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Texas Lawyer Convicted of Conspiracy and Perjury for Laundering Kickbacks

This was intentional criminal conduct of conspiracy and perjury related to Anti-Kickback Statute violations. From a U.S. Attorney’s Office for the Eastern District of Texas Press Release:

“By facilitating kickbacks, this defendant knowingly enabled theft from Medicare and Medicaid, putting personal profit before legitimate patient needs and ultimately costing taxpayers millions of dollars,” said Jason E. Meadows, Special Agent in Charge at the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). …

According to information presented in court, [Peter J. Bennett] created sham trusts and shell corporations through which he laundered at least $2,724,080.41 in healthcare kickback proceeds. Bennett used his law firm’s Interest on Lawyers Trust Account (IOLTA), operating account, and a personal bank account to launder and transmit the kickback proceeds. The perjury charges arose out of false statements Bennett made in response to interrogatories propounded in Civil Investigative Demands issued by the Department of Justice as part of a False Claims Act (FCA) investigation. Bennett was indicted by a federal grand jury in February 2022.

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Mark Cuban’s Drug Company Will Soon Be Selling Its Medicine Directly to Hospitals

Will Maddox, for D Magazine:

Mark Cuban Cost Plus Drug Co. CEO Dr. Alex Oshmyansky is always busy disrupting the healthcare system. The latest iteration? Selling medicines directly to hospitals and clinics to address shortages and help providers save on needed medications.

The company is focused on manufacturing drugs that are in shortage. The FDA keeps a running list of around 180 medicines in its drug shortage database. When I visited, a few vials of the Cost Plus’ 23.4 percent Sodium Chloride Injection sat on Oshmyansky’s desk. The solution, which was manufactured via the robotic machinery in the factory, is listed in the shortage database and is used to replenish lost water and salt in your body or as an additive to total parenteral nutrition, which allows patients to be given nutrition without accessing the digestive tract.

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Complex AKS/Stark Complaint Survives Rule 9(b) Particularity Challenge – A Guide for FCA Complaints

Francis C. Oroszlan, Brett Barnett and Timothy Fry, for McQuireWoods:

Generally, a complaint will survive a motion to dismiss if it states a plausible claim and allows a court to reasonably infer the defendant’s liability for the allegations made therein. Merely reciting the elements of a cause of action followed by a general statement of liability is insufficient. Further, where a complaint alleges claims under the FCA, Rule 9(b) of the Federal Rules of Civil Procedure (“Rule 9(b)”) applies and requires that the complaining party “state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). As noted by the court, Rule 9(b) imposes a more exacting pleading standard and requires the complaint to allege facts as to time, place, and substance of the defendant’s alleged fraud, specifically the details of the defendant’s allegedly fraudulent acts, when they occurred, and who engaged in them.” (Citing Hopper v. Solvay Pharms., Inc., 588 F.3d 1318, 1324 (11th Cir. 2009)).

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CMS Proposes Payment Cuts in CY24 Medicare Physician Fee Schedule

Victoria Baily, for Revcycle Intellegence:

The agency has said that proposed payment increases for primary care and other direct patient care providers meant that payment cuts must occur in other specialties to achieve budget neutrality. While specialties like internal medicine (1 percent) and family practice (3 percent) would see reimbursement increases, others are facing cuts, including radiation oncology (-2 percent) and emergency medicine (-2 percent).

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Texas Data Privacy and Security Act, Data Breaches Notification

From Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., posted on National Review:

Texas has joined the growing list of states enacting comprehensive consumer data privacy laws. On June 18, 2023, Governor Abbott (R) signed H.B.4, otherwise known as the Texas Data Privacy and Security Act (“TDPSA”).  The TDPSA is another close cousin of the business-friendly Virginia statute, though Texas takes a different approach with applicability thresholds and gets tougher with regards to high-risk processing activities and consent requirements for using sensitive data. The compliance patchwork continues…

Just a few weeks before the TDPSA became law, the state also tightened the screws on its data breach notification requirements in order to require covered entities to report data breaches to the Texas Attorney General within 30 days (rather than 60 days) of discovering a breach. The amendment to Texas’ data breach notification law (Tex. Bus. & Com. Code Ann. §§ 521.002 and 521.053) takes effect on September 1, 2023 and will also require that reporters of breaches use an electronic form available on the AG’s website.

