Health Law – Page 14 – Duane Morris Health Law

January 29, 2015 by Amy E. McCracken

Health Care Workers May Think Twice Before Becoming a Relator

The Federal False Claims Act (and many similar state false claims acts) allow an individual—called a “relator”—to file a lawsuit on behalf of the United States Government. If successful, the relator stands to collect a portion of the amount collected. Since the False Claims Act provides for treble damages and statutory penalties of up to $11,000 per false claim, the reward to the relator can be considerable.

Complaints by relators must filed under seal. This allows the Government time to investigate the relator’s allegations before deciding whether to intervene in the case. Cases in which the Government intervenes tend to have higher judgments or settlements. Once the Government makes this decision, the complaint is unsealed and the case can move forward.

Earlier this week, an Alabama judge ruled that the relators could not keep their identities secret, even though they voluntarily dismissed their lawsuit against Great Bend Regional Hospital. Frank Coyle and Randy Bruce argued that their careers in health care may be damaged if their identities are revealed. However, the court agreed with the Government, that the reason for sealing the complaint is for the limited purpose of protecting the Government’s investigative process.

It may have been a bad choice for Coyle and Bruce to ask for anonymity. If they had merely dismissed their case, the dismissal may have been a mere footnote or back page news item. By seeking anonymity and losing, it is front page news. When filing a case, relators may think that they will no longer have to work once they win millions of dollars. As these relators have learned, you don’t always win. And there are consequences to your actions.

January 27, 2015 by Amy E. McCracken

ACOs are More Important Than Ever for LTC Facilities

On January 26, 2015, the United States Department of Health & Human Services (HHS) announced its timeline for shifting Medicare reimbursements from volume-based criteria to value-based criteria. HHS has adopted a framework that categorizes health care payments according to how providers receive payment to provide care:

• Category 1—fee-for-service with no link of payment to quality
• Category 2—fee-for-service with a link of payment to quality
• Category 3—alternative payment models built on fee-for-service architecture
• Category 4—population-based payment

In Monday’s announcement, HHS disclosed its initiative to drive more of the Medicare payments to categories 3 and 4. This is the first time in history that HHS has set explicit goals for alternative payment models and value-based payments. HHS declared: “Improving the quality and affordability of care for all Americans has always been a pillar of the Affordable Care Act, alongside expanding access to such care. The law gives us the opportunity to shape the way health care is delivered to patients and to improve the quality of care system-wide while helping to reduce the growth of health care costs.”

By the end of 2016, HHS has set a goal of tying 30 percent of traditional, fee-for-service, Medicare payments to quality or value through alternative payment models, such as Accountable Care Organizations (ACOs) or bundled payment arrangements. By the end of 2018, the goal is 50 percent of these payments.

An ACO is an organization of health care providers that agree to be accountable for the quality, cost, and overall care of a group of Medicare beneficiaries. Reimbursement is tied to quality metrics to reduce the total cost of care for the assigned population of patients. Hospitals and physicians have been forming ACOs, and HHS’s most recent initiative should drive even more dollars in this direction.

However, in our experience, long-term care facilities (LTC Facilities) have been slow to adopt the ACO model. Refusal to join an ACO could result in fewer referrals from hospitals and other providers, since ACO members will refer to the facility (or facilities) within the ACO. LTC Facilities with high ratings for their Quality Measures (on Nursing Home Compare) and low re-hospitalization rates will be more attractive to ACOs. Now is the time to join an ACO, before it is too late.

January 16, 2015January 23, 2015 by Amy E. McCracken

Antipsychotic Drug Use Can Lower Nursing Home’s Five-Star Rating

The Centers for Medicare & Medicaid Services (CMS) is continuing its efforts to reduce the national prevalence of antipsychotic drug use in long-stay nursing home residents. Its initial goal of a 15.1% reduction in antipsychotic drug use was met, so CMS now seeks to reduce antipsychotic drugs by 25% by the end of 2015 and 30% by the end of 2016. The national average of antipsychotic drug prevalence was 19.8% in early 2014.

CMS has been publishing each facility’s antipsychotic drug use on the Nursing Home Compare web site. Now in 2015, as further incentive to nursing homes, CMS will use antipsychotic drug use as a factor in calculating each facility’s Five-Star Rating. A low Five-Star Rating can have a direct impact on a facility’s census and profitability.

Nursing homes need to develop strategies to reduce antipsychotic drug use. They cannot depend upon physicians to change the drug orders; they need to partner with physicians to develop creative approaches for treatment. Each resident should be thoroughly evaluated to determine the root cause of behaviors that trigger the use of antipsychotic drugs. Frequently, the undesirable behaviors are caused by an unmet need. Once the need or cause is determined, individualized, person-centered approaches can be developed to prevent or respond to the behaviors. This is the beginning of a new year, now is the time to start some new interventions to reduce antipsychotic drug use and enhance your Five-Star Rating.

