October 2013 Health Care Compliance Sales Update
WK Health Law Daily
The WK Health Law Daily features the latest news involving Medicare, Medicaid,
health care reform, health care compliance, fraud and abuse, and other health care
reimbursement and compliance topics. For more information, go to
http://wkhealthlawdaily.com. The following health care compliance related stories
appeared in Health Law Daily in October.
HIPAA
Privacy action fails due to lack of evidence that prohibited medical information was
communicated. Summary judgment was granted to the United States and to all
defendants in an action for invasion of privacy regarding the release of private medical
information to the daughter and son-in-law of the patient (Saucier v United States,
September 30, 2013, Drell, D). The Health Insurance Portability and Accountability Act
of 1996 (HIPAA) prohibits unauthorized disclosure of personal health care information.
Under 45 C.F.R. sec 164.502, a health care provider may use or disclose health
information for treatment, payment, or health care operations, or if there is a valid
authorization. While HIPAA does not provide for a private right to sue, the HIPAA
standard indicates that a privacy interest is implicated when an unauthorized disclosure
occurs. The court found that while communications between medical personnel and
certain unauthorized members of the patient’s family may have occurred, there was no
record or evidence that any of the supposed communications contained prohibited
medical information.
Fraud and Abuse/False Claims Act
Government has prosecutorial discretion in dismissal of serial whistleblower’s suit.
The government was correct in asserting that it had the right to put an end to litigation it
deemed expensive and needless or futile (U.S. ex rel. Piacantile v Amgen Inc., September
30, 2013, Johnson, S). An eight-year investigation of several claims brought by different
relators resulted in a $780 million settlement of alleged fraudulent marketing and illegal
kickbacks in conjunction with the sale of drug products. Amgen, Inc. (Amgen) was
alleged to have engaged in fraudulent marketing practices, the promotion of off-label
uses and the provision of kickbacks to physicians in the course of promoting its drugs.
The government offered what it believed was a reasonable amount to a relator in light of
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the weakness of his claims. The government deemed that further litigation on the matter
was not necessary, but the whistleblower disagreed and filed suit.
Former hospice employees qualify as original sources for FCA allegations. Three
relators included sufficient evidence to support allegations in their complaint brought
under the False Claims Act (FCA) alleging that Southerncare Inc. (Southerncare)
submitted false Medicare or Medicaid claims to obtain government reimbursement for
hospice care (U.S. ex rel Woods v Southerncare, Inc., September 30, 2013, Reeves, C).
The court found that the relators qualified as original sources because, in addition to
having direct and independent knowledge of the information indicated in their
allegations, they became whistleblowers by providing the government any essential
element of the fraudulent scheme before filing their action. The information provided
included specific patient names and information regarding Southerncare’s scheme of
forging and backdating documents. Therefore, the information that each relator disclosed
to the government was sufficient because it consisted of at least one essential element of
the allegations of fraud included in their complaint. The qui tam complaint, filed by three
former employees (the relators) of Southerncare facilities in Mississippi, provided
enough evidence by original sources to survive a motion to dismiss by Southerncare.
Further discovery granted for Medicaid false claims action. A relator’s motion in
limine, seeking to limit testimony and argument as to whether prescriptions issued by
Jennifer King Vassel (King Vassel) were issued for off-label uses not otherwise
supported by a medical text was denied, while a protective order seeking more
information about possible prescriptions was granted (US ex rel Watson v Vassel,
October 1, 2013, Molloy, D). Watson (relator) alleged King Vassel, violated the False
Claims Act by writing prescriptions to a minor, N.B., for uses that are not medically
accepted. According to the court, “if King Vassel prescribed a medication to N.B. for a
use that is neither approved by the Food, Drug, and Cosmetic Act or supported by a
medical compendia, then such a prescription was not for a medically accepted indication,
further meaning that the prescription is not for a covered outpatient drug, and accordingly
establishing that the prescription written by King Vassel was a false claim if submitted to
Medicaid for reimbursement.”
