Exclusive Agreement Between Hospital and Insurance Plan Does Not Violate Section 1

The Seventh Circuit refused to revive an exclusive dealing claim by one hospital against its competitor because of an exclusivity agreement with an insurance plan. Judge Richard Posner wrote the short opinion strongly reiterating in the health insurance context the established principle that a competitor trying to attack vertical agreements under Section 1 of the Sherman Act will have an uphill struggle under the Rule of Reason. The case is Methodist Health Services Corp. v. OSF Healthcare System d/b/a Saint Francis Medical Center, No. 16-3791 (7th Cir. June 19, 2017). Continue Reading

When your Hospital-of-Choice is In-Network but, SURPRISE, your Anesthesiologist is Not: California’s AB-72 and Other State Responses to the Surprise Billing Pandemic

Regardless of a patient’s diligence in selecting an in-network hospital, ambulatory surgery center, or other health facility for treatment, patients are still being saddled with surprisingly high medical bills that include out-of-network rates which often dwarf the discounted in-network rates. These “Surprise Bills” occur when a patient receives treatment from an in-network facility but also receives treatment from an out-of-network physician (or other healthcare practitioner)[1] who provides services to in-network facility patients – consider an out-of-network anesthesiology group that is the exclusive physician of anesthesia services at an in-network hospital. Studies show that this and other similar scenarios are frequently played out across the Country. Continue Reading

The Enforcement Risks for Medicare Advantage Plans Continue: A New False Claims Act Settlement in Florida

Recent activities of the Department of Justice (“DOJ”) and Qui Tam whistleblowers reveal that Medicare Advantage Plans remain at the forefront of investigations for violations of the federal False Claim Act (“FCA”) for allegedly engaging in improper risk adjustment practices and other improper or fraudulent practices. In addition to the pending FCA enforcement cases in the Swoben and Poehling cases, as well as reports of ongoing federal investigations, the recent federal settlement in May in Florida with Freedom Health, Inc., and Optimum HealthCare, Inc. – both Medicare Advantage-participating managed care plans that are subsidiaries of America’s 1st Choice Holdings of Florida, LLC – demonstrates that the DOJ, the Office of the Inspector General of the United States Department of Health and Human Services (“OIG”) and Qui Tam whistleblowers are not only interested in large players, such as UnitedHealth Group and others, but also in smaller and regional Medicare Advantage organizations. Continue Reading

To Report or Not to Report – Is it Really A Question?

In a May 15, 2017 Bankruptcy Court decision (Gardens Decision) from California’s Central District (In re Gardens Regional Hospital and Medical Center, Inc. (Bankr. C.D.Cal., May 15, 2017, No. 1617463), Judge Ernest M. Robles wrote that the grant of oversight and approval authority given to California’s Attorney General over buy/sell and change-in-control transactions between nonprofit sellers of health facilities and for-profit buyers of health facilities (see, California Corporation Code Section 5914 (Section 5914)) is limited to those situations in which a nonprofit seller has an active California health facility license at the time of closing. As written by Judge Robles, the Gardens Decision concludes that transactions between nonprofit sellers and for-profit buyers fall outside the scope of Section 5914 if the assets at hand do not include an operating, California-licensed health facility. As a nonoperational, unlicensed health facility, the transaction at issue is not a health facility transaction subject to Section 5914 and, in turn, Attorney General oversight and approval. Continue Reading

WannaCry Ransomware Alert

This is not a drill.

