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Articles Posted in Healthcare Litigation

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On Thursday, the U.S. Supreme Court issued a decision that recognizes implied certification as a viable theory under which to pursue False Claims Act cases against healthcare providers. Implied certification can impose liability if a contractor has engaged in a lie by omission, for instance, failing to disclose its noncompliance.

In the case, Universal Health Services v. Escobar, the court ruled that companies are subject to False Claims Act liability and the implied certification theory, but only if: (1) claims from healthcare providers request payment and make “specific representations about the goods or services provided” and (2) an organization’s failure to disclose noncompliance with “material” requirements would equate to “misleading half-truths.”

This case could result in a significant increase in False Claims Act cases being pursued against healthcare providers.

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In U.S. ex rel. Wall v. Circle C. Construction, Case #14-6150, 2016 WL 423750 (6th Cir. Feb. 4, 2016), the 6th Circuit Court held that damages in false certification cases should be based on the difference between the value of the items or services the government should have received and the value of the items or services the government actually received. The holding, which arose in the non-healthcare context of a construction contract, arguably applies in healthcare matters where medically necessary items or services were furnished pursuant to referrals that violated AKS or Stark laws and thus the government did not sustain any actual damages. A court could then find that the treble damage provision under the False Claims Act is not applicable and the government’s damage recovery is limited to the $5,500-11,000 per claim penalty.
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Researchers have examined Medicare claims from 2013 to see which doctors prescribed opioids (including OxyContin, morphine and codeine) and how many prescriptions they filled. Research found that these drugs are being prescribed by a broad cross-section of medical professionals, rather than concentrated among a small group of practitioners. While it is not surprising that pain management specialists and anesthesiologists wrote the most prescriptions for opioids when compared to other specialties, primary care physicians such as family practitioners had the highest volume of opioid prescriptions since there are more primary care physicians than specialists. As such, primary care physicians should recognize that future efforts to curb opioid prescribing (including but not limited to state licensing and DEA registration actions) are likely to focus on them. Moreover, the Centers for Disease Control and Prevention has issued new guidelines urging physicians to take a more conservative approach to prescriptions and to closely monitor their patients’ use of opioids.

Broader Strategies Necessary to Counter Painkiller Over Prescribing, Researchers Say” [link]
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Seven physicians groups, including the Connecticut State Medical Society, the American Medical Association, the California Medical Association, the Medical Association of Georgia and others, have reached a settlement with insurance company Anthem Blue Cross and Blue Shield (“Anthem”) over allegations of ‘out-of network shenanigans’. The suit, which was filed in 2007, accused Anthem of unfair practices when determining reimbursement rates for out-of-network care. Patients were unsure as to which providers were in or out of network and patients were responsible for higher than expected charges due to being misled about how much of the bill for out-of-network care the insurance company would accommodate.

The settlement amount has not been revealed but, according to general counsel for the Connecticut State Medical Society, Anthem will be upgrading their provider finder tool and will also provide a very small monetary reward to the medical societies involved.

