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COVID-19: Updates and Developments (Week of April 13)

  • April 17, 2020

Federal and state governments began considering this week plans for reopening the economy, with President Trump unveiling April 16 guidelines for doing so.

The guidelines, called Opening up America Again, propose a three-phased approach once states meet certain threshold criteria, including a "downward trajectory" of coronavirus and flu-like cases within a 14-day period and a "robust testing program" for at-risk health care workers. To move between phases, states must have "no evidence of rebound" and again satisfy the "gating criteria." 

The guidelines note that state and local officials may need to tailor the application of the criteria to local circumstances and governors may need to work together on a regional basis.

The guidelines, which rely on state governors to assess and decide their readiness to reopen their economies, also list "core state preparedness responsibilities," including the ability "to quickly set up safe and efficient screening and testing sites."

Meanwhile, lawmakers and the administration continued to wrangle about an interim relief measure to inject more funding into the small business loan program under the Coronavirus, Aid, Relief, and Economic Security Act (CARES Act).

While boosting funding for the Paycheck Protection Program (PPP) has bipartisan support, Democrats want the measure to include an additional $100 billion for hospitals and $150 billion for state and local governments, on top of the $250 billion that Republicans have proposed for the PPP. House Speaker Nancy Pelosi (D-CA) and Senate Minority Leader Charles Schumer (D-NY) also want to focus more relief on minority-owned companies and others struggling to secure loans.

“Small businesses, hospitals, frontline workers and state and local governments across the country are struggling to keep up with this national crisis,” Pelosi and Schumer said in a joint statement issued April 13. “They need more help from the federal government and they need it fast,” the lawmakers said.

In an April 14 press briefing, Treasury Secretary Steve Mnuchin urged lawmakers to “top up” the small business loan program immediately and consider further stimulus later. “The federal government has just started sending CARES Act funding to hospitals and states. They haven’t come close to using that money,” Mnuchin told reporters. He said the administration would consider a fourth stimulus package later, which could potentially include spending on infrastructure.

Senate Majority Leader Mitch McConnell (R-KY) said the Senate is not expected to travel back to Washington DC before May 4, though that could change. “While other CARES Act programs such as hospital funding and assistance for state governments are just beginning to push out money, 70% of the PPP’s funding has been already allotted in just a week and a half,” he said. Later in the week, the administration indicated that funding for the PPP had run out. 

The National Governors Association (NGA), led by Maryland Governor Larry Hogan (R), also called on Congress to provide $500 billion in funding for states and territories to help plug substantial budget shortfalls resulting from the public health crisis. In addition, Hogan said states need flexibility to use funds already allocated to them under the CARES Act for non-COVID-19 expenses.

“In the absence of unrestricted fiscal support of at least $500 billion from the federal government, states will have to confront the prospect of significant reductions to critically important services all across this country, hampering public health, the economic recovery,” Hogan said.

Later in the week, Democrats unveiled a $30 billion plan for a comprehensive national testing strategy, including boosting the supply and manufacturing chain and expanding reporting and contact tracing.

“We need to have testing kits widely available across America so that we can beat this pandemic and help those affected. We need to track the results in real-time so we can quickly spot flare-ups. We need a dedicated, domestic supply chain to produce millions of effective and accurate tests to ensure they are readily available in every community, large and small,” Schumer said April 15.

Agency Action

Department of Health and Human Services (HHS)

April 16—HHS inked a new deal under the Defense Production Act (DPA) with General Electric, in partnership with Ford, to produce 50,000 ventilators by July 13. The total contract price is $336 million.

April 13—HHS announced five new contracts that, together with two earlier contracts, are set to deliver more than 137,000 ventilators to the Strategic National Stockpile by year’s end. HHS last week announced contracts with General Motors and Philips under the DPA. The latest contracts under the DPA are with General Electric ($64.1 million), Hill-Rom ($20.1 million), ResMed ($39.1 million), Medtronic ($9.1 million), and Vyaire ($407.9 million). HHS also entered into two additional contracts, though not pursuant to the DPA, with Hamilton ($552 million) and Zoll ($350.1 million) for ventilator production.

Centers for Medicare & Medicaid Services (CMS)

April 15—Medicare will pay nearly double for high-production COVID-19 diagnostic tests that can produce results rapidly and accurately, CMS announced. CMS Administrator Seema Verma called the rapid tests “an absolute game-changer for nursing homes, where risk of Coronavirus infection is high among our most vulnerable.” Effective April 14 through the duration of the COVID-19 national emergency, Medicare will pay $100 for COVID-19 clinical diagnostic lab tests that use high-throughput technologies that increase testing capacity and provide faster results. Medicare pays about $51 for other COVID-19 lab tests. According to CMS, high-throughput lab tests can process more than 200 specimens a day but require more sophisticated equipment and specially trained technicians and are more time intensive.

April 14—CMS postponed the 2019 benefit year HHS Risk Adjustment Data Validation (HHS-RADV) process so individual and small group health insurers can focus on responding to the COVID-19 pandemic. CMS plans to provide future guidance this summer on the updated timeline for 2019 benefit year HHS-RADV activities that are planned to begin in 2021, the agency said in a memorandum. CMS previously announced a similar suspension of the Medicare Advantage RADV program. The HHS-RADV was slated to get underway in late May. CMS said postponing the process will delay the release of 2019 benefit year HHS-RADV error rates and the publication of 2019 benefit year HHS-RADV results to issuers.

April 13—CMS issued Frequently Asked Questions for states on the Families First Coronavirus Response Act (FFCRA) and the CARES Act that address enhanced federal Medicaid funding and other benefit and eligibility issues.

April 13—CMS has now approved 50 state Medicaid waivers under Section 1135. The Section 1135 waivers give states additional flexibilities to administer their Medicaid programs during the coronavirus outbreak. CMS recently approved waivers for Utah, as well as Puerto Rico and Commonwealth of Northern Mariana Islands.

April 13—CMS provided supplemental guidance for long term care (LTC) facilities for purposes of cohorting them based on COVID-19 status. Under the guidance, licensed LTC facilities generally can transfer/discharge residents to another certified LTC facility without state agency approval. The guidance indicates, however, that transfer/discharge of a resident for COVID-19 cohorting purposes to a non-certified LTC facility does require state agency approval. The guidance builds on recommendations CMS issued April 2 on mitigating the spread of the virus in nursing homes, including designating separate facilities or units for residents based on their COVID-19 status.

April 11—CMS and the Departments of Treasury and Labor issued guidance to implement statutory requirements under the FFCRA and CARES Act that private insurers cover at no cost COVID-19 diagnostic testing and certain services relating to testing, including urgent care, emergency room, and in-person or telehealth visits. Notably, the guidance also extends the requirement to covering antibody testing without out-of-pocket expenses.

