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The Department of Justice recently filed suit against Anthem, Inc. (Anthem) alleging that the Medicare Advantage Organization (MAO) violated the False Claims Act when it knowingly failed to delete inaccurate diagnosis codes submitted to the Centers for Medicare and Medicaid Services (CMS) for risk adjustment purposes. As predicated in our 2020 outlook post, we continue to see enforcement activity and ongoing litigation against Medicare Advantage plans. Notably, this trend is referenced in SDNY’s complaint, alleging that the government has “sought to enforce” data accuracy in the risk adjustment system by “actively pursuing legal remedies against [] MAOs that have knowingly submitted inaccurate and untruthful diagnosis data to CMS[.]” The complaint provides four examples of settlements obtained from 2012-2019 against MAOs and healthcare providers who, purportedly like Anthem, submitted inaccurate diagnosis codes to CMS or allegedly failed to delete unsupported diagnosis codes.
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On March 16th, Attorney General William Barr issued a memorandum to all United States Attorneys directing each U.S. Attorney’s Office (USAO) to “prioritize the detection, investigation, and prosecution of all criminal conduct related to the current pandemic,” noting that “the pandemic is dangerous enough without wrongdoers seeking to profit from public panic.”  It appears that USAOs have wasted no time in prioritizing such cases, as the owner of a Georgia-based marketing company that generated leads for medical-testing companies was arrested earlier this week and charged with conspiracy to commit health care fraud and conspiracy to violate the Anti-Kickback Statute.
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The Ninth Circuit Court of Appeals recently allowed a False Claims Act (FCA) case based on an alleged lack of medical necessity to proceed, rejecting the lower court's decision that subjective medical opinions about the necessity of hospitalization cannot be "objectively false." The Ninth Circuit joins several other circuits (including the Third Circuit, which recently issued the Druding decision that we posted about a few weeks ago) in reaching this decision, which has been a rapidly evolving area of FCA law.
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India Orders Shutdown Impacting Millions of Outsourced Technology and Financial Sector Workers

March 26, 2020 | Alert | By Julie Korostoff, Meredith M. Leary, Laura A. Stacey

This alert discusses what companies outsourcing critical business process functions to India should do in light of the Indian government’s order that telecom, IT, and other technology companies should, as far as possible, work from home.
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Yesterday, we blogged on how scammers are trying to monetize on the COVID-19 health crisis for their personal gain. Though the U.S. Food & Drug Administration (FDA) issued a consumer update yesterday saying that there is still no approved vaccine or drug to prevent or treat this disease, companies have continued to market products that claim to prevent, treat, or even cure COVID-19 in an attempt to “help” or profit from distressed, vulnerable Americans. While the FDA is working tirelessly to review possible vaccines, treatments, and cures, Americans should avoid endangering their health or lives by self-medicating. Per the FDA, self-medicating with any new product on the shelf (real or virtual) could not only lead to adverse effects but also could interfere with crucial medications. We are closely monitoring whether Congress will take specific actions on these increasingly prevalent issues in the context of the COVID-19 pandemic.
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In the midst of the upheaval caused by social distancing and related efforts to minimize and contain COVID-19-related risks, we have been monitoring steps taken by the Department of Justice (DOJ), the U.S. Attorneys’ Offices (USAOs), and federal courts to adapt to these circumstances.  Any steps taken are sure to affect ongoing government investigations and related proceedings and how we, as defense counsel, approach them. 
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Last week, the Third Circuit joined several other appellate courts in finding that medical opinions related to medical necessity of hospice services can be subject to scrutiny and found to be “false” for purposes of proving a violation of the False Claims Act (FCA) in U.S. ex rel. Druding v. Care Alternatives. Our Health Care Enforcement Defense Group has been closely tracking recent qui tam cases brought under the FCA based on allegations that health care services or procedures lacked the requisite medical necessity, including the conclusion of the landmark AseraCare case last week.  As we’ve previously discussed on the blog, several district courts across the country have determined that differences of opinions between physicians and medical experts alone cannot be used to prove the FCA’s falsity requirement. However, some appellate courts have reached different conclusions. The Third Circuit’s decision last week in Care Alternatives joins those appellate courts in rejecting this argument and finding that “a difference of medical opinion is enough evidence to create a triable dispute of fact regarding FCA falsity.”
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Landmark AseraCare Case Finally Ends in Settlement

