Husch Blackwell attorney Joe Geraci weighed in on recent guidance provided by HHS related to whether the federal anti-kickback statute applies to patients who purchase subsidized health insurance products on the new state or federal healthcare exchanges. Specifically, the anti-kickback regulations apply to “federal healthcare programs” that are defined to include the following:
Any plan
…
On August 20, the Fifth Circuit Court of Appeals rejected a whistleblower claim by a former employee of Cardinal Health, Inc., affirming dismissal of the former employee’s complaint, which alleged that Cardinal Health sold hospitals run by the U.S. Department of Veterans Affairs defective medical equipment, in violation of the False Claims Act (FCA).
Before her termination from Cardinal Health, the plaintiff marketed Cardinal Health’s “Signature pump”—an electronic device that regulates the rate at which intravenous fluids flow into patients—to various hospitals, including hospitals run by the VA. The plaintiff alleged that the Signature pump had a dangerous defect, causing air bubbles to accumulate and be released into a patient’s intravenous fluids flow, potentially resulting in serious injury or death.
The plaintiff claimed that she became aware of the defect in late 2000 and discussed it with a Cardinal Health area manager in early 2001. In mid-2001, Cardinal Health suspended shipment of the Signature pump for three months and undertook a review of the possible defect. Cardinal Health terminated the plaintiff at the end of the three-month review period. Cardinal Health suspended production and sale of the Signature pump for independent reasons in 2006.
The crux of the plaintiff’s FCA claim was that Cardinal Health falsely certified to the VA that the Signature pump was in compliance with the warranty of merchantability in the parties’ contract each time it requested payment from the VA for the pumps—a so-called “implied false certification” theory.
On June 14ththe Governor signed into law SB 1803. It amends Chapter 531 by limiting the Texas Health and Human Services Office of Inspector General’s (HHSC-OIG) ability to implement payment holds, improving providers’ rights to expedited appeals before the State Office of Administrative Hearings, redefining the liability for hearing costs, creating new requirements…
On May 18th2013 HHS gave state Medicaid Fraud Control Units (State Attorney General MFCUs) more power to data mine for patterns of overpayments, waste, fraud or abuse. They expect these new resources to have an almost 7 to 1 return on investment to the United States government. Providers should expect to see more…
Are you worried about audits and investigations at your post-acute care facility? If not, you may need to be. Husch Blackwell attorneys Brian Bewley and Barb Miltenberger weighed in on this issue in Report on Medicare Compliance. The article discusses audits and investigations at post-acute care facilities and Bewley points out that home health and hospice…
The jury in the Tuomey case (U.S. ex rel. Drakeford v. Tuomey Healthcare Systems, Inc.) returned a verdict in favor of the government yesterday, May 8, 2013. As is well known, this is the re-trial of a case centered on a series of employment agreements that Tuomey Healthcare entered to allegedly capture referrals…
More and more judges are rejecting settlements negotiated between federal regulators and companies accused of corporate fraud. Two recent examples illustrate this trend.
1. WakeMed
In January of 2013, a judge in North Carolina rejected a settlement reached between the Department of Justice and WakeMed Health and Hospitals, an 870-bed hospital system. WakeMed was accused…
Cyber security is on everyone’s mind. President Obama signed an executive order in February aimed at increasing protection of our nation’s critical infrastructure, while HHS released its new HIPAA mega rule in January (effective in March) in an effort to strengthen the security of electronic health records. As providers work to update their HIPAA policies…
The Departments of Justice and Health and Human Services released a report last week showing that the government has achieved the highest return on investment in the 16-year history of the Health Care Fraud and Abuse (HCFAC) Program. According to the report, for every dollar spent on healthcare-related fraud and abuse investigations in the last three years, the government recovered $7.90.
The government recovered $4.2 billion from healthcare fraud enforcement efforts in FY 2012, up from $4.1 billion in FY 2011. The government continues to focus on reducing fraud and waste in the healthcare system.
“This was a record-breaking year for the Departments of Justice and Health and Human Services in our collaborative effort to crack down on health care fraud and protect valuable taxpayer dollars,” said Attorney General Holder. “In the past fiscal year, our relentless pursuit of health care fraud resulted in the disruption of an array of sophisticated fraud schemes and the recovery of more taxpayer dollars than ever before. This report demonstrates our serious commitment to prosecuting health care fraud and safeguarding our world-class health care programs from abuse.”
The government also touted the use of fraud-fighting tools authorized by the Affordable Care Act including enhanced screenings and enrollment requirements, increased data sharing across the government, expanded recovery efforts for overpayments and greater oversight of private insurance abuses. Screening of all 1.5 million Medicare-enrolled providers through the new Automated Provider Screening system began in FY 2012. The report states that nearly 150,000 ineligible providers have already been eliminated from Medicare’s billing system.
President Barack Obama signed the American Taxpayer Relief Act of 2012, often called the “fiscal cliff” agreement, on January 2, 2013. Buried in the 59 pages of the act is a seven-line amendment to Section 1870 of the Social Security Act. This section bars recovery of overpayments from providers who are “without fault” and automatically deems a provider to be without fault three years from the year in which the original payment was made (unless there is evidence of fault). The three-year “without fault” limitation provision was enacted in 1972. Without much notice, the fiscal cliff deal extended this to five years.
The push for extension of the limitation began when the Department of Health and Human Service’s Office of Inspector General (OIG) issued a report recommending to the Centers for Medicare & Medicaid Services (CMS) that it pursue legislation to extend the statute of limitations. (See OIG, Obstacles to Collection of Millions in Medicare Overpayments.) This report blamed the time limitations on reopening and recovery of payments (four years and three years, respectively) as the reason why approximately $330 million in overpayments could not be recovered by CMS. The OIG also concluded that CMS’ inadequate guidance and monitoring of contractors was to blame. The Congressional Budget Office (CBO) has issued a report estimating that $500 million would be added to the federal treasury by 2022 as a result of the statute of limitation change. (See CBO, Detail on Estimated Budgetary Effects of Title VI.)
The biggest question for providers is how to deal with this change going forward. The following illustration demonstrates how the three-year limitation period applied: Provider was notified on February 22, 2009, that it had been paid for services provided to beneficiary. On January 2, 2013, the contractor determined that provider was overpaid for these services. If there was no evidence that provider acted fraudulently, this overpayment could not be recovered because under the statute of limitations the right to do so expired on December 31, 2012. Had the contractor determined that the provider was overpaid on any date prior to December 31, 2012, it would have been recoverable. (See Medicare Financial Management Manual, Chapter 3, Section 80.1.) Accordingly, any payments made in 2009 or before were not recoverable as of January 1, 2013.
