Healthcare Empowered

Jim Parker, for Hospice News:

Some hospice owners have been selling their businesses soon after securing a license. This has prompted federal agencies to pursue new regulations to address the problem.

The practice appears to stem from a rash of newly licensed hospices that have emerged in California, Nevada, Texas and Arizona.

Some of these providers have secured licenses, as well as Medicare certification and, sometimes, accreditation. They then proceed to enroll a small number of patients for whom they never bill Medicare …

By not billing, they are better able to avoid regulators’ attention.

Hospice is perceived as a predictable revenue stream by private equity (PE). Too often, PE does not understand the hospice business model nor does it have the commitment to prioritize standard of care over maximizing profits. Flipping licenses has undoubtedly increased because of an influx of PE funds.

Telehealth has been a boon for fraud because it expands the reach of the fraudster. But this type of fraud is nothing new. It’s just a different mechanism for communicating with vulnerable targets.

Joseph Choi for The Hill:

The Department of Justice (DOJ) announced Wednesday it has charged 78 people relating to their alleged involvement in defrauding care programs for elderly and disabled people of more than $2.5 billion. …

The bulk of the fraud appears to have been conducted through telemedicine schemes. According to the DOJ, individuals in the U.S. and abroad engaged in an operation that targeted elderly and disabled people through advertisements and the mail, connecting them with offshore staff who upsold unnecessary equipment and prescriptions.

Michael R. Bertoncini & William Kang for Jackson Lewis:

Liability in False Claims Act (FCA) suits depends on whether a defendant subjectively believed its claims were false, not on whether it can offer an objectively reasonable basis for its claims, the U.S. Supreme Court has held in a unanimous decision authored by Justice Clarence Thomas. U.S. ex. rel. Schutte v. SuperValu Inc., No. 21-1326, together with U.S. ex rel. Proctor v. Safeway, Inc., No. 22-111 (June 1, 2023).

Following the Court’s decision, Medicare and Medicaid providers and other federal contractors should practice caution when submitting claims to the U.S. government. An FCA defendant’s subjective beliefs at the time claims were submitted may become subjected to intense scrutiny.

Recommending to clients that they self-disclose violations of the False Claims Act often creates a lot of anxiety. It is a certainty that self-disclosure will be percevied as a good faith effort to by the provider to correct the conduct. It is also true that, without the disclosure, OIG might not identify the wrongful conduct.

Trey Hendershot, for Hendershot Cowart, PC discusses why self-disclosure is almost always the best course of action.

[T]he OIG Self-Disclosure Protocol generally benefits the provider in several ways:

The OIG views a good-faith disclosure as an indication of a robust and effective compliance program. As a result, many self-disclosed violations are resolved through settlements that do not involve exclusion from participation in federal healthcare programs.

The OIG believes that entities that self-disclose and cooperate deserve to pay a lower multiplier on damages than normally would be required in resolving an DOJ-led investigation.

The Self-Disclosure Protocol may mitigate potential exposure under the Civil Monetary Penalties Law and the False Claims Act.

Providers can expect a streamlined and less costly review and resolution process upon acceptance into the Self-Disclosure Protocol.

Matt Stringer, for The Texan:

[T]he Texas Data and Privacy Security Act (TDPSA), was signed into law by Gov. Greg Abbott on Sunday and will take effect in two stages over the next two years.

The act creates a list of rights for internet users over their personal data, including knowing when it is collected, the ability to correct and delete personal data, the right to prohibit the sale of personal data, and protections against being discriminated against or retaliation by companies for using these rights.

Companies will also be required to obtain consent before collecting data relating to racial or ethnic origins, health conditions, sexuality, or citizenship status, as well as genetic and biometric data.

Artificial Intelligence, particularly generative AI, is upending many industries. It will be years before we have an appreciation for the many ways AI can be used to improve quality and equity in healthcare. It will be even longer before laws catch up to protet patients from its inevitable misuse.

Sarah M. Worthy, for The Fast Mode:

Healthcare executives must navigate the delicate balance between harnessing the power of AI and safeguarding the privacy and security of sensitive data. This article explores the imperative for healthcare executives to fortify data protection efforts, delves into the unique challenges posed by AI, and emphasizes the need for a comprehensive approach to safeguard patient and employee data.

Holden Godat, Taylor Anderson, CVA, and Trent Fritzsche, writing for VMG Health:

With the emergence of private equity (PE) firms attempting to align with physician practices, VMG Health has seen an increase in the number of management services agreements (MSAs). Due to the highly fragmented and regulated nature of healthcare, PE investment in healthcare is not as straightforward as in other industries. In states with some level of corporate practice of medicine (CPOM) adoption, PE’s interaction with physician practices usually involves a “Friendly PC” model with an affiliated management services organization (MSO) [1]. In return for providing most of the non-clinical assets and services to a physician practice, the MSO charges a management fee via an MSA. To better understand how these arrangements are structured in the market, VMG Health experts have outlined their findings from valuing over 120 MSAs and offer insight into how to generate more value from these agreements.

Jose Vela, Jr., for Clark Hill:

Last Friday, the U.S. Supreme Court (SCOTUS) handed down an important ruling that will give healthcare organizations and practitioners relief against meritless whistleblower lawsuits. The ruling could result in saving organizations and practitioners their time, money, and reputation.

In a near-unanimous 8-1 decision, the SCOTUS affirmed the Third Circuit Court of Appeals on whether the federal government may obtain dismissal of a whistleblower lawsuit it declined to intervene under the federal False Claims Act (FCA). Upon a defendant’s request or its own volition, the federal government may move to voluntarily dismiss a FCA case over the objection of the whistleblower.

From HuschBlackwell, Healthcare Law Insights:

Following two weeks of trial testimony, a Travis County jury recently rendered a $10 million verdict in a novel corporate practice of medicine (CPOM) case. The jury found in favor of a physician hospitalist group that claimed a management company repeatedly broke its promise to comply with the state’s CPOM prohibition, putting profits over patients, among other wrongdoings.

An appeal is underway, but the case stands out among CPOM cases that typically focus on terms of a contract or on practice models and are limited to seeking declaratory judgments and not money damages. The case also serves as a reminder that breaching a contractual promise to follow applicable state laws (even those to be enforced by regulators and that do not provide for a private right of action) can carry real risk.