Author: WadeEmmert

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DOJ Settlements Are a Stark Reminder

Arrangements with referring physicians are common in healthcare, but they can be very danagerous if not structured properly. Too often they are used to obfuscate the purpose of payments to physicians.

The Department of Justice for the Eastern District of Michigan announced three civil settlements which serve as good reminders of the types of arrangements that can get providers into trouble:

  • The health system had contracts with several physicians to serve as medical directors, and none of these arrangements satisfied any exceptions to the Stark Law or the AKS, such that referrals these physicians made to the health system violated the False Claims Act.
  • The health system employed a physician and this financial relationship did not satisfy any exception to the Stark Law, such that referrals for designated healthcare services were prohibited and violated the False Claims Act.
  • The health system rented office space to a physician and forgave rent payments, constituting remuneration paid in exchange for referrals from that physician in violation of the AKS and the False Claims Act, and creating a financial relationship that did not meet any exception to the Stark Law, also violating the False Claims Act.
  • The health system permitted a group of referring physicians to secure an equipment lease through non-arm’s-length negotiations, in order to induce referrals of patients from these physicians, in violation of the AKS and the False Claims Act.
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Widespread Third-Party Tracking On Hospital Websites Poses Privacy Risks For Patients And Legal Liability For Hospitals

Web tracking technology has been in the news a lot lately. Most websites use such tools to track users as they navigate through a particular site and around the web. Nothing new here. But in doing so, user data gets transferred from one site to another, or actively collected, posing privacy risks for healthcare providers.

A new study, published in Health Affairs, indicates that 99% of hospital websites use third-party tracking code on their sites, creating privacy risks for patients and legal liability for hospitals:

We found that third-party tracking is present on 98.6 percent of hospital websites, including transfers to large technology companies, social media companies, advertising firms, and data brokers. Hospitals in health systems, hospitals with a medical school affiliation, and hospitals serving more urban patient populations all exposed visitors to higher levels of tracking in adjusted analyses. By including third-party tracking code on their websites, hospitals are facilitating the profiling of their patients by third parties. These practices can lead to dignitary harms, which occur when third parties gain access to sensitive health information that a person would not wish to share. These practices may also lead to increased health-related advertising that targets patients, as well as to legal liability for hospitals.

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OIG Approves Gift Cards to Promote Patient Compliance with a Preventive Screening Measure

OIG has approved the use of gift cards to incentivize patients to return sample collection kits, provided there are certain safeguards in place:

  • Mailing the gift cards only to those patients who return the kits by the deadline specified in the reminder letter.
  • Advising patients that they may not use the gift cards on items or services provided by the requestors.
  • Limiting patients to one gift card every 36 months, which is consistent with Medicare’s coverage period for the screening test.
  • Implementing processes to ensure patients who received a gift card during the 36-month period do not receive another one during that period.
  • Refraining from patient-focused promotional activities that advertise the availability of the gift card.
  • Prohibiting advertising or marketing the proposed arrangement to healthcare providers who may order the test.
  • Excluding tests ordered by healthcare providers through the requestors’ website from the proposed arrangement.

Dee Harleston, Stewart Kameen, Jinnifer Michael, and Danielle Sloane, for Bass Berry & Sims:

The U.S. Department of Health and Human Services Office of Inspector General (OIG) recently issued Advisory Opinion 23-03, approving a proposal by the manufacturer of a colorectal cancer screening test and its wholly owned laboratory to provide gift cards to certain patients to encourage them to return the sample collection kits. While limited in scope, this favorable opinion is noteworthy because OIG typically disfavors arrangements under which providers or suppliers distribute gift cards to incentivize patients to obtain federally reimbursable services. Although OIG approved the proposed arrangement at issue in Advisory Opinion 23-03, the agency also pointedly warned entities against structuring arrangements that differ from the facts of the proposed arrangement.

OIG Advisory Opinion 23-03

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Can Actions Be Considered Remuneration Under the Anti-Kickback Statute?

When discussing the Anti-Kickback Statute (AKS), it’s common to say that “remuneration” can be “anything of value.” That board definition has been called into question by the Sixth Circuit in United States ex rel. Martin v. Hathaway et al., No. 22-1463. In that case, a qui tam relator (physician) alleged that a small-town hospital refused to hire her in exchange for a physician group to continue to send the hospital referrals. The “value” then was the not hiring a physician in exchange for referrals. The AKS does not define “remuneration.”

The Sixth Circuit determined that a careful examination of the meaning of “remuneration” and context shows that this term is limited to “payments and other transfer of value,” not “any act that may be valuable to another.” Thus the act of not hiring the physician is not remuneration.

Further, even if remuneration was present, the court stated that False Claims Act liability “resulting from” an AKS violation requires showing but-for causation. In other words, an FCA plaintiff must show “that the referrals would not have been made without the remuneration, and that the claims would not have been submitted to the government without those referrals.” Here, the qui tam physician was unable to point to any specfic Medicare claims that would not have been submitted as a result of the hospital’s decision not to hire the physician.

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FDA to Refuse Medical Device Submissions For Cybersecurity Reasons Beginning in October

Jill McKeon, for Health IT Security:

Effective immediately, the US Food and Drug Administration (FDA) will require medical device manufacturers to provide cybersecurity information in their premarket device submissions. Additionally, beginning October 1, the FDA will exercise its authority to refuse submissions for cybersecurity reasons.

