US Supreme Court to Hear FCA Statute of Limitations Case

Posted in Fraud & Abuse & False Claims Act, Healthcare Law, Healthcare Litigation

The Eleventh Circuit Court of Appeals, in its ruling in Cochise Consultancy Inc. v. U.S. ex rel. Hunt, created a 3-way circuit split regarding the determination of the applicable statute of limitations period in a False Claims Act (FCA) case. On March 19, the United States Supreme Court will hear oral argument on the matter, hopefully ending the division among the circuit courts of appeal.

Pursuant to 31 U.S.C. § 3731(b)(1)-(2), two potential statutes of limitations apply to FCA cases.  A qui tam plaintiff can bring an FCA case on behalf of the Government either (1) six years after the date of the alleged FCA violation or (2) three years after the date when the responsible Government official learned or should have known of the relevant facts supporting the claim, but not more than ten years after the alleged FCA violation.

The Fourth, Fifth, and Tenth Circuit Courts have held that a whistleblower plaintiff can only use the three-year, knowledge-based statute of limitations if the Government intervenes in the FCA case, reasoning that Congress intended this limitations period to apply only to the Government because the statute’s language specifically identified the knowledge of a responsible Government official as determinative of when the statute runs. Continue Reading

Antitrust Exemption Allows Health System to Avoid All Claims for Damages in Antitrust Class Action

Posted in Antitrust, Government Affairs, Licensure & Regulatory, Healthcare Law, Hospitals & Health Systems

Atrium Health (formerly known as Carolinas Healthcare System) scored a big victory in its defense of an antitrust class action on March 4, when the Court ruled that the plaintiffs in Benitez v. The Charlotte-Mecklenburg Hospital Authority, d/b/a Carolinas Health System, could not seek damages in the action. In granting the defendant’s motion for judgment on the pleadings on the issue, the Court held that Atrium was a governmental entity subject to the provisions of the Local Government Antitrust Act of 1984 (the LGAA), which grants local governments statutory immunity from antitrust claims for damages.

Notably, the plaintiffs’ antitrust claims in Benitez largely tracked allegations that had been made by the DOJ Antitrust Division when they brought an antitrust action against Atrium in 2016 (United States v. The Charlotte-Mecklenburg Hospital Authority). Specifically, the plaintiffs claimed that Atrium’s contracts with insurers contained “anti-steering” provisions that limited the ability of insurers to send their insureds to hospitals other than Atrium, driving up prices for inpatient services and thus inflating the amount of co-insurance that insureds were required to pay for services at Atrium. However, while the DOJ action (which was recently settled) sought only injunctive relief that would terminate the allegedly anticompetitive contract provisions, the Benitez plaintiffs sought damages for the alleged harm that contended they suffered as a result of the provisions. Continue Reading

Multiple States Considering Possible Modification to Their “Certificate of Need” Laws

Posted in Antitrust, Government Affairs, Licensure & Regulatory, Healthcare Law, Hospitals & Health Systems

In December, the U.S. Department of Health and Human Services issued a report – “Reforming America’s Healthcare System Through Choice and Competition” – expressly calling upon the states to repeal their “Certificate of Need” (CON) laws. In the report, HHS indicated that the existence of such laws – which typically prevent healthcare providers from expanding their services/entering new markets absence their ability to demonstrate to state regulators that there is an unmet need for such services in the community – has been a significant cause of escalating healthcare costs.

