Healthcare Regulatory Update: What to Watch for in 2016

Happy New Year, and welcome to another year sure to be chock-full of new healthcare regulations. Here’s what to watch for in 2016:

The 60-Day Rule and False Claims Act Liability

In 2010, the Affordable Care Act (“ACA”) instituted the requirement that Medicare providers return Medicare overpayments to the government no later than sixty (60) days after identification.  Failure to comply with the 60-day rule can lead to significant liability under the False Claims Act (“FCA”).  Although the rule has been in place for over five years now, the Centers for Medicare and Medicaid Services (“CMS”) has to this point delayed issuing final regulations explaining how it will enforce the 60-day rule.  CMS is expected to release that final rule by mid-February.

One key issue for CMS to sort out is determining when the 60-day clock begins to run. In other words, CMS’ new regulations should clarify (or at least provide guidance) as to when an overpayment has been “identified” by a Medicare provider. In promulgating this final rule, CMS will likely take into account the U.S. Supreme Court’s decision in August 2015, which held that the 60 days begins when the provider has been “put on notice that a certain claim may have been overpaid.”

Another key issue that should be addressed by the final rule is the length of the “look-back period” under the 60-day rule.  Under proposed regulations issued by CMS in February 2012, CMS proposed to require providers to implement a 10-year look-back period when identifying and calculating overpayments.  CMS received a great deal of pushback from stakeholders during the comment period, much of which implored CMS to implement a shorter look-back period.

 New Rules on Gainsharing

The practice of “gainsharing,” whereby hospitals share savings with physicians who cut costs for the hospital without sacrificing the quality of care, has to this point been prohibited by the Civil Monetary Penalties Law (“CMPL”). The CMPL states, in part, that hospitals cannot give doctors financial incentives that encourage reducing or limiting medical care.

However, by April 2016, the U.S. Department of Health and Human Services (“HHS”) is set to make recommendations to ease restrictions on gainsharing. Additionally, 2016 may also be the year that the HHS Office of Inspector General (“OIG”) finalizes its 2014 proposed rule to ease gainsharing prohibitions.

Merit-Based Incentive Payment System

After years of implementing temporary patches, 2015 saw Congress finally repeal the Sustainable Growth Rate (“SGR”), colloquially known as the “doc fix.” Now, however, regulators must come up with a replacement payment system, one that reflects the ACA’s policy objectives of rewarding physicians for quality rather than quantity. Specifically, CMS will be tasked in 2016 with designing the ACA’s Merit-Based Incentive Payment System (“MIPS”), with the goal of incentivizing quality.  Physicians already have the option of taking part in MIPS, and, as part of the program, will be measured on performance beginning in 2017 for payment adjustments (whether up or down) to begin in 2019.  As such, 2016 will be an important year for CMS to put the details of the MIPS program into place.

New Bundled Payment Model

On April 1, CMS is also set to roll out the Comprehensive Care for Joint Replacement, a bundled payment system that provides lump-sum payments for hip and knee replacements. Because hip and knee replacements are the most common inpatient procedures under Medicare, the new payment system is designed to incentivize hospitals to take more accountability for the quality and costs of such procedures.

The attorneys at Chilivis Grubman will continue to monitor these and other items throughout the year and bring you important updates as they arrive.  For any questions, or if we can assist you in connection with a healthcare regulatory or compliance issue, please contact us at (404) 262-6505 or