A per se violation of Section 1 of the Sherman Act, 15 U.S.C. § 1, generally requires an agreement among horizontal competitors that unreasonably restrains trade. To withstand a motion to dismiss, a Section 1 plaintiff must allege facts that suggest direct of evidence of an agreement among the defendants, as opposed to alleging facts that merely are consistent with parallel conduct. These principles have been referred to by some courts as creating a heightened pleading standard for Section 1 claims.
In Arapahoe Surgery Center, LLC, et al. v. Cigna Healthcare, Inc., et al., 2015 U.S. Dist. Lexis 28375 (D. CO.), the Colorado District Court determined that the plaintiffs’ allegations of a group boycott were sufficient to meet the pleading requirements under Section 1, and therefore denied a motion to dismiss filed by three insurance carrier defendants. The specificity of the factual allegations concerning the agreement among the defendants, and the acts in furtherance thereof, underscore the importance of antitrust compliance in the healthcare and health insurance industries. Continue reading Specific Facts Suggest Hospitals and Insurers Agreed to Group Boycott
An orthopedic surgeon agreed on two separate occasions to an on-call coverage contract with a local hospital in which he warranted that no portion of his compensation was in exchange for referrals. When the contracts were terminated by the hospital after the surgeon invested in a competing surgery center, the surgeon brought a whistleblower False Claims Act action against the hospital, alleging that the contract was intended to induce his referrals.
The U.S. District Court for the Eastern District of Pennsylvania, in Cooper v. Pottstown Hospital Co., LLC, et al., dismissed the surgeon’s complaint. The district court’s description of the failure of the complaint illustrates the characteristics of on-call contracts that make them a permissible relationship between hospitals and physicians. Continue reading On-call coverage contracts are OK
A district court in the Northern District of Illinois recently partially granted a motion to dismiss the Government’s False Claims Act (“FCA”) complaint filed against IPC The Hospitalist Company, Inc. (“IPC”) and its subsidiaries and affiliates. The district court dismissed IPC’s subsidiaries and affiliates because the Government simply “lumped” those subsidiaries and affiliates in with IPC, and did not plead facts tying the subsidiaries and affiliates to the alleged fraud. The decision underscores an important defense available to FCA defendants, and highlights the nuanced pleading requirements that the Government must meet in an FCA case. Continue reading Certain FCA Defendants Dismissed; “Lumping” Defendants Together Is Not Enough To State An FCA Claim
The Centers for Medicare and Medicaid Services (CMS) recently announced the creation of the Next Generation Accountable Care Organization (ACO) model (see http://www.hhs.gov/news/press/2015pres/03/20150310b.html).
The new model builds on lessons learned from the earlier Pioneer Model and Medicare Shared Savings Program (MSSP) ACOs. As with the earlier ACOs, the new model aims to improve quality and coordination of care. The new model is also part of a larger, ongoing effort to shift Medicare reimbursement away from traditional fee-for-service payment models to alternative and value-based payment models. Next Generation ACOs will take on greater risk than ACOs did under the earlier models, but will also have the potential to reap greater rewards.
CMS touts its new model as “one that sets predictable financial targets, enables providers and beneficiaries greater opportunities to coordinate care, and aims to attain the highest quality standards of care.” (http://innovation.cms.gov/initiatives/Next-Generation-ACO-Model/) The Next Generation model provides several new “benefit enhancement” tools to further these goals. While patients will be free to visit doctors outside the ACO, the model seeks to encourage patient participation by providing a reward of up to $50 per year to patients who obtain a majority of their care from ACO-participating providers. Beneficiaries will also have greater ability to confirm their ACO participation and to communicate with their providers. The new model will increase the availability of home visits, telemedicine services and skilled nursing facilities. Finally, CMS envisions increased communication and collaboration between CMS and ACOs themselves.
Next Generation ACOs will be measured against new, prospectively determined benchmarks, a change from the current ACO models for which benchmarks are finalized at the end of the performance year. The new model also provides a choice between two risk arrangements for assessing the ACO’s share of savings or losses. Four payment systems will be available to the Next Generation ACOs: traditional fee-for-service; fee-for-service with an additional monthly, per-beneficiary infrastructure payment; population-based; and capitation.
Letters of Intent for the first round of Next Generation ACO applications are due by May 1, 2015; and the applications themselves are due by June 1, 2015. A second round of applications will take place during Spring of 2016.
On March 16, 2015, a panel of the New Jersey General Assembly approved a package of three bills designed to improve the operation of New Jersey’s medical marijuana program for patients with severe illnesses who rely on the program for medical relief. These bills will now be subject to consideration by the entire General Assembly.
ACR-224 would require the Department of Health (“DOH”) within thirty days to revise certain regulations governing New Jersey’s medical marijuana program. The proponents believe that the regulations have placed an undue burden on patients seeking medical marijuana therapy and are inconsistent with the legislative intent underlying the New Jersey Compassionate Use Medical Marijuana Act (“Compassionate Use Act”). Continue reading Proposed Bills Would Address Hitches in New Jersey’s Medical Marijuana Program
A Senate Bill introduced on March 10, 2015 would amend federal law that conflicts with state laws legalizing medical marijuana. The Compassionate Access, Research Expansion and Respect States (CARERS) Act, S.683, was introduced by a bipartisan trio of senators: Senator Corey Booker (D-N.J.), Senator Rand Paul (R-Ky.) and Senator Kirsten Gillibrand (D-N.Y.).
