Health Law & Policy Matters

Health Care Attorneys | Mintz Levin Law Firm

Compliance is No Joke: OCR Releases Security Risk Assessment Tool

Posted in Privacy & Security/HIPAA/HITECH

Written by: Stephanie D. Willis and Dianne J. Bourque

On March 28, 2014, the Office of Civil Rights (OCR) announced the release of an online and iPad app-based security risk assessment (SRA) tool.  The tool is intended to help health care providers in small to medium sized offices conduct and document risk assessments of their organizations and meet their compliance obligations under the Health Insurance Portability and Accountability Act (HIPAA) Security Rule.  The SRA tool is a self-contained, operating system application that can run on Windows for desktop and laptop computers or Apple’s iOS for iPad.  OCR has imposed penalties based on a provider’s failure to properly perform a risk assessment compliant with the Security Rule’s standards, as we profiled in a recent post.  The release of the tool further signals OCR’s increased focus on preventive measures that covered entities and business associates must undertake to demonstrate awareness of and adherence to HIPAA’s requirements.

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Five Key Decisions for ACOs Looking to Participate in the 2015 MSSP

Posted in Accountable Care Organizations, Mergers, Acquisitions & Other Transactions, Reimbursement, Uncategorized

Written by: Stephanie D. Willis and Christi Braun

The Centers for Medicare & Medicaid Services (CMS) has announced the upcoming deadlines for the third round of new applications to the Medicare Shared Savings Program (MSSP).  Accountable Care Organizations (ACOs) that ultimately are accepted into the MSSP would begin their three-year participation agreements with CMS on January 1, 2015 and join the over 360 existing ACOs currently in the MSSP or Pioneer ACO model.  This timeline is very similar to last year’s schedule.

Notice of Intent to Apply (NOI) Process Deadlines
NOI Memo Posted to CMS Website April 1, 2014
NOI Questionnaire Posted to CMS Website May 1, 2014
NOI Submission Period May 1, 2014 – May 30, 2014
NOI Deadline May 30, 2014 at 8:00 p.m. EST
CMS User ID Forms Submission Period May 6, 2014 – June 9, 2014

 

Application Process Deadlines
MSSP Application Posted to CMS Website

May 30, 2014

MSSP Application Submission Period

July 1, 2014 – July 31, 2014

MSSP Application Deadline July 31, 2014 at 8:00 p.m. EST
MSSP Application Approval or Denial Decision Sent to Applicants

Fall 2014

MSSP Application Denial Reconsideration review deadline

15 Days from Notice of Denial

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ML Strategies Posts Weekly Health Care Update on March 24, 2014

Posted in Health Care Reform

ML Strategies has posted its weekly Health Care Update.  This publication provides timely information on implementation of the Affordable Care Act, Congressional initiatives affecting the health care industry, and federal and state health regulatory developments.  Click here to read this week’s Update.

After Arkansas Supreme Court Reverses $1.2 Billion Medicaid False Claims Verdict, Will State Attorneys General Rethink the Use of Private Counsel?

Posted in Fraud & Abuse, Pharma & Medical Devices, State & Federal Audits, Investigations & Litigation

Written by: Ellyn L. Sternfield

On March 20, 2014, the Arkansas Supreme Court reversed a $1.2 billion judgment against Johnson & Johnson and its related companies over alleged Medicaid fraud stemming from the off-label marketing of the drug Risperdal.  This decision comes on the heels of the January 28, 2014 reversal by the Louisiana Supreme Court of a $330 million Medicaid false claims verdict, also stemming from Risperdal marketing.

The two cases share many similarities:

  • Both Arkansas and Louisiana opted out of the $2.2 billion federal/multi-state false claims settlement over Risperdal marketing to pursue their own individual state false claims cases.
  • The state Attorneys General of Arkansas and Louisiana each pursued the Risperdal case using private counsel, retained on a contingency fee basis as “special” assistant attorneys general.
  • Both Arkansas and Louisiana have state false claims statutes that do not exactly mirror the federal false claims act.
  • In both the Arkansas and Louisiana cases, the state chose to forgo seeking any actual Medicaid damages and limited their monetary demands to statutory penalties, attorneys’ fees and costs, likely as a means to forgo sharing any eventual Medicaid-based award with the federal government.
  • In both cases, the defendants argued that the state false claims statutes were inapplicable to the conduct alleged by the state in pre-trial motions, in summary judgment motions, in post-trial motions, and on appeal, before finally prevailing in front of the state supreme court.

