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.

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.

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]