Little Health Law Blog

Fraud and Abuse Update: St. Joseph’s Hospital Health Center Agrees to Pay $3.2 Million to Resolve Allegations that it Violated the New York False Claims Act

August 3, 2016 | Little Health Law

gavel-952313-m On August 1, 2016, the United States Department of Justice (DOJ), through the United States Attorney’s Office, Northern District of New York issued a press release regarding the DOJ’s resolution of fraud allegations against St. Joseph’s Hospital Health Center (St. Joseph’s). No determination of fraud by a Court has been determined nor have the allegations of fraud been proven. Our Georgia healthcare law firm follows legal developments with regard to healthcare reimbursement and fraud and abuse.

The Federal Government’s allegations against St. Joseph concern the state’s Medicaid program. The DOJ alleged that St. Joseph’s staff was not qualified to provide certain mental health services for which Medicaid reimbursement was sought and obtained. St. Joseph provided the services in question under its program known as the Comprehensive Psychiatric Emergency Program (CPEP). The CPEP maintained a mobile unit that would serve patients in particular counties who could not, or would not, access mental health crisis intervention services available in the emergency room. New York law has regulations with which CPEPs must comply. Those State regulations delineate the proper composition of professional staff who must be involved with the applicable intervention services when such services are provided somewhere other than in the emergency room. Reimbursement for such services is expressly conditioned upon compliance with the New York regulations that govern proper staffing.

The DOJ alleged that St. Joseph violated the New York False Claims Act by submitting payment to Medicaid for “mobile-crisis outreach services” by individuals who did not meet New York’s CPEP qualifications to provide such services. The alleged violation of the New York False Claims Act was premised on the submission of claims for payment without disclosing that St. Joseph’s staff (allegedly) failed to meet the qualification requirements under State law for the particular services provided. St. Joseph’s agreed to pay $3.2 million to conclude the matter.

Senate Finance Committee Proposes Changes to STARK Law

July 8, 2016 | Little Health Law

law-education-series-3-68918-m In a Senate Finance Committee Majority Staff Report (the Senate Report) entitled, “Why Stark, Why Now?”, the Committee’s Chairman, Senator Orrin Hatch, argues that changes are needed to Stark Law.

Georgia Stark Law and Physician Self-Referral Attorneys

The Senate Report is, at a minimum, a strong indicator that calls for change in the law are heard and efforts are underway to evaluate improvements to the law.

A Brief History of Stark Law

Stark Law is Federal physician self-referral law premised upon the notion that physicians are prone to order (i.e., “refer”) more medical items and services if they stand to benefit financially from doing so. For example, where a physician has an ownership interest in a lab to which he refers patients, he will incentivized to send more patients to the lab for lab work.

Thus in 1989 Representative Fortney “Pete” Stark (D-CA), of whom the statute was named, proposed the law to address two perceived adverse consequences of financial incentives for physician self-referrals of medical items and services reimbursed by a Federal healthcare program: (1) overbilling of Federal healthcare programs; and (2) the provision of medical services that do not benefit a patient. Stark Law, Section 1877 of the Social Security Act, codified at 42 U.S.C. § 1395nn, as originally passed, was a fairly straightforward and narrow prohibition that precluded a physician from referring patients or specimens to clinical labs, including physician office labs, where labs paid for by fed programs (Medicare, Medicaid, or CHAMPUS) if the physician (or immediate family member) had a “financial relationship” with the lab. Indeed, Pete Stark declared in sponsoring the law that the intent was to create a “bright line” standard that would benefit physicians and protect Federal healthcare programs. But the law did not remain simple and expanded from the straightforward lab referral context to apply to a list of services and items known as “Designated Health Services,” identified by CMS billing codes.

General Accounting Office Issues Findings Regarding Medicare Appeals Backlog

July 1, 2016 | Little Health Law

files Earlier this month, the United States General Accounting Office (GAO) issued its monthly anticipated report (the Report) to Congress about the status of the Medicare Appeals backlog. The Report states on the first page, “Opportunities Remain to Improve Appeals Process,” which is a gross understatement and will likely be received with frustration by unpaid providers. At least it appears the backlog is on Congress’ radar and someone is trying to do something to improve this very difficult problem that adversely impacts so many providers.

Fraud and Abuse Update: OIG Reports Big Recoveries from Providers

June 6, 2016 | Little Health Law

us-capitol-building-2-431642-m The U.S. Department of Health & Human Services (HHS), Office of Inspector General (OIG) recently issued its Semiannual Report to Congress regarding the OIG’s success in detecting and obtaining recoveries as a result of fraud, waste and abuse in Federal healthcare programs. Our Atlanta and Augusta, Georgia based business and healthcare law firm follows healthcare industry developments with regard to compliance, fraud and abuse.

