Government Issues

The Supreme Court’s unanimous decision in Universal Health Services, Inc. v. United States ex rel. Escobar, No. 15-7 (U.S. June 16, 2016) upholds the viability of the implied certification theory of False Claims Act liability. But it also makes cases arising from minor instances of noncompliance much harder to prove. The Court held that a knowing failure to disclose a violation of a material statutory, regulatory, or contractual requirement can create False Claims Act liability. The requirement need not be an express condition of payment, but it must be material to the government’s decision to pay.

On April 27, 2016, the Department of Health & Human Services Centers for Medicare & Medicaid Services (CMS) released its proposed rule regarding models for tying professional reimbursement to quality. While this may be great news for providers who enjoy the challenges of tracking and reporting data, these challenges are going to cause problems (namely, reimbursement reductions) for some providers. Regardless of whether providers think this is good or bad, providers should start looking at the proposed regulations now because, as proposed, quality-based payments will be a fact of life for all physicians, mid-levels, CRNAs and groups effective Jan. 1, 2019. The regulations will be published in the May 9, 2016, Federal Register. The comment period will officially start at that time and run through 5 p.m. on June 27, 2016.

In some courts in the United States today, a government contractor or a healthcare provider seeking reimbursement from a federal program can violate the False Claims Act even when its work is satisfactory and its invoices are correct. Under the theory of “implied certification,” a minor instance of non-compliance with one of the thousands of applicable statutes, regulations, and contract provisions can be the basis for a federal investigation, years of litigation, as well as fines, penalties, suspension and debarment, even imprisonment of company personnel.

A new ordinance went into effect April 4, 2016, which prohibits many employers in Austin from asking job applicants about their criminal histories until they’re well into the hiring process. The Fair Chance Hiring Ordinance, colloquially known as the “Ban the Box” measure, will forbid most employers from considering an applicant’s criminal record until after making a conditional offer of employment. Thus, Austin employers must evaluate whether the ordinance will affect their operations and, if so, what steps they need to take to alter their hiring processes and related guidelines.

Based on recent news stories and our experience, it appears that cybercriminals may be targeting healthcare providers with ransomware attacks. Publicly reported incidents and others of which we are aware have involved providers ranging from clinics and imaging centers to hospitals, and these entities have had to pay hundreds to thousands of dollars to gain access to their medical records, billing records or other vital computer systems – often after significant interruption of operations. On March 31, 2016, the U.S. Dept. of Homeland Security issued an alert about these attacks as a result of recent attacks on businesses including healthcare facilities and hospitals worldwide.

Patricia Smith, U.S. Department of Labor solicitor, recently announced the final rules regarding the changes to the FLSA White Collar Exemption Regulations will be published in July 2016. She also indicated the regulations will be effective 60 days after their publication. This means the changes will become effective no later than September 2016.

Husch Blackwell Labor and Employment attorneys Terry Potter and Robert Rojas presented a webinar Feb. 3, 2016, on Workplace Safety vs. Workplace Gun Rights. The webinar focused on the legal landscape of current gun legislation, how certain legislation effects employers and the workplace, and how to minimize any risks associated with that legislation. Workplaces, including those in the healthcare industry, are facing the effects of such laws.

On Feb. 12, the Department of Health and Human Services’ (“HHS”) Centers for Medicare & Medicaid Services (“CMS”) published its final rule regarding reporting and returning Medicare overpayments. This final rule comes nearly four years after its proposed rule regarding the reporting and return of Medicare overpayments that left the provider community nervous and uncertain about when an overpayment would be considered “overdue” under CMS’s vague 60-day standard.

Gov. John Bel Edwards signed an executive order Jan. 19, 2016, to make Louisiana the 32nd state to adopt Medicaid expansion under the Affordable Care Act. Montana’s Medicaid expansion became effective Jan. 1, and South Dakota, Virginia and Wyoming are including Medicaid expansion in upcoming state budget proposals.

This is reflective of a growing trend of so-called “red” states that are nevertheless adopting provisions of the Affordable Care Act that subsidize healthcare costs for new groups of citizens who cannot afford commercial or exchange insurance products and do not qualify for Medicare. To sweeten the pot, the Obama administration announced its 2017 budget proposal will include a legislative proposal to provide any state that expands Medicaid coverage under the Affordable Care Act with the same three years of full federal funding that states that expanded their Medicaid programs in 2014 enjoyed.