The centerpiece of the CARERS Act is a reclassification of marijuana as less dangerous drug under federal law, with acknowledged therapeutic purposes. Under the federal Controlled Substances Act (CSA), marijuana is presently categorized as a Schedule I drug along with other substances like heroin, LSD, and peyote, which are deemed to have the highest potential for abuse and “no currently accepted medical use in treatment in the United States.” 21 U.S.C. § 812(b)(1)(B). The legislation would reclassify marijuana as a Schedule II drug, which would be an acknowledgement under federal law that marijuana “has a currently accepted medical use in treatment in the United States or a currently accepted medical use with severe restrictions.” 21 U.S.C. § 812(b)(2)(B). Also, the CARERS Act would amend the CSA to allow states to establish their own medical marijuana policies, so that patients, medical providers, and others participating in state medical marijuana programs will not be in violation of federal law and subject to potential federal prosecution. Continue reading Bipartisan Senate Bill Would Resolve Federal Law Conflict With State Laws Legalizing Medical Marijuana
CMS recently issued Transmittal SE1504 entitled “Payment Codes on Home Health Claims Will Be Matched Against Patient Assessments”.
In this Transmittal, CMS advises that, beginning on April 1, 2015, Medicare systems will compare the Health Insurance Prospective Payment System (HIPPS) code on a Medicare home health claim to the HIPPS code generated by the corresponding Outcomes and Assessment Information Set (OASIS) assessment before the claim is paid. If the HIPPS code from the OASIS assessment differs, Medicare will use the OASIS-calculated HIPPS code for payment. As of now, if no corresponding OASIS assessment is found, the claim will still process normally.
Submission of an OASIS assessment for all home health episodes of care is a condition of payment according to CMS. CMS advises that if the OASIS is not found during medical review of a claim, the claim is denied. Claims that don’t match may be automatically selected for Medical Review. Additionally, it is important to note that eventually CMS will use this new claims matching process to deny claims and enforce the condition of payment.
A copy of the transmittal can be found here –> http://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R2495CP.pdf
For more information on Home health claims, home health reimbursement and Medicare, please feel free to contact Ari J. Markenson at firstname.lastname@example.org or 212.692.1012.
As of February 20, 2015, the Centers for Medicare & Medicaid Services (CMS) has revised its 5 Star Rating System for nursing homes. The changes to the system involve adding two new nursing home quality measures for antipsychotic use into the Quality Measure Rating, Increasing the number of points necessary to earn a Quality Measure Star Rating of two or more stars and changing the scoring method for the Staffing star rating.
The two new quality measures relate to the use of antipsychotics for short-stay residents without certain diagnoses and the continued use of antipsychotics for long-stay residents with the same conditions. According to CMS, they added these QA measures to address concerns that antipsychotics often are prescribed for diagnoses that do not require them.
CMS also changed the way facilities can earn a four star rating for Staffing to require that the facility must now scores four stars on both its registered nurse and staffing metrics to get such a rating.
CMS advised that these changes will likely result in many (a third or more) nursing homes seeing a lower rating than they have seen in prior years. Nursing homes can take a look at their current rating by going to – http://www.medicare.gov/nursinghomecompare/search.html
For more information on CMS’ star rating system, nursing homes, skilled nursing facility and Medicare, please feel free to contact Ari J. Markenson at email@example.com or 212.692.1012.
In healthcare, companies often hire consultants to review billing and coding, privacy and security and a host of other technical issues that regular staff does not have the time or expertise to pursue. A recent discovery ruling in federal court in the Eastern District of Pennsylvania holds that communications with such outside consultants are privileged from discovery if they are made for the purpose of assisting the company in securing legal advice or making legal decisions.
In Smith v. Unilife Corporation, a whistleblower brought an action under Sarbanes-Oxley and Dodd-Frank alleging shareholder fraud and failure to comply with certain FDA requirements. The plaintiff sought discovery of two non-lawyer consultants regarding drafts of the company’s SEC Form 10-K filing. The Court’s decision to deny the plaintiff’s motion to compel was based on the “functional equivalent” doctrine, a principle already adopted in the 8th, 9th and D.C. Circuits, but not yet in the 3rd Circuit.
Continue reading Consultants’ Communications Privileged from Discovery
Over the past several years, insurance carriers have aggressively pursued civil suits against doctors and other medical providers in an effort to fight healthcare insurance fraud. Besides theories of liability based upon common law claims such as fraud and unjust enrichment, insurers have more frequently asserted claims under the federal Racketeer Influenced and Corrupt Organizations Act, a.k.a. RICO, as well as its state law analogues, as tools in their litigation arsenal. Thirty-three states, as well as Puerto Rico and the U.S. Virgin Islands, have state civil RICO statutes.
Civil RICO claims entail demanding proof of the defendants’ operation of an criminal enterprise intended to harm another and engaged in a pattern of racketeering activities, which are statutorily-defined and typically involve a list of specific criminal acts. Notwithstanding its arduous proof requirements, civil RICO claims provide a substantial incentive for success: an award of three times actual damages as well as recovery of attorneys’ fees and expenses.
A suit filed this month in New York federal court by the GEICO insurance companies, Gov’t Employees Ins. Co. v. Bakst, No.: 15-cv-537 (E.D.N.Y., filed Feb. 4, 2015), illustrates the expanding use of civil RICO claims by insurers against doctors and other medical providers.
Continue reading Civil RICO Actions on the Rise to Combat Healthcare Insurance Fraud