Office for Civil Rights (OCR)

April 16—OCR resolved a complaint filed against the Pennsylvania Department of Health (PDH) after it revised its triage policies to help ensure individuals with disabilities don’t face discrimination if the state needs to ration health care resources. OCR last week resolved similar concerns against the state of Alabama after it removed ventilator rationing guidelines that allegedly discriminated on the basis of disability. Earlier this month, OCR issued a bulletin reminding covered entities that they must continue to comply with federal civil rights laws during the COVID-19 public health emergency. OCR enforces the Americans with Disabilities Act, Section 504 of the Rehabilitation Act, the Age Discrimination Act, and Section 1557 of the Affordable Care Act. OCR said it received complaints from disability rights advocates in Pennsylvania, including Disability Rights of Pennsylvania, alleging state guidelines weren’t in compliance with Section 504, Title II, and Section 1557. The complaint alleged that Pennsylvania’s Crisis Standards of Care for Pandemic Guidelines “unlawfully singled out and authorized the denial of treatment to individuals with disabilities when prioritizing access to critical care and ventilators” and used “preexisting conditions that are disabilities” to determine a priority score. To resolve the complaint, the PDH revised the guidelines, including removing criteria that automatically deprioritized persons on the basis of particular disabilities and requiring individualized assessments to support triaging decisions. As a result, OCR closed its complaint investigation without a finding of liability.

National Institutes of Health (NIH)

April 10—NIH launched a new study to determine the number of undetected cases of COVID-19 in the U.S. adult population by testing for antibodies in their blood. As part of the “serosurvey,” researchers will collect and analyze blood samples from as many as 10,000 volunteers. The study is aimed at determining the extent the novel coronavirus spread undetected in the United States and provide key data on communities and populations most affected.

Food and Drug Administration (FDA)

April 16—FDA is temporarily loosening rules for compounding certain drug products used to support patients hospitalized with COVID-19 during the public health emergency. The move is aimed at addressing shortages of certain drugs that are in high demand because of the pandemic. Under the guidance, the FDA said it would not take enforcement action against outsourcing facilities that compound drug products that are copies of an approved drug, use bulk substances not on the agency's approved list, or that don't meet certain manufacturing requirements related to product stability testing and establishing an expiration date. The protection extends only if certain conditions detailed in the guidance are satisfied, including that the drug product is one that the FDA identifies as in short supply. Most of the drugs on the FDA list are those used to support patients while they are ventilators such as muscle relaxers and anesthetics. 

Occupational Safety and Health Administration (OSHA)

April 13—OSHA issued new guidance that prioritizes enforcement activities during the COVID-19 pandemic on those workplaces with high risks of exposure to the virus such as hospitals, nursing homes, emergency responders, home or hospice care, and biomedical laboratories. The guidance indicates OSHA will focus inspections on these high-risk settings. Formal complaints alleging exposure to the coronavirus in medium or lower-risk settings normally will not result in an onsite inspection. In these cases, OSHA instead will use non-formal procedures to investigate alleged hazards, though an onsite inspection is possible if the response is unsatisfactory. The guidance also details information about the scope, scheduling, and procedures of inspections.

Health Resources and Services Administration (HRSA)

April 15—HRSA announced it is temporarily waiving query fees for health care entities to search the National Practitioner Data Bank. “This waiver supports efforts to mobilize and deploy health professionals against the COVID-19 pandemic by reducing costs and expediting credentialing, hiring, privileging, and licensing processes,” HRSA said in an emailed announcement. The waiver is retroactive from March 1 through May 31.

Other Developments

April 15—Four House Democrats, Representatives Jan Schakowsky (IL), Peter DeFazio (OR), Rosa DeLauro (CT), and Lloyd Doggett (TX), want to advance provisions in the next round of coronavirus legislation they said would prevent drug companies from “price gouging on any potential vaccine or treatments for COVID-19.” The lawmakers outlined three minimum protections: not granting pharmaceutical manufacturers exclusivity for any COVID-19 vaccine, drug, or treatment; prohibiting “profiteering” by mandating upfront that manufacturers charge “reasonable” prices; and requiring full transparency through public reporting of a manufacturer’s total expenditures on any vaccine or treatment.

April 15—National and state medical groups led by the American Medical Association (AMA) are asking Congress to provide further aid to physicians in response to the COVID-19 pandemic. In a letter to House and Senate leaders, the groups raised “significant concerns” about physician practices being unable to repay money advanced by Medicare pursuant to the Accelerated and Advance Payment Program that the CARES Act expanded. The groups recommended that lawmakers, in the next round of stimulus legislation, postpone recoupment until 365 days after the advance payment and extend the repayment period for at least two years; reduce the per-claim recoupment amount from 100% to 25%; waive interest during the extended payment period; and authorize HHS to issue more than one advance payment. The groups also urged Congress to provide a positive Medicare payment update in 2020; increase Medicaid and TRICARE payment rates for the duration of the public health emergency; waive budget neutrality for the Medicare payment changes for evaluation and management services that will be implemented on January 1, 2021; and extend sequestration relief through the end of next year. In addition, the groups said lawmakers should provide physicians with direct financial relief, grants, and loans; require group health plans to cover telehealth and telephone services to the same extent as Medicare through the duration of the COVID-19 pandemic; and consider broader liability protections for health care providers.

April 13—The American Hospital Association wants CMS to take additional steps to expand the role of home health agencies in efforts to combat COVID-19. In a letter to CMS Administrator Seema Verma, AHA urged the agency to allow home health agencies to count telehealth encounters as in-person visits for payment purposes. The group also urged CMS to ease documentation requirements and allow the use verbal orders and eligibility certifications to expedite discharges form hospitals to homecare. “[H]ospitals are relying on home health agencies as a critically valuable discharge option for both patients with and without the virus. Such transfers allow hospitals to focus limited resources on those COVID-19 patients requiring hospital-level care,” the letter noted.  

April 13—AHA asked the Treasury Department and the Federal Reserve for more guidance on hospital’s access to financing through the Main Street New Loan Facility under the CARES Act. Specifically, the group wants clarification of eligibility for nonprofits and public hospitals, compensation restrictions, and the earnings before interest, taxes, depreciation, and amortization test.

April 13—The Medicare Shared Savings Program could lose more than half of participating health care organizations as a result of the COVID-19 pandemic, according to a recent survey by the National Association of Accountable Care Organizations (NAACOS). The group surveyed Accountable Care Organizations (ACOs) in an online poll between April 3 and April 8. Fifty-six percent of respondents indicated they may leave the program over fears of accruing massive losses. Almost 80% of ACOs said they were “very concerned” about their ACO performance this year, NAACOS said. “When ACOs made a commitment to assume risk, they didn’t expect they’d be handling the risk of a global pandemic,” said Clif Gaus, Sc.D., NAACOS President and CEO. “Rather than be forced to pay enormous losses resulting from the pandemic, these groups of providers may sadly quit the program, which they can do without penalty by May 31.” NAACOs and other health care organizations asked CMS last month to hold harmless providers participating in alternative payment models from performance-related penalties for 2020. “CMS has yet to adequately mitigate the costs and disruptions of the pandemic,” Gaus said.


