Texas Health System MD Anderson Seeks 5th Circuit Review of HHS Determination that HIPAA Required Encryption of its ePHI

On April 8, 2019, The University of Texas MD Anderson Cancer Center (MDA) filed a petition with the U.S. Court of Appeals for the Fifth Circuit seeking review of a decision by the Department of Health & Human Services’s (HHS) Departmental Appeals Board (DAB) Appellate Division to uphold $4.35 million in civil money penalties (CMPs) assessed against MDA by HHS for alleged violations of HIPAA’s Security and Privacy Rules.

The DAB’s decision, issued on February 8, 2019, affirmed a 2018 decision by an Administrative Law Judge that sustained CMPs issued against MDA arising from three HIPAA breaches in 2011 and 2012 (see our previous analysis of the ALJ’s decision here). Continue Reading

OIG Approves of Free In-Home Follow-Up Care Program Targeting High Risk CHF and COPD Patients in Advisory Opinion

On March 6, 2019, the U.S. Department of Health & Human Services Office of Inspector General (OIG) issued a favorable advisory opinion that allows a nonprofit medical center (“Center”) to offer free, in-home follow-up care after a recent hospital admission for qualifying patients (the “In-Home Program”). In Advisory Opinion No. 19-03, the OIG concluded that although services furnished to qualifying patients under the In-Home Program would constitute remuneration to patients under the Anti-Kickback Statute (AKS) and the Civil Monetary Penalties law (CMP), the OIG would not impose sanctions on the Provider due to the low-risk nature of the In-Home Program.

The Provider furnishes a range of inpatient and outpatient hospital-based services, and currently offers in-home care to qualifying high-risk patients suffering from congestive heart failure (CHF) who (i) are currently admitted as inpatients of the Provider or (ii) were admitted within the previous 30 days and are being treated by the Provider’s outpatient cardiology department (“Current Arrangement”). Under the Current Arrangement, a clinical nurse leader must determine that the patient is a high risk for inpatient readmission using an industry-standard risk assessment tool, the patient must be willing to enroll in the program after consultation with the clinical nurse leader, the patient must seek follow-up care at the Provider’s CHF center, and the patient must live in the Provider’s service area. Continue Reading

Series of 2019 Enforcement Actions Highlight Continued Federal and State Scrutiny of Health Care Billing in Connecticut

Since the beginning of 2019, federal and state authorities in Connecticut have announced a number of enforcement actions targeting alleged health care fraud in the state. These cases are a reminder to providers of heightened criminal and civil scrutiny of arrangements implicating health care fraud and abuse laws in the state, and also reflect the extensive federal-state cooperation between the Department of Justice (DOJ) and Office of the Attorney General (AG) in investigating fraud and abuse. That federal-state cooperation is part of Connecticut’s Interagency Fraud Task Force, an initiative started in 2013 to prosecute fraud that includes multiple Connecticut agencies, as well as DOJ and the Office of Inspector General (OIG) within the Department of Health & Human Services (HHS). Continue Reading

CBD Update: FDA Issues Statement, Calls Public Hearing, and Announces Warning Letters on Products Containing Cannabis and its Components

On April 2, 2019, the Federal Food and Drug Administration (FDA) issued a statement and announced a public hearing on consumer products derived from cannabis and its components, including cannabidiol (CBD). Recognizing the need to provide clarity on the authority of FDA to regulate these products, and what pathways are available for marketing them, the agency outlined its next steps:

  • public hearing will be held on May 31, and written comments are being sought from the public.
  • FDA is forming a high-level internal agency working group to explore potential pathways for dietary supplements and/or conventional foods containing CBD to be lawfully marketed, including possible changes in existing laws. The working group plans to begin sharing information and/or findings with the public as early as Summer 2019.
  • Frequently asked questions on FDA’s webpage will continue to be updated to address this subject.
  • FDA will continue to issue warning letters to companies marketing CBD products, in particular those making what FDA characterizes as “egregious and unfounded claims that are aimed at vulnerable populations.”

The FDA statement noted that products containing cannabis and cannabis derivatives (such as CBD) are currently being marketed as human drugs, dietary supplements, conventional foods, animal foods and drugs, and cosmetics, among other things. The agency pointed out that attention to these products increased after passage of the Agriculture Improvement Act of 2018 (2018 Farm Bill). The 2018 Farm Bill established “hemp” as a new classification of cannabis – and defined hemp as cannabis and cannabis derivatives with extremely low (no more than 0.3 percent on a dry weight basis) concentrations of the psychoactive compound delta-9-tetrahydrocannabinol (THC). Although the 2018 Farm Bill removed hemp from regulation under the Controlled Substances Act, Congress retained the FDA’s authority to regulate these products under the Federal Food, Drug, and Cosmetic Act and Public Health Service Act. At that time, the FDA issued a statement explaining the agency’s approach to these products.

FDA also announced that it had issued warning letters, in collaboration with the Federal Trade Commission, to three companies, alleging that they made unsubstantiated product claims on product webpages, in online stores, and on social media websites, including the purported ability to limit, treat or cure: cancer, neurodegenerative conditions, autoimmune diseases, opioid use disorder, and other serious diseases. The subject products included oils, salves, gummies, and CBD for dogs.

The FDA statement clarified the agency’s commitment to “protect consumers from companies illegally selling CBD products that claim to prevent, diagnose, treat, or cure serious diseases, such as cancer, Alzheimer’s disease, psychiatric disorders and diabetes.” This includes continuing to monitor the marketplace and taking enforcement action in these cases. At the same time, FDA emphasized the countervailing goal of “exploring an appropriate, efficient and predictable regulatory framework to allow product developers that meet the requirements under [its] authorities to lawfully market these types of products.” The FDA acknowledged in the statement that it could take “some time” to fully resolve the pathways available for dietary supplements and/or conventional foods containing CBD to be lawfully marketed.

