Jury Returns Massive Verdict in Hospital Gown Fraud Lawsuit

On Friday, April 8, 2017, a federal jury in California sent shockwaves throughout the healthcare and legal community when it returned a $454 million verdict against Kimberly-Clark Corp. and its affiliate Halyard Health Inc. (together, “Kimberly-Clark”) in a case involving the sale of Kimberly-Clark’s MicroCool Breathable High Performance surgical gowns. The verdict is believed to be one of the largest in U.S. history in the medical device space. Continue Reading

New York AG Takes Enforcement Action Against Heart Monitoring Apps: Murmurs of Concern are Heard in mHealth App World

In a move sure to cause murmurs in the large and growing mobile health application industry, the Office of New York Attorney General Eric Schneiderman (OAG) has used state trade laws to extract concessions and monetary penalties from mHealth app developers, including the developer of a supposed fetal heart monitoring smartphone app.

Continue Reading

Merger and Acquisition Activity in the Rehabilitation, Home Health and Hospice Sectors Increased in 2016, But Will this Trend Continue?

Since 2014, there has been a steady increase in mergers and acquisitions in the Rehabilitation sector, with a total of 40 deals announced in 2016.  This is almost double the number of deals in 2014 (a total of 21), and includes deals with both publicly traded corporations as well as privately held acquirers.  Similarly, after seeing a sharp decline in M&A activity in 2015, the home health and hospice sectors saw an increase of 12% in M&A activity in 2016 with a total of 57 deals announced, including several deals involving private equity investors.

Continue Reading

Health-Related Programs Face Deep Cuts In President Trump’s “Budget Blueprint to Make America Great Again”

On March 16, 2017, the President Trump Administration released his first budget outline for the 2018 fiscal year (FY 2018). In an effort to “shrink the role of government,” the $1.1 trillion budget proposal calls for a $54 billion increase in defense spending, with a corresponding $54 billion reduction in funding for many federal government programs. In particular, the Department of Health and Human Services (HHS) and the National Institutes of Health (NIH) would absorb double-digit budget cuts, in addition to other consolidation efforts involving those agencies.

President Trump is expected to release a full FY 2018 budget request in May of this year. Although the budget blueprint delivers on President Trump’s campaign promise for increased homeland security and military spending, opposition from both Democratic and Republican lawmakers suggests that the proposed cuts are unlikely to fully survive the congressional appropriations process.

Continue Reading

CMS Delays Implementation of New Payment Models (Again)

On March 21, 2017, the Centers for Medicare and Medicaid Services (“CMS”) published an interim final rule (“Interim Final Rule”) delaying (i) the effective date of several new Medicare payment models developed by the CMS Innovation Center to advance care coordination, and (ii) the implementation of updates to an additional existing model.

Continue Reading

California HMO Timely Access Report Available

California became the first state to set limits on how long HMO patients must wait to see a physician when the California Department of Managed Health Care (“DMHC”) adopted certain “timely access” regulations in 2010, based upon a 2002 law.[1]  These regulations require health plans to maintain provider networks sufficient to ensure that consumers can get appointments and services, such as interpreter support, within specified timeframes. For example, members must be able to obtain an appointment for a non-urgent primary care provider appointment within 10 business days.  Plans are required to monitor their own networks and submit annual reports.

Continue Reading

The Siege Continues: The Justice Department is Investigating Four Additional Medicare Advantage Plans

In our prior blog post, we reported that, at the request of the federal Department of Justice, the FCA qui tam whistleblower lawsuit in the case of United States ex rel Benjamin Poehling v. United HealthGroup, Inc., et. al. was unsealed on February 15, 2017.  The complaint alleges that United HealthGroup, as well as a number of other defendants, had fraudulently collected “hundreds of millions—and likely billions—of dollars” in Medicare Advantage risk payments by claiming patients were sicker than they really were.  At the time of the unsealing, the Department of Justice partially intervened in the lawsuit against only two of the defendants – UnitedHealth Group and WellMed Medical Management, Inc. – and declined to intervene against the other defendants.

Continue Reading

California Court of Appeal Affirms Validity of Hospital Meal Period Waivers

The ability of hospitals to use meal period waivers was called into question by a 2015 Court of Appeal decision in Gerard v. Orange Coast Memorial Medical Center (Gerard I), which held that the provision in Wage Order 5 allowing waivers even when employees work over 12 hours was invalid.  Following two more years of litigation, we can now inform you that the three-member panel that reached the 2015 decision in Gerard I, reversed itself on March 1, 2017 in Gerard II.  In its new opinion, the Court of Appeal adopted Sheppard Mullin’s argument and confirmed that the special meal period rules for health care employees in Wage Order 5 are, in fact, valid.

Continue Reading

Antitrust Not Always Available in Competitor Disputes in the Healthcare Sector

The antitrust injury and antitrust standing defenses/doctrines are alive and well in healthcare.  A recent case, SCPH Legacy Corp. et al. v. Palmetto Health et al., shows that a competitor is not always the most legally appropriate plaintiff to bring an antitrust case, especially when the competitor’s alleged harm stems from increased competition.  This article explains the court’s reasoning and makes some predictions for similar arguments in the future.

Continue Reading

Part V: A Brief Overview of the American Health Care Act

In Part IV of our blog series, Very Opaque to Slightly Transparent: Shedding Light on the Future of Healthcare, we discussed a few post-inauguration developments with respect to the Affordable Care Act (ACA).  In this Part V, we provide a brief overview of some of the key provisions of the American Health Care Act (AHCA), the latest in the ongoing saga of the ACA’s future.

On March 6, 2017, Speaker of the House Paul Ryan unveiled his much anticipated ACA “repeal and replace” bill, the AHCA. Although it is currently undergoing markup in the House of Representatives, and thus is subject to change even in the immediate future, it is worth considering some of the legislation’s core features, as they establish a general framework within which a successful repeal and replace effort may operate.  For example, in its current draft form, the AHCA includes various key components, including those set forth in the following abridged list:

Continue Reading

LexBlog