…

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For any submission after March 29, manufacturers must include a “plan to monitor, identify, and address, as appropriate, in a reasonable time, postmarket cybersecurity vulnerabilities and exploits, including coordinated vulnerability disclosure and related procedures,” the FDA stated.

In addition, manufacturers must develop and maintain procedures that provide a reasonable assurance that the device and systems are cybersecure and incorporate plans to patch and update the device and related systems at the postmarket stage.

Lastly, manufacturers are required to provide a software bill of materials (SBOM) for their devices, including commercial, open-source, and off-the-shelf software components. The FDA issued an accompanying FAQ document to help manufacturers determine their obligations.

FDA: Cybersecurity in Medical Devices Frequently Asked Questions (FAQs)

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FDA Cybersecurity Requirements for Medical Devices Now in Effect

From the HIPAA Journal:

On Wednesday, March 29, 2023, the medical device cybersecurity requirements of the $1.7 trillion omnibus spending bill – The Consolidated Appropriations Act, 2023 – took effect and the FDA now requires all regulatory submissions for medical devices to include information about the cybersecurity measures that have been implemented for the devices. Section 3305 of the Omnibus bill — Ensuring Cybersecurity of Medical Devices — amended the Federal Food, Drug, and Cosmetic Act (FD&C Act) by adding section 524B, Ensuring Cybersecurity of Devices. This requirement took effect 90 days after the enactment of the Act on December 29, 2022, which means premarket submissions submitted to the FDA after March 29, 2023, require information to be included about the cybersecurity of medical devices.

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A Federal Judge Suspends FDA’s Longtime Approval of an Abortion Pill, but Gives the Government 7 Days to Appeal

Medication abortions typically use two drugs taken together: Mifepristone and Misoprostol. This ruling only affects Mifepristone. The other drug, Misopostol, is still available, but its use has always required the physician to prescribe it “off-label,” meaning it is not FDA-approved for abortions. It is FDA-approved only for use to prevent stomach ulcers while taking NSAIDs.

Chloe Atkins writing for NBC News:

In an unprecedented move, U.S. District Judge Matthew Kacsmaryk on Friday suspended the Food and Drug Administration’s longtime approval of key abortion pill mifepristone, though he gave the government a week to appeal his decision. If the ruling does eventually go into effect, it would curtail access to the standard regimen for medication abortion nationwide.

The FDA approved mifepristone more than 20 years ago to be used in combination with a second drug, misoprostol, to terminate pregnancies at up to 10 weeks. Over half of U.S. abortions are done by medication abortion, according to the Guttmacher Institute, a research group that supports abortion rights.

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If the stay on the FDA’s mifepristone approval goes into effect, the drug would no longer be available anywhere in the U.S. That would leave a surgical procedure or off-label use of misoprostol on its own as the only options in states where abortion is legal.

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Telemedicine Prescribing of Controlled Substances When the Practitioner and the Patient Have Not Had a Prior In-Person Medical Evaluation

When the public health emergency ends, so do many of the waivers that were created to facilitate healthcare during the pandemic. One such concession involves the The Ryan Haight Online Pharmacy Consumer Protection Act of 2008 (the “Act”).

Generally, the Act provides that no controlled substance may be delivered, distributed, or dispensed by means of the Internet without a valid prescription. A valid prescription requires a medical practitioner to conduct at least one in-person medical evaluation of a patient before issuing a prescription for a controlled substance. There are seven exceptions, one of which is during a public health emergency.

For the past three years, many telehealth providers have become accustomed to prescribing controlled substances following a telehealth visit, without first conducting an in-person exam.

With the PHE coming to an end in May, an in-person exam will be required. However, the Drug Enforcement Agency (DEA) has proposed rules to that will create additional flexibilities on the timing and manner for obtaining an in-person exam.

Federal Register

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OIG Expands Topics for Frequently Asked Questions

OIG has used various avenues to communicate its views on various healthcare compliance issues, such as advisory opinions, contractor self-disclosures, corporate integrity agreements, and exclusions. In March, the OIG has expanded the number of topics it will consider for FAQs submitted by the healthcase stakeholders:

  1. general questions regarding the Federal anti-kickback statute and the civil monetary penalty (CMP) provision prohibiting certain remuneration to Medicare and State health care program beneficiaries and OIG’s administrative enforcement authorities in connection with these statutes
  2. inquiries regarding the general application of the Federal anti-kickback statute and Beneficiary Inducements CMP to a type of arrangement that may implicate these statutes,
  3. questions regarding compliance considerations, and
  4. OIG’s Health Care Fraud Self-Disclosure Protocol.

More information at Frequently Asked Questions | Office of Inspector General | U.S. Department of Health and Human Services.

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Judge Strikes Down ACA’s Preventive Care Requirement

A Fort Worth federal judge yesterday ruled that insurers cannot be compelled under the Affordable Care Act to provide preventative care free of charge to insureds. The basis of the ruling involves the U.S. Preventive Services Task Force, which is the body tasked with enforcing the ACA. The judge determined that the Task Force is unlawful because the members are not appointed by the President or confirmed by the Senate.

Julia Forrest, writing for the The Texas Tribune:

O’Connor found that preventive care recommendations issued by the panel do not have to be followed because he found their volunteer members, who are 16 medical professionals and scientists charged with issuing the recommendations, do not have to be appointed by the president nor confirmed to their posts by the Senate.