Medicare’s Fraud Fighting 2YR ROI – $12.4 for every $1 Invested…

The U.S. Department of Health and Human Services (DHHS) and the Centers for Medicare and Medicare Services (CMS) recently released its – Annual Report to Congress on the Medicare and Medicaid Integrity Programs For Fiscal Years 2013 and 2014.

The biggest and most important take-away from the report – the government achieved “… a two-year average return on investment of 12.4 to 1 for the period that ended on September 30, 2014.”

Program integrity and fraud fighting efforts by DHHS and CMS have consistently represented a significant return on investment for the government. This is likely the single biggest reason why providers have not seen any serious reduction in program integrity efforts and fraud fighting enforcement over at least the last 10 years. Continue reading Medicare’s Fraud Fighting 2YR ROI – $12.4 for every $1 Invested…

Assessing Common Regulatory Risks in Health Care Provider Transactions: Where to start for PE investors…

Health care providers are heavily regulated, that’s no surprise to private equity investors. As a result, investing in health care provider businesses requires savvy in assessing what regulatory risks an acquisition target may present and whether or not those risks are an impediment to moving forward with a transaction.

Common risks include: reimbursement and claims issues, internal audits, external audits, regulatory investigations, criminal and civil government initiated litigation, and licensure and inspection citations or deficiencies.

The diligence process often uncovers one or many issues with any of these common risk areas. Continue reading Assessing Common Regulatory Risks in Health Care Provider Transactions: Where to start for PE investors…

CMS Preventative Measures…Pre-Claim Review Demonstration for Home Health Services

Beginning August 1, 2016, the Centers for Medicare & Medicaid Services (CMS) will be implementing a three-year Medicare pre-claim review demonstration for home health services in the states of Illinois, Florida, and Texas. Michigan and Massachusetts will follow in 2017. CMS is testing whether pre-claim review will help it prevent fraud occurring in Home Health Agencies (HHAs) as well as whether or not pre-claim review will help reduce expenditures while maintaining or improving quality of care.

During the pre-claim review demonstration period, HHAs will submit the same information they currently submit for payment, but will be required to do so earlier in the claims process. Continue reading CMS Preventative Measures…Pre-Claim Review Demonstration for Home Health Services

DOJ Settles Another FCA Case with A Hospice Over Patient Ineligibility

Following on the heels of a number of recent False Claims Act (“FCA”) cases alleging that patients were not eligible to receive hospice services (Good Shepherd Hospice Inc., Guardian Hospice of Georgia LLC,  Hospice of Arizona, L.C. and Altus Healthcare & Hospice Inc., to name a few), the U.S. attorney for the District of Colorado just completed an $18 million dollar settlement with UnitedHealth Group Inc. affiliate, OptumHealth LLC.

The settlement follows the DOJ’s 2014 intervention in two whistleblower-initiated FCA suits.   The whistleblowers, and eventually the DOJ, alleged that the hospice defrauded Medicare by billing services for hospice patients who were not terminally ill.  The DOJ had alleged that the Hospice’s  practices reportedly discouraged doctors from recommending that ineligible patients be removed from hospice and failed to monitor that nurses were accurately recording patients’ conditions in medical records.

As usage of the hospice benefit continues to increase at a rapid pace, investigations of whether or not patient eligibility is determined to be appropriate are going to continue. Additionally, the DOJ’s success in investigating and settling FCA cases relating to hospice eligibility issues  translates into continued enforcement efforts in this area. Providers should focus their compliance efforts on this important risk area and ensure that they are conducted period auditing and monitoring of patient eligibility and physician certifications for hospice care.

For more information on hospice FCA claims or investigations, hospice regulatory enforcement, or Medicare or regulatory compliance in general, please feel free to contact Ari Markenson at amarkenson@duanemorris.com or 212.692.1012.

The Marijuana Business Takes Root in Pa.

