Private Equity Driven Healthcare Market Consolidation Scrutinized

Seth Goldberg
Seth Goldberg

Earlier this month, the Antitrust Division of the DOJ, the Department of Health and Human Services, and the Federal Trade Commission announced a joint cross-government inquiry into the control over health care by private equity firms and other corporate owners, and, in conjunction with that announcement, released a Request for Information seeking public comment from stakeholders, including patients, consumer advocates, doctors, nurses, health care administrators, employers,  private insurers, PBMs, GPOs, nursing homes, hospices, home health agencies, hospitals, and other health care providers, facilities, providers of and entities that provide ancillary health care products or services, on how mergers and acquisitions have effected them, and what actions, if any, should be taken by the federal government to address adverse impacts that might result from market consolidation or corporate control issues.  In a related press release, the FTC explained: 

Private equity firms and other corporate owners are increasingly involved in health care system transactions, and, at times, those transactions may lead to a maximizing of profits at the expense of quality care. The cross-government inquiry seeks to understand how certain health care market transactions may increase consolidation and generate profits for firms while threatening patients’ health, workers’ safety, quality of care, and affordable health care for patients and taxpayers.

The public comment period will end on May 6, 2024.   

Nursing Homes Under Siege from More than COVID-19

U.S. nursing homes would benefit from a less punitive approach to performance improvement, according to Doctors Without Borders, the international medical humanitarian organization that has been assisting U.S. nursing homes with their response to COVID-19. The organization recently conducted in-person infection prevention and control trainings and provided technical support and wellness sessions to staff and residents in over 50 Michigan nursing homes and adult care facilities, and now is doing the same in Texas. Continue reading “Nursing Homes Under Siege from More than COVID-19”

Healthcare Fraud Takedowns

As a former federal prosecutor in Chicago, I am well acquainted with the phrase “takedowns.” For the unwary, a subject-area “takedown” is a practice used by federal prosecutors to send a message to a given industry. Prosecutors investigate and prepare to charge cases in a given industry sector and then release the charges nationally on the same day along with a press release. The idea is that such public “takedowns” serve as a deterrent to future criminal activity in the industry. For example, almost every April 15th, prosecutors across the country release charges in dozens of tax-fraud cases.

Recently, this practice has expanded into the healthcare industry. See more on the The Department of Health and Human Services Office of Inspector General website. In June 2016, there was the largest healthcare fraud takedown in DOJ history – prosecutors charged more than 300 defendants in 36 federal judicial districts (and this does not even include civil fraud investigations).

To read the full text of this blog post, please visit the Duane Morris White-Collar Criminal Law Blog.

$125 Million Settlement For Alleged FCA Violations

In a settlement with the US DOJ in U.S. ex rel. Halpin and Fahey v. Kindred Healthcare Inc. et al., 1:11-cv-12139, Kindred Healthcare, Inc., a skilled nursing and long-term care company, has agreed to pay the federal government more than $125 million for alleged False Claims Act violations by a therapy services company, RehabCare Group, Inc., acquired by Kindred in June, 2011.

RehabCare contracts with more than 1,000 skilled nursing facilities across the country, and, along with Kindred, is alleged to have caused those facilities to submit Medicare claims for services at the highest reimbursement levels that were not actually provided, or not necessary.   Two whistleblowers stand to receive almost $24 million from the settlement.

While all providers need to have strong compliance, this is a reminder that larger providers, whose operations span multiple offices, cities and states, need to be especially vigilant and install strong company-wide compliance programs.

Increased Spotlight on Emergency Department Facility Coding by CMS, HHS and DOJ

Although the professional component of coding for evaluation and management services (“E&M Services”) has been scrutinized over the years, until recently, little attention has been given to coding practices for the facility component of these services—including emergency department facility services. In a September 24, 2012, letter written by Kathleen Sebelius, Secretary, U.S. Department of Health and Human Services (HHS); and Eric Holder, Jr., Attorney General, U.S. Department of Justice, to hospital leadership throughout the United States, HHS and the Justice Department expressed their concern that hospitals may be inappropriately coding E&M Services. Specifically, the letter notes that “CMS is initiating more extensive medical reviews to ensure that providers are coding evaluation and management services accurately.” In light of the recent attention on emergency department facility component coding practices, an area that so far has largely been overlooked by the regulators, any facility that has not reviewed its coding practices for the facility component of E&M Services may want to consider doing so at this time.

Click here to read the full Alert.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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