Companies and law enforcement agencies around the world have been left scrambling after the world’s most prolific ransomware attack hit over 500,000 computers in 150 countries over a span of only 4 days. The ransomware – called WannaCry, WCry, WannaCrypt, or WannaDecryptor – infects vulnerable computers and encrypts all of the data. The owner or user of the computer is then faced with an ominous screen, displaying a countdown timer and demand that a ransom of $300 be paid in bitcoin before the owner can regain access to the encrypted data. The price demanded increases over time until the end of the countdown, when the files are permanently destroyed. Hospitals and healthcare entities in the UK and elsewhere were particularly hard hit and continue struggling to recover, with doctors around the world blocked from access to patient files and multiple emergency room and even entire-hospital shut-downs. To date, the total amount of ransom paid by companies is reported to be less than $60,000, indicating that companies are opting to let their files be destroyed and to rely instead on backups rather than pay the attackers. Nevertheless, the total disruption costs to businesses is expected to range from the hundreds of millions to the billions of dollars. Continue Reading

Medicare Advantage Plans Under Fire: The Department of Justice Files Complaints-in-Intervention

As reported in earlier blogs, the federal Department of Justice (DOJ) has been actively looking into potential abuses by Medicare Advantage (MA) Organizations as to allegedly improper risk adjustment claims submissions and practices. Earlier this month, and as had been anticipated, the DOJ filed complaints-in-intervention against UnitedHealth Group, Inc., and related Medicare Advantage entities, in two False Claims Act qui tam lawsuits in United States ex rel. James Swoben v. Secure Horizons, et. al., and United States ex rel. Benjamin Poehling v. UnitedHealth Group, Inc., et. al. Previously, the DOJ had announced its intent to intervene in both cases, as well as its intent to conduct “on-going investigations” of other potential defendants, including Health Net, Inc., Aetna, Inc., Bravo Health, Inc. (which is part of Cigna), and Humana, Inc. Continue Reading

The Opportunities and Challenges of Freestanding Emergency Departments

Following our blog post regarding the retail clinic movement, “Patient Check-Ups Before Checking Out: Partnering to Bring Health Care into the ‘One-Stop Shopping’ Sector” (April 19, 2017), we continue our examination of alternative healthcare providers by examining the regulatory landscape that shapes the opportunities and challenges of freestanding emergency departments (“FSEDs”). Continue Reading

ACA Cost-Sharing Reductions: An Uncertain Future

“Cost-sharing reductions” (CSRs) are one of the primary mechanisms under the Affordable Care Act (ACA) to make health coverage affordable for consumers. CSRs are government payments to insurance companies for the purpose of reducing out-of-pocket costs (e.g., copayments and deductibles) for individuals who purchase insurance coverage through the healthcare exchanges established under the ACA. In 2016, over half of ACA exchange enrollees benefited in some manner from CSRs, for which the government paid out over $7 billion. Continue Reading

Part VI: An Update on the American Health Care Act

In Part V of our blog series, Very Opaque to Slightly Transparent: Shedding Light on the Future of Healthcare, we outlined some of the key provisions of the American Health Care Act (AHCA). Roughly two weeks after our post was published, GOP congressional leadership pulled the legislation from a floor vote, recognizing that the bill did not have sufficient support to pass in the U.S. House of Representatives. Nevertheless they persisted, and an amendment to the legislation negotiated in substantial part by Representatives Tom MacArthur and Mark Meadows injected new life into the AHCA. The so-called “MacArthur Amendment” sought to bridge the gap between conservative Republican members of the House Freedom Caucus and more moderate GOP members of the House, and an additional amendment – the “Upton Amendment” – helped seal the deal. With those two amendments attached, the bill narrowly cleared the House on a party-line vote (albeit with some GOP defectors), 217-213. Continue Reading

The Financial Impact of MACRA – Uncertainty Reigns in a Recent RAND Corporation Study

With all the talk of the Affordable Care Act’s uncertain future, it is easy to forget about the Medicare Access and CHIP Reauthorization Act (“MACRA”), a bipartisan law passed by Congress in 2015 to change the way physicians will be reimbursed by Medicare. MACRA is a complex and confusing law. A new study published by Health Affairs in April 2017, which used the RAND Corporation’s Health Care Payment and Delivery Simulation Model (the “Study”), has estimated the potential effects of MACRA payment models on physician and hospital Medicare reimbursement revenue. The results: uncertain. Continue Reading

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