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Thank you for your interest in the FCA Update Blog. We’ve relocated to McDermott’s Health & Life Sciences News blog. Visit us at healthlifesciencenews.com for future posts on for future posts on enforcement and compliance issues impacting the healthcare industry, False Claims Act litigation and more. For additional healthcare and white collar alerts, reports and webinar invitations from McDermott Will & Emery, please subscribe to our mailing lists.

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More Than a Decade at the Top; McDermott Earns 11th Chambers USA Band 1 Healthcare Practice National Ranking

We are pleased to announce that our Healthcare Group received a national Band 1 ranking for the eleventh year in a row in the 2020 edition of Chambers USA. After more than a decade at the top, we are once again the only one to rank Band 1 nationally. The Health team also earned Band 1 state-level rankings for its healthcare practices in California, Florida, Illinois, Massachusetts and Washington, DC. Additionally, the team also earned the national Spotlight Table ranking for the Privacy and Data Security: Healthcare category. In addition, nearly half of the Healthcare Industry Advisory group partners were individually ranked. Click here to view the full announcement.

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New Guidance on Medicare Payment Rule Enforcement

A few days before Thanksgiving, the news media published an internal memo by the Office of General Counsel (OGC) at the US Department of Health and Human Services (Department) to officials at the Centers for Medicare and Medicaid Services (CMS). The memo expressed OGC’s views on the impact of the Supreme Court’s Azar v. Allina Health Services, et. al., No. 17-1484 decision earlier this year on the enforcement of various CMS guidance. Specifically, OGC states that Medicare payment rules that meet the Court’s standard that did not go through notice-and-comment rulemaking cannot form the basis for an enforcement action, including an overpayment finding. The issue in this case was whether the Department’s determination that Medicare Part C patients should be included in the Medicare fraction represented a change in a “substantive legal standard” within the meaning of Section 1871(a)(2) of the Social Security Act (SSA). If the answer was yes, then...

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Stark Law Proposed Change Affects Group Practice Special Rules for Productivity Bonuses, Profit Shares

On October 9, 2019, the US Department of Health and Human Services Centers for Medicare and Medicaid Services (CMS) published proposed changes to the physician self-referral law (Stark Law). Physician practices are subject to the Stark Law, and the proposed rule includes an important clarification affecting certain group practices’ compensation models. CMS proposes to revise its regulations to clarify the special rule for group practice distributions of income from Stark designated health services (DHS). Compliance with this special rule is a requirement of the Stark Law’s definition of a “group practice,” and compliance with the “group practice” definition is generally necessary for physician groups to have the protection of the in-office ancillary services (IOAS) exception to the Stark Law. The special rule for sharing DHS profits permits a group, or a pod of five or more physicians in the group, to pool their DHS income and distribute the pool in a manner...

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Agenda is Live: McDermott’s Healthcare Litigation, Compliance & Investigations Forum

Join McDermott for our 2019 Healthcare Litigation, Compliance & Investigations Forum on November 5, 2019 in Washington, DC Featuring insights from government representatives, in-house lawyers and compliance officers from across the healthcare and life sciences landscape, attendees will learn strategies for proactively managing and effectively responding to compliance risks, investigations and litigation during this day-long program. The event will also feature an address by Daniel R. Levinson, Former Inspector General, Office of Inspector General Department of Health and Human Services, and a lunchtime keynote by Dr. Ezekiel Emanuel,  Vice Provost for Global Initiatives & Chair of the Department of Medical Ethics and Health Policy, University of Pennsylvania; Former Special Advisor for Health Policy, White House Office of Management and Budget. Click here to view the program agenda and register today. 

