jan 7 16 hc webinar 2015 year in review
TRANSCRIPT
Fraud and Abuse:
2015 Year In ReviewJanuary 7, 2016
Jeffrey Fitzgerald, Esq.
Asher Funk, Esq.
52120593
Settlement Trends
� Kickback cases still yielding big settlements, but
no common thread – Novartis AG $390M (kickbacks to specialty pharmacies for pushing
Novartis drugs)
– Millennium Health $256M (free specimen testing cups)
– Warner Chilcott $125M (cash payments and expensive dinners for
referring physicians)
– Health Diagnostics Laboratories $48.5M (S&H for lab specimens,
waiver of co-pays)
– Daiichi Sanko $39M (honoraria and meals for referring physicians)
– Westchester Medical Center $18.8M (advancing money to physician
practice and forgiving debt)
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Settlement Trends
� Hospice enforcement: smaller dollars, but more settlements– Covenant Hospice $10.1M (billing issues)
– Compassionate Care Hospice Group $6M (failure to treat based on POC)
– Good Shepherd Hospice $4M (lack of terminal illness)
– Guardian Hospice of Georgia LLC $3M (lack of terminal illness)
– Hospice of Citrus County $3.2M (length of stay issues)
– Serenity Hospice and Palliative Care $2.2M (AKS and Stark violations)
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Settlement Trends
� Physician employment and compensation cases– Citizens Medical Center paid $21.7M
• Non-FMV payments to cardiologists
• Bonus payments to ED MDs based on cardiology referrals
– Resolution of Tuomey litigation for $72.4M
– Adventist Health System paid $115M
• Bonus payments to physicians based on volume of referrals for tests or
procedures ordered
– North Broward Hospital District paid $69.5M
• Non-FMV comp for nine employed physicians in violation of Stark
• Complaint alleged that losses on hospital-owned practice was evidence
of non-FMV compensation
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Interesting Settlements
� Resolution of DOJ’s ICD investigation ($250M settlement with 457 hospitals)
� Sandoz Inc., $12.6M (CMP for misrepresenting drugs pricing data)
� Piedmont Pathology Associates Inc., $500,000 (providing free EMR licenses allegedly for referrals)
� Regent Management Services $3.2M (alleged swapping arrangement for ambulance transport)
� Shelby Regional Med. Center's former CFO pled guilty and sentenced to 23 months for falsely certifying compliance with meaningful use
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Noteworthy Court Decisions
� Active year for litigation of the FCA’s public disclosure bar
– Chattanooga-Hamilton Cnty. Hosp. v. U.S. ex rel. Whipple -
anonymous tip and gov’t investigation not a public disclosure
– U.S. ex rel. King v. Solvay S.A. – off-label promotion allegations
based on elements of a New Yorker magazine article are barred
– U.S. ex rel. Antoon v. Cleveland Clinic Found – retired air force
colonel was not an “original source” of allegations regarding his
own botched surgery
– U.S. ex rel. Hartpence v. Kinetic Concepts - Ninth Circuit
overruled prior decision that an “original source” had to have
played a role in the public disclosure
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Noteworthy Court Decisions
� Providers generally prevail in FCA cases based upon
noncompliance with condition of participation
– U.S. ex rel. Ortolano v. Amin Radiology – State regulation addressing
certification of nuclear medicine tech not a condition of payment
– U.S. ex rel. Gampie v. Gilead Scis. - Switch to unapproved
manufacturing sources for APIs (that did not have NDA) not a
condition of payment
– But, U.S. ex rel. Ecobar v. Universal Health Svcs. - First Circuit
reversed and held that Medicaid licensing and supervision
standards for psychiatric services were a condition of payment
• Supreme Court will review “implied certification theory” and need for
“conditions of payment” to be expressly set forth in statute or regulation
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Noteworthy Court Decisions
� Reasonable interpretation of ambiguous or confusing
regulations not an FCA violation
– U.S. ex rel. Saldivar v. Fresenius – Provider did not
“knowingly” submit false claims for drug overfill based on
reasonable interpretation of ambiguous regulation
– U.S. ex rel. Donegan v. Anestesia Assocs. Of Kan. City –
Medicare regulation addressing presence of anesthesiologist
during portions of surgery was ambiguous and provider’s
reasonable interpretation of regulation did not lead to
“knowingly” submitting false claims
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Noteworthy Court Decisions
� First decision addressing ACA’s 60-day rule
– U.S. ex rel. Kane v. Continuum Health Partners (S.D.N.Y.)