DOCTOR GROUPS SETTLE WITH ANTHEM OVER ‘SHENANIGANS‘” [LINK]
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Although there is no federal or state law barring physicians from providing health care services to themselves or their immediate family members including prescribing medication, there are limitations imposed by both applicable ethical rules and third party payor billing policies. For example, the American Medical Association (“AMA”) has Ethics Opinion 8.19 which provides, in pertinent part, that: “physicians generally should not treat themselves or members of their immediate families” since their “professional objectivity may be compromised” and they may fail to: “probe sensitive areas when taking the medical history” or “perform intimate parts of a physical examination.” AMA Ethics Opinion 8.19 does indicate that self-treatment or immediate family treatment may be appropriate in emergency circumstances or isolated settings where there is no other available qualified physician, however, it warns that controlled substance prescribing for themselves or immediate family members should only be done in emergencies. Michigan physicians should be aware that a violation of the AMA Ethics Opinion 8.19 could give rise to an administrative action against the physician’s medical license under MCL 333.16221(b)(vi) which authorizes such action for lack of good moral character as evidenced by violation of the ethics opinion. It should also be noted that many third party payors have policies that bar claims for reimbursement for services rendered by physicians to themselves or their immediate family members. For examples, Blue Cross Blue Shield of Michigan does not cover services that health care providers render to themselves or any first-degree relatives, including parents, siblings, spouse and children. This bar covers not only controlled substances but all care services and does not provide for any exceptions. Thus, in the rare event that a Michigan physician does provide self-treatment or immediate family treatment, he or she should document the treatment using a S.O.A.P. format and indicate the emergency reason (which is required if prescribing a controlled substance) and/or isolated circumstances (if not prescribing a controlled substance). Moreover, in either case, the physician should not bill a third party payor for his/her services unless such payor allows such claims (which is unlikely).
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On November 2, 2015 the President signed The Bipartisan Budget Act of 2015, requiring that civil monetary penalties must be raised to account for inflation, followed by an annual review for further increases. Providers accused of False Claims Act (FCA) violations are likely to see an increase as high as 40% over the current penalty ranging from $5,500 to $11,000. Higher penalties may add up quickly in FCA cases, which generally involve hundreds of alleged tainted claims.

This could potentially have a negative impact on providers that have earmarked monies for quality of care improvement efforts who must now spend the money on paying higher penalties. The threat of higher penalties might also influence a provider’s decision to settle FCA cases due to the risk of astronomical penalties that may be imposed.

Budget Deal Raises Stakes for False Claims, Civil Monetary Penalties [link]
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After a ten week trial, a federal court in Alabama has granted a hospice care provider, Aseracare Inc.’s motion for a new trial in a False Claims Act (FCA) case. The Government alleged that this hospice care provider knowingly submitted false claims to Medicare for patients who were not terminally ill and thus did not qualify for hospice benefits. However, the Alabama federal court determined that there was reversible error in the jury instructions that left out that the FCA requires proof of an objective falsehood and that a minor difference in opinion is not enough to show falsity. At this time, the court is considering summary judgment given that the government maintains its only evidence for proving falsity is expert testimony and medical records of the patients at issue.
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Recently, the National Practitioner Data Bank (NPDB) website revised both the content and appearance of its Frequently Asked Questions (FAQs) pages in order to provide more insight and better guidance to its users based upon its call center statistics and other customer feedback. The revised questions and answers are now organized into new categories by audience: Health Care Professionals, Organizations, and Other Topics. There is also a FAQ search bar that allows the user to type in a keyword to search for a topic. See: http://www.npdb.hrsa.gov/faqs/faqs.jsp
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The Wall Street Journal has reported that Federal prosecutors are investigating widespread fraud, in at least four states, by compounding pharmacies in claims submitted to TRICARE–the health-insurance program that insures over 9 million U.S. military members (active, guard/reserve and retired) and their families. Some of the allegations include: false billings, physicians writing prescriptions despite not meeting the beneficiaries in person, and improper kickbacks being received in exchange for referring business to a government agency.

U.S. Targets Pharmacies Over Soaring Claims to Military Health Program” [link]

The major increase in spending on compounded drugs is believed to be the primary reason behind a $1.3 billion deficiency in the military’s health-care budget earlier this year. As a result, funds had to be redirected from other programs to compensate for the shortage and Prosecutors are considering and pursuing civil and criminal charges against the pharmacies, physicians and drug marketers.

This action by Federal prosecutors is yet another example of the increased enforcement by federal authorities against the pharmaceutical industry seen in the last six months.
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It was just released that Congress is contemplating whether Medicare will be able to restrict at-risk drug abuse beneficiaries to a limited number of pharmacies and providers when they seek narcotics. Currently, Medicaid and the Veterans Affairs (VA) are able to impose these restrictions, but Medicare is not.

If successful, this action will help prevent opioid abuse by averting doctor shopping and encouraging physicians and insurers to aid patients battling drug abuse.

Congress Looks to Curb Medicare Prescription Drug Abuse
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