Anti-Kickback Leniency During COVID-19 Pandemic

  • April 17, 2020
  • Erin M. Eiselein , Brownstein Hyatt Farber Schreck LLP
  • Anna-Liisa Mullis , Brownstein Hyatt Farber Schreck LLP
  • Amanda Hutson , Brownstein Hyatt Farber Schreck LLP

Among the onslaught of waivers and policy statements on enforcement discretion coming out of the federal agencies over the past month to provide flexibility in the fight against coronavirus disease 2019 (COVID-19), the Department of Health and Human Services Office of Inspector General (OIG) has announced[1] a policy to exercise its enforcement discretion to not impose administrative sanctions under the federal Anti-Kickback Statute (AKS)[2] when certain conditions are met. Importantly, this enforcement discretion does not apply carte blanche to all conduct that otherwise would violate AKS. OIG is limiting this enforcement discretion to only 11 of the 18 blanket waivers for the Stark Law that the Centers for Medicare & Medicaid Services (CMS) published on March 30, 2020.[3] And, perhaps most importantly, OIG is retaining the right to enforce the AKS with respect to any relationship that creates fraud and abuse concerns.

The 11 Stark Law blanket waivers that are covered by the OIG policy are as follows:

  1. Remuneration from an entity to a physician that is above or below the fair market value for services personally performed by the physician to the entity;
  2. Rental charges paid by an entity to a physician that are below fair market value for the entity’s lease of office space from the physician;
  3. Rental charges paid by an entity to a physician that are below fair market value for the entity’s lease of equipment from the physician;
  4. Remuneration from an entity to a physician that is below fair market value for items or services purchased by the entity from the physician;
  5. Rental charges paid by a physician to an entity that are below fair market value for the physician’s lease of office space from the entity;
  6. Rental charges paid by a physician to an entity that are below fair market value for the physician’s lease of equipment from the entity;
  7. Remuneration from a physician to an entity that is below fair market value for the use of the entity’s premises or for items or services purchased by the physician from the entity;
  8. Remuneration from a hospital to a physician in the form of medical staff incidental benefits that exceeds the limit set forth in 42 CFR 411.357(m)(5);
  9. Remuneration from an entity to a physician in the form of nonmonetary compensation that exceeds the limit set forth in 42 CFR 411.357(k)(1);
  10. Remuneration from an entity to a physician resulting from a loan to the physician: (i) with an interest rate below fair market value; or (ii) on terms that are unavailable from a lender that is not a recipient of the physician’s referrals or business generated by the physician; and
  11. Remuneration from a physician to an entity resulting from a loan to the entity: (i) with an interest rate below fair market value; or (ii) on terms that are unavailable from a lender that is not in a position to generate business for the physician.[4]

However, OIG declined to offer enforcement discretion to other conduct even though CMS is providing enforcement discretion under the Stark Law for the same conduct. Hence, OIG is offering no leniency to improper referral relationships involving the following situations: hospitals that have expanded capacity in excess of that which it was licensed on March 23, 2020; hospitals that converted from a physician-owned ambulatory surgical center to a hospital on or after March 1, 2020; certain referrals to home health agencies, assisted and independent living facilities; referrals in rural areas; referrals to group practices not located in the same or centralized building; and referrals to physicians having a compensation arrangement without the arrangement being properly documented.[5]

Additionally, to receive enforcement discretion in the 11 scenarios covered by the OIG policy, OIG is requiring providers to satisfy all conditions and definitions applicable to the Stark Law blanket waivers.[6] These conditions include: (i) the providers are acting in good faith to provide care in response to the COVID-19 pandemic, (ii) the government does not determine that the financial relationship creates fraud and abuse concerns, and (iii) providers seeking protection under this policy statement maintain sufficient documentation.[7]

OIG has also limited the time frame in which it will exercise enforcement discretion, stating that its policy applies to conduct occurring on or after April 3, 2020. By contrast, the Stark Law blanket waivers applied retroactively effective March 1, 2020. Thus, there will be about 30 days in which an arrangement could be legal under Stark but potentially violate the AKS. The OIG policy will terminate on the same date as the Stark blanket waivers terminate—which will stay effective during the COVID-19 public health emergency. Of note, neither CMS nor OIG has explained how providers should plan to unwind arrangements that fall under the blanket waivers when the COVID-19 public health emergency ends.

Finally, unlike the Stark Law, which is a strict liability law that does not require intent to violate the law, AKS is an intent-based statute. It seems clear that OIG will apply its enforcement discretion and show leniency toward good faith relationships designed to support the COVID-19 public health emergency. However, given the admonition that enforcement discretion will apply only to situations not raising fraud or abuse concerns, there should be no assumption that the OIG will extend any leniency to conduct outright intended to induce referrals.

This is especially so in light of the recent reports of fraudulent behavior associated with the COVID-19 public health emergency. Numerous federal agencies and state attorneys general have issued guidance on fraud prevention and have made it clear that fraud prevention is a priority during the current crisis. Enterprising health care providers who view the current regulatory environment as an opportunity to engage in business relationships that otherwise would not pass regulatory muster—and that are not designed in good faith to address COVID-19-related issues—are cautioned that such behavior will not be viewed favorably by either OIG or the Department of Justice.

About the Authors

Erin M. Eiselein, Anna-Liisa Mullis, and Amanda Hutson are attorneys in Brownstein Hyatt Farber Schreck’s health care group in Denver, Colorado.

 

 

 
[1] OIG Policy Statement Regarding Application of Certain Administrative Enforcement Authorities Due to the Declaration of Coronavirus Disease 2019 (COVID-19) Outbreak in the United States as a National Emergency (Apr. 3, 2020), https://oig.hhs.gov/coronavirus/OIG-Policy-Statement-4.3.20.pdf (OIG Policy Statement).
[2] 42 U.S.C. § 1320a-7b.
[3] Blanket Waivers of Section 1877(g) of the Social Security Act Due to Declaration of COVID-19 Outbreak in the United States as a National Emergency (Mar. 30, 2020), https://www.cms.gov/files/document/covid-19-blanket-waivers-section-1877g.pdf (CMS Stark Law Waivers).
[4] Compare OIG Policy Statement with CMS Stark Law Waivers.
[5] Compare OIG Policy Statement with CMS Stark Law Waivers.
[6] See OIG Policy Statement.
[7] See CMS Stark Law Waivers.

