Health Care Compliance, Fraud and Abuse, & Regulatory Counseling

On January 24, 2019, CMS published its annual Notice of Benefit and Payment Parameters for 2020 ("Proposed 2020 Payment Notice") proposing parameters applicable to qualified health plans (QHPs) on the Exchanges for plan years beginning January 1, 2020.  Among several other proposals, CMS is proposing that issuers be permitted to exclude drug manufacturer coupons for prescription brand drugs that have a generic equivalent from counting toward patients’ annual limit on cost-sharing. 

In an Advisory Opinion posted earlier this week, the OIG gave the green light to a charitable pediatric clinic’s routine waiver of patient cost-sharing amounts on the basis.  The OIG’s analysis hinged on several factors that, taken together, led the OIG to refrain from exercising its enforcement discretion.

Over the last few weeks, we published a number of posts examining important developments and trends in 2018 as well as what we expect to see in 2019. Our posts cover a range of topics, including enforcement and litigation, HIPAA and the FDA. In case you missed one, below are links to all of our Year In Review posts.

As in years past, the False Claims Act (FCA) remained a powerful health care enforcement tool in 2018, and FCA investigations and litigation persisted, fueled mainly by hundreds of lawsuits filed annually by relators, including 645 new qui tam actions initiated in FY 2018.

Last year, as we previously discussed, there were two significant Department of Justice (DOJ) policy developments that are applicable to False Claims Act (FCA) litigation: (1) the “Granston Memo” (issued by DOJ Civil Fraud Director Michael Granston), which set forth direction for DOJ’s exercise of its authority to dismiss declined qui tam FCA cases; and (2) the “Brand Memo” (issued by Associate Attorney General Rachel Brand), which instructed DOJ’s FCA litigators not to use any sub-regulatory guidance to create legal obligations. 

Criminal healthcare enforcement in 2018 once again focused heavily on opioids, targeting manufacturers, prescribers, dispensers and those who contribute to the addiction epidemic, and on prosecution of individuals for a variety of offenses.  In addition, the DOJ announced some expected policy changes related to the way it investigates and prosecutes corporations as well as the restrictions placed on corporations after resolution of government charges.  We will address each of these issues in this post and will attempt to forecast what we expect to occur in the coming year.

In 2018, the volume of False Claims Act (FCA) litigation remained high, and health care-related qui tam (i.e., whistleblower) cases continued to lead the way. Using data compiled in the Mintz Health Care Qui Tam Database (which is described further below), this post analyzes the trends in cases unsealed in 2018. To evaluate long-term trends, we examined the annual Department of Justice (DOJ) compilation of FCA cases. Together these data sets show that health care cases continue to make up a large majority of all whistleblower cases brought under the FCA, and almost two-thirds of those cases were brought by current or former employees, mostly against large pharmaceutical companies, physicians, and hospitals.

Nearly one year ago, on January 25, 2018, the Department of Justice’s (DOJ) Regulatory Reform Task Force issued a memorandum entitled “Limiting Use of Agency Guidance Documents In Affirmative Civil Enforcement Cases.”  Many refer to this memorandum as the “Brand Memo” because it was authored by Associate Attorney General Rachel Brand.  The Brand Memo implemented the prohibition previously issued by U.S. Attorney General Jeff Sessions in November 2017 against, in part, DOJ using guidance documents issued by other agencies “to create binding standards by which [DOJ] will determine compliance with existing statutory or regulatory requirements” (the “Sessions Memo”).

Today, we’re looking back at HIPAA and other privacy and security developments in 2018.  This past year saw continued HIPAA enforcement (including the largest ever fine for a HIPAA breach), reminders from the OCR on best practices for HIPAA compliance, and updates to state and international privacy and security laws.  We’ll also look ahead to 2019, which could bring several significant changes to HIPAA, such as reducing the burdens for sharing patient information in order to promote care coordination and better patient outcomes.

The Federal Courts gave the America Hospital Association and 340B covered entities a late Christmas present and in doing so may have dealt a blow to the Trump Administration’s initiatives aimed at controlling or reducing drug prices.


On December 27, 2018, Judge Rudolph Contreras granted the American Hospital Association’s Motion for a Permanent Injunction over CMS’ Medicare Part B reimbursement cut for 340B hospitals. As I have previously written, the vehicle for that reimbursement cut was the 2018 Outpatient Prospective Payment System (OPPS) rule, and CMS’ existing authority to adjust OPPS drug reimbursement.

