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.Continue reading…
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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.Continue reading…
In a continuing wave of fraud and abuse civil enforcement actions brought by qui tam relators, big pharma giant, Biogen, is the latest corporate actor to reach a mega settlement with the U.S. Department of Justice (DOJ) for allegations of False Claims Act liability for paying bribes to physicians who participated in Biogen’s sales and marketing programs veiled as “physician training and education” seminars over a five year period from 2009 through 2014. DOJ did not intervene in the case.
According to an investor relations statement released by Biogen on September 26, 2022, the Company reached a final agreement to pay $900 million to settle the qui tam action; however, Biogen insists that its intent and conduct were at all times lawful and, therefore, it denies all allegations raised in the qui tam law suit. Significantly, the Company stated in the release as a basis for the settlement that, “Biogen determined that now was the right time to resolve the litigation and allow the Company to remain focused on our patients and strategic priorities.”
In this case, the qui tam relator, Michael Bawduniak, who was also an employee at Biogen, alleged specifically that the Company routinely paid fees to physicians as inducements for ordering/prescribing three Biogen products (Avonex, Tysabri and Tecfidera) in the form of speaker honoraria, training fees, consulting fees and meals at speaker programs and training sessions. If true, these practices would be in violation of the federal Anti-Kickback Statute.
What is material about this settlement is that industry manufacturers (whether pharma or DME) need to take stock of their interactions with physicians and clinical institutions and they need to do this soon. While, in this case, DOJ did not intervene, there is now precedent. As a result, we can expect only greater enforcement activity and intervention by DOJ.
Those affected by this case, or similar fact patters, should pay close attention, and seek counsel if there are questions about their own industry conduct concurrently or retrospectively.
The Office of Civil Rights of the Department of Health and Human Services (“OCR”) announced the resolution of three more right of access cases, bringing the total to a whopping 41 since the start of its drive to increase compliance with this Health Insurance Portability and Accountability Act (“HIPAA”) requirement over two years ago. From small physician practices to nursing homes to health systems, OCR has spared no one in its quest to reduce patient complaints related to medical records request fulfillment. The three most recent actions all involved dental practices, with settlements ranging from $25,000 to $80,000. Each instance involved a failure to timely provide records (where the respective patient made multiple requests over a span of months to over a year), and one where the practice’s $170 copying fee exceeded HIPAA’s reasonable and cost-based standard.Continue reading…
In its recently published Special Fraud Alert, the Office of Inspector General (“OIG”) presented a list of suspect characteristics related to arrangements with telehealth and telemedicine companies, which may help determine the potential for fraud.
The OIG developed this list based on dozens of fraud investigations involving companies in the digital health space. The schemes investigated by the OIG varied in design and operations, as well as the types of entities and individuals involved. They implicated a whole slew of Federal laws, including, among others, violations of the Federal anti-kickback statute and the False Claims Act. These schemes raised significant fraud concerns because “of the potential for considerable harm to Federal health care programs and their beneficiaries.”
The list of suspect characteristics related to arrangements with telemedicine companies is as follows:Continue reading…
On August 19, 2022, the United States Departments of Health and Human Services, Labor and Treasury released final rules (“Final Rules”) revising certain provisions of their previously issued interim final rules regarding the No Surprises Act (“NSA”).
The revisions reflect some comments received on the interim final rules under the NSA that the department published in 2021, but they were made necessary because two separate federal trial courts vacated certain provisions of the department’s interim final rules regarding the use of the Qualified Payment Amount (“QPA”) in the Independent Dispute Resolution IDR process. Here are the four things you need to know about the Final Rules:
- The QPA, the plan’s median contract rate for a particular item or service, is a factor that the certified IDR entity must take into account in determining the payment that best represents the value of the item or service in dispute, along with the additional information, if any, submitted by the parties that is permissible under the NSA rules (“Additional Information”). This is a change to the interim final rules that were necessitated by the litigation challenging those rules. The vacated interim final rules established a “rebuttable presumption” that the QPA best represents the value of the item or service in dispute.
- The Final Rules do not require the certified IDR entity to select the offer closest to the QPA. Rather, they require certified IDR entities to select the offer that best represents the value of the item or service under dispute after considering the QPA and all Additional Information. This is another change to the interim final rules that were necessitated by the litigation challenging those rules.
- The Departments were clearly concerned that the certified IDR entities’ consideration of Additional Information might lead to “double counting” information that is already factored into the establishment of the QPA and provided several examples of how double counting can be avoided while still considering non-duplicative Additional Information.