OIG must disclose portions of reports of compliance with CIAs. Much of the
information contained within annual reports of drug makers’ compliance with their
corporate integrity agreements was subject to disclosure under the Freedom of
Information Act (Public Citizen v HHS v Pfizer, Inc., October 4, 2013, Howell, B). HHS
has the burden of proof to show that any document is exempt from disclosure. Because
the parties did not provide enough detail for the court to determine whether most of the
information requested was exempt, the court denied the parties’ motions for summary
judgment. A public interest organization, however, successfully established that HHS had
not conducted an adequate search for records responsive to the request, and the agency
established that portions of the reports that concerned the companies’ findings as to offlabel marketing by specific sales representatives were exempt as confidential commercial
information under 5 USC sec. 552(b)(4).
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DOJ settles fraud charges against Rhode Island doctor. A settlement agreement has
been entered into between the U.S. Department of Justice (DOJ), on behalf of the HHS
Office of Inspector General (OIG), and Hafeez Khan, M.D., U.S. Care, Inc., and U.S.
Care Pain Clinic, for allegedly fraudulent Medicare and Medicaid claims submitted
between August 1, 2006 and December 31, 2010, in violation of the federal False Claims
Act (FCA), 31 U.S.C. sections 3729-33 (Settlement Agreement, September 27, 2013).
The agreement alleges that the parties submitted claims to Medicare and Medicaid for
services not rendered, engaged in overbilling, and unbundling of certain CPT codes. The
settlement agreement, however, is not an admission of liability by Khan or a concession
by the U.S. government that its allegations are not well-founded. Under the terms of the
settlement, the parties must pay $1,200,000 to the United States. In the event of default,
OIG may exclude the parties from participation in all federal health care programs until
payment is made.
Physician’s employee status must be determined before alleged EMTALA violations
can be reviewed. A physician’s lawsuit alleging a hospital violated the Emergency
Medical Treatment and Active Labor Act (EMTALA) survived a motion to dismiss based
on lack of subject matter jurisdiction (Muzaffar v Aurora Health Care Southern Lakes,
Inc., October 4, 2013, Joseph, N). Dr. Kamal Muzzafar contracted with Aurora Health
Care Southern Lakes (Aurora) to provide physician services under hospital privileges. Dr.
Muzaffar alleged that Aurora retaliated against him after he reported potential EMTALA
violations to the hospital’s Medical Executive Committee, which is in violation of
EMTALA’s whistleblower protection statute. The hospital argued that there is no federal
question in the complaint, and that Dr. Muzzafar was not an employee subject to
whistleblower protection. The court determined that facially it could find Dr. Muzzafar
an employee of the hospital, (allowing the complaint to survive the facial challenge) but
factually it was not clear and the matter required further briefing.
Anti-kickback
Opinion approves provider billing Medicaid for services that it furnished free to
other needy children. The Office of Inspector General (OIG) would not sanction or
attempt to exclude from federal health care programs a nonprofit community health
organization that proposed to bill Medicaid for pediatric dental services furnished to
Medicaid beneficiaries while it continued offering the services at no charge to uninsured
or underinsured children (OIG Advisory Opinion, No. 13-13, October 8, 2013). Soc. Sec.
Act sec. 1128(b)(6) provides that submission of bills to Medicaid or another federal
program that are substantially in excess of a provider’s usual charges is a ground for
permissive exclusion. The OIG’s enforcement policy, however, does not consider the
“usual charges” to be the amounts charged when services are provided free or at reduced
charges to low-income, uninsured, or underinsured individuals who are responsible for
any charges imposed. Because the provider stated that it would not bill any federal
program other than Medicaid for the services provided to the children even if they were
eligible under TRICARE. The OIG also concluded that the arrangement described in the
request did not present any issues of remuneration or unlawful inducement to patients to
choose a particular provider.
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Journal of Health Care Compliance
The November/December issue of the Journal of Health Care Compliance will mail to
subscribers on November 11, 2013, and will be available to electronic subscribers on
Intelliconnect on November 18, 2013.
Health Care Compliance Professional’s Manual
The Health Care Compliance Professional’s Manual quarterly report will mail to subscribers on
December 17, 2013, and became available to electronic subscribers on December 27, 2013.
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