CMS Proposes $784 Million Increase in SNF Medicare Payments for FY 2021

  • April 17, 2020

Skilled nursing facilities (SNFs) would see a $784 million (2.3%) increase in Medicare reimbursement in fiscal year (FY) 2021 under a proposed rule (85 Fed. Reg. 20914) the Centers for Medicare & Medicaid Services (CMS) issued April 10.

The estimate reflects a 2.7% market basket update less a 0.4 percentage point reduction for a multifactor productivity adjustment, according to a CMS fact sheet.

“While CMS is focused on helping the healthcare system respond to the COVID-19 pandemic, we are releasing the annual Medicare payment rules as required by law to ensure providers are informed on the 2021 payment updates,” the agency said.

In addition to the annual payment update, the rule also includes proposals “that reduce burden and may help providers in the COVID-19 response,” according to CMS.

Among other things, CMS is proposing to adopt the most recent Office of Management and Budget statistical area delineations and apply a 5% cap on wage index decreases from FY 2020 to FY 2021.

In the FY 2019 final rule, CMS adopted a new case-mix model, which went into effect October 1, 2019, for the SNF Prospective Payment System. The Patient Driven Payment Model (PDPM) focuses on clinically relevant factors, rather than volume-based services for determining Medicare payment. PDPM uses ICD-10 codes to classify SNF patients into certain payment groups.

Responding to stakeholder feedback, the proposed rule includes changes to the ICD-10 Code mappings that would be effective in FY 2021, CMS said.  

Comments are due June 9.


Rehab Services Provider Agrees to $4 Million Fraud Settlement

  • April 17, 2020

Encore Rehabilitation Services LLC agreed to pay $4.03 million to resolve allegations that it knowingly caused three Michigan skilled nursing facilities to submit false claims to Medicare for rehabilitation therapy services that were not reasonable, necessary, or skilled, the Department of Justice announced April 10.

According to a press release, the settlement resolves allegations that Encore’s policies and practices at the nursing facilities resulted in the provision of unreasonable, unnecessary, or unskilled rehabilitation therapy or the recording of therapy minutes as individual therapy when concurrent or group therapy was actually provided. 

Encore, based in Farmington Hills, MI, provides rehabilitation services to patients at over 600 health care facilities, including skilled nursing facilities, in more than 30 states.

In addition to the settlement, Encore entered into a five-year Corporate Integrity Agreement with the Department of Health & Human Services Office of Inspector General that requires, among other things, the implementation of a risk assessment and internal review process designed to identify and address evolving compliance risks. 

The settlement resolves allegations only, there has been no determination of liability.


Rural Health Provider Agrees to $1.7 Million Settlement Based on Self-Disclosed Improper Billing

  • April 17, 2020

Maury Regional Hospital, d/b/a Maury Regional Medical Center, agreed to pay $1,702,903 to settle False Claims Act allegations, U.S. Attorney for the Middle District of Tennessee Don Cochran announced April 13.

According to a press release, Maury Regional submitted a voluntary self-disclosure to the U.S Attorney’s Office and the Department of Health and Human Services Office of Inspector General, which was prompted after an internal investigation concluded there was aberrant billing for certain inpatient services. 

During its investigation, Maury Regional found that certain diagnosis-related groups with complications or comorbidities or major complications or comorbidities—specifically stroke, respiratory infection, simple pneumonia, and septicemia—may not have been reasonable, allowable, or documented in accordance with Medicare Part A requirements, the release said.

“Maury Regional is again to be commended for its transparency and diligence in handling the disclosure of these aberrant billing issues,” said Cochran. “As in the past, Maury Regional swiftly implemented a protocol to address the problem going forward and developed a plan to determine the scope of the issues to be remedied, with which we agreed. It worked closely and quickly with us to bring this matter to a satisfactory resolution, even in the midst of the challenges it is facing in light of the novel coronavirus pandemic.”


CMS Proposes 2.6% Increase in FY 2021 Medicare Payments to Hospices

  • April 17, 2020

The Centers for Medicare & Medicaid Services (CMS) published April 15 a proposed rule (85 Fed. Reg. 20949) that would update the hospice wage index, payment rates, and cap amount for fiscal year (FY) 2021. Hospices would see a 2.6% ($580 million) boost in Medicare payments in FY 2021 under the proposed rule.

The estimated increase reflects a 3.0% market basket update reduced by a 0.4 percentage point multifactor productivity adjustment, according to a CMS fact sheet.

“While CMS is focused on helping the healthcare system respond to the COVID-19 pandemic, we are releasing the annual Medicare payment rules as required by law to ensure providers are informed on the 2021 payment updates,” the agency said.

The proposed rule also would set the cap amount for FY 2021 at $30,743.86, which is equal to the FY 2020 cap amount of $29,964.78 updated by the proposed FY 2021 hospice payment increase of 2.6%, according to the fact sheet. The statutory aggregate cap limits overall payments made to a hospice annually.

CMS also is proposing to adopt the most recent Office of Management and Budget statistical area delineations and apply a 5% cap on wage index decreases. The proposed rule includes model examples of the hospice election statement and the hospice election statement addendum to reflect the changes finalized in the FY 2020 hospice final rule for elections on or after October 1, 2020, CMS said.

Last year’s final payment rule required hospices to include additional information in election statements to help patients make an informed choice when deciding to elect hospice.

Comments on the proposed rule are due June 9.


Nursing Home Chain Agrees to $10 Million False Claims Settlement

  • April 17, 2020

Saber Healthcare Group LLC and related entities agreed to pay $10 million to resolve allegations that the nursing home chain knowingly caused skilled nursing facilities (SNFs) to submit false claims to Medicare for rehabilitation therapy services that were not reasonable, necessary, or skilled, the Department of Justice announced April 14.

Saber Healthcare, based in Bedford Heights, OH, owns and operates SNFs in seven states, a press release said.

According to the release, the government alleged Saber improperly established general goals that all patients should be provided with the Ultra High level of therapy, regardless of the patients’ individual therapeutic needs, and enforced that expectation by pressuring therapists to provide Ultra High therapy to each patient at nine facilities. 

In addition to the civil settlement, Saber entered into a five-year Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General that requires an independent review organization to annually assess the medical necessity and appropriateness of therapy services billed to Medicare.

The settlement resolves allegations only, there has been no determination of liability.


Medicare Proposes 2.6% Boost to Psychiatric Facility Payments in FY 2021

  • April 17, 2020

Inpatient Psychiatric Facilities (IPFs) would receive a 2.6%, or $75 million, Medicare payment increase in fiscal year (FY) 2021 under a proposed update to the IPF prospective payment system that the Centers for Medicare & Medicaid Services (CMS) issued April 10.

