In its second quarter Securities Exchange Commission (SEC) filing, Allscripts addressed its announced agreement in principle with the Department of Justice (DOJ) to resolve investigations into certain alleged practices of Practice Fusion, an electronic health records (EHR) vendor acquired by Allscripts in February 2018 for $100 million. Allscripts indicated the agreement is still subject to further negotiation and government approval, and would likely include additional non-monetary terms, including a deferred prosecution agreement, if a finalized settlement is reached.…
Archives: Government Enforcement
Subscribe to Government Enforcement RSS FeedDOJ Intervenes in FCA Suit Against Spinal Device Manufacturer and Senior Executives that Allegedly Paid Kickbacks to Surgeons
In a complaint filed on July 22, 2019, the U.S. Attorney’s Office for the Southern District of New York (DOJ) intervened in a qui tam False Claims Act (FCA) suit against Life Spine Inc. (Life Spine), and senior executives of Life Spine. DOJ alleges that the company – a maker of spinal implants, devices and equipment – offered and paid kickbacks in the form of consulting fees, royalties, and intellectual property acquisition fees to surgeons to induce the use of its products in violation of the Anti-Kickback Statute (AKS). DOJ …
White House Issues Executive Order to Increase Transparency in American Healthcare
On June 24, 2019, President Donald Trump issued an “Executive Order on Improving Price and Quality Transparency in American Healthcare to Put Patients First” (the Order). The Order requires multiple federal agencies to issue regulations and take other actions as part of an ongoing focus of the Trump Administration to “enhance the ability of patients to choose the healthcare that is best for them” through transparency and competition. The Order addresses the following five initiatives.…
Eighth Circuit Affirms Preliminary Injunction Blocking Physician Practice Acquisition in North Dakota
On June 13, 2019, the U.S. Court of Appeals for the Eighth Circuit affirmed a preliminary injunction granted to the Federal Trade Commission (FTC) and North Dakota Attorney General (NDAG) blocking the proposed acquisition of Mid-Dakota Clinic, P.C. (MDC) – a multispecialty physician group in North Dakota – by Sanford Health, a large South Dakota-based health system (Sanford). This decision may foreclose continued pursuit of MDC by Sanford, and represents another success for the FTC in challenging health care consolidation (see our previous analysis of the granting of the injunction …
DOJ Enters into $225 Million Settlement with Opioid Manufacturer to Resolve Criminal and Civil Investigations
On June 5, 2019, the Department of Justice (DOJ) announced a global settlement with Insys Therapeutics (Insys) that preliminarily resolves criminal and civil cases against the opioid manufacturer in a number of jurisdictions. Under the terms of the settlement, Insys agreed to pay a total of $225 million – $195 million in civil remedies and $30 million in criminal restitution (comprising a $2 million fine and $28 million in forfeiture). In addition to the monetary penalties, Insys entered into a five year deferred prosecution agreement with DOJ, as well as …
U.S. Supreme Court Clarifies Scope of False Claims Act Statutes of Limitations
In a unanimous decision issued on May 13, 2019, the U.S. Supreme Court sought to resolve lingering confusion over the statute of limitations under the False Claims Act (FCA) for qui tam suits in which the federal government declines to intervene. In Cochise Consultancy, Inc. v. United States Ex Rel. Hunt, the Court held that a relator’s claim may be brought within 3 years after the government was made aware of underlying material claims, even where the government did not intervene in the case, because 10 years had not …
Seeking to Incentivize Self-Disclosures, DOJ Issues Guidance on Credit for Cooperation with FCA Investigations
On May 7, 2019, the U.S. Department of Justice (DOJ) provided important new guidance addressing cooperation credit that may be available to defendants in False Claims Act (FCA) investigations (Guidance). The Guidance – issued in the form of an update to DOJ’s Justice Manual – explains how defendants in an FCA investigation may be awarded credit by DOJ for certain disclosures, cooperation, and remedial activities.