Duane Morris’ Seth Goldberg was quoted in the Philadelphia Business Journal  on the opportunities and risk facing entrepreneurs in the development medical marijuana industry in Pennsylvania.

While the upfront costs to entrepreneurs wanting to enter the market are expected to run into the millions of dollars, the payoff could be substantial. The ArcView Group, a market research firm that studies the cannabis industry, estimates the Pennsylvania medical marijuana market will start out with annual sales at about $125 million and grow at a rate of about 180 percent per year in the program’s first few years.

“There will also be huge opportunities for entrepreneurs who want to create ancillary businesses that are integral to the core growing and dispensing businesses,” said Seth Goldberg, a Philadelphia attorney with Duane Morris who specializes in commercial and health care matters.

Continue reading The Marijuana Business Takes Root in Pa.

Mid-Year OIG Work Plan Update Provides Insight Into Long-Term Care Regulatory Hot Spots

The Office of Inspector General (OIG) of the Department of Health and Human Services recently released a Mid-Year Update to its 2016 Fiscal Year Work Planhttp://oig.hhs.gov/reports-and-publications/archives/workplan/2016/WorkPlan_April%202016_Final.pdf. The Mid-Year Update gives long-term care providers a preview of the OIG’s regulatory enforcement focus during the remainder of the current fiscal year.

Some highlights from the Mid-Year Update include:

Skilled Nursing Facility Prospective Payment System Requirements

The OIG will review compliance with the skilled nursing facility (SNF) prospective payment system requirement that a beneficiary must be an inpatient of a hospital for at least 3 consecutive days before being discharged from the hospital, in order to be eligible for SNF services. Prior OIG reviews found that Medicare payments for SNF services were not compliant with the 3-day hospital stay requirement.

Potentially Avoidable Hospitalizations of Medicare and Medicaid Eligible Nursing Home Residents for Urinary Tract Infections

The OIG will review nursing home records of residents hospitalized for urinary tract infections (UTIs), to determine whether the nursing homes provided services to prevent or detect UTIs in accordance with their care plans before the residents were hospitalized.

National Background Check Program for Long-Term-Care Employees

The OIG will review current State procedures for conducting background checks on prospective employees and providers who have direct access to patients, and determine the costs of conducting background checks. The goal is to determine the effectiveness of the States’ programs and determine whether the checks led to any unintended consequences.

State Agency Verification of Deficiency Corrections

The OIG intends to determine whether State survey agencies verified correction plans for deficiencies identified during nursing home recertification surveys, noting that a prior OIG review found that one State survey agency did not always verify that nursing homes corrected deficiencies identified during surveys, in accordance with Federal requirements.

Medicaid Beneficiary Transfers from Group Homes and Nursing Facilities to Hospital Emergency Rooms

The OIG will review the rate of and reasons for transfer from group homes or nursing facilities to hospital emergency departments, as high occurrences of emergency transfers could indicate poor quality of care.

Managed Long-Term-Care Reimbursements

States’ reimbursements to managed long-term-care (MLTC) plans will be examined to determine whether they complied with Federal and State requirements, including those relating to eligibility and enrollment of beneficiaries.

SCOTUS Strikes Down Texas Statute in Whole Woman’s Health v. Hellerstedt

In a 5-3 decision today, the Supreme Court of the United States in Whole Woman’s Health v. Hellerstedt, No. 15-275, slip op. (June 27, 2016) reversed a decision of the Fifth Circuit and overturned as unconstitutional a Texas law that (1) required abortion providers to have “active admitting privileges” at a hospital within 30 miles of the location at which they provide abortions and (2) required abortion facilities to meet standards adopted for ambulatory surgery centers. The Court wrote that each of the requirements “places a substantial obstacle in the path of women seeking a previability abortion, each constitutes an undue burden on abortion access, and each violates the Federal Constitution.”  A team of Duane Morris attorneys, including Philip H. Lebowitz, Erin M. Duffy, Katharyn I. Christian McGee, Alison Taylor Rosenblum, and Erica Fruiterman, filed an amicus curiae brief on behalf of medical staff professionals in support of petitioners Whole Woman’s Health et al.  In its decision, the Supreme Court cited Duane Morris’ amicus brief, noting, “Other amicus briefs filed here set forth without dispute other common prerequisites to obtaining admitting privileges that have nothing to do with ability to perform medical procedures.”  The brief was one of only a handful of amici curiae briefs cited in the decision out of a total of 41 such briefs filed on behalf of petitioners.

