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Les Levinson is the co-chair of the Transactional Healthcare Practice Group at Robinson+Cole. His practice concentrates on transactional, regulatory, and compliance matters for healthcare and life science clients, including home care and hospice companies, other non-acute providers, physician practices, hospitals, information technology and medical device companies, healthcare equipment providers and healthcare investors, lenders, and related enterprises and he has completed over 300 M&A and financing transactions. Read his full rc.com bio here.

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).

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

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 Finalizes 2020 Home Health Agency Payment and Policy Changes

On September 18, 2019, the Department of Justice (DOJ) announced a $21.36 million settlement with compounding pharmacy Patient Care America (PCA), as well as PCA’s Chief Executive, PCA’s former Vice President of Operations, and a private equity firm (PE Firm) that managed PCA on behalf of investors. The settlement resolves a False Claims Act (FCA) lawsuit alleging involvement in a kickback scheme designed to generate unnecessary referrals for prescription pain creams, scar creams, and vitamins reimbursed by TRICARE, the federal health care program for military members and their families. No determination of liability was made as part of the settlement. See our prior analysis of DOJ’s intervention in this case here.
Continue Reading DOJ Reaches $21.36 Million Agreement with Compounding Pharmacy, Two of its Executives, and Managing Private Equity Firm to Resolve FCA Allegations

“A mere difference of opinion between physicians, without more, is not enough to show falsity.”

In a 3-0 decision issued September 9, 2019, the U.S. Court of Appeals for the Eleventh Circuit affirmed a three-year-old district court ruling in United States v. AseraCare, Inc. that a Medicare claim for hospice services cannot be deemed false under the False Claims Act (FCA) based on a difference in clinical judgment. This decision – apparently the first circuit-level determination of the “standard for falsity [under the FCA] in the context of the Medicare hospice benefit” – will affect all hospice providers, as the Department of Justice (DOJ) and whistleblowers will not be able to rely on disagreements between physician opinions as the basis for establishing falsity under the FCA. Instead, the Eleventh Circuit instructs that a claim for hospice reimbursement “cannot be “false” – and thus cannot trigger FCA liability – if the underlying clinical judgment does not reflect an objective falsehood.” The Eleventh Circuit’s decision emphasizes that reasonable differences of opinion between physician reviewers of medical documentation are not sufficient to suggest that the judgments concerning a particular patient’s eligibility for Medicare’s hospice benefit, or any claims submitted based on such judgments, are false for purposes of the FCA.
Continue Reading Eleventh Circuit Endorses Objective Falsehood Standard for False Claims Cases Concerning Physician Judgment of Hospice Eligibility

On July 25, 2019, New York Governor Andrew Cuomo signed the Stop Hacks and Improve Electronic Data Security Act (SHIELD Act) into law. The SHIELD Act modifies the current Breach Notification Law to expand the types of data elements that are considered “private information” and to expand the data breach disclosure requirements for individuals and businesses. Moreover, the law creates a requirement that owners or licensors of private information meet a new “reasonable security requirement.”
Continue Reading SHIELD Act Becomes Law, Expanding Breach Notification and Data Security Requirements

On June 11, 2019, the New York Court of Appeals issued an opinion in Andrew Carothers, M.D., P.C. v. Progressive Insurance Company, 2019 NY Slip Op 04643, holding that an insurer could withhold payments for medical services provided by professional corporations “when there is willful and material failure to abide by licensing and incorporation statutes” without a direct finding of fraud.  The court found that medical professional corporations (PCs) ceding too much control of management activities, including finances and operations, to a non-physician violates the Business Corporation law and the corporate practice of medicine doctrine, making the entity improperly incorporated, thus allowing an insurance company to withhold payment. While the scope of the Carothers case was limited to “no-fault” insurance reimbursement, this opinion is instructive on how New York courts may in the future examine the arrangements between PCs and management service organizations (MSOs).
Continue Reading New York Court of Appeals Holds that PCs that Cede Excessive Control to MSOs Violate the Corporate Practice of Medicine Doctrine

The New York Senate and Assembly recently passed Senate Bill S2844B to strengthen current laws for employees who are victims of wage theft to secure and collect unpaid wages from their employers for work already performed. This bill would amend five sections of the law (Lien Law; Labor Law; Attachment under the Civil Practice Law and Rules; the Business Corporations Law; and the Limited Liability Law). If signed by the Governor, this bill would create a broad right for any employee to obtain a lien on an employer’s property based on the allegation of a wage claim and would significantly increase employee power in such disputes.
Continue Reading New York Legislature Passes Bill Allowing Employees to Place a Lien on Employer’s Property for Wage Claims

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

The Centers for Medicare & Medicaid Services (CMS) recently published a Proposed Rule, primarily intended to modify certain Medicare payment policies.  The Proposed Rule contains several provisions that address the growing use of telehealth. CMS noted that it had received many suggestions regarding the expansion of access to telehealth as well as appropriate pay for the same, in response to its call for comments in the CY 2018 Medicare physician fee schedule (PFS) proposed rule.
Continue Reading Medicare Proposes Revised Telehealth Services and Payments

A recent complaint filed by the United States Department of Justice against a private equity firms regarding an alleged kickback further illustrates new concerns private equity should be aware of in the healthcare arena and working with counsel to mitigate such concerns.  A February 23, 2018 press release from the DOJ regarding United States ex rel. Medrano and Lopez v. Diabetic Care Rx, LLC dba Patient Care America, et al., No. 15-CV-62617 (S.D. Fla.), available here, describes how the complaint was made against a pharmacy, several of its executives and the private equity firm, which manages the pharmacy and the private equity fund that owns the pharmacy.  The United States Attorney’s Office for the Southern District of Florida stated in the release that “We will hold pharmacies, and those companies that manage them, responsible for using kickbacks to line their pockets at the expense of taxpayers and federal health care beneficiaries.”
Continue Reading Private Equity Firm Named as Defendant in False Claims Act Case Targeting A Portfolio Company