Breazeale, Sachse & Wilson, L.L.P. RSS Feed Oct 2019 00:00:00 -0800firmwise Facts About Cancer In Louisiana's Industrial Corridor21 Oct 2019 00:00:00 -0800 <p>Locating along the Mississippi River in Louisiana provides a great deal of advantages to petrochemical facilities, such as access to natural gas and a global transportation network. These advantages have created an Industrial Corridor in the Louisiana parishes along the river, such as Ascension, East Baton Rouge, Iberville, St. Charles, St. James, St. John the Baptist, and West Baton Rouge.</p> <p>One claim that is repeatedly made in opposition to new facilities or facility expansions is that people residing in the Industrial Corridor have a greater incidence and mortality from cancer. However, objective data contradicts these claims and establishes that cancer rates and deaths are lower than, or there is no significant difference from, the rest of the state.</p> <p>Louisiana law requires that health care providers report cancer cases to the Louisiana Tumor Registry (LTR). LTR collects all this data and publishes annual reports regarding cancer incidences and deaths. The empirical data published by the LTR shows that cancer rates in the Industrial Corridor do not differ significantly for white men, black men, and black women from the rates for the rest of Louisiana. Rates for all cancers combined in white women were significantly lower than the statewide rate. Additionally, death rates for all cancers combined in the Industrial Corridor were significantly lower than those for Louisiana among whites; blacks in the Industrial Corridor experienced the same mortality rates as their counterparts statewide. <i>Cancer in Louisiana, 2011-2015</i>, Vol. 33, Sep. 2018.</p> <p>A recent report issued by the LTR, <i>Cancer Incidence in Louisiana by Census Tract, 2005 &mdash; 2015</i>, yet again establishes this point. The report provides information, at the census tract level, regarding actual cancer incidences for census tracts that meet the reporting threshold. To be included, it was required that the population count exceed 20,000 and the case count exceed 15 (or greater than or equal to 16) cases when combining the 2005 to 2015 data together. There are about 146 census tracts in the Industrial Corridor and 128 of the census tracts (or 88%) do not have a significantly higher cancer rates.</p> <p>Some also claim that cancer risks are higher in the Industrial Corridor. Again, however, the facts do not support this claim. A study entitled <i>Uneven Magnitude of Disparities in Cancer Risks from Air Toxics</i>, which has been cited by several groups speaking at public hearings in opposition to petrochemical permits, compares estimated risks of cancer based on exposure to certain toxic air pollutants. The vast majority of high risk areas in the study are in the urban areas of Orleans Parish and East Baton Rouge Parish, which is well away from industrial activity. By contrast, the study found that most other census tracts in the Industrial Corridor are at a &quot;Low Risk&quot; of cancer caused by air toxics exposure. In fact, that study notes the &ldquo;residents living adjacent to petrochemical plants fail to report any substantial mortality differentials, meaning that residents at presumably the greatest risk do not report worse outcomes.&rdquo;</p> <p>The claims of environmental groups ignore the fact that there are numerous risk factors for contracting cancer, including diet, obesity, smoking status, and genetics. As to cancer caused by industrial emissions, the LTR's objective analysis establishes that cancer incidences and deaths in the Industrial Corridor are lower than, or there is no significant difference from, the rest of the state. As a result, there is no truth to the claim that cancer incidences and deaths in the Industrial Corridor are higher due to industrial activity.</p> Substantial Changes Proposed to the Stark Law and Anti-Kickback Statute Regulations to Address Regulatory Burdens and Value-Based Care Arrangements15 Oct 2019 00:00:00 -0800 <div style="break-after: page;"><span style="DISPLAY:none">&nbsp;</span></div> <div>On October 9, 2019, the U.S. Department of Health and Human Services (&ldquo;HHS&rdquo;) released proposed changes to the physician self-referral law (the &ldquo;Stark Law Proposed Rule&rdquo;) and the Anti-Kickback Statute (AKS) and the Civil Monetary Penalty Law (CMPL) (the &ldquo;AKS Proposed Rule&rdquo;).&nbsp; These proposed changes to the Stark Law, the Anti-Kickback Statute, and the Civil Monetary Penalty Law contain some of the most significant changes to these laws in the last several years.