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Health Law Highlights

Concurrent Call Coverage: Key Considerations for a Compliant Structure

Summary of article from VMG Health, by Holden Godat, CVA, Taylor Harville, Trent Fritzsche:

Concurrent call coverage, where a physician provides on-call services to multiple locations or specialties simultaneously, is increasingly being adopted due to a significant shortage of physicians and the growing demand for healthcare services. This approach aims to distribute work evenly and assure sufficient patient care. However, it brings about challenges in setting fair market value physician compensation, which needs to consider factors such as the burden of call, required specialty, physician availability, and sources of compensation. Each of these factors requires careful consideration to avoid overpayment and ensure regulatory compliance. Given the complexity and increased regulatory scrutiny, it is recommended to obtain third-party fair market value guidance for structuring compliant concurrent call coverage arrangements.

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Health Law Highlights

Twin Brothers Plead Guilty to $45 Million Healthcare Fraud

Summary of article from D Magazine, by Will Maddox:

Drs. Desi and Deno Barroga have admitted to a healthcare fraud scheme involving false claims for steroid injections that were never provided, defrauding insurers including Blue Cross Blue Shield, Cigna, and United Healthcare. The scheme involved monthly office visits for patients on addictive drugs, where they fraudulently claimed to perform costly treatments. Manipulated medical records and coerced patient statements were used to validate the fraudulent claims, leading to the doctors billing insurance for $45 million and receiving $9 million. Both doctors have a history of disciplinary actions from the Texas Medical Board related to improper prescribing and inadequate record-keeping. The brothers now face a maximum of 10 years in federal prison.

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Health Law Highlights

Second Circuit Defines “Willful” under Anti-Kickback Statute

Summary of article from Policy & Medicine, by Thomas Sullivan:

The United States Court of Appeals for the Second Circuit recently ruled that for a defendant to be considered “willful” under the federal Anti-Kickback Statute (AKS), they must be aware that their actions are somehow unlawful. This decision came from a qui tam case against McKesson Corp, which was accused of offering free access to business tools to oncology practices in return for using McKesson as their primary drug supplier. The court upheld the dismissal of the case, finding the evidence insufficient to prove that McKesson acted with wrongful intent. The court’s interpretation of “willful” under the AKS protects those who unintentionally engage in prohibited conduct. Despite this, the case was sent back for review of potential violations of state anti-kickback laws, which may have less stringent requirements.

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Health Law Highlights

Honest Services Fraud: A World Beyond the Anti-Kickback Statute

Summary of article from Dorsey & Whitney LLP, by Nicole Engisch, Seth Goertz, Sarah Malham, Mara Sanders:

The Department of Justice (DOJ) is increasingly using Honest Services Fraud (18 U.S.C. § 1346) to prosecute bribery, kickbacks, and other improper payments in the healthcare industry, in addition to traditional mechanisms like the Anti-Kickback Statute and the Federal False Claims Act. The honest services fraud law is especially useful as it covers areas not reached by the Anti-Kickback Statute, which is limited to federally funded healthcare programs. Recent court cases have upheld convictions based on honest services fraud, indicating its growing relevance in combating healthcare fraud. Therefore, it is crucial for healthcare practitioners and administrators to carefully review payment arrangements and financial interests that intersect with patient service delivery, ensuring full disclosure of relevant financial interests.

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Health Law Highlights

Let’s Make a Deal with DOJ: The Impact of the DOJ’s New Whistleblower Reward Program on Corporate Compliance

Summary of article from Husch Blackwell, by Christina Moore, Madison Rector:

The DOJ announced a new whistleblower rewards program aimed at incentivizing reports of corporate or financial misconduct. This program, allowing individuals to report violations of any federal law, particularly criminal abuses of the U.S. financial system, fills gaps not covered by existing whistleblower initiatives like the False Claims Act (FCA) or the IRS Whistleblower Program. Under the new program, whistleblowers do not need to file a lawsuit or hire an attorney, making it easier for them to report wrongdoings. This initiative could increase pressure on companies to maintain high ethical standards and prevent misconduct. To mitigate risks, compliance officers should foster a culture of openness and communication, ensuring that employees are aware of internal reporting procedures and feel safe using them.

