Healthcare

This post is the first in a series dedicated to Colorado’s Medicaid finance and payment systems, challenges faced by those programs, and opportunities for expansion.

The Colorado Healthcare Affordability and Sustainability Enterprise (CHASE) oversees Colorado’s hospital provider tax and the use of those taxes to support Medicaid supplemental payments. CHASE uses the largest portion of those taxes to generate payments targeting the cost shortfalls from treating Medicaid and uninsured patients. Broadly speaking, federal regulations (see 42 C.F.R. §§ 447.272, 447.321) allow each class of institutional providers to be paid for Medicaid services (on a fee-for-service basis) to a level that approximates what could have been paid under Medicare payment principles. This is known as the Upper Payment Limit (UPL). For the past several years, CHASE has limited these payments to less than the full amount permitted by federal law out of concerns about potential overpayments and statewide recoupment risks. The Colorado Hospital Association (CHA) is currently advocating for CHASE to increase payments to 100% of the UPL—i.e. “the full UPL.”

On April 29, 2024, the Food and Drug Administration (FDA) announced a Final Rule amending regulations to make explicit that in vitro diagnostic products (IVDs) are devices under the Federal Food, Drug, and Cosmetic Act including when the manufacturer of the IVD is a laboratory. Under the new rule, the FDA will phase out its laboratory developed test (LDT) enforcement discretion policy over a four-year period. The phaseout policy “applies to IVDs that are manufactured and offered as LDTs by laboratories that are certified under CLIA[1] and that meet the regulatory requirements under CLIA to perform high complexity testing, and used within such laboratories, even if those IVDs do not fall within FDA’s traditional understanding of an LDT because they are not designed, manufactured, and used within a single laboratory.”

Husch Blackwell’s False Claims Act team previously covered the results of a rare False Claims Act (FCA) trial in which a federal jury found that a surgical product distributor was liable for paying kickbacks to physicians. The federal judge overseeing that trial initially entered judgment against the distributor defendants for $487 million after trebling the government’s actual damages and then adding penalties for each kickback-tainted claim.

On February 8, 2024, however, that same federal judge amended the judgment over concerns that the statutory penalties were unconstitutionally excessive. This article highlights the issue and explains what those accused of violating the FCA can learn from this decision.

Wyoming physicians are sometimes confronted with the awkward and difficult choice of whether to bring a colleague’s potentially unprofessional, unethical, or harmful conduct to light by making a report to a hospital’s peer review committee, or even the Wyoming Board of Medicine in some circumstances. However, physicians are often unsure whether such a report is justified, and whether it is ethically or legally required. Whether a report is justified or ethically required in any particular situation is beyond the scope of this article–however, we can shed light on whether it is required by Wyoming law.

Supreme Court Sunrise

The Supreme Court issued a number of headline-grabbing decisions this term on topics like religious accommodation, LGBTQ protections, and consideration of race in college admissions. These decisions are wide-reaching and impact individuals, employers, and higher education institutions. Though not nearly as wide-reaching, the Supreme Court also issued two important decisions this year dealing with the False Claims Act (FCA) that could have dramatic impact nonetheless for those ensnared in an FCA action.

Executive Order GA-40

Following two weeks of trial testimony, a Travis County jury recently rendered a $10 million verdict in a novel corporate practice of medicine (CPOM) case. The jury found in favor of a physician hospitalist group that claimed a management company repeatedly broke its promise to comply with the state’s CPOM prohibition, putting profits over patients, among other wrongdoings.

Environmental, Social and Governance (ESG) strategy is an increasingly more common consideration for those undertaking healthcare M&A or capital investments. The nature of healthcare poses unique ESG risks in terms of community impact and involvement, retention in the workforce, and environmentally friendly buildings and medical supplies. As ESG concerns continue to become more important to investors and acquirors—and as government regulations increasingly necessitate movements towards ESG-friendly business practices—both for-profit and non-profit entities in the healthcare industry need to ensure that proper ESG standards are maintained.

Hospice Insights

Each July, the Medicare Administrative Contractors issue notices of a 2% Medicare payment reduction to those providers who did not meet quality data reporting requirements. Those notices have been sent. In this episode, Husch Blackwell’s Meg Pekarske and Jacob Harris talk about the issues providers faced in 2021 and how to pursue an appeal of…