The Guidance is intended to incentivize companies and individuals to (i) be forthcoming with the government upon discovery of potential FCA violations, (ii) aid ongoing …
Massachusetts Reaches $10 Million in Settlements Tied to Medicaid Billing for Home Health Services
On April 30, 2019, the Office of the Attorney General of Massachusetts (AG) announced that it had entered into two settlements totaling over $10 million with home health care companies to resolve allegations of submission of false claims to MassHealth – the Commonwealth’s Medicaid program. The AG entered into an $8.3 million settlement with Avenue Homecare Services of Dracut, and a $2.13 million settlement with Amigos Homecare of Lawrence, to resolve allegations that they billed MassHealth for unauthorized home health services.…
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 …
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 …
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 …
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.…
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 …
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 …
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 …
OIG Advisory Opinion Allows Charitable Pediatric Clinic to Provide Routine Cost-Sharing Waivers
On January 14, 2019, the Health and Human Services Office of Inspector General (OIG) published the favorable Advisory Opinion 19-01 allowing a charitable pediatric clinic (“Clinic”) to routinely waive cost-sharing amounts for patients in financial need (“Arrangement”). OIG noted that the Arrangement did not meet the regulatory exception for permitted waivers of cost sharing amounts under the Civil Monetary Penalties Law (CMP), but ultimately decided not to impose administrative sanctions in connection with the Arrangement.…
DOJ Enters Into $12.5 Million Settlement with For-Profit Health System and its CEO in Connection with Improper Unbundled Billing
On December 11, 2018, the U.S. Attorney’s Office for the Eastern District of Pennsylvania (DOJ) announced that it had entered into a $12.5 million dollar settlement with Pennsylvania-based health system Coordinated Health Holding Company, LLC and its Chief Executive Officer (CEO), to resolve allegations of improper billing for orthopedic procedures. Under the terms of the settlement, the CEO (who is also the founder and principal owner of the for-profit system) agreed to pay $1.25 million dollars personally, and the health system entered into a five-year Corporate Integrity Agreement with DOJ …
In Amicus Brief, Government Discourages Supreme Court Review of Pro-Relator Ninth Circuit FCA Decision, but Pledges to Seek Dismissal of Case Upon Remand
On November 30, 2018, the Solicitor General of the United States filed a long-awaited amicus brief in response to the U.S. Supreme Court’s request for the government’s view of the False Claims Act (FCA) case U.S. ex rel. Campie v. Gilead Sciences, Inc. (see here for previous analysis of the Ninth Circuit decision in the case, and here for discussion of the Supreme Court’s request).
In its brief, the Solicitor General states that the conclusion of the Ninth Circuit – that “the fact of continued government payments did not by …
OIG Disapproves of Drug Company’s Plan to Provide Hospitals Free Medications in Advisory Opinion
On November 16, 2018, the Office of the Inspector General of the Department of Health and Human Services (OIG) posted an unfavorable Advisory Opinion No. 18-14 regarding an arrangement where a vendor (Requestor) of a commonly used drug would supply free doses of the drug to hospitals for treatment of inpatients with a rare and serious form of epilepsy (Proposed Arrangement). The drug is not separately reimbursable in the inpatient setting. As a result, and according to the Requestor, many hospitals do not stock sufficient quantities of the drug and …
2019 Physician Fee Schedule Rule Review: Supervision Requirements for Radiologist Assistants Reduced
In its 2019 Medicare Physician Fee Schedule Final Rule (PFS Rule), CMS finalized a regulatory change that updates supervision requirements for Registered Radiologist Assistants and Radiology Practitioner Assistants (collectively, RAs) to reduce the level of supervision necessary to perform diagnostic tests reimbursable by Medicare. Specifically, the PFS Rule revises 42 C.F.R. § 410.32(b) to provide that RAs may perform certain diagnostic tests that would otherwise require a personal level of supervision under direct supervision instead, to the extent permitted by state law and regulations.…
2019 Physician Fee Schedule Rule Review: Option to Extend MSSP Agreements for Currently-Expiring ACOs Finalized
On November 1, 2018, the Centers for Medicare & Medicaid Services (CMS) released its 2019 Physician Fee Schedule Final Rule (PFS Rule), which contains a number of significant substantive changes to Medicare payment practices and policies. The PFS Rule will be officially published in the Federal Register on November 23, 2018. The PFS Rule also includes an interim final rule implementing amendments to federal telehealth regulations to maintain consistency with recent changes to the Social Security Act to address the opioid crisis enacted in October 2018 through the …
OIG Issues Favorable Advisory Opinion for Trust Donations to Public-Private Research Institute Affiliated with a Health System Having Ongoing Business Relationships with Trustee-Owned Long-Term Care Facilities
On November 6, 2018, the Office of Inspector General (OIG) of the Department of Health and Human Services published a favorable Advisory Opinion regarding a proposed arrangement comprised of substantial donations that were earmarked for biomedical research purposes, made by a charitable trust (“Trust”) to a public-private medical research institute (“Research Institute”). The Research Institute had been formed by a health care system (“Health Care System”) and a public university (“University”). In addition, one of the Trustees planned to make a separate, individual donation to the Research Institute, through the …
OIG Issues Favorable Advisory Opinion Regarding Health Plan’s Incentive Payment Program
On October 18, 2018, the Office of Inspector General (OIG) of the Department of Health and Human Services published a favorable Advisory Opinion regarding a Medicaid managed care organization’s (Requestor) proposal to pay incentives to its network providers who meet benchmarks for increasing the amount of early and periodic screening, diagnostic, and treatment (EPSDT) services provided to Medicaid beneficiaries (Proposed Arrangement).…
Laws Affecting Health Care Entities in Connecticut Take Effect October 1, 2018
On October 1, 2018, a number of new laws affecting health care entities in Connecticut became effective. Below please find a brief description of some of the newly-effective provisions, as well as links to our analyses of the changes.…
