DOJ Announces Settlement with Physicians Based on Pre-Signed Blank Prescriptions for Controlled Substances

On August 8, 2018, the U.S. Attorney’s Office for the District of Massachusetts announced that two physicians had agreed to settle allegations of improper dispensing of controlled substances and improper billing. According to this press release, a physician and his addiction treatment clinic, H.K.D. Treatment Options, agreed to pay $23,000 to settle claims of improper billing of medical services under the Controlled Substances Act and the False Claims Act. A physician employed by the pain treatment clinic also agreed to pay a $12,500 civil penalty for issuing invalid prescriptions for controlled substance under the Controlled Substance Act.

The government alleged that under the direction of the physician-owner of the pain management clinic, another physician signed hundreds of blank prescriptions for use by unsupervised non-physician staff while the physician signing the prescriptions was on vacation. The non-physician staff issued over 600 prescriptions for controlled substances using the pre-signed blank prescriptions. The government also alleged that the pain treatment center billed Medicare improperly for services related to the prescriptions that non-physician staff provided in the other physician’s absence and that the physician-owner falsely reported to Medicare that the physician on vacation had supervised the services by the non-physician practitioners. A copy of the press release on the settlement can be found here.

Written by: Clay J. Countryman

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Justice Department Files Brief in Texas Lawsuit Supporting Challenge to the Constitutionality of the ACA

Co-authored by Cecilia G. Vazquez, Summer Law Clerk, Breazeale, Sachse & Wilson, L.L.P.

Depending on how a Texas federal court rules in a lawsuit filed February 2018, by 20 state attorneys general (including Louisiana), all or part of the Affordable Care Act (ACA) could be declared unconstitutional. On June 7, 2018, the Justice Department filed a brief in Texas v. the United States (N.D. Texas 2018) (the “Texas lawsuit”) that largely supported the challenge to the constitutionality of the Individual Mandate in the ACA requiring individuals to maintain essential health insurance coverage. Continue reading

CMS Requests Feedback on Regulatory Burden of the Stark Law

The Centers for Medicare & Medicaid Services (“CMS”) is seeking public feedback regarding the regulatory impact and burdens of the Physician Self-Referral Law (commonly known as the “Stark Law”). On Monday, June 25th, CMS published in the Federal Register a Request for Information Regarding the Physician Self-Referral Law (the “RFI”). According to the RFI, CMS has identified some aspects of the Stark Law as a potential barrier to coordinated care and is seeking public comment on the impact and burden of the Stark Law and whether the Stark Law prevents or inhibits care coordination.

CMS plans to issue guidance or revise regulations to address obstacles such as certain portions of the Stark Law, as well as to encourage and incentivize coordinated care. In the RFI, CMS has asked for stakeholders’ comments on the following areas:

  • The structure of arrangements between parties that participate in alternative payment models or other novel financial arrangements;
  • The need for revisions or additions to exceptions to the Stark Law; and
  • Certain terminology used in the context of healthcare delivery, payment reform, and the Stark Law.

In the RFI, CMS asked for public feedback on 20 questions that address the above areas. Some of the areas and questions include:

  1. What existing or potential arrangements involving alternative payment models do you participate in that involve a designated health services entity and referring physician under the Stark Law;
  2. What, if any, additional exceptions to the Stark Law are necessary to protect financial arrangements that involve integrating and coordinating care outside of an alternative payment model;
  3. Whether the current exception at 42 CFR 411.357(n) for risk-sharing arrangements is effective;
  4. Whether the special rule for compensation under a physician incentive plan within the exception for personal services arrangements is useful;
  5. Comments on possible approaches to addressing the application of the Stark Law to financial arrangements with participants in alternative payment models.
  6. How should the CMS define commercial reasonableness in the context of the Stark Law;
  7. Whether the CMS should modify the definition of “fair market value”;
  8. When compensation should be considered to “take into account the volume or value of referrals” by a physician or “take into account business generated” between parties to an arrangement;
  9. Whether barriers exist to qualifying as a “group practice”;
  10. Whether transparency about physician’s financial relationships, price transparency or the availability of other data necessary for informed consumer purchasing could reduce or eliminate the harms to the Medicare program and its beneficiaries that the Stark Law is intended to address; and
  11. What are the compliance costs for regulated entities, such as physician practices and hospitals.

