DOJ Antitrust Division Announces the Creation of New Task Force on Health Care Monopolies and Collusion

Posted by on May 15, 2024
Antitrust, DOJ / No Comments

Last week, the United States Department of Justice’s Antitrust Division announced the formation of the Task Force on Health Care Monopolies and Collusion (“HCMC”). The task force appears to have been inspired by concern for health care platforms that combine doctors with insurers, data, and other assets. For example, one platform company that combines a number of different health care industry sectors under its roof may be scrutinized by the HCMC. Leading the task force will be Katrina Rouse, an antitrust prosecutor who joined the DOJ’s antitrust division in 2011 and who served as a health care and consumer products section trial attorney.

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FTC Issues Final Rule Banning Noncompetes: Implications on Nonprofit Health Care Systems Are Uncertain

Posted by on May 08, 2024
FTC / No Comments

On April 23, 2024, the Federal Trade Commission (“FTC”) issued its final rule regarding noncompete clauses, and which determined that such clauses are an unfair method of competition and therefore violate section 5 of the Federal Trade Commission Act (“FTC Act”). See 16 CFR Part 910. Since its release, the rule has generated some uncertainty in the health care industry because the ban’s ultimate applicability to nonprofits is unclear. Nonprofit hospitals make up the majority of all hospital systems in the United States, with the American Hospital Association (“AHA”) having indicated that as many as 58% of hospital systems claim tax-exempt status as nonprofits. Notably, nonprofit health care organizations regularly use noncompetes with physicians.

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CMS Issues Final Rule Impacting Prior Authorization Process

Posted by on January 24, 2024
CMS / No Comments

Last week CMS issued its final rule “CMS Interoperability and Prior Authorization” (CMS-0057-F), unchanged from its proposed rule in 2022, which addresses prior authorizations. Prior authorization, a “utilization management” technique, requires a health insurer to consent to a doctor’s proposed course of treatment for a patient before the insurer agrees to pay for any medical services the physician wishes to provide. See July 2023 Health Law Informer Article.

On January 17, 2024, CMS issued the rule which requires certain health plans to decide prior authorization requests within 72 hours for expedited requests and seven days for non-urgent appeals. The rule applies to Medicare, Medicare Advantage (MA), Medicaid, and Children’s Health Insurance Plans (CHIP), as well as qualified health plans on the Federally-Facilitated Exchanges (collectively, “Covered Entities”). [cite] In addition to the decision timeframe requirements, the rule also requires payers to provide a specific reason for denied prior authorization requests, and allows such decisions to be communicated via portal, fax, email, mail or phone. [cite] The rule does not apply to prior authorization decisions for drugs. [cite

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New York May Be Paving the Way for State-level Cybersecurity Regulations on Health Care Facilities

Posted by on November 28, 2023
cybersecurity / No Comments

Last month, a cyberattack forced two New York hospitals to divert and even discharge some patients to other facilities, while the affected hospitals shut down their IT systems to address the issue and restore their secure network. [cite] In the wake of this event, New York Governor Kathy Hochul has proposed a cybersecurity regulation that would create a new section, Section 405.46 of Title 10 of the Official Compilation Codes, Rules and Regulations of the State of New York, and which would apply to all general hospitals in New York State. Governor Hochul plans to allocate $500 million to back the proposed regulation. [cite]

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Provider Charged with Receiving and Paying Millions in Kickbacks in Connection with Sober Homes

Posted by on September 22, 2023
Kickback / No Comments

On Friday, September 15th, the United States Attorney’s Office for the District of Massachusetts (United States) and the Massachusetts Attorney General’s Office (Massachusetts) filed a joint complaint in the United States District Court for the District of Massachusetts against a Massachusetts-based substance abuse treatment provider. According to the complaint, the United States seeks to recover damages, restitution, and civil penalties against Bournewood Inc. d/b/a Bournewood Health Systems (Bournewood) and First Psychiatric Planners, Inc. d/b/a Bournewood Hospital (FPP) under the federal False Claims Act (FCA) and under the common law. Massachusetts seeks to similarly recover under the Massachusetts False Claims Act (MFCA), the Massachusetts Medicaid False Claims Act (MMFCA), common law. The case was initially filed as a qui tam whistleblower action in 2021 by the former operator of the group of sober homes, David Perry.