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HHS Proposes Substantial Changes to the Stark Law and the Anti-Kickback Statute Regulations

On October 9, 2019, the US Department of Health and Human Services (HHS) published proposed changes to the physician self-referral law (Stark Law) (Stark Proposed Rule) and the Anti-Kickback Statute (AKS) and the Beneficiary Inducement Civil Monetary Penalty Law (CMPL) (AKS Proposed Rule). The proposed rules represent some of the most significant potential changes to these laws in the last decade. HHS Deputy Secretary Eric Hargan said that they “would be a historic reform of how healthcare is regulated in America.” This On the Subject provides a high-level overview of key provisions in the proposed rules. More in-depth analysis will follow at our Regulatory Sprint Resource Page. The “Sprint” The Stark Law and AKS Proposed Rules have been promulgated as part of HHS’s “Regulatory Sprint to Coordinated Care,” which was launched in 2018 with the goal of reducing regulatory burden and incentivizing coordinated care. As part of this initiative, the Centers for...

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Third Circuit Perpetuates Tuomey’s Controversial Stark Law “Volume or Value” Standard

In U.S. ex rel. J. William Bookwalter, III, M.D. et al. v. UPMC et al., the US Court of Appeals for the Third Circuit endorsed two controversial interpretations of the Stark Law’s “volume or value” standard, known as the correlation theory and the practice “loss” theory. Specifically, the court held that the relators had made out a plausible allegation of an indirect compensation arrangement between surgeons and University of Pittsburgh Medical Center (UPMC)-affiliated hospitals. The court held that the relators were entitled to proceed to discovery because of the correlation between the amount of the productivity-based compensation paid to the surgeons and the volume of the surgeons’ referrals for inpatient hospital services (e.g., operating room and hospital room and board). Repeatedly invoking the concept of “where there is smoke, there might be fire,” the court also stated that the fact that at least three of the surgeons allegedly received compensation...

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Remuneration? Not If It’s Fair Market Value, Says Eleventh Circuit

Bingham v. HCA, Inc., a recent Eleventh Circuit case, highlights the centrality of fair market value to Anti-Kickback Statute (AKS) analyses. This decision is significant for several reasons and we expect to see Bingham cited by many defendants in future False Claims Act cases. The case is also a reminder that the current regulatory and enforcement environment can result in litigation over arrangements with fair market value payments that involve little, or no, compliance concerns. One of the most fundamental elements of managing risk under the federal Anti-Kickback Statute (AKS) is ensuring remuneration is consistent with fair market value. A recent Eleventh Circuit case highlights the centrality of fair market value to AKS analyses. See Bingham v. HCA, Inc., Case No. 1:13-cv-23671 (11th Cir. 2019). In Bingham, the court held that proving fair market value is an essential element for a relator to survive summary judgment and that relators must plead a lack...

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Healthcare Enforcement Quarterly Roundup – Q2 2019

In this second installment of the Healthcare Enforcement Quarterly Roundup for 2019, we cover several topics that have persisted over the past few years and identify new issues that will shape the scope of enforcement efforts for the remainder of this year and beyond. In this Quarterly Roundup, we discuss DOJ’s guidance on compliance programs and cooperation credit, new US Department of Health and Human Services (HHS) rules and enforcement activity on provider religious/conscience opt-out rights, enforcement activity against home health agencies and telemedicine providers, continued federal action to combat the opioid crisis, and resolution of ambiguity in the False Claims Act (FCA) statute of limitations. Click here to read the full issue of the Healthcare Enforcement Quarterly Roundup. Click here to download a PDF of the issue.  

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Dash to Digital Health? How the Regulatory Sprint to Coordinated Care Could Expand Access to Care

Certain long-standing laws, such as the civil monetary penalty provision prohibiting patient inducements, have hampered providers’ ability to fully leverage remote patient monitoring and other telehealth tools. Many stakeholders are hoping that developments in the Regulatory Sprint to Coordinated Care will begin the rulemaking process to enable greater access to digital health and virtual care products. The US Department of Health and Human Services (HHS) launched the Regulatory Sprint to Coordinated Care in 2018 with the goal of reducing regulatory burden and incentivizing coordinated care. As part of this initiative, the Centers for Medicare and Medicaid Services and other agencies are scrutinizing a variety of long-standing regulatory requirements and prohibitions to determine whether they unnecessarily hinder the innovative arrangements policy-makers are otherwise hoping to see develop. While regulations such as the civil monetary penalty prohibition on...

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