Perhaps in response to this prodding, legislation has recently been introduced in several states that would modify their respective CON laws. In Georgia (HB 198), South Carolina (HB 3823), Virginia (HB1680) and Alaska (HB 17), for example, legislation has been proposed that would either reduce the scope of such laws or repeal them altogether. In contrast, in Indiana, legislation (S. 573) has been introduced that would create a new CON law, something that has not occurred in any state in quite some time. Additionally, while not yet introduced, Florida is also expected to consider changes to its CON laws this legislative session as well. Continue Reading

Year in Review/Year Ahead: Medicaid Expansion: An Unanswered Call in 2018

Posted in Affordable Care Act and Other Healthcare Reform Legislation, Healthcare Law, Medicare & Medicaid

The Akerman Healthcare Practice Group, as part of its ongoing informational blogs and Practice Updates, will be publishing a series of articles, each outlining a significant healthcare industry issue from 2018, with an eye towards what to expect in 2019. The following is the third in our series – The Year in Review/The Year Ahead:

One of the more significant “non-events” of 2018 was Florida’s continued rejection of the call for Medicaid expansion under the Affordable Care Act – a/k/a Obamacare. Florida remains one of 17 states that has not expanded Medicaid. Last debated in 2015, the Governor and Legislature of Florida have shown little interest in pursuing Medicaid expansion over the past few years.  This comes despite a significant increase in the number of uninsured in the State, and a projected loss over 10 years of approximately $66 billion dollars. A recent study by the non-partisan Urban Institute found that an expansion of Medicaid in Florida would cover an additional 650,000 lives and lower the State’s uninsured rate from 15.7% to nearly 11%. And, while a poll of Florida residents indicated that about 68% favorably support expansion of Medicaid, Republican leadership of the State seemed more focused in 2018 upon alternative measures such as block grants, and premium assistance. Continue Reading

Year in Review/Year Ahead: Vertical Mergers

Posted in Healthcare M&A, Joint Ventures, Transactions & Health Ventures, Uncategorized

The Akerman LLP Healthcare Practice Group, as part of its ongoing informational blogs and Practice Updates, will be publishing a series of articles, each outlining a significant healthcare industry issue from 2018, with an eye towards what to expect in 2019. The following is the second in our series – The Year in Review/The Year Ahead:

In 2018, there were a number of large mergers in the healthcare industry that have the potential to significantly alter the ways in which healthcare is delivered in the United States. Several of the largest announced mergers were “vertical mergers” – mergers in which the merging parties are not current competitors, and are instead operating at different levels of the healthcare distribution chain. Two of the biggest such mergers – but certainly not the only ones – were the merger between Cigna and Express Scripts and CVS and Aetna. Each of these mergers paired a “top five” national health insurer with a “top five” pharmacy benefit manager.

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Year in Review/Year Ahead: The Eliminating Kickbacks in Recovery Act of 2018-The New All-Payor Anti-Kickback Statute

Posted in Fraud & Abuse & False Claims Act, Health Insurers & Managed Care Organizations, Healthcare Law

The Akerman Healthcare Practice Group, as part of its ongoing informational blogs and Practice Updates, will be publishing a series of articles, each outlining a significant healthcare industry issue from 2018, with an eye towards what to expect in 2019.  The following is the first in our series – The Year in Review/The Year Ahead:

The enactment, on October 24, 2018, of a federal law with a far too complicated  name, i.e. the “Substance Use–Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act” or the “SUPPORT for Patients and Communities Act”, created an all-payor anti-kickback statute aimed at prohibiting certain marketing practices of the substance abuse treatment community.  Specifically, within the Act is the Eliminating Kickbacks in Recovery Act of 2018 (‘EKRA”), which charts new ground for permissible ways to compensate employees and contractors engaged by “recovery homes,” “clinical treatment facilities,” and “laboratories.”

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New Year, New Wellness Program Rules

Posted in Accountable Care Organizations, Healthcare Law

Employers with established wellness programs that collect health information and/or require a medical exam can no longer rely on the EEOC regulations to justify that incentives provided under their wellness programs are voluntary. On December 20, the EEOC published a final rule (83 Fed. Reg. 65296) vacating the rules that allowed employers to offer those financial incentives to workers who participated in those wellness programs.

