CMS Proposes Changes to Increase Advisory Opinions

Don’t you love it when you seek someone’s opinion but they go out of their way to make it inconvenient for you to ask for it? Such has been the case with the Centers for Medicare and Medicaid Services (CMS) and its Advisory Opinion process. CMS Advisory Opinions are issued by CMS when hospitals request an interpretation of a particular law or regulation.

So why is it that there have only been 20 requests in the past 30 years?

Given the millions of dollars that CMS and the Office of Inspector General (OIG) have fined hospital systems, physicians, and others for regulatory violations, one would think that Advisory Opinions would be more common as entities would seek guidance from regulators to avoid potentially disastrous consequences. It’s taken awhile but apparently CMS agrees as it’s now proposing to make it easier, less expensive, and more beneficial to request an Advisory Opinion.

In August, CMS announced a series of proposed changes to the process.

1. Reduced Response Time: Advisory opinions will now be issued within 60 days of submission (down from 90 days). It’s expected that CMS will consider expedited opinions, most likely at an additional cost.
2. Lower Cost: Right now, a typical opinion may be rendered for about $500-$1,000+. CMS is changing to a $220 per hour fee structure which is expected to save applicants on filing charges.
3. More Details are Required: By requiring the applicant to provide additional facts, the Advisory Opinion will provide better guidance for everyone.
4. Advisory Opinions as “Gospel”: CMS is also proposing to preclude sanctions against an entity involved in a matter that is “indistinguishable” from the fact pattern in the Advisory Opinion-not just the entity asking for the Advisory Opinion. This would preclude CMS from “changing its mind” when it eventually rules on a matter that has the same fact pattern as an Advisory Opinion.

The last two recommendations are perhaps, the most important of all. Trying to keep up with changes in the political and regulatory environment is challenging at best when trying to find relevant decisions or guidance, even if the opinion doesn’t exactly fit a particular circumstance.  Advisory opinions can play an important role in predicting an agency’s anticipated action related to certain facts, since they’re usually binding on the agency and the entity that requested it. If the agency agrees that a certain action is not a violation, the entity can legally rely on that opinion.  Others can use the Advisory Opinion as “guidance,” but the agency is free to change its mind from the Advisory Opinion. Under the new rules, Advisory Opinions will carry more weight in the event of a legal dispute or fine.

It’s hard to find fault with the proposed Advisory Opinion changes. More opinions will inevitably reduce the number of violations. Lower costs and reduced response time will encourage entities to seek clarification in a more frequent manner. And finally, the ability to rely on an Advisory Opinion as “gospel,” will create invaluable guidance when formulating processes and procedures.

Advisory Opinions should be a tool in the toolbox for legal and regulatory compliance. Now, along with your lawyer, accountant and consultant, the CMS Advisory Opinion will be added to the collection.