Healthcare Regulatory Check-Up April 2022: Notable Enforcement Resolutions and Activity

PHARMA MANUFACTURER AGREES TO PAY $260M TO SETTLE LAWSUITS ALLEGING MEDICAID DRUG REBATE UNDERPAYMENTS, ILLEGAL KICKBACKS

On March 9, 2022, a pharmaceutical firm agreed to pay $260 million to resolve allegations that it violated the False Claims Act (FCA) by knowingly underpaying Medicaid rebates due for its drug and paying unlawful subsidies in violation of the federal anti-kickback statute (AKS). In 2019 and 2020, the federal government filed separate complaints detailing allegations that the producer used a basis as a conduit to pay unlawful kickbacks within the type of copay subsidies for its drug in order that it c ould market the drug as “free” to docs and sufferers, leading to rising the worth and underpaying rebates pursuant to the Medicaid Drug Rebate Program. In reference to the settlement, the corporate additionally entered right into a 5 -year company integrity settlement with the US Division of Well being and Human Companies (HHS) Workplace of Inspector Basic (OIG). The company integrity settlement accommodates distinctive drug worth transparency provisions and monitoring provisions centered on Medicaid rebate and affected person help program actions.

We word an rising development involving intermediaries approaching hospitals and providing pharmaceutical producer rebate preparations regarding inpatient medication and associated inpatient drug allotting knowledge. A variation on this theme includes the intermediaries providing buy preparations regarding such knowledge. These preparations elevate a number of vital regulatory and sensible points that hospitals ought to contemplate earlier than getting into into these preparations.

PATIENT RECRUITER PLEADS GUILTY TO $870,000 KICKBACK SCHEME

On March 11, 2022, a Florida man (the affected person recruiter) pleaded responsible within the Southern District of Florida for a scheme to receive kickbacks and bribes in trade for referring Medicare beneficiaries to 5 South Florida residence well being businesses for companies that the sufferers didn’t want and, in lots of instances, by no means acquired. In accordance with courtroom paperwork, from January 2010 to June 2015, the affected person recruiter and his co-conspirators paid kickbacks to Medicare beneficiaries to recruit them for referral to residence well being businesses. The affected person recruiter additionally coached the Medicare beneficiaries who didn’t want residence well being companies on what to say to acquire residence well being prescriptions from docs. In trade for referring these beneficiaries, the affected person recruiter solicited and acquired kickbacks and bribes from the house well being businesses. The house well being businesses then submitted $870,000 value of false claims to Medicare for companies that weren’t medically mandatory and usually not even supplied.

* We word this settlement as a result of affected person recruitment and brokering preparations can come up in lots of various kinds of relationships. It is very important determine these preparations and analyze to mitigate threat.

BILLING CONSULTANT SETTLES FCA ALLEGATIONS THAT IT CAUSED FALSE CLAIMS FOR COPAY WAIVERS

On February 14, 2022, a billing guide and its proprietor agreed to pay $50,000 to resolve allegations that they violated the FCA by inflicting false claims to be submitted to Medicare as a result of facilitating kickbacks to beneficiaries. The federal government alleged that the proprietor and the billing consulting agency, by means of its position as a guide and head of reimbursement to a laboratory, developed insurance policies for assortment of beneficiary copayments and submission of claims to Medicare that concerned routinely waiving copayment obligations. The federal government additionally alleged that the defendant brought on the submission of claims to Medicare for glucometers on behalf of ineligible Medicare beneficiaries. This settlement originated from a qui tam case introduced by a name middle worker.

This settlement is notable for instance of the federal government pursuing allegations in opposition to a billing guide that the federal government seen as having some accountability for the supplier’s conduct. Whereas the settlement quantity shouldn’t be massive, it’s a reminder that billing consulting and income cycle administration firms ought to be cognizant of the compliance implications of their work and their recommendation to supplier purchasers.

MEDICAL CENTER PAYS $3.8M TO RESOLVE FCA ALLEGATIONS THAT IT PROVIDED FREE CALL COVERAGE FOR ONE PHYSICIAN

On February 9, 2022, a medical middle paid $3.8 million to settle kickback-related FCA allegations that it supplied and paid free of charge name protection (by means of utilizing its employed cardiologists to offer the decision protection) for a heart specialist whereas the heart specialist was on trip or in any other case unavailable. The heart specialist who allegedly acquired the free name protection referred thousands and thousands of {dollars} in medical procedures and companies to the medical middle over the last decade through which the free name companies had been supplied. The whistleblower was the previous chair of the medical middle’s division of drugs. 

This settlement is noteworthy due to the greenback worth associated to a single doctor and that it concerned the federal government alleging that the medical middle’s use of its personal staff functioned because the remuneration to the heart specialist. The settlement emphasizes the significance of correctly evaluating the compliance posture of every doctor association in a corporation.

SOBER HOME MEDICAL DIRECTOR CONVICTED OF BILLING FRAUD

On February 11, 2022, a medical director of a sober residence was convicted for a scheme through which he ordered medically pointless urine assessments for the ability’s residents three to 4 instances per week. The drug-free condo complicated required tenants to submit common assessments as a situation of residency. In accordance with the federal government, the director didn’t overview the outcomes of those assessments or use them to develop affected person therapy plans. The scheme resulted in $110 million in fraudulent billing to residents’ insurers. The federal government additionally charged the director with paying kickbacks to affected person recruiters that referred residents and with bribing different sober houses to ship their lab assessments to his facility’s in-house lab.

This motion reveals the federal government’s sustained curiosity in urine drug testing and funds made by sober houses, together with affected person recruiter funds.

