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Hospice, home health agency and owners pay over $1.8M to resolve claims concerning physician payments

The founders of an Edinburg hospice and related home health agency have paid $1,847,279.36 to resolve allegations they submitted claims to Medicare that resulted from unlawful referrals. The company offered compensation to physicians who were responsible for a significant majority of their patient referrals. Specifically, they provided physicians with monthly payments pursuant to medical directorship agreements with Allstate and Verge. Those payments were in excess of fair market value for the services the physicians actually provided. They also sold interests in Allstate to five different physicians which ultimately netted them substantial quarterly dividends. They also provided physicians other gifts and benefits, such as travel and tickets to sporting events.

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2020 Health Antitrust Year in Review

The federal antitrust enforcement agencies brought three hospital merger challenges and three criminal antitrust enforcement actions in health care in the past year. Combined with the incoming Democratic administration, healthcare antitrust enforcement is likely to remain strong in 2021.

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Improper Billing of “P-Stim” Devices is Focus of Recent FCA Settlements

Improper billing for electro-acupuncture using a “P-Stim” device (or peri-auricular stimulation device) has been the subject of two False Claims Act (FCA) settlements already in 2021, following a trend of such enforcement actions within the past year. And there are more to come. These prosecutions involve providers billing federal healthcare programs for acupuncture using P-Stim […]

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Texas Company Agrees to Reimburse Medicare for Improper Billing Related to Neurostimulators

Spinal Decompression Clinic of Texas (“SDCT”) has agreed to pay $330,898.00 to resolve liability under the False Claims Act for the alleged improper billing of electro-acupuncture device neurostimulators. Medicare does not reimburse for acupuncture or for acupuncture devices such as P-Stim, nor does Medicare reimburse for P-Stim as a neurostimulator or as implantation of neurostimulator electrodes.

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New HHS Advisory Opinion Confirms Complete Federal Preemption for PREP Act Cases and Applicability of the Act’s Defenses in Non-Use Situations

Advisory Opinion 21-01 expands on the language of the amended Declaration to clarify that the PREP Act provides complete preemptive federal jurisdiction for cases in which it is a defense. Once invoked, the PREP Act provides complete preemptive federal jurisdiction, and the federal court retains the case to decide whether the immunity and preemption provisions apply; if they do not apply, then the court would try the case as it would a diversity case.

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HHS Issues Advisory Opinion on Contract Pharmacies Under the 340B Program

Many covered entities enter into written agreements with pharmacies (contract pharmacies) to distribute their covered outpatient drugs to the entities’ patients. The covered entity orders and pays for the 340B drugs, which are then shipped from the manufacturer to the contract pharmacy. The contract pharmacy then sends the drug to the patient. The covered entity purchases the drug, and the contract pharmacy provides the pharmacy services to dispense the drug to a patient.

In the advisory opinion, the HHS Office of the General Counsel asserts that the plain meaning of Section 340B requires manufacturers to sell covered drugs to covered entities at or below the ceiling price.

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CMS finalizes “reasonable and necessary” definition, expedited breakthrough device coverage process

On January 14, 2021, the Centers for Medicare & Medicaid Services (CMS) published a final rule that, for the first time, adopts a regulatory standard for determining whether a particular item or service is “reasonable and necessary” under section 1862(a)(1)(A) of the Social Security Act (SSA) and sets the stage for commercial insurance coverage to be considered in assessing such coverage in prescribed circumstances. In addition, the final rule establishes a “Medicare Coverage of Innovative Technology” (MCIT) pathway, which is a voluntary and expedited mechanism to obtain national Medicare coverage for medical devices designated with “breakthrough” device status by the Food and Drug Administration (FDA).

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Large Health System Agrees To Pay $200,000 as Part of OCR’s Fourteenth Right of Access Initiative Settlement

In its first enforcement action of 2021, on January 12th, the United States Department of Health and Human Services (“HHS”), Office for Civil Rights (“OCR”) announced it settled with Banner Health its fourteenth enforcement action as part of its HIPAA Right of Access Initiative (the “Initiative”). OCR announced the Initiative in 2019 to ensure individuals can easily and timely access their health information at a reasonable cost under the Health Insurance Portability and Accountability Act (“HIPAA”) Privacy Rule. In 2020, OCR announced eleven settlements as part of the Initiative including most recently against a primary care provider. The Initiative has resulted in settlements with all sizes of providers.

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HIPAA Safe Harbor Bill Becomes Law; Requires HHS to Incentivize Security

The legislation directs HHS to take into account a covered entity’s or business associate’s use of industry-standard security practices within the course of 12 months, when investigating and undertaking HIPAA enforcement actions, or other regulatory purposes.

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Texas, Pennsylvania hospitals lose lawsuit challenging Medicare payments

The hospitals said HHS wrongly calculated their Medicare disproportionate share hospital payments for fiscal year 2015, using the wrong data. As a result, the hospitals appealed the DSH payment decision to the HHS provider reimbursement review board, where it was dismissed. In its dismissal, the review board said it lacked jurisdiction to consider the hospitals’ objections to their payments.