- To increase transparency as to the plans’ initial payment determinations and the certified IDR entities’ ultimate payment determinations, the Final Rule added the following requirements:
- A plan must provide a statement that the service code or modifier billed by the provider was downcoded; an explanation of why the claim was downcoded, including a description of which service codes were altered, if any, and which modifiers were altered, added, or removed if any; and the amount that would have been the QPA had the service code or modifier not been downcoded.
- A certified IDR entity’s written decision must include an explanation of its determination, including what information the certified IDR entity determined demonstrated that the offer selected as the out-of-network rate is the offer that best represents the value of the item or service in dispute, including the weight given to the QPA and any Additional Information.
The Final Rules as well as the litigation that necessitated them, are generally seen as favorable to providers, but it remains to be seen whether they will have a material effect on what providers are paid by plans for out-of-network services that are subject to the NSA.
Patient privacy concerns are at an all-time high following the Supreme Court’s ruling in Dobbs v. Jackson Women’s Health Organization. Following their statements affirming that abortion constitutes basic and essential health to which every woman should be entitled issued by both Xavier Becerra, Secretary of the United States Department of Health and Human Services (“HHS”) and Chiquita Brooks-LaSure, Administrator of the Centers for Medicare and Medicaid Services, the Office of Civil Rights of HHS (“OCR”) released new guidance on June 29th clarifying scenarios when an individual’s protected health information (“PHI”) may, but does not have to be, released. One such example is disclosures required for law enforcement purposes. OCR explains that the Privacy Rule permits, but does not require covered entities to disclose PHI about an individual for law enforcement purposes “pursuant to process and as otherwise required by law”, under certain conditions. For example, “a covered entity may respond to a law enforcement request made through such legal processes as a court order or court-ordered warrant, or a subpoena or summons, by disclosing only the requested PHI, provided that all of the conditions specified in the Privacy Rule for permissible law enforcement disclosures are met.” It states further:Continue reading…
CMS continued to roll out guidance regarding the No Surprises Act. The latest guidance is the second set of FAQs regarding the Good Faith Estimate Requirement for uninsured and self-pay patients was issued on April 5, 2022. The FAQs address six questions regarding the requirement and can be found here.
On February 23, 2022, the U.S. District Court for the Eastern District of Texas gutted portions of the interim final rule affecting the independent dispute resolution (“IDR”) process of the No Surprises Act (the “Act”). Tex. Med. Ass’n v. U.S. Dep’t of Health & Human Servs., No. 6:21-cv-425-JDK, 2022 WL 542879, at *15 (E.D. Tex. Feb. 23, 2022). In particular, the Court found that the rule did not square with the plain language of the Act, which mandates that the IDR process equally consider a number of factors in deciding payments for out-of-network (“OON”) services. Id. at *7–9. Instead, the rule substantially favored one factor over the others. In further rejecting the IDR-related portions of the rule, the Court found that the government had failed to provide an opportunity for notice and comment in advance of publishing the interim final rule. Id. at *10–14. As a result, the Court granted the plaintiffs’ motion for summary judgment, denied the defendants’ cross-motion for summary judgment, and severed portions of the rule. Id. at *15.Continue reading…
A few weeks ago, the U.S. Court of Appeals for the Fourth Circuit answered a critical inquiry in the False Claims Act (“FCA”) context: does a defendant violate the FCA when its reading of the regulation is objectively reasonable and there is no government guidance discouraging or rejecting that interpretation? Answering in the negative in a 2-1 decision, the court affirmed the dismissal of the case and injected into FCA cases the requisite state of mind (i.e., scienter) for violating a regulation as set out in Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 127 S. Ct. 2201 (2007) by the U.S. Supreme Court. United States ex rel. Sheldon v. Allergan Sales, LLC, 24 F.4th 340, 347–48 (4th Cir. 2022). In doing so, the Fourth Circuit joined the ranks of five other circuit courts that had considered the issue. Disturbed by the exceedingly complex Medicaid rules at issue that were open to varying interpretations and the constitutional implications of “the veritable thicket of Medicaid regulations, “labyrinthine reporting requirements,” and “the most completely impenetrable texts within human experience,” the Fourth Circuit placed the onus on the government “to indicate a way through the maze.” Id. at 344, 350, 352 (internal quotations and citations omitted).Continue reading…