• Medicaid HMO has IT glitch that causes large NY hospitals to bill Medicaid FFS (resulting in Medicaid overpayments)
• All overpayment were refunded before DOJ intervened (but after DOJ investigation)
• Relator ran report identifying 900 claims, of which only 50% were actual overpayments; relator terminated 4 days after emailing report, and files complaint 61 days after email
• DOJ investigates for 3.25 years, then intervenes
• Court denies motion to dismiss
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Noteworthy Court Decisions
� Resistance is not futile
– U.S. v. Bertie Ambulance – DOJ’s failure to provide 30-
days' notice before filing FCA lawsuit breached tolling
agreement with provider, resulting in DOJ’s loss of
claims
– U.S. ex rel. Green v. Inst. Of Cardiovascular Excellence –
Suspension of Medicare payments one week after
settlement talks with DOJ broke down, raised
suspicion of whether payment suspension was
retaliatory
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Noteworthy Court Decisions
� Miscellaneous, but noteworthy, cases
– U.S. v. Patel - 7th Circuit upholds physician’s AKS
conviction, expands definition of “referral” to include
home health care recertification
– U.S. ex rel. Boise v. Cephalon Inc. – Breach of corporate
integrity agreement actionable under the FCA
– Amarin Pharma Inc., v. FDA – Truthful non-misleading
off-label promotion of drug held not to violate FDCA’s
prohibition on misbranding
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HIPAA Privacy and Security
� Triple – S Management Corp. - $3.5M settlement
– Widespread non-compliance including disclosing PHI to third-parties without
permission and using or disclosing more than the min necessary for mailings
� Lahey Hospital and Medical Center - $815,000 settlement
– Stolen laptop exposed PHI for 599 individuals
� The University of Washington Medicine - $750,000 settlement
– PHI of 90,000 individuals exposed after employee downloaded an email
attachment that contained malicious
� Cancer Care Group PC - $750,000 settlement
– Stolen laptop from car exposed PHI for 55,000 current/former patients
� St. Elizabeth Medical Center - $218,000 settlement
– Use of unsecure internet based document sharing system, unsecured
PHI on employee’s laptop and USB drive
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HIPAA Privacy and Security
� Large volume of individuals’ PHI exposed during
breaches based on hackers
– Anthem, Inc. (IN) – cyberattack on unencrypted PHI, 37.5M
records impacted
– Premera Blue Cross (WA) – cyberattack exposed medical, financial,
and claims data for 11M customers
– Excellus Health Plan Inc., (NY) – cyberattack allowed unauthorized
access to 10M beneficiaries information
– UCLA (CA) – cyberattack on unencrypted data allowed access to
information for 4.5M patients
– Medical Informatics Engineering (IN) – cyberattack on EHR
provider compromised PHI for 3.9M individuals
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The Yates Memo
� September 2015 memorandum from Deputy Attorney General Sally Quillian Yates– Outlined six steps to strengthen pursuit of individual
corporate wrongdoing
– Some areas of focus new, while others were affirmation of prior policy
– Revision to USAM, particularly in regard to “cooperation credit”
� True impact is unclear at best– New articulation of old policy?
– Practical impact of pursuing individuals and ability to reach civil settlements with entities substantially implicated if DOJ strictly interprets this policy
OIG Also Focusing on Individuals
� OIG creates new litigation team to pursue CMP and exclusion
cases:
– Jump in CMP cases from 36 in FY13 to 60 in FY14
– Stated goal of holding individuals accountable
– Meant to complement DOJ’s enforcement activities (filling
enforcement gaps)
– Potential to spin-off from FCA cases and pursuit of executives or
physicians
� OIG issues Special Fraud Alert: “Physician Compensation
Arrangements May Result in Significant Liability”
– Focus on FMV and bona fide services and MD exposure
– Came before Tuomey, Adventist and North Broward settlements
Other Noteworthy Developments
� 15 OIG Advisory Opinions
– But 7 modifications of prior AOs
� CMS official reports that there have been 554 self-disclosures through the Stark/SRDP (March 2015)
– 33% increase from 2013 to 2014
– Total of 115 disclosure settled or withdrawn
� OIG Self-Disclosure Protocol
– OIG official indicates that average length to resolution is 9 months (Oct. 2015)
� DOJ hires “compliance expert” to provide guidance on effectiveness of corporate compliance programs
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The DOJ’s “Year in Review”
� Total recoveries down by almost $2.2B
� In FY15 85% of new matters based on qui tam actions, and recoveries from qui tam
actions exceeded DOJ initiated enforcement by ~$2.2B
� Huge jump in recoveries from non-intervened cases, largest $ in FCA history17
Predictions for 2015 – How Did We
Score?
� DOJ enforcement nearly exclusively driven by
whistleblowers
� HIPAA and computer security compliance increases in
importance (trending to be bigger than FCA
compliance)
� Final 60-day refund rule issued and it creates much
ambiguity, compliance risk and headaches
� No mandatory compliance plan rule for hospitals
� More activity in enrollment and payment suspension
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Grade
Predictions for 2016
� Supreme Court limits the use of “implied certification” in FCA cases to express “conditions of payment”
� Yates Memo does not create a substantial difference in resolution of FCA cases by providers
� But increased enforcement and rhetoric of DOJ or OIGpursuing individuals criminally, under FCA or with exclusion (including some “exemplar” cases)
� FCA enforcement continues to be dominated by whistleblower cases with little or no clear DOJ priority agenda
� Increase in FCA cases based on physician compensation
� Increased state level enforcement (MFCU and Attorney General) and growing volume of FCA cases based on Medicaid
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Fraud and Abuse:
2015 Year In ReviewJanuary 7, 2016
Jeffrey Fitzgerald, Esq.
Asher Funk, Esq.