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Matt is an associate in the Corporate Department and a member of the Health Care Group.  His practice focuses on providing regulatory compliance advice for the Firm’s health care clients, including service providers, health plans, operators, investors, and lenders, among others.  Matt specifically provides advice on fraud and abuse matters arising under the Federal False Claims Act (FCA), Civil Monetary Penalties Law (CMPL), Federal Anti-Kickback Statute (AKS), and Physician Self-Referral Law (Stark Law), as well as on the regulations promulgated by the Drug Enforcement Administration (DEA) and the Department of Health and Human Services, including the Office of Inspector General (OIG), Centers for Medicare & Medicaid Services (CMS), and Food and Drug Administration (FDA).

We previously noted that the regulations implementing the No Surprises Act (“NSA”) appeared to be inconsistent with the NSA because they seemed to establish the qualifying payment amount (“QPA”) as the appropriate payment amount to be used in arbitrations by certified IDR entities (viz. the regulation-established independent dispute resolution (“IDR”) process) between plans and providers, and that the United States District Court for the Eastern District of Texas (“Texas District Court”) vacated portions of the NSA regulations relating to the QPA for purposes of the IDR process.  The Federal government recently responded to the Texas District Court—by removing such portions of the NSA regulations.

Continue Reading The Saga of the No Surprises Act Continues to be … Surprising

On July 20, 2022, the Office of Inspector General for the Department of Health and Human Services (“OIG”) issued a special fraud alert (“Alert”) advising “practitioners to exercise caution when entering into arrangements with purported telemedicine companies.” The Alert is only one of four such “special fraud alerts” that the OIG has issued in the past decade and it illustrates the importance of OIG’s statements.

OIG Flags Seven Characteristics of Telehealth Fraud

In the Alert, OIG cautions that certain companies that purport to provide telehealth, telemedicine, or telemarketing services (collectively, “Telemedicine Companies”) have carried out fraudulent schemes by: (i) aggressively recruiting physicians and non-physician practitioners (collectively, “Providers”) and (ii) paying kickbacks to such Providers in exchange for the ordering of unnecessary items or services, including durable medical equipment, genetic testing, and other prescription items. According to OIG, the fraudulent schemes have varied in design and operation and involved a variety of individuals, Providers, and health care vendors, including call centers, staffing companies, and marketers.

Continue Reading OIG Issues Special Fraud Alert Regarding Telemedicine Arrangements

This past week, the Supreme Court of the United States (Supreme Court) denied UnitedHealthcare Insurance Company’s (UnitedHealthcare) petition for a writ of certiorari (Petition) challenging, in part, the Centers for Medicare & Medicaid Services’s (CMS) Overpayment Rule, which requires Medicare Advantage (MA) plans, such as UnitedHealthcare, to return identified “overpayments” to CMS within 60 days.  With this denial, the Overpayment Rule remains in full force and effect, and UnitedHealthcare, among other MA plans, must comply or potentially face False Claims Act (FCA) liability.

Continue Reading The Supreme Court Denies Petition Challenging CMS’s Overpayment Rule

We previously discussed the requirements of the Hospital Price Transparency Rule (“Rule”) on health care providers and health plans, as well as CMS’s proposal to increase penalties for a hospital’s failure to comply with the Rule.  About a year and a half after the Rule became effective, CMS has now imposed its first set of civil monetary penalties (“CMPs”) on Northside Hospital Atlanta and Northside Hospital Cherokee, which have been fined $883,180 and $214,320, respectively.

The Rule requires, in part, hospitals to make public a machine-readable file containing a list of all standard charges for all items and services, such as, e.g., supplies, room and board, and use of the facility, among other items.  See 45 C.F.R. § 180.40(a); id. at § 180.20.  The Rule also requires hospitals to display shoppable services in a consumer-friendly manner.  See id. at § 180.60(d)(2); id. at § 180.60(b).  The goal of these specific requirements, in addition to those set forth in the remainder of the Rule, is to provide consumers with sufficient information about the charges for certain items and services by requiring health care providers and health plans to be publicly transparent about such charges.

Based on CMS’s CMP letters, dated June 7, 2022, Northside Hospital Atlanta and Northside Hospital Cherokee were non-compliant with the aforementioned specific requirements of the Rule.  The chronology of events is important to understand how CMS ended up issuing its CMP letters.

