The defendants are alleged to have conspired to pay and receive kickbacks in exchange for physicians’ orders that were used to submit claims for payment to federal health care programs. The conspirators obtained patient information, including protected health information and personally identifiable information, and used the information to create fictitious physicians’ orders. The conspirators then sold the physicians’ orders to each other and to other durable medical equipment providers. Within approximately eight months, the defendants collectively obtained more than $2.9 million in proceeds from the criminal scheme.
Source: Fifth Individual Charged in Health Care Kickback Conspiracy
According to the U.S. Department of Health & Human Services’ Breach Portal, sometimes called the “Wall of Shame,” 418 breaches of HIPAA were reported in 2019. Some 34.9 million Americans had their protected health information (PHI) compromised. How is this still happening?
Healthcare companies and practices make the biggest mistake by believing human behavior can be perfect all the time. … [R]esulting from this assumption about human behavior, healthcare providers cheap out and refuse to pay for sufficient security measures for their network. A cheap security system may not contain proper firewalls and leave devices vulnerable, while wholly unencrypted devices can be a nightmare. Healthcare employees leave their cell phones, laptops, or iPads in their vehicles while they run out for coffee or to the grocery. And what happens next? The vehicles are broken into, and PHI is at risk.
I think there is another erroneous assumption that employers make: they assume their business model will continue to be the same.
It is so easy when putting a deal together, to come up with workflows and policies that make the deal compliant. But as time goes on, the business model shifts, even slightly, in a way that makes the previously workflow and policy no longer compliant.
As a result, as part of their ongoing Compliance Program, Covered Entities should routinely audit their HIPAA Privacy and Security standards to ensure they are evolving with their business.
Source: Ways your Healthcare Company is Breaking the Law — Without Realizing it
The final rules for changes to the Stark Law and Anti-Kickback Statute (healthcare fraud & abuse laws) have been published and go into effect on January 19, 2020. Of course, health lawyers love this stuff, but it could impact other practice areas too.
Transaction attorneys, you already know to be very careful if your transaction or arrangement, in any way, involves a hospital, doctor, or any other healthcare provider or entity. Even if your deal does not involve a healthcare provider, but could impact reimbursement by any federal program, these statutes may be implicated.
Litigators, these statutes can apply to your cases too. If your case involves one of these improper payments or an improper business structures, you might have a contractual avoidance theory available to you, if you’re the defendant, or an additional claim of fraud, if you are the plaintiff.
The key point is that these statutes can apply in ways that don’t seem immediately obvious.
Source: Stark + AKS Final Rules
In a Special Fraud Alert issued on November 16, 2020, the Department of Health and Human Services Office of Inspector General (HHS-OIG) raised significant fraud and abuse concerns with companies offering or providing remuneration in connection with physician speaker programs. Speaker programs typically involve one health care professional presenting to others on a company’s drug or device, or a disease state relevant to the company’s products, in exchange for a speaker honorarium. While speaker programs may have some legitimate purposes, HHS-OIG warned of risk the programs create for drug or medical device companies and health care professional participants, if one purpose of the program is to induce or reward federal health care program referrals.
This has been a long time coming. There have been various prosecutions and settlements involving speaker programs over the years. I’m surprised it has taken this long for OIG to issue a Special Fraud Alert.
Source: OIG Fraud Concerns Over Physician Speaker Programs
Yolanda Hamilton, MD, was found guilty by a federal jury of participating in a Medicare scheme that involved signing false “plans of care” and other medical documents for home health services that were used to submit fraudulent claims to Medicare. She allegedly received $30,000 in kickbacks during the four-year scheme. Prosecutors alleged that Dr. Hamilton and her co-conspirators submitted more than 2,500 fraudulent claims to Medicare, according to the Houston Chronicle.
Source: Houston physician sentenced to prison for $17M billing fraud
Medicare is the Secondary Payor when other insurance is available to pay the claim. However, when the Primary Payor delays payment, Medicare will make a “conditional payment.” If the Primary Payor fails to reimburse Medicare within 60 days, Medicare and other Medicare Advantage Organizations (MAOs) can recover double damages from the Primary Payor.
This Eleventh Circuit decision opens the door to allow “downstream actors” (the physician groups who contract with MAOs to provide care) to recover double damages from the Primary Payor.
[T]he Eleventh Circuit held that “downstream actors that have made conditional payments in an MAO’s stead or that have reimbursed an MAO for its conditional payment can bring suit for double damages against the primary payer.” Included in its reasoning, the court observed that the MSPA was intended to protect Medicare and MAOs from paying for medical costs that should have been covered by a primary payer. If a downstream actor renders a conditional payment that should have been the responsibility of a primary payer, the downstream actor suffers the same financial loss.
