Compliance Date for Information Blocking Rule May Be Extended
Eddie Williams III and Sakinah N. Jones
Earlier this year, the Office of the National Coordinator for Health Information Technology (ONC) published a final rule (ONC Rule) addressing interoperability, information blocking and patient access to data. The ONC Rule implements the 21st Century Cures Act's prohibition against information blocking or engaging in practices that are likely to prevent, interfere with or materially discourage access to, use of or exchange of electronic health information, unless required by law or covered by an exception set forth in the rule. The compliance date established by the ONC Rule for certain individuals and entities, called "actors," is Nov. 2, 2020. Thus, on or after the compliance date, actors — which include healthcare providers, health IT developers of certified health IT, health information networks and health information exchanges — must not engage in practices that may inhibit the appropriate exchange, access and use of electronic health information.
However, on Sept. 17, 2020, the U.S. Department of Health and Human Services (HHS) submitted to the Office of Management and Budget an Interim Final Rule, which may result in an extension of the compliance date. While the text of the Interim Final Rule is not available, the title of such rule, "Information Blocking and the ONC Health IT Certification Program: Extension of Compliance Dates and Timeframes in Response to the COVID-19 Public Health Emergency," suggests that the compliance date will be extended in response to COVID-19. Until the Interim Final Rule is published and becomes effective, individuals and entities subject to the ONC Rule should continue their efforts in implementing practices that are in compliance with the ONC Rule.
Enforcement
Reimbursements Without or With Defective Plans of Care Deemed False Claims
Nathan A. Adams IV
In United States v. Dynamic Visions, Inc., 971 F. 3d 3030 (D.C. Cir. 2020), an audit of a home healthcare company revealed that it lacked a Plan of Care (POC) or contained POCs that were deficient because they had no signature from a physician, had untimely or forged signatures, or authorized fewer hours of care than claimed for patients for whom the company sought reimbursement from the District of Columbia Medicaid Program. An ensuing investigation also revealed that the owner of the company had been funneling money into his private offshore account in Cameroon. The court affirmed the trial court's grant of summary judgment to the government on the government's claim that the provider had knowingly submitted false claims to Medicaid, and did so with reckless disregard for their falsity, in violation of the False Claims Act (FCA). The court agreed that the regulatory requirement to maintain valid POCs was material to the government's reimbursement decision and that the provider's violations were thoroughgoing. The court also concurred with piercing the corporate veil to hold the owner personally liable because he failed to maintain corporate formalities when he transferred large sums of money from provider's accounts to his own personal accounts. The court reversed summary judgment on the limited question of whether the provider forged physician signatures on POCs for patients on the grounds that there remains a question of fact. As a result, the court also reversed the treble damages judgment to take into account this difference and to reduce the amount for the 70 percent federal share of the Medicaid reimbursements.
Plaintiffs State FCA Claim for Defective Medical Devices
Mia L. McKown
In United States ex rel. Wallace v. Exactech, Inc., No. 2:18-cv-01010-LSC, 2020 WL 4500493 (N.D. Ala. Aug. 5, 2020), the court ruled that the relators adequately stated a claim against the defendant, a medical device manufacturer, for violation of and conspiracy to violate the FCA, 31 U.S.C. § 3729 et seq., and corresponding state FCAs by knowingly causing false claims to be submitted to federal and state healthcare programs for allegedly defective replacement knee devices surgically implanted by unsuspecting physicians and by making false statements material to those claims. Specifically, the plaintiff alleged that the defendant was aware of the high rate of failure of its knee replacement devices, misled its sales representatives and physicians about the device's defects and paid remuneration to doctors in order to induce the doctors to continue to purchase the medical device despite the defendant's knowledge of prior device failures. The defendant sought to dismiss the amended complaint as a "shotgun pleading," but the court determined that the relators alleged more than a "link" between the payment of remuneration and the submission of false claims. According to the court, the allegations satisfied the more stringent standard of showing that defendant's provision of illegal remuneration "actually caused" the submission of false claims to the government.
Nephrologist Self-Referral Scheme Inadequately Pled Fraud
Nathan A. Adams IV
In United States ex rel Levine v. Vascular Access Ctrs., L.P., No. 12 Civ 5103, 2020 WL 5534670 (S.D.N.Y. Sept. 15, 2020), the court granted defendants' motion to dismiss a "self-referral" complaint filed by a physician relator who practiced at the defendant's vascular access center and then dialysis center. The relator is an interventional nephrologist. He alleged that the government's reimbursement rules require that primary or treating nephrologists at dialysis centers — and not interventionists at vascular access centers — maintain responsibility for monitoring an end-stage renal disease (ESRD) patient's vascular access and determining whether follow-on visits or procedures are necessary. The relator alleged that many patients of the dialysis center had follow-up appointments at vascular access centers, although neither he nor the other healthcare professionals referred them. The relator also argued that patients were redirected by dialysis staff to the defendants if patients were to receive access elsewhere. The relator claimed all of this was with the full knowledge of the defendants. Nevertheless, the court ruled that the relator failed to plead fraud with particularity against one of the individual defendants by failing to plead representative examples of false claims or cases. The complaint alleged that the quantity and frequency of certain procedures indicated lack of medical necessity and self-referral. The plaintiff claimed that routine and regular review of patient charts would put defendants on notice of the medically unnecessary procedures at the access centers. The complaint also alleged that one of the individual defendants "went along and collaborated with the vascular access centers" by "allowing, or at least not stopping" patients from undergoing medically unnecessary procedures and that he once stated that making initial referral decisions to the centers were based on a "what's in it for me" test and added that "a number" of the centers "are shady." The court ruled this was not particularized enough. The relator also pointed to a telephone call with the physician to ask why a particular patient who underwent a successful vascular access procedure was scheduled for a follow-up appointment. The physician responded that it was routine practice and "everyone did it." But on the relator's advice, the patient did not attend the appointment and, thus, no fraudulent billing occurred.
