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CARES Act Provides Vital Financial Support for Health Care Providers on COVID-19 Front Lines

On March 27, Congress enacted the Coronavirus Aid, Relief, and Economic Security Act (CARES Act, or the Act), Public Law 116-136, a trillion-dollar stimulus bill intended to provide financial assistance to individuals and business affected by the COVID-19 pandemic.  The Act contains a broad range of measures intended to bolster the economy in the midst of the COVID-19 pandemic.  Unsurprisingly, a central focus of the Act is the provision of relief and support for hospitals and health care providers on the front lines of the COVID-19 pandemic.  This article …

COVID-19: HHS Issues FAQs on HIPAA and Telehealth to Help Providers Maintain Access to Care During the Pandemic

On March 20, the U.S. Department of Health and Human Services (HHS) issued additional guidance in the form of Frequently Asked Questions (FAQs) on HIPAA and telehealth services to help providers furnish care during the COVID-19 pandemic.

The FAQs follow and provide further information on the Notification of Enforcement Discretion issued by HHS on March 17 (Notification), in which HHS indicated that it would not penalize providers for using popular video chat applications, such as FaceTime and Skype, in good faith to provide telehealth services amid the COVID-19 …

Federal Government Significantly Expands Telehealth Reimbursement During COVID-19 Public Health Emergency

On March 17, the Trump Administration announced expanded reimbursement for clinicians providing telehealth services for Medicare beneficiaries during the COVID-19 Public Health Emergency. The Centers for Medicare and Medicaid Services (CMS) published an announcement, a fact sheet and Frequently Asked Questions.  To further facilitate telehealth services, the Office for Civil Rights (OCR) issued a notification describing certain technologies that would be permitted to be used for telehealth without being subject to penalties under the Health Insurance Portability and Accountability Act regulations (HIPAA). In addition, the Office of Inspector …

Massachusetts COVID-19 Guidance for Health Care Providers, Payors and Laboratories on Issues Including Telehealth, Elective Procedures, COVID-19 Testing, and Provider Licensure

Massachusetts executive agencies have been issuing an array of further guidance to the healthcare provider community regarding COVID-19.  All orders and guidance are available at https://www.mass.gov/2019coronavirus. Review of this website and CDC websites for periodic updates is strongly encouraged, as the situation is fluid and continually evolving. …

HHS Issues Section 1135 Waiver, and CMS Issues Blanket Waivers of Health Care Laws, in Response to Coronavirus (COVID-19) Emergency

Following the President’s proclamation on March 13 that the COVID-19 outbreak constitutes a national emergency, Secretary of the Department of Health and Human Services (HHS) Alex Azar issued a Waiver or Modification of Requirements Under Section 1135 of the Social Security Act (full text available here) that waives or modifies certain health care laws and regulations in connection with the COVID-19 pandemic.  This “1135 Waiver” applies nationwide and took effect on March 15 at 6:00 p.m., but its applicability is retroactive to March 1, 2020.  The 1135 Waiver applies …

DOJ Announces Settlement with EHR Company to Resolve Criminal and Civil Kickback Investigations Tied to Opioid Prescribing

On January 27, 2020, the Department of Justice (DOJ) announced a $145 million settlement with Practice Fusion Inc., an electronic health records (EHR) software company that resolves parallel criminal and civil investigations involving allegations of kickbacks, false claims, and non-compliance with federal EHR program requirements. We previously discussed a preliminary settlement in this case here, and in announcing the finalizing of that settlement the DOJ has shed more light on the allegedly improper conduct at issue. According to the DOJ, this is the first criminal action ever brought against …

Connecticut Governor Lamont Issues Executive Orders Aiming to Contain Health Care Cost Growth and Improve Transparency

On January 22, 2020, Connecticut Governor Ned Lamont issued two health care-related executive orders, Executive Order No. 5 and Executive Order No. 6, (the Executive Orders) to address the increasing cost of health care in Connecticut. The Executive Orders build upon the state’s Office of Health Strategy’s (OHS) obligation to create a health care cost-containment strategy for Connecticut.…

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 …

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 …

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 …

Government Releases Proposed Rules on Physician Self-Referral Law (Stark Law), Anti-Kickback Statute and CMP Law; Significant Regulatory Changes Intended to Encourage Care Coordination and Value-Based Care

On October 9, 2019, the Department of Health and Human Services (HHS) released its long-awaited proposals (the Proposed Rules) to update regulatory exceptions and safe harbors, for the federal Physician Self-Referral Law (also known as the Stark Law), the Anti-Kickback Statute (AKS), and the beneficiary inducement Civil Monetary Penalties Law (CMP). The Centers for Medicare & Medicaid Services (CMS) issued a proposed rule to update exceptions to the Physician Self-Referral Law (the PSR Rule), and the HHS Office of Inspector General (OIG) issued a proposed rule to update the …

DOJ Reaches $21.36 Million Agreement with Compounding Pharmacy, Two of its Executives, and Managing Private Equity Firm to Resolve FCA Allegations

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 …

Government Continues to Closely Scrutinize Pharmaceutical Marketing Practices

On September 4, 2019, the Department of Justice (DOJ) announced a $15.4 million settlement with pharmaceutical company Mallinckrodt ARD LLC (Mallinckrodt) to resolve alleged violations of the Anti-Kickback Statute (AKS) in two whistleblower suits filed under the False Claims Act (FCA). The settlement addresses allegations of AKS violations between 2009-2013 by sales representatives of a company later acquired by Mallinckrodt via the “wining and dining” of physicians to induce Medicare prescriptions of that company’s drug. Interestingly, the settlements do not cover related allegations within those FCA suits that Mallinckrodt improperly …

Eleventh Circuit Endorses Objective Falsehood Standard for False Claims Cases Concerning Physician Judgment of Hospice Eligibility

“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 …

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.…

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 …

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.…

New York Court of Appeals Holds that PCs that Cede Excessive Control to MSOs Violate the Corporate Practice of Medicine Doctrine

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 …

Supreme Court Rejects HHS Proposal that Could Have Significantly Lowered Certain Medicare DSH Payments to Hospitals

In a 7-1 decision released June 3, 2019, the U.S. Supreme Court vacated a proposal of the U.S. Department of Health and Human Services (HHS) that would have had the effect of significantly reducing Disproportionate Share Hospital (DSH) payments to thousands of hospitals for care furnished to low income patients in 2012.

In Azar v. Allina Health Services, Et Al., the Supreme Court held that HHS needed to comply with statutory notice and comment rulemaking procedures under the Social Security Act (Act) when making interpretive changes, because HHS sought …

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 …

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 …

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