Healthcare False Claims Act Judgments/Settlements Lead Way in 2023

Seth Goldberg
Seth Goldberg

The DOJ recently reported that two-thirds of the $2.68 billion in False Claims Act judgments and settlements in 2023, or $1.8 billion, came from the healthcare industry.  2023 also marked the highest number of FCA settlements and judgments in a year, totaling 543.

The treble damages that result from FCA violations provide a powerful tool to the federal government to root out fraudsters who knowingly defraud the U.S. or fail to pay money owed to the U.S.  As Principal Deputy Assistant Attorney General Boynton, head of the Justice Department’s Civil Division, stated, “the record-breaking number of recoveries reflects, those who seek to defraud the government will pay a high price.”

Healthcare FCA settlements and judgments spanned the industry, including managed care providers, hospitals, pharmacies, laboratories, long-term acute care facilities, and physicians.  FCA claims settled or decided included charges against providers for overbilling and medically unnecessary billing, and charges against insurers for submitting inaccurate information, such as diagnosis codes, in order to increase reimbursement.  Kickbacks and lab testing fraud were also the subject of FCA settlements and judgments.

 

Federal and State Antitrust Enforcers Reiterate Focus on Healthcare

Federal and state antitrust enforcers are keenly focused on potential anticompetitive conduct in the healthcare space.

Federal Trade Commission Chair Lina Kahn recently noted that “the FTC is squarely focused on tackling illegal business practices that deprive Americans of access to affordable and innovative healthcare” in a speech to the American Medical Association’s national advocacy conference.  According to Chair Kahn, medical professional consistently express frustration to the FTC “about how the business of healthcare today forces many [medical providers] to subordinate [their] own medical judgment to corporate decision-makers at the expense of patient health.” In response to those complaints, Chair Khan highlighted a few recent enforcement efforts, including scrutiny of group purchasing organizations, drug wholesalers, and pharmacy benefit managers; tackling unlawful consolidation in healthcare markets and roll-ups of healthcare providers. She also touted the FTC’s work protecting healthcare workers, tackling unlawful practices by pharmaceutical companies, including suits to block two major pharmaceutical mergers, and protecting patient privacy and data.

Continue reading “Federal and State Antitrust Enforcers Reiterate Focus on Healthcare”

EMR Software Utilizing AI Targeted for Fraud and Abuse

 

Seth Goldberg
Seth Goldberg

Artificial intelligence (AI) can enhance efficiencies in providing healthcare in many ways, one of which is by utilizing algorithms to read medical records and thereby assist providers in better understanding their patients and treatments that may be available. Increasingly, electronic medical review (EMR) software companies are utilizing AI to boost their products, offering hospitals, healthcare facilities, and physicians powerful tools that can enhance their decision-making as to operations and treatment.  Recently, it was reported that DOJ has subpoenaed the records of digital health companies and pharmaceutical companies in investigating whether AI may be used to steer treatment decisions, resulting in medically unnecessary anti-kickback and false claims violations.  Given the speed at which AI creates information and then expands upon it with compounding effect, determining whether AI is the subject of and resulting in fraud may not be straightforward.  However, AI related healthcare fraud and abuse actions are clearly on DOJ’s radar and will likely become increasingly common.  Hospitals, healthcare facilities, and physicians should be aware of the possibility that ERM systems could be the subject of AI fraud, and be careful not to turn a blind eye where it curiously seems to be generating results disproportionately in favor of one treatment or drug over or another.


CMS Rules for Coding Emergency Department Claims

By Gregory A. Brodek and Arti Fotedar

The Centers for Medicare and Medicaid Services (CMS) has consistently authorized hospitals to establish and utilize their own coding guidelines for emergency department facility claims. CMS makes clear that “[a]s long as the services furnished are documented and medically necessary and the facility is following its own system, which reasonably relates the intensity of hospital resources to the different levels of HCPCS codes, we will assume that it is in compliance with these reporting requirements as they relate to the clinic/ emergency department visit code reported on the bill.” 65 Fed. Reg. 18433, 18451 (Apr. 7, 2000). CMS also makes clear that “[t]he coding guidelines should be applied consistently across patients in the clinic or emergency department to which they apply” and should be verifiable by hospital staff and outside sources. 72 Fed. Reg. 66759, 66805 (Nov. 27, 2007). Continue reading “CMS Rules for Coding Emergency Department Claims”

FTC Wields Health Breach Notification Rule for First Time in Quest to Protect Consumer Health Information

