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Alert

Data Breaches Can Result in Federal and State Liability

Regulatory bodies continue to impose severe penalties on covered entities who fail to protect patient data from unauthorized disclosure.

Community Health Systems, Inc. recently settled claims with HHS Office of Civil rights resulting from a 2014 data breach that exposed personal information of approximately 6.1 million patients for $2.3 million.

But settlement with the federal government does not necessarily end the matter as such large-scale data breaches likely implicated state law.

On October 8, 2020, the New Jersey Attorney General announced a multi-state settlement involving 28 participating states for a total of $5 million.

These cases are in contrast to penalties imposed on providers who fail to give patients access to their own records, such as the recent $160,000 fine imposed on Dignity Health.

Sources: Community Health Systems, Inc. Settles for $5 M in Multi-State Settlement; Dignity Health Settles with OCR for $160,000 for Failing to Provide Access to Records

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Alert

Two charged in prescription and kickback scheme

An 11-count indictment unsealed on Friday charges former Kindred Home Health employee Amber Price, 37, and Christopher Cruz, 46, owner of a medical marketing business, CP Cruz Management Group, LLC (Cruz), with one count of conspiracy to violate the federal anti-kickback law.

Under the alleged scheme, Price and Cruz would create fraudulent prescriptions using actual hospital patient data. They would either forge the physicians’ signatures on the prescription forms or use pre-signed or photocopied forms. Price and Cruz would then provide fraudulent prescriptions to pharmacies or labs for submission to Medicare and private payors for reimbursement. When the pharmacies and labs got reimbursed, they would pay a percentage of the reimbursement to Price and Cruz.

The submission of false prescriptions is a violation of the civil False Claims Act. No doubt, Price and Cruz were charged with conspiracy to violate the Anti-Kickback Statute in order to impose criminal liabilities on top of the civil penalties under the FCA.

Source: Two people charged in connection with health care fraud scheme, officials say

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Alert

Medical Device Maker to Pay $18 Million to Settle Allegations of Improper Payments to Physicians

This is not a Texas company, but it is a good example of how some manufacturers try to cloak improper payments under the veil of legitimate compensation.

The device manufacturer paid millions of dollars in “advertising assistance, practice development, practice support, and purported unrestricted educational grants” directly to local healthcare providers to induce sales of their products. Moreover, these inducements were only paid to select providers to reward them for past sales. The press release highlights the fact that the manufacturer’s compliance officer warned them of the practice, but those warnings went unheeded.

This matter started as a qui tam (Whistleblower) action under the False Claims Act by the former chief compliance officer of the company.

Source: Medical Device Maker to Pay $18 Million to Settle Allegations of Improper Payments to Physicians

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Alert

OCR Settles Eighth Investigation in HIPAA Right of Access Initiative

Since 2019, the Office for Civil Rights (OCR) at the U.S. Department of Health and Human Services (HHS) has been prioritizing enforcement actions against covered entities that do not allow patients timely access to their health records at a reasonable cost as required by HIPAA. This month, OCR settled an eighth investigation for $160,000 and corrective action against a hospital who failed to provide a mother full access to her son’s medical records for more than 22 months.

Source: OCR Settles Eighth Investigation in HIPAA Right of Access Initiative

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Alert

VIDEO: TBCE Stem Cell Stakeholder meeting

https://youtu.be/8De4ocoV8tY

Stem Cell Stakeholder meeting of the Texas Board of Chiropractic Examiners from Tuesday, October 13, 2020.

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Alert

HHS Renews Public Health Emergency Declaration through January 20, 2021

On Friday, October 2, the U.S. Department of Health & Human Services (HHS) announced that the Public Health Emergency (PHE) declaration for COVID‑19 will be renewed for another 90 days, beginning on October 23 (the date the PHE was previously scheduled to expire) and extending through January 20, 2021.

Source: Renewal of Determination That A Public Health Emergency Exists

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Presentation

VIDEO: Bad Batch of Miracle Cure: Texas Response to Stem Cell Therapies

https://youtu.be/70S8A7meICI

A presentation I gave to the Dallas Bar Association, Health Law Section on stem cell regulation in Texas.

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Alert

Professional Relators Have No Right to Sue for Beneficial Conduct

The Seventh Circuit determined that professional qui tam relators formed as “investment vehicles for financial speculators” should not be allowed to challenge conduct determined by the government likely to be lawful, and definitely beneficial to the government and the public.

The court creates a new standard for dismissal, joining the standards articulated in Sequoia Orange and Swift. Under the new standard, “[t]he Government may dismiss the action without the relator’s consent if the relator receives notice and opportunity to be heard.”

Source: United States ex re. Cimznhca, LLC v. UCB, Inc.

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Alert

FDA Clarifies Types of Evidence Relevant to Determining the “Intended Use” of FDA-Regulated Products

The FDA proposed updates to clarify the types of evidence it considers when determining the “intended use” of a product. A product’s “intended use” determines whether it is a medical product within the FDA’s jurisdiction. The proposed updates allow any source to be considered, even the subjective knowledge of the manufacturer. The proposed update clarifies, however, that just because a manufacturer has knowledge that health care providers prescribe or use the product for an unapproved use, does not establish a new “intended use” for the product.

Source: FDA Clarifies Types of Evidence Relevant to Determining the “Intended Use” of FDA-Regulated Products

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Alert

FDA Will No Longer Review EUA Requests for COVID-19 Laboratory Developed Tests

The Food and Drug Administration (FDA) will no longer require premarket review of laboratory developed tests (LDTs), including COVID-19 tests, decline to review emergency use authorization (EUA) request for LDTs. Instead, the FDA will prioritize review of EUAs for point-of-care tests, home collection tests, at-home tests, tests that reduce reliance on test supplies, and high-throughput, widely distributed tests.

Source: FAQs on Laboratory Developed Tests (LDT)