The Louisiana case was brought under the state’s Medicaid false claims act, and alleged the off-label marketing of Risperdal caused false claims to be submitted to, and paid by, the state Medicaid Program.   After a liability verdict in Louisiana’s favor, the trial court awarded $257.7 million in civil penalties, $70 million in attorneys’ fees, and another $3 million in costs. By a 5-4 vote the Louisiana Supreme Court found that the false claims verdict could not stand because the Louisiana statute only applied if a false claim was knowingly submitted to Medicaid by a Louisiana health care provider or its billing agent, and the defendant companies were not in fact a Louisiana health care provider or billing agent.

The Arkansas case was brought under the Arkansas Medicaid false claims act and consumer protection statute, alleging that the drug manufacturer made false statements of material fact in connection with Medicaid claims for Risperdal, and promoted the drug through deceptive marketing practices.  Based upon a jury verdict of liability, the trial court assessed penalties of $1.19 billion on the false claims allegations and $11 million on the consumer-based violations, and awarded $181 million attorneys’ fees and another $300,000 in costs.  A unanimous Arkansas Supreme Court found the false claims verdict could not stand because the false claims statutory provision relied on by the state was only applicable to institutional Medicaid providers, which did not include the defendant companies.  The consumer-based violation was reversed by a divided court on evidentiary grounds, based on improper and prejudicial use of an FDA warning letter that was used throughout the trial and referred to fifteen times in closing arguments.

The Arkansas Supreme Court issued a separate ruling indicating that because of the reversal of the verdicts, it would not address defense arguments regarding the state’s use of private counsel on a contingency basis, nor would it address questions involving the federal share of any award.

State Attorneys General are frequently lobbied by private counsel to forgo joining national settlements of health care false claims cases, in lieu of pursuing individual cases in state court.  These cases can be lucrative for the chosen private counsel.  Questions have been raised regarding the propriety of these contingency fee agreements and there are also questions as to whether these Medicaid-based cases are being pursued through strategies meant to disadvantage the federal government.

All states’ Medicaid costs are paid on a matching basis by federal and state funds.  When false claims cases are handled “globally” by teams of federal and state attorneys, the Medicaid-based recoveries are allocated between federal and state funds on the same matching basis.   When states pursue these cases individually, a federal directive advises that all state Medicaid-based recoveries in false claims cases be shared with the federal government, including damages, penalties, attorneys’ fees and costs awards.    Despite that directive, private counsel frequently argue that in cases like Risperdal, forgoing Medicaid damages negates the need to share any recoveries with the federal government.

This strategy did not work in Arkansas and Louisiana.  Instead of joining the national settlements, and sharing Medicaid-based judgments with the federal government, Arkansas and Louisiana will receive nothing.  These judgments likely will be read carefully by state Attorneys General and taken into consideration when they are asked in the future to opt out of national false claims settlements and instead place their state’s interests in the hands of private contingency fee counsel.

ML Strategies Posts Weekly Health Care Update on March 17, 2014

Posted in Health Care Reform

ML Strategies has posted its weekly Health Care Update.  This publication provides timely information on implementation of the Affordable Care Act, Congressional initiatives affecting the health care industry, and federal and state health regulatory developments.  Click here to read this week’s Update.

For New Recovery Audit Contracting Cycle, CMS “RAC”s up Changes

Posted in Home Health & Hospice, Hospitals & Health Systems, Physicians, Reimbursement, Uncategorized

Written by: Stephanie D. Willis 

Last month, the Centers for Medicare & Medicaid Services (CMS) announced important changes to the Recovery Audit Program.  The agency had already begun the procurement process to find new Recovery Audit Contractors (RACs) in May 2013, but these recent changes confirm the agency’s plans to wind down the current contracts and revamp the program to address some of the criticism levied against it. 

In January, CMS announced its plans to select four Medicare Part A/B RACs and one national DME and Home Health/Hospice RAC in 2014.  The agency also modified the jurisdictional boundaries that each of the Medicare Part A/B RACs would oversee.  Thereafter, CMS’s announcements on February 18, 2014 and March 7, 2014 notified providers subject to RAC audits of the following wind-down activities for the current RAC contract cycle:

  1. RACs had until February 21,2014 to send a postpayment Additional Documentation Request (ADR) to a provider;
  2. RACs had until February 28,2014 to send prepayment ADRs under the Recovery Auditor Prepayment Review Demonstration and will continue to complete the reviews for the ADRs they’ve already sent as of this date;
  3. RACs have until June 1, 2014 to send improper payment files to the Medicare Audit Contractor (MAC) for adjustment; and
  4. CMS stated that it generally will not conduct postpayment patient status reviews for claims with dates of admission of October 1, 2013 through October 1, 2014.

By regulation, providers have 45 days to respond to an ADR and RACs have up to 60 days to make a determination on the claim.