By Samantha Dalmass and Melissa Sobel Snyder

The Federal Trade Commission (“FTC”) is seeking enforcement under the Health Breach Notification Rule for the first time since the rule was adopted in 2009. The Health Breach Notification Rule (16 C.F.R. Part 318) requires vendors of personal health records, PHR-related entities, and third party service providers that are not otherwise subject to the Health Insurance Portability and Accountability Act (“HIPAA”) to notify their customers and individuals whose personal health records are disclosed in the event of a breach or unauthorized disclosure. In its complaint filed against GoodRx on January 1, 2023, the FTC targets the digital health platform, alleging that it repeatedly violated the promises it has made to its customers regarding its protection of their personal health information, including that such information would be shared only with limited third parties and for limited purposes; that GoodRx would restrict such third parties’ use of customer information; and that it would never share personal health information with advertisers or other third parties. Continue reading “FTC Wields Health Breach Notification Rule for First Time in Quest to Protect Consumer Health Information”

340B Hospital Reimbursement Update: D.C. District Court Remands Underpayment Remedy to HHS

On Tuesday, January 10, 2023, the United States District Court for the District of Columbia issued an important ruling allowing the U.S. Department of Health and Human Services (HHS) to propose an appropriate retrospective remedy for underpayments made from 2018 through September 27, 2022, to hospitals participating in the 340B drug pricing program.

To read the full text of this Duane Morris Alert, please visit the firm website.

Revised Code of Pharmaceutical Research and Manufacturers of America Takes Effect

On January 1, 2022, the updated Code on Interactions with Health Care Professionals, published by the Pharmaceutical Research and Manufacturers of America (PhRMA), became effective. The updates reflect fraud and abuse concerns voiced by the Department of Health and Human Services’ Office of Inspector General in its November 2020 Special Fraud Alert. While it is not a legal document, companies that adopt the code’s rules are more likely to comply with federal fraud and abuse laws like the Anti-Kickback Statute.

To read the full text of this Duane Morris Alert, please visit the firm website.

CMS Mandate Blocked Nationwide

By Erin M. Duffy and Samantha Dalmass

A federal judge in New Orleans blocked the Interim Final Rule with Comment requiring the vaccination of all staff of health care facilities subject to the health and safety standards under the Medicare Conditions of Participation (“CoPs”) issued by the Centers for Medicare and Medicaid Services (“CMS”) earlier this month. The nationwide block was issued on November 30, 2021, less than one week before the December 6, 2021 deadline for all staff of covered facilities to have received at least their first dose of a two-dose COVID-19 vaccine series, and only one day after a federal court in Missouri blocked the CMS vaccination requirement in Missouri, Arkansas, Alaska, Iowa, Kansas, Nebraska, New Hampshire, North Dakota, South Dakota, and Wyoming.

Notwithstanding the broad authority of CMS to regulate the health and safety of facilities subject to Medicare CoPs, the order issued by the U.S. District Court for the Western District of Louisiana blocking implementation of the CMS mandate set forth in 86 Fed. Reg. 61555-01 (November 5, 2021) will remain in effect pending final resolution of the case. The Biden Administration will likely appeal to the Supreme Court, but in the meantime facilities covered by the mandate should plan accordingly and ensure they are prepared to implement the required plans and processes for vaccinating staff, providing exemptions and accommodations for those who are exempt, and tracking and documenting staff vaccinations.

New Reporting Requirements for Philadelphia Health Care Facilities

By Erin M. Duffy and Samantha Dalmass

On June 9, 2021 Mayor Jim Kenney signed municipal legislation amending the Philadelphia Health Code to add a section establishing reporting and employment requirements related to changes in ownership or of the license holder of long-term care facilities and hospitals. Proposed in April by the Committee on Public Health and Human Services, Bill No. 210331 (the “Ordinance”) was passed by the Philadelphia City Council on May 27, 2021. The Ordinance imposes certain notification requirements for hospitals and long-term care facilities pursuant to a 5% or more change in ownership of the owner or operator of such institutions. The City of Philadelphia Ordinance requires hospitals and long-term care facilities to provide notices to the City of Philadelphia, as well as to facility employees prior to the effective date of a sale or other change in ownership interest. The ordinance also requires that certain documentary evidence of the transaction be posted the institution’s website. Following the initial posting of such notices, there are ongoing requirements for the owner or operator of a facility to update the information made available to its employees and the public on a weekly basis as well as additional notice requirements upon the effective date of the change. Continue reading “New Reporting Requirements for Philadelphia Health Care Facilities”

Emergency Temporary Standard Issued for the Healthcare Industry by OSHA

On June 10, 2021, the U.S. Department of Labor’s Occupational Safety and Health Administration submitted for publication in the Federal Register its COVID-19 Emergency Temporary Standard (ETS), setting forth new mandatory safety requirements designed to protect workers from COVID-19. The much-anticipated ETS is generally applicable only to certain healthcare workplaces and imposes differing obligations with respect to vaccinated and unvaccinated employees in various contexts.

To read the full text of this Duane Morris Alert, please visit the firm website.

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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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