</div> <div>&nbsp;</div> <div>According to the Centers for Medicare and Medicaid Services (CMS) and the HHS Office of Inspector General (OIG), the Stark Law and AKS Proposed Rules propose new exceptions and safe harbors for certain innovative coordinated care and associated value-based arrangements between physicians, providers such as hospitals, and other healthcare suppliers.&nbsp;&nbsp;</div> <div>&nbsp;</div> <div>These proposed changes to the Stark Law, CMPL and AKS Statute present significant opportunities for new alternative payment and value-based care arrangements, and may also require restructuring and revisions to current arrangements by healthcare providers and others involved in the healthcare industry.&nbsp; An in-depth analysis of these new proposed rules is being prepared by the BSW Healthcare group.</div> <div>&nbsp;</div> <div><u><strong>The Stark Law Proposed Rule <br /> <br /> </strong></u>The Stark Law Proposed Rule includes new proposed exceptions to enable value-based care arrangements and proposed changes to the Stark Law regulations intended to address many of the most challenging aspects raised by the healthcare industry for compliance with the Stark Law.&nbsp; The following are some of the key proposed new exceptions and changes:<br /> <u><strong><br /> New Proposed Stark Law Compensation Exceptions&nbsp;</strong></u><br /> &bull;<span style="white-space:pre"> </span>Value-Based Care Exceptions. CMS proposes new exceptions for value-based care arrangements that satisfy a series of requirements, depending on the level of financial risk undertaken by the parties to the arrangement.<br /> &bull;<span style="white-space:pre"> </span>New Exception for Limited Remuneration to a Physician. CMS proposes a new exception to protect compensation not exceeding an aggregate of $3,500 per calendar year if certain conditions are met.<br /> &bull;<span style="white-space:pre"> </span>New Exception for Cybersecurity Technology and Related Services. CMS proposes a new exception to protect arrangements involving the donation of certain cybersecurity technology and related services.</div> <div style="break-after: page;"><span style="DISPLAY:none">&nbsp;</span></div> <div><br /> <u><strong>New Defined Terms and Regulatory Modifications to the Stark Law&nbsp;</strong></u><br /> &bull;<span style="white-space:pre"> </span>New or Modified Definitions for Key Stark Law Terms. CMS proposes several new definitions of key concepts, including commercial reasonableness, the volume/value standard and fair market value. CMS also proposes to modify the definition of designated health service (DHS) to make clear that an inpatient hospital service is only a DHS if the furnishing of the service affects the amount of Medicare&rsquo;s payment to the hospital under the CMS Inpatient Prospective Payment System. This change has the potential to dramatically reduce the number of hospital claims that may be tainted by a prohibited financial relationship between a hospital and a physician where the physician is not the admitting physician.<br /> &bull;<span style="white-space:pre"> </span>Clarifications to &ldquo;Group Practice&rdquo; Requirements. CMS proposes clarifications to the regulations defining a &ldquo;group practice&rdquo; for purposes of the Stark Law, including revisions that make clear that group practices may not use designated health service specific pods for purposes of distributing profits from a real designated health service.<br /> &bull;<span style="white-space:pre"> </span>Modifications to Various Compensation Exceptions. CMS proposes a series of modifications to various compensation exceptions, including the space lease exception, recruitment exception, fair market value exception.&nbsp;<br /> &bull;<span style="white-space:pre"> </span>Temporary Non-Compliance. CMS proposes to expand the 90-day grace period for certain writing requirements in state law exceptions.<br /> &bull;<span style="white-space:pre"> </span>Period of Disallowance. CMS proposes to delete the conditions for when an entity would know the period of disallowance has ended under the Stark Law.<br /> &bull;<span style="white-space:pre"> </span>Clarification for Electronic Health Records Items and Services. CMS proposes changes to the exception, including modifying the physician contribution requirement and permitting certain donations of replacement technology.</div> <div>&nbsp;</div> <div><u><strong>The Anti-Kickback Statute Proposed Rule&nbsp;<br /> </strong></u>The Anti-Kickback Proposed Rule includes many important proposals that would modify existing AKS safe harbors, create new AKS safe harbors and create new CMPL exceptions.