The OIG uses technology and forensic audit expertise to identify new types of healthcare fraud and take enforcement steps to curb fraud and obtain recoveries for the Federal government. The OIG’s Semiannual Report covers the OIG efforts and results during the first six months of fiscal year 2016. According to the Semiannual Report:

the OIG anticipates recoveries of more than $2.77 billion, comprising about $555 million in “audit receivables,” $2.22 billion in “investigative receivables.”
the OIG reported 428 criminal actions against individuals or entities engaged in crimes relating to Federal healthcare programs
the OIG reported 383 civil actions filed in U.S. District Court for civil monetary penalties (CMP) matters, unjust enrichment claims, and administrative recoveries based on provider self-disclosures
exclusions of 1,662 individuals and entities from participation in Federal healthcare programs

The Semiannual Report provides numerous specific case examples of the OIG’s accomplishments in combatting healthcare fraud and abuse so far this year, noted in the report as “Highlights of Our Accomplishments,” including the following:

Federal Appeals Court Affirms Medicare’s $8.9 Million Overpayment Determination based on Improper Multi-Dosing

May 24, 2016 | Little Health Law

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Vitreo Retinal Consultants of the Palm Beaches, P.A. (VRC) sued the U.S. Department of Health and Human Resources (HHS) to recover payments it made to Medicare, having previously refunded the payments to Medicare based on Medicare’s notice of overpayment. The Eleventh Circuit affirmed the decision of the U.S. District Court, which upheld the administrative decision supporting Medicare’s overpayment notice. The ophthalmologist/owner of the VRC was indicted and charged with 46 counts of healthcare fraud, according to a Department of Justice press release.

Georgia Medicare Reimbursement Attorneys

VRC treated Medicare patients who suffered from age-related macular degeneration (AMD) and similar retinal diseases with intravitreal injections of Lucentis, a Medicare Part B drug approved by the FDA. There was no dispute in the case that the drug was medically reasonable and necessary for treatment of AMD. However, the FDA labeling instructed that the full contents of the 2.0-mg vial be injected into a syringe for purposes of injecting a single 0.5-mg dose of Lucentis into the patient’s eye once a month. The label clearly stated that “[e]ach vial should only be used for the treatment of a single eye.” VRC did not follow the labeling instructions; rather, it treated up to three patients from a single vile.

Based on applicable Medicare reimbursement rates, if administered as per the FDA label, a physician would inject 0.5 mg into the patient’s eye, dispose of 1.5 mg, and receive reimbursement in the amount of approximately $2,025, the average total cost of the vial. VRC would bill Medicare $2,025 for every 0.5-mg dose it administered, however, and be reimbursed $2,025 for every dose. Since VRC would get up to three doses from a single vial, it was reimbursed up to $6,075 per vial, about three times the allowed reimbursement.

Medicare’s contractor issued a preliminary overpayment determination of $8.9 million. Reconsideration was denied and the overpayment determination was upheld by and administrative law judge and the Medicare Appeals Council. VRC filed suit, and the US District Court deferred to the agency decision.

PAY IT BACK OR ELSE: CMS’ NEW OVERPAYMENT RULE FOR REPORTING AND RETURNING SELF-IDENTIFIED OVERPAYMENTS UNDER MEDICARE PARTS A AND B

April 29, 2016 | Little Health Law

889854_freedom_2 The U.S. Centers for Medicare & Medicaid Services (CMS) recently finalized a final rule to effectuate the federal government’s ability under the Affordable Care Act (ACA) to recover self-identified overpayments, applicable to Medicare Parts A and B. CMS’ implementing overpayment rule is the latest sword in the government’s formidable arsenal to combat fraud and abuse with regard to healthcare reimbursement under federal programs. Physicians and other healthcare businesses and suppliers should take heed, as they will be subject to considerable potential financial liability and professional risks for noncompliance with the new overpayment rules. Our Atlanta/Augusta business and healthcare law firm follows developments in healthcare fraud and abuse laws.

