Whistleblower

The “Other” Safe Harbor: OIG Warns Healthcare Providers and Vendors Against Information Blocking and Federal Anti-Kickback Violations

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For those of us who work in the privacy and security space this past week has been a whirlwind with focus on the ramifications of the European Court of Justice (ECJ) decision invalidating the EU-U.S. Safe Harbor Agreement.  Much has been written on the EU-U.S. Safe Harbor Agreement and much more will be written in the coming weeks.  See Cozen O’Connor’s Cyber Law Monitor recent blog post, The End of Safe Harbor – What Does it Mean?   However, the ECJ decision was not the only news on safe harbor last week.  The U.S. Department of Health and Human Services, Office of Inspector General (“OIG”) issued their thoughts on data arrangements and safe harbor, albeit a much different safe harbor than the EU-U.S. Safe Harbor Agreement.  Healthcare providers and health IT vendors should pay close attention to OIG’s Alert.  See October 6, 2015 OIG Alert.

OIG issued the Alert during National Health IT Week and described it as a “Policy Reminder” on Information Blocking and the Federal Anti-Kickback Statute (42 U.S.C. 1320a-7b (b)).  The Federal Anti-Kickback statute prohibits individuals and entities from knowingly and willfully offering, paying, soliciting, or receiving remuneration to induce or reward referrals of business reimbursable under any Federal health care program (“FHCP”).  The Alert addresses a growing trend in the industry, arrangements involving the provision of software or information technology to a referral source.  Although there is a safe harbor for electronic health records (“EHR”) arrangements it “must fit squarely in all safe harbor conditions to be protected.” 42 CFR § 1001.952(y).

In its alert, OIG focused on the parameters of the safe harbor exception that allows donors to enter into a wide variety of arrangements involving EHR software, IT, and training services, provided there are no restrictions to the use, compatibility, or interoperability of donated items or services.  42 CFR § 1001.952(y)(3).  OIG provided guidance on this issue in 2013, explicitly stating that if the interoperability of an item or service is restricted by the donor or anyone acting on the donor’s behalf, including the recipient, then the donation violates the exemption and thus will be actionable under the Federal anti-kickback statute.

OIG’s Alert highlights practices outlined in its 2013 guidance that would be actionable under the Federal anti-kickback statute.  For example, an agreement between a donor and a recipient to limit a competitor from interfacing with the donated items or services would be actionable.  Even an agreement between a donor and an EHR technology vendor to charge non-recipient providers, non-recipient suppliers, or competitors’ high fees may be actionable.

OIG also provided an open invitation to whistleblowers to report fraud by urging persons with knowledge of violations of the safe harbor to be vigilant in reporting potential violations to their office.  Violations will occur when donors engage in information blocking, which refers to practices that unreasonably block the sharing of electronic health information (EHI).  OIG provided three criteria in a 2015 report for identifying practices that qualify as information blocking:

  1. Interference with the ability of authorized people to access, exchange, or otherwise use EHI.
  2. Knowledge, actual or expected under the circumstances, that the practice will be considered information blocking.
  3. No reasonable justification for limiting sharing of EHI.

If all three criteria are met, then the practice in question is considered information blocking.

For more information on this Alert, contact Ryan P. Blaney or any member of Cozen O’Connor’s Health Care team.

Ryan Blaney

Ryan Blaney

Ryan Blaney joined Cozen O'Connor as a member of the firm's Health Law group. Ryan practices in the firm's Washington, D.C., office. He focuses his practice on representing clients in the health care and life sciences industries in a wide range of matters, including health care fraud and abuse, civil and criminal government investigations, qui tam and whistle-blower disputes under the False Claims Act and other federal and state laws and regulations, HIPAA privacy and data security, compliance and transactional services, and antitrust matters.

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We Don’t Need No Intervention: Qui Tam Relator in Omnicare Wins Big Without DOJ

Posted by J. Nicole Martin on July 23, 2014
DOJ, False Claims Act, Whistleblower / No Comments

The United States Department of Justice (DOJ) recently announced the settlement of two qui tam whistleblower lawsuits against Omnicare Inc., the largest nursing home pharmaceutical and pharmacy services vendor in the nation. The suits alleged that Omnicare gave significant discounts to skilled nursing facilities in exchange for lucrative referrals and pharmacy provider contracts. This $124.24 million settlement is the largest ever in a “swapping” case brought under the Anti-Kickback Statute.

In addition to its size, this settlement is noteworthy because DOJ had initially declined to intervene in the underlying suits and relators pursued the claims independently. That go-it-alone decision was so resoundingly vindicated in Omnicare, it is likely that this case will encourage other whistleblowers to follow a similar course of action. Relators have long had the right to continue False Claims Act litigation without governmental participation. DOJ’s decision whether to intervene or not was traditionally (although not explicitly stated) viewed as a reflection of the strength of the whistleblower’s allegations.  With the increase in whistleblower complaints, the limitations on the number of cases that DOJ can put resources on, statutory changes, the rise of a specialized qui tam bar, and big dollar victories like this may significantly increase the number of independent qui tam lawsuits. Continue reading…

J. Nicole Martin

J. Nicole Martin

J. Nicole Martin is an associate and practices in the Health Care Practice Group. Nicole assists accountable care organizations, health care systems, long term care providers, behavioral and mental health providers, medical device manufacturers, physician practices and pharmacies with their compliance, regulatory and transactional needs. Nicole’s practice includes providing clients with counsel regarding HIPAA/HITECH and state privacy and security laws, data breaches, business associate and covered entity obligations, licensure laws, Medicare, Medicaid and third-party payer matters, medical staff issues, and fraud and abuse laws. Nicole also represents clients undergoing changes of ownership and changes of control, and assists them with the transactional, regulatory and compliance requirements necessary to finalize the transactions.

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