DME OWNER ORDERED TO PAY $7.5M FOR LACK OF PATIENT RELATIONSHIP IN TELEMEDICINE PRESCRIPTIONS

On January 20, 2022, the proprietor and supervisor of a number of sturdy medical tools (DME) firms, together with three in Missouri, was ordered to pay more than $7.5 million as a part of pleading responsible to Medicare and Medicaid fraud. The DME firms paid kickbacks for orders and prescriptions signed by telemedicine docs and nurse practitioners who usually didn’t look at the sufferers, have contact with the sufferers or in any other case decide that the sufferers wanted DME. The DME firms then submitted claims to Medicare and Medicaid.

* This motion is one instance of the precedence the federal government has positioned on investigating telemedicine actions, significantly when telemedicine visits end in further objects being prescribed, comparable to DME.

HEALTH SYSTEM PAYS $5.5M TO SETTLE FCA CLAIMS FOR DONATIONS TO COUNTY

On February 14, 2022, a Florida well being system agreed to a $5.5 million settlement for allegedly offering donations (e.g., free nursing and athletic coaching companies) to the county authorities and faculty board that resulted in inflating federal Medicare share funds.

This settlement is an instance of the vital compliance issues that well being techniques ought to take note of when making donations to a authorities entity.

DOJ INTERVENES IN HEALTH SYSTEM FCA CASE ALLEGING KICKBACKS IN JOINT VENTURE

On April 11, 2022, the US Division of Justice (DOJ) intervened in an FCA qui tam case in opposition to a well being system for allegedly paying illegal kickbacks to a doctor observe in trade for affected person referrals, inflicting harm in extra of $800 million to Medicare and Medicaid applications. The federal government had initially declined to intervene. This case highlights the significance of evaluating hospital-physician ventures. See our in-depth evaluation of this matter here.

NATIONWIDE COORDINATED LAW ENFORCEMENT ACTION TO COMBAT HEALTHCARE RELATED COVID-19 FRAUD

On April 20, 2022, the DOJ introduced that it was pursuing legal prices in opposition to 21 defendants across nine federal districts (the Central District of California, Northern District of California, District of Maryland, Southern District of Florida, District of New Jersey, Japanese District of New York, Western District of Tennessee, Western District of Washington and District of Utah) for alleged illegal COVID-19-related schemes. The instances referenced within the press launch allegedly resulted in additional than $149 million in stolen funds and seizure of greater than $8 million in money and different “fraud proceeds,” in accordance with DOJ.

People and unlawful actions focused by this takedown run the gamut. Allegations embody creation, sale and distribution of counterfeit check outcomes and faux vaccination report playing cards; providing faux COVID-19 cures; illegal conversion of cash from the Coronavirus Help, Reduction, and Financial Safety (CARES) Act Supplier Reduction Fund; unlawful kickbacks; false statements to federal applications; bribes; cash laundering; securities fraud; telehealth schemes; and fraudulent billing schemes. People and entities charged embody homeowners and operators of medical laboratories, hospices and residence well being businesses; docs and healthcare suppliers (together with a heart specialist, naturopathic physician and a complicated registered nurse); a hospital director of pharmacy; entrepreneurs of COVID-19 assessments; a publicly traded medical expertise firm; a postal employee; and an worker at an airport COVID-19 testing service.

LABORATORY REFLEX ORDER ENFORCEMENT

On March 31, 2022, a laboratory agreed to pay $11.6 million to resolve FCA allegations that it submitted false claims for medically pointless urine drug testing. The laboratory allegedly carried out presumptive and confirmatory testing on the similar time, and submitted each outcomes to healthcare suppliers with out ready for them to request confirmatory testing. The federal government alleged that nothing supported the medical necessity of a separate confirmatory check absent doctor overview of presumptive urine testing outcomes, and alleged that the confirmatory assessments had been carried out in accordance with standing/reflex orders relatively than pursuant to a doctor’s overview of lab outcomes.

On April 12, 2022, a doctor observe and its founder and former chief medical officer agreed to pay $24.5 million to resolve FCA allegations of billing for pointless medical testing, paying illegal remuneration to doctor staff and making false statements associated to the Paycheck Safety Program. Particular to the pointless testing allegations, the federal government claimed that physicians had been ordering presumptive and confirmatory urine testing on the similar time with out figuring out whether or not such testing was cheap and mandatory and even reviewing the outcomes of preliminary testing to find out whether or not further te sting was warranted. The federal government said that the check orders had been issued as a result of standing/reflex orders relatively than pursuant to a doctor’s overview of lab outcomes.

Laboratory reflex orders can happen the place a laboratory makes use of reflex templates or pre-orders for particular stains and/or immunohistochemical stains previous to a pathologist’s overview of the routine hematoxylin and eosin stain. Such particular stains should not cheap and mandatory in accordance with Medicare Administrative Contractors First Coast and Palmetto GBA. Laboratory reflex orders could appear environment friendly from a workflow perspective, however these settlements display the significance of reviewing a laboratory’s protocols for reflex assessments and standing orders to make sure that the laboratory shouldn’t be billing for medically pointless companies.

FALSE CLAIMS ACT CASE DATA

FCA instances netted their highest complete recoveries in historical past final yr. Of all FCA recoveries in 2021, 90% (greater than $5 billion) got here from the well being care sector. A few of this quantity derives from the massive opioid-related settlements. These outcomes are per the outcomes from previous years the place healthcare organizations make up a considerable a part of FCA enforcement exercise and recoveries.

On February 8, 2022, the American Hospital Affiliation continues to notice issues about disproportionate illustration of healthcare in FCA instances.

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