Payment Matters

July 31, 2009

One Court Upholds Medicare "Written Agreement" Requirement for GME/IME

By: Thomas W. Coons and Mark A. Stanley *

The United States District Court for the District of Columbia's recent decision in Cottage Health System v. Sebelius, which can be viewed here, serves as a reminder that teaching hospitals must be extra vigilant when resident training takes place in non-hospital sites. Cottage Hospital upheld CMS's rule that, in order to receive medical education reimbursement for resident training in non-hospital sites, a provider must have a written agreement establishing that it will pay all expenses associated with such training. The Cottage Hospital holding affirmed the decisions of the Provider Reimbursement Review Board (PRRB) and CMS Administrator. In finding that CMS's written agreement requirement was within the agency's discretion, the court placed a significant roadblock in the way of providers who would challenge the requirement. The court also remanded the CMS Administrator's decision on the matter of medical education reimbursement for managed care days, which we shall discuss in an upcoming edition of Payment Matters.

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Are You Prepared to Obtain Your Own PS&R Report?

By: Carel T. Hedlund and Lisa D. Stevenson *

Providers are now responsible for obtaining their own Summary Provider Statistical and Reimbursement (PS&R) reports needed to file their Medicare cost reports, and should register with CMS as soon as possible to avoid delays in submitting cost reports.

On June 12, 2009, CMS released Transmittal 153, which reminded providers of the implementation of the redesigned PS&R system, a web-based, centralized system that allows providers to generate, download and print Summary PS&R reports, at their convenience.

Prior to the implementation of the redesigned PS&R system, Fiscal Intermediaries and Medicare Administrative Contractors (FIs/MACs) were required to supply each provider with a PS&R report every fiscal year. Beginning with cost reports for fiscal years ending on or after January 31, 2009, providers are required to utilize the new PS&R system to obtain Summary PS&R reports needed to file their Medicare cost reports. FIs/MACs will no longer send reports containing dates of service after January 30, 2009.

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Enforcement Date for Red Flag Rules Delayed Until November 1st - Additional Guidance to be Released

By: James B. Wieland and Mark A. Stanley *

At least in part due to Congressional pressure, the FTC, in response to what it termed "uncertainty" amongst smaller businesses regarding obligations imposed by the rule, has again delayed enforcement of the Red Flag rule, this time until November 1, 2009. Specifically, the FTC stated that the extension would allow it to:

". . . redouble its efforts to educate [small businesses] about compliance with the "Red Flags" Rule and ease compliance by providing additional resources and guidance to clarify whether businesses are covered by the Rule and what they must do to comply."

The full FTC posting can be accessed here.

Despite the multiple extensions, the FTC is maintaining that the rule is intended to have a substantial reach. There remains the possibility that the FTC will, under pressure from a number of national trade associations, reexamine the rule's scope.

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