New Teeth for ACA Fraud and Abuse Provisions

Section 6402 of the ACA requires physicians, healthcare providers and suppliers, managed care plans, and other groups to self-report and refund to the government any Medicare or Medicaid overpayments by the latter of 60 days from the date the overpayment is identified or the date any corresponding cost report is due. The failure to do so subjects the offending party to civil monetary penalties and exclusion from all federal healthcare reimbursement programs. Additionally, according to the new overpayment rules, the retained overpayment is an “obligation” under the False Claims Act (FCA), subjecting the violator to all the financial consequences that attend FCA liability. The new rule is part of CMS’ final regulations to implement the ACA’s requirements with regard to overpayments as concerns Medicare Part A and B.

April 27, 2016 Kevin Little speaks to American Osteopathic Association physicians on Stark and other self-referral laws

April 27, 2016 | Little Health Law

Kevin Little speaks to American Osteopathic Association physicians on Stark and other self-referral laws.

CMS Announces Medicare’s New Primary Care Reimbursement Initiative, “Comprehensive Primary Care Plus”

April 25, 2016 | Little Health Law

usa-dollar-bills-1431130-m CMS recently announced what it describes as the largest-ever multi-payer initiative to improve primary care in America,” known as Comprehensive Primary Care Plus (CPC+). Though much of the press release is couched in terms of improving patient care — and surely CPC+ is intended to do so — the real impetus appears to be the government’s critical need to control healthcare costs funded by federal programs.

Atlanta/Augusta, Georgia Physician Practice Lawyers

The idea is to support a new primary care delivery model that will incentivize and reward value and quality. The current Administration’s goal is to have 50% of all Medicare fee-for-service payments made via alternative payment models by 2018. The Center for Medicare and Medicaid Innovation, which exists pursuant to Section 1115A of the Social Security Act (added under the Affordable Care Act) for the purpose of testing new payment and service delivery models, developed CPC+ as part of its mission, to aid the federal government in its efforts to curb its healthcare costs and enhance the quality of healthcare delivery.

CMS Expected To Provide New Guidance For Hospitals’ Uncompensated Care

April 18, 2016 | Little Health Law

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For several years, hospital administrators have been adjusting to changes in federal rules for calculating patients’ unpaid medical bills into hospital Medicare reimbursement.

The federal government provides funding to hospitals that treat indigent patients under so-called “Disproportionate Share Hospital (DSH) programs,” which provide partial compensation to facilities based on a formula. Many of the roughly 3,100 hospitals receiving DSH payments are teaching hospitals or those in large urban areas.

The Patient Protection and Affordable Care Act changed the formula for calculating DSH payments in fiscal year 2014, significantly reducing the share hospitals received, with goals of reducing funding for the Medicare DSH payments initially by 75 percent and subsequently increasing payments based on the percent of the population uninsured and the amount of uncompensated care provided; and to reduce the Medicaid DSH program by $18.1 billion by 2020.

Healthcare Providers and Business Partners Get Ready: The Next Phase of HIPAA Audits is Here

March 28, 2016 | Little Health Law

medical-doctor-1314902-m The U.S. Department of Health & Human Services (HHS) announced its preparation to move into its next phase of audits of healthcare covered entities and their business associates. According to HHS, “[t]he 2016 Phase 2 HIPAA Audit Program will review the policies and procedures adopted and employed by covered entities and their business associates to meet selected standards and implementation specifications of the Privacy, Security, and Breach Notification Rules.” Physicians, medical practices, other providers and healthcare businesses, and their business associates, should take steps to ensure they are current and compliant with respect to HIPAA requirements.

Federal Investigation/ Medical Audit Lawyers

HHS is charged by federal law with the responsibility to enhance and protect the health and well-being of all Americans. To that end, HHS, through its Office of Civil Rights (OCR), endeavors to ensure high quality health and human services and promote advances in medicine and public health. Federal law known as the Health Information Technology for Economic and Clinical Health Act (HITECH) requires HHS to conduct periodic audits of healthcare providers and their business associates to ascertain compliance (or lack thereof) with the HIPAA Privacy Rule, the HIPAA Security Rule, and the HIPAA Breach Notification Rule. The HIPAA Privacy, Security and Breach Notification Rules, though very important to our government’s efforts to protect protected health information (PHI), are additional burdens for those in the business of providing healthcare and their business partners who might have access to PHI.

A few years ago, OCR used a “pilot” audit program to assess a sampling of covered entities’ progress in implementing HIPAA’s requirements for protecting PHI. Now, utilizing the information obtained by its pilot audit program, OCR will begin auditing both healthcare providers and their business associates. Beginning this year, OCR will review and analyze policies and procedures adopted by covered entities and business associates against the requirements of the HIPAA Privacy, Security and Breach Notification Rules.