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The 2023 DOJ Health Care Fraud Enforcement: Big Dollars or Clever Packaging?

Zachary S. Taylor and Sarah M. Hall, for Epstein Becker Green:

Of the numerous cases, three specific areas comprised the vast majority of the $2.5 billion in alleged fraud:

Telemedicine Fraud: … 11 defendants were charged for their alleged connection to an $1.9 billion fraudulent scheme in the Southern District of Florida, which involved C-suite executives who were selling DME templates via a software platform in exchange for kickbacks and bribes. These defendants allegedly used telemarketing and advertising to induce elderly and disabled individuals to order unnecessary medical equipment and prescriptions. The defendants allegedly bypassed Medicare requirements of in-person contact by fraudulently generating documentation. Interestingly, this scheme continued after new owners acquired the underlying business. …

Pharmaceutical Fraud: 10 defendants were charged for a $370 million fraud scheme related to drug diversion. One defendant in this case allegedly paid over $5 million in kickbacks in order to get individuals to submit prescriptions to a pharmacy; such drugs were allegedly never dispensed. The defendant received over $100 million from Medicare and Medicaid.

Opioids and Clinical Laboratories: $150 million of the enforcement action’s total loss amount was attributed to the illegal distribution of opioids and clinical laboratory testing fraud.

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FDA Approves the First Over-The-Counter Birth Control Pill

Beth Mole, for ArsTechnica:

The OTC-approved pill is the Opill (norgestrel), a once-a-day progestrin-only pill manufactured by the Dublin-based company Perrigo. The company said it expects the pill will be available starting in the first quarter of 2024, though its pricing is not yet clear. For optimal efficacy, it needs to be taken consistently every day in the same three-hour window. Opill is estimated to be about 93 percent effective at preventing pregnancy in real-life use, higher than the real-life efficacy of other over-the-counter birth control methods, such as condoms, which are around 87 percent effective.

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OIG Advisory Opinion 23-04 – Favorable Opinion Regarding the Use of an Online Health Care Directory by Federal Health Care Program Beneficiaries

A website offers users the ability to search for physicians and other health care providers who have paid a fee to be included in the database. The website generates personalized results using a proprietary algorithim. The user can book an appointment with the provider directly through the website.

No fee is charged to the user. However, the providers pay to be listed in the database and pay when a user books an appointment. Providers can also purchase advertisments which are displayed to the users along with the search results.

OIG concluded that:

  • although the Arrangement would generate prohibited remuneration under the Federal anti-kickback statute if the requisite intent were present, OIG would not impose administrative sanctions on Requestor in connection with the Arrangement under sections 1128A(a)(7) or 1128(b)(7) of the Act, as those sections relate to the commission of acts described in the Federal anti-kickback statute; and
  • although the Arrangement could generate prohibited remuneration under the Beneficiary Inducements CMP, OIG would not impose administrative sanctions on Requestor in connection with the Arrangement under the Beneficiary Inducements CMP or section 1128(b)(7) of the Act, as that section relates to the commission of acts described in the Beneficiary Inducements CMP.
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Billing Medicare or Medicaid? Understanding Your Audit Risk

Jenna Godlewski and Alice Harrs, for MaynardNexsen:

If you are a healthcare provider enrolled with Medicare and Medicaid, it is imperative that you know the governmental agencies’ expectations for compliant billing and understand that the agencies constantly monitor and audit provider claims to identify aberrant claims submissions and billing patterns.  This article summarizes several primary governmental agencies and Center for Medicare and Medicaid Services (“CMS”) contractors who conduct audits of healthcare claims reimbursed by Medicare and Medicaid and provides information as to how to monitor and identify the current audit targets of these auditors.

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AI’s Increasing Role in the Health Care Delivery System: Key Legal Considerations

Douglas A. Grimm, for ArentFox Schiff:

In a recent Yale CEO Summit survey, 48% of CEOs indicated that AI will have its greatest effect as applied to the health care industry — more than any other industry. This alert analyzes how AI is already affecting the health care industry, as well as some of the key legal considerations that may shape the future of generative AI tools.

The article addresses the emerging regulatory framework, AI’s potential to streamline administrative processes, reduce operating expenses, and increase the amount of time a physician spends with a patient. While we all anticipate  AI can assist providers diagnose conditions and develope plans of care, we also need processes to confirm that AI is generating reliable information.