Continue Reading Health Care Providers on Alert: Two Hospitals Penalized for Continuous Noncompliance with the Hospital Price Transparency Rule

Contingency management (CM) is a form of intervention treatment program that incentivizes patients with substance use disorders to observe certain conditions—such as non-use of drugs or alcohol confirmed via urine drug screening or breathalyzer test, or even drug therapy adherence—in exchange for something of monetary value.  Adherence is often tracked and confirmed by those that provide the incentive payment through digital health technologies—including apps that can be downloaded to the patient’s smart phone or that are already downloaded to a smart phone provided to the patient as part of a CM program.  While many contend that CM is an effective, evidence-based treatment, certain legal barriers limit, and often prevent, its widespread adoption and use.  When there is the potential for patients to receive items and services payable by Federal health care programs (FHCPs), CM incentives are subject to scrutiny under the Federal anti-kickback statute (AKS) and the Beneficiary Inducements CMP.  A recent advisory opinion issued by the United States Department of Health and Human Services (HHS), Office of Inspector General (OIG), approved a digital health company’s offer to provide cash equivalents to patients participating in a CM program.  This favorable result continues to demonstrate OIG’s flexibility notwithstanding regulatory precedent or guidance appearing to the contrary.

Continue Reading OIG Approves Cash Equivalents Paid to Patients Participating in Contingency Management Program Offered Through Digital Health Technology

On February 24, 2022, the Department of Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS), announced the Accountable Care Organization Realizing Equity, Access, and Community Health (ACO REACH) Model, which will begin January 1, 2023, and replace the Global and Professional Direct Contracting (GPDC) Model.  The Request for Applications (RFA) has been posted on CMS’s website, and applications are due by April 22, 2022.  While the application is not binding, the failure to apply will foreclose any opportunity to participate.

This article discusses the termination of the GPDC Model, the establishment of the ACO REACH Model, and the differences between them.

Continue Reading CMS Responds to Industry Stakeholder Feedback, Redesigns and Renames the GPDC Model for DCEs as the ACO REACH Model

On January 11, 2022, the Office of Inspector General (OIG) for the Department of Health and Human Services (HHS) issued, without an opportunity for public notice and comment,[1] a Final Rule, amending its internal process for accepting and issuing advisory opinions.  87 Fed. Reg. 1367 (Jan. 11, 2022).  In response to the industry’s

Earlier this month, the Centers for Medicare and Medicaid Services (CMS) released its final rules for the 2022 Medicare Physician Fee Schedule (PFS Final Rule) and 2022 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System (OPPS Final Rule).  Both rules take effect January 1, 2022.  This post is the first in a series covering the myriad Medicare-related changes set forth in those rules.  We turn first to an area addressed extensively in the PFS Final Rule—the amendments to the Physician Self-Referral Law (Stark Law) regulations.

Those amendments correct inadvertent omissions in a previous CMS rulemaking and clarify the reach of the prohibition related to “indirect compensation arrangements.”  As the tale unfolded, within a matter of months of publishing its Modernizing and Clarifying the Physician Self-Referral Regulations Final Rule (MCR Final Rule), which went into effect January 19, 2021, and which made significant changes to the Stark Law, CMS identified certain crucial omissions related to the regulatory calculus for analyzing indirect compensation arrangements, and sought to correct those oversights through its 2022 Medicare Physician Fee Schedule Proposed Rule (PFS Proposed Rule).  85 Fed. Reg. 77492 (Dec. 2, 2020); 86 Fed. Reg. 39104 (July 23, 2021).  After a short notice-and-comment period, on November 2, 2021, CMS announced that it had taken care of the issues through the PFS Final Rule, which is scheduled to be published in the Federal Register on November 19, 2021.

As explained in more detail below, the import of the PFS Final Rule for physicians, their immediate family members, and entities furnishing designated health services (DHS) is that, while indirect compensation arrangements still must satisfy the requirements of an applicable exception to avoid the Stark Law’s referral and billing prohibitions, the number of indirect compensation arrangements subject to those prohibitions, currently enforceable under the law set forth in the MCR Final Rule, is now reduced.  More specifically, CMS’s corrections to that rule ultimately reduce the number of arrangements that satisfy the definition of “indirect compensation arrangement” and, thus, decrease the number of arrangements that fall within the prohibitions’ purview.  To CMS’s credit, the changes appear to be consistent with its long-standing policy of ensuring program integrity against the risk of program or patient abuse.  To better understand the significance of CMS’s clarifications, we provide a chronological-based history of the amendments to the definition of “indirect compensation arrangement.”

Continue Reading CMS Corrects Inadvertent Omissions in Recent Stark Law Regulatory Amendments, Clarifies Reach of the Prohibition Related to Indirect Compensation Arrangements