&nbsp;</div> <div>&nbsp;</div> <div><u><strong>New AKS Safe Harbors&nbsp;</strong></u><br /> &bull;<span style="white-space:pre"> </span>Value-Based Arrangements. OIG proposes to create 3 new safe harbors to protect certain remuneration among certain individuals and entities in a value-based arrangement. The three new safe harbors would vary in terms of the type of remuneration that could be provided, the level of financial risk the parties assume and the types of &ldquo;safeguards&rdquo; OIG proposes to include in each arrangement.<br /> &bull;<span style="white-space:pre"> </span>Patient Engagement. OIG proposes to protect furnishing certain tools and support to patients by certain individuals and entities to improve quality, health outcomes and efficiency.<br /> &bull;<span style="white-space:pre"> </span>CMS-Sponsored Models. OIG proposes to protect certain remuneration provided in connection with certain models sponsored by CMS which would reduce the need for HHS to issue individualized fraud and abuse waivers for each model.<br /> &bull;<span style="white-space:pre"> </span>Cybersecurity Technology and Services. OIG proposes to create standalone protection for donations of cybersecurity technology and services.</div> <div>&nbsp;</div> <div><u><strong>Modifications to Existing AKS Safe Harbors&nbsp;</strong></u><br /> &bull;<span style="white-space:pre"> </span>Personal Services and Management Contracts Safe Harbor. OIG proposes to add greater flexibility for part-time and outcomes-based arrangements by removing the part-time schedule requirement and the aggregate compensation set-in-advance requirement.&nbsp;<br /> &bull;<span style="white-space:pre"> </span>Local Transportation. OIG proposes to expand and modify mileage limits applicable to rural areas and for transportation related to patients discharged from inpatient facilities.<br /> &bull;<span style="white-space:pre"> </span>Electronic Health Records Items and Services Safe Harbor. OIG proposes to extend protection for certain related cybersecurity technology, update the interoperability provisions and make the safe harbor permanent by removing the &ldquo;sunset&rdquo; date.<br /> &bull;<span style="white-space:pre"> </span>Warranties. OIG proposes to protect bundled warranties for one or more items and related services.</div> <div>&emsp;</div> <div><u><strong>New Civil Monetary Penalty Law (&ldquo;CMPL&rdquo;) Exceptions&nbsp;</strong></u><br /> &bull;<span style="white-space:pre"> </span>Accountable Care Organization (ACO) Beneficiary Incentive Programs. OIG proposes to codify the Bipartisan Budget Act of 2018 statutory exception for ACO Beneficiary Incentive programs for the Medicare Shared Savings Program.<br /> &bull;<span style="white-space:pre"> </span>Telehealth for In-Home Dialysis. OIG proposes to include the Bipartisan Budget Act of 2018 statutory exception for furnishing telehealth technologies to certain in-home dialysis patients.</div> <div>&nbsp;</div> <div>Copies of the proposed new rules are located at Stark Law Proposed Rule and AKS Proposed Rule.&nbsp;</div> <div>&nbsp;</div> <div>The proposed rules provide that comments for each of the proposed rules may be submitted within 75 days from the date of publication in the Federal Register, which is currently scheduled for October 17, 2019.&nbsp;</div> <div>&nbsp;</div> Coming Soon: Changes to the Private Works Act10 Oct 2019 00:00:00 -0800 <div>The Louisiana Private Works Act contains protections for those that perform work on private construction projects and sets forth a method for contractors and others involved on such projects to recover the costs of their work.&nbsp; The Act does so by providing a mechanism by which enumerated persons are afforded a claim against the owner and general contractor despite no direct contractual relationship with those parties and also allows for claims to be secured against the property itself.&nbsp; In practice, the preservation of these rights is accomplished through the filing of a statement of claim and privilege in the public records, otherwise known as a lien.&nbsp;<br /> &nbsp;</div> <div>Louisiana law has long provided protections for those involved on construction projects, with comprehensive revision and consolidation of such laws in 1922 and again in 1981.&nbsp; Since that time, the Private Works Act has been amended on several occasions with the most recent amendments enacted by Act 325 of the 2019 Regular Legislative Session.&nbsp; These amendments, passed by the legislature and signed into law by the Governor this past summer, contain several rather significant revisions based upon the study and recommendation of the Louisiana Law Institute. (The Louisiana Law Institute is the official law revision commission, law reform agency, and legal research agency of the State of Louisiana.)