Any comments and feedback to CMS in response to the Request for Information on the Stark Law must be received by CMS by 5:00 p.m. on August 24, 2018. A copy of the CMS RFI is available here.

Written by: Clay Countryman

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BLUE VALLEY HOSPITAL UPDATE – Kansas District Court Dismisses Case, BVH Medicare Provider Agreement Terminated for Failing to be “Primarily Engaged”

As reported in last month’s LHA article, Blue Valley Hospital (“BVH”) recently filed a lawsuit seeking to restrain and enjoin the United States Department of Health and Human Services (“HHS”) and the Centers for Medicare & Medicaid Services (“CMS”) from terminating BVH’s Medicare certification and provider contracts. In the lawsuit filed with the United States District Court for the District of Kansas (“Kansas District Court”), BVH argued that if the Temporary Restraining Order (“TRO”) and injunction were not granted, BVH would lose nearly all of its revenue while the administrative appeal was pending, which would force BVH to close and would result in irreparable harm. At the time of the prior article, it was unclear how the Court would rule and whether the BVH Medicare provider agreement would be terminated.

On June 7, 2018, the Kansas District Court dismissed the BVH case for lack of subject matter jurisdiction because BVH had not exhausted its administrative remedies. BVH’s Medicare provider agreement was subsequently terminated by CMS in a Public Notice of Termination effective June 15, 2018. Hospitals should carefully analyze the requirements to be “primarily engaged” that are summarized below, and make any necessary adjustments to meet those requirements prior to the arrival of surveyors. As the BVH case illustrates, the administrative process can be slow and the courts are not likely to grant injunctive relief to protect against termination of a hospital’s provider agreement while the hospital pursues its administrative remedies. Continue reading

LDH Licensing “Express Lane” Coming Soon

Hospitals and other healthcare providers may soon find relief from the long licensing wait times.  Effective May 15, 2018, the Governor signed into law House Bill 539 (Act No. 324) which authorizes the Louisiana Department of Health (“LDH”) to establish an expedited licensing process for healthcare facilities and providers that LDH licenses.  Getting in the “express lane” will not be cheap, however.  LDH may assess fees for the expedited licensing process up to $7,500. Continue reading

Patience is a Virtue, an Administrative Hearing is a Right: Fifth Circuit Creates Possibility of Enjoining Recoupment

Zone Program Integrity Contractors’ (“ZPIC”) ability to recoup payments as a hospital appeals the ZPIC’s audit finding may have been weakened. A recent decision by the United States Court of Appeals for the Fifth Circuit, Family Rehabilitation, Incorporated V. Azar, 886 F. 3d 496, (5th Cir. 3/27/2018), sent a strong message regarding the federal government’s administration of Medicare claims appeals: failure to provide a provider with a timely appeal may be grounds for a violation of due-process. Pertinent to hospitals on an operational level, an untimely administrative hearing may be grounds for the hospital to seek an injunction of the corresponding recoupment. Either way, the Family Rehabilitation decision should not be ignored. Continue reading

CMS Terminates Medicare Provider Agreement For Failing to be “Primarily Engaged” in Providing Services to Inpatients

As mentioned in a previous article Recent CMS Guidance Could Jeopardize Medicare Provider Agreement, the Centers for Medicare & Medicaid Services (“CMS”) recently issued Survey and Certification Memo: 17-44-Hospitals (“S&C 17-44”) which requires hospitals to have a minimum of two inpatients at the time of survey, as well as an average length of stay (“ALOS”) and average daily census (“ADC”) of two over the past twelve months. At the time of that article (February 2018), CMS had not yet issued any public notices of intent to terminate a hospital’s Medicare Provider Agreement for failing to be “primarily engaged” in providing services to inpatients.  That has since changed. Continue reading