The proposed rule (85 Fed. Reg. 20625) reflects a 3.0% market basked increase, less a 0.4 percentage point productivity adjustment, according to an agency fact sheet. CMS is estimating that total payments to IPFs will decrease an additional 0.2 percentage point due to updating the outlier threshold amount. Taken together, CMS projects total IPF payments will increase by $100 million in FY 2021.

The proposed rule also would adopt Office of Management and Budget statistical area delineations, which CMS said would result in wage index values being more representative of actual labor costs in a given area.
CMS is proposing to cap any wage index decrease at 5% for FY 2021.
 


Medicare Improperly Paid $93 Million for Inpatient Psychiatric Care, OIG Reports

  • April 17, 2020

An estimated 87% of inpatient psychiatric facility (IPF) claims for fiscal years 2014 and 2015 with outlier payments didn’t meet Medicare medical necessity or documentation requirements, the Department of Health and Human Services Office of Inspector General (OIG) reported April 13.

As a result, OIG estimated that Medicare overpaid IPFs $93 million for stays that were at least partially noncovered and resulted in outlier payments.

Of 160 sampled claims, OIG found 25 did not meet Medicare medical necessary requirements for some or all days of the stay. An additional 142 claims didn’t satisfy documentation requirements such as physician certifications.

OIG focused on outlier payments associated with IPF stays, citing a 28% increase in the number of those claims from FY 2014 to FY 2015 and a 19% increase in total Medicare payments, from $450 million to $534 million during that period. Outlier payments are intended for cases that are unusually expensive to treat, but OIG found they weren’t always warranted.

OIG recommended that CMS do more to ensure IPF claims, whether or not they result in outlier payments, comply with Medicare requirements.

The review also raised concerns that certain beneficiaries may have lacked capacity to make informed decisions about their care, and that CMS failed to track patient falls or fall rates at IPFs. OIG recommended CMS exercise additional rulemaking or oversight in both these areas.

The report is An Estimated 87 Percent of Inpatient Psychiatric Facility Claims With Outlier Payments Did Not Meet Medicare’s Medical Necessity or Documentation Requirements (A-01-16-00508).


OIG Cites Major Flaws in Medicaid Claims for Telemedicine Services in South Carolina

  • April 17, 2020

Ninety-six percent of claims for telehealth services paid for by South Carolina’s Medicaid fee-for-service (FFS) program were unallowable because they didn’t meet federal and state requirements, according to a recent report from the Department of Health and Human Services Office of Inspector General (OIG).

OIG audited a sample of 100 Medicaid FFS telemedicine payments in the state between July 2014 and June 2017, finding only three of the payments were allowable. The remaining 97 failed to meet documentation requirements such as recording start and stop times or the consulting site location of the service, which means they shouldn’t have been paid, OIG said.

According to OIG, the high number of faulty payments stemmed from South Carolina’s failure to provide formal training on telemedicine documentation requirements and to monitor compliance.

OIG recommended that South Carolina refund $1.5 million to the federal government and address the lack of formal training and monitoring.

The state agreed with the recommendations to conduct training on telemedicine documentation requirements and enhance monitoring, but argued a lesser refund was appropriate given the type of documentation that was missing. OIG continued to maintain that the state should refund the entire amount of unallowable payments.

The report is 96 Percent of South Carolina's Medicaid Fee-for-Service Telemedicine Payments Were Insufficiently Documented or Otherwise Unallowable (A-04-18-00122 ).
 


Eighth Circuit Upholds Iowa’s Certificate of Need Requirements

  • April 17, 2020

The Eighth Circuit upheld certificate of need (CON) requirements in Iowa, rejecting a challenge that argued the regime violated due process and equal protection.

According to the appeals court, applying the CON requirement to protect hospitals from outpatient surgery centers that draw away profitable business was rationally related to a legitimate state interest in ensuring the viability of full-service hospitals that provide other needed services that aren’t profitable.

Two health care providers that wanted to expand their outpatient surgery practices sued the state arguing its CON requirement was unconstitutional.

Under Iowa law, opening a new outpatient surgery center requires a CON, which is a long and expensive process, requiring the applicant to establish a need for the services and allowing existing businesses to oppose the issuance of a CON. The appeals court noted that existing hospitals often are successful in opposing the issuance of a CON.

The statute includes a capital expenditure exemption that allows CON-holders to expand or open new facilities without a new CON if the cost is $1.5 million or less annually and the new facility is located in the facility’s existing county or a contiguous county. A second exemption allows the CON-holder to sell an existing outpatient center to a new party or existing partner, which may then own and operate the surgery center without a new CON.

The providers in the case wanted to open outpatient surgery centers in a non-contiguous county without having to obtain a new CON. They alleged the CON laws violated due process and equal protection.

The district court upheld the CON requirements, and the Eighth Circuit affirmed.

The appeals court refused to apply strict scrutiny because the state’s CON regime didn’t implicate a fundamental right. The CON requirement passed constitutional muster under a rational-basis review, the Eighth Circuit held.

“Iowa could rationally conclude that its full-service hospitals would be at risk if its regulatory scheme allowed competitors to cherry pick more lucrative medical services like outpatient surgery,” the appeals court said. “We find that Iowa’s CON requirement is rationally related to a legitimate state interest in full-service hospital viability,” the appeals court concluded.

The Eighth Circuit also found it wasn’t unreasonable for Iowa to permit a limited amount of competition through the capital expenditure exemption as a way to strike a balance between protecting full-service hospitals and promoting continual improvement in hospital services.

Birchansky v. Clabaugh, No. 18-3403 (8th Cir. Apr. 14, 2020).


Lab, Pain Clinic, Former Executives Agree to $41 Million Settlement for Unnecessary Drug Testing

  • April 17, 2020

U.S. Attorney for the Eastern District of Pennsylvania William McSwain announced April 15 that reference laboratory Logan Laboratories, Inc., Tampa Pain Relief Centers, Inc., and two former executives, Michael T. Doyle and Christopher Utz Toepke, agreed to pay $41 million to resolve allegations that they fraudulently billed Medicare, Medicaid, TRICARE, and other federal health care programs for medically unnecessary Urine Drug Testing (UDT). 

The government alleged that defendants developed and implemented a policy and practice of automatically ordering both presumptive and definitive UDT for all patients at every visit, without any physician making an individualized determination that either test was medically necessary for the patients, a press release said.

In addition to the settlement, Logan Labs and Tampa Pain also entered into a Corporate Integrity Agreement with the Department of Health and Human Services Office of Inspector General. 

The claims resolved by the settlement are allegations only, there has been no determination of liability.