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UnitedHealthcare’s Changing Approach to Prior Authorizations

Posted by on July 13, 2023
Insurer / No Comments

Prior authorizations, one of health insurers’ many “utilization management” techniques, is a hot topic amongst practicing physicians, patients, and regulators, to name a few. The prior-authorization process requires a health insurer to consent to a doctor’s proposed course of treatment for a patient before the insurer agrees to pay for any medical services the physician wishes to provide. The insurer’s consent is allegedly based on whether the prescribed treatment plan is considered “medically necessary” by the insurer.

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HHS Proposes $9 Billion Lump Sum Payment for Hospitals to Remedy Unlawful 340B Payment Reductions

Posted by and on July 10, 2023
CMS, HHS / No Comments

On Friday, July 7, 2023, the Centers for Medicare & Medicaid Services (CMS) published their long-awaited proposed remedy to the unlawful 340B drug payment reductions.

Background: In 2018, CMS significantly reduced the Average Sales Price (ASP) plus six-percent (6%) formula for calculating 340B drug payments to ASP minus 22.5%. After conflicting decisions from the District of Columbia’s federal District and Appeals Courts, on June 15, 2022, a unanimous U.S. Supreme Court concluded that the ASP minus 22.5% formula was “unlawful” and violated a clear statutory mandate to reimburse 340B drugs at ASP plus 6%. American Hospital Assn. v. Becerra, 142 S. Ct. 1896, 1906 (2022). However, the U.S. Supreme Court did not address remedies and remanded the case to the U.S. District Court for the District of Columbia. On September 28, 2022, the District Court vacated the payment reduction and ruled that CMS had to stop paying the unlawful rate. However, it did not address the damages from January 1, 2018 – September 27, 2022.[1]  On January 10, 2023, the District Court further remanded the case to CMS to provide a remedy for the underpayments dating back to January 1, 2018.[2]  

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Will The Standard of Liability Under The 60-Day Repayment Rule Change?

Posted by on February 21, 2023
CMS, Repayment Rule / No Comments

At the end of last year, the Centers for Medicare & Medicaid Services (CMS) proposed changes to the so-called 60-day repayment rule. The proposed changes include eliminating the current “reasonable diligence” standard that applies to providers in connection with potential liability for overpayments and replacing it with “actual knowledge” or “acting with reckless disregard.” The proposed changes can be located here.

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New Protections for Employees of Certain New Jersey Health Care Entities

Health care entities, home health care agencies, and staffing registries considering a transaction in New Jersey will need to keep in mind new obligations to certain employees. On August 18, 2022, Governor Murphy signed into law New Jersey Senate Bill No. 315 (the “Act”), which created broad protections for many employees in the health care sector in the event of a change in control. The Act requires any change in control to be made pursuant to a contract or agreement between the parties that preserves the wages, benefits, and employment status of eligible employees.

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En Banc Fourth Circuit Affirms Dismissal of False Claims Act Lawsuit and Vacates Panel Opinion

Posted by on October 14, 2022
False Claims Act / No Comments

We previously reported that the Fourth Circuit, via a 2-1 decision in United States ex rel. Sheldon v. Allergan Sales, LLC, 24 F.4th 340 (4th Cir. 2022), affirmed the dismissal of a False Claims Act (“FCA”) qui tam lawsuit against Forest Laboratories, LLC (“Forest”). The plaintiff alleged that Forest had underpaid states by over $680 million under the Medicaid Rebate Statute by failing to aggregate all the discounts it offered in a distribution channel for its drugs. Instead, Forest had indicated that the best price it offered was the largest discount provided among the entities in that same distribution channel. How a manufacturer calculates its best price is critical in determining what Medicaid rebates it sends to states, affecting how much the federal government sends in Medicaid payments to states. For a full breakdown of the calculation under the Statute, please see our prior post.

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