Along with most of us, last January DOJ set its own goals for 2018: new policies related to False Claims Act (“FCA”) enforcement. One such “resolution” for 2018 was the DOJ Civil Fraud section’s instruction to its attorneys and all AUSAs handling FCA cases to routinely consider whether declined qui tam actions should be dismissed under the Department’s authority in Section 3730(c)(2)(A) of the FCA, which it had rarely used from 1986 through 2017. Known as the “Granston Memo” (which we discuss here) and now codified in the Justice Manual, the central theme of the instruction is that seeking dismissal of qui tam actions may be in the government’s interest to “preserve limited resources and avoid adverse precedent.” We are now seeing the first evidence of DOJ following through on that resolution.

On December 10-11, 2018, FDA hosted a public workshop, Medical Device Servicing and Remanufacturing Activities, as part of its effort to develop a draft guidance that will distinguish servicing activities from remanufacturing. FDA expressed intent to develop a draft guidance on this topic as part of its May 15, 2018 report to Congress on the quality, safety, and effectiveness of medical device servicing. This post provides some observations about areas of agreement among stakeholders and FDA’s perspective on servicing versus remanufacturing.

In its favorable Advisory Opinion 18-11, the OIG explains how a managed care organization’s proposed incentive program to pay network providers to increase the amount of Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) services provided to Medicaid beneficiaries would not violate the Anti-Kickback Statute (AKS).  What is interesting about this Advisory Opinion is that the OIG finds that the health plan’s proposed arrangement would be protected by the managed care safe harbor for eligible managed care organizations (ECMOs), and there are not many opinions addressing this safe harbor.

The Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (the “SUPPORT for Patients and Communities Act”) – which is intended to combat the spread and pernicious effects of opioid abuse – contains an all-payor kickback prohibition that applies to laboratories, recovery homes, and clinical treatment facilities.   

Recently, the Department of Health and Human Services (“HHS”) and the Department of Treasury (“Treasury”) released new guidelines (the “Guidance”) on the application and approval process for states seeking waivers through Section 1332 of the Patient Protection and Affordable Care Act (“ACA”) from certain requirements for health plans issued under the ACA. The Guidance replaces guidelines issued under the Obama Administration and previously published on December 16, 2015. This post highlights how the Guidance differs from the Obama Administration guidelines and what those differences will mean for states seeking Section 1332 waivers.

For much of the past 18 months, the Trump Administration, and in particular CMS, have talked a good game regarding reducing pharmaceutical prices. On October 16, 2018, a key component of the Administration’s strategy was revealed in the form of CMS’ Proposed Rule requiring manufactures to include the “list price” for prescription drugs reimbursable by Medicaid or Medicare in television advertisements. While I do think that there will be new initiatives to address drug pricing, I believe most will come through the state and not the federal level. This post addresses six potential initiatives from a recently released report of the National Governors' Association.

While Congress is in full campaign-mode, the Administration is continuing its regulatory push in the health space. On Monday, the Administration put forth new guidance on Section 1332 waivers. These waivers were created by the Affordable Care Act as a way for states to seek additional flexibility to pursue avenues for providing high quality and affordable health coverage. Today's guidance will put the Administration out front on interpreting state proposal's to drive innovation. We cover this and more in this week's health care preview.

The Department of Health and Human Services Office of the Inspector General (“OIG”) has issued an Advisory Opinion regarding a surgical device and wound care product manufacturer’s proposal to offer its hospital customers who purchase a suite of three joint replacement products a warranty program covering the Product Suite.

In the first new guidance document from FDA in several years specific to the subject of direct-to-consumer (DTC) promotion of prescription drugs and biological products, the Agency is recommending that companies take additional steps to ensure that quantitative efficacy or risk information does not convey inaccurate information and does not have the potential to confuse consumers. The draft guidance defines quantitative efficacy and risk information as “information that numerically addresses the likelihood or magnitude of a drug’s effectiveness or risks.” FDA’s advice on how to most clearly share this type of information should be considered by companies when developing any form of DTC promotional media, whether they are digital, broadcast, in traditional print format, or otherwise.

On August 27, 2018 the Office of the Inspector General (OIG) of the Department of Health and Human Services (HHS) issued a request for information (RFI) seeking comment on the anti-kickback statute (AKS) and the beneficiary inducement prohibition to the civil monetary penalties (CMP) as potential barriers to coordinated and value-based care. The August 27 RFI was the second RFI issued as part of HHS’s “Regulatory Sprint to Coordinated Care,” an ongoing effort to accelerate the transition from fee for-service to a value-based system that emphasizes care coordination.