&nbsp; Act 325 becomes effective January 1, 2020, subject to certain exceptions for projects commenced prior to the effective date.&nbsp;&nbsp;<br /> &nbsp;</div> <div>Under existing law, the deadlines to record liens are currently 30 days, 60 days, 70 days, or an unlimited timeframe under certain facts, with the applicable deadline depending upon several factors.&nbsp; The factors considered include your role on the project (i.e. a general contractor, subcontractor, material supplier, lessor), whether a notice of contract is recorded at the beginning of the project, whether a notice of termination is recorded at the end of the project, and whether the project is for residential purposes. Under the new amended law, there remain multiple deadlines for recording a lien, which still depend on the application of the aforementioned factors.&nbsp; Those deadlines under the new law are 30 days, 60 days, 70 days, 6 months, or 7 months, thereby eliminating any of the circumstances which can create an unlimited lien period under existing law.&nbsp;<br /> &nbsp;</div> <div>Other amendments within Act 325 include (but are not limited to): increasing the project cost threshold from $25,000 to $100,000 for when general contractors must record a notice of contract to preserve their rights, modifying the notice requirements imposed upon lessors of movables, allowing general contractors to initiate a summary proceeding to have a project declared substantially complete, extending the claim against an owner when the owner fails to provide notice of termination of the work upon prior request, clarifying the degree of specificity of property descriptions required in filings, among others.&nbsp;<br /> &nbsp;</div> <div>The purpose of the Louisiana Private Works Act remains unchanged by Act 325, but many of the details are impacted.&nbsp; With the amendments becoming effective in the near future, all players involved on private construction projects in Louisiana should familiarize themselves with the changes to preserve those protections set forth by law with respect to the recovery of the costs of their work.</div> <div>&nbsp;</div> <div style="break-after: page;"><span style="DISPLAY:none">&nbsp;</span></div> CMS Announces Initiative to Enhance Nursing Home Transparency09 Oct 2019 00:00:00 -0800 <div>On Monday, October 7, 2019, the Centers for Medicare &amp; Medicaid Services (&ldquo;CMS&rdquo;) announced an enhancement available to nursing home residents, families and caregivers on CMS&rsquo; &ldquo;Nursing Home Compare&rdquo; website.&nbsp; By the end of the month, CMS will display a consumer alert icon next to nursing homes that have been cited on inspection reports for one or both of the following: 1) Abuse that led to harm of a resident within the past year; and 2) Abuse that could have potentially led to harm of a resident in each of the last two years.</div> <div>&nbsp;</div> <div>The Nursing Home Compare website is available <a href="">here.</a></div> CMS Finalizes DSH Medicaid Payment Reductions08 Oct 2019 00:00:00 -0800 <div>On September 25, 2019, the Centers for Medicare &amp; Medicaid Services published a final rule detailing the methodology for implementing the Affordable Care Act (&ldquo;ACA&rdquo;) reductions to state Medicaid Disproportionate Share Hospital (&ldquo;DSH&rdquo;) allotments beginning in FY 2020. The final rule calculated $4 billion in state Medicaid DSH cuts for FY 2020 and an estimated $8 billion for each subsequent year through 2025.<br /> &nbsp;</div> <div><strong>BACKGROUND</strong></div> <div>Federal law requires that state Medicaid programs make DSH payments to qualifying hospitals that serve a large number of Medicaid and uninsured patients.&nbsp; However, the ACA modified the amount of funding available to states under the Medicaid program, in anticipation of lower levels of uncompensated care and lower rates of uninsured patients.&nbsp;</div> <div>In 2013, CMS issued a final rule to implement the ACA state Medicaid DSH allotment reductions. Subsequent legislative actions delayed the implementation of the reduction until FY 2020. However, a resolution approved in late September by both the U.S. Senate and House of Representatives temporarily provided an extension to the current DSH funding through November 21, 2019.&nbsp; The reduction was originally scheduled to go in effect on October 1, 2019.&nbsp;<br /> &nbsp;</div> <div><strong>NEW METHODOLOGY</strong></div> <div>The final rule sets forth a number of factors required in the methodology by the ACA, including: the rate of uninsured in each state, the volume of Medicaid inpatients, and the level of uncompensated care. The current DSH formula has not changed since 1992.