Earlier this year, I wrote an article regarding the Office of Inspector General’s (“OIG”) December 2006 review of Louisiana’s Medical Assistance Programs Integrity Law (“MAPIL”). At that time, the OIG had determined that MAPIL did not meet the requirements outlined in Section 6031 of the Deficit Reduction Act of 2005 (“DRA”) and, therefore, Louisiana was not entitled to the financial incentives outlined in the DRA. In my January 2007 article, I mentioned that it was likely Louisiana would amend MAPIL to comply with the DRA requirements. It now appears that the legislature has attempted to do just that.
Continue Reading Louisiana Revises Its State False Claims Act in Light of OIG Review

On July 19, 2007, the Fifth Circuit Court of Appeals affirmed the ruling of the U.S. District Court for the Eastern District of Louisiana denying class certification to three plaintiffs seeking to represent a class of uninsured patients who had received treatment from Ochsner Clinic Foundation. Maldonado v. Ochsner Clinic Found., No. 06-30573 (5^th Cir. July 19, 2007).  The plaintiffs filed a lawsuit against Ochsner Clinic Foundation, a non-profit corporation, on behalf of themselves and all others similarly situated uninsured patients. The plaintiffs claimed that Ochsner billed uninsured patients higher rates for their care according to Ochsner’s internal “chargemaster” rates, while offering lower discounted rates to patients with private insurance, Medicare or Medicaid.
Continue Reading Uninsured Patients Lose Appeal to Fifth Circuit for Class Certification

The medical necessity of durable medical equipment (“DME”) billed to the Medicare Program may have no relevance to a court’s determination of whether a DME supplier submitted claims based on fraudulent Certificates of Medical Necessity (“CMN”).   The Sixth Circuit Court of Appeal recently upheld a conviction of aiding and abetting Medicare fraud when a DME supplier submitted apparent fraudulent CMNs, even though the DME supplier might have been able to prove the medical necessity of the DME.

In United States v. Davis, Nos. 06-5073/5074, decided June 22, 2007, the Sixth Circuit affirmed a conviction on twelve (12) counts of aiding and abetting Medicare fraud. The convictions of an owner and an employee of the DME supplier stemmed from the supplier’s submitting claims to the Medicare Program for oxygen equipment that had been provided to miners with black lung disease.Continue Reading Medically Necessary DME May Not Save Supplier From Fraud Conviction

On July 24^th, Representative Pete Stark (D- CA) introduced an amendment to The Children’s Health and Medicare Protection Act of 2007 that would eliminate the whole hospital exception in the Federal physician self-referral law, otherwise known as the Stark Law.

Specifically, Section 651 of The Children’s Health and Medicare Protection Act of 2007 would eliminate the whole hospital exception in the Stark Law which would result in physicians being prohibited from referring Medicare patients to hospitals in which they have ownership interest. This amendment would apply to all hospitals, and not only physician-owned specialty hospitals. However, the amendment would grandfather hospitals that were in operation with Medicare provider agreements as of the date of introduction of the bill which is July 24, 2007.Continue Reading Congressman Pete Stark Takes Aim at Whole Hospital Exception in the Stark Law

In June, 2007, the United State Court of Appeals for the District of Columbia Circuit affirmed the dismissal of a lawsuit brought by a physician association, alleging that the “fair market value safe harbor” under the federal Stark law developed by the Centers for Medicare and Medicaid Services (“CMS”) is invalid because it was implemented without following proper procedure. The court did not rule on the merits of the association’s claim. Instead, the court decided that the association did not have standing to bring the suit because even if the court were to declare the “safe harbor” invalid, the substance of the “safe harbor” would likely still be relied on to demonstrate that physicians who refer Medicare and Medicaid patients to “designated health services” (DHS) providers with whom they have a financial relationship are being paid fair market value by the DHS providers for any contracted services they perform.
Continue Reading D.C. Circuit Upholds Dismissal of Lawsuit Alleging Invalidity of Stark Exception

On July 2, 2007, the Centers for Medicare and Medicaid Services (CMS) posted on its website the proposed updates to the Medicare Physician Fee Schedule for 2008. These proposed changes included a number of significant revisions to the federal physician self-referral prohibition otherwise known as the Stark Law. This article includes a brief summary of some of the proposed changes to the Stark Law regulations. The Kean Miller healthcare regulatory group will issue an expanded summary of the changes to the Stark Law regulations included in the proposed changes for 2008.
Continue Reading CMS Includes Proposed Stark Law Changes in 2008 Medicare Physician Fee Schedule Proposed Rules

The OIG issued an advisory opinion on June 12, 2007 regarding a hospital’s proposed purchase of a partial ownership interest in a physician-owned Ambulatory Surgical Center (ASC). The message from this advisory opinion appears to be that the purchase of an interest in an existing physician-owned provider, such as an ASC, imaging center or Specialty Hospital, will receive a heightened level of scrutiny by the OIG.
Continue Reading OIG Issues Advisory Opinion Regarding Hospital Acquisition of Physician-Owned Ambulatory Surgery Center

The Centers for Medicare and Medicaid Services (”CMS”) recently issued a letter to State Survey Directors, who conduct surveys to ensure that health care providers (such as hospitals) are meeting the Medicare conditions of participation, to advise them that a hospital may not condition its acceptance of an EMTALA transfer on the sending hospital’s using a particular transport service. In Letter No. S&C-07-20, dated April 27, 2007, CMS indicated that the Emergency Medical Treatment and Active Labor Act (“EMTALA”) Technical Advisory Group has received testimony that in some instances in which an EMTALA transfer was appropriate, the receiving hospital conditioned its acceptance of the patient on the sending hospital’s using a medical transport service owned by the receiving hospital.
Continue Reading CMS Issues EMTALA Guidance