Possible Relief for Hospitals in the Protection of PSO Information?

Last Thursday, September 5, 2019, Judge James Moody, Jr. of the United States District Court for the Middle District of Florida issued a positive ruling for hospitals dealing with patient safety organization (PSO) data. The opinion can be reviewed here. Note, while this decision is not binding on state courts, it is persuasive authority. It may be used to argue against the production of adverse incident materials.

Federal Judge Moody commented regarding some specific issues:

Subject Matter Jurisdiction

The Plaintiff, Tampa General Hospital (TGH), was facing daily monetary sanctions pursuant to federal law in a state court action if it knowingly disclosed patient safety data. The federal statutory penalty is expressed in mandatory terms in both the Patient Safety Act and the Administrative Rules. Since the U.S. Department of Health and Human Services (HHS) had refused to assure TGH it would not be penalized if TGH produced the Patient Safety Work Product (PSWP), the court had to act.

Pre-Emption

Both TGH and HHS agreed that the Patient Safety Act expressly preempts Florida Amendment 7. Judge Moody states that the language in the Patient Safety Act clearly is an express preemption clause. The key point, in this particular case, is that the documents that TGH maintained, were made for and submitted to, a PSO. They were therefore not subject to forced disclosure in the state court medical malpractice action.

The federal court addressed the Florida Supreme Court’s opinion in Charles v. S. Baptist Hosp. of Fla., Inc., 209 So. 3d 1199 (Fla. 2017). The distinct difference is that the documents in Charles had not been submitted to a PSO. Preemption therefore was not directly at issue. Continue Reading

Long Delayed CVS/Aetna Merger Finally Gains Court Approval

By James M. Burns on September 5, 2019 Posted in Antitrust, Government Affairs, Licensure & Regulatory, Healthcare Law, Healthcare M&A, Joint Ventures, Transactions & Health Ventures

Concluding one of the longest merger reviews in history, on September 4, Judge Richard Leon, District Judge for the District of Columbia, issued his final ruling in United States v. CVS Health, approving the proposed settlement of the United States’ challenge to CVS’s merger with Aetna. The ruling concludes Judge Leon’s eleven month review of the proposed settlement, during which he repeatedly questioned whether the proposed settlement was “in the public interest” – the test for approval of the proposed settlement set forth under the Tunney Act (15 USC 16(e)(1)). To make that determination, Judge Leon conducted the first-ever live hearing in a Tunney Act proceeding, at which he heard testimony from those for and against the proposed settlement. The decision grants final approval of a merger that combines the nation’s largest pharmaceutical chain (CVS) with the nation’s third largest health insurance company. Both entities are also among the largest providers of insurance in the individual Medicare Part D prescription drug plan market, and the settlement requires CVS to divest Aetna’s Medicare Part D business to WellCare. Continue Reading

FDA’s Safe Importation Action Plan May Give Florida’s Drug Import Program a Pathway to Approval

By Martin R. Dix on August 23, 2019 Posted in Pharmacy, Drugs, Medical Devices & Equipment

At both the federal level and within Florida, there are the beginnings of the seeds of change regarding drug importation policies. President Trump and Governor DeSantis have both been HUGE supporters of drug importation as a mechanism to reduce prescription drug prices.

First, at the federal level, as a result of the President’s interest, in June 2018, DHHS Secretary Azar was directed by the FDA to establish a Working Group on Drug Importation to Address Price Spikes. Following on the working group’s efforts, earlier this month, the FDA announced its “Safe Importation Action Plan” (the Plan) to allow the importation of prescription drugs. The Plan has two options or Pathways, as they are referenced in the Plan. Continue Reading

Florida Board of Pharmacy Initiates Work on International Export Pharmacy Permit Application and Rules

By Martin R. Dix on July 23, 2019 Posted in Healthcare Law, Pharmacy, Drugs, Medical Devices & Equipment

International export pharmacies took another step forward towards a separate, distinct licensure in Florida as the Florida Board of Pharmacy held a specially called Rules Sub-Committee Meeting on June 27, 2019, to address the Board’s responsibilities under House Bill 19, which went into effect on July 1, 2019. Section 465.0157, FS, establishes an “international export pharmacy” permit as part of the governor’s initiative to try to bring less expensive drugs from Canada to Florida residents. An international export pharmacy is a pharmacy located outside of the United States that holds an active and unencumbered permit under Chapter 465, FS [The Florida Pharmacy Practice Act], to export prescription drugs from their location into this state under the program. These pharmacies will also need to be registered as exporters with the Department of Business and Professional Regulation, Division of Drugs, Devices, and Cosmetics before they can export drugs into this state.

Only drugs that meet FDA standards relating to safety, effectiveness, misbranding and adulteration, and ones that do not violate U.S. patent laws can be imported. Even then, not all prescription drugs may be imported. The law excludes: Continue Reading

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

By William J. Spratt, Jr. on July 15, 2019 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 July 1, 2019 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 June 28, 2019 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 June 24, 2019 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 June 17, 2019 Posted in Antitrust, Healthcare Law, Healthcare M&A, Joint Ventures, Transactions & Health Ventures, Hospitals & Health Systems, Physicians

The 8^th 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 June 10, 2019 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