Archives for September 2016

Former Tuomey CEO faces the ‘Stark’ reality of referral scheme

The former CEO of Tuomey Healthcare System agreed to a four-year period of exclusion and a $1 million settlement as a result of his involvement in a physician-referral scheme. The former executive’s exclusion and settlement follow a jury finding that Tuomey defrauded Medicare by filing false claims based upon illegally referred services.

Fraud

The government alleged that, due to fears that Tuomey would lose outpatient procedure referrals to a new surgery center, the former CEO entered into contracts with 19 specialist physicians, requiring the physicians to refer patients to Tuomey in exchange for compensation greatly in excess of fair market value. During the trail against Tuomey, the government asserted that the former CEO ignored warnings from the hospital’s attorneys that the physician contracts were “risky.”

Tuomey judgment

 After a month long trial, a South Carolina jury determined that the referral arrangement violated the Stark Law (42 U.S.C. § 1395nn). The illegal arrangement resulted in a $237.4 million judgment against Tuomey. Subsequently, the U.S. resolved its judgment against the health care system for $72.4 million and Tuomey was sold to Palmetto Health, a multi-hospital health care system. Prior to the CEO’s termination, the jury concluded that Tuomey filed more than 21,000 false claims with Medicare (see Tuorney saga punctuated with DOJ settlement, Health Law Daily, October 19, 2015). 

Settlement

The settlement with the former CEO is based upon allegations that, as a key decision maker, he led or participated in the scheme to defraud Medicare. Under the terms of the agreement, in addition to the $1 million payment, the former CEO will be excluded from federal health care program participation for a period of four years. His exclusion prohibits him from providing management or administrative services paid for by federal health care programs.

Highlight on Hawaii: Lawmakers say aloha to stronger overdose measures

More people in Hawaii die from drug overdoses than car crashes—a reality that is driven by an excess of opioid abuse. However, recent efforts are directed at reducing the state of Hawaii’s opioid crisis. A key component of the state’s fight against drug abuse is a piece of legislation (S.B. 2392) which creates immunity for those who describe and dispense overdose reversal medication such as Naloxone. Additionally, the law authorizes a greater range of individuals to administer such medications to individuals experiencing an overdose.

Drug abuse

In 2015, Hawaii saw 158 deaths from drug poisonings/overdoses, adding to the total of 1,523 over the past 10 years. Drug overdoses are a greater problem in Hawaii than in other U.S. states. For example, drug overdose deaths increased by 83 percent between 2006 and 2014—an increase which more than doubled the 37 percent average rise nationwide. There is speculation that Hawaii may be particularly susceptible with respect to overdoses due to its isolation and the inconsistency in the quality of drugs brought to the islands.

Naloxone

The FDA approved Naloxone to prevent overdose by opioids such as heroin, morphine, and oxycodone. The drug reverses the toxicity of an overdose by blocking opioid receptor sites. The medication is administered when a patient is showing signs of an opioid overdose. The drug is an important life-saving medication, according to a community health outreach worker who has heard stories about “people trying to help friends overdosing on narcotics like opioids, injecting them with everything from saltwater to milk.”

Law

The law encourages the prescription, distribution, and administration of Naloxone through a variety of measures. A key provision of the law is immunity that it provides for health care professionals and pharmacists who prescribe, dispense, distribute or administer overdose medications like Naloxone. The legislation also authorizes several kinds of individuals—police, firefighters, lifeguards, all emergency medical technicians, family, and friends—to administer drugs like Naloxone to individuals experiencing opioid-related drug overdoses.

Bigger than Hawaii

The opioid crisis is a problem that stretches far beyond the island chain of Hawaii, with overdose deaths from prescription painkillers claiming 165,000 lives in the U.S. since 2000. Part of the problem is the widespread prescription and use of opioids. In 2015, 227 million opioid prescriptions were written, enough for 9 out of 10 American adults to receive a bottle of opioids.

