Government Issues

The Internal Revenue Services (IRS) issued Notice 2014-67 on Oct. 24, 2014, to “amplify” Revenue Procedure 97-13 by (i) creating a new five-year safe harbor for management contracts, and (ii) expanding the permitted types of productivity awards allowed.

Rev. Proc. 97-13 describes certain “safe harbor” arrangements that tax-exempt healthcare facilities financed with tax-free bonds can rely on to ensure any “management, service or incentive payment contract” between the facility and a service provider does not result in private business use. Many physician service agreements fall within this category.

A Dec. 1 Strafford webinar on the legal and regulatory challenges of Ebola will feature five Husch Blackwell attorneys. The 90-minute CLE webinar with interactive Q&A will provide guidance to healthcare counsel and their clients in addressing HIPAA and EMTALA concerns when treating Ebola patients.

The panel will discuss state and federal mandatory reporting requirements, employment issues and lessons learned from the first U.S. Ebola cases.

The U.S. Department of Health & Human Services (HHS) Office for Civil Rights (OCR) released a bulletin on Nov. 10 reminding entities covered under the Health Insurance Portability and Accountability Act (HIPAA) that the protections continue to be in effect during emergencies, including Ebola and other outbreaks. HHS wants to make sure healthcare providers are aware of the ways in which patient information may be shared under the HIPAA Privacy Rule in emergency situations.

The U.S. District Court for the Eastern District of Tennessee answered what it acknowledged was a novel question: whether statistical sampling and extrapolation are appropriate to establish liability under the False Claims Act (FCA). The court found the government could extrapolate from a sample of patient records to prove FCA liability. While the court’s decision approved the use of sampling, it emphasized the defendant could challenge the government’s methodology and that the government was not using sampling to prove all of the elements of the alleged FCA violations.

The U.S. Department of Health & Human Services Office of Inspector General (“OIG”) issued a proposed rule Oct. 2 that would add new safe harbors to the Anti-Kickback Statute (“AKS”) regulations and interpret existing, statutory safe harbors. The rule would also amend the Civil Monetary Penalties (“CMP”) regulations by adding statutory exceptions to the regulatory definition of “remuneration” and codifying the so-called “gainsharing CMP” found in the Social Security Act.

The Kentucky Supreme Court issued an opinion Aug. 21, 2014, (Tibbs v. Bunnell, Ky., No. 2012-SC-000603-MR)  in which it held that the incident report developed by the University of Kentucky Hospital (“hospital”), through the hospital’s Patient Safety Evaluation System (“PSES”), following the death of a patient, was not protected as patient safety work product (“PSWP”) under the Patient Safety and Quality Improvement Act of 2005 (the “Act”).

The U.S. Department of Justice (DOJ) and the New York State Attorney General intervened in a federal False Claims Act (FCA) case on June 27, 2014, accusing Mount Sinai Health System of failing to report and return Medicaid overpayments within 60 days of identifying them. See U.S. ex rel Kane v. Healthfirst, Inc., et al., No. 11-2325 (S.D.N.Y). This case is one of the first examples of litigation involving “the 60-day repayment provision” under the Affordable Care Act (ACA).

The Federal Trade Commission (FTC) recently issued a policy paper urging state legislators to carefully evaluate proposals that limit nurse practitioners’ scope of practice. Nurse practitioners (also known as Advanced Practice Registered Nurses, or APRNs) are registered nurses who have been both educated and received specialized training beyond the requirements for a registered nurse. Notably, the FTC paper concluded that expanding the scope of APRN practice would create more competition in the health care sector – helping to control costs, improve quality, promote innovation, and expand access to care.

The Patent Trial and Appeal Board (PTAB) issued its first final written decisions June 20, 2014, in four inter partes reviews (IPR) of pharmaceutical-related patents. The four decisions effectively invalidated all 58 of the challenged patent claims spread across four patents owned by Merck & Cie and South Alabama Medical Science Foundation (SAMSF) who previously accused Husch Blackwell client Gnosis SpA of infringement.