Health Care Law Blog

So far, July has been a busy month for health care fraud enforcement across the country.

On July 18, Divyesh Patel, owner of Alpine Nursing Care Inc. in North Randall, Ohio, was sentenced to two years in prison after pleading guilty to one count of conspiracy to commit health care fraud and four counts of health care fraud. Patel was also ordered to pay total restitution of $1,939,864 to the Medicaid Program in Ohio. According to court documents, Patel hired Belita Mable Bush as the office manager despite knowing that Bush had been convicted of a health care-related felony and excluded from involvement in billing federal health care programs. From June 1, 2006 to October 18, 2009, Patel conspired with Bush to defraud Medicaid by billing for services that had never been performed or that had been performed by excluded individuals. The conspiracy resulted in losses of approximately $1.9 million to the Medicare and Medicaid programs. Bush was convicted on similar charges and will be sentenced next month.

According to a recent Modern Healthcare article, up to 9 of the 32 Pioneer Accountable Care Organizations ("ACOs") may be leaving the program. Four have already notified providers of such withdrawal. Of the 9, 4 of the departing ACOs tentatively say they will be joining Medicare's lower- risk ACO alternative – the Medicare shared savings program. The deadline for deciding whether or not to remain in the Pioneer program is July 31, 2013.

On June 17, 2013, the U.S. Supreme Court ruled that brand name drug makers can be sued for paying generic drug makers to delay the introduction of low-cost versions of popular medicines to the marketplace. The Court's 5-3 ruling is a victory for the Federal Trade Commission (“FTC”), and reverses a lower-court ruling that shielded drug makers from liability.

So-called "pay-for-delay" or reverse payment arrangements between brand name and generic drug makers result in payments being made to generic drug makers in order delay the launch of competing generic drugs. These settlements often stem from litigation, or threatened litigation, brought by brand name drug makers against generic drug makers who try to sell products prior to the patent expiration period. In this case, the FTC argued that pay-for-delay agreements cost consumers as much as $3.5 billion per year, while the pharmaceutical industry alleged that such deals are legitimate means of settling patent disputes.

The Michigan Department of Licensing and Regulatory Affairs (LARA) Corporations Division has recently implemented a new policy for professional service corporations requiring that the purpose clause in the articles of incorporation includes the type of license held. Previously, only the type of services provided was required.

For example, the purpose clause for a dental practice must now state that the purpose of the corporation is to provide "dental services through a licensed dentist."

This new policy is not stated in any of the LARA materials. However, Foster Swift attorneys and paralegals frequently work with LARA and can help streamline the creation of a professional services corporation by knowing these LARA policy insights.

If you have questions about the new policy or would like assistance with starting a professional services corporation, please contact an attorney at Foster Swift.

Julie C. LaVille authored this article as a Law Clerk.

On July 2, 2013, the Obama administration declared that it was delaying the effective date of the Patient Protection and Affordable Care Act’s Employer Mandate until January 1, 2015. The Employer Mandate, which was scheduled to become effective on January 1, 2014, required all large employers to offer health care coverage to their full-time employees or pay a penalty. Most importantly, this delay means that the penalties to large employers for failure to provide health insurance coverage will not be enforced for another year. You may read the full statement issued by the U.S. Department of Treasury here.

A key component of the Patient Protection and Affordable Care Act ("PPACA") involves expanding Medicaid to anyone who earns up to 133 percent of the poverty level. In its landmark ruling last year the Supreme Court, while upholding PPACA, ruled that states could not be compelled to expand the joint federal-state Medicaid program.

State legislatures and governors across the country have considered whether to expand Medicaid, with only 23 states and the District of Columbia implementing an expansion according to the (We have identified that the following link is no longer active, and it has been removed.) Under the PPACA, 100 percent of the cost of the Medicaid expansion will be covered by the federal government from 2014 through 2016. The federal government's contribution will gradually decline until reaching 90 percent in 2022 and beyond.