On May 10, 2017, the U.S. Health and Human Services Department Office for Civil Rights (OCR) announced an agreement whereby Memorial Hermann Health System (MHHS) will pay a $2.4 million penalty for releasing a patient’s name in a press release. According to the resolution agreement, in September 2015, a patient at an MHHS clinic presented an allegedly fraudulent identification card to office staff. The staff notified law enforcement and the patient was arrested. Although notification to law enforcement did not violate the HIPAA rules, it wa a violation to include the patient’s ...
A proposed rule intended to stabilize the individual and small group insurance markets was issued on February 17, 2017, only a week after the Senate confirmed Tom Price as the Secretary of the U.S. Health and Human Services Department (HHS). Although the proposed rule is intended to stabilize these markets, it may make it more difficult for individuals to obtain and maintain health insurance coverage, thereby reducing the number of people who are insured.
This is a turbulent time for American healthcare. Within weeks after the publication of the proposed rule, the American Health Care Act (AHCA) was introduced in the U.S. House of Representatives to repeal and replace key provisions of the Affordable Care Act (ACA) and make significant changes to federal funding for Medicaid. On Friday, March 24, House Speaker Paul Ryan pulled the bill before a vote. In the aftermath of the bill’s withdrawal, President Trump predicted that if it were left in place, ObamaCare would explode. As recently as Sunday, April 2, however, the President tweeted that talks of repeal and replace of the ACA were ongoing and would continue until a deal was struck. On Tuesday, April 4, House Speaker Paul Ryan said Republican lawmakers are having productive talks on a new healthcare reform bill.
This on again, off again, action to attack the ACA leaves a great deal of uncertainty for healthcare providers. That uncertainty is compounded by regulatory action that will affect the ACA in ways less visible to the public. Apparently, Secretary Price is well aware of HHS' options to make regulatory changes. According to the Chicago Tribune, he remarked during the House Appropriations Committee hearing on his agency’s proposed budget that "[f]ourteen hundred and forty-two times the ACA said 'the secretary shall' or 'the secretary may.'
The Anti-Kickback Statute
Those in the business of providing healthcare services to Medicare and Medicaid beneficiaries are all too familiar with the federal Anti-kickback Statute (AKS). Among other dreadful sanctions, it imposes criminal penalties on those individuals or entities that knowingly and willfully offer, pay, solicit, or receive remuneration in order to induce or reward the referral of business reimbursable under federal healthcare programs. A violation of the AKS is a felony punishable by fines of up to $25,000 and imprisonment for up to five years. An offense may also result in the imposition of civil monetary penalties, government program exclusion, and liability under the federal False Claims Act. The U.S. Department of Health and Human Services (HHS) has the authority, however, to protect certain provider arrangements and payment practices under the AKS. To that end, HHS has established safe harbors in various areas. While compliance with a safe harbor is not mandatory, healthcare providers and others may voluntarily seek to comply with safe harbors so that they may have substantial assurance that their business practices do not violate the AKS.
A New Safe Harbor
On January 20, 2017, a new safe harbor became available for local transportation services furnished by healthcare providers to Medicare and Medicaid beneficiaries.  The safe harbor protects an offer of free or discounted local transportation services when paid for by an eligible entity. An eligible entity may be a direct provider of healthcare services or one that arranges for the provision of healthcare services to patients, such as a health plan or clinically integrated network. The definition of an eligible entity excludes organizations that primarily supply healthcare items rather than services, such as a durable medical equipment suppliers or pharmacies. However, entities that primarily provide services, but also provide items, such as a hospital, may provide patients with transportation to the hospital for items or services provided by the hospital (such as for obtaining items at the hospital’s on-site pharmacy).
The safe harbor is available for two types of transportation. First, the safe harbor protects an offer to provide transportation of an established patient to or from an eligible entity for medically necessary items or services. An established patient is a person who has contacted the eligible entity to schedule an appointment or had a previous appointment with the eligible entity furnishing the transportation.
Second, the safe harbor protects certain types of shuttle services that are generally available to the public, as well as patients on a non-discriminatory basis.
On January 19, 2017, the Federal Trade Commission announced a settlement which would resolve allegations that competing ophthalmologists violated federal antitrust laws when they refused to negotiate contracts with MCS Advantage, Inc. (MCS), a Medicare Advantage Plan, and Eye Management of Puerto Rico (Eye Management), MCS’s network administrator.
According to the complaint, the charges arise from an arrangement between Eye Management and MCS entered into in April, 2014. Eye Management agreed to create and manage a network of ophthalmologists to provide services to MCS enrollees and to do so at a cost savings to MCS. Eye Management planned to replace MCS’s existing contract with each individual ophthalmologist with a new contract between Eye Management and the ophthalmologist at a lower reimbursement rate. In early June 2014, Eye Management sent a proposed contract to every ophthalmologist contracted with MCS at the time. These contracts offered payments at rates that were about 10% lower, on average, than the rates under the existing contracts between MCS and each ophthalmologist.
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