Eleventh Circuit Affirms Key Kickback Statute, Stark Law, and False Claims Act Principles in Dismissing Allegations Against HCA

By Michael Paddock, Erica Kraus and Theresa Thompson on August 16, 2019 Posted in False Claims Act, Hospitals

On July 31, 2019, the U.S. Court of Appeals for the Eleventh Circuit affirmed a lower court’s decision to grant summary judgment to hospital operator HCA and dismiss relator Thomas Bingham’s allegations. Bingham v. HCA (S.D. Fla. July 31, 2019) (“Op.”). In a well-reasoned opinion, the Court affirmed several key holdings:

There is no “remuneration”, for Federal health care program anti-kickback statute (“AKS”) purposes, unless a benefit is conferred for less than fair market value. In other words, as long as compensation to or from a referral source is consistent with fair market value, the AKS is not implicated.
With respect to the Stark Law, showing that a space lease arrangement effectuates an “indirect compensation arrangement” between a hospital and a referring physician requires a showing that the space, rental rates, or benefits under the lease correlate with the volume of the physician’s referrals to the hospital.
It may be appropriate for a court to strike allegations from an amended False Claims Act complaint if they are based on information uncovered by a relator during discovery.

These holdings should be welcomed by defendants of alleged AKS, Stark Law, and False Claims Act violations. Continue Reading

CMS Finalizes 2020 Hospice Rule: Big Changes Coming

By Brian Daucher on August 12, 2019 Posted in Hospice Law

On August 6, 2019, CMS finalized its 2020 hospice rule, including adopting, without substantial modification, two controversial and material changes to the hospice benefit:

Rebasing payment rates to shift about $500 million from routine care to enhanced levels of care including general inpatient, continuous, and respite care.
Adopting a requirement that, upon request (either at admission or later), hospices disclose in an extensive written addendum to patients (and other health care providers) any care that would be deemed unrelated to hospice care.

We reviewed these proposals in detail in prior blogs posts on rebasing and unrelated care disclosures; and, we submitted these comments to CMS. In this blog, we will note the changes that CMS did make to these proposals and note some of the potential effects.

What’s in the Bottle? FDA Announces New Blockchain Pilot Program for Tracking Drug Distribution

By Samuel Gilkeson and John Tilton on August 12, 2019 Posted in Healthcare

Where does my prescription come from? Has it been altered or diluted? Can I trust the label? With millions of prescriptions filled each year, quality control and security across the pharmaceutical supply chain seems like a herculean task. In an attempt to slay this proverbial hydra, the Food and Drug Administration (FDA) developed a new pilot program – the DSCSA Blockchain Interoperability Pilot (the “Blockchain Pilot”) – which aims to use blockchain to create a secure electronic, interoperable system that tracks and traces certain prescription drugs as they are distributed in the United States. Continue Reading

Unintended Consequences: Dynamex and California Health Care Employers

By Gregg Fisch, Chris Bell (Partner, Moss Adams) and Chris Parker (Senior Manager, Moss Adams) on August 8, 2019 Posted in Labor and Employment

This article originally appeared in Healthcare News on August 6, 2019.

The California Supreme Court’s 2018 landmark decision, Dynamex Operations West, Inc. v. Superior Court (Dynamex), redefines the employment relationship between entities and workers in California and creates one of the most stringent standards in the United States for classifying workers as independent contractors.

Applying the changes introduced by Dynamex can present significant complications in many industries. This is especially true for the health care industry due to California’s prohibition of corporate practice of medicine (CPOM) and its associated rules. For example, the state requires hospitals to have physicians available during all hours of hospital operation, while, at the same time, generally prohibiting hospitals from hiring physicians directly.

Due to these complexities, many California health care entities may benefit from examining the potentially sweeping impacts of this new interpretation of the law and determining near- and long-term methods for making necessary changes to their hiring and retention policies. Following is an in-depth overview of the potential implications for health care employers and how those in the health care industry will likely need to respond. Continue Reading

Proposed and Expanded Disclosure Obligations for Hospitals Regarding not Only Gross Charges, but Third Party Payor Pricing as Well

By Erica Kraus and Steven Chananie on August 5, 2019 Posted in Federal Healthcare Legislation, Medicare

On July 29, 2019, CMS released its proposed outpatient prospective payment system (“OPPS”) rule outlining a variety of changes it may implement for calendar year 2020. One proposal that has inspired immediate reactions from industry members would require hospitals to disclose certain additional pricing information, including some prices negotiated with third party payors, to the public. Continue Reading

CBO Report Shows Senate’s Bipartisan Bill on Surprise Billing, Drug Prices, Transparency, and More Would Result in Deficit Decrease

By Kathleen Stratton and Theresa Thompson on July 29, 2019 Posted in Healthcare Legislation and Rulemaking

On July 16, 2019, the Congressional Budget Office (“CBO”) released a Cost Estimate for Senate Bill S. 1895, the “Lower Health Care Costs Act.” The bipartisan bill, introduced June 19, 2019, intends to end surprise medical bills, reduce the prices of prescription drugs, improve transparency in health care costs, and increase public health awareness and access to health information. Continue Reading

Is Prescription Drug Pricing The Cure For Partisanship?

