CMS to Repay Hospitals Millions After Court Finds Reduction in Rates Improper

On December 12, 2019, the Centers for Medicare and Medicaid Services (CMS) announced that it will automatically reprocess claims which had been reimbursed at a reduced rate in 2019 under the site-neutral payment policy and pay hospitals monies that were withheld due to the policy.

In November 2018, CMS promulgated a Final Outpatient Prospective Payment System (OPPS) Rule and implemented its site-neutral payment policy, which cut Medicare reimbursement rates for outpatient hospital services provided at certain off-campus provider-based departments (PBDs) to the lower Physician Fee Schedule (PFS) rate for the clinic visit services – a 60 percent reduction from the OPPS reimbursement rate for the same service. CMS planned to phase in application of this payment reduction over two years. The American Hospital Association, Association of American Medical Colleges and nearly 40 hospitals challenged the policy, arguing that the Medicare Act did not allow CMS to cut the rates. CMS believed that it could develop a method to set payment rates for a particular service which is causing “an unnecessary increase in cost and volume without regard to budget neutrality.”

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DOJ Announces $26.67 Million Settlement with Laboratory to Resolve FCA Allegations

On November 26, 2019, the Department of Justice (DOJ) announced a $26.67 million settlement with a laboratory testing corporation, Boston Heart Diagnostics Corporation (Boston Heart). The settlement resolves allegations of False Claims Act (FCA) violations related to alleged payments for patient referrals in violation of the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (PSR Law) – commonly known as the Stark Law – and other improper billing. Continue Reading

DOJ Announces Physician Self-Referral (Stark) Law Settlement in Excess of $46 Million with California Health System and Surgical Group

On November 15, 2019, the Department of Justice (DOJ) announced it had reached a settlement with Sutter Health (Sutter) and Sacramento Cardiovascular Surgeons Medical Group Inc. (Sac Cardio) to resolve alleged violations of the Physician Self-Referral Law (PSR Law), commonly known as the Stark Law. Sutter is a California-based health services provider; Sac Cardio is a Sacramento-based practice group of three cardiovascular surgeons. The total settlement in excess of $46 million includes $30.5 million from Sutter to resolve allegations of an improper financial relationship specific to compensation arrangements with Sac Cardio. Sac Cardio has agreed to pay $506,000 to resolve allegations of duplicative billing associated with one of these compensation arrangements. Separately, the settlement includes another $15,117,516 from Sutter to resolve self-disclosed conduct principally concerning the PSR Law. Continue Reading

Texas Health and Human Services Fined $1.6 Million for HIPAA Violations

The Office for Civil Rights (OCR) announced that it has fined the Texas Health and Human Services Commission (TXHHS) $1.6 million for HIPAA violations. This is one of the few fines the OCR has levied against a state agency.

The fine centers around a data breach that TXHHS self-reported to the OCR in June 2015 regarding the personal health information (PHI) of 6,617 individuals that was viewed over the Internet. The information that was publicly accessible includes the individuals’ names, addresses, Social Security numbers and treatment information. Continue Reading

New York DOH Proposed New Licensure Regulations for LHCSAs to be Effective April 1, 2020

The New York Department of Health (DOH) proposed amendments and additions to 10 NYCRR 765 that would amend application processes for Licensed Home Care Services Agencies (LHCSA). These regulatory changes stem from the 2018 NY State budget, which established a two-year moratorium on LHCSA applications and stipulated certain changes to licensure requirements. If finalized, the proposed regulations will create new public need and financial feasibility requirements for LHCSA applications, in addition to the existing character and competence requirement, and will change what constitutes an application amendment requiring the approval of the Public Health and Health Planning Council (PHHPC).
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CMS Issues Final Regulations for Hospital Price Transparency

On November 15, 2019, the U.S. Department of Health and Human Services (HHS) Centers for Medicare and Medicaid Services (CMS) announced final regulations implementing greater price transparency requirements for hospitals. Issued on the heels of a Trump Administration Executive Order directing HHS to propose regulations on increased price transparency, the new regulations modify and finalize CMS’ earlier guidance implementing section 2718(e) of the Public Health Service Act, to further expand price transparency requirements for hospitals. (See our previous analysis of the Executive Order here.) Effective January 1, 2021, the new regulations will be located at 45 C.F.R. 180.00 et. seq. and will require hospitals to make accessible specific “standard charge” pricing data for all “items and services” provided. Furthermore, the regulations include special requirements for posting pricing information about “shoppable services.” Key details are summarized below:
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DOJ Announces FCA Lawsuit Settlement with Spinal Device Manufacturer and Senior Executives for Alleged Kickbacks Paid to Surgeons

On November 7, 2019, the Department of Justice (DOJ) announced it had settled a False Claims Act (FCA) lawsuit against Life Spine, a spinal device manufacturer, and two of Life Spine’s senior executives. The settlement totaled $5.99 million and included various admissions of responsibility to settle allegations of kickbacks paid by Life Spine that the DOJ claimed were designed to induce surgeons to utilize Life Spine devices and submit claims to federal health programs for these improperly-induced utilizations in violation of the federal anti-kickback statute (AKS) and FCA. The settlement includes $5.5 million to be paid by Life Spine and $490,000 to be paid by its CEO and VP of business development.
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CMS Finalizes 2020 Home Health Agency Payment and Policy Changes

On October 31, 2019, the Centers for Medicare and Medicaid Services (CMS) finalized its 2020 payment and policy changes rule for Home Health Agencies (HHA Rule).  The final rule is scheduled to be posted in the Federal Register on November 8, 2019 (see the since published rule), and allows for comments until December 30 in advance of its January 1, 2020, effective date. The HHA Rule makes changes to the Home Health Prospective Payment System (HH PPS), including the implementation of the Patient-Driven Groupings Model (PDGM), and makes other policy changes for home health agencies to the Home Health Value-Based Purchasing (HHVBP) Model and the Home Health Quality Reporting Program (HH QRP).  These changes further the shift to a value-based payment system focusing on patient need over volume of care. Continue Reading

CMS Proposes to Newly Define Commercially Reasonable, and Tweak Definition of Fair Market Value, in New Physician Self-Referral Law (Stark Law) Regulations

On October 17, 2019, the Centers for Medicare & Medicaid Services (CMS) formally published its proposed rule (PSR Rule) to update exceptions to the Physician Self-Referral Law (PSR Law, also known as the Stark Law). For our initial overview of the PSR Rule (and of the Office of Inspector General’s corresponding proposal to update the Anti-Kickback Statute) see here. The PSR Rule contains a number of important proposals to update the PSR Law, including putting forward a definition of the term “commercially reasonable” and revising the definition of “fair market value.”  These terms and concepts are essential to PSR Law compliance, and constitute key elements of a number of exceptions to the PSR Law, including for space and equipment leases, employment arrangements, and isolated financial transactions. Continue Reading

CMS Proposes Rule Clarifying Physician Self-Referral Law Rules for Group Practice Profit Sharing

On October 9, 2019 the Department of Health and Human Services Centers for Medicare and Medicaid Services (CMS) published a proposed rule making changes to the Physician Self-Referral Law (PSR Rule), also called the Stark Law. Among other revisions to the PSR Rule, the proposed rule would modify the group practice special rule that allows physician profit sharing in certain circumstances. Under the proposed rule, the “overall profits” group practice physicians can share must be a combination of all designated health services (DHS) profits, not just the DHS profits from the type of service the physician renders. The clarification is significant as it resolves lingering uncertainty regarding proper compensation arrangements for group practice physicians. Continue Reading

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