital's Medicare patients are entitled to supplemental security income. And that's reserved for people who are, were pretty pretty indigent. Um, when it comes to that CMS entitled , um, I mean , interprets that phrase entitled to SSI very narrowly that only a patient that receives a cash benefit in a particular month. So even if the patient has applied, been enrolled , uh, and usually a one year enrollment period , if in a particular month the patient doesn't receive that SSI benefit, CMS says you weren't entitled. And the hospitals instead are arguing, no, you're entitled for that full year. Uh, there's all sorts of reasons why you might not get , uh, your check in a particular month if you didn't update your address. Um, in some cases, CMS or SSA, this is actually the Social Security Administration that's sending the check. They can't send it to the beneficiary directly because, you know, the person has, has mental issues or whatever the case may be. So they're looking for a designated , uh, representative, and if they don't have that, they can't send the check. So all , all those type of patients are excluded from this measure of indigency. And that obviously adversely affects hospitals and kind of consistent with the theme that I started with, you know, by extension, you know, the , um, indigent patients that, that the hospitals serve. So it's an important issue , um, for hospitals. Folks are watching it closely. Um, again, I think any day , um, in fact by the time this podcast is, is published , uh, there might be a decision , uh, from the Supreme Court. I listened to the oral argument. I think it's gonna be a split decision. Um, it seemed pretty clear. It's going too , too close to call. I think in terms of, I'm optimistic that the hospitals will win. I'm, I'm hopeful, certainly. Um, but we should know pretty soon. So it was one other hot topic that I was remiss in not mentioning , uh, at the outset.
Speaker 3:Yeah, that's, that's great. I , I think the other, another thing as you were talking that made me think of things that are also shifting right now is just recently it was announced that CMS is gonna consolidate some of the regional office functions.
Speaker 4:Hmm . I hadn't heard about that .
Speaker 3:Yeah. So we'll see how that actually pans out. But on the sort of the operation side and survey and certification side, you know, again, just another shift , uh, in another way, you know, perhaps where there may be some delays or other concerns for, for hospitals and other healthcare providers to get answers or have processing of various , um, concerns , uh, dealt with. 'cause so much has been, you know, punted to the regional offices or CMS locations, whatever they're calling them, they change the name every few years just to be interesting. Um, and the state agencies on the licensing side , um, it seems like, again, pendulum swing, you know, with the Fed . Does , does the federal government wanna handle some of this stuff? Are they gonna turf a lot of it back to the state agencies ? So just a period of a lot of change, be it on, you know, reimbursement , um, things like the case you mentioned , uh, new developments, and then, you know , how it actually trickles down to patient care. Um, all of which, you know , fully, fully explored to some best we could in the fundamentals chapter, but it just goes to show that, you know , there's almost an impossibility to put some of this on paper because it can change so much and so quickly.
Speaker 4:Yeah, yeah . As I said before, it's certainly very interesting times to be a , to be a healthcare lawyer. Sandy , I , I think we're out of time. I don't know if you have any final thoughts. Um, I'll say it was a pleasure working with you on this and, and having this conversation. Uh, I said lots, lots more to come. We could probably do this every year and have right . All different topics to talk about
Speaker 3:Recurrent . Yeah, for sure. No, it's been great. Thanks so much, Dan.
Speaker 4:Take care.
Speaker 2:Thank you for listening. If you enjoyed this episode, be sure to subscribe to ALA's speaking of health law, wherever you get your podcasts. To learn more about a HLA and the educational resources available to the health law community, visit American health law.org.