Owner of Medical Marketing Company Found Guilty in $2 Million Medicare Fraud Scheme…Again!

By William J. Spratt, Jr. on Posted in Fraud & Abuse & False Claims Act, Healthcare Law, Medicare & Medicaid

The Department of Justice announced on June 27, 2019 that David Brock Lovelace, the owner of DBL Management LLC, was found guilty by a federal jury in the U.S. District Court for the Middle District of Florida of conspiracy to pay healthcare kickbacks and structuring currency transactions to avoid reporting requirements. According to the evidence at trial, Lovelace was paid by a clinical laboratory company for each DNA swab he arranged to be referred to the laboratory. To obtain DNA swabs, the evidence indicated that Lovelace paid kickbacks and bribes to medical clinics located in Miami, Florida in exchange for the referral of swabs obtained from Medicare beneficiaries, without regard to medical necessity. According to the Department of Justice, the clinical laboratory billed the Medicare program over $2.2 million in claims and paid Lovelace a percentage of the Medicare reimbursement it received.  Mr. Lovelace is expected to be sentenced on October 2, 2019.

Mr. Lovelace had been convicted previously, in December of 2015, of healthcare fraud, wire fraud, and money laundering, according to an announcement by the Department of Justice dated March 7, 2016.  Trial evidence showed that he and co-conspirators paid illegal kickbacks in exchange for access to Medicare patients and Medicare patient information used in the fraud scheme, used forged and falsified documents in the Medicare enrollment process to enroll medical clinics, and billed Medicare for services that had not been rendered by physicians. Lovelace was sentenced to 14 years in prison and ordered to pay $2.5 million in restitution. Continue Reading

Paper Prescription Pads to go the Way of the Horse and Buggy as Prescribers Will Soon Be Required to Electronically Transmit Prescriptions – Sometimes

By Martin R. Dix on Posted in Electronic Health Records & Medical Records, Healthcare Law, Pharmacy, Drugs, Medical Devices & Equipment

Governor Desantis recently signed House Bill 831, which will require certain healthcare practitioners to “electronically transmit prescriptions”. Unfortunately, the legislature left this term undefined, creating some ambiguity as to what the law requires. While the legislature likely intended this law to require “electronic prescribing,” the statute does not say that, and therefore the term “electronically transmit prescriptions” could also be interpreted to include the common practice of faxing prescriptions and possibly (encrypted) e-mailing as well.

Florida law had already defined the term “electronic prescribing” in Section 408.0611, FS. Electronic prescribing is defined as:

  • at a minimum, the electronic review of the patient’s medication history, the electronic generation of the patient’s prescription, and the electronic transmission of the patient’s prescription to a pharmacy. Section 408.0611, FS.

The requirement that practitioners electronically transmit prescriptions only applies to healthcare practitioners licensed by law to prescribe (MDs, DOs, APRNs, PAs, podiatric physicians, dentists, and optometrists) and who:

  • Maintain an electronic health records (EHR) system; or
  • Prescribe medicinal drugs as an owner, employee or contractor of a licensed health care facility or practice that maintains an EHR system

This requirement will apply to practitioners at hospitals, healthcare clinics, ambulatory surgical centers, and other licensed facilities which have EHR systems. It is less clear when it applies to practitioners in unlicensed locations with EHR systems (such as exempt healthcare clinics) as well as other entities that may or may not qualify as a “practice.” Clearly, practitioners that use paper medical record systems only will not have to comply. Continue Reading

Florida Patient Brokering Act Amended – Does it Clarify or Create New Issues?

By William J. Spratt, Jr. on Posted in Fraud & Abuse & False Claims Act, Government Affairs, Licensure & Regulatory, Healthcare Law, Hospitals & Health Systems, Medicare & Medicaid, Physicians

The Florida Legislature recently passed HB 369 (the Bill), which would tweak an important provision of the Florida Patient Brokering Act, Section 817.505 of the Florida Statutes (Patient Brokering Act).  It seeks to clarify the exception to the Patient Brokering Act which incorporated by reference the criminal provisions of the federal Anti-Kickback Statute (42 U.S.C. S1320a-7b(b)) pertaining to illegal remuneration) (the AKS) and its safe harbor regulations.  But the attempt to clarify the exception may have made it less clear.

