Jackson Health System Fined by OCR

The Office for Civil Rights (OCR) announced on October 23, 2019 that Jackson Health System (Jackson), a not-for-profit hospital system comprised of six hospitals, urgent care centers, nursing facilities, and primary care and specialty services based in Miami, Florida, has waived its right to a hearing and did not contest the findings set forth in the OCR’s Notice of Proposed Determination (NPD), and has agreed to pay the full civil monetary penalty assessed by OCR. This unusual step means that Jackson will pay the full fine of $2.15 million.

According to the OCR, Jackson notified the OCR in 2013 that paper records of 256 patients’ personal health information (PHI) located in three boxes were lost in 2012. It thereafter reported in 2016 that the loss was actually 1,436 patient records.

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HHS Proposes Changes to Permit Donation of Cybersecurity Technology

On October 17, 2019, the Department of Health and Human Services (HHS) published proposed rules to update the regulatory Anti-Kickback Statute (AKS) safe-harbors and exceptions to the Physician Self-Referral (PSR) Law, known commonly as the Stark Law (AKS proposed rule available here; PSR proposed rule available here). In an earlier blog post, we described each of the proposed rules. Among the proposed changes are a new safe harbor/exception that would generally permit entities to donate certain cybersecurity technology and related services to physicians, subject to compliance with the conditions described below. In the preamble to each proposed rule, the HHS Office of Inspector General (OIG) (which published the AKS proposed rule) and the Centers for Medicare and Medicaid Services (CMS) (which published the PSR proposed rule) noted that cyber-attacks in the health care industry are on the rise and cybersecurity technology can be cost-prohibitive for some providers. Both OIG and CMS stated their hope that the proposed rules will improve overall cybersecurity in the health care industry and reduce instances of data breaches resulting from cyber-attacks. Continue Reading

Massachusetts Board of Registration in Medicine Adds New Physician Credentials Verification Requirement for First Time Licensure

On October 11, 2019, the Massachusetts Board of Registration in Medicine (BORIM) announced a new requirement for initial physician licensure in the state. Effective January 1, 2020, all first-time applicants in Massachusetts will be required to also complete an application through the Federation Credentials Verification Service (FCVS). FRVS’s website indicates it is “a Lifetime Repository of Verified Core Credentials … that can be used for multiple state medical boards.” The new BORIM requirement will require first-time applicants to apply for a verified profile with FCVS that designates BORIM as the recipient of a “Medical Professional Information Profile.” Applicants still will have to apply through BORIM for licensure, but certain credentials will now be verified through the FCVS profile. Continue Reading

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 AKS safe harbors and expand exceptions to the CMP’s beneficiary inducements prohibition (the AKS Rule). The Proposed Rules are intended to reduce perceived regulatory barriers to beneficial health care arrangements, and to facilitate the implementation of new approaches to health care service delivery and coordination, including value-based care models. Continue Reading

CMS Passes Final Rule Reducing Regulations Burdensome on Health Care Providers

The Centers for Medicare and Medicaid Services (CMS) is moving forward with its Patients over Paperwork initiative, which was created in accordance with President Trump’s Executive Order directing federal agencies to reduce burdensome regulations in order to improve the patient and provider experience, and the health care system as a whole. On September 26, 2019, CMS passed the Omnibus Burden Reduction (Conditions of Participation) Final Rule (Final Rule), with the goal of removing CMS regulations that have become extraneous or burdensome on health care providers, allowing providers to increase and improve focus on patients. CMS estimates savings resulting from the Final Rule will be 4.4 million hours of time, and $800 million annually. The Final Rule was published on September 30, 2019, and goes into effect 60 days thereafter. Hospitals and Critical Access Hospitals (CAHs), however, have six months to implement antibiotic stewardship programs and CAHs have eighteen months to implement Quality Assessment and Performance Improvement (QAPI) programs. Continue Reading

New Connecticut Legislation Affecting Healthcare Providers and Entities Effective October 1, 2019

Multiple public acts from Connecticut’s 2019 legislative session go into effect on October 1, 2019. Below is a list of public health legislation effective October 1, with links to our previous posts summarizing the acts:

  • Public Act No. 19-89 “An Act Concerning Nursing Home Staffing Levels” (previous post available here).
  • Public Act No. 19-98 “An Act Concerning The Scope Of Practice Of Advanced Practice Registered Nurses” (previous post available here).
  • Public Act No. 19-113 “An Act Concerning the Use of Automatic External Defibrillators” (previous post available here).
  • Public Act No. 19-117, implementing the state budget, includes a newborn screening provision effective October 1  (previous post available here).
  • Public Act No. 19-164 “An Act Concerning Social Workers,” (previous post available here).
  • Public Act No. 19-176 “An Act Concerning Newborn Screening for Spinal Muscular Atrophy.” (previous post available here).
  • Public Act No. 19-191 “An Act Addressing Opioid Use” (previous post available here).

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 determination of liability was made as part of the settlement. See our prior analysis of DOJ’s intervention in this case here. Continue Reading

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 used a patient assistance foundation to “pay illegal kickbacks in the form of copay subsidies” for the same drug. Continue Reading

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 hospice benefit” – will affect all hospice providers, as the Department of Justice (DOJ) and whistleblowers will not be able to rely on disagreements between physician opinions as the basis for establishing falsity under the FCA. Instead, the Eleventh Circuit instructs that a claim for hospice reimbursement “cannot be “false” – and thus cannot trigger FCA liability – if the underlying clinical judgment does not reflect an objective falsehood.” The Eleventh Circuit’s decision emphasizes that reasonable differences of opinion between physician reviewers of medical documentation are not sufficient to suggest that the judgments concerning a particular patient’s eligibility for Medicare’s hospice benefit, or any claims submitted based on such judgments, are false for purposes of the FCA. Continue Reading

HHS Issues Favorable Advisory Opinion Permitting Community Health Center to Purchase Real Estate from an Excluded Individual

On September 6, 2019, the Department of Health and Human Services (HHS) Office of the Inspector General (OIG) issued OIG Advisory Opinion No. 19-05 (Advisory Opinion) permitting a community health center (Requestor) to purchase real estate from a limited liability company (LLC) owned and managed by an individual excluded from participation in federal health care programs (Proposed Arrangement). The OIG indicated the Proposed Arrangement would not result in the imposition of sanctions under the civil monetary penalties law because no claims for reimbursement from federal programs would be sought by the Requestor, nor would they use federal grant funds to finance the purchase. Continue Reading

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