The Department of Health and Human Services Office of the Inspector General (OIG) has issued an Advisory Opinion (Opinion) in connection with a hospital’s gainsharing arrangement (Arrangement) with a designated group of neurosurgeons who perform spinal fusion surgeries at the hospital. According to the Opinion, the OIG would not impose sanctions because the Arrangement, when viewed in its entirety, is not designed or likely to induce the neurosurgeons to (i) reduce or limit medically necessary services to their Medicare or Medicaid patients, or (ii) increase referrals to the hospital. This Opinion is the latest in a line of earlier advisory opinions to “bless” gainsharing arrangements that meet certain criteria for minimizing the risk of fraud and abuse. Continue Reading OIG Reaffirms Permissibility of Certain Gainsharing Arrangements

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

Correction: An earlier version of this post incorrectly noted that the American Medical Association opposed the rule. The post has been updated to include the AMA’s full statement expressing support for proposed rule. [October 10, 2017]

The U.S. Department of Veterans Affairs (“VA”) is taking a significant step towards expanding needed services to Veterans by proposing a rule to preempt state restrictions on telehealth.

Most states currently restrict providers (including VA employees) from treating patients that are located in that state if the provider is not licensed there. As a result, the VA has had difficulty getting a sufficient number of providers to furnish services via telemedicine for fear that they will face discipline from those states for the unlicensed practice of medicine. Continue Reading Department of Veterans Affairs Aims to Trump State Telemedicine Rules

A New Jersey Supreme Court case earlier this summer has New Jersey lawyers re-examining their clients’ business structures under the State’s corporate practice of medicine doctrine.

Many states prohibit the corporate practice of medicine (“CPOM”) in order to prevent or limit a lay person from interfering with a physician’s independent medical judgment. In New Jersey, for example, the State Board of Medical Examiners’ regulations prohibit a licensee with a more limited scope of practice (e.g., physical therapists, chiropractors, nurse practitioners, etc.) from employing physicians.

In Allstate Ins. Co. v. Northfield Med. Ctr., P.C., 2017 BL 148804 (N.J. May 4, 2017), the New Jersey Supreme Court  ruled that a chiropractor (and his attorney that advised on the structure) may have violated the Insurance Fraud Prevention Act because, under the structure,  a chiropractor could terminate a physician’s employment at any time and had more control over the practice’s profits than the physician (who is required to own a majority interest of the practice in New Jersey).  Thus, the court ruled that the medical practice was controlled by the chiropractor instead of the physician in violation of the New Jersey CPOM prohibition.

Submitting claims while a practice is structured in violation of the CPOM doctrine can lead to insurers recouping payments as false claims. Individual physicians, corporations, and attorneys can also face disciplinary action for their involvement in setting up or operating the fraudulent entity.

It is important that the organizational documents are set up to give the physician control over the practice, but this control should be exercised in reality and not just on paper. Physicians often have managers run many of the business aspects of the practice, but the physician should have the final say with respect to the medical and financial decisions of the practice and the hiring and firing of professionals.  Courts may look past the face of the documents to see who is really calling the shots on a daily basis.

While this recent case is spurring attorneys to evaluate their clients’ structures in New Jersey, this is a good reminder to take a fresh look at CPOM restrictions in other states as well.  Make sure your structure works at the outset and re-examine every so often to adapt with evolving laws and court interpretations of such laws.

In a major public move that has been long-awaited by proponents of evidence-based stem cell science, FDA Commissioner Scott Gottlieb issued a lengthy statement on August 28, 2017 “on the FDA’s new policy steps and enforcement efforts to ensure proper oversight of stem cell therapies and regenerative medicine.” Continue Reading FDA Commissioner Announces Stem Cell Enforcement Shift, Plans to Develop Comprehensive Regenerative Medicine Policies

Last week, a number of health care industry associations sent letters to Congress detailing ways in which the government could relieve them of the burdens associated with “red tape.” The letters are in response to the first stage of a House initiative dubbed the “Medicare Red Tape Relief Project,” which was announced earlier this summer by the House Committee on Ways and Means’ Subcommittee on Health.  Continue Reading Hospitals and Others Respond to “Red Tape Relief Project” Requests

On the eve of trial, and after years of litigation (including an appeal to the Sixth Circuit), all claims by Dayton, Ohio hospital The Medical Center at Elizabeth Place (“MCEP”) against Premier Health Partners (“Premier”) have been dismissed with prejudice. This case represents an important development in the body of case law addressing the antitrust risk introduced by joint ventures.  Continue Reading District Court Finds Hospital’s Joint Venture Not “Per Se” Unlawful

A New Jersey district court recently denied a motion to dismiss Talone, et. al. v. The American Osteopathic Association, an antitrust class action. The suit alleges that the physician association violated the Sherman Act by illegally tying osteopaths’ board certification to association membership.  The defendant association moved to dismiss, arguing that plaintiffs, a group of affected doctors, had failed to allege sufficient facts to demonstrate foreclosure of competition or antitrust injury.  This alert reviews plaintiffs’ claims, the association’s arguments against them, and the court’s denial of the association’s motion to dismiss.

In an opinion written by Judge Posner, the Seventh Circuit on Friday, June 9, 2017, affirmed OSF Saint Francis Medical Center’s summary judgment win in a $300 million antitrust suit brought by a smaller competitor alleging unlawful exclusive dealing and attempted monopolization.  This alert discusses the Court’s decision in this case, which is a notable precedent for hospitals and provider networks — particularly those with substantial market shares — that wish to negotiate narrow and exclusive network agreements with payors.

By now, you may have heard about the global ransomware attacks affecting health care and other organizations throughout the world, in particular the United Kingdom, but also in the United States. The ransomware variant, called “Wanna Decryption” or “WannaCry” works like any other ransomware: once it is inadvertently installed, it locks up the organization’s data until ransom is paid.  Here are some quick facts about the WannaCry attack and suggestions for avoiding it. Continue Reading Ransomware Attack – Quick Facts