Many areas of the False Claim Act are subject to legal interpretation and have been subject to Circuit splits, sometimes resulting in rulings from the Supreme Court. In the United States, there are thirteen federal circuit courts that provide intermediate appellate review of the federal district courts in several states. The decision by a circuit court has binding authority on the district courts within its jurisdiction. When there is a conflict between circuit courts on an important issue it creates the basis for review by the Supreme Court.
One such area that is currently subject to a Circuit split is the standard to which a relator or the government must plead their case for the False Claims Act. The Federal Rules of Civil Procedure, Rule 9(b), requires that when alleging fraud or mistake, “a party must state with particularity the circumstances constituting fraud or mistake.” F.R.C.P. Rule 9(b). Continue reading
On June 27, 2014, in the case of United States ex rel. Kane v. Healthfirst, Inc., et al., No. 11-2325 (S.D.N.Y.), the United States Department of Justice (USDOJ), via the United States Attorney’s Office for the Southern District of New York, sued several Medicaid providers under the federal False Claims Act for failing to return Medicaid overpayments within 60 days of identifying them. Continue reading
One of the lingering questions about the Health Insurance Marketplace created under the Affordable Care Act is whether plans on the Marketplace are considered part of a Federal health care program, thus opening up potential liability under the Anti-Kickback Statute. There was concern that the broad language defining a “Federal health care program” would apply to the Exchanges because of the federal tax subsidizes provided to individuals on the private market. Under 42 U.S.C. 1320a-7b(f)(1), a “Federal health care program” is defined as “any plan or program that provides health benefits, whether directly, through insurance, or otherwise, which is funded directly, in whole or in part, by the United States Government.” This presented the possibility that, by virtue of the inclusion of federal subsidy payments, even private insurance plans on the Marketplace and the state Exchanges would constitute Federal health care programs and necessitate compliance with the entire array of federal legal requirements. Continue reading
The Office of Inspector General for the Department of Health and Human Services (OIG) and the Centers for Medicare and Medicaid Services (CMS) published on April 10, 2013 proposed rules to extend and amend the Electronic Health Records (EHR) donation exceptions under the Anti-Kickback Statute and Stark Law, respectively.
The proposed rules would extend the exceptions until the end of 2016, but both the OIG and CMS are seeking comments on extending the sunset date to December 31, 2021, which corresponds to the end of the EHR Medicaid incentives program. Under the current law, both exceptions are set to sunset on December 31, 2013 .
In addition, the OIG and CMS propose to amend the conditions of the EHR donation exceptions by removing the electronic prescribing requirement and redefining (i.e. limiting) the type of entities that can donate. The current EHR donation exceptions permit donations by any individual or entity that provides patients with health care items or services covered by a Federal health care program, based on a public policy initiative to expedite adoption and use of EHR systems. The proposed rules would remove, among other entities, clinical laboratories and pharmacies from the definition of a protected donor.
Finally, the OIG and CMS propose to address a critical issue identified as “data and referral lock-in,” in which EHR technology that appears to support the interoperable exchange of information on its face, in practice restricts the recipient provider to transmit data and communicate only with the donor entity to control referrals. In response, the OIG and CMS propose to require that the donated EHR software is certified in accordance with the definition of Certified EHR Technology applicable on the date of the donation. Under the current law, both exceptions require only that the EHR software is interoperable.
Comments on the proposed rules will be accepted for 61 days from the date of publication, which is June 10, 2013.
This post is contributed by Charles Dunham.
As a result of a recent Congressional report on New York State’s Medicaid program, the Legislative Gazette has reported that Senate Republican leader Dean Skelos and New York State Senate’s Republican Conference have called for an independent audit of the New York State Medicaid program. A Congressional panel had requested that federal auditors review New York State’s $54 billion Medicaid spending and fraud, waste and abuse oversight programs.
A previous post on this blog, available here, reported that the U.S. House of Representatives Committee on Oversight and Government Reform issued a report entitled “Billions of Federal Tax Dollars Misspent on New York’s Medicaid Program.” Among its conclusions are that fraud, waste, abuse and mismanagement has permeated the New York State Medicaid program for decades; that New York must crack down on wealthy individuals posing as indigent patients, as well as on allegedly excessive salaries paid to health care executives; and that New York overcharged the federal government $15 billion on its developmentally disabled patient facilities and that the state must repay an appropriate amount of the funds.
The report also questioned the operations of the New York State Office of the Medicaid Inspector General (OMIG), which is tasked with investigating and auditing the misspending of taxpayer funds. Congressional officials said either the federal Centers for Medicare and Medicaid Services (CMS) or the Government Accounting Office (GAO) must send auditors to New York to review the OMIG and various Medicaid programs.
Senator Dean Skelos said that “An immediate, independent audit of the entire state Medicaid system is imperative” and also that “These are serious allegations against OMIG.”
