Physicians

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On August 26, 2024, the United States Attorney’s Office for the District of Montana filed a False Claims Act (FCA) complaint against a Montana oncologist, alleging that the oncologist’s busy schedule led to excessive claims that violated the FCA. The complaint is unusual in that its chief theory is the amount of time the oncologist spent with patients, relative to what the Justice Department claims is the standard practice of other oncologists. In that respect, the complaint is a warning sign to busy physicians across the country.

This blog post begins by explaining how this Montana oncologist found himself on the Justice Department’s radar—a self-disclosure by the health system that previously employed the oncologist—before discussing what the Justice Department is alleging against the oncologist, as well as what other physicians should learn from this lawsuit.

Investor-Hat_-When-Physicians

Engaging in management and investor conversations about maintaining and growing a business is critical, no matter the industry. Whether you’re discussing normal business sustainability, organic growth, or contemplating a sale, these discussions become more complex when practicing physicians are the business’s revenue generators. These conversations must be handled carefully to comply with the spirit and letter of healthcare’s strict fraud and abuse laws. To ensure these discussions are both productive and compliant, it’s essential to navigate these complex regulations effectively.

On June 27, 2022, the United States Supreme Court, by a vote of 9-0, overturned the lower circuit courts’ rulings affirming the convictions of two physicians of the unlawful distribution of controlled substances. In Ruan v. United States (Case No. 20-1410), consolidated with Kahn v. United States (Case No. 21-5261), the Supreme Court was asked to determine whether a physician may be convicted of unlawful distribution of controlled substances under 21 U.S.C. § 841(a)(1) without regard to whether, in good faith, the physician “reasonably believed” or “subjectively intended” that his or her prescriptions fall within that course of professional practice. The Controlled Substances Act makes it unlawful for “any person knowingly or intentionally … to manufacture, distribute, or dispense” a controlled substance, “except as authorized.” A prescription is authorized when it is “issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.” 21 C.F.R. § 1306.04(a). The “vague and highly general regulatory language” left open the question of what conduct would fall under the statute’s exception and thus be considered legal.

In the wake of a record number of Covid-19 cases and with flu season around the corner, Governor Tony Evers and Wisconsin Department of Health Secretary Designee Andrea Palm issued a new emergency order on October 1, 2020. Emergency Order #2 is designed to help address an anticipated surge in healthcare staffing needs.

Executive Order GA-40

On June 19, 2020, the Texas Department of Insurance adopted final rules specifying patient notice and election requirements in order for out-of-network providers to balance bill. The final rules replace similar emergency rules that were adopted on December 18, 2019.

Under the new rules, which are meant to implement legislation passed in 2019 by the Texas Legislature, out-of-network providers are prohibited from Balance Billing for nonemergency services unless a patient elects, in writing, to obtain the service from the out-of-network provider. The patient’s election is only effective if the provider satisfies the following notice and disclosure requirements: (1) the patient is provided with a “meaningful choice between an in-network provider and an out-of-network provider,” (2) the patient is not “coerced” into choosing the out-of-network provider, and (3) the patient is provided with a written notice and disclosure. The notice and disclosure statement must be signed by the patient at least 10 business days before receiving any care.[1]

CARES Act Reporting

Under new guidance from the U.S. Department of Health and Human Services (HHS), hospices and other providers who received CARES Act Provider Relief Fund payments can hold off on filing their first quarterly compliance report, slated to be due on July 10, 2020.[1] Instead, HHS states that it will develop its own report and this report itself will contain “all information necessary for recipients of Provider Relief Fund payments to comply with” the quarterly reporting requirements under the Relief Fund Terms and Conditions.

The Federal Communications Commission (“FCC”) has opened the COVID-19 Telehealth Program Application portal and is now accepting applications for the COVID-19 Telehealth Program (the “Telehealth Program”). Authorized by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), the Telehealth Program will provide $200 million in funding to assist eligible health care providers deliver telehealth services to patients in their homes or other mobile locations in an effort to combat the novel Coronavirus 2019 disease (“COVID-19”).  The funding is available for eligible health care providers responding to the COVID-19 pandemic by fully compensating providers for their telecommunication services, information services, and devices necessary for them to provide critical telehealth services. Notably, the Telehealth Program is not currently available to certain types of health care providers, including for-profit providers. Consequently, some providers, including local hospitals that are part of a larger for-profit health system, may find themselves ineligible for telehealth funding.

At Husch Blackwell we understand the financial hardships our healthcare industry clients face in the midst of the COVID-19 pandemic. While you have no doubt heard about the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act signed into law on Friday, March 27, 2020, we want to make sure you are aware of the estimated $377 billion in Small Business Administration (“SBA”) relief that may be available to you as an eligible small business. We encourage you to act immediately so that you may secure funding as quickly as possible.

Texas Comptroller Glenn Hegar announced last week that he will delay the implementation of a sales tax on medical billing services until the Texas Legislature considers the proposed change when it meets in a regular session in 2021. The Comptroller’s staff will work with industry leaders leading up to the 140-day session in order to develop language that could amend the state’s sales tax statutes. The regular session of the Texas Legislature is scheduled to begin January 12, 2021, and end June 1, 2021.

Our prior article discussed the Texas Comptroller’s policy change in the fourth quarter of 2019, which would have rendered medical billing services subject to Texas sales tax, after longstanding reliance on rulings which exempted such services.

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COVID-19 Update: CMS Waiver Information for Private Practice Physicians and Non-Physician Practitioners

By Hal Katz and Tamar E. Hodges

President Donald Trump declared the coronavirus pandemic a National Emergency on March 13, 2020. This declaration granted the Department of Health and Human Services (HHS) Secretary Alex Azar authority to relax certain Medicare, Medicaid, and Children’s Health Insurance Program (CHIP) requirements set forth in Section 1135 of the Social Security Act. The primary purpose of this waiver is to give providers greater flexibility to meet the needs of Medicare, Medicaid, and CHIP beneficiaries during an emergency.  CMS may issue “blanket waivers” after a declaration of a public health emergency when it determines many “similarly situated providers” would require certain waivers. CMS requires providers to put the state licensing agency and CMS Regional Office on notice if it intends to modify their operations in light of such waivers, although the blanket waivers are essentially automatic and, therefore, do not require the provider to submit a request. The waiver is in effect through the duration of the emergency or until CMS terminates the waiver.