 

Pennsylvania Medical Marijuana Act: Key Components and Potential Risks

On April 17, 2016, Pennsylvania became the 24th state to legalize the use of marijuana for medicinal purposes when Pennsylvania Governor Tom Wolf signed into law Senate Bill 3, known as the “Medical Marijuana Act” (the “Act”).  While the Act will become effective on May 17, 2016, its implementation will not be fully realized until various reports and regulations contemplated in the Act are developed. The Act will be administered by the Pennsylvania Department of Health (the “Department”).

The Act limits the use of medical marijuana to patients suffering from one of the 17 “Serious Medical Conditions” identified in the Act, which are: cancer; HIV/AIDS; amyotrophic lateral sclerosis; Parkinson’s disease; multiple sclerosis; epilepsy; inflammatory bowel disease; damage to the nervous tissue of the spinal cord with objective neurological indication of intractable spasticity; neuropathies; Huntington’s disease; Crohn’s disease; post-traumatic stress disorder; intractable seizures; glaucoma; sickle cell anemia; severe chronic or intractable pain of neuropathic origin or severe or intractable pain in which conventional therapeutic intervention and opiate therapy is contraindicated or ineffective; and autism.

The Act also restricts the forms in which medical marijuana may be dispensed to patients and caregivers to pill, oil, topical cream/ointment, vaporization, nebulization, tincture or liquid, and it makes smoking and incorporating into edible form unlawful. Continue reading Pennsylvania Medical Marijuana Act: Key Components and Potential Risks

Wound Company’s Antitrust Claim Tossed

Having dismissed the Sherman Act Section 1 conspiracy and Section 2 monopolization claims of Suture Express in August 2013, a federal judge in Kansas, on April 11, 2016, tossed the remainder of plaintiff’s $200 million claim, which asserted that Cardinal Health and Owens & Minor, wound care companies, entered into a predatory pricing scheme to prevent hospitals from buying the plaintiff’s competing products.  Suture Express, Inc., v. Cardinal Health, Inc., et al., 2:12-cv-02760.

The court determined that the summary judgment record did not demonstrate an injury to competition in the acute care market resulting from defendants’ alleged pricing arrangement, as the plaintiff failed to establish that defendants had market power.  Rather, according to the court, the record on summary judgment demonstrated a competitive market, where a number of defendants’ rivals have been able to grow their businesses and compete effectively against defendants, while defendants’ market shares have remained relatively stable; in fact, the court found that defendants’ themselves competed against one another.

In dismissing the case, the court noted, as courts usually do in cases where the record demonstrates, at most, an injury only to the plaintiff, the antitrust laws were designed to protect competition not competitors, and the failure to demonstrate an injury to competition in the market is fatal to a plaintiff’s Sherman Act claims.

Although, as this case shows, antitrust defendants may have to endure lengthy and expensive litigation, experienced antitrust counsel, familiar with the deep and growing body of defense-oriented antitrust decisions, have a number of arrows in their quiver for shooting down antitrust claims.

 

Come Join Us and Duane Morris Partner – Ari Markenson @ the Columbia – Mailman School 2016 HPM Conference

On April 15,2016 – Columbia University’s Mailman School of Public Health will be putting on its annual Health Policy and Management Conference.

Ari J. Markenson will be moderating a panel entitled – Aging Successfully: How to Direct Policy

This is a wonderful conference, please consider joining us at it.

You can get agenda and registration info here – https://goo.gl/9t8BCm

Duane Morris is a sponsor of the program.