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CONGRESS AGREES ON MEDICARE/MEDICAID RATES

In its agreement on the federal budget bill, Congress overrode President Bush’s 4.4% reduction in Medicare physician fees, instead freezing payments for 2006 at the 2005 level. The bill increases funding to fight Medicaid fraud and imposes cost-savings in the Medicare program via changed payment policies for some providers, including imaging services, and increased Part B premiums.

HIGH COURT ENDORSES BROAD UNPRECEDENTED “SEARCH AND SEIZURE” POWERS FOR OPMC

The New York State Court of Appeals recently held that The Office of Professional Medical Conduct need not obtain a subpoena before conducting what is known as a “Comprehensive Medical Review (“CMR”) of a physician’s records. The decision provides OPMC with seizure powers that far exceed even those bestowed upon police, state and federal prosecutors, who must obtain a search warrant before doing so. While a CMR serves as the functional equivalent of a search warrant, and permits OPMC to seize large numbers of patient records without advance notice, none of the due process protections attendant to a search warrant apply. Therefore, OPMC may seize records from a physician without demonstrating to a judge that there is cause to believe that the records will reveal evidence of misconduct and, furthermore, may seek to admit those records into evidence at a disciplinary proceeding, even if it is ultimately proven that the records were seized without cause.

OIG ANNOUNCES RECORD RECOVERIES FOR FRAUD AND ABUSE

In its semiannual report to Congress, the Office of Inspector General for the US Department of Health and Human Services (“OIG”) announced that it has nearly doubled its savings and recoveries over the last five years and expects to save or recover nearly $35.4 billion for this fiscal year. The figures for 2005 include $1.2 billion in recoupments attributable to audits and $1.6 billion from various fraud initiatives. Nearly 4,000 providers were excluded from federally funded healthcare programs, and more than 750 criminal and civil actions were initiated against providers for fraud. Among those prosecuted were physicians who filed false claims for diagnostic tests and consultations, sleep studies, anesthesiology, chiropractic services, and pain management, as well as a hospital administrator who settled charges of providing kickbacks to a medical staff physician. The OIG also recently released its Work Plan for 2006 which describes both continuing and new investigative initiatives in its fight against fraud and abuse, including emphasis on documentation of medical necessity for power wheelchairs, duplicate billing for physical therapy, wound care equipment, therapeutic footwear and glucose test strips. Of course, major new (and novel) initiatives will also be undertaken to control the cost of the new Medicare part D prescription drug benefit. If you, or your practice, are contacted by OIG or an insurance company concerning a fraud claim, audit or demand for repayment, feel free to contact Kern Augustine for guidance at (800) 445-0954.

KERN AUGUSTINE ANNOUNCES NEW ASSOCIATION

KACS is delighted to announce that Dr. Lorne Sheren, will be joining the firm on January 3, 2006. Dr. Sheren has been the Vice Chair and Director of Clinical Operations, as well as the Director of Quality Assurance, for the Department of Anesthesiology at University Hospital, Newark, as well as an Assistant Professor of Anesthesiology at UMDNJ. He is a Magna Cum Laude graduate of Seton Hall University Law School. His extraordinary combination of talent and experience will further KACS’ mission of providing the finest legal services to our physician clients.

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