&nbsp;<br /> &nbsp;</div> <div>A copy of the full text of the final rule is <a href="">available here.</a></div> <div>&nbsp;</div> <div style="break-after: page;"><span style="DISPLAY:none">&nbsp;</span></div> Management Update Newsletter Volume 8, Issue 1004 Oct 2019 00:00:00 -0800 Tips For Hospitals On Bayou Health Plan Agreements23 Sep 2019 00:00:00 -0800 <p>When reviewing participating provider agreements with Bayou Health Plans, hospitals should keep the Louisiana Department of Health (&ldquo;LDH&rdquo;) requirements in mind as they carefully review proposed agreements for potential pitfalls. The following are some tips for hospitals to consider.</p> <ol> <li><u>Who is included in the agreement?</u> Although the question of who are the parties to an agreement seems simple enough, it can be trickier than expected. Hospitals should carefully review information on the identity of the contracting entity. Further, some agreements reference &ldquo;Affiliates&rdquo; and the ability of those Affiliates to access the provider agreement. Sometimes an the agreement includes an attachment listing affiliates. Often times, the term is defined broadly to include a significant number of additional parties.</li> <li><u>What programs are covered?</u> Another important initial consideration is whether the hospital intends the agreement to cover only services payable under the Louisiana Medicaid/Bayou Health Program. If so, it is important to identify (and remove) language that would obligate the hospital to participate in other products such as health plans purchased on the exchange, Medicare Advantage plans, or other commercial products offered by the health plan.</li> <li><u>Provider Manual, Policies and Procedures.</u> Virtually all provider agreements reference the applicability of a plan&rsquo;s manual, policies and procedures. Hospitals should review these documents because they may be more restrictive than the requirements in the provider agreement. For example, manuals often contain detailed information about dispute resolution processes that have a significant impact on the ability challenge or enforce the agreement</li> <li><u>Amendments.</u> Provider agreements, like most contracts, contain provisions regarding how the contract itself may be amended. Often, there is a provision that states that the agreement cannot be amended absent the written agreement of the parties. It is not uncommon to see language in provider agreements which allows a health plan to update its provider manual, policies, or procedures through electronic notice or a newsletter. These changes can have significant impacts on providers and hospitals should consider including language which would require prior notice and acceptance in writing by the provider of certain changes. Further, hospitals should be wary of provisions that allow a health plan to amend the agreement upon written notice to the provider, where the provider does not object within thirty days, after receiving written notice of the proposed amendment.</li> <li><u>Handling Clean Claims.</u> As a part of its agreement with health plans participating in the Bayou Health Program, the LDH requires that health plans pay 90% of all clean claims of each provider type within fifteen business days of the date of receipt. Further, plans must pay 99% of all clean claims of each provider type within thirty calendar days of the date of receipt. The date of receipt is the date that the health plan receives the claim (showed by its date stamp on the claim). The date of payment is the date of the check or other form of payment. Hospitals should be mindful of this baseline set by LDH.</li> <li><u>Can they do that?</u> Louisiana Medicaid MCO provider agreements frequently allow for the imposition of financial penalties or sanctions by the health plan. <i>Can they do that?</i> Yes, they can. LDH allows for plans to impose monetary penalties, sanctions or reductions in payment by a health plan for a provider&rsquo;s specific failure to comply with a contractual or credentialing requirement. These include, without limitation, a provider&rsquo;s failure or refusal to respond through the plan&rsquo;s request for information, the request to provide medical records, or credentialing information. However, hospitals should make sure agreements contain appropriate notice provisions and appeal rights so that they can challenge the proposed penalty, sanction, or reduction in payment.</li> <li><u>Timely Submission of Claims.