In addition, CMS’s February 18, 2014 announcement also detailed procedural changes to the determination and appeal process.  As background, there are five levels of appeal for disputes involving Medicare payments.  A provider may appeal an adverse payment determination by a RAC to the MAC, then the Qualified Independent Contractor (QIC), then to an Administrative Law Judge (ALJ) at the Office of Medicare Hearings and Appeals (OMHA), then to the Medicare Appeals Council. 

The changes in the February 18, 2014 announcement concern the RAC’s responsibilities before the appeal process begins.  Beginning in the new contract cycle: 

  1. RACs will have to honor a 30-day period for discussion before sending claims for overpayment-related denials to a MAC for adjustment;
  2. RACs will have to confirm receipt of a discussion request from a provider within three days of receipt;
  3. RACs will no longer collect their contingency fee unless the second level (of the five total levels) of appeals has been exhausted;
  4. CMS shall establish ADR limits that will take the different claim types submitted by a facility into account, rather than imposing them on the entire facility’s total claims; and
  5. CMS will require RACs to adjust ADR limits based on providers’ denial rates so that those with low rates of denied claims will not receive a higher number of ADRs than those with higher denial rates.

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FTC Cautions States Against Overbroad Regulation of Nurse Practitioners

Posted in Accreditation, Licensing & Certification, Physicians

On March 7, 2014 the Federal Trade Commission (FTC) issued a policy paper as part of its on-going effort to urge state legislators to open health care markets to a broader range of providers.  In its paper, the agency focused on expanding the scope of practice for advanced practice registered nurses (APRNs) and cautioned that physician supervision requirements for APRNs may harm competition among health care providers, leading to higher costs and reduced quality of care.  The FTC has a well-established role in promoting competition in health care through enforcement, advocacy, and policy agendas such as this.

For further analysis of the FTC’s policy paper and the agency’s other actions to promote increased roles for non-traditional providers, read the Alert authored by Bruce Sokler and Farrah Short of Mintz Levin’s Antitrust Practice.

ML Strategies Posts Weekly Health Care Update on March 10, 2014

Posted in Health Care Reform

ML Strategies has posted its weekly Health Care Update.  This publication provides timely information on implementation of the Affordable Care Act, Congressional initiatives affecting the health care industry, and federal and state health regulatory developments.  Click here to read this week’s Update.

Privacy and Security Practice Panel Discusses the NIST Cybersecurity Framework

Posted in Privacy & Security/HIPAA/HITECH, Uncategorized

Cybersecurity is of increasing importance to health care organizations, given the growing trend of enforcement and increasing penalties.  President Obama’s Executive Order 13636: Improving Critical Infrastructure Cybersecurity included “the incapacity or destruction of [] systems and assets [that] would have a debilitating impact on . . . national public health or safety” as part of the “critical infrastructure” of the United States.   On the anniversary of this Executive Order, the U.S. Commerce Department’s National Institute of Standards and Technology (NIST) released a Framework for Improving Critical Infrastructure Cybersecurity (Framework) that provides a structure that organizations, regulators and customers engaged in the nation’s critical infrastructure can use to create, guide, assess or improve comprehensive cybersecurity programs.

On March 25th, Mintz Levin’s Privacy & Security Practice is hosting a panel discussion in the firm’s Boston office that will examine the NIST Framework in depth and provide insights into how organizations, including health care and life sciences companies,  can use it to assess and improve their security procedures.  Topics will include:

  • An update on cybersecurity legislative policies;
  • The NIST Framework and federal regulatory initiatives affecting government and private sector suppliers;
  • Recent developments in the U.S. Securities and Exchange Commission’s approach to disclosure of cybersecurity threats for public companies; and
  • The current state of the market for cybersecurity insurance and considerations for potential insureds.

To register and get more details about the panel, click here.

CMS Abandons Certain Controversial Provisions in its Proposed Medicare Part D Rule

Posted in Payors & PBMs, Pharma & Medical Devices, Pharmacies, Physicians, Uncategorized

Written by:  Theresa C. Carnegie

Following an onslaught of criticism, CMS told Congress today that it will not move forward with certain controversial provisions of its proposed rule on the Medicare Advantage and Medicare Part D prescription drug program.

In a letter to House Ways and Means Committee Ranking Member Sander Levin (D-MI), CMS Administrator Marilyn Tavenner stated that the agency will not finalize proposals to (i) lift the protected class definition of three drug classes, (ii) set standards on Medicare Part D plans’ requirements to participate in preferred pharmacy networks, (iii) reduce the number of Part D plans a sponsor may offer, and (iv) clarify the Part D non-interference provisions.  Tavenner states:

Given the complexities of these issues and stakeholder input, we do not plan to finalize these proposals at this time.  We will engage in further stakeholder input before advancing some or all of the changes in these areas in future years.

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