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Eric B. Gordon advises clients on fraud and abuse and compliance issues and health care transactions. He is partner-in-charge of the California Health Industry Practice Group. Eric represents a wide range of clients, including proprietary and tax-exempt hospital systems, medical groups, academic medical centers and faculty practice groups, pharmaceutical companies and medical device manufacturers, and group purchasing organizations. Read Eric B. Gordon's full bio.

On August 24, 2018, the Office of Inspector General (OIG), Department of Health and Human Services (HHS) published a request for information, seeking input from the public on potential new safe harbors to the Anti-Kickback Statute and exceptions to the beneficiary inducement prohibition in the Civil Monetary Penalty (CMP) Law to remove impediments to care

On June 25, 2018, the Centers for Medicare and Medicaid Services (CMS) published a request for information, seeking input from the public on how to address any undue regulatory impact and burden of the physician self-referral law (Stark Law) on value-based and other coordinated care arrangements designed to improve quality and lower cost. While

On July 12, 2016, the US Senate Finance Committee held a hearing to “examine ways to improve and reform the Stark Law” as a follow up to releasing a white paper on June 30 titled Why Stark, Why Now? Suggestions to Improve the Stark Law to Encourage Innovative Payment Models. The white paper summarizes

Health systems routinely employ physicians, either directly or through corporate affiliates. Media reports and anecdotal evidence suggest such practices routinely, perhaps uniformly, result in net practices losses for the system when measured solely based on physician practice revenues. Does this fact have any legal import under the Stark Law?

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In 1989, Congress enacted the Ethics in Patient Referrals Act. Twenty-five years later, in United States ex rel. Drakeford v. Tuomey, the Fourth Circuit upheld the largest False Claims Act (FCA) judgment predicated on Stark Law violations to date: $237 million. Writing in concurrence, Judge Wynn summarized the situation as “[a]n impenetrably complex set

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

The US Court of Appeals for the Fourth Circuit affirmed the trial court’s May 2013 decision that Tuomey Healthcare System, Inc., a hospital and health system based in Sumter, South Carolina, submitted 21,730 false claims, claims prohibited by the Stark Law, to the Medicare program. The court rejected Tuomey’s request for a new trial based

Over the last month the Office of Inspector General (OIG) of the Department of Health and Human Services and the Department of Justice (DOJ) have each taken actions that suggest an increasing appetite to examine the financial relationships between physicians and recipients of those physicians’ referrals under the federal Anti-Kickback Statute (AKS). By announcing new OIG and DOJ enforcement actions and the new OIG fraud alert, the agencies are signaling to the health care industry that physician financial relationships are one of their priority areas. These announcements should prompt organizations to review their physician arrangements and contracting policies to help ensure compliance with the AKS as well as the Physician Self-Referral (“Stark”) Law.
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A 2008 rule change from the Centers for Medicare and Medicaid (CMS)—which effectively prohibited referring physician-owned companies from furnishing hospital services “under arrangements”—has withstood a challenge by a urology trade association. On June 12, 2015, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) held that the 2008 rule change, which redefined an “entity furnishing designated health services” to include entities that perform the services, not just bill for them, constituted a reasonable construction of the Stark Law and was entitled to deference. The appellate court, however, held that CMS’ prohibition on “per-click” equipment rental arrangements lacked a rational basis in light of the agency’s “tortured reading” of a relevant conference report, which, the court noted, was “the stuff of caprice.” Accordingly, the court struck down CMS’ 2008 prohibition on per-click equipment rental arrangements involving referring physician-owned equipment leasing companies.
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Health care fraud enforcement continues to be a priority for the federal government and is poised to expand even more. As a result, health care providers and suppliers should anticipate greater oversight activities from auditors and investigators. Ensuring that your compliance program is up-to-date and up-to-task in proactively identifying problems and making timely decisions about corrective actions and potential disclosures is key to protecting the organization.

BIGGER BUDGETS FOR LAW ENFORCEMENT AND PROGRAM INTEGRITY

In the fiscal 2015 budget, Congress more than doubled the appropriation to the Health Care Fraud and Abuse Control (HCFAC) program to $672 million. This means that the U.S. Centers for Medicare and Medicaid Services (CMS), the U.S. Department of Justice (DOJ), and the Office of Inspector General (OIG) for the U.S. Department of Health and Human Services (HHS) received a large infusion of new funding at a time when many agencies continue to face flat or declining appropriations. CMS program integrity functions received more than $477 million for Medicare oversight, including Parts C and D. OIG and DOJ received more than $67 million and $60 million, respectively, from HCFAC.
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