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Health Law Highlights

False Claims Act Settlements to Know from Q1 2024

Summary of article from Bass, Berry & Sims PLC, by Theresa Androff, Molly Ruberg:

The first quarter of 2024 saw significant False Claims Act (FCA) and civil healthcare fraud settlements in the healthcare industry, despite a recent downward trend. These settlements, worth millions of dollars, were related to alleged kickbacks, medically unnecessary services and equipment, pharmaceutical issues, and Controlled Substances Act violations. Key settlements included New York York-Presbyterian/Brooklyn Methodist Hospital’s $17.3 million for alleged kickbacks, Lincare’s $25.5 million for false claims related to medical equipment, and Endo Health Solutions’ $475.6 million for its opioid marketing schemes. There were also significant settlements related to voluntary self-disclosures, such as Moffitt’s $19.5 million for false claims related to research studies. Additionally, eBay Inc. settled for $59 million, marking the first Controlled Substances Act settlement with an e-commerce company.

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Health Law Highlights

DOJ Releases 2024 COVID-19 Fraud Enforcement Task Force Report

Summary of article from Morrison Foerster, by Adam Braverman, Kate Driscoll, Kamran Jamil, Brian Kidd, Nathaniel Mendell:

The U.S. Department of Justice (DOJ) has released a comprehensive report on the COVID-19 Fraud Enforcement Task Force, calling for an extension of the statute of limitations for pandemic fraud-related offenses and increased funding for investigations and prosecutions. Since May 2021, the Task Force has charged over 3,500 defendants, recovered more than $1.4 billion in government funds, and filed over 400 civil suits. The report highlights cases involving False Claims Act liability, primarily related to the Small Business Administration’s Paycheck Protection Program (PPP), Economic Injury Disaster Loans (EIDL), and COVID-19 testing claims. The DOJ is seeking to establish a permanent interagency body to combat government benefits fraud. The report also calls for legislation to extend time limits for charging pandemic-related fraud cases and further resource fraud investigations.

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Around the Web

Clinic Owner Sent to Prison for Orchestrating $15M Medicare Fraud and Kickback Scheme

Gwendolyn Gibbs, the owner of the Houston-based Daybreak Rehabilitation Center, has been sentenced to 84 months in federal prison and ordered to pay $8.68 million in restitution to Medicare for conspiracy to commit healthcare fraud. Gibbs fraudulently billed Medicare for unnecessary mental health services provided to vulnerable adults with intellectual disabilities. From 2007 to 2016, she submitted fraudulent claims for partial hospitalization program (PHP) services, falsified medical records, and paid kickbacks for patient referrals. Charles Guidry Jr., a manager at Daybreak and Gibbs’ ex-husband, was previously sentenced to 70 months imprisonment for his involvement. Gibbs will remain in custody until her transfer to a U.S. Bureau of Prisons facility. Source: Press Release.

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Health Law Highlights

Houston Clinic Owner Sentenced for Healthcare Fraud Scheme

Summary of article from mytexasdaily.com:

Gwendolyn Gibbs, the 72-year-old owner of a Houston-based mental health clinic, has been sentenced to seven years in federal prison for a healthcare fraud scheme. Gibbs pleaded guilty to conspiracy to commit healthcare fraud in December 2021 and was ordered to pay over $8.6 million in restitution to Medicare. The court found that Gibbs had fraudulently billed Medicare for services provided to adults with intellectual disabilities who did not require mental health services, from 2007 to 2016. She admitted to falsifying medical records and paying kickbacks for patient referrals. The case was investigated by multiple agencies, including the FBI and the Department of Health and Human Services.

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Health Law Highlights

Pandemic Fraud Suits Have Yielded Over $100 Million, Report Says

From Bloomberg Law, by Daniel Seiden:

The Covid-19 Fraud Enforcement Task Force has reported that over $100 million has been reclaimed by the US government through False Claims Act (FCA) cases related to pandemic fraud. These funds have been recovered from more than 400 settlements and judgments, including cases of Paycheck Protection Program fraud, Economic Injury Disaster Loan fraud, health-care fraud, and agricultural program fraud. The report indicates a steady rise in new whistleblower actions under the FCA alleging pandemic relief fraud from 2020 to 2023. In 2023 alone, the Department of Justice (DOJ) recovered a record $2.68 billion from 543 FCA settlements and judgments.