Health Care Counsel

Arent Fox's health care law blog offers news, analysis, and insights for the health care industry.

Health Care Counsel
Fraud & Abuse Compliance, Hospices and Palliative Care
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California Court of Appeal Limits Scope of Patient Rights Claims in Elder Abuse Cases

* The following alert was originally published in California Healthcare News (CHN). To read it on the CHN website, click here.

In recent years, elder abuse cases have become more dangerous and costly. It is not unusual for juries to return verdicts against skilled nursing homes (“SNFs”) for millions of dollars. A new decision from the California Court of Appeal is a positive development for SNFs and their defense attorneys as it may eliminate the use of certain theories and tactics historically utilized in prosecuting elder abuse and negligence cases.

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HIPAA / Health Privacy & Security, Litigation & Alternative Dispute Resolution
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No Harm, No Foul: California Court Denies Class Action Bid Seeking $4 Billion from Provider

On July 22, 2014, the California Court of Appeal, Third Appellate District, found that patients whose confidential health information had been stolen could not sustain a class action absent an allegation that the information was actually viewed by unauthorized third parties.

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Office of Inspector General Developments, Pharmaceutical & Device Compliance, Prescription Drug Pricing & Government Price Reporting, Wholesaler & Pharmacy Benefits Compliance
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OIG Issues Favorable Advisory Opinion to Pharmaceutical Manufacturer on Direct-to-Patient Discount Sales Program

On July 28, 2014, the US Department of Health and Human Services’ Office of Inspector General (OIG) issued a favorable opinion concerning a drug manufacturer’s program to offer a certain branded drug via an online, mail order pharmacy directly to cash-paying customers at a discounted price. In Advisory Opinion 14-05, the OIG concludes that, while aspects of the proposed arrangement implicate the Anti-Kickback Statute (AKS), certain outlined safeguards provide OIG comfort with the proposed arrangement such that the OIG will not impose administrative sanctions on the manufacturer or pharmacy.

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Transactions & Regulatory Due Diligence
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Amendments to Reform ‘Burdensome’ Medicare Regulations Now Effective

On July 11, 2014, amendments designed to reform Medicare regulations that the Centers for Medicare and Medicaid Services (CMS) has identified as “unnecessary, obsolete, or excessively burdensome on health care providers and suppliers” became effective. Published as final rules in the May 12, 2014 Federal Register, the amended regulations affect a broad range of providers and suppliers, including hospitals, long-term care facilities, rural health and primary care facilities, clinical laboratories, transplant centers and organ procurement organizations, ambulatory surgical centers (ASC), and intermediate care facilities for individuals who are intellectually disabled.

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Compliance Program Development & Counseling, Litigation & Alternative Dispute Resolution
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DC Circuit Provides Guidance on Preserving Attorney-Client Privilege in an Internal Investigation

The DC Circuit recently held that the attorney-client privilege applies to internal investigations, even when the investigations are mandated by law and are not conducted with the sole purpose of obtaining or providing legal advice.

In a case that caught the eye of a number of business organizations and trade associations, the court ruled that defense contractor Kellogg Brown & Root (KBR) was not required to disclose confidential communications made during an internal investigation conducted at the direction KBR’s in-house counsel. The court’s opinion provides guidance on how best to protect the confidentiality of communications made during internal investigations.

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False Claims Act, Fraud & Abuse Compliance
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The DOJ Intervenes in ‘Reverse False Claims Act’ Case

Government Steps in After Hospital System’s Alleged Failure to Promptly Return Medicaid Overpayments

On June 27, 2014, the US Department of Justice (DOJ) intervened in a False Claims Act suit against Continuum Health Partners and the Mount Sinai Health System, alleging that the health system failed to return hundreds of thousands of dollars of overpayments to the government in a timely manner. This is one of the first “reverse False Claims Act” cases where the DOJ has filed a complaint-in-intervention claiming a health care provider violated 31 U.S.C. § 3729(a)(1)(G) of the False Claims Act based on the premise that the provider failed to return overpayments within the 60-day timeframe set forth in the Affordable Care Act (ACA).

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False Claims Act
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US Supreme Court Grants Cert in Closely Watched False Claims Act Case

The US Supreme Court this morning granted cert in a closely watched False Claims Act (FCA) case, Kellogg Brown & Root Services, Inc. v. United States ex rel. Carter — a case that raises important questions about wartime suspension of the FCA’s statute of limitations, and about how the FCA’s “first-to-file bar” operates.

How the Court rules will impact how long after an FCA violation the government — or a qui tam relator — can bring suit, and whether multiple relators can bring related actions against a defendant so long as the related actions are not simultaneously pending.

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Payer Disputes & Reimbursement
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Is Anyone Listening? CMS Appoints Provider Relations Coordinator to Field Gripes about RACs

The CMS announced this week the appointment of a Provider Relations Coordinator “to help increase program transparency and offer more efficient resolutions to providers affected by the medical review process.” The “medical review process” garnering the most attention these days is the Recovery Audit Contractor (RAC) program. RACs are the target of ongoing criticism along with pleas to fix a system so backed-up with appeals that Congress placed a moratorium on the program.

According to the statement issued by CMS, questions regarding specific claims should continue to be directed to the RAC responsible for the audit and review. Apparently, the Provider Relations Coordinator will field concerns about “larger process issues,” such as a RAC’s failure to follow program requirements and guidelines.

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Government Investigations & Litigation, Litigation & Alternative Dispute Resolution, Office of Inspector General Developments, Transactions & Regulatory Due Diligence
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OIG Releases Supplemental Guidance for Bona Fide, Charitable Patient Assistance Programs

On May 21, 2014, the Department of Health and Human Services Office of Inspector General (OIG) released a Supplement Specialty Advisory Bulletin entitled “Independent Charity Patient Assistance Programs” (the Supplemental SAB, available here), to supplement its Special Advisory Bulletin on Patient Assistance Programs for Medicare Part D Enrollees (2005 SAB) (70 Fed. Reg. 70623) (Nov. 22, 2005, available here). The OIG was very clear that the additional guidance was not meant to replace the 2005 SAB or any other guidance. However, in several aspects, as explained below, Supplemental SAB modifies existing OIG advisory opinions provided to many bona fide independent charitable patient assistance programs (PAPs).

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Government Investigations & Litigation, Transactions & Regulatory Due Diligence
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Initiative to Amend California’s Medical Injury Compensation Reform Act Qualifies for the November Ballot

On May 15, 2014, an initiative to amend California’s Medical Injury Compensation Reform Act (MICRA) and other statutes qualified for the November ballot. If passed, the initiative titled “The Troy and Alana Pack Patient Safety Act of 2014,” would make several amendments to California law, including:

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