By Christine Clements, Bevin Newman, Erica Kraus, Susan Ingargiola and Theresa Thompson on July 25, 2019 Posted in Medicaid, Medicare

In a rare act of bipartisanship, Senate Finance Committee Chairman Chuck Grassley, R-Iowa, and Ranking Member Ron Wyden, D-Ore., introduced on July 23^rd a chairman’s mark, the Prescription Drug Pricing Reduction Act (PDPRA) of 2019 (the “PDPRA” or “Mark”), to lower the price of prescription drugs for Americans. According to the Committee, the Congressional Budget Office (“CBO”) projects that the PDPRA would save taxpayers more than $100 billion in Medicare and Medicaid spending over 10 years, lower Medicare beneficiaries’ out-of-pocket costs by $27 billion and lower beneficiaries’ premiums by $5 billion. The bill passed out of committee by a 19-9 vote on July 25^th.

Reaction to the Mark has been mixed. For example, the Pharmaceutical Research and Manufacturers of America criticized the PDPRA as the “wrong approach to lowering drug prices” and predicts it will “siphon” billions of dollars away from research and development without benefitting seniors at the pharmacy counter. America’s Health Insurance Plans was “encouraged” by the Committee’s work and expressed its readiness to work with Congress and the Administration. Continue Reading

The State of Washington Has Another Arrow in its Healthcare Antitrust Quiver: State Healthcare Antitrust Enforcement in the Spotlight

By Bevin Newman on July 24, 2019 Posted in Antitrust

On May 7, 2019, The Governor of the State of Washington signed into law Substitute House Bill 1607 (“HB 1607”) – a first-of-its-kind premerger notification requirement covering healthcare transactions closing on or after January 1, 2020. HB 1607 is a timely reminder that state attorneys general have not hesitated in recent years to enforce both federal and their own state antitrust laws when a transaction poses local anticompetitive concerns. Continue Reading

SPOTLIGHT ON INNOVATION: Improving best practices for infection control at skilled nursing facilities

By John Booher on July 18, 2019 Posted in Medicare, Skilled Nursing Facility

Skilled nursing facilities (SNFs) operate in a changing and challenging environment. The upcoming implementation by the Centers for Medicare & Medicaid Services (CMS) of a Patient Driven Payment Model will shift the reimbursement paradigm for SNFs from a focus on the volume of services provided to a focus on specific, clinically-relevant patient characteristics. Combining this significant change in reimbursement criteria with the challenges of low to non-existent profit margins, high employee churn, federal and state regulatory scrutiny and an active plaintiffs’ class action bar, means that in order to survive in today’s marketplace, SNFs must evolve their practices to maximize their operational efficiency and improve their bottom line. Continue Reading

CMS Proposes New Home Health Agency Rule Including Potential Changes to Reimbursement, Coverage, Quality, and More: CMS Accepting Comments until September 9, 2019

By Kathleen Stratton and Theresa Thompson on July 16, 2019 Posted in Federal Healthcare Programs, Medicare

On July 11, 2019, the Centers for Medicare and Medicaid Services (“CMS”) announced a proposed rule for home health agency Medicare reimbursement that would increase payments by an aggregate 1.3% for 2020, amounting to $250 million. In doing so, CMS would begin a transition to payments that are value-based, implementing the Patient-Driven Groupings Model (“PDGM”), an alternate case-mix payment methodology. In the PDGM, home health agencies are paid for 30 rather than 60-day episodes of care, and reimbursement is based on patient characteristics rather than the number of therapy visits provided. In a statement from CMS administrator Seema Verma regarding the proposed rule, she said the PDGM will reward “value over volume.” The proposed changes to reimbursement also include a one-year phasing out of pre-payments for home health services, known as Requests for Anticipated Payment. These proposed changes reflect a significant shift in the manner in which home health agencies historically have been reimbursed. Continue Reading

By scrolling this page, clicking a link or continuing to browse our website, you consent to our use of cookies as described in our Cookie and Advertising Policy. If you do not wish to accept cookies from our website, or would like to stop cookies being stored on your device in the future, you can find out more and adjust your preferences here.

Agree