The applicable exception in the Patient Brokering Act currently states that:

“(3) This section shall not apply to: (a) Any discount, payment, waiver of payment, or payment practice not prohibited by 42 U.S.C. s. 1320a-7b(b) or regulations promulgated thereunder.”

The revision in the Bill enacted by the Legislature on May 3, 2019 states that:

“(3) This section shall not apply to the following payment practices: (a) Any discount, payment, waiver of payment, or payment practice expressly authorized by 42 U.S.C. s. 1320a-7b(b)(3) or regulations adopted thereunder.”

So, what does the change mean?  And why was the language changed? Continue Reading

A Wake Up Call for Hospital Boards

By Bill Ide III and Amanda K. Leech on Posted in Healthcare Law, Hospitals & Health Systems

The Georgia Legislature recently passed House Bill 321 (the Act) adding a new code section (O.C.G.A. §31-7-22), which imposes significant financial and business transparency requirements on certain hospitals in Georgia, including non-profit hospitals. Beginning October 1, 2019, non-profit hospitals operating in Georgia will be required to post links in a prominent location on their homepages. These links must direct the individual to a plethora of detailed information, including, among other items, audited financials, Form 990’s, the salaries and fringe benefits of the facility’s ten highest paid administrative positions and notably, each facility’s completed annual hospital questionnaire.  Posting the annual hospital questionnaire will provide an easy to access record on the facility’s populations served, services provided, outcomes, payment sources and staff employed. This information was previously available through a complex database on the Georgia Department of Community Health’s website. Now, it will be available to every visitor to the hospital’s website advancing transparency and setting the stage for increased accountability.  Transparency is being embraced at the federal level as well – an executive order is expected to be issued this month to compel disclosure of healthcare prices. Continue Reading

FTC Prevails in Physician Merger Case Before the 8th Circuit

By James M. Burns on Posted in Antitrust, Healthcare Law, Healthcare M&A, Joint Ventures, Transactions & Health Ventures, Hospitals & Health Systems, Physicians

The 8th Circuit Court of Appeals recently handed the Federal Trade Commission another appellate victory in its efforts to curtail anticompetitive mergers in the healthcare industry, affirming the FTC’s earlier District Court victory in Federal Trade Commission v. Sanford Health. The decision follows a number of other recent FTC appellate victories in healthcare merger cases – in the Third, Seventh and Ninth Circuits – over the last several years.

In the Sanford Health case, the FTC (joined by the State of North Dakota), alleged that Sanford Health’s proposed acquisition of a large multi-specialty physician group in Bismarck, North Dakota – Mid Dakota Clinic, P.C. – would have anticompetitive effects. In support of the claim, the FTC alleged that, post-merger, Sanford Health would have a 99.8% market share in the general surgeon services market in the Bismarck-Mandan region, a 98.6% share in pediatric services, an 85.7% share with respect to adult primary care services; and an 84.6% share of the OB/GYN physician services market. Each of these market shares, and the increase in these shares caused by the proposed merger, create presumptions under the FTC/DOJ Horizontal Merger Guidelines that the proposed transaction would have anticompetitive effects.  Continue Reading

Supreme Court Resolves Statute of Limitation Circuit Split in False Claims Act Cases

By Ayman Rizkalla on Posted in Fraud & Abuse & False Claims Act, Healthcare Law, Healthcare Litigation

Last month, in a unanimous decision, the U.S. Supreme Court ruled that the analysis of the applicable statute of limitations under the False Claims Act (FCA) as set forth in 31 U.S.C. § 3731 is the same regardless of whether the government intervenes in the action or not.  While the decision is not likely to affect either the government or relator conduct, it will encourage defendants to expand the scope of discovery to better gauge whether the action may be time barred.