March 2, 2020 | Blog | By Samantha Kingsbury, Brian Dunphy, Laurence Freedman

As many of our readers know, the AseraCare case was closely watched over the last several years because of its significance to efforts by the Department of Justice (DOJ) to allege that submission of claims for services lacking “medical necessity” violate the False Claims Act (FCA) as well as to efforts by providers to defend such cases. On Wednesday, we learned that the AseraCare case has reached its dramatic conclusion with an agreement to resolve $200 million in alleged damages for the agreed amount, as reported by AseraCare, of $1 million.
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Massachusetts Considers Drug Pricing Transparency Laws

February 10, 2020 | Blog | By David Chorney

Like many states, Massachusetts is considering drug pricing transparency legislation. The legislation would require pharmaceutical manufacturers to disclose certain pricing information.  Governor Charlie Baker has proposed legislation which would expand upon current reporting requirements for drug manufacturers in Massachusetts, and the Massachusetts Senate passed legislation which includes drug price transparency requirements and increased regulatory oversight of the pharmaceutical industry in Massachusetts. 
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The Office of Inspector General for the Department of Health and Human Services (OIG) recently issued a favorable Advisory Opinion regarding a proposal by a pharmaceutical manufacturer (Requestor) to provide financial assistance for travel, lodging, and other expenses to certain patients receiving a cell therapy that it offers (the Arrangement). The OIG concluded that the Arrangement could potentially violate the Anti-Kickback Statute as well as the prohibition on beneficiary inducement in the Civil Monetary Penalties Law (the Beneficiary Inducement CMP) but ultimately declined to impose administrative sanctions.
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Health Care Enforcement Year-in-Review and 2020 Outlook: Criminal Case Developments

January 22, 2020 | Blog | By Eoin Beirne, Nicole Henry, Jason Burrell, Jane Haviland

As discussed in our article recently published by Law360, criminal health care enforcement in 2019 was in many ways a continuation of 2018, with opioid-related enforcement continuing to be the clear top priority for the Department of Justice (DOJ), in addition to DOJ's sustained focus on prosecuting individuals and data-driven identification of health care fraud.  This post provides an overview of our article, which covers these issues and our expectations for 2020 in detail.
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Health Care Enforcement Year-in-Review and 2020 Outlook: Civil Fraud Enforcement Developments and Trends

January 21, 2020 | Blog | By Brian Dunphy, Laurence Freedman, Karen Lovitch, Julianna Hanlon, Nicole Henry, Clare Prober

As discussed in our article recently published by Law360, 2019 brought yet another year of robust health care enforcement activity, and the False Claims Act (FCA) remains the government’s most powerful civil health care enforcement tool.  This post will give an overview of our article, which covers these issues and more in great detail.
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On December 16, 2019, a nationwide coalition of hospitals sued HHS to block implementation of the 340B rate cuts contained in the 2020 Hospital Outpatient Prospective Payment System (“OPPS”) Final Rule. As detailed in our prior blog post, the 2020 OPPS Final Rule reduces by nearly 30% the Medicare Part B reimbursement for certain drugs provided by hospitals to outpatient beneficiaries that are acquired through the 340B Program. The final rule purports to continue the reimbursement cuts for 340B drugs first implemented in 2018, despite the fact that those cuts (and the 2019 OPPS rule continuing those cuts) are the subject of ongoing litigation in which the cuts were determined to be unlawful. For a detailed walk-through of the 2020 OPPS Final Rule and litigation up to this point, please see our prior three blog posts here, here, and here. 
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As reported previously, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently published two proposed rules that seek to implement wholesale changes to the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (commonly known as the Stark Law). This final post in our blog series focuses on a proposed new safe harbor that would protect patient engagement and support arrangements designed to improve quality, efficiency of care, and health outcomes. The OIG is also proposing modifications to the existing safe harbor for local transportation and a new safe harbor for remuneration provided in connection with certain payment and care delivery models developed by the Centers for Medicare & Medicaid Innovation Center or by the Medicare Shared Savings Program. Lastly, the OIG is codifying an existing statutory safe harbor for Accountable Care Organization (ACO) beneficiary incentives and an existing statutory exception to the Civil Monetary Penalty (CMP) rules on beneficiary inducement for telehealth technology related to in-home dialysis services.
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As we previously reported, the Department of Health & Human Services (HHS) recently issued two proposed rules intended to reduce the regulatory burden associated with the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (commonly known as the Stark Law). Although the rules’ main focus is on value-based arrangements, the proposed rule issued by the Centers for Medicare & Medicaid Services (CMS) also includes a number of provider-friendly changes and clarifications to the Stark Law. As discussed below, CMS is proposing several changes to key Stark Law requirements as well as modifications to existing Stark Law exceptions.
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CMS Finalizes Changes Expanding the Scope of the Open Payments Program