The EEOC entered the wellness program regulation arena in 2016 with rules under the Americans with Disabilities Act (ADA) and the Genetic Information Nondiscrimination Act (GINA). The ADA and GINA Wellness Program Rules required employers sponsoring wellness programs that collect health information (such as through a health risk assessment) and/or require a medical exam (for example, a biometric screening) to satisfy certain requirements. One such requirement involved limiting incentives under the wellness program to 30% of the cost of health coverage, so that the wellness program would qualify as a “voluntary” employee health program. Continue Reading

CVS Completes Acquisition of Aetna

Posted in Antitrust, Government Affairs, Licensure & Regulatory, Healthcare M&A, Joint Ventures, Transactions & Health Ventures

In a filing with the Securities and Exchange Commission on November 26, CVS Health Corporation announced that it has received all of the regulatory approvals necessary to complete its acquisition of Aetna and that the transaction will close on or before November 28. The announcement follows the recent approvals of the deal received from California and New York regulators. CVS previously received approval for the deal from the United States Department of Justice Antitrust Division in October, conditioned upon CVS’s agreement to divest Aetna’s Medicare Part D business to Wellcare. CVS has already begun steps to satisfy that requirement. Continue Reading

DOJ Settles “Anti-Steering” Antitrust Case Against Atrium Health

Posted in Antitrust, Government Affairs, Licensure & Regulatory

The United States Department of Justice Antitrust Division announced on November 15 that it was settling its antitrust lawsuit against Atrium Health (formerly known as Carolinas Health System). The action, United States v. Atrium Health, filed in the United States District Court for the Western District of North Carolina, challenged Atrium’s use of restrictions in its contracts with commercial insurers that the Antitrust Division contended had anticompetitive effects, preventing health insurers from promoting more cost-effective healthcare services for consumers in and around Charlotte, North Carolina.

Atrium is the largest healthcare system in North Carolina, and operates nine general acute-care hospitals in Charlotte, North Carolina.  In 2016, the Antitrust Division, together with the North Carolina Attorney General’s Office, filed a suit against Atrium, contending that Atrium had used its dominant market position in Charlotte to force insurers to refrain from engaging in practices that might “steer” members to lower cost providers (principally through the creation of narrow networks and/or tiered networks that would not have included Atrium, absent the contractual prohibition). The Antitrust Division also alleged that Atrium’s contracts constrained insurers from providing consumers and employers with information regarding the cost and quality of alternative health benefit plans. Continue Reading

Privacy Policy: The Midterm Effect

Posted in Electronic Health Records & Medical Records, Healthcare Law, Technology

Congress has long attempted to grapple with issues of cyber-security, both within the healthcare field, and generally in the United States.  The Health Insurance Portability and Accountability Act (HIPAA), as well as the Health Information Technology for Economic and Clinical Health Act (HITECH) have provided significant compliance requirements for healthcare entities in the area of data security. For the last eight years, though, a united Congress has not addressed whether or not there should be a federal standard for how companies as a whole manage electronic data. Additionally, there is yet to be a federal law that addresses curtailing attempted foreign disruption of both government and private industry.

Ironically, it is possible that a divided Congress may do more to move the needle on cybersecurity than the current one? On most controversial issues, tax cuts, healthcare, there will likely be little to no movement due to partisan gridlock. However, issues like privacy tend to have bipartisan support, so there may be movement forward on the issue.

The issue of an overarching federal privacy regulation has been spurred on by the European Union’s General Data Privacy Regulation (GDPR) enacted earlier this year. It has caused all companies that do business in Europe to take a deep, hard look at their data infrastructure, and, in some cases, make significant investments in order to come into compliance. Additionally, states such as California enacted what is considered our country’s first laws to provide consumers with greater control of what companies may do with their data. In some ways, the California law contains similar aspects to the EU’s GDPR regulations.

Up until now, certain congressional committees have held hearings with tech industry representatives to discuss what a privacy framework might come to look like. Of course, as of yet, no proposed legislation has resulted from those conversations. With calls for action in the last several months from some industry giants such as Google and Microsoft, bipartisan action may not be far behind.

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