Health Care Law Blog

Michigan Supreme Court Refuses to Reconsider its Decision to Reject Class Action Against Pharmacies for Allegedly Overcharging Medicaid for Generic Prescription Drugs

On August 5, 2014, the Michigan Supreme Court (the "Court") declined to reconsider its decision to reject two class actions and a qui tam action against CVS Caremark Corporation, Rite Aid of Michigan, Inc., and several other pharmacies. The lawsuits were based on allegations that the companies had overcharged Medicaid for generic prescription drugs.

The underlying case was argued before the Court on January 16, 2014, and the Court ruled against the plaintiffs on June 11, 2014. The plaintiffs argued that the pharmacies violated Michigan Public Health Code, MCL 333.17755(2), which requires a pharmacist to “pass on the savings in cost” when dispensing a generic drug instead of a brand name drug. Read More ›

Categories: Medicare/Medicaid, Pharmacy

CMS Proposed Rule Affecting Home Health Agencies

The Centers for Medicare & Medicaid Services ("CMS") recently announced proposed changes to the Medicare home health prospective payment system (“PPS”) for the 2015 calendar year. CMS is proposing to tighten eligibility requirements for home health services and set a minimum requirement on Home Health Agencies ("HHAs") to prove their effectiveness, as well as revise how much CMS will pay for certain services. These proposed changes are expected to reduce Medicare payments to HHAs by $58 million next year alone, a reduction of .30 percent.

To qualify for the Medicare home health benefit, a beneficiary must be under the care of a physician, have a need for skilled nursing care, physical therapy, speech-language pathology, or continued need for occupational therapy. Further, the beneficiary must be homebound and receive home health services from a Medicare approved agency.

The proposed changes include the following: Read More ›

Categories: Health Care Reform, Medicare/Medicaid

OIG Issues Special Fraud Alert on Clinical Laboratory Payments to Physicians

The Office of the Inspector General for the United States Department of Health and Human Services (the “OIG”) recently issued a Special Fraud Alert regarding laboratory payments to referring physicians (the “Alert”). The Alert relates to two types of compensation arrangements - Specimen Processing Arrangements and Registry Arrangements - between clinical laboratories and physicians who order clinical laboratory tests that the OIG believes present a substantial risk of fraud and abuse under the federal anti-kickback statute. Read More ›

Categories: Compliance, Fraud & Abuse, Physicians

Michigan's Tax on Paid Health Care Claims is Upheld

The United States Court of Appeals for the Sixth Circuit has upheld Michigan’s tax on paid health care claims in an opinion published on August 4.  The decision has very significant implications for the State of Michigan, which uses the revenues to partially fund the Medicaid program, and for employers, group health plans, and third-party administrators, which are subject to the tax. Read More ›

Categories: 6th Circuit Court of Appeals, Tax

Dumping Medical Records Results in $800,000 HIPAA Fine for Health Care System

The Department of Health and Human Services (HHS) Office for Civil Rights (OCR) recently announced that it reached a resolution agreement with a health care system in connection with alleged violations of the Health Insurance Portability and Protection Act of 1996 (HIPAA). Pursuant to the settlement, Parkview Health System, Inc. (Parkview) agreed to adopt a corrective action plan (CAP) to address deficiencies in its compliance program and to pay $800,000. 

As explained by OCR in a news release, Parkview, a covered entity under the HIPAA Privacy Rule, took custody of medical records of approximately 5,000 to 8,000 patients while assisting a retiring physician to transition patients to new providers, and while considering the purchase of some of the physician’s practice. Subsequently, Parkview employees, with notice that the physician was not at home, left 71 cardboard boxes full of medical records unattended and accessible to unauthorized persons on the driveway of the physician’s home. The physician complained, prompting the HHS investigation. Read More ›

Categories: Compliance, HIPAA, Providers

Health Facilities and Agencies Face Liability for Terminating or Dismissing Employees Who Report Malpractice

A recent decision by the Michigan Court of Appeals holds that a health facility or agency can be sued for taking or threatening disciplinary action against an employee for reporting or intending to report malpractice by a health professional. Employers should carefully review existing policies and practices, or if necessary, adopt appropriate policies, to protect against potential wrongful termination lawsuits. Read More ›

Categories: Compliance, Employment, Providers

HHS Report Reveals That Many Affordable Care Act Consumers Received Large Subsidies

In a recently released 26 page report the Department of Health and Human Services revealed that federal subsidies cover 76 percent of premiums for those who have signed up for coverage under the Affordable Care Act in the 36 federally administered markets. According to the Los Angeles Times, the total cost of subsidies could exceed $16.5 billion this year, which is significantly higher than the $10 billion cost that the Congressional Budget Office projected earlier this year. Read More ›

Categories: Health Care Reform, Health Insurance Exchange

Planning for CHOWs of Home Health Agencies and the 36-Month Rule

Due to regulatory and reimbursement constraints, health care providers are increasingly merging, affiliating, and acquiring other health care entities. In these transactions, the Medicare providers must identify whether a Medicare change of ownership (“CHOW”) will occur. Although it may appear, from a business standpoint, that a change of ownership will occur, the transaction may not necessarily be considered a CHOW for Medicare. Essentially, if the person or entity with ultimate responsibility for the provider changes, typically there will be a Medicare CHOW. Sometimes, but not always, this will be indicated by whether there has been a change in the taxpayer identification number.

CHOWs impact the Medicare provider agreement involved in the sale. Unless the buyer takes steps to affirmatively reject the seller's provider agreement, in a Medicare CHOW, the seller's provider agreement is automatically assigned to the buyer. This provides billing advantages for the buyer without having to enroll as a new Medicare provider, go through the initial enrollment process, and be re-surveyed or re-accredited, which takes several months.   Read More ›

Categories: Compliance, Medicare/Medicaid, Providers

Cracking Down on Fraud and Waste: OIG Releases Recommendations to Increase HHS Program Efficiency

In March of 2014, the Office of the Inspector General ("OIG") released the "OIG Compendium of Priority Recommendations." The recommendations offered are designed to help current programs for the Department of Health and Human Services ("HHS") run more effectively. The recommendation discussed twenty-five "opportunities" which, if addressed, would help to eliminate fraud and waste among HHS programs. The “opportunities” include the following: Read More ›

Categories: Compliance, Fraud & Abuse, Medicare/Medicaid, Providers

New requirements for tax exempt hospitals imposed by the Affordable Care Act

The Affordable Care Act, enacted on March 23, 2010, has established a number of new requirements that nonprofit hospitals must meet to maintain tax exemptions. Some of these new obligations, all codified in Section 501(r) of the Internal Revenue Code, include community health needs assessment and implementation, financial assistance and emergency care policies, limits on charges, and billing and collection restrictions.

In June 2012, the IRS released proposed regulations offering guidance to tax-exempt hospitals relating to certain provisions of Section 501(r). Although, the proposed regulations do not have the force of law, hospitals may rely on these to assist in implementing the requirements.

Below is a brief summary that highlights some of the new requirements for tax-exempt hospitals. Please refer to the full rule, Section 501(r) or contact us, to explore the extent of the new requirements in more detail.

Community health needs assessment and implementation (CHNA)

Effective for tax years beginning after March 23, 2012, hospital facilities must conduct a CHNA and adopt an implementation strategy at least once every three years. Read More ›

Categories: Health Care Reform, Hospitals