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.
Recently in Healthcare Litigation Category
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.
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]
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).
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.
Per Alabama Court The Government Must Show More Than Difference of Opinion to Prove Falsity in False Claims Act (FCA) Action
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.
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
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.
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.
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.
The U.S. Department of Health and Human Services Office of Inspector General has released their Work Plan for Fiscal Year 2016
The United States Department of Health and Human Services Office of Inspector General ("HHS-OIG") has released its Work Plan for Fiscal Year 2016. This plan summarizes new and continuing areas of review and activities that HHS-OIG plans to pursue as well as describing its primary objectives. The newest additions to the work plan are:
• Medical device credits for replaced medical devices
• Medicare payments during Medicare Severity Diagnosis Related Groups (MS-DRG) payment window
• Content Management System (CMS) validation of hospital-submitted quality reporting data
• Skilled nursing facility prospective payment system requirements
• Orthotic braces-reasonableness of Medicare payments compared to amounts paid by other payers
• Osteogenesis stimulators-lump-sum purchase versus rental
• Orthotic braces-supplier compliance with payment requirements
• Increased billing for ventilators
• Ambulatory surgical centers-quality oversight
• Physicians-referring/ordering Medicare services and supplies
• Anesthesia services-non covered services
• Physician home visits-reasonableness of services
• Prolonged (E & M) services-reasonableness of services
• Histocompatibility laboratories-supplier compliance with payment requirements
• Accountable Care Organizations: Strategies and Promising Practices
• Medicare payments for unlawfully present beneficiaries in the United States-mandated review
• Medicare payments for incarcerated beneficiaries-mandated review
• Content Management System (CMS) management of ICD-10 implementation
• Medicare Advantage organization practices in Puerto Rico
• Medicare Part D beneficiaries' exposure to inappropriate drug pairs
• Medicare Part D Eligibility Verification transactions
• Part D Pharmacy Enrollment
• Increase in prices for brand-name drugs under Part D
• Specialty drug pricing and reimbursement in Medicaid
• Express Lane Eligibility
• State agency verification of deficiency corrections
• Medical loss ratio-recoveries of MCO rebates from profit-limiting arrangements
• Review of States' methodologies for assigning Managed Care organization payments to different Medicaid FMAPs
• Managed long-term-care reimbursements
• Center for Disease Control (CDC)-oversight of the Select Agent Program
• Controls over networked medical devices at hospitals
• Food and Drug Administration (FDA)-tobacco establishment compliance with the Family Smoking Prevention and Tobacco Control Act
• Health Resources and Services Administration (HRSA)-compliance with Maternal, Infant, and Early Childhood Home Visiting (MIECHV) Requirements
• IHS-change card program review
• NIH-controls over subcontracting of NIH grant and contract work
• Controls over the preparation and receipt of select agent shipments
• Review of Office for Human Research Protections compliance evaluations to ensure human subject protection
• Foster Care-States' protocols for the use and monitoring of psychotropic medications for children in foster care
• States' implementation of guardian ad litem requirements
• Consumer Operated and Oriented Plan Loan Program-CO-OP compliance with requirements and CMS monitoring activities
• Allowability of contract expenditures
• Rollup of State-based marketplace eligibility determination audits and Content Management System (CMS) oversight
• Health Resources and Services Administration (HRSA)-compliance with Maternal, Infant, and Early Childhood Home Visiting (MIECHV) requirements
The HHS-OIG expects significant recoveries in audit receivables, investigative receivables and non-HHS investigative receivables resulting from their Work Plan, as well as tremendous savings in legislative, regulatory, and/or administrative actions.
A top priority of the Department of Justice (DOJ) is battling corporate fraud and now the focus is on holding the individuals who carry out the wrongdoing accountable. The DOJ released a memorandum this month setting forth six key steps that should be taken by federal law enforcement agents in any investigation of corporate misconduct: (1) to be qualified for any cooperation credit, corporations must provide the Department all applicable facts about the individuals involved in the corporate misconduct; (2) criminal and civil corporate investigations should target individuals from the commencement of the investigation; (3) routine communication must be present between criminal and civil attorneys handling corporate investigations; (4) no corporate resolution will provide protection from criminal or civil accountability for any individual, unless it is an out of the ordinary circumstance; (5) before resolution of corporate cases, a plan to resolve similar individual cases must be memorialized; and (6) civil attorneys should focus on individuals as well as the company and determine if suit should be filed against the individual wrongdoer(s) based on considerations above that wrongdoer's ability to pay.
As a result of these changes, healthcare corporations are likely to see a rise in the number of individual prosecutions. Healthcare corporations are well advised to seek the early assistance of learned, experienced healthcare legal counsel when first contacted by any agents regarding federal inquiries or federal payor audits (e.g., Medicare or Medicaid audits) to limit individual criminal or civil liability.
June 25, 2015
On June 18, 2015, the United States Supreme Court decided the case of King, et al. v. Burwell, Secretary of Health and Human Services, et al., upholding federal subsidies for taxpayers who buy health insurance on the federal government's healthcare.gov webpage. The potential loss of the subsidies was seen by commentators as a significant threat to the Affordable Care Act.
Chief Justice John Roberts wrote for the 6-3 majority of the Court, finding that though the text of the law was ambiguous, the Affordable Care Act was passed "to improve health insurance markets, not destroy them." Thus, the Court found that the tax credits that are available to the state health insurance exchanges should also be available to insurance purchased on the federal government's healthcare.gov page, which is relied upon by as many as 37 states that do not have their own insurance exchanges. Chief Justice Roberts' opinion was joined by Justices Kennedy, Ginsburg, Breyer, Sotomayor and Kagan. Justice Scalia dissented, and was joined by Justices Thomas and Alito.
The attorneys at The Health Law Partners have a significant amount of experience in providing guidance to healthcare stakeholders as to developments in healthcare law, regulation and policy throughout the United States. For more information regarding such matters, please call (248) 996-8510 or visit thehlp.com.
On June 18, 2015, the U.S. Department of Health and Human Services ("HHS") arrested 243 individuals for allegedly participating in Medicare/Medicaid fraud schemes. The government claims that combined, the cases involve $712 million in supposedly false billings. As part of the sweep, the Centers for Medicare and Medicaid ("CMS") also suspended a number of providers' ability to bill Medicare using the Affordable Care Act's suspension authority. 16 individuals in the Metro Detroit area were arrested as part of the sweep. The arrests were credited to the Health Care Fraud Prevention and Enforcement Action Team ("HEAT"), a joint initiative between HHS and the Justice Department. HEAT operates in regions of concern throughout the U.S., including the Baton Rouge, Brooklyn, Chicago, Dallas, Detroit, Houston, Los Angeles, Miami-Dade and Tampa Bay areas.
The government claims that the fraud occurred in various areas of healthcare, including home health care, psychotherapy, physical and occupational therapy, durable medical equipment ("DME") and pharmacy. Court documents claim that those charged were involved in billing Medicare and Medicaid for treatment that never occurred, treatment that was not medically necessary or for the payment of kickbacks in exchange for patient referrals.
BILL TO AMEND MICHIGAN NO-FAULT LAW TO CREATE "D-INSURANCE" FOR THE CITY OF DETROIT WILL HAVE SIGNIFICANT ADVERSE IMPACT ON HEALTH CARE PROVIDERS
In addition to the proposed amendment to Michigan's No-Fault Act that is presently on the floor of the State House of Representatives awaiting a second reading, another bill that poses to decrease reimbursements has cleared the Michigan Senate's Insurance Committee. Senate Bill 288, proposed by Senator Virgil Smith, involves limiting no-fault benefits for injured residents of Detroit and potentially other large cities in the State of Michigan.
As proposed, cities over 500,000 in population (only the City of Detroit, with a U.S. Census-estimated 2014 population of 680,250 would qualify) or a city that can demonstrate that 35% or more of the city's residents who regularly drive a vehicle do so without automotive insurance would qualify. The bill's sponsors admit that it is not known which Michigan cities other than Detroit would qualify as 35% or greater uninsured, due to lack of data.
Under the bill, qualifying cities would be able to cause their residents to have access to particular insurers who could issue "qualifying no-fault policies." Unlike the current no-fault law, which requires that insurers provide unlimited coverage for reasonable charges incurred for medically necessary products, services for an injured person's care, recovery or rehabilitation, a qualifying no fault policy would have a minimum aggregate coverage amount of $275,000.00 for catastrophic injuries.
As currently proposed, the bill would limit coverage for the victims of catastrophic car accidents to as little as $275,000.00, which would have a significant negative effect on many healthcare providers/suppliers and their patients.
Now that the bill has been passed by the Senate Insurance Committee, it needs to be passed by the Senate as a whole before being sent to the Michigan House of Representatives for consideration.
On Thursday, April 24, 2015, the Michigan House of Representatives' Insurance Committee passed a bill to reform Michigan's No-Fault law and sent it to the House floor for a vote. The bill (SB 248) will have significant negative changes for No-Fault reimbursements for health care providers in Michigan.
As currently proposed, the bill will cap reimbursements for accident victims at 150% of the amount that would be paid for the same services by Medicare. Additionally, it would create a fraud authority to investigate alleged fraudulent activities relative to No-Fault claims.
Now that the bill has been passed out of the House Insurance Committee, it could be up for passage by the House of Representatives during the week of April 27. If passed, it would be sent back to the Senate relative to the amendment currently proposed by the House. The bill, as currently proposed, will have a devastating financial impact on many healthcare providers and suppliers. The HLP will provide updates as to this bill's progress and the impacts to healthcare providers and suppliers in Michigan.