FDA Seeks to Regulate Laboratory Developed Tests

On July 31, 2014, the Food and Drug Administration (“FDA”) announced that it would begin regulating laboratory developed tests (LDTs).  According to the FDA, LDTs are designed, manufactured, and used within a single lab, and include some genetic tests and tests that are used by various health care professionals.  These tests are developed by hospitals, academic, and clinical laboratories in response to unmet clinical needs to ensure patients receive the best possible care.  The FDA considers these tests to be medical devices.

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Absher v. Momence: A Mixed Decision—Limiting and Expanding the False Claims Act

In the ever-expanding area of the federal False Claims Act, the recent decision by the 7th Circuit in Absher v. Momence Meadows Nursing Center Inc., limited pursuing a False Claims Act violation under the worthless services theory but potentially expanded what administrative reports do not trigger the public disclosure bar of the False Claims Act.

Former nurses of the nursing home brought a qui tam suit against Momence Meadows Nursing Center, Inc. (“Momence”), an Illinois nursing home, alleging that Momence had submitted “‘thousands of false claims to the Medicare and Medicaid program”.  U.S. ex rel. Absher v. Momence Meadows Nursing Center, Inc., 2014 WL 4092258, *3 (7th Cir. 2014).    The case went to trial and earlier in February 2014, a jury found that Momence had violated the False Claims Act and provided worthless services, with the court entering a verdict of $9 million.  Momence appealed to the 7th Circuit, which issued its ruling on August 20, 2014.  The 7th Circuit addressed several issues including public disclosure, the scope of the worthless services theory, and scope of false certification under the False Claims Act.  The 7th Circuit ultimately vacated the decision and remanded.  Continue reading

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Filed under False Claims Act, Fraud and Abuse

Cardiology Group to Pay More than $1.33 Million to Settle Allegations of Stark Law and False Claims Act Violations

According to United States Attorney Richard Hartunian of the Northern District of New York, Cardiovascular Specialists, P.C., has agreed to pay the federal government $1,336,636.98 plus interest to settle allegations that it violated the federal Physician Self-Referral Law (also known as the Stark Law) and the federal False Claims Act by knowingly compensating its physicians in a manner that violated federal law. Cardiovascular Specialists is a group practice of cardiologists with offices throughout upstate New York does business as New York Heart Center (NYHC).

USDOJ alleges that NYHC used a compensation system that violated the Stark Law, and thereby the False Claims Act, by compensating each NYHC partner-physician using a formula that took into account the volume or value of that physician’s referrals for nuclear scans and CT scans.   Continue reading

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Filed under False Claims Act, Stark Law

CMS Audit of OPWDD ICFs Seeks Recovery of $1.26 Billion from New York State

New York State is appealing to the Secretary of the United States Department of Health and Human Services (“HHS”) for reconsideration of a July 25, 2014 Centers for Medicare and Medicaid Services (“CMS”) final audit report that found the State liable for $1,257,499,670 in federal Medicaid overpayments.  In its letter to the State, CMS indicated it would be initiating similar reviews of the State’s two subsequent fiscal years based upon the audit findings.  To make matters worse, this federal cost recovery  is in addition to an agreement between the State and CMS to lower Medicaid rates for developmental disability centers, effective April 1, 2013, resulting in an approximately $1.1 billion reduction in federal Medicaid funding annually. Continue reading

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Filed under Health Care Reform, HHS OIG, Medicaid, New York State Agencies

NYC HRA Sued under False Claims Act by Whistleblower; Settles with US DOJ for $1.05 Million

According to United States Attorney Richard S. Hartunian, the City of New York (NYC) has agreed to pay the United States Department of Justice (US DOJ) $1.05 million to settle allegations that the NYC Human Resources Administration (HRA) violated the federal False Claims Act by causing various managed care organizations (MCOs) to provide Medicaid coverage to individuals that HRA knew, or should have known, were ineligible to receive New York State Medicaid benefits because they had moved outside New York State. The case was brought by a whistleblower and investigated by the US DOJ and United States Department of Health and Human Services Office of the Inspector General (OIG). Continue reading

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Filed under False Claims Act, Fraud and Abuse, HHS OIG, Medicaid, Medicaid Fraud, New York State Agencies, NY Office of Medicaid Inspector General, NYC HRA

UPDATE: OMIG Releases Revised Compliance Guidance to OASAS Providers

The Office of the Medicaid Inspector General (“OMIG”) has issued Revised Compliance Guidance for use by providers regulated by the New York State Office of Alcoholism and Substance Abuse Services (“OASAS”). 

The revision clarifies that the Compliance Guidance examples are taken from OMIG Audit Protocols for OASAS Chemical Dependence Programs and Services for dates of service prior to the date that the Ambulatory Patient Group (“APG”) regulations (14 NYCRR Part 822) went into effect.  Once OMIG audit protocols are developed for the APG reimbursement system, OMIG may update this compliance alert.

Check out our original post for more information about this Compliance Guidance.

The Revised OMIG Compliance Guidance for OASAS providers is available here.

