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Amy Hooper Kearbey advises clients on health care fraud and abuse laws and digital health strategy.  She represents a broad range of health industry stakeholders, including hospital systems, medical societies, pharmaceutical and medical device companies, clinical laboratories, and data informatics companies. Read Amy Hooper Kearbey's full bio.

On January 23, 2018, the same judge who two weeks ago set aside a $350 million jury verdict against a nursing home operator denied a new emergency motion by relator to freeze the defendant’s assets pending the relator’s appeal of the court’s order granting judgment as a matter of law.

The relator argued that the defendant should be enjoined from engaging in transactions outside the ordinary course of business during the pendency of the appeal to protect “Relator’s, the United States’, and the State of Florida’s interests during the time the appeal is pending.”  Relator asserted that she has a “strong likelihood of success” on appeal and that the defendant could attempt to “thwart judgment” by transferring assets to related parties while the appeal is pending. Continue Reading Update: Judge Denies Relator’s Attempt to Freeze Nursing Home’s Assets Pending Appeal

Eventually, any health care organization with an effective compliance program is very likely to discover an issue that raises potential liability and requires disclosure to a government entity. While we largely discuss False Claims Act (FCA) litigation and defense issues on this blog, a complementary issue is how to address matters that raise potential liability risks for an organization proactively.

On August 11, 2017, a group of affiliated home health providers in Tennessee (referred to collectively as “Home Health Providers”) entered into an FCA settlement agreement with the US Department of Justice (DOJ) and the US Department of Health and Human Services Office of Inspector General (OIG) for $1.8 million to resolve self-disclosed, potential violations of the Stark Law, the Federal Anti-Kickback Statute, and a failure to meet certain Medicare coverage and payment requirements for home health services. This settlement agreement underscores the strategic considerations that providers must weigh as they face self-disclosing potential violations to the US government. Continue Reading DOJ Settlement with Home Health Providers Underscores Strategic Considerations for Self-Disclosure

A hospital system in Missouri recently agreed to settle with the US Department of Justice (DOJ) for $34 million to resolve claims related to alleged violations of the Stark Law. On May 18, 2017, DOJ announced a settlement agreement with Mercy Hospital Springfield (Hospital) and its affiliate, Mercy Clinic Springfield Communities (Clinic). The Hospital and Clinic are both located in Springfield, Missouri. The relator’s complaint was filed in the Western District of Missouri’s Southern Division on June 30, 2015.

The complaint’s allegations center on compensation arrangements with physicians who provided services in an infusion center. According to the complaint, until 2009 the infusion center was operated as part of the Clinic, and the physicians who practiced at the infusion center shared in its profits under a collection compensation model. In 2009, ownership of the infusion center was transferred to Mercy Hospital so that it could participate in the 340B drug pricing program, substantially reducing the cost of chemotherapy drugs. The complaint alleges that the physicians “expressed concern about losing a substantial portion of the income they had received under the collection compensation model as a result of the loss of ownership of the Infusion Center.” In response, the Hospital allegedly assured them that they would be “made whole” for any such losses. While it doesn’t provide precise details, the complaint alleges that the Hospital addressed the shortfall by establishing a new work Relative Value Unit (wRVU) for drug administration in the infusion center, which now operated as part of the Hospital. The value of this new wRVU was allegedly calculated by “solving for” the amount of the physician’s loss and “working backwards from a desired level of overall compensation.” Physicians were able to earn the wRVU for the patients they referred to the infusion center. The complaint alleges that the drug administration wRVU rate was 500 percent of the comparable wRVU for in-clinic work. In its announcement of the settlement agreement, DOJ characterized the compensation arrangement as being “based in part on a formula that improperly took into account the value of [the physicians’] referrals of patients to the infusion center operated by [the Hospital].” Continue Reading Physician Compensation Scrutiny Continues in Recent FCA Settlement

The Centers for Medicare & Medicaid Services (CMS) recently published a notice of proposed rulemaking to amend its regulations implementing and interpreting the Stark Law. CMS also used this proposed rule to state its positions on certain questions of Stark Law interpretation and application, and to solicit comments from the industry on whether the Stark Law is a barrier to health care delivery and payment innovation, and whether the industry needs more guidance on how the Stark Law applies to physician compensation. Notably, the proposed rule adds two new Stark Law exceptions—one for financial assistance to practices to recruit primary care non-physician practitioners and one for “time-share” arrangements. Comments on the proposed rule are due September 8, 2015.

Read the full Special Report.