Month: January 2021

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Improper CBD Product Marketing Lands in FDA’s Crosshairs

green and white labeled bottles
Photo by CRYSTALWEED cannabis on Unsplash

The FDA issued warning letters to five companies for violations of the Federal Food, Drug, and Cosmetic Act (FD&C Act) related to the sale of cannabidiol (CBD) products.

CBD is the primary non-psychotropic compound in Cannabis sativa plant. The FDA stated the companies who were served warning letters illegally marketed CBD products for the treatment or prevention of medical conditions, including COVID-19. For instance, one company’s website quoted people who used CBD oil “as treatment” for various medical conditions, claiming positive effects. Another company marketed the use of CBD oil to treat medical conditions on social media, using several hashtags related to serious medical conditions.

The FDA considers these products “new drugs” under section 201(p) of the FD&C Act, and therefore they are not considered safe and effective for treatment of medical conditions as these companies promoted.

Source: Improper CBD Product Marketing Lands in FDA’s Crosshairs

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The United States and Tennessee Resolve False Claims Act Claims Relating to “P-Stim” Devices

A physician and two chiropractors agreed to pay the United States and Tennessee a total of $1.72 million to resolve liability under the False Claims Act for the alleged improper billing for electro-acupuncture using a peri-auricular stimulation device known as “P-Stim” that does not qualify for reimbursement under Medicare.

From May 2016 through November 2018, Dr. Anderson, Total Family, and Chiro2Med billed for, and were reimbursed by the United States for acupuncture using P-Stim devices under HCPCS Code L8679, which instead requires implantation of a neurostimulator with anesthesia in a surgical setting by a physician, typically a surgeon. Dr. Anderson, Total Family, and Chiro2Med separately billed for, and were reimbursed by, Medicare and/or TennCare for these devices over a two year period.

Dr. Anderson agreed to pay $1 million over five years, Dr. Spencer and Total Family agreed to pay $700,000 over five years and Dr. Shea and Chiro2Med agreed to pay $20,000 over five years.

Source: The United States And Tennessee Resolve Claims With Three Providers For False Claims Act Liability Relating To “P-Stim” Devices For A Total Of $1.72 Million

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Revisions to Stark Law Rules Covering Physician Profit Sharing and Bonuses

The new provision allows a member of a group practice to receive profits from DHS directly attributable to the physician’s participation in a value-based enterprise.

CMS clearly has made the determination that participation in such enterprises is so essential that it is allowing a direct tie between a physician’s participation and the profits derived from DHS.

CMS also clarified that if a group has five or fewer physicians, overall profits means the profits from DHS from the entire group; but if a group has more than five physicians, the group may designate a component of at least five physicians to aggregate the profits for the purpose of distribution.

Although other portions of the Final Rule go into effect January 1, 2021, the profit sharing and productivity bonus provisions do not go into effect until January 1, 2022.

Source: Revisions to Stark Law Rules Covering Physician Profit Sharing and Bonuses

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OIG Issues New Guidance Regarding Big-Box Store Gift Cards as Patient Incentives

In a new advisory, the OIG addressed the use of gift cards to incentivize patients to utilize health care services.

Even though gift cards have been discussed previously in various OIG guidance over the years, this Advisory Opinion together with the OIG’s guidance around the new Safe Harbor is the first time the OIG has taken the position that gift cards to “big-box” retailers are identified as impermissible “cash or cash equivalent” incentives under the CMP Law.

Source: OIG Issues New Guidance Regarding Big-Box Store Gift Cards as Patient Incentives

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What Stark law, anti-kickback changes mean for value-based care at ASCs

HHS issued two rules on value-based care arrangements recently that will affect orthopedic surgeons and ASCs. CMS made adjustments to the Stark law, and HHS updated the federal Anti-Kickback Statute and the civil monetary penalties law to ensure healthcare providers could develop value-based care arrangements without fear of fraud and abuse charges.

The changes to the Anti-Kickback Statute make it easier to enter into value-based care arrangements, especially if providers take full risk. The exceptions create flexibility in how physicians are compensated. The exceptions don’t require setting compensation in advance, consistency with fair market value or determined in a way that doesn’t take the volume or value of physician referrals into account. But there is a commercial reasonableness standard for pay, and the exceptions apply to both Medicare and non-Medicare beneficiaries.

The new exceptions and safe harbors are for value-based arrangements when participants take on full risk, substantial risk with at least 10 percent downside, or arrangements where providers do not take on financial risk. There are incentive payments for participants who take on at least 10 percent risk.

Source: What Stark law, anti-kickback changes mean for value-based care at ASCs

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The OCR Settles another Investigation under the HIPAA Right of Access Initiative

OCR has settled its thirteenth enforcement action under the HIPAA Right of Access Initiative, which involved a primary care physician practicing in the State of Georgia. Dr. Peter Wrobel, M.D., P.C., operating under the fictitious name of Elite Primary Care, became subject to an OCR investigation (twice) for his alleged violations of the HIPAA Privacy Rule. Dr. Wrobel must pay a Resolution Amount of $36,000.00 and implement a two year Corrective Action Plan following the OCR’s second investigation. This is an example of another single patient complaint leading to a substantial penalty under the Right of Access Initiative.

Source: No Signs of Slowing Down: The OCR Settles another Investigation under the HIPAA Right of Access Initiative

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Patient Recruiter Convicted in $2.8 Million Telemedicine Scheme Against Medicare

The owner of an Orlando-area telemarketing call center was convicted for his role in a kickback scheme involving expensive genetic tests and fraudulent telemedicine services that resulted in the payment of approximately $2.8 million in false and fraudulent claims to Medicare.

Ivan Andre Scott, 34, of Kissimmee, Florida was convicted after a four-day trial of one count of conspiracy to commit health care fraud, three counts of health care fraud, one count of conspiracy to defraud the United States and pay and receive health care kickbacks, and three counts of receiving kickbacks.

The evidence showed that Scott targeted Medicare beneficiaries with telemarketing phone calls falsely stating that Medicare covered expensive cancer screening genetic testing, or “CGx.” The tests could cost as much as $6,000 per test. After beneficiaries agreed to take the test, the evidence showed Scott paid bribes and kickbacks to telemedicine companies to obtain doctor’s orders authorizing the tests.

Between November 2018 and May 2019, labs submitted more than $2.8 million in claims to Medicare for genetic tests Scott referred to them, of which Medicare paid over $880,000. In that timeframe, Scott personally received approximately $180,000 for his role in the scheme.

Source: Patient Recruiter Convicted in $2.8 Million Telemedicine Scheme Against Medicare

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Hospital Price Transparency Rule in Effect

The Hospital Price Transparency Rule went into effect on January 1, 2021. The Rule requires all hospitals operating within the United States to make public a list of their standard charges for items and services via the Internet in a machine-readable format. Hospitals must also provide prices for a list of 300 shoppable services that must be made publicly available in a searchable, consumer-friendly format. The Rule’s intent is to enable healthcare consumers to make more informed decisions based on cost, increase market competition, and ultimately drive down the cost of healthcare services, making them more affordable for all patients.