Under the FCA, an action must be brought within: (1) six years of the date on which the violation was committed [31 U.S.C. § 3731(b)(1)]; or (2) three years of the date on which “the facts material to the right of action are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances, but in no event more than 10 years after the date on which the violation is committed, whichever occurs last.”  Continue Reading

Georgia Leads the Way with Enactment of Pharmacy Anti-Steering Law

By Amy Jeon McCullough on Posted in Fraud & Abuse & False Claims Act, Healthcare Law, Pharmacy, Drugs, Medical Devices & Equipment

With an overwhelming amount of bi-partisan support, on May 7, 2019, Georgia enacted the Pharmacy Anti-Steering and Transparency Act, O.C.G.A. §26-4-119 (the GA Act). The GA Act goes into effect as of January 1, 2020.

As healthcare providers are well aware, prohibitions against self-referrals are not new – federal and state laws prohibiting self-referrals by physicians and other healthcare providers have been in place for decades (e.g., federal Stark Law; Anti-Kickback Statute).  However, many pharmacy benefit managers (PBMs) and insurers have leveraged their affiliations with pharmacies to steer patients to their affiliated pharmacies without much regulatory oversight or transparency resulting in increased profits for the PBMs and insurers and negatively impacting patient choice and quality of care. The GA Act seeks to address these issues by imposing self-referral and anti-steering prohibitions against pharmacies affiliated with PBMs and insurers. Continue Reading

Caution: Curb Your Enthusiasm for the Reduced HIPAA Annual Limits

By Amy Jeon McCullough on Posted in Healthcare Law, HIPAA, Privacy, and Data Security

Until recently, the annual limit for civil monetary penalties (CMP) that could be levied against covered entities and business associates in violation of the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, and their implementing regulations, as amended from time to time (collectively, HIPAA) was $1,500,000. On April 30, 2019, the U.S. Department of Health and Human Services (HHS) released a notice of enforcement discretion lowering the annual CMP caps for certain types of penalties imposed for violating HIPAA. Given 2018 was HHS’ all-time record year for HIPAA enforcement ($28.7 million in penalties collected), the new annual caps seemingly appear to provide relief to covered entities and business associates. The reduced annual caps certainly lower the financial risks for covered entities and business associates that have taken steps to meet HIPAA’s requirements.

However, covered entities and business associates should not get too excited because the reduction in the annual CMP caps are limited in many ways, including, as follows: Continue Reading

2019 Legislative Session – The Passage of Telehealth (HB 23)

By Steven Grigas and Bruce D. Platt on Posted in Government Affairs, Licensure & Regulatory, Health Insurers & Managed Care Organizations, Healthcare Law, Medicare & Medicaid

In the closing days of this year’s legislative session, the Florida House and Senate came to agreement on statutory language that adopts the parameters for telehealth for Florida. HB 23, sponsored by Representative Clay Yarborough, establishes a statutory basis for telehealth services, provides meaningful definitions of the terms telehealth and telehealth provider, and creates Section 456.47 Florida Statutes which provides the standards of practice under which all telehealth providers must operate. HB 23 further creates Sections 627.42396 and 641.31 relating to certain reimbursement requirements for contracts between health insurers, health maintenance organizations, and telehealth providers.  Notably absent from this bill is earlier language that provided for a tax credit and a requirement of payment parity for out-of-state and in -state services. Continue Reading

Florida Legislature Repeals its “Certificate of Need” Law

By James M. Burns on Posted in Antitrust, Government Affairs, Licensure & Regulatory, Healthcare Law, Hospitals & Health Systems

In a somewhat surprising move, on April 29, 2019 the Florida Legislature passed legislation (HB 21) that repeals the state’s “Certificate of Need” (CON) laws with respect to general hospitals and tertiary services. Such laws, which are in place in many states, typically prohibit a healthcare provider from expanding its services and from entering new markets absent its ability to demonstrate to state regulators that there is an unmet need for such services in the target community. The Legislature’s action comes during the last week of the legislative session, and after numerous unsuccessful efforts to pass such legislation over the last several years. HB 21 now goes to Governor DeSantis for approval, and if signed, general hospitals and providers of tertiary services will be free of this requirement beginning in July (the legislation also provides that specialty hospitals will no longer be subject to the CON law starting in 2021; at least for now, nursing homes and hospices would still be subject to the CON regulations). Continue Reading

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