Health Care Counsel

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

Health Care Counsel
Certification, Accreditation & Licensure
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CMS Announces Extension of Meaningful Use Hardship Exception

On October 7, 2014, the Centers for Medicare & Medicaid Services (CMS) announced plans to reopen and extend the deadline for eligible professionals and eligible hospitals to submit a hardship exception application for not demonstrating “Meaningful Use” of Certified Electronic Health Record Technology (CEHRT).

Under the Health Information Technology for Economic and Clinical Health Act (HITECH Act), eligible hospitals, critical access hospitals, and eligible professionals had to demonstrate “meaningful use” of a CEHRT, or face reductions in their Medicare payment. Under certain circumstances, the Secretary of Health and Human Services has discretion to consider hardship exceptions on a case-by-case basis to avoid payment penalties, including issues related to difficulties with vendors obtaining certification.

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Government Investigations & Litigation, Litigation & Alternative Dispute Resolution, Transactions & Regulatory Due Diligence
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Hospitals Face Important Decision on Whether to Accept CMS Settlement Offer for Certain Claims on Appeal

Hospitals Can Settle Certain Claims Now for 68 Percent of Their Value

The Centers for Medicare and Medicaid Services (CMS) recently announced a policy1 allowing acute care and critical access hospitals to settle inpatient-status claims currently on appeal in exchange for a partial payment equal to 68 percent of the claims’ net allowable amount. The claims eligible for the settlement are those that were billed on an inpatient basis but, according to Medicare contractors (particularly the RACs), should have been billed as outpatient or inpatient Part B claims. Claims that have been denied for a reason other than “patient status” are not eligible for the settlement.

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Certification, Accreditation & Licensure, Corporate Governance, Patient Safety Organizations, Product Coverage & Payment
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Medical Emergency Teams Can Recoup Their Costs by Reducing Adverse Events

Studies analyzing the cost-effectiveness of certain medical practices can sometimes indirectly suggest other, seemingly-unrelated benefits to a health care organization’s bottom-line. Such is the case in a study (Study) of medical emergency teams (MET) published in Pediatrics (“Cost-Benefit Analysis of a Medical Emergency Team in a Children’s Hospital,” Pediatrics 2014; 134; 235 (Aug. 2014)).

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Fraud & Abuse Compliance, Prescription Drug Pricing & Government Price Reporting
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Local Drug Take-Back Law Creates Regulatory Burden for Manufacturers

On September 30, 2014, the US Court of Appeals for the Ninth Circuit unanimously held that the first-in-the-nation Safe Drug Disposal Ordinance passed by Alameda County, California is constitutional. The Safe Drug Disposal Ordinance requires all prescription drug manufacturers that sell drugs in Alameda, including both brand name and generic companies, to operate and finance a “Product Stewardship Program.” As part of this Product Stewardship Program, the manufacturers must either individually or jointly provide for the collection, transportation, and disposal of unwanted drugs, regardless of who made them.

Plaintiffs Pharmaceutical Research and Manufacturers of America, the Biotechnology Industry Organization, and the Generic Pharmaceutical Association challenged the ordinance as being unconstitutional because it violates the dormant Commerce Clause by unduly burdening interstate commerce.

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Corporate Governance, Fraud & Abuse Compliance, Government Investigations & Litigation
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The Department of Justice’s New Focus Could Place Health Care Executives at Risk

The US Department of Justice (DOJ) periodically makes statements announcing changes in its planned approach to prosecuting corporations generally. As attorneys for health care providers, we pay close attention to those statements because they often are of particular interest to our clients. On September 25, 2014, Law360 published an article by Arent Fox partner Peter R. Zeidenberg that addresses just that type of DOJ statement.

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Corporate Governance, Office of Inspector General Developments, Payer Disputes & Reimbursement, Product Coverage & Payment
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OIG Finds Commercial Drug Copay Coupons Are Being Used by Medicare Part D Beneficiaries and Warns of Anti-Kickback Statute Exposure

On September 19, 2014, the Department of Health and Human Services Office of Inspector General (OIG) released a Special Advisory Bulletin (SAB) in tandem with the results of an OIG report entitled “Manufacturer Safeguards May Not Prevent Copayment Coupon Use for Part D Drugs” (Report on Copay Coupons) reinforcing the government’s position that the provision of cost-sharing assistance or “coupons” by pharmaceutical manufacturers to or for use by federal health care program beneficiaries implicates the federal Anti-Kickback Statute (AKS).

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False Claims Act
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Health Care Industry: Expect More DOJ Criminal Prosecutions on the Horizon

On Wednesday, September 17, 2014, Leslie Caldwell, Assistant Attorney General for the Criminal Division of the US Department of Justice (DOJ), joined the chorus of federal officials promising heightened criminal enforcement targeting those engaging in fraud against the federal government. Speaking with the members of Taxpayers Against Fraud (an organization supported by whistleblowers/relators and their legal counsel), she stated that DOJ’s Criminal Division is dedicating additional resources to pursuing criminal charges against those who violate the False Claims Act:

Today, I want to announce that we will be stepping up our use of one tool, and that is the fine work done by all of you in investigating and filing cases under the False Claims Act.

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Certification, Accreditation & Licensure
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EHR Certification ... One Step at a Time

Not often that a government agency retreats from a proposal for large-scale regulatory change in favor of fewer requirements in order to provide flexibility and clarity. So it is worth note that the Office of the National Coordinator for Health Information Technology (ONC) did just that when it issued its final rule last week to update criteria for Electronic Health Record (EHR) Certification. In the final rule, ONC “adopted a small subset” of its original proposals revealed in a proposed rule issued back in February.

In the Preamble, ONC states it was driven by its goals and timeline to enhance health information exchange by making the program “more effective and less burdensome in achieving regulatory objectives,” while increasing “regulatory flexibility” and promoting further innovation.

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False Claims Act
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Eighth Circuit Joins Handful of Federal Courts of Appeals to Erode Important Defendant Protections in False Claims Act Actions

An unfortunate trend for defendants in False Claims Act (FCA) cases is continuing as the Eighth Circuit Court of Appeals joined other federal circuit courts in lowering the pleading standards that qui tam relators (whistleblower plaintiffs) must satisfy in FCA cases. In U.S. ex rel. Thayer v. Planned Parenthood of the Heartland, No. 13-1654, 2014 WL 4251603 — F.3d — (8th Cir. Aug. 29, 2014), the Eighth Circuit held that a False Claims Act case can survive a motion to dismiss even if the plaintiff did not specifically identify any false claims in the complaint.

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Fraud & Abuse Compliance, Government Investigations & Litigation, Hospices and Palliative Care
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Two California Nursing Homes Accused of Medicare and Medicaid Fraud

On August 29, 2014, the United States Department of Justice filed an action against two nursing homes located in Watsonville, California for defrauding the Medicare and Medicaid programs. Filed under the False Claims Act (FCA), the lawsuit seeks recovery of $20 million and alleges that the nursing homes “severely overmedicated numerous residents, causing serious injuries and deaths over the course of six years.” Some of the alleged injuries resulting from the overmedication include “infection, sepsis, malnutrition, dehydration, falls, fractures, pressure sores,” and death.

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ABOUT ARENT FOX LLP

Arent Fox LLP, founded in 1942, is internationally recognized in core practice areas where business and government intersect. With more than 350 lawyers, the firm provides strategic legal counsel and multidisciplinary solutions to clients that range from Fortune 500 corporations to trade associations. The firm has offices in Los Angeles, New York, San Francisco, and Washington, DC.