November 18, 2019 | Blog | By Brian Dunphy, Rachel Yount

On November 15, 2019, the Centers for Medicare & Medicaid Services ("CMS") finalized changes to the Open Payments Program as part of the CY 2020 Physician Fee Schedule Final Rule. Perhaps most importantly, CMS broadened the list of Covered Recipients. Starting for data collection for CY 2021, manufacturers will be required to track and report payments and transfers of value made to physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and certified nurse midwives. CMS also added three new nature of payment categories – debt forgiveness, long-term medical supply or device loan, and acquisitions. CMS also consolidated the two payment categories for continuing education programs – accredited/certified and unaccredited/non-certified – into one payment category for all continuing education programs. Lastly, in a move expected to impose a substantial burden on medical device manufacturers, CMS added a reporting requirement for the ‘device identifier’ component of the unique device identifier for devices and medical supplies.
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The Centers for Medicare and Medicaid Services (CMS) recently published the 2020 Hospital Outpatient Prospective Payment System (OPPS) rule, which finalizes a proposed reduction in Medicare Part B reimbursement for certain drugs provided by hospitals to outpatient beneficiaries that are acquired through the 340B drug discount program. Through the final rule, CMS purports to continue Medicare reimbursement cuts for 340B drugs first implemented in 2018, despite the fact that those cuts (and the 2019 OPPS rule continuing those cuts) are the subject of ongoing litigation in which the cuts were determined to be unlawful. That ruling, and a Court-imposed stay of the cuts, are the subject of a just-argued appeal.  For a detailed walk-through of the litigation up to this point, please see our prior blog post.
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This post is the fourth installment of our blog series on significant, proposed changes to the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (commonly known as the Stark Law) recently announced by the Department of Health & Human Services (HHS).  The proposed rule issued by the Centers for Medicare & Medicaid Services (CMS) offers new and revised definitions on key Stark Law terms, some of which CMS has previously neglected to define or provide significant guidance.  In addition, CMS proposes a new Stark Law exception for limited remuneration to a physician, which offers health care entities more flexibility for unwritten, short-term compensation arrangements with physicians.
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This post is the third installment of our blog series on recent proposed rules from the Department of Health & Human Services (HHS) that, if finalized, would implement major changes to the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (commonly known as the Stark Law). Below is an in-depth summary of the Office of Inspector General’s (OIG) proposed modifications to the safe harbors for personal services and management contracts, which includes a proposed new provision protecting outcomes-based payments. We also cover the OIG’s proposed modifications to the warranties safe harbor.
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HHS Proposes Sweeping Changes to AKS and Stark Law, Part 2: Cybersecurity Technology and Electronic Health Records

October 21, 2019 | Blog | By Karen Lovitch, Dianne Bourque, Theresa Carnegie, Rachel Yount

On October 17, 2019, the Department of Health & Human Services published two proposed rules that, if finalized, would implement significant changes to the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (commonly known as the Stark Law). This post is the latest installment in our blog series covering these proposed rules.
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