February 2013 Health Care Compliance Update
WK Health Law Daily
The WK Health Law features the latest news involving Medicare, Medicaid, health care reform, health care compliance, fraud and abuse, and other health care reimbursement and compliance topics. The Daily is delivered via email to the customer’s computer, tablet, or smart phone. News stories include links to full text documents: cases, administrative decisions, regulations, new laws, and more. For more information, go to
PRRB Smart Chart
The Provider Reimbursement Review Board (PRRB) conducts hearings and renders decisions on cost report appeals from Medicare providers. PRRB decisions are reviewable by the CMS Administrator and by the courts.The PRRB Smart Chart has been designed to help customers quickly find and track PRRB decisions on health care topics as well as subsequent related decisions by the CMS Administrator and the federal courts. The Smart Chart includes decisions from 2003 to the present.The PRRB Smart Chart is an add-on to any customer whose subscription includes the Medicare and Medicaid Guide online. This new offering emphasizes why the Medicare and Medicaid Guide, especially on IntelliConnect, is the “go-to” resource for timely primary source information and analysis related to the Medicare and Medicaid programs.The PRRB Smart Chartis on IntelliConnect under Tools/Smart Charts—Health Care Compliance and Reimbursement – PRRB Smart Chart.
Health Care Compliance Letter
The last monthly edition of the Health Care Compliance Letter was mailed on January 15, 2013. The next edition will be published in March 12, 2013.
Journal of Health Care Compliance
The March/April issue of the Journal of Health Care Compliancemailed to subscribers on March11, 2013.
Health Care Compliance Professional’s Manual
The next update to the Health Care Compliance Professional’s Manual will mail to subscribers on March 12, 2013.
Health Law Daily – February 2013 Compliance Related Stories
FCA claims against a doctor’s for allegedly billing Medicare for noncovered cataract surgical services require a trial to resolve issues. A qui tam relator’s claim against a doctor for submitting fraudulent bills for payment to Medicare for lens rotations disguised as lens repositions and duplicative evaluation and management services will proceed to trial (United States of America ex rel. Armfield v Gills, January 30, 2013, Whittemore, J). Allegations posed by Samuel Armfield, M.D. (Armfield), against Dr. James P. Gills claiming violations of the False Claims Act include: (1) the false use of CPT® Code 66825 for the lens repositioning procedure because it was not performed in an operating room; (2) the false use of CPT® code 66825 for the lens repositioning procedure because the repositioning constitutes a refractive procedure that is not covered by Medicare; and (3) the lens repositioning procedure was not medically necessary. The court concluded that resolution of the issue depends on the credibility of the parties' respective experts with regard to the scope and interpretationof the applicable regulatory provisions, the medical necessity of a repositioning of the lens for Medicare purposes, and whether a reasonable jury could find, if the Medicare claims were not reimbursable, that they were submitted with the knowledge that they were not reimbursable.
Complaint that fraudulent promotion of a drug violated the FCA survives a motion to dismiss. Allegations that fraudulent actions by five drug companies caused physicians and pharmacists to submit claims for reimbursement to the federal government were sufficient to state a claim in qui tam action under the False Claims Act(U.S. ex rel. Dickson v Bristol Myers Squibb Company, January 30, 2013, Herndon, D). The relator alleged the drug companies instructed their sales force to present various data and studies in a manner designed to confuse physicians and make them believe that Plavix® was more effective than cheaper alternatives.In addition, she alleged that the drug companies specifically instructed their sales force, including the relator, to “focus sales calls on physicians who wrote significant numbers of prescriptions for patients covered by certain government payors.” An allegation that the drug companies caused physicians to certify that Plavix® was reasonable and necessary when it wasnot,sufficiently stated a plausible claim under the FCA to survive a motion to dismiss from the drug companies, the court held.
FCA alternate remedy is not available to qui tam relators.Two qui tam relators were not entitled to a share of the restitution ordered in a criminal conviction against two physicians also named in the qui tam case because the criminal conviction was not an alternate remedy for settling a qui tam case (U.S. ex rel Babalola v Sharma, February 1, 2013, Lake, S). In a qui tam case, relators are entitled to a share of the amount recovered from a civil finding of fraud under the False Claims Act (FCA). Under 31 U.S.C. §3730, the portion the relators are entitled to under the FCA is preserved if the government pursues an alternative remedy against the parties named by the relators. In this instance, the government did not pursue a claim under the FCA and as such the criminal conviction was not an alternate remedy to an existing FCA claim. The government’s motion for summary judgment was granted.
