Archives: Fraud and Abuse

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Is it Legal to Maximize Value of Secondary Diagnosis Codes?

By selecting a more severe Secondary Diagnosis Code for a patient, a physician may increase the reimbursement due from Medicare. If a hospital intentionally changes codes across its patient population, the increased revenue can be substantial. Is that legal? A federal district court in Texas faced this question when a relator filed suit under the … Continue Reading

DOJ Challenges Charitable Copay Subsidies

The Department of Justice intervened in a False Claims Act lawsuit involving “so-called charitable patient assistance funds” used for prescription drug copays. The DOJ wants to make “clear that the Department will hold accountable drug companies that pay illegal kickbacks to facilitate increased drug prices.”  See a report at the Anticorruption blog here.… Continue Reading

New DOJ Guidance On Credit Under False Claims Act

The Department of Justice just released new guidance how to obtain credit for cooperation under the False Claims Act (FCA).  The guidance stresses the importance of cooperation but mentions other actions as well.  The FCA greatly impacts the health care sector, with settlements and judgments reaching to billions of dollars.  Please see the post on the Anticorruption blog … Continue Reading

HHS Proposes Changes to the Discount Safe Harbor Framework to Realign Incentives and Put Downward Pressure on Drug Prices

On February 6, 2019, the Department of Health and Human Services (HHS) published a Proposed Rule modifying the Anti-Kickback Statute safe harbor protection with the aim of lowering prescription pharmaceutical product prices and out-of-pocket costs for (primarily Medicare Part D and Medicaid Managed Care Plan) consumers. With the Proposed Rule, HHS hopes to encourage medication … Continue Reading

Health Care Fraud Leads $2.8 Billion Collected for False Claims

The federal government’s civil recoveries for false claims during FY2018 topped $2.8 billion. Health care fraud claims lead the collection. Government Rakes in Billions The Department of Justice (DOJ) recently released statistics for its civil False Claims Act (“FCA”) recoveries during FY2018.   Although that total is lower than in some previous years, the trajectory of recoveries … Continue Reading

Yates Memo Softened

Deputy Attorney General Rod J. Rosenstein announced a revision of the “Yates Memo” concerning credit a company will receive for cooperating with an investigation.   Instead of an “all or nothing” approach, the new policy permits a company to “identify all individuals substantially involved in or responsible for the misconduct at issue.” More about this change … Continue Reading

CMS “Regulatory Sprint to Coordinate Care” Seeks Input to Lessen the Regulatory Burden of the Stark Law

Late last month, the Centers for Medicare & Medicaid Services (“CMS”) issued a request for information (“RFI”) seeking input regarding the Medicare physician self-referral law and its implementing regulations (“Stark Law”) and how it may prevent or inhibit care coordination amongst healthcare providers. As part of CMS’s broader “Regulatory Sprint to Coordinated Care” initiative, the … Continue Reading

CMS to Review Stark Law in Connection with Payment Reform

CMS has recently signaled its intention to review the Stark Law and its impact on providers. During a January, 2018 American Hospital Association webinar, CMS Administrator Seema Verma announced the development of an inter-agency group to review the Stark Law in light of provider complaints that the law acts as a barrier to their ability to … Continue Reading

Update on Rejected C Plea for Pharma Company

A recent blog post summarized an opinion in which a district court catalogued his reasons for rejecting a corporate “C” plea involving a pharmaceutical company.  Several developments have occurred since the court’s opinion including a plea and sentencing hearing scheduled for January 30, 2018. Please see the Anticorruption blog here for an update on this matter.… Continue Reading

OIG Allows Nursing Facility Discounts to Insurers

The HHS Office of Inspector General allows nursing facilities to give discounts to private insurers. OIG Advisory Opinion 17-08 describes a startup company planning to develop a network of nursing facilities (the Network). The company wants nursing facilities in the Network to provide discounts on daily rates charged to a long-term care insurer (Participating Payor) and its Policyholders. Qualifying nursing … Continue Reading

Government rewards biopharma by declining penalty

In a settlement this week, the government rewards prompt action of a biopharma company by declining a penalty. Although an enforcement action by the Securities and Exchange Commission, the approach corresponds to a recent announcement by the Department of Justice. Companies that self-report, cooperate, and remediate will receive lenient treatment. This settlement makes clear just how valuable those efforts can … Continue Reading

Judge Rejects Healthcare Company's "C" Plea

A federal judge rejects healthcare company’s “C” plea as not good enough.  Lessons from this decision apply to any healthcare provider trying to negotiate a specific sentence with the federal government. A summary of the judge’s criticism follows a short background about a C plea. Types of Guilty Pleas Federal Criminal Rule 11(c)(1) governs plea agreement procedure. It … Continue Reading

What Kickback Training Overlooks

Effective training prepares healthcare providers to recognize violations of the anti-kickback and false claims statutes. However, a violation may seem just a straightforward business arrangement to those not familiar with the statutes. This article on the Squire Patton Boggs Anti-Corruption blog uses an example to explain that training must focus on remuneration, not just kickbacks.… Continue Reading

Fundamental Right to be a Federal Healthcare Provider?

Rejecting a contrary holding in the Fourth Circuit, the Sixth Circuit decided a healthcare provider has no “fundamental right to participate in federal health care programs.” Accordingly, the Department of Health and Human Services (HHS) was correct to exclude a pharmacist from federal healthcare programs simply because he was convicted of misdemeanor misbranding.… Continue Reading

Applying Escobar — Decisions on Materiality, Falsity and Other Issues

June 16, 2017, marks the one-year anniversary of the precedent-setting U.S. Supreme Court decision in Universal Health Services v. United States ex rel. Escobar (Escobar), which approved the implied false certification theory as a basis for liability under the False Claims Act (FCA). Because the decision impacts every provider who supplies goods and services to … Continue Reading

Lawyer Misconduct Dooms FCA Suit

A fraudulent survey of doctors sponsored by attorneys for a qui tam relator doomed a False Claims Act (FCA) complaint against a pharmaceutical company. In a forceful opinion, United States District Judge Dennis Saylor IV, District of Massachusetts, found violation of ethical rules, excised more than 100 paragraphs of the complaint as a sanction, and … Continue Reading

Can DOJ Impose False Claims Act on States?

The immense power wielded by the Department of Justice (DOJ) under the False Claims Act (FCA) has limits according to United States District Judge Anna J. Brown in the District of Oregon. This month the court decided DOJ cannot force the Act to apply to an “arm of the state” simply by intervening in the suit. Although … Continue Reading

OIG Expands Anti-Kickback Statute and Civil Monetary Penalties Protections (Part 2)

As we discussed in a previous post, the Department of Health and Human Services Office of Inspector General (OIG) published a final rule (Final Rule) amending the safe harbors to the Anti-Kickback Statue (AKS) and also amending exceptions to the Civil Monetary Penalties rule (CMP), providing greater protection for certain arrangements with beneficiaries. In this second … Continue Reading

OIG Expands Anti-Kickback Statute and Civil Monetary Penalties Protections

Late last year, the Department of Health and Human Services Office of the Inspector General (OIG) published a final rule (Final Rule) that amends the safe harbors to the federal Anti-Kickback Statute (AKS) by modifying an existing safe harbor, adding new safe harbors and codifying existing statutory provisions that provide further protections from sanctions under the … Continue Reading
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