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Karen Lovitch is the Practice Leader of the firm’s Health Law Practice. She counsels health care clients on regulatory, transactional, and operational issues, including Medicare coverage and reimbursement, the development and implementation of health care compliance programs, and licensure and certification matters. Her experience includes matters related to the anti-kickback statute, the Stark law, state statutes prohibiting kickbacks and self-referrals, and the federal Physician Payments Sunshine Act.

The Department of Justice (DOJ) recently intervened in a False Claims Act (FCA) case that raises a variety of interesting allegations, including payment of kickbacks by a compounding pharmacy to contracted marketing companies in the form of percentage-based compensation, to TRICARE beneficiaries in the form of copayment waivers, and to physicians who submitted prescriptions without seeing patients.  According to the complaint, Patient Care America (PCA), a Florida compounding pharmacy, implemented a scheme to manipulate the compounding formula for pain and scar creams that resulted in the submission of false claims to TRICARE.  The complaint also names two of PCA’s senior executives (one of which has since left the company) as well as the private equity firm that owns a controlling interest in PCA. Continue Reading DOJ Intervenes in False Claims Act Case Against a Compounding Pharmacy and a Private Equity Firm

In both civil and criminal enforcement proceedings, 2017 was perhaps most notable for the cases brought against individual health care providers and small physician practice owners.  Among the factors that may have resulted in the uptick in cases against individuals are the Yates Memo issued in late 2015, improved and increased reliance on sophisticated data analytics, and the aggressive focus on opioid addiction and its causes. Continue Reading Health Care Enforcement Review and 2018 Outlook: Criminal and Civil Enforcement Trends

In the recently published proposed rule related to the CY 2018 Hospital Outpatient Prospective Payment System (OPPS), the Centers for Medicare & Medicaid Services (CMS) announced that it is considering changes to the regulation governing the date of service (DOS) for clinical laboratory and pathology specimens.  The DOS rules are important to laboratories and hospitals because they dictate which party must bill Medicare for certain laboratory testing performed on stored specimens collected during a hospital procedure but ordered after the patient has left the hospital.  If revisions are ultimately finalized, the proposal could have significant business implications for independent laboratories and hospitals.

Continue Reading CMS May Decide to Permit Labs to Bill for Certain Tests Provided to Outpatients

In this final installment of our Health Care Enforcement Review and 2017 Outlook series, we analyze health care enforcement trends gathered from 2016 civil settlements and criminal resolutions of health care fraud and abuse cases. Behind the headlines covering enormous recoveries in 2016, several themes are apparent.

The False Claims Act continued to generate large civil settlements.

Continuing the trend from recent years, the False Claims Act (“FCA”) remained the primary civil enforcement tool against health care providers as well as pharmaceutical, life sciences, and medical device companies, predominantly driven by qui tam FCA complaints filed by relators.  In fiscal year 2016, the Department of Justice obtained more than $4.7 billion in settlements and judgments from FCA cases, $2.5 billion of which it obtained from the health care industry.  Continue Reading Health Care Enforcement Review and 2017 Outlook: Significant Health Care Fraud and Abuse Civil Settlements and Criminal Resolutions

While 2016 marked one of the least productive years in the history of Congress, the same cannot be said of health care enforcement and regulatory agencies.  Perhaps motivated by the impending change in administration, these agencies promulgated a number of notable regulations in 2016, including:

  • A Department of Justice (DOJ) Interim Final Rule that significantly increases penalties under the False Claims Act (FCA), making already high stakes litigation even higher.
  • An Interim Final Rule from the Office of Inspector General for the U.S. Department of Health and Human Services (OIG) and other agencies increasing civil penalties for violations of various statutes and regulations, including the Civil Monetary Penalties Law (CMPL) and its implementing regulations.
  • A Final Rule that addresses the OIG’s expanded authority under the CMPL.
  • A long-awaited Final Rule from the Center for Medicare & Medicaid Services (CMS) concerning the “60 Day Rule” for returning overpayments.
  • A Final Rule from the OIG that amends the safe harbors under the federal Anti-Kickback Statute (AKS) and adds exceptions under the CMPL’s beneficiary inducement prohibition.

Below we discuss the highlights of each rule and how we expect each to impact the enforcement environment in 2017 and beyond. Continue Reading Health Care Enforcement Review and 2017 Outlook: Significant Regulatory Developments

The waiver of copayments, coinsurance, and deductibles owed by patients treated by out-of-network laboratories and other providers is a hot topic in the health care industry.  Despite the near absence of clear legal prohibitions on this practice, commercial insurers are aggressively pursuing out-of-network providers who fail to collect amounts owed by their members under a variety of statutory and common law theories.

For example, in 2015, Aetna filed suit against Health Diagnostic Laboratory (HDL), Tonya Mallory (HDL’s former CEO), and BlueWave Health Care Consultants (an independent sales group), alleging that they engaged in a variety of illegal actions, including the failure to collect any amounts owed by Aetna’s members, and that Aetna overpaid for services provided by HDL as a result.  While HDL settled, Aetna continues to pursue its claims against Ms. Mallory, who recently failed in her efforts to have the case against her dismissed.   However, a recent court decision may give providers some comfort.  In June 2016, a Texas federal district court prevented Cigna from recovering funds paid to Humble Surgical Hospital, which allegedly waived amounts owed by Cigna’s members and engaged in other misconduct.  The court dismissed all of Cigna’s claims and found that Cigna owed $13 million to Humble. Continue Reading Lessons Learned from FCA Settlement Involving Waiver of Medicare Coinsurance Amounts

Dionne Lomax named Vice Chair of Publications for the AHLA Antitrust Practice Group.

Dionne is a Member in the firm’s Antitrust and Health Law practices and is based in the Washington, DC office. She provides counsel and representation on health care–related mergers and acquisitions, international mergers, joint ventures, other commercial arrangements, antitrust investigations, and other antitrust matters. Her experience also includes serving as a trial attorney at the DOJ Antitrust Division Health Care Task Force Section.

The AHLA Antitrust Practice Group addresses enforcement activity and competition policy that affect all areas of the health care industry.

Connect with Dionne on Twitter and LinkedIn.


Testtubes_143897611Last Friday afternoon CMS released its eagerly anticipated final rule (the Final Rule) implementing the Protecting Access to Medicare Act of 2014 (PAMA), which, together with the Final Rule, will make sweeping changes to the rate-setting process under the Medicare Clinical Laboratory Fee Schedule (MCLFS).  According to CMS estimates, Medicare Part B payments for clinical diagnostic laboratory tests (CDLTs) will decrease by $390 million in fiscal year 2018 when the repricing will take effect.  The Final Rule comes nearly nine months after CMS issued its proposed rule (the Proposed Rule) and long after PAMA’s statutory deadline.  Our previous coverage of the Proposed Rule is available here, here, and here. Continue Reading At Long Last, CMS Issues Final Rule for Lab Fee Schedule Changes

As reported in our 2015 Laboratory Industry Year in Review post, the laboratory industry began 2016 amid confusion regarding how to comply with the Protecting Access to Medicare Act of 2014 (PAMA), which made the most significant changes to the Medicare Part B payment structure for laboratories since implementation of the Medicare Clinical Laboratory Fee Schedule (MCLFS) in 1984.  Despite PAMA’s requirement that the Centers for Medicare & Medicaid Services (CMS) publish final regulations no later than June 30, 2015, CMS did not issue a proposed rule until October 1st and has yet to follow up with the final rule.  Given stakeholders’ substantial concerns regarding the proposed rule – and the track record of CMS – the delay is not surprising. Continue Reading Delay in Final Rule Implementing PAMA: Sunshine Act Revisited?

The Centers for Medicare & Medicaid Services (CMS) has finally published the long-awaited final rule establishing a process for Medicare Part A and B providers and suppliers to report and return overpayments within 60 days (the “60-day rule”).    As discussed in detail in a previous post, the proposed 60-day rule was published nearly four years ago, and it understandably sparked a high degree of anxiety for the provider community.  Upon an initial review CMS appears to have made an effort to address at least some of those concerns by, for example, decreased the lookback period from ten to six years.   We are in the process of preparing a full analysis of other provisions – especially the definition of “identified” – that will be published in the next day or so.  In the meantime we are providing a comparison of the proposed and final rule to expedite your review of the changes.