Baltimore Doctor Settles Allegations of Improper Procedures

  • April 17, 2020

Internist Ebenezer Quainoo, M.D. agreed to pay the United States $436,000 to settle allegations that he submitted false claims for medically unnecessary autonomic nervous function tests and trigger point injections with the use of ultrasound guidance, U.S. Attorney for the District of Maryland Robert K. Hur announced April 15.

According to the settlement agreement, from July 24, 2014 to November 30, 2018, Quainoo performed autonomic nervous function tests that were not medically necessary because he lacked the equipment to conduct the tests, the patients did not have an autonomic nervous function disorder before the test was conducted, he lacked the specific training to conduct such tests, and he only used the tests to monitor patient symptoms, not make any clinical decisions about future patient care. 

The government further alleged that the trigger point injections were not medically necessary because Quainoo failed to document a muscular knot or nodule before the patient underwent the injections, failed to exhaust conservative treatments or therapy before performing the injections, and ultrasound guidance was not needed to perform the injections.

The claims resolved by the settlement are allegations only, there has been no determination of liability.


Virginia High Court Allows Punitive Damages in Wrongful Death Suit Against Physician

  • April 17, 2020

The Virginia Supreme Court said April 9 that a punitive damages claim should have gone to the jury in a wrongful death case against a physician who prescribed over 7,000 Percocet pills to a patient.

According to the high court, the jury could reasonably have found that the physician’s conduct rose to the level of “willful and wanton” based on the facts that the prescriptions were written despite the patient’s heightened risk of drug addiction and without monitoring of the patient’s health.

Defendant Dr. Christopher Highfill performed several surgeries on Mary Jo Curtis after she broke her ankle. Following the first surgery, Highfill prescribed Percocet to alleviate Curtis' pain.

Over the next 40 months, Highfill wrote Curtis 144 prescriptions for Percocet, generally prescribing between 40 and 60 five-milligram Percocet pills to Curtis on a weekly basis. Highfill knew that Curtis had an increased risk of developing an addiction to narcotic pain medication due to her history of bipolar disorder and alcohol use, but never attempted to treat her pain with a nonnarcotic medication.

Highfill’s last examination of Curtis was April 23, 2013, but despite the lack of monitoring, Highfill wrote Curtis 52 prescriptions for approximately 2,400 Percocet pills after that date.

After Curtis was found dead of an accidental overdose of oxycodone, alcohol, and other prescription medications, the administrator of her estate sued Highfill for wrongful death and requested punitive damages. 

Highfill argued that his negligence was not the proximate cause of Curtis' death and moved to strike the punitive damages claim. The circuit court agreed and granted the motion.

On appeal, the state high court reversed, finding a jury could have concluded that Highfill's actions constituted a "willful and wanton" disregard for Curtis' health and safety; therefore, the punitive damages claim should have been submitted to the jury.

While acknowledging that the evidence presented did not in any way establish that Highfill had "ill will" toward Curtis or that he intended her to suffer any harm, the high court said that finding was not a required element of the willful and wanton conduct underlying a claim for punitive damages.

Curtis v. Highfill, No. 190117 (Va. Apr. 9, 2020).


Ventilator Allocation: Considerations During the COVID-19 Pandemic

  • April 17, 2020
  • Raj Shah , Institute at MagMutual
  • Susannah Gleason , MagMutual Insurance Company

The COVID-19 pandemic exposed the scarcity of ventilators throughout the United States. Both health care providers and the American public acknowledge that the nation’s health care system does not have sufficient ventilator capacity and challenging decisions regarding ventilator allocation and usage must be made. This concern is coupled with a lack of federal regulatory guidance on how hospitals should allocate the existing ventilators that are available when a hospital’s demand for additional ventilators exceeds its ventilator supply. While some states enacted guidance regarding ventilator allocation, the majority of hospitals are located within states that have not provided sufficient regulatory guidance outlining the optimum allocation of existing ventilators. This article explores the current state of hospital decision making regarding ventilator allocation and the existing ventilator allocation models available during the COVID-19 pandemic.

Most hospitals are not used to making decisions regarding scarce resources and ventilator allocation. Because of this inexperience, hospitals generally establish a triage committee.[1] A triage committee is composed of individuals, such as physicians and nurses, removed from the care of the patient.[2] The triage committee creates guidance regarding how the hospital will handle its ventilator allocation and then makes decisions based on that guidance.[3] This way, a health care provider treating a patient does not have to compromise their legal duty of care to their patient by making the ventilator allocation decision, but rather, can focus on advocating for their patient within the bounds of the triage committee’s guidance.[4]

The guidance the triage committee develops involves multiple considerations, including existing state guidelines or their health care system’s existing guidelines. A few states have enacted new guidance on how health care providers within that state should allocate resources such as ventilators, while others are following older models.[5] For example, New York issued guidelines in 2015 that essentially boil down to “save the most lives,” which has been recommended for physicians to follow now as well.[6] Alternatively, Minnesota and Pennsylvania use a point system, which prioritizes patients based on who benefits the most.[7] Arizona created a color-coded chart to assess a patient’s need.[8] Colorado is following its influenza plan from 2018, which sets exclusion criteria for allocation.[9] In 2011, the Centers for Disease Control and Prevention (CDC) published guidelines recommending that hospitals follow basic bioethics principles in allocation decision making, which include respect, beneficence, and justice.[10] These principles include informed consent, the best interest of the patient, and allocating with equality.[11] While these principles provide some framework, many of these principles are in conflict during the COVID-19 pandemic, such as balancing the best interest for the patient versus the best interest for public health. To date, the CDC has not issued updated guidelines during the COVID-19 pandemic. The only recent guidance that the CDC issued, involves allocation of ventilators from stockpiles to facilities but not allocation between patients.[12] Accordingly, there are no federal guidelines available during the COVID-19 pandemic and only a patchwork of limited state-specific guidance.

