OIG Issues Guide For Health Care Boards on Compliance Oversight

On April 20, 2015, the Department of Health and Human Services Office of Inspector General (“HHS-OIG“) published its “Practical Guidance for Health Care Governing Boards on Compliance Oversight” (the “Guide“).  The Guide was prepared in collaboration with the Association of Healthcare Internal Auditors, the American Health Lawyers Association, the Health Care Compliance Association, and according to the Guide, provides tips to health care boards (“Boards“) on four categories: “(1) roles of, and relationships between, the organization’s audit, compliance, and legal departments; (2) mechanism and process for issue-reporting within an organization; (3) approach to identifying regulatory risk; and (4) methods of encouraging enterprise-wide accountability for achievement of compliance goals and objectives.”  While not a legally binding document, the Guide provides helpful insight for Boards and underscores best practices in these areas. Continue reading OIG Issues Guide For Health Care Boards on Compliance Oversight

Health Care Deals 2015 – ACG NY Panel May 15, 2015

Connect with Duane Morris LLP’s Health Law and Private Equity practices at the ACG NY Health Care Deals 2015 panel, in Tarrytown, New York, May 15, 2015.

Ari J. Markenson will be moderating the panel.

Panelists will talk about the state of the health care deal market in 2015, the effects of health reform and regulatory changes and talk about what might be on the horizon.

The panel includes –

Joshua Cherry-Seto, Chief Financial Officer, Blue Wolf Capital Partners LLC

John Cramer, Managing Director, Oppenheimer & Co.

Scott Gold, Senior Vice President, Alcentra Capital Corporation

Jeff Woods, Partner, Head of Healthcare Practice, The Parthenon Group

Event and Registration Information is available at -> http://www.acg.org/nyc/events/event.aspx?F_d=05%2f15%2f2015&F_y=2015&F_m=5&EventId=8765&

You can reach Ari J. Markenson at 212.692.1012 or amarkenson@duanemorris.com.

We look forward to seeing you at the event.

For more information about our healthcare and private equity practice, please visit: www.duanemorris.com.

Specific Facts Suggest Hospitals and Insurers Agreed to Group Boycott

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

On-call coverage contracts are OK

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

Certain FCA Defendants Dismissed; “Lumping” Defendants Together Is Not Enough To State An FCA Claim

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

CMS Announces “Next Generation” ACO Model

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.

Proposed Bills Would Address Hitches in New Jersey’s Medical Marijuana Program

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

Bipartisan Senate Bill Would Resolve Federal Law Conflict With State Laws Legalizing Medical Marijuana

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 Advises That Payment Codes on Home Health Claims Will Be Matched Against OASIS

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 amarkenson@duanemorris.com or 212.692.1012.

CMS Updates 5 Star Ratings System for Nursing Homes with New Measures

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 amarkenson@duanemorris.com or 212.692.1012.