Excerpt of a contributed article published in Medical Economics on November 3, 2020.

These waivers could lead to lasting flexibilities for physicians — if a few bad apples don’t spoil the bunch

On October 19, 2020, the Administrator of the Centers for Medicare & Medicaid Services (CMS) highlighted recent actions taken by the federal government

On March 24, 2020, the Department of Justice (DOJ) and Federal Trade Commission (FTC) issued a joint statement on COVID-19-related antitrust enforcement highlighting ways “firms, including competitors, can engage in procompetitive collaboration that does not violate the antitrust laws” to protect public health and safety. The DOJ and FTC emphasized their commitment to facilitating antitrust compliance for businesses that are responding to the national emergency. In furtherance of this position, the agencies gave examples of collaborative activities designed to improve health and safety during the COVID-19 pandemic that are unlikely to run afoul of the antitrust laws, absent exceptions. These include:

  • Collaboration on research and development as “efficiency-enhancing integration of economic activity” which is typically procompetitive.
  • Sharing technical know-how – rather than company specific data about prices, wages, outputs, or costs – as necessary to achieve procompetitive benefits of collaboration.
  • The “development of suggested practice parameters – standards for patient management developed to assist providers in clinical decisionmaking” by providers will not be challenged except in extraordinary circumstances.
  • Joint purchasing arrangements among health care providers “designed to increase the efficiency of procurement and reduce transaction costs.”
  • “[P]rivate lobbying addressed to the use of federal emergency authority, including private industry meetings with the federal government to discuss strategies on responding to COVID-19, insofar as those activities comprise mere solicitation of governmental action with respect to the passage and enforcement of laws.”


Continue Reading DOJ and FTC Issue Joint Statement on Antitrust Enforcement and the COVID-19 Pandemic

On February 27, 2020, the Federal Trade Commission (FTC) announced an action to block a proposed transaction between Thomas Jefferson University d/b/a Jefferson Health (Jefferson) and Albert Einstein Healthcare Network (Einstein). Jefferson and Einstein entered into a “System Integration Agreement” in late 2018 under which Jefferson would become the sole member (i.e., owner) of Einstein and oversee a 14-hospital system (11 of which would be located in Pennsylvania). According to the FTC, Jefferson and Einstein are leading providers of inpatient general acute care (GAC) hospital services and inpatient acute rehabilitation services in Philadelphia County and Montgomery County, Pennsylvania, and therefore the FTC now challenges the proposed integration on the basis that it will substantially harm competition for those services in both Philadelphia and Montgomery counties.
Continue Reading FTC and Commonwealth of Pennsylvania Challenge Proposed Hospital Merger

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 an EHR company, and the “unique” deferred prosecution agreement (DPA) imposed by the DOJ against Practice Fusion that seeks “to ensure acceptance of responsibility and transparency as to” underlying conduct may reflect a new approach to settlements with corporate health care defendants.
Continue Reading DOJ Announces Settlement with EHR Company to Resolve Criminal and Civil Kickback Investigations Tied to Opioid Prescribing

On January 10, 2020, The Department of Justice (DOJ) and Federal Trade Commission (FTC) announced new draft vertical merger guidelines for public comment. Once finalized, the draft guidelines will replace the DOJ’s 1984 Non-Horizontal Merger Guidelines and describe how the FTC and the DOJ will analyze and enforce vertical mergers for compliance with the antitrust laws. Vertical mergers combine two or more companies operating at different levels of the same supply chain, e.g., a combination between a hospital and independent physician group, or a health system and a skilled nursing facility. The draft guidelines adopt common concepts from the Horizontal Merger Guidelines, such as the definition of a “market,” the framework for analyzing the sale of a failing business or its assets, and the purchase of partial ownership interests. Notably, and to the disappointment of many within the health care community, the draft guidelines provide little guidance on vertical mergers specific to the health care industry. Additionally, two FTC Commissioners abstained from voting on the draft guidelines and issued statements outlining their concerns that the guidelines are too lenient toward vertical mergers.

Continue Reading DOJ and FTC Announce Draft Vertical Merger Guidelines

On January 21, 2020, the Department of Justice (DOJ) announced a $3 million settlement with Patient Services, Inc. (PSI) to resolve allegations of False Claims Act (FCA) violations. The DOJ alleged that PSI enabled three pharmaceutical companies to pay kickbacks to patients by funneling money to patients taking drugs manufactured by those same pharmaceutical companies. In addition to the $3 million, PSI has entered into a three-year integrity agreement with Health and Human Services’s Office of the Inspector General. The settlement involved no determination of liability.

Continue Reading DOJ Reaches Settlement with Patient Assistance Foundation Resolving Allegations of FCA Violations

On November 26, 2019, the Department of Justice (DOJ) announced a $26.67 million settlement with a laboratory testing corporation, Boston Heart Diagnostics Corporation (Boston Heart). The settlement resolves allegations of False Claims Act (FCA) violations related to alleged payments for patient referrals in violation of the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (PSR Law) – commonly known as the Stark Law – and other improper billing.
Continue Reading DOJ Announces $26.67 Million Settlement with Laboratory to Resolve FCA Allegations

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 Cardio. Sac Cardio has agreed to pay $506,000 to resolve allegations of duplicative billing associated with one of these compensation arrangements. Separately, the settlement includes another $15,117,516 from Sutter to resolve self-disclosed conduct principally concerning the PSR Law.
Continue Reading DOJ Announces Physician Self-Referral (Stark) Law Settlement in Excess of $46 Million with California Health System and Surgical Group

On November 7, 2019, the Department of Justice (DOJ) announced it had settled a False Claims Act (FCA) lawsuit against Life Spine, a spinal device manufacturer, and two of Life Spine’s senior executives. The settlement totaled $5.99 million and included various admissions of responsibility to settle allegations of kickbacks paid by Life Spine that the DOJ claimed were designed to induce surgeons to utilize Life Spine devices and submit claims to federal health programs for these improperly-induced utilizations in violation of the federal anti-kickback statute (AKS) and FCA. The settlement includes $5.5 million to be paid by Life Spine and $490,000 to be paid by its CEO and VP of business development.

Continue Reading DOJ Announces FCA Lawsuit Settlement with Spinal Device Manufacturer and Senior Executives for Alleged Kickbacks Paid to Surgeons

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