</u> The LDH allows providers to submit all clean claims for payment no later than twelve (12) months from the date of service.</li> <li><u>Offsetting/Recoupments.</u> Some agreements give plans the right to immediately offset or recoup amounts allegedly owed to the plan. La. R.S. 22:1832, of the Louisiana Insurance Code, requires that providers be given written notice, including certain information with an explanation of the reason for the recoupment request.</li> <li><u>Check out the Cheat Sheet!</u> Don&rsquo;t miss the LDH&rsquo;s helpful requirement checklist, most recently updated on August 19, 2014. It&rsquo;s available at the following website and includes a five page list of 61 different items:&nbsp;<a href=""></a>.</li> </ol> This Summer's Healthcare Enforcement Trends20 Sep 2019 00:00:00 -0800 <p>Summer is traditionally a slow time for everyone, including those in law enforcement. But this summer was a little &ldquo;hotter&rdquo; enforcement-wise. Here are a few observations from the recent enforcement cases that have emerged this summer.</p> <p>1. <u>The Opioid Epidemic.</u> Since the beginning of the summer, the trend in both Department of Justice and HHS-OIG enforcement continues to be weighted heavily in the prosecution and civil enforcement in matters related to the opioid epidemic. Some of these cases involve ongoing opioid prescription abuse (pill mills and pill mill doctors), while others involve drug diversion, which is a common problem in larger clinics and hospitals. The common drug diversion schemes&mdash;some more sophisticated than others&mdash;involve: (1) the diversion in the prescription itself&mdash;i.e., when someone other than the doctor has access to prescribing documents; (2) the substitution of a controlled substance with a non-controlled substance, either at the distributor, pharmacy, or clinic level; and (3) the prescription of opioids to &ldquo;straw men&rdquo; who are paid to divert the drugs to others.</p> <p>Larger institutions are likely to have more robust compliance systems in place to catch diversions early. However, as with any problem tied to addiction, the effort to control diversion is a bit like Whack A Mole&mdash;once one scheme is discovered and new compliance measures are enacted to prevent it from happening again, the schemers find a new and, at times, more sophisticated ways to achieve their end goal. While it&rsquo;s hard to prevent the actions of a smart bad actor (smart drug diverters are harder to catch), regular training and continued diligence by all employees to follow up on what seems out of the ordinary is one good way to uncover theft and diversion sooner rather than later. Unfortunately, abuse and fraud involving opioids is not likely to decrease in the near future.</p> <p>2.&nbsp;<u>Laboratories, Treatment Facilities, and Hospitals.</u> Although clinical diagnostic laboratories have been on the government&rsquo;s radar screen for several years, we are beginning to see more enforcement actions becoming public, especially for the time period between 2011-2016, before the reimbursement model changed. Because clinical diagnostic laboratories generally face a competitive market, many of the enforcement actions that we are seeing now involve violations of the Anti-Kickback Statute. Thanks to the ongoing opioid epidemic, we should continue to expect the increased scrutiny of laboratories and substance abuse treatment facilities as we see more and more schemes to game the system.</p> <p>Once such scheme that came to light this summer implicated several rural hospitals in Florida and Georgia. On July, 9, 2019, the Department of Justice issued a press release regarding a guilty plea entered by the owner of a substance abuse treatment facility for his alleged involvement in a $57 million money laundering conspiracy. It involved not only the treatment facility and a laboratory, but also several rural hospitals. (United States v. Marcotte, Middle District of Florida). The owner of the treatment facility entered into an agreement with the owner of a laboratory for reference of urine drug testing to the laboratory in exchange for receiving 40% of the insurance reimbursements. The lab owner, in turn, arranged with the managers of two rural hospitals to have the testing billed to private insurers through the hospitals and reimbursed at favorable rates under the hospitals&rsquo; in-network contracts insurers. The lab owner subsequently acquired a hospital in Georgia and other rural hospitals, and continued to broker deals with other substance abuse treatment facilities to have the samples sent to his lab and billed through his hospitals. Over $50 million in payments were made to companies and individuals as part of the scheme that the defendant concocted. Stay tuned to see more convictions as well as civil settlements arising from this scheme, and potentially similar pass-through schemes that have undoubtedly arisen throughout the nation.