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 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.

Tale of Two Cases: Nursing Home COVID Immunity Battle Playing out in Court

A recent case decided Feb. 10 has the nursing home industry and plaintiff malpractice attorneys clamoring over whether certain measures taken by nursing homes during the pandemic should be immune from plaintiff negligence lawsuits against nursing homes.

To read the full text of this article by Duane Morris partner Neville M. Bilimoria, which was originally published in Chicago Lawyer, please visit the firm website.

GAO Report: Assisted Living Providers & Federal Regulation

Neville M. Bilimoria
Neville M. Bilimoria
OCR Loosens HIPAA Enforcement Amidst Coronavirus Pandemic
On February 5, 2018, the Government Accountability Office, a nonpartisan investigative arm of Congress, found that there are huge gaps in regulation of assisted living facilities. The report, entitled “Medicaid Assisted Living Services: Improved Federal Oversight of Beneficiary Health and Welfare is Needed,” comes on the heels of years of discussion as to whether assisted living facilities are sufficiently regulated by individual states, or whether further federal oversight is warranted.

The suggestion of the need for federal regulation of assisted living came from GAO’s finding that more than $10 billion a year is spent from federal and state funds for assisted living services for more than 330,000 Medicaid beneficiaries. With demand for additional Medicaid assisted living funding, and the potential increase in demands of the senior population in the next 5 years, these numbers will continue to rise significantly as noted by the GAO: “Medicaid spending on long-term care is significant, representing about one quarter of Medicaid spending annually and is expected to grow with an aging population.” Continue reading “GAO Report: Assisted Living Providers & Federal Regulation”

Illinois Posts Medicaid Managed Care Performance Report

In January 2018, The Office of the Auditor General for the State of Illinois published its Performance Audit (“Audit Report”) of Medicaid Managed Care Organizations (“Medicaid MCOs”) for Fiscal Year 2016. What was unleashed was a startling review of the Medicaid MCOs’ performance over FY 2016 in administering the Medicaid Program for what was then called the Integrated Care Program (“ICP”) or Medicare/Medicaid Alignment Initiative (“MMAI”) Programs. You may recall these ICP and MMAI Medicaid MCO programs in Illinois involved almost a dozen Medicaid MCOs that covered about 70% of the State of Illinois Medicaid recipients.

The Audit Report played into health care providers’ deepest fears in Illinois: showing that Medicaid Managed Care may not be working as it was intended; namely, to reduce costs and improve quality of care in the Medicaid Program in Illinois. For example, long term care providers in Illinois had to fight tooth and nail with Medicaid MCOs under the ICP and MMAI programs, experiencing cumbersome Medicaid contracts, denied claims, delayed claims, and worse yet, a prior authorization administration problem (administrative MCO delay) which in some instances prevented residents from receiving care timely. Most, but not all, of those issues are still being resolved, but providers had hoped that there was a good reason for this madness involving Medicaid MCOs: better and lower cost care for Medicaid beneficiaries. Continue reading “Illinois Posts Medicaid Managed Care Performance Report”

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.

FTC to Keep Healthcare and Pharmaceutical Sectors in Antitrust Crosshairs

While the Trump Administration’s antitrust policy is still developing, and most believe it will provide for less enforcement than antitrust policy under the Obama Administration, the Federal Trade Commission announced on Friday, March 31, that it has no intention of letting up on the healthcare and pharmaceutical sectors, where the FTC has been increasingly active over the past few years.  In 2016, the FTC challenged the mergers of hospitals/health systems in Illinois and Pennsylvania, and initiated actions to protect pharmaceutical price competition; early 2017 has been no different.

Thus, while the Trump Administration’s antitrust policy unfolds, and it may be less strict than the antitrust policy of the prior administration, healthcare and pharmaceutical industry participants should stay vigilant about antitrust compliance because the FTC intends to remain focused on competition in those sectors.

 

 

 

Cybersecurity and Emergency Preparedness for Long-Term Care

On January 13, 2017, the Centers for Medicare and Medicaid Services (“CMS”) sent a Memorandum (“Memo”) to State survey agency directors encouraging long-term care providers to “consider cybersecurity when developing or reviewing their emergency preparedness plans.” The Memo was a follow-up to the CMS long-term care emergency preparedness rule published in the Federal Register on September 16, 2016: “Medicare and Medicaid Programs; Emergency Preparedness Requirements for Medicare and Medicaid Participating Providers and Suppliers.” Under that final rule, long-term care facilities were held to additional standards, including requirements to have emergency and standby power systems in place. Nursing homes were also required to create plans regarding missing residents that could be activated regardless of whether the facility has activated its full-scale emergency plan. The rule was spurred on by recent flooding in Baton Rouge, Louisiana, and other emergency disasters, such as Hurricane Sandy and the 2009 H1N1 pandemic, according to CMS.

Whether State surveyors will actually enforce lack of cybersecurity plans for emergency preparedness as violations remains to be seen from this Memo. But certainly, a State survey agency could impose deficiencies for failure to have a proper cybersecurity plan and/or a proper cybersecurity back‑up plan as part of a facility’s emergency preparedness going forward. It is not clear why CMS decided to send this encouragement Memo three months after the Final Rule on emergency preparedness, but it likely has something to do with the fact that 2016 was a banner year for HIPAA privacy infractions and HIPAA enforcement by the Office for Civil Rights (“OCR”), the entity responsible for HIPAA compliance. In 2016, payouts for HIPAA violations skyrocketed to record heights of $23.51 million from OCR enforcers against health care providers. That number was triple the previous record of almost $7.94 million in payouts in 2014, followed by $6.19 million in payouts in 2015.

Continue reading “Cybersecurity and Emergency Preparedness for Long-Term Care”

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.

 

FTC Settles Antitrust Claims Against Orthopedists

Following an investigation, on December 14, 2015, the FTC filed a Complaint and a Decision and Order that resolved antitrust claims against 19 orthopedists in Berks County, PA, arising out of a 2011 merger of six independent physician groups in which the orthopedists practiced.  Those six groups merged to form Keystone Orthopaedic Specialties (“Keystone”).

According to the Complaint, the 19 orthopedists comprised 76% of the 25 physician orthopedic physician services market in Berks County.  Prior to the merger, competition among orthopedists was robust, with the 25 orthopedists in the market practicing in 11 different physician groups.  The merger, however, resulted in market concentration likely well above the thresholds for presuming market power and illegality under the Herfindahl-Hirschman Index.

According to the Complaint, because of the highly concentrated market and entry barriers, health plans operating in Berks County were unable to establish networks of orthopedists for their enrollees in Berks County, and were therefore forced to pay higher rates to the Keystone  orthopedists, which they passed on to their enrollees.

The Decision and Order imposes extensive multi-year restrictions on the types of joint arrangements the Keystone orthopedists and their practices may enter into going forward, prohibiting some arrangements altogether, while requiring FTC consent for others.

The lesson of Keystone is simple.  Physicians practicing in independent physician groups who are contemplating a joint venture of any kind should retain antitrust counsel to advise on and resolve any antitrust issues before the arrangement is consummated in order to avoid regulator scrutiny and the potential for the severe penalties and practice restrictions that come with it.

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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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