Legal and regulatory news roundup
Find out what’s happening in the world of federal healthcare regulations by reviewing some recent headlines from across the country.
Legislation introduced to stop Stark Law loophole
A bill introduced in Congress seeks to close a loophole in the Stark Law that allows physicians to self-refer patients for certain services that they have a financial interest in and that they provide in their offices. The Promoting Integrity in Medicare Act (PIMA), also known as H.R. 5088, aims to prevent harmful and wasteful Medicare spending by prohibiting self-referrals for the following four services: advanced diagnostic imaging, anatomic pathology, radiation oncology, and physical therapy.
Under the Stark Law, physicians are banned from referring Medicare patients for healthcare services in which they have a financial interest. However, the law includes an exception for in-office ancillary services, which are those that are can be provided at the time of a patient’s initial visit. The four services targeted by PIMA are typically not performed the same day.
According to the Congressional Budget Office, closing the loophole on the four services could save an estimated $ 3.3 billion over 10 years.
"How many [U.S. Government Accountability Office] studies outlining the abuse and billions of dollars of Medicare reimbursement to doctors for unnecessary services that are driven purely for personal profit does it take to shut this activity down?" said Rep. Jackie Speier, the bill’s sponsor, in a statement. "This is a golden opportunity to put patient health and program health over profits."
The bill has been referred to the Committee on Energy and Commerce and the Committee on Ways and Means.
Healthcare product manufacturer, supplier pay to settle kickback allegations
To resolve allegations that it paid unlawful kickbacks to a medical products supplier, Hollister, Inc., has agreed to pay $ 11.4 million. In turn, the medical products supplier Byram Healthcare Centers, Inc., has agreed to pay $ 9.3 million to settle allegations of receiving the kickbacks.
According to the U.S. Department of Justice, from 2007 to 2014, Hollister, which manufactures disposable healthcare products, allegedly paid Byram kickbacks in return for marketing promotions, conversion campaigns, and other patient referrals to its products. Several times throughout the years, Hollister allegedly paid Byram’s costs for bonus commission paid to its sales personnel for new patient orders of Hollister products. Hollister also allegedly paid Byram $ 200,000 every year from 2009 to 2014 for "catalog funding," which instead was used to generate recommendations of its products to Byram’s patients.
Byram’s settlement payment resolves allegations it received kickback payments from Hollister and three other manufacturers?Coloplast Corp., Montreal Ostomy, and Safe N’ Simple?in exchange for promotional campaigns and patient referrals to their products.
As part of the settlement, Byram must also pay $ 127,000 to California to resolve allegations it submitted falsely inflated claims to the state’s Medicaid program, Medi-Cal. Byram allegedly failed to account for substantial discounts it received for products when it billed Medi-Cal for products sold to Medi-Cal beneficiaries.
Of the settlements, U.S. Attorney Carmen M. Ortiz, for the District of Massachusetts, said, "We are committed to rooting out commercial bribery, especially in the healthcare industry where the payment of kickbacks erodes patients’ trust in the quality of their medical care … These unlawful cash incentives also threaten the integrity of the healthcare system and siphon taxpayer dollars from our nation’s healthcare programs."
The settlements also resolved a whistleblower lawsuit filed by one current and two former Coloplast employees. A provision of the False Claims Act allows whistleblowers a share in any recovery. The whistleblowers’ share of the settlement has not yet been determined.
ACLU launches campaign over alleged EMTALA violations
The American Civil Liberties Union (ACLU) and MergerWatch recently released a report to bring attention to what they believe is the practice among Catholic hospitals of denying emergency reproductive healthcare on religious grounds.
The report takes issue with Catholic hospitals’ partial or full adherence to Ethical and Religious Directives for Catholic Healthcare Services, a set of policies issued by the U.S. Conference of Catholic Bishops. The ACLU claims that implementation of these directives has led to instances in which pregnant patients are denied care, which is a violation of the Emergency Medical Treatment & Active Labor Act of 1986 (EMTALA).
EMTALA requires hospitals that receive Medicare funds to provide medical screening exams to patients who arrive at their emergency departments and appear to need emergency medical services. These screenings must be conducted by a qualified medical staff professional to determine whether a patient has an emergency condition. If so, the patient must be provided stabilizing treatment.
The report collects accounts of patients suffering miscarriages who were denied reproductive health services, such as emergency abortions or tubal ligations, even when their own health was at risk, due to the directives.
The report recommends that CMS issue a statement emphasizing that denial of emergency reproductive healthcare violates EMTALA, regardless of religious affiliation. It also calls for CMS to investigate any alleged violations and take corrective actions when necessary.
A statement released by the Catholic Health Association denounces the ACLU-MergerWatch report and states, "To frighten families with scary, one-sided stories and exaggerated data is grossly disrespectful to the thousands of physicians, midwives and nurses working in Catholic hospitals who are so devoted to their patients and to the care they deliver."
The statement adds that allegations made in the report are unsubstantiated and that some have been subject to lawsuits that have been dismissed by the courts. It also defends the Ethical and Religious Directives for Catholic Healthcare Services as guidelines consistent with the delivery of safe and effective patient care.
Healthcare company owner convicted on kickback charges
A New Orleans jury convicted Tracy Richardson Brown, owner and operator of Psalms 23 DME, LLC, for directing a scheme that billed Medicare $ 3.9 million for often fraudulent claims. Brown was convicted on nine counts of healthcare fraud, seven counts of paying illegal kickbacks, one count of conspiracy to commit healthcare fraud, and one count of conspiracy to pay illegal kickbacks.
According to evidence introduced at trial, Brown paid patient recruiters for the information of Medicare recipients in the New Orleans area. Her company then used names and Medicare numbers to bill Medicare for medical equipment that was not needed, such as power wheelchairs and orthotics. Often the equipment was not even provided to the patients. Brown also billed Medicare for high-cost back and knee braces, when in reality she provided patients with much cheaper versions. In all, Medicare paid Brown $ 1.9 million for her fraudulent claims.
Brown’s sentencing hearing is scheduled for August 10.
Physician sentenced to nine years in prison for fraud scheme
A Miami physician who admitted to his role in a Medicare fraud scheme has been sentenced to 108 months in prison and ordered to pay more than $ 30 million in restitutions.
In February, Henry Lora, the former medical director of Miami-based clinic Merfi Corporation, pleaded guilty to one count of conspiracy to commit healthcare fraud and one count of conspiracy to defraud the United States, receive healthcare kickbacks, and make false statements relating to healthcare matters.
As part of a plea deal with prosecutors, Lora admitted he and his co-conspirators wrote prescriptions for home health care and other services for Medicare beneficiaries that were not medically necessary or provided in exchange for bribes and kickbacks from multiple home healthcare agencies in the Miami-Dade area. He also admitted to falsifying patient records so that it appeared beneficiaries qualified for the services.