On December 28, 2023, the Office of Inspector General (the “OIG”) issued a favorable Advisory Opinion (No. 23-15) (the “Opinion”) to a consulting vendor (the “Requestor”) that wanted to provide up to $75 in gift cards to physician practices in exchange for referring the Requestor’s practice optimization services (e.g., workflow and performance assessment, data analytics, and certain Medicare eligibility and performance assistance). Among other things, the Requestor: (i) did not itself provide any services that were eligible for reimbursement under any Federal healthcare program to any of its clients, (ii) did not have an ownership or investment interest in any entity that provided items or services paid for by any Federal healthcare program, and (iii) received compensation from the physician practices that did not vary based on whether the physician practices received a greater or lesser reimbursement from Medicare based on the Requestor’s services. The Opinion concluded that this proposed arrangement would not generate prohibited remuneration under Section 1128B(b) of the Social Security Act (the “Act”), also known as the Federal Anti-Kickback Statute (“Anti-Kickback Statute”), and thus OIG would not impose administrative sanctions under Section 1128A(a)(7) (exclusion) or Section 1128(b)(7) (civil monetary penalty) of the Act on the Requestor. As always, the Opinion stipulated that it may only be relied on by the Requestor on the specific facts presented to OIG, and that certain state and federal laws may continue to limit similar arrangements. However, the Opinion indicates that the tight scope of potential marketing options for physician practice vendors could expand a bit for those who are similarly situated to the Requestor.Continue Reading New Marketing Possibilities for Vendors Contracted with Medicare Providers and Suppliers Following OIG’s Favorable Advisory Opinion on Limited Referral Bonuses

At the first day of the J.P. Morgan Healthcare Conference, “[T]he answer to the ultimate question of life, the universe and everything is 42.” Recognize that famous line? No, it’s not something from ChatGPT, it’s Douglas Adams’ “The Hitchhiker’s Guide to the Galaxy of Healthcare.” Well, not healthcare…for that you have to be here in San Francisco for the 42nd edition of this conference. It was indeed an intriguing day, for even without major announcements, there were very clear signs and portents of our coming year in the healthcare industry.Continue Reading Day 1 Notes from the 42nd Annual J.P. Morgan Healthcare Conference

On November 6, 2023, the Centers for Medicare and Medicaid Services (“CMS”) released the contract year 2025 proposed rule for Medicare Advantage (“MA”) organizations and Part D sponsors (the “Proposed Rule”). The Proposed Rule covers an array of regulatory topics including the Star Ratings program, marketing and communications, agent and broker compensation, health equity, dual eligible special needs plans (“D-SNPs”), utilization management, network adequacy, and access to biosimilars.Continue Reading CMS Promotes Competition, Transparency, Health Equity and More in the CY2025 Medicare Advantage and Part D Proposed Rule

The Centers for Medicare & Medicaid Services (“CMS”) released the final rule on risk adjustment data validation (“RADV”) audits of Medicare Advantage (“MA”) organizations (the “Final Rule”) on January 30, 2023. Among other changes, this Final Rule will allow CMS to audit a sample of an MA organization’s (“MAO”) diagnoses reported for risk adjustment purposes (from 2018 and later) and then use the audit findings to calculate an extrapolated improper payment amount for the MAO’s contract. This extrapolation technique is controversial for a number of reasons, including whether CMS has the authority to use it in the manner proposed in the Final Rule, and whether it is an actuarially sound method of auditing. As we predicted in February, this Final Rule is now being challenged in court.Continue Reading Medicare Advantage RADV Audit Final Rule Challenged in Court

This month, pharmaceutical manufacturer, Merck & Co., Inc. (“Merck”), as well as four chambers of commerce, have filed suits against the federal government, arguing that the Medicare Drug Price Negotiation Program introduced by the Inflation Reduction Act of 2022 stands in violation of multiple constitutional provisions.Continue Reading The Drug Price Negotiation Program Faces Pushback from Private and Public Industry Participants

With the Medicare Comprehensive Error Rate Testing program projected error rate for skilled nursing facilities (SNFs) showing a significant increase in 2022 (15.1%, up from 7.9% in 2021), the Centers for Medicare and Medicaid Services (CMS) has instructed each of its Medicare Administrative Contractors (MACs) that review SNF Medicare claims to initiate a five-claim probe and educate medical review for each SNF in the MAC’s jurisdiction.Continue Reading CMS Takes Steps to Lower SNF Medicare Payment Error Rates

The Inflation Reduction Act (the “IRA”) requires drug manufacturers to pay rebates to Medicare when the prices of their Part B and Part D prescription drug increase faster than the rate of inflation. We recently discussed the guidance documents issued by the Centers for Medicare and Medicaid Services (“CMS”) detailing the proposed implementation of the Medicare Part B and Medicare Part D Prescription Drug Inflation Rebate Programs.Continue Reading CMS Releases First Set of Part B Rebatable Drugs for Coinsurance Adjustment Under IRA

On February 15, 2023, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule that would require nursing homes enrolled in Medicare and Medicaid to disclose new information about their ownership and management structures. If finalized, the rule would require nursing homes to disclose any ties to private equity companies or real estate investment trusts (REITs) (defined below), as well as the names and information of individuals and entities that provide certain administrative, management or consulting services.Continue Reading CMS Issues Proposed Rule Requiring Nursing Homes to Disclose Additional Ownership Information, Including Ties to Private Equity and REITS

On February 9, 2023, the Centers for Medicare and Medicaid Services (“CMS”) released two highly-anticipated guidance documents (the “Guidance”) detailing the agency’s proposed implementation of the Medicare Part B (“Part B”) and Medicare Part D (“Part D”) Prescription Drug Inflation Rebate Programs (each, a “Rebate Program” and, collectively, the “Rebate Programs”). The Rebate Programs are administered as part of the prescription drug affordability provisions of the Inflation Reduction Act (the “IRA”), which is aimed at “lower[ing] out-of-pocket drug costs for people with Medicare and improv[ing] the sustainability of the Medicare program for current and future generations.”[1] The IRA represents the most sweeping healthcare legislation passed by Congress since the Affordable Care Act.[2] Please refer to our previous blog post on the IRA.Continue Reading CMS Releases Guidance on Implementation of Rebate Programs for Certain Medicare Part B and Part D Drugs

On January 30, 2023, the Centers for Medicare & Medicaid Services (“CMS”) released the long-delayed final rule on risk adjustment data validation (“RADV”) audits of Medicare Advantage (“MA”) organizations (the “Final Rule”). CMS promotes the Final Rule as improving program integrity and payment accuracy as well as transparency and certainty. One thing that is certain, CMS can expect further challenges to its RADV audit methodology.Continue Reading CMS Issues Long-Awaited Medicare Advantage RADV Final Rule

Just in time for the holidays, the Centers for Medicare and Medicaid Services (“CMS”) issued the Contract Year 2024 Proposed Rule for Medicare Advantage organizations (“MAOs”) and Part D sponsors (the “Proposed Rule”). The Proposed Rule includes changes on an array of topics including: Star Ratings, medication therapy management, marketing and communications, health equity, provider directories, coverage criteria, prior authorization, behavioral health services, identification of overpayments, requirements for valid contract applications, and formulary changes. Continue Reading CMS Issues CY2024 Proposed Rule for Medicare Advantage Organizations and Part D Sponsors