Archives: Office of Inspector General

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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 …

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.…

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 …

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 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 …

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.…

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 …

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 Advisory Opinion Approves Surgical Device Warranty Program Intended to Reduce Readmissions

On September 17, 2018, the Office of Inspector General (OIG) of the Department of Health and Human Services published a favorable Advisory Opinion allowing a manufacturer of surgical devices and wound care products to offer a warranty program to hospital customers covering three joint replacement products (“Proposed Arrangement”).

Under the Proposed Arrangement, the manufacturer would refund hospitals for the combined purchase price of three of its products if a patient who received them as part of a joint replacement surgery was readmitted to the hospital within 90 days following the …

OIG Posts Telemedicine Advisory Opinion

The Office of Inspector General (OIG), Health and Human Services issued an Advisory Opinion allowing an arrangement proposed by a federally qualified health center look-alike (FQHC look-alike) to provide free technology items and services to a clinic run by a county Department of Health (County Clinic), that would facilitate telemedicine encounters (the Arrangement).  Although the OIG found that the Arrangement could potentially implicate the anti-kickback statute (AKS), the OIG concluded that it would not impose administrative sanctions.…

OIG Reports That CMS Paid Practitioners For Telehealth Services That Failed To Meet Medicare Requirements

On April 5, 2018, the Office of the Inspector General (OIG) announced its findings that the Centers for Medicare and Medicaid Services (CMS) paid practitioners for telehealth services that did not meet Medicare requirements. Certain telehealth services are reimbursable by Medicare as Part B services. According to the OIG, it engaged in a review of telehealth services after finding that Medicare paid a total of $17.6 million in telehealth payments in 2015, compared to just $61,302 in 2001.…

Recent Anti-Kickback Cases Emphasize Government Scrutiny of Speaker’s Bureaus and Lavish Meals Funded by Pharmaceutical and Device Manufacturers

The Department of Justice (DOJ) recently resolved two health care fraud cases – one criminal and one civil – that demonstrate the government’s continued scrutiny of lavish meals and “speaker’s bureaus” sponsored by pharmaceutical and device manufacturers as potential avenues for the payment of kickbacks to physicians for referrals of health care items and services. These cases indicate the criminal and civil risk that providing lavish meals or purported speaker’s bureau payment can pose, and the corresponding need to proactively assess the legitimacy of such programs and events.…

OIG Advisory Opinion Allows Medical Center to Share Cost Savings with Neurosurgeons for Curbing Spinal Fusion Surgery Costs

On January 5, 2018, the Health and Human Services Office of Inspector General (OIG) posted a favorable Advisory Opinion, permitting an arrangement involving payment by a Medical Center to a multi-specialty physician Group for cost-reduction measures achieved through the efforts of certain Neurosurgeons, relating to the selection and use of products during spinal fusion surgeries (Program).  Payment under the Program was calculated as a percentage of cost savings realized by the Medical Center over a three-year period.  Though not yet paid at the time of the OIG advisory opinion, …

OIG Advisory Opinion Allows Pilot Collaborative Program Proposed by Pharmaceutical Manufacturer for Medication Therapy Management Interventions

On December 11, 2017, the Health and Human Services Office of Inspector General (OIG) posted a favorable Advisory Opinion, permitting a proposed pilot Program involving a collaboration between a pharmaceutical manufacturer (the Requestor), a trade association (Association), a Medicare Advantage Part D plan (MA Plan), a Hospital System, and a Vendor.  As proposed, the program would provide new technology to allow real-time access to patient discharge information for use by MA Plan pharmacists who conduct medication therapy management (MTM) services. …

OIG Rescinds Advisory Opinion Due to Requestor’s Failure to Disclose Information

On November 28, 2017, the Office of Inspector General (OIG) rescinded advisory opinion 06-04, in which it had previously determined that a charity’s (Requestor) proposal to provide assistance to financially needy Medicare beneficiaries did not warrant the imposition of sanctions. The OIG explained that “public interest requires rescission” after finding that Requestor failed to comply with earlier factual certifications that were material to the original advisory opinion.

Under the program, the Requestor provides assistance with premiums and cost-sharing obligations for patients with two specific chronic diseases. Most of the …

New OIG Advisory Opinion Allows Waiver of Cost Sharing in Research Studies

The Office of Inspector General (OIG) recently issued Advisory Opinion 17-02, allowing waivers or reductions of cost-sharing amounts owed by financially needy Medicare beneficiaries in connection with certain clinical research studies conducted at a non-profit medical center.  In the advisory opinion, the OIG reiterated its longstanding concern about routine waivers of Medicare beneficiary cost-sharing amounts in the absence of financial hardship, and noted this can lead to liability under the anti-kickback statute (AKS).  The research studies were conducted utilizing protocols under the Medicare Coverage with Evidence Development (CED) framework …

OIG Publishes Prioritized Recommendations for HHS

The OIG has released the 2017 Compendium of Unimplemented Recommendations, summarizing prioritized recommendations relating to HHS programs and operations.   Topping the list are recommendations relating to hospitals, including:

  • Reimbursement rates for critical access hospital swing beds should be adjusted to the lower rates for similar services provided in skilled nursing facilities.
  • Reimbursement rates for hospital outpatient department procedures should be adjusted to the lower rates for similar procedures conducted in ambulatory surgical centers.
  • Medicare should adopt a hospital transfer payment policy to lower hospital reimbursement for beneficiaries who are

OIG Warns of Scam Using the OIG Hotline Number

The U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) has issued a fraud alert, warning that the OIG Hotline telephone number was being used in scams across the country.  According to the OIG, the scammers pose as OIG Hotline employees and alter the caller ID to make it appear as if the call is coming from the OIG Hotline number. The scammer then tries to obtain or verify personal information, which could be used for fraudulent activities such as stealing money from bank accounts.…

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