January 9, 2015January 9, 2015 by Seth A. Goldberg

Fees and Costs Awarded to False Claims Act Defendant

A recent decision in the U.S. District Court for the Southern District of New York provides fair warning to qui tam relators who assert erroneous claims under the False Claims Act (“FCA”) that they could be hit with legal fees and expenses pursuant to 31 U.S.C. § 3730, which permits such an award “upon a finding that the . . . claims were objectively frivolous, irrespective of plaintiff’s subjective intent.” Mikes v. Straus, 274 F.3d 687, 705 (2d Cir. 2001).

On December 1, 2014, in U.S., et al., ex rel. Fox Rx, Inc., 1:12-cv-00275, defendant Managed Health Care Associates Long Term Care Network, Inc. (“MHA”), was awarded attorneys’ fees and expenses because the relator’s, Fox Rx, Inc.’ (“Fox”), claim that MHA, which negotiates reimbursement rates, among other things, on behalf of a network of pharmacies, allegedly (i) failed to substitute generic drugs for named brand drugs, and (ii) dispensed drugs beyond their termination date, was objectively frivolous given that the plain language of the very agreement Fox attached to its second amended complaint demonstrated that MHA did not itself dispense drugs, and exercised no control or supervision of its network pharmacies’ dispensing. Continue reading “Fees and Costs Awarded to False Claims Act Defendant”

January 5, 2015 by Seth A. Goldberg

Another Win for a False Claims Act Defendant

On January 2, 2015, the U.S. District Court for the Central District of California threw out claims that Walgreens pharmacy violated the federal and California false claims acts on the basis that the plaintiff failed to meet the applicable stringent pleading requirements.

In Irwin v. Walgreens, 2:13-cv-08473, a whistleblower/Relator contended that Walgreens cheated Medicare and Medi-Cal out of millions of dollars by establishing schemes to bill those government healthcare programs for prescriptions that were never picked up by patients, rather than restocking the drugs and reversing any associated charges to the government payers. Among other things, the complaint asserted that, as demonstrated by the fact that they were not picked up by the patients, the prescriptions were not medically necessary, and therefore should not have been billed. The complaint sought money damages, including a penalty of up to $11,000 for each violation and treble damages. In September 2014, the government declined to intervene in the qui tam action. Continue reading “Another Win for a False Claims Act Defendant”

December 22, 2014December 22, 2014 by Seth A. Goldberg

False Claims and Anti-Kickback Defendants Should Insist on Discovery from the Whistleblower/Relator

One arrow in the quiver for healthcare providers sued for violations of false claims and anti-kickback statutes is pressing for discovery from the whistleblower/relator, including a deposition of the relator. The failure of the whistleblower to comply with the discovery obligations could result in meaningful sanctions, including dismissal.

In Guthrie v. A Plus Home Health Care, Inc. et al, 0:12-cv-60629-WPD (S.D. FL), the relator, William Guthrie, sued a home health care provider, its seven doctors, and their spouses, alleging that the doctors and their spouses implemented a fraudulent scheme of compensation and referral payments resulting in violations of the False Claims Act, the Stark Act, and the federal Anti-Kickback Statute. Continue reading “False Claims and Anti-Kickback Defendants Should Insist on Discovery from the Whistleblower/Relator”

December 12, 2014 by Philip H. Lebowitz

Clinical trial sponsors can be liable for inadequate consent forms

Physicians acting as investigators for a clinical trial testing a new therapy are required to present to each patient or study subject a consent form, indicating that the patient understands the risks, benefits and alternatives of participating in the trial and voluntarily elects to do so. Federal law imposes several specific items to be included in the consent form. Where all pertinent risks, benefits and alternatives have been disclosed, and the patient signs the form, the patient is said to have given “informed consent.”

A patient injured in a clinical trial studying a new therapy for Parkinson’s Disease sued the manufacturer of the equipment used in the procedure. In addition to a claim of negligent design and manufacture of the equipment itself, the patient asserted that the manufacturer, as the sponsor of the clinical trial, was negligent in drafting and approving the informed consent documents that the patient signed to participate in the clinical trial. Can a manufacturer be liable for an improperly drafted consent form? Continue reading “Clinical trial sponsors can be liable for inadequate consent forms”

December 10, 2014June 14, 2017 by Philip H. Lebowitz

Medical Marijuana article

My partner Seth Goldberg and I just published an article in the Legal Intelligencer describing the ethical dilemmas faced by lawyers who have clients who may embark on business ventures that involve medical marijuana in Pennsylvania and other jurisdictions where the law and the norms are still being formulated. You can read the full text here.