Most recently, the University of Pittsburgh published a model on March 27, 2020 that addresses the concerns of existing models and provides a new framework for allocation decisions (the Pittsburgh Model).[13] First, the Pittsburgh Model cautions against excluding certain patients from access to ventilators.[14] According to the Pittsburgh Model, excluding certain patients violates the basic bioethics principle of justice or equality.[15] Further, excluding certain patients could lead to discrimination claims because it is separating out certain patient types from access to a ventilator. Second, the Pittsburgh Model recommends against a “save the most lives” model because it does not take into account other necessary considerations.[16] For example, experts debate whether to “save the most lives” or to “save the most life-years” is a better model.[17] A “save the most life-years” model gives higher priority to those who are younger and have not had the same opportunities to go through life.[18] The Pittsburgh Model recommends providing priority to health care workers because these workers add value in continuing to fight COVID-19.[19]

With its multi-faceted approach, the Pittsburgh Model is becoming well-recognized.[20] The Pittsburgh Model recommends a prioritization tool like that currently being used by the state of Pennsylvania.[21] Under the Pittsburgh Model, patients are assigned a score based on their likely benefit from critical care.[22] The score considers the likelihood of survival upon discharge, the severity of illness, and chances of long-term survival.[23] These scores are then color-coded into priority groups.[24] Additionally, heightened priority is given to workers performing vital tasks to responding to the pandemic and in tie-breakers, younger patients are given priority.[25] Compared to the “save the most lives” model, the Pittsburgh Model gives care to those most likely to benefit.[26]

In addition to the Pittsburgh Model, some hospitals have adopted The Sequential Organ Failure Assessment (SOFA) as their ventilator allocation prioritization model.[27] A SOFA score is calculated based on the patient’s oxygen levels, blood platelet count, and other factors.[28] Additionally, a New England Journal of Medicine paper recommends four values to consider when making a rationing decision: (1) maximizing the benefits, (2) equality in allocating to both COVID-19 and non-COVID-19 patients, (3) promoting and rewarding instrumental value (i.e. prioritizing health care workers), and (4) giving priority to the worse off.[29] Maximizing benefits, in this case, can be applied by saving the most lives, life-years, or a balance in between, as long as it is applied consistently across the board.[30]

No matter what model a hospital triage committee chooses to adopt, consistency and transparency in allocation are key.[31] Following a policy consistently will help hospitals limit their liability exposure when making these challenging decisions regarding ventilator allocation.

About the Authors

Raj Shah is a Senior Regulatory Attorney, Policyholder Advisor, with MagMutual Insurance Company. Susannah Gleason is a Risk Intern with MagMutual Insurance Company  

 
 

 
[1] Robert D. Truog, M.D. et al, The Toughest Triage—Allocating Ventilators in a Pandemic, New Eng. J. Med., Mar. 23, 2020, https://www.nejm.org/doi/full/10.1056/NEJMp2005689.  
[2] Id.  
[3] Sacha Pfeiffer, U.S. Hospitals Prepare Guidelines for Who Gets Care Amid Coronavirus Surge, NPR, Mar. 21, 2020, https://www.npr.org/2020/03/21/819645036/u-s-hospitals-prepare-guidelines-for-who-gets-care-amid-coronavirus-surge.
[4] Truog, supra note 1.
[5] See generally Kevin McCoy and Dennis Wagner, Which coronavirus patients will get life-saving ventilators? Guidelines show how hospitals in NYC, US will decide, USA Today, Apr. 4, 2020, https://www.usatoday.com/story/news/2020/04/04/coronavirus-ventilator-shortages-may-force-tough-ethical-questions-nyc-hospitals/5108498002/.
[6] New York State Dep’t of Health, Ventilator Allocation Guidelines (2015), https://www.health.ny.gov/regulations/task_force/reports_publications/docs/ventilator_guidelines.pdf.
[7] Douglas B. White, MD, MAS and Bernard Lo, MD, A Framework for Rationing Ventilators and Critical Care Beds During the COVID-19 Pandemic, JAMA Network, Mar. 27, 2020, https://jamanetwork.com/journals/jama/fullarticle/2763953. See generally Minnesota Dep’t of Public Health, Patient Care Strategies For Scarce Resource Situations (2019), https://www.health.state.mn.us/communities/ep/surge/crisis/standards.pdf; Pennsylvania Dep’t of Health, Interim Pennsylvania Standards of Care for Pandemic Guidelines, (Apr. 10, 2020), https://www.health.pa.gov/topics/Documents/Diseases%20and%20Conditions/COVID-19%20Interim%20Crisis%20Standards%20of%20Care.pdf.
[8] Arizona Dep’t of Health Resources, Arizona Crisis Standards of Care Plan, (2020), https://www.azdhs.gov/documents/preparedness/emergency-preparedness/response-plans/azcsc-plan.pdf; see also McCoy, supra note 5.
[9] See generally Colorado Dep’t of Public Health & Environment, CDPHE All Hazards Internal Emergency Response and Recovery Plan, (May 10, 2018), https://cha.com/wp-content/uploads/2018/10/Crisis-Standards-of-Care-05102018-FINAL.pdf.
[10] Ctrs. for Disease Control and Prevention, Ethical Considerations for Decision Making Regarding Allocation of Mechanical Ventilators during a Severe Influenza Pandemic or Other Public Health Emergency, 1, 10 (July 1, 2011), https://www.cdc.gov/od/science/integrity/phethics/docs/Vent_Document_Final_Version.pdf.
[11] Id.
[12] See Ctrs. for Disease Control and Prevention, Strategies to Allocate Ventilators from Stockpiles to Facilities (Mar. 20, 2020), https://www.cdc.gov/coronavirus/2019-ncov/hcp/ppe-strategy/ventilators.html.
[13] White, supra note 7.
[14] Id.
[15] Id.; Ctrs. for Disease Control and Prevention, supra note 10, at 10.
[16] White, supra note 7.
[17] Truog, supra note 1.
[18] Id.; White, supra note 7.
[19] Id.
[20] McCoy, supra note 5; Glenn Cohen, JD, Potential Legal Liability for Withdrawing or Withholding Ventilators During COVID-19, JAMA Network, Apr. 1, 2020, https://jamanetwork.com/journals/jama/fullarticle/2764239?widget=personalizedcontent&previousarticle=2763953.
[21] White, supra note 7.
[22] Id.
[23] Id.; See also Univ. of Pittsburgh Sch. of Med., Allocation of Scarce Critical care Resources During a Public Health Emergency, 1 (Apr. 3, 2020), https://www.ccm.pitt.edu/sites/default/files/UnivPittsburgh_ModelHospitalResourcePolicy.pdf.
[24] Univ. of Pittsburgh Sch. of Med., supra note 23, at 1.
[25] White, supra note 7.
[26] Id.
[27] Maia Anderson, UPMC develops 8-point system to allocate scarce ventilators, Becker’s Hosp. Rev., Apr. 2, 2020, https://www.beckershospitalreview.com/supply-chain/upmc-develops-8-point-system-to-allocate-scarce-ventilators.html.
[28] Id.
[29] Truog, supra note 1.
[30] Id.
[31] Ctrs. for Disease Control and Prevention, supra note 10, at 11.

Fifth Circuit Tosses Whistleblower Lawsuit Against Mississippi Health Plan Alleging Medicaid Fraud

  • April 17, 2020

The Fifth Circuit affirmed the dismissal with prejudice of a qui tam action alleging a health plan that contracts with the Mississippi Medicaid program violated the False Claims Act (FCA) by using licensed practical nurses for case and care management services that should have been staffed by registered nurses.