Source: Eleventh Circuit Extends Scope and Time Limits for People Who Sue under the Medicare Secondary Payer Act
The Federal Trade Commission is suing to block Farmers Branch-based Tenet Healthcare’s $350 million sale of two hospitals in the Memphis area to another healthcare system.
I don’t know the specifics of the transaction, but the FTC likely objected after the parties filed a “Hart-Scott-Rodino Premerger Notification,” or just “Hart-Scott filing.” These filings, which must take place a certain amount of time prior to the closing of the transaction, give the FTC time to object.
Often, the FTC will object and also file an injunction in Federal Court to prohibit the transaction. The practical effect is that the preliminary injunction hearing becomes the “trial” for whether the transaction will be allowed. If the FTC is successful with the injunction, the deal is usually scuttled.
Source: FTC sues to block $350 million sale of 2 Tenet Healthcare-owned hospitals in Memphis area – Dallas Morning News
On September 15, 2020, Doctor Akikur R. Mohammad, a California resident and drug treatment facility owner, pled guilty before the U.S. District Court of New Jersey for violating the Eliminating Kickbacks in Recovery Act (“EKRA”), one of the country’s first convictions under this statute targeting opioid kickbacks. Enforcement under EKRA can help shed light on questions remaining concerning the statute’s broad definitions, particularly around laboratory services, and its application in light of other federal laws such as the federal anti-kickback statute (“AKS”). Thus far, known enforcement cases under EKRA have focused on opioid and drug treatment cases.
EKRA was designed to combat the opioid crisis, but in its haste to passage, the definition of “laboratory” was not sufficiently limited to those involved in substance abuse testing. The omission has cased a great amount of speculation about the DOJ’s enforcement intentions.
The full extent of EKRA’s implications still remain uncertain. Most open questions circulate around its application to clinical laboratories, but Dr. Mohammed’s guilty plea, as well as earlier enforcement in other jurisdictions have focused on opioid and drug treatment. Such experiences suggest DOJ is focused on EKRA’s intent and inclusion in the SUPPORT Act, despite potentially broader statutory language. That said, such focus does not ensure that it will not be used more broadly in the future. This plea does signal an increased focus on EKRA enforcement by DOJ moving forward. Future enforcement may provide further certainty around EKRA’s applicability to non-opioid-related lab and other services, as well as answer other questions about how the AKS safe harbors and EKRA interact.
You can read the DOJ Press Release here.
Source: California Doctor Pleads Guilty to EKRA Violations
A former patient has sued Baptist Emergency Hospital in San Antonio and its owner alleging they fraudulently overcharged for lab work to generate higher reimbursements.
This is not a qui tam case, but rather a state court private action. The Plaintiff accuses Baptist Emergency Hospital at Shavano Park of carrying out a scheme known as “unbundling,” which is when a facility bills separately for some or all tests analyzed as part of a panel rather than billing for the panel.
The Plaintiff visited the hospital in December 2018. Although the hospital accepted his insurance, he received a “laboratory” bill for $4,500 nine months later. Most of the charge was related to a metabolic panel and a liver function test, together consisting of multiple components. The suit alleges that the components were billed individually rather than as a complete panel, resulting in a higher bill.
A “Pricing Transparency Document” posted on the hospital’s website in 2018 showed the cost of a basic metabolic panel as almost $754. Only seven of the eight tests in the panel were performed, the suit says, but Keslar was billed nearly $1,221, according to the suit.
The petition alleges that this same unbundling practice is occurring across all Baptist Emergency Hospital facilities. Plaintiff is seeking certification of a class-action.
Source: San Antonio emergency hospital sued for alleged overbilling
In an effort to provide additional relief to a health care system strained by the COVID-19 pandemic, the Office of the National Coordinator for Health IT (“ONC”) released an Interim Final Rule with Comment Period (“IFC”) on October 29, 2020 that extends the compliance dates under the 21st Century Cures Act Interoperability, Information Blocking, and ONC Health IT Certification Program Final Rule (the “Final Rule”) and offers some technical corrections and clarifications.
Of particular interest to health care providers, health IT developers and health information networks and exchanges, the IFC extends for five months (from November 2, 2020 to April 5, 2020) the deadline to comply with the Final Rule’s information blocking provisions. The Final Rule also extends the compliance timeframes to meet the updated 2015 Edition Health IT certification criteria, and the Conditions and Maintenance of Certification requirements under ONC’s Health IT Certification Program.
Source: Office of the National Coordinator for Health IT Extends Compliance Deadlines under Interoperability Final Rule