Kathleen Evers wrote this post.  For more information, please contact David R. Ross, who served as Acting New York State Medicaid Inspector General under governors Pataki and Spitzer, as well as General Counsel, Deputy Medicaid Inspector General, and Director of Audits and Investigations for the Office of the Medicaid Inspector General.  Prior to his service at the OMIG, David held several positions at the New York State Office of Alcoholism and Substance Abuse Services, including Acting General Counsel, Deputy Counsel, and Associate Counsel.  He can be reached at (518) 462-5601 or via e-mail at dross@oalaw.com.

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Filed under NY Office of Medicaid Inspector General

Congressional Panel Hears HHS OIG Testimony About Increasing Oversight of New York State’s Medicaid Program

The United States Congress House Committee on Oversight and Government Reform, Subcommittee on Energy Policy, Health Care and Entitlements, held a hearing on July 29, 2014 entitled “Examining the Federal Government’s Failure to Curb Wasteful State Medicaid Financing Schemes.” Mr. John Hagg, Director of Medicaid Audits for the United States Department of Health and Human Services Office of Inspector General (OIG), testified, and, at the Subcommittee’s request, focused on the State of New York’s alleged Medicaid compliance issues. Continue reading

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Filed under Fraud and Abuse, Medicaid, Medicaid Fraud, NY Office of Medicaid Inspector General

Congress Questions ONC’s Authority to Pursue Health IT Safety Center

The House of Representatives has grown increasingly skeptical of the Office of the National Coordinator for Health Information (“ONC”) and its plans to expand its programming and reach.  House members have questioned whether the ONC has the authority to make changes it has recently proposed.

In a June 3, 2014, letter to the Office of the National Coordinator for Health Information Technology (“ONC”), the United States House Committee on Energy and Commerce (“Committee”) asked the agency to explain its presumed authority to implement new regulatory measures in the realm of Health Information Technology (“Health IT”).  The letter, signed by Chairman Fred Upton (R-MI), Vice Chairman Marsha Blackburn (R-TN), Subcommittee on Health Chairman Joseph R. Pitts (R-PA), and Subcommittee on Communications and Technology Chairman Greg Walden (R-OR), asked ONC to respond to a number of questions, including “When the authorization for the Medicare and Medicaid Incentive program expires, under what statutory authority does ONC believe it is able to regulate Health IT and electronic health records, particularly in (but not limited to) non-Meaningful Use areas?” Continue reading

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Filed under HIPAA

Attention OASAS Providers: OMIG Releases Compliance Guidance for Inpatient Chemical Dependency Rehabilitation and Outpatient Chemical Dependency Services

The New York State Office of the Medicaid Inspector General (“OMIG”) has released Compliance Guidance for use by providers regulated by the New York State Office of Alcoholism and Substance Abuse Services (“OASAS”).

New York State Social Services Law Section 363-d and the implementing regulations at 18 NYCRR Part 521 require OMIG to routinely identify compliance risk areas relating to the particular type of services being offered by Medicaid providers.  The purpose of the OMIG’s Compliance Guidance is to offer examples of compliance risk areas that may be of particular concern to those providing Inpatient Chemical Dependence Rehabilitation and Outpatient Chemical Dependence services.  Many of the examples are taken from OMIG Audit Protocols for OASAS Chemical Dependence Programs and Services, which can be found on OMIG’s Web site at www.omig.ny.gov.

Update: The OMIG Compliance Guidance for OASAS providers has been revised, and the guidance we wrote about in this post is no longer available online.  Please see our post about the recent revision to this Guidance.

Kathleen Evers wrote this post.  For more information, please contact David R. Ross, who served as Acting New York State Medicaid Inspector General under governors Pataki and Spitzer, as well as General Counsel, Deputy Medicaid Inspector General, and Director of Audits and Investigations for the Office of the Medicaid Inspector General.  Prior to his service at the OMIG, David held several positions at the New York State Office of Alcoholism and Substance Abuse Services, including Acting General Counsel, Deputy Counsel, and Associate Counsel.  He can be reached at (518) 462-5601 or via e-mail at dross@oalaw.com.

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Filed under NY Office of Medicaid Inspector General

The Trouble with RACs

It seems the United States House of Representatives has taken aim at Medicare Recovery Audit Contractors (“RACs”). The RACs are private, non-governmental entities that are authorized by the Medicare program to conduct audits of Medicare providers and suppliers.

In December, 2013, the Office of Medicaid Hearings and Appeals (“OMHA”) sent a letter to providers with “a significant number of Medicare appeals currently pending” informing them that OMHA had temporarily suspended all Medicare claim and entitlement appeals “due to the rapid and overwhelming increase in claim appeals.” At the end of 2013, the number of appeal requests had grown to approximately 15,000 per week. The goal of the suspension was to “allow OMHA to adjudicate appeals involving almost 357,000 claims for Medicare services and entitlements already assigned to its 65 Administrative Law Judges.” The current wait time for a hearing to review the results of a RAC audit with an Administrative Law Judge is over two years. Continue reading

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Filed under Medicare