Employee FCA complaint against a Nevada Medicaid contractor proceeds to trial.A former employee of APS Healthcare, Inc. pleaded certain claims of fraud with sufficient particularity to withstand APS Healthcare’s (APS) motion to dismiss (U.S. v APS Healthcare, Inc., January 30, 2013, Du, M). The relator provided enough facts in her complaint to demonstrate that APS violated the False Claims Actby knowingly presenting or causing to be presented, a false or fraudulent claim for Medicaid payment. Also, her complaint for retaliation in the work place for being a whistleblower met the three elements necessary to proceed. A number of her counts were dismissed because they had more to do with APS failing to meet the terms of its contract with the state of Nevada, and they were not related to the submission of a false claim.
Double jeopardy did not attach to a second indictment against a physical therapist for health care fraud conspiracy.The indictment of a physical therapist previously acquitted of conspiracy to commit health care fraudwas not prohibited by the Double Jeopardy clause of the Fifth Amendment or collateral estoppel because the indictment alleged his participation in a separate and distinct conspiracy to commit fraud(U.S. v Meda, February 1, 2013, Hood, D). The indictment charged the physical therapist employed by Acure Home Care, Inc. (Acure) with one count of conspiracy to commit health care fraud and one count of health care fraud. He had been acquitted of a charge of conspiracy to commit health care fraud while working for two other physical therapy agencies. The indictment involving those agencies did not include any of the alleged conspirators involved in Acure, except one.
HHS issues final “sunshine” rule.Payments and transfer of anything of value to physicians and teaching hospitals by most manufacturers of drugs, devices, biological and medical supplies covered by Medicare, Medicaid and the Childrens’ Health Insurance Program (CHIP) will have to be reported to CMS (Final rule, 78 FR 9458, February 8, 2013). Group purchasing organization (GPOs) as well as manufacturers will have to report certain physician ownership or investment interestsas well. The first report will be due March 31, 2014, and will cover all payments and transfers of value from August 1, 2013, to December 31, 2013. Reports will be due on March 31 of subsequent years for all payments and transfers made during the previous year. Physicians and teaching hospitals will have 45 days to review the reports and, if necessary, challenge any information before the information is made publicly available on a CMS website. The Final rule implements sec. 6002 of the Patient Protection and Affordable Care Act codified at Social Security Act §1128G.
Georgia hospital merger violated anti-competition laws.The Supreme Court concluded that a hospital merger approved by a Georgia county hospital authority violated anti-competition laws and was not subject to state-action immunity (Federal Trade Commission v Phoebe Putney Health System, Inc., February 19, 2013, Sotomayor, S). State-action immunity is generally disfavored under federal antitrust laws. Because the state did not affirmatively express a state policy to displace competition when it granted the hospital authority general corporate powers, the Supreme Court reversed an Eleventh Circuit decision granting the hospitals’ motion for summary judgment.
Realtors pled sufficient facts to sustain federal and state FCA claims.Two medical coding experts who had been employed by Indianapolis Neurosurgical Group, Inc. (ING), for the most part, sufficiently pled violations of federal False Claims Act (FCA) and the Indiana False Claims Act (Indiana FCA) to sustain their qui tam lawsuit against ING and individual physicians (physicians) that practiced medicine at ING (United States of America and the State of Indiana ex rel Herron v Indianapolis Neurological Group, Inc., February 20, 2013, Magnus-Stinson, J). The court found that the relators’ allegations regarding the physicians’ participation in three schemes, coupled with numerous specific examples of how those schemes were carried out, were sufficient to satisfy the FCA pleading requirements. The relators also sufficiently pled their Indiana FCA claims even though some of the examples of misconduct they cited occurred prior to the Indiana FCA’s enactment in 2005 and, thus, those claims were dismissed. Furthermore, the retaliation claims were dismissed for failure to allege that the defendants had notice of the qui tam action.
Texas whistleblower law requires a report to a law enforcement authority.The court did not have jurisdiction to hear the case of a physician who claimed that his demotion at a university hospital was in retaliation for reporting activities that were not in conformance with Medicare and Medicaid regulations (The University of Texas Southwestern Medical Center at Dallas v Gentilello, February 22, 2103, Willett, D). The physician did not report the violation to an appropriate law enforcement authority as required by the Texas Whistleblower Act. He reported the transgressions to his supervisor, who was not an appropriate law enforcement authority and the physician should have known that from his training.
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