New York Court of Appeals Upholds Thirteen-Hour Rule for Home Health Aide Pay

On March 26, 2019, the New York Court of Appeals upheld the state Department of Labor’s (the DOL) so-called “13-hour rule” governing payment of home health care aides who work 24-hour shifts. In a closely-watched decision with significant ramifications for the state’s home health industry,  New York’s highest court reversed two 2017 appellate decisions that had overturned the DOL’s  rule and caused substantial uncertainty for home health providers throughout the state.  In short, the New York Court of Appeals confirmed that New York home health care aides may be paid for 13 hours of a 24-hour shift, as long as the aides are given eight hours of sleep time (with five of those being uninterrupted hours) and three hours of meal breaks.

As background, in New York home health aides who work 24-hour shifts have been treated as “live-in employees” for purposes of New York’s Minimum Wage Order regulation (the Wage Order). Under the DOL’s interpretation of the Wage Order, employers were not required to pay an aide for each hour of a 24-hour shift as long as the aide was given up to eight hours of sleep time (with at least five of those hours uninterrupted) and three hours for meal breaks. The DOL most recently affirmed its interpretation via an opinion letter issued in March 2010, which states in pertinent part that “it is the opinion and policy of this Department that live-in employees must be paid not less than for 13 hours per 24-hour period provided that they are afforded at least eight hours for sleep and actually receive five hours of uninterrupted sleep, and that they are afforded three hours for meals.” This recognition of the 13-hour rule for live-in employees was consistent with positions taken by the DOL in previous decades. Continue Reading

Group Practice to Pay $1.85 Million Settlement Tied to Allegations of Improper Unbundled Billing

On February 25, 2019, the U.S. Department of Justice (DOJ) announced a settlement with a urology group practice to settle allegations of False Claims Act (FCA) violations tied to the alleged submission of improperly unbundled Medicare claims. The pursuit and settlement of this FCA suit by the DOJ represents at least the second recent enforcement action targeting allegations of improper unbundled billing of services to Medicare, and may therefore indicate heightened governmental interest in those billing practices. See here for our analysis of the previous unbundled billing case. Continue Reading

Department of Justice Intervenes in False Claims Act Suit, Adding Reimbursement Consultant Defendant

On February 19, 2019, the Department of Justice (DOJ) announced that it had intervened in a False Claims Act (FCA) whistleblower suit filed against Arriva Medical LLC (Arriva) and its parent that allegedly involves the submission of false claims for medically unnecessary glucometers, and alleged kickbacks to Medicare beneficiaries in the form of free glucometers and copayment waivers.  This intervention is particularly noteworthy for the fact that in addition to joining the suit, DOJ announced that it was adding a reimbursement consultant used by Arriva as a defendant to the FCA suit. Continue Reading

Department of Justice Announces Significant False Claims Act Settlements Tied to Electronic Health Records Arrangements

The Department of Justice (DOJ) recently announced two high-dollar False Claims Act (FCA) enforcement actions involving allegedly fraudulent arrangements tied to the implementation and use of electronic health record systems (EHRs). The respective settlements enable recovery by DOJ of over $100 million, and immediately precede the government’s recent proposal of new rules to promote the interoperability of EHRs. The settlements thus serve as an important reminder of the importance of adhering to federal fraud and abuse laws and regulations as hospitals and other health care providers continue to implement EHR technology. Continue Reading

HHS Proposes to Amend AKS Safe Harbors to Exclude PBM Rebates and Incentivize Consumer Drug Discounts

On February 6, 2019, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) published a proposed rule (Proposed Rule) that would amend the safe harbor regulations under the Federal Anti-Kickback Statute. The Proposed Rule is intended to “address the modern prescription drug distribution model” and make sure that the safe harbors “extend only to arrangements that present a low risk of harm to the Federal health care programs and beneficiaries.” Specifically, in the Proposed Rule OIG proposes to alter the definition of  “discounts” under the so-called “discounts safe harbor” at 42 C.F.R. § 1001.952(h) to exclude from protection any reductions in price or other remuneration offered by pharmaceutical drug manufacturers to pharmacy benefit managers (PBMs), Part D plan sponsors, or Medicaid managed care organizations. Additionally, the Proposed Rule proposes and solicits comment on two new safe harbor provisions: one aimed at reducing the price of pharmaceuticals where reductions in price are reflected at the point of sale to a beneficiary, and a second that would protect certain fixed fee services arrangements between manufacturers and PBMs. Continue Reading

OIG Advisory Opinion No. 19-02 Allows Pharmaceutical Manufacturer to Temporarily Loan Smartphones to Financially Needy Patients to Receive Data from a Digestible Medication Sensor

On January 24, 2019, the Office of Inspector General (“OIG”) issued a favorable advisory opinion allowing a pharmaceutical manufacturer (“Manufacturer”) to temporarily loan limited-functionality smartphones to financially needy patients who lack the required technology to receive adherence data from a sensor embedded in a prescribed antipsychotic medication (“the Arrangement”). The OIG concluded that the Arrangement did not constitute grounds for penalties under the Civil Monetary Penalties law (“CMP”) and that although the Arrangement could potentially cause remuneration under the Anti-Kickback Statute (“AKS”), the OIG would not impose sanctions on the Manufacturer as related to the Arrangement based on the low-risk nature of the Arrangement. Continue Reading

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