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Allscripts Announces $145 Million Preliminary Settlement with DOJ Related to an Investigation of Practice Fusion, a Recently Acquired EHR Company

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.…

Connecticut Empowers DSS to Expand Medicaid Coverage of Telehealth Services

On June 28, 2019, Connecticut Governor Ned Lamont signed into law Public Act No. 19-76 “An Act Expanding Medicaid Coverage of Telehealth Services” (PA 19-76).  PA 19-76 revises the criteria and process by which the Connecticut Department of Social Services (DSS) determines the telehealth services covered by the Medicaid program. PA 19-76 is effective July 1, 2019.…

CMS Announces Pilot Program for Clinicians to View Claims Data of Medicare Beneficiaries

On July 30, 2019, the Centers for Medicare & Medicaid Services (CMS) announced “Data at the Point of Care” (DPC), a pilot program that will provide clinicians with access to claims data. The pilot program follows on the heels of the recently proposed Interoperability and Patient Access Proposed Rule, which would require regulated health plans to make patient data available through an application programming interface (API). These actions are also part of the MyHealthEData initiative spearheaded by the White House Office of American Innovation.…

DOJ 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 …

CMS Issues Final Rule Restricting Arbitration Agreements with Long Term Care Facilities

On July 18, 2019, the Centers for Medicare & Medicaid Services (CMS) published a Final Rule establishing requirements for arbitration agreements between long-term care (LTC) facilities and their residents. The Final Rule represents a revamping by CMS of a prior rule that had been published in October 2016 that prohibited pre-dispute binding arbitration agreements. CMS undertook to revise the 2016 rule after the U.S. District Court for the Northern District of Mississippi enjoined enforcement of the prohibition on pre-dispute binding arbitration agreements.…

Federal Judge Vacates Final Rule on Drug Pricing Transparency in Consumer Advertising

In a Memorandum Opinion, Judge Amit P. Mehta, of the U.S. District Court for the District of Columbia, vacated a U.S. Department of Health and Human Services (HHS) Final Rule, just days before its July 9 effective date. The Final Rule would have required the list prices of prescription drugs to be included in direct-to-consumer advertisements.…

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.…

OIG Issues Alert to Warn of ‘Free’ Genetic Testing Scams Seeking to Steal Information

On June 3, 2019, the U.S. Department of Health and Human Services Office of Inspector General (OIG) issued a fraud alert to notify consumers about genetic testing fraud schemes (the Alert). According to the OIG, fraudulent actors are using the provision of free genetic testing kits to obtain Medicare information from unwitting consumers, and then using the stolen information for purposes of fraudulent billing and/or identity theft.…

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 …

CMS Amends Regulations to Lower Drug Prices and Reduce Out-Of-Pocket Expenses in Medicare Advantage and Part D Prescription Drug Benefit Program

The Centers for Medicare and Medicaid Services (CMS) announced a final rule, to be published on May 23, 2019, amending the Medicare Advantage program (Part C) and Prescription Drug Benefit program (Part D) regulations. According to CMS, the purpose of the rule is to lower drug prices and reduce out-of-pocket expenses in the Medicare Advantage and Part D drug programs.

The major provisions are:

  1. Protected classes. The final rule contains an exception to the requirement that Part D sponsors include all Part D drugs in these protected classes

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 …

CMS Final Rule on Drug Pricing Transparency in Consumer Television Ads

On May 10, 2019, the Centers for Medicare and Medicaid Services published a Final Rule on drug pricing transparency in consumer advertisements. The new rule requires direct-to-consumer (DTC) television advertisements to include the list price of prescription drugs and biological products distributed in the US that are reimbursable by Medicare or Medicaid, whether directly or indirectly.…

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.…

CMS Announces New Direct Contracting Care Models

On April 22, 2019, the Centers for Medicare and Medicaid Services (CMS) announced two new voluntary risk-sharing payment models—Professional Population-Based Payment (PBP) and Global PBP. Under the Professional PBP model, CMS will pay participating organizations (referred to as Direct Contracting Entities or DCEs) a monthly, risk-adjusted primary care capitation payment, as well as 50 percent of shared savings/losses for enhanced primary care services. The Global PBP model, which is aimed at larger organizations, offers a higher level of risk and reward. DCEs participating in the Global PBP will receive/be responsible …

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 …

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 …

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 …

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 …

CMS Finalizes Overhaul of the Medicare Shared Savings Program in “Pathways to Success” Final Rule

On December 31, 2018, the Centers for Medicare and Medicaid Services (CMS) published a final rule (Final Rule) establishing the “Pathways to Success” program that overhauls the Medicare Shared Savings Program (MSSP). The Final Rule largely mirrors CMS’ proposed rule (see our summary here), but with several modifications in response to public comments. Accountable care organizations (ACOs) may participate in the Pathways to Success program beginning July 1, 2019, and those ACOs interested in beginning participation in July must submit to CMS a notice of intent to apply by …

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 …

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