Recently, current and past employees of the OMIG have publicly criticized the OMIG and alleged that the office is performing poorly and that its staff suffers from low morale.
The Legislative Gazette article is available here.
For more information, please contact the author, David R. Ross, who served as Acting 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 OMIG.
A Brooklyn dentist who alleged that his career was ruined by a New York State Attorney General’s Office Medicaid Fraud Control Unit (MFCU) investigation has won a $7.7 million verdict against two of then-Attorney General Eliot Spitzer’s staff members.
According to court papers filed by Dr. Leonard Morse’s attorney, available here, the dentist was pursued by Elliot Spitzer’s MFCU because he was one of the top Medicaid billers in the state with 30,000 patients, almost all of whom were Medicaid eligible. He was criminally charged with stealing more that $1 million in false billings for dentures but was acquitted at trial. The dentist alleged that he lost his practice and his credibility in the field as a result of the publicity. He also alleged that the MFCU individuals had fabricated evidence.
After winning his case against his accusers, a legal battle that took almost 7 years, Dr. Morse was quoted in a New York Daily News article (available here) as feeling “totally vindicated.”
The jury deliberated for merely three hours. After requesting a calculator from the Judge, they rendered its $7.7 million verdict.
The AG’s office had no official comment but apparently they will appeal.
The New York Daily News also reported that Dr. Morse may have a new patient. As he was leaving the courtroom, one of the jurors in the case asked him to look at his tooth.
For more information, please contact the author, David R. Ross, who served as Acting 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 (OMIG).
The complaint in this case may be found here: Morse v Spitzer (Complaint)
The New York Daily News article may be found here: http://www.nydailynews.com/dentist-wins-7-7m-ex-spitzer-staff-article-1.1262539
Over the past several years, some commercial insurers have made a concerted effort to reduce costs associated with laboratory services, which physicians have increasingly relied upon in diagnosing and treating patients. In particular, insurers are concerned with the rise in laboratory services being performed out-of-network and the increased costs associated with such claims. Despite the imposition of higher premiums for out-of-network benefits, insurers are attempting to do indirectly – what they cannot do directly – to restrict the ability of health plan members to receive laboratory services from out-of-network providers.
A federal complaint was filed on November 14, 2012, in the Northern District of California that highlights the extent of such activities alleged to have been taken by Aetna, Inc., Blue Shield of California, and Blue Cross and Blue Shield Association in violation of federal and state law, and charges that such efforts are being initiated in concert with Quest Diagnostics Incorporated, the largest clinical laboratory provider in the nation. Rheumatology Diagnostics Lab., Inc. et al v. Blue Shield of Cal. Life & Health Ins. Co. et al, Case No. 12-5847 (November 14, 2012).
In short the complaint alleges that Aetna and Blue Shield, in order to receive capitated rate discounts on laboratory services, have conspired with Quest to direct all laboratory testing business to Quest by controlling referrals and reducing competition by the following: Continue reading
Today, the New York State Office of the Medicaid Inspector General (“OMIG”) posted its 2011 Annual Report. We will post a detailed analysis in the coming days. In the meantime, the report may be accessed here.
On May 17, 2012, the U.S. Department of Health and Human Services, Office of Inspector General (OIG) released a report that found Medicaid overpayments to New York State-operated developmental centers. The OIG concluded that, in 2009, State-operated facilities for the developmentally disabled received $1.7 billion in Medicaid payments in excess of the reported costs of these facilities. The Medicaid rates paid to these New York State-operated facilities were ten times higher than the rates paid to private Intermediate Care Facilities in New York, which the OIG found comparable. The OIG determined that these overpayments had occurred for two decades and that they are still occurring in 2012. In fact, in fiscal year 2011, the daily payment rate to New York’s developmental centers was $5,118, which represented a 24 percent increase since 2009 and means that State-run developmental facilities are being paid approximately $1.9 million per year for each individual patient. This surprising increase was triggered by the formula for Medicaid payment rates for patients in developmental centers, which allows State-operated facilities to collect roughly two-thirds of the total Medicaid payment after an individual who has left the facility. Continue reading
In accordance with federal law, the OMIG has finalized proposed regulatory changes to conform New York State law to federal law regarding the withholding of payments to Medicaid providers when there is a “credible allegation of fraud.” This requirement is imposed on States that participate in the Medicaid program as part of the the Affordable Care Act (see 42 CFR § 455.23). The regulations that have been modified are 18 NYCRR 518.7 and 18 NYCRR 518.9. 18 NYCRR Part 518.9 has incorporated the above federal regulation by reference in its entirety.
There was public comment on the proposed regulatory changes. However, the OMIG did not make any changes as a result of the public comment. A minor technical correction was made in 18 NYCRR § 518.7(a)(1) in that the term “law enforcement agency” was deleted and replaced with the term “law enforcement organization.” Continue reading