Category: Blog

Change or No Change in Healthcare Fraud and Abuse Enforcement?

Practitioners are wondering whether the robust role of the federal government in healthcare fraud and abuse cases will remain the same. In Fiscal Year (FY) 2016, the federal government recovered over $3.3 billion as a result of health care fraud judgments, settlements and additional imposition in health care fraud cases and proceedings. Additionally, in June 2016, the Medicare Fraud Strike Force engaged in a nationwide healthcare fraud takedown that resulted in charges against about 300 individuals that include doctors, nurses and other licensed medical professionals. Rooting out fraud and abuse in healthcare has been a goal of every administration since President Ronald Reagan.

On October 27, 1986, President Reagan signed the False Claims Amendments Act of 1986, which soon became a successful anti-fraud law to deter and fight waste, fraud and abuse in the healthcare field. What makes the False Claims Act (FCA) an important tool to fight any malfeasance in the healthcare system is the qui tam provision that allows whistleblowers to expose fraud against federal government. In 2010, the Patient Protection and Affordable Care Act (ACA) amended portion of the FCA and some of those changes are considered by practitioners to have increased the number of healthcare-related FCA cases. It is undisputed that the FCA allows government to recover billions of dollars, however, the FCA defense bar is awaiting to see if there would be any change to the FCA related provision in ACA. During the confirmation hearing of Attorney General Jeff Sessions, when Senator Charles Grassley asked him to elaborate his intent regarding the FCA, Attorney General Sessions stated, “in the qui tam