The appeals court agreed with the lower court that relator Gwendolyn Porter, a licensed registered nurse, who formerly worked for defendant Magnolia Health Plan Inc., failed to show that the staffing issue was material to the plan's contracts with the state.

The Mississippi Medicaid program contracted with Magnolia to provide a “comprehensive package” of services on par with current Medicaid benefits. Magnolia also was contracted to provide care and case management services.

Porter alleged that while working for Magnolia from February 2011 through September 2012, she discovered that licensed practical nurses were serving as case and care managers instead of registered nurses.

The district court dismissed the action, finding Porter failed to identify specific contractual provisions requiring case and care managers to be registered nurses, to identify any specific federal or state statute requiring registered nurses to provide these services, and to establish that the staffing issue was a material term of the contract.

In an unpublished decision, the Fifth Circuit affirmed.

Even assuming Mississippi statutes and regulations required specific staffing of case and care manager positions, broad boilerplate language to adhere to all laws in Magnolia’s contracts with the state wasn’t enough to establish FCA liability, the Fifth Circuit said.

The appeals court also noted that the state continued to pay and renew contracts with Magnolia after Porter informed officials about the staffing issue.

The appeals court agreed with the lower court that it would be futile for Porter to amend her complaint since there was no reasonable basis for her to recover.

Porter v. Magnolia Health Plan, Inc., No. 18-60746 (5th Cir. Apr. 15, 2020).


U.S. Court in Utah Allows Claims Against Physician Who Allegedly Used Stolen Hard Drive as Basis of Qui Tam Claim

  • April 17, 2020

The U.S. District Court for the District of Utah allowed several claims to proceed against a physician who allegedly used a hard drive stolen from plaintiff Sherman Sorensen, M.D. as the basis of a qui tam suit against him.

Although plaintiff was unable to sustain his claims under the Racketeer Influenced and Corrupt Organizations Act (RICO), the court allowed all other claims to survive defendant Dr. Gerald Polukoff’s motion to dismiss.

During his career, Sorensen developed an expertise in medical procedures known as patent foramen ovale and atrial septal defect closures and performed a large number of them at his practice, Sorenson Cardiovascular Group (SCG). Medical charts were stored at the SCG office while billing records were maintained digitally and were stored on a series of hard drives that were housed on the SCG site. A local technical support company, TecCon, Inc., performed the maintenance and periodic replacement of these hard drives for SCG as well as general IT services.

Polukoff entered into an employment agreement with SCG. He was not authorized to make decisions or formulate policies on behalf of SCG and was also not given authority to access patient medical records, charts, or any of SCG's billing records.

After Sorensen decided to retire, he approached Polukoff and said that he would either pay Polukoff the balance of his guaranteed salary or he would turn the SCG practice over to him. Polukoff indicated that he would consider the offer but needed to ensure the financial viability of SCG before making his decision.

Polukoff then met with TecCon without Sorensen’s authorization, knowledge, or consent. Polukoff falsely informed a TecCon technician that he would be assuming ownership of SCG, instructed that new backup hard drives be installed, and requested and obtained his own hard drive to take off site.

Polukoff subsequently met again with TecCon without Sorensen’s authorization, knowledge, or consent and instructed TecCon to set up and provide him with remote access to SCG's billing records. Polukoff also sent emails to TecCon falsely stating that he was authorized to access patient information.

Polukoff eventually declined the offer to take over Sorensen’s practice. On December 6, 2012, Polukoff initiated a qui tam action against Sorensen, SCG, St. Mark's Hospital, Intermountain Healthcare, Intermountain Medical Center, and HCA, Inc. alleging that Sorenson performed unnecessary medical procedures for which he improperly billed the government. Polukoff and his attorneys admit that they accessed and used information obtained from the hard drive in the qui tam action.

Sorensen later filed suit against Polukoff and others asserting multiple claims and requesting injunctive relief. The court dismissed some of Sorensen’s claims and declined to exercise supplemental jurisdiction over the remaining state law claims. Sorensen appealed the court’s decision that he failed to adequately plead a pattern of racketeering activity, and the Tenth Circuit reversed and remanded.

Sorensen filed a Revised Second Amended Complaint, and defendants sought to dismiss all claims.

In dismissing the RICO claim, the court found Sorensen failed to sufficiently plead continuity. According to the court, a "pattern of racketeering activity" must include "at least two acts of racketeering activity" in a ten-year period.

Here, Sorensen pleaded what was actually a closed-ended series of predicate acts constituting a single scheme to accomplish a discrete goal (to facilitate the qui tam action and induce former patients to bring malpractice actions) directed at a finite group of individuals with no potential to extend to other persons or entities, the court found.

Accordingly, the court dismissed the RICO claim. The court declined to dismiss Sorensen’s claims of civil conspiracy, receipt of stolen property, conversion, and misappropriation of trade secrets, among others, and claims against the lawyer defendants.

Sorensen v. Polukoff, No. 2:18-CV-67 TS-PMW (D. Utah Apr. 7, 2020).


IRF Rule Proposes Boost in Medicare Payment, More Flexibility for Non-Physician Practitioners

  • April 17, 2020

Inpatient Rehabilitation Facilities (IRFs) would see a 2.9% (or $270 million) update in Medicare payments for fiscal year (FY) 2021, relative to payments in FY 2020 under a proposed rule issued April 16 by the Centers for Medicare & Medicaid Services (CMS).

The rule also proposes to adopt the most recent Office of Management and Budget statistical area delineations and apply a 5% cap on wage index decreases from FY 2020 to FY 2021.

Because of the “significant impact” of the COVID-19 pandemic, “and limited capacity of health care providers to review and provide comment on extensive proposals,” CMS said it limited the rulemaking to essential policies.

The rule proposes to allow non-physician practitioners to perform any of the IRF coverage service and documentation duties that are currently required to be performed by a rehabilitation physician, provided that the duties are within the non-physician practitioner’s scope of practice under applicable state law, according to a fact sheet.

In addition, CMS is proposing to no longer require a post-admission physician evaluation because the post-admission evaluation covers much of the same information as continues to be included in the pre-admission screening of the patient and the patient’s plan of care, the fact sheet said.

The rule is scheduled to be published in the April 21 Federal Register and comments are due by June 15, 2020.


Antitrust Collaborations in Light of COVID-19

  • April 16, 2020

In this podcast, Monica Noether, Vice President, Charles River Associates, talks to Robert Canterman, senior attorney, Health Care Division, FTC Bureau of Competition, and Peggy Ward, Partner, Jones Day, about the types of health care provider collaborations likely to happen in response to the COVID-19 pandemic. The podcast discusses limits to the appropriate scope of coordination, available agency guidance for providers seeking to form collaborations, and examines what key issues FTC staff will consider when evaluating proposals. Sponsored by Charles River Associates.