Issues of Material Fact Precluded Summary Judgment in FCA Case
Patrick Scott O'Bryant
In United States ex rel Gohil v. Sanofi U.S. Servs. Inc., Case. No. 02-2964 2020 WL 4260797 (E.D. Pa. July 21, 2020), the government alleged that Aventis engaged in nationwide kickback schemes to induce doctors to prescribe and receive reimbursement from the government for Aventis' cancer drug, Taxotere. One such program, Planning, Access, Care & Treatment (PACT), allegedly helped doctors submit reimbursement claims, handled administrative appeals when those claims were denied and gave doctors free replacement vials of the drug when appeals were unsuccessful. The plaintiff claimed those services were kickbacks and violated the FCA. Both parties filed summary judgment motions, and both motions were denied. Aventis established issues of material fact requiring resolution by a jury about whether the PACT program was remuneration, that at least one purpose of the program was to induce doctors to prescribe more Taxotere, and that Aventis behaved knowingly and willfully. Deposition testimony showed that Aventis did not guarantee reimbursement, denied that PACT's purpose was in part to increase sales and implemented internal policies to ensure that PACT complied with federal law, thus defeating the government's motion for summary judgment. However, the plaintiff provided compelling evidence that likewise raised issues of material fact defeating Aventis' motion, such as emails from Aventis sales representatives stating that if reimbursement failed, Aventis would replace the Taxotere, along with internal documents describing PACT's goals to maximize product sales and increase a physician's incentive to prescribe Taxotere, and evidence showing Aventis was aware of HHS Office of the Inspector General guidance and warnings that some patient assistance programs may violate federal law.
Downstream Actors That Make Conditional Payments May Bring Suit for Double Damages
Nathan A. Adams IV
In MSP Recovery Claims, Series LLC v. Ace Am. Ins. Co., No. 18-12139, 18-12149, 18-13049, 18-13312, 2020 WL 5365978 (11th Cir. Sept. 4, 2020), the court ruled, as a matter of first impression, downstream actors that have made conditional payments or that have reimbursed a Medicare Advantage Organization (MAO) for their conditional payment may bring suit for double damages against primary payers. The Medicare Advantage system allows Medicare beneficiaries to opt into private health insurance plans offered by MAOs that provide coverage in excess of the coverage provided by Medicare. To better compete with Medicare, some MAOs contract with smaller organizations, such as independent physician associations that have closer connections to local healthcare providers. These smaller organizations are the "downstream" actors. The court gave Skidmore deference to the HHS interpretation of the Medicare Secondary Payer Act (MSPA) statute in support of the outcome. MSPA established that Medicare should not bear the costs of medical procedures that are already covered by a "primary payer," or other insurer such as a provider of workers' compensation insurance. Under the MSPA, Medicare and MAOs still can, as a stopgap measure, make a "conditional payment" to cover their beneficiaries' medical bills when the primary payer "cannot reasonably be expected to make payment with respect to such item or service promptly." If Medicare or an MAO has made a conditional payment and the primary payer's responsibility for such payment has been demonstrated, the primary payer is obligated to reimburse Medicare or the MAO within 60 days. When a primary payer fails to do so, Medicare can seek "double damages," or twice the amount of the conditional payment, from the primary payer under the MSPA's right of action. HHS urged that any downstream actor that has actually suffered an injury because it provided or paid for care from its own coffers and was harmed by a primary plan's failure to provide reimbursement should be able to access the private right of action per § 1395y(b)(3)(A).
Convictions Appealed
Evidence Sufficient to Establish Wrongful and Willful Violations of Healthcare Laws
Patrick Scott O'Bryant
In United States v. Goodwin, Case No. 19-2778, 2020 WL 5358651 (8th Cir. June 16, 2020), Reuben Goodwin was the executive of a nonprofit agency that entered into a contract with AMS Medical Laboratory Inc., under which Goodwin's agency referred to AMS specimens for testing allegedly without a doctor or qualified professional ordering them in exchange for a percentage of the federal reimbursement. Goodwin was convicted by a jury of conspiracy to violate federal healthcare laws and 11 substantive counts of healthcare fraud. Goodwin appealed, challenging the sufficiency of the evidence supporting the verdict. Goodwin argued that, because the conspiracy charge's criminal objectives required a heightened mens rea, the government was required to establish that he knew his conduct was wrongful and that he intended to further the criminal objectives. Viewing the evidence in the light most favorable to the government, the U.S. Court of Appeals for the Eighth Circuit rejected Goodwin's characterization of the evidence. The evidence showed that Goodwin was aware of, and actively participated in, the negotiation of the agreement underlying the case. Evidence before the jury could lead to a reasonable conclusion that Goodwin knew federal law prohibited the arrangement, and Goodwin had significant experience working with federal healthcare programs. The collective evidence supported a conclusion that Goodwin knew the arrangement at issue was wrongful and that he voluntarily joined the conspiracy.
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