Influence

An investigation by the Associated Press and the Center for Public Integrity discovered that the prevalence of opioid use and abuse may be, in no small part, related to the financial efforts of pharmaceutical manufacturers. For example, the investigation found that “drug companies and allied advocates spent more than $880 million on lobbying and political contributions at the state and federal level over the past decade.” The figure is staggering when juxtaposed with the $4 million spent by organizations advocating for limits on opioids and the fact that the pharmaceutical lobbying is eight times higher than spending by the gun lobby over the same period. Additionally, the pharmaceutical industry maintains an average of 1,350 lobbyists covering all 50 state capitals.

A step forward

However, despite these significant and growing challenges, states like Hawaii are taking steps to reduce the impact of opioids. Authorizing greater utilization of drugs like Naloxone is an important move in the journey towards eliminating opioid abuse, one that all states can benefit from.

Are employer wellness programs under attack by the EEOC?

Many employers or their group health insurance plans offer wellness programs to promote healthier lifestyles for their employees. These employer wellness programs (EWPs) often involve medical questionnaires, health risk assessments (HRAs), and weight, cholesterol, glucose and blood pressure screenings. Some employer and group health insurance plans offer financial and other types of incentives to participating employees or to those who achieve certain targeted health outcomes.

Until 2014, it seems to have been clear sailing for employers on the EWP front as long as they complied with certain federal nondiscrimination provisions. In 2014, however, the U.S. Equal Employment Opportunity Commission (EEOC) starting filing lawsuits against employers alleging that their EWPs were not voluntary as required by Title I of the Americans with Disabilities Act (ADA). While the courts have uniformly ruled in favor of the employers in these cases, the EEOC, nevertheless, proceeded to propose new regulations under the ADA and Title II of the Genetic Information Nondiscrimination Act (GINA) that imposed new standards and ignored an existing ADA “safe harbor” provision for bona fide employer benefit plans. Despite both Congressional concerns and numerous industry comments asking the EEOC to align its new ADA and GINA final rules with the requirements of the Health Insurance Portability and Accountability Act (HIPAA) (P.L. 104-191) and the HIPAA privacy and security breach notification requirements, with which employers had worked so hard to comply, the final rules made no concessions to these concerns.

This White Paper first examines the federal law applicable to EWPs, the recent court challenges by the EEOC, the new ADA and GINA final rules, and the status of proposed legislation to void the rules. It closes by providing the results of a Q&A session with industry experts and advice on what employers should do to ensure that their EWPs pass muster with the new EEOC rules, both applicable on January 1, 2017.

Read further, “Are employer wellness plans under attack by the EEOC?

Kusserow on Compliance: HHS OIG annual report on Medicaid Fraud Control Units

Medicaid Fraud Control Units (MFCUs) are funded jointly by each state and the federal government. Federal funding is administered by the HHS Office of Inspector General (OIG) with each receiving approximately 75 percent of its total expenditures from the federal government. In fiscal year (FY) 2015, combined federal and state expenditures for the MFCUs totaled approximately $251 million.

Statistical results from 2015 MFCU investigations

  1. 1,553 convictions
  2. 731 civil settlements
  3. $744 million in criminal and civil recoveries
  4. 71 percent of convictions involved fraud
  5. 29 percent of convictions involved abuse or neglect
  6. Half of fraud cases involved unlicensed providers
  7. Personal care services attendants accounted for 439 convictions (or 65 percent of all fraud convictions)
  8. 40 percent of all abuse or neglect convictions were nurse aides, with 160 convictions
  9. 117 drug diversion cases were 8 percent of convictions and $4.4 million in recoveries
  10. All MFCUs reported civil settlements or judgments, ranging from 3 to 69 per Unit
  11. 731 civil settlements and judgments
  12. 279 (38 percent) civil settlements involved pharmaceutical manufacturers
  13. 54 settlements and judgments involved retail and wholesale pharmacies
  14. On average MFCUs recovered almost $3 for every dollar spent

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2016 Strategic Management Services, LLC. Published with permission.