Senate Proposes Expanded Use of Telehealth

On May 18, 2017, the Senate Finance Committee voted to move forward a bill entitled the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (CHRONIC) Care Act of 2017 (S870), which would increase access to telehealth services in the home.

Telehealth is the use of electronic information and telecommunications technology to support remote clinical healthcare, patient and professional health related education and other healthcare delivery functions.  Continue Reading

EHR Vendor Settles False Claims Act Suit for $155 Million

Electronic health record (EHR) vendor eClinicalWorks (eCW) recently entered into a settlement with the US Department of Justice (DOJ) and the Department of Health and Human Services’ Office of Inspector General (OIG) to resolve allegations under the federal False Claims Act (FCA) that eCW misrepresented its software and paid customers kickbacks to promote its products. The settlement imposes joint and several liability for payment on the EHR Vendor and three of its founders for $154.92 million, and liability for settlement payments individually by a developer ($50,000) and two project managers ($15,000 each).  The settlement resolves a qui tam whistleblower action and the government’s complaint-in-intervention in United States ex rel. Delaney v. eClinicalWorks LLC, 2:15-CV-00095 (D. Vt.).   Continue Reading

CMS Reverses Direction in Proposed Rule on Long Term Care Facility Arbitration Agreements

The Centers for Medicare & Medicaid Services (CMS) announced a Proposed Rule scheduled to be published in the Federal Register on June 8, 2017, revising its prior restrictions on binding arbitration provisions between long term care facilities and their residents set forth in a Final Rule published in October 2017.  Comments are due sixty days after publication of the Proposed Rule. In the Final Rule published last year, CMS had prohibited pre-dispute binding arbitration agreements and imposed requirements on facilities that asked residents to sign arbitration agreements.  The U.S. District Court for the District of Missouri had issued a preliminary injunction  against CMS prior to the Final Rule taking effect.  After the court ruling, CMS issued a memorandum to states and Medicare contractors notifying them that the Final Rule would not be enforced until the injunction was lifted.

The Proposed Rule also comes on the heels of a closely-watched case we reported on earlier relating to nursing home arbitration agreements, Kindred Nursing Centers Ltd v. Clark, et al. In that case, the U.S. Supreme Court held that the Federal Arbitration Act preempted a rule applied by a state court that had refused to enforce binding arbitration agreements between a nursing home and individuals who held general powers of attorney on behalf of residents.

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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 discharged early to hospice care.
  • CMS and the Agency for Healthcare Research and Quality should take steps to reduce harm to patients in rehabilitation hospitals.
  • CMS should increase protections for beneficiaries under the 2-midnight policy that applies to hospitals decisions about a beneficiary’s inpatient or outpatient admission status.
  • The disparity in beneficiary coinsurance for outpatient services received at a critical access hospital versus an acute-care hospital should be reduced.

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Connecticut Enacts Legislation Updating HIV Testing Laws

Connecticut Governor Dannel Malloy recently signed into law Public Act 17-6 (PA 17-6), a bill that makes certain revisions to state laws concerning human immunodeficiency virus (HIV) testing and syringe services programs pursuant to recommendations of the Department of Public Health (DPH). The substantive provisions of this legislation take effect July 1, 2017.

Currently, Conn. Gen. Stat. §19a-90 states that physicians furnishing prenatal care to pregnant women shall take (or cause to be taken) a blood sample within 30 days of the woman’s first examination, and again during the final trimester of her pregnancy (between the 26th and 28th week of gestation, or shortly thereafter), to be tested for syphilis and an HIV-related test (i.e., a test for indicators of HIV infection) by a DPH-approved laboratory.

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Connecticut Legislature Expands Universe of Available Disciplinary Actions Against Licensed Practitioners

The Connecticut Legislature recently approved Public Act 17-10, a bill that establishes a new disciplinary action that may be taken against certain licensed practitioners in Connecticut, including physicians, physician assistants, nurses, dentists, podiatrists, physical therapists, psychologists, and EMS personnel. Continue Reading

U.S. Supreme Court – the FAA Preempts State Court Ruling in Nursing Home Arbitration Case

On May 15, 2017, in a closely-watched case involving arbitration clauses in nursing home contracts and powers of attorney, the U.S. Supreme Court held that the Federal Arbitration Act preempted a rule applied by the Kentucky Supreme Court when it refused to enforce two binding arbitration agreements between a nursing home and individuals holding general powers of attorney on behalf of two former residents of the nursing home.  Kindred Nursing Centers Ltd v. Clark, et al. 

As part of the nursing home’s resident intake process, the two individuals holding powers of attorney entered into arbitration agreements on behalf of their relatives that contained a provision requiring that “[a]ny and all claims or controversies arising out of or in any way relating to . . . the Resident’s stay at the Facility” would be resolved through “binding arbitration.” After the death of their family members, the individuals holding powers of attorney sued in state court, alleging that the nursing home had delivered substandard care, causing the deaths of their family members. The Kentucky Supreme Court applied a “clear-statement rule” in holding that both arbitration agreements were invalid because the powers of attorney did not specifically state that the representatives could enter into an arbitration agreement, and therefore the individuals holding powers of attorney were prohibited from restricting their relatives’ rights of access to the courts and trial by jury guaranteed under the Kentucky Constitution.

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DOJ Settles Allegations of Fraudulent Loan Program Between Hospital System and FQHC

The U.S. Department of Justice (DOJ) recently announced a settlement with a hospital operated by Indiana University Health, Inc. and a federally qualified health center operated by HealthNet, Inc. to resolve claims that the parties violated the Anti-Kickback Statute, the Federal Claims Act and Indiana law. Each of the parties will pay over $5 million to the United States and approximately $3.9 million to the State of Indiana. The lawsuit was originally brought by a qui tam relator, a physician and former employee of the hospital and HealthNet, and later joined by the DOJ and the State. The Anti-Kickback Statute prohibits, in relevant part, the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal health care program, such as Medicaid. Claims submitted to federal health care programs in violation of the Anti-Kickback Statute are false claims under the False Claims Act. The government alleges that the parties had, for over a decade, established a series of illegal referral based relationships to guarantee that Medicaid beneficiaries were directed to the hospital for both inpatient and outpatient services and collaborated to provide services focused on collections for patient services, rather than improving health outcomes, in violation of the federal Anti-Kickback Statute and Indiana law. In particular, the government alleges that, in exchange for a no-interest loan to HealthNet, the hospital was guaranteed that high-risk maternity patients would deliver at the hospital, thereby allowing the hospital to benefit from expensive services provided to critically ill infants. Continue Reading

Anthem Terminates Cigna Merger Following D.C. Circuit Setback

On May 12, 2017, Anthem Inc. announced that it had terminated its merger agreement with Cigna Corporation, a deal that would have united the second and third largest sellers of health insurance to large companies in the country. Anthem’s termination of the merger came two weeks to the day after the U.S. Court of Appeals for the D.C. Circuit rejected Anthem’s appeal of an injunction blocking the merger issued by a U.S. District Court earlier this year. Anthem terminated the merger one week after filing a petition for a writ of certiorari with the U.S. Supreme Court that sought guidance on the viability of the “efficiencies defense” under antitrust law.

Anthem and Cigna initially entered into a merger agreement in July, 2015 that was subsequently challenged on antitrust grounds by the Department of Justice, eleven states, and the District of Columbia. The government alleged that the merger would violate Section 7 of the Clayton Act (15 U.S.C. §18) by substantially lessening competition in the insurance markets for (i) national accounts (i.e., insurance purchased by employers with 5000+ employees), and (ii) large group employers (those with 50+ employees) in various geographic areas throughout the country. Continue Reading

Federal Court Holds Online Medical Products Auction Contract Violates the AKS

The U.S. District Court for the District of Connecticut granted a motion for summary judgment in favor of Becton, Dickinson & Co. (BDC), a medical products provider, on the grounds that its contracts with MedPricer.com, Inc. (MedPricer), a company operating an online auction platform, violated the federal Anti-Kickback Statute (AKS), and were therefore unenforceable under Connecticut state law. MedPricer.com, Inc. v. Becton, Dickinson & Co., 2017 U.S. Dist. LEXIS 30854 (Memorandum opinion).

As described in the opinion, MedPricer enters into service agreements with hospitals and other health care providers to host online “auctions” for the sale of medical equipment. The health care provider determines which vendors to invite to the online auction and MedPricer sends invitations to the vendors. In order to participate in the MedPricer auction, a vendor must, among other things, accept the terms of a click-through user agreement. Vendors that accept the terms of the agreement may submit bids to the health care provider in response to requests for quotes. The agreements at issue before the Court required BDC to pay MedPricer a fee of 1.5% of the value of any purchase from the vendor, whether or not the sale occurs during the auction events or afterward.

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