</p> <p>3.&nbsp;<u>Claims Involving Medical Necessity.</u>&nbsp;Traditionally, claims that a certain treatment was not medically necessary have been hard for the government to prove, both criminally and civilly, because of the element of medical judgment involved in treating patients. Further, because every patient is different, it&rsquo;s hard to extrapolate data to accurately predict an error rate, and the alternative&mdash;the review of thousands of medical records&mdash;is a laborious and expensive endeavor. Traditionally, such claims have been easier to prove where the service was provided in total disregard for the patients&rsquo; actual medical conditions.</p> <p>A recent ruling in a suit brought under the False Claims Act suit involved a question of whether a claim for hospice treatment under Medicare may be deemed &ldquo;false&rdquo; where the defendant hospice providers certified patients as eligible for the hospice benefit based on erroneous clinical judgments regarding the patients&rsquo; conditions. (United States v. Asercare, Inc., Eleventh Circuit, No. 16-13004, 9/9/19). The government contended that the patients were not in fact terminally ill at the time of certification, and thus the provider&rsquo;s claims to Medicare were false. The district court, and subsequently the court of appeals, were tasked with deciding whether a medical provider&rsquo;s clinical judgment that a patient is terminally ill could be deemed false based merely on the existence of a reasonable difference of opinion between experts as to the accuracy of that prognosis. The appellate court agreed with the trial court and found that, for purposes of the False Claims Act, the clinical judgment of terminal illness warranting hospice benefits under Medicare cannot be deemed false when the only evidence supporting the alleged falsity of the statement involves a reasonable disagreement between medical experts as to the accuracy of the medical opinion.</p> <p>The ruling in the Asercare affirms that it is hard for the government to win a claim of unnecessary medical services based on expert testimony alone. However, the ruling may be limited in some part to its facts, most specifically, the difficulty in predicting a patient&rsquo;s life expectancy. Under Medicare regulations, &ldquo;terminally ill&rdquo; means that the patient &ldquo;has a medical prognosis that the individual&rsquo;s life expectancy is 6 months or less.&rdquo; This is something that could vary significantly based on an individual&rsquo;s specific characteristics.</p> <p>In contrast, in another case involving medical necessity that was settled this summer before the ruling in Asercare, the government pursued claims against the nation&rsquo;s largest operator of inpatient rehabilitation facilities based in part on its claim that the inpatient rehabilitation facilities admitted (and treated) patients who were not eligible for admission because they were too sick and/or disabled to participate in or benefit from IRF.&nbsp;(United States ex rel. Simon, v. HealthSouth Corp., No. 08-CV-236, Middle District of Florida.)&nbsp;The defendant settled the claims against it for $48 million, although no specific finding or admission on the issue of medical necessity was made in the record. &nbsp;</p> <p>Time will tell the effect of the Asercare ruling on the government&rsquo;s decisions on pursing medical necessity claims where there is conflicting expert testimony on the issue.</p> <p>4.&nbsp;<u>Behavioral Health.</u> Behavioral health is a perennial source of enforcement actions, partly because there is a certain population that seems destined to cycle in and out of inpatient, partial hospitalization, and outpatient care. Manipulation and control of this population can produce a near-constant revenue source. Thus, behavioral health&mdash;like clinical laboratory testing, substance abuse treatment, DME, and home health&mdash;is rife with accusations of fraud and abuse, particularly in the form of prohibited inducements.</p> <p>Unfortunately, hospital administrators have been known to fall to the temptation of paying for client referrals. One CFO/COO from the Houston, Texas area, Starsky Bomer, was recently sentenced to ten years in prison for orchestrating a scheme in which he and others paid illegal bribes and kickbacks to group home owners and &ldquo;patient recruiters&rdquo; in exchange for the referral of Medicare patients to the facilities he was responsible for. The prosecutors presented evidence at trial that Bomer knew that many of the patients admitted to the facilities did not qualify for, and were in fact never provided, legitimate partial hospitalization services.</p> <p>As the author notes from her own experience prosecuting and defending healthcare providers, it can be very difficult to attract patients in an environment where kickbacks and bribes are the status quo. Nevertheless, the cost of non-compliance is not worth the potential revenue gained by resorting to the level of non-legitimate providers.</p> The 2015 WOTUS Rule Is Repealed13 Sep 2019 00:00:00 -0800 <p>The EPA and the Corps of Engineers have taken the first of two steps to repeal and replace the definition of &lsquo;waters of the United States&rsquo; promulgated by the Obama Administration in 2015 (the 2015 Rule). The definition establishes the jurisdictional reach of the EPA and Corps under the Clean Water Act to regulate navigable waterways, tributaries, and their adjacent wetlands. The 2015 Rule had been widely criticized as being overly expansive because more waterways, tributaries, and wetlands were considered to be subject to jurisdiction.</p> <p>When it was published, the 2015 Rule spawned lawsuits in multiple district courts and appellate courts, ultimately resulting in a patchwork of regulation. In 22 states, the 2015 Rule applied, but in the rest of the states, the pre-2015 rule applied. When the Trump Administration took office, it vowed to repeal the 2015 Rule (Step One) and replace it (Step Two) with a new definition that would clearly define where federal jurisdiction begins and ends in accordance with the CWA and Supreme Court precedent. The Step Two proposal for a new definition was published in December, 2018.</p> <p>The recent action completes Step One - the repeal of the 2015 Rule and the reinstatement of the rule in place prior to the 2015 revision. The agencies stated that they took the final action to eliminate the ongoing patchwork of regulation and provide regulatory certainty. The agencies stated that restoring the prior regulation is preferable to maintaining the 2015 Rule because returning to the pre-2015 regulations will reinstate a longstanding regulatory nationwide framework that is more familiar to and better understood by the agencies, regulated entities, and the public.</p> <p>The agencies provided several justifications for the repeal of the 2015 Rule. Chief among them is the conclusion that the 2015 Rule exceeded the agencies&rsquo; authority under the CWA by adopting an overly expansive interpretation of the &lsquo;significant nexus&rsquo; standard articulated by Justice Kennedy in the Supreme Court&rsquo;s 2006 <i>Rapanos</i> decision. In <i>Rapanos</i>, Justice Kennedy concluded that the CWA covers only &ldquo;waters that are or were navigable in fact or that could reasonably be so made&rdquo; as well as waters, such as tributaries and adjacent wetlands, with a &ldquo;significant nexus&rdquo; to navigable waters in the traditional sense. The agencies now view the significant nexus standard as a &ldquo;limiting test necessarily constraining overly broad applications of the statute.&rdquo; The 2015 Rule, however, broadened the meaning and application of the terms &lsquo;tributary,&rsquo; &lsquo;adjacent&rsquo; and &lsquo;significant nexus&rsquo; to support the assertion of federal regulation over nearly all waters within large watersheds. The broad interpretations in the 2015 Rule impermissibly expanded the scope of federal jurisdiction, resulting in the regulation of waters beyond what Congress intended.</p> <p>Additionally, the agencies concluded that the 2015 Rule failed to adequately consider and accord due weight to CWA provisions that afford the states the right to plan the development and use of land and water resources. The 2015 Rule expanded jurisdiction over the pre-existing regulatory regime in a manner that encroached on traditional state land-use regulation and the authority of states to regulate state waters.</p> <p>The Step One repeal rule is effective 60 days from publication in the Federal Register. Now, the EPA and the Corps will turn to Step Two &ndash; finalizing a rule that, in their words, will clarify federal authority under the CWA in a clear and understandable way. It is very likely, if not a certainty, that the Step Two rule will spawn its own set of district court challenges that may create another patchwork of regulation until the Supreme Court ultimately speaks again about the scope of federal jurisdiction over &lsquo;waters of the US.&rsquo;</p> Management Update Newsletter Volume 8, Issue 901 Sep 2019 00:00:00 -0800