Let the Audits Begin . . .

Following the mandate set forth in HITECH, OCR has just announced that it's piloting a HIPAA compliance audit program beginning this month in order to assess HIPAA compliance efforts.  During this pilot phase, which is expected to last through December 2012, OCR will audit up to 150 covered entities from "as wide a range of types and sizes of covered entities as possible."  At least for now, Business Associates will not be included in the pilot program.  OCR has engaged KPMG LLP to conduct the audits, and has made public a sample initial notification letter.  

Each audit will include a request for documents and information, a site visit, and a draft audit report.  Covered entities will have the ability to comment on the auditor's report before its finalized.  While OCR states that it primarily will be using the audit reports to help develop technical assistance and evaluate the efficacy of corrective action plans, OCR is retaining the right to initiate a compliance review to evaluate any serious compliance issues uncovered during this process.  At the conclusion of the pilot program, OCR will "broadly share best practices gleaned through the audit process and guidance targeted to observed compliance challenges."  What happens after the pilot program, however, remains to be seen.            

Red Flags Rule Enforcement Postponed until Court Ruling

The Federal Trade Commission (“FTC”) and several medical associations have agreed to a joint stipulation that the FTC would not enforce its Red Flags Rule with respect to physician members of various associations until the DC Circuit rules on the American Bar Association’s pending action challenging the Red Flags Rule. Although the FTC has already announced that it will again delay the deadline for compliance with the Red Flags Rule until December 31, 2010, this stipulation may extend further the compliance deadline for physicians in the medical associations and state medical societies referred to in the case.

OIG Report on Improper ENT Billing

The Department of Health and Human Services (“HHS”) Office of the Inspector General (“OIG”) recently released a report presenting the results of an extensive medical record review conducted in 2006 regarding payments made to nursing facilities for Medicare Part B enteral nutrition therapy (“ENT”) claims for non-Part A patients. The study found that 21 percent of the claims were inappropriate or inadequately documented, resulting in an estimated $39 million in Part B payments that the government should not have paid. Although in the 2010 Work Plan OIG already declared its intent to focus on review of nursing homes’ Part B ENT billing, this report may result in increased scrutiny of providers’ claims and documentation.

Healthcare Professionals Call on FTC for Exemption from its Red Flags Rule

Will health care providers be the second profession to escape the Federal Trade Commission's (FTC) Red Flags Rule?  The heads of the American Dental Association, the American Medical Association, the American Osteopathic Association, and the American Veterinary Medical Association hope so, and they're asking the FTC to declare that its identity theft prevention rule (Red Flags Rule or Rule) does not apply to their licensed professionals.

In light of the November 2009 United States District Court decision in American Bar Association v. FTC, which held that the Red Flags Rule did not apply to legal professionals, the healthcare organizations issued a joint letter to the FTC requesting the same treatment.

The healthcare organizations specifically requested that the FTC:  (1) Announce that the Rule will not be applied to licensed health care professionals until at least ninety days after the final resolution of the ABA litigation and (2) Commit that if the result of the final ABA litigation is that the Red Flags Rule will not be applied to lawyers, the FTC will not apply the Rule to licensed health care professionals either.

The letter noted the substantial cost and burdens on healthcare professionals in complying with the Rule and stated that if lawyers were exempt from the Rule it would be "manifestly unfair" to subject healthcare professionals it.