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Articles Posted in Health Law News

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By Adrienne Dresevic, Esq. of The Health Law Partners, P.C., Olivia Dresevic JD expected 2020

On June 1, 2019, Joanne Chiedi assumed the role of Acting Inspector General at the U.S. Department of Health and Human Services (HHS) following Daniel R. Levinson’s resignation. Ms. Chiedi recently sat down with the Compliance Perspectives Podcast to speak on key issues she addressed at the 2019 Compliance Institute. This article will highlight some of Ms. Chiedi’s insight regarding how healthcare providers can maintain successful compliance and oversight considering the rapid innovative changes occurring in Healthcare.

Innovation and Technology in the world of Healthcare

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The Office of Medicare Hearings and Appeals (OMHA) has announced an expansion of the Settlement Conference Facilitation (SCF) program available to the appellant community as of June 7, 2019. Previously, the option of an SCF was only available to appeals filed on or before November 3, 2017.

An SCF is “an alternative dispute resolution process designed to bring the appellant and the Centers for Medicare and Medicaid Services (CMS) together to discuss the potential of a mutually agreeable resolution for Medicare Part and Part B claims.” Claims that are eligible for SCF must be at the OMHA level or the Medicare Appeals Council (MAC) level.

An employee of OMHA is designated as a facilitator for the duration of an SCF, whose main purpose is to facilitate payment negotiations between the appellant and OMHA, working to make the two parties see the relative strengths and weaknesses of their positions. The facilitator does not act as a fact finder during this process, nor do they make determinations on the qualities of the claims.

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Section 1557 of the Affordable Care Act (ACA) is the nondiscrimination provision that prohibits discrimination on the basis of race, color, national origin, sex, age, and disability in any health program that receives federal funding. On May 24, 2019, the Department of Health and Human Services (HHS) proposed a new rule that would maintain vigorous civil rights enforcement and revise certain provisions that a federal court has said are likely unlawful.

Existing civil rights laws and regulations were originally applied to Section 1557 of the ACA. These include:

  • Title VI of the Civil Rights Act of 1964, prohibiting discrimination on the basis of race, color, and national origin;
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Following a circuit split over the statute of limitations on whistleblower actions, the Supreme Court (SCOTUS) issued a unanimous decision on May 13, 2019. This decision held that, regardless of government intervention, a longer statute of limitations may apply to qui tam lawsuits under the False Claims Act (FCA).

Two types of limitation periods govern whistleblower actions under Section 3731(b)(2):

  1. The action must be brought within six years after the violation; or,
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In order to secure a new Beneficiary and Family Centered Care Quality Improvement Organization (BFCC-QIO) contractor, the Centers for Medicare and Medicaid Services (CMS) has temporarily paused both Short Stay and Higher Weighted Diagnosis-Related Group (HWDRG) reviews.

Previously, two BFCC-QIOs have performed HWDRG reviews since 2014 and Short Stay reviews since 2015 for all 50 states and three territories: Kepro and Livanta. Moving forward, one organization will handle both types of reviews on a national basis.

Short Stay reviews provide an opportunity for BFCC-QIOs to ensure doctors and hospitals are maintaining compliance with the Medicare Part A payment policy for inpatient admission. BFCC-QIOs assumed responsibility of conducting Short Stay reviews on October 1, 2015. Previously, the reviews were conducted by Medicare Administrative Contractors (MACs) and Recovery Auditors.

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As of April 30, 2019, the maximum penalties for violations of the Health Insurance Portability and Accountability Act (HIPAA) have new annual limits. These updated penalties will be based on the level of culpability associated with the violation, according to the Department of Health and Human Services (HHS). Organizations that have taken measures to meet HIPAA’s requirements now face a smaller maximum potential penalty than organizations who are found neglectful.

The level of culpability associated with a HIPAA violation is based on four tiers, described in the Health Information Technology for Economic and Clinical Health (HITECH) Act. In order to address “apparently inconsistent language” in HITECH’s penalty scheme, which outlines the minimum and maximum HIPAA enforcement penalties, HHS published a notice of enforcement discretion that further defines the updated fines for the four tiers:

  1. The person did not know (and, by exercising reasonable diligence, would not have known) that the person violated the provision – $100 to $50,000 per violation, capped at $25,000 per year the issue persisted
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The former CEO of a hospital chain that was headquarted in Naples, Florida has agreed to pay $3.46 million to settle allegations that he caused the hospital to knowingly submit false claims to government health care programs. Gary D. Newsome was the CEO of Health Management Associates (HMA) from September 2008 to July 2013, during which time he caused patients to be admitted who could have been treated on a less costly, outpatient basis, according to the Department of Justice’s release. Allegations that Newsome caused HMA to pay remuneration to Emergency Department (ED) physicians in exchange for referrals are also resolved by this settlement.

“A physician’s health care decisions should be driven by what is in the patient’s best interest, not by what helps line a provider’s pockets,” said Barbara Bowens, the Acting U.S. Attorney for South Carolina for purposes of this case. “The U.S. Attorney’s Office will not tolerate false claims based on unnecessary hospital admissions, which drive up health care costs and can harm patients.”

The allegations against Newsome that are resolved by this settlement payment include:

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Following the December 2018 attempt of the U.S. Department of Justice (DOJ) to dismiss nearly a dozen False Claims Act (FCA) lawsuits, a recent ruling by Pennsylvania Federal Judge Timothy J. Savage states that the DOJ must have a legitimate reason for dismissing whistleblower suits.

On Wednesday, April 3, 2019, Judge Savage granted a DOJ dismissal request – ending a case against Pfizer, Inc. – while also emphasizing that there must be a valid purpose for any FCA dismissal, rather than allowing the “unfettered discretion” of the DOJ to toss whistleblower suits. The requirement of “some justification, no matter how insubstantial…acts as a check against the executive [branch] from absolving a fraudster on a whim or for some illegitimate reason”, Savage added.

This justification for dismissal is needed partly because the FCA authorizes a court hearing if a whistleblower objects to dismissal. However, “if the government’s right to dismiss is ‘unfettered,’ as the [D.C.] Circuit has held,” Judge Savage wrote, “a hearing would be superfluous, rendering the requirement of a hearing a nullity.”

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For health care providers concerned about the effect the Covenant Medical Center v. State Farm ruling would have on their right to receive insurance payments for undisputed services, the University of Michigan Regents v. Victor P. Valentino, J.D. decision is a victory. The Michigan Supreme Court upheld the right of no-fault insurers to directly pay medical providers, reversing the earlier Michigan Court of Appeals decision.

The Court of Appeals ruling had awarded Victor P. Valentino, a personal-injury attorney, a portion of more than $98,000 from his client’s no-fault auto insurance settlement that was designated for medical treatment. The client, Larry Reed, later filed for bankruptcy and was subsequently unable to pay the University of Michigan’s University Hospital’s health care bills.

Reed had agreed upon a 1/3 contingency fee “of the net recovery…received through suit, settlement, or in any other manner” in Valentino’s retainer agreement. Therefore, when Reed’s insurance company began sending two-party checks listing both the hospital and Reed as payees, Valentino would take his portion of the check. Only after the hospital filed a five-count complaint alleging conversion, tortious interference with a contract, claim and delivery, declaratory relief, and injunctive relief, did Valentino forward the remainder of the insurance proceeds to the University Hospital in order to cover Reed’s medical bills.

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In her Federation of American Hospitals’ 2019 Public Policy Conference speech, CMS Administrator Seema Verma indicated the Stark Law would be receiving a major overhaul sometime in 2019. This update, according to Verma, will “represent the most significant changes to the Stark Law since its [1989] inception.”

One of the primary goals of this update is to ensure the policy maintains relevance in the modern health care world with the relatively recent implementation of electronic health records and cybersecurity. This includes the clarification of certain areas of noncompliance as well as reflection of the shift from a fee-for-service model to a value-based care model.

These regulatory modifications come in response to CMS’ public Request for Information (RFI) in June 2018 concerning adjustments that may be necessary in order to lessen any undue impact or burden brought about by the Stark Law. Specifically, CMS solicited responses regarding “the structure of arrangements between parties that participate in alternative payment models or other novel financial arrangements, the need for revisions or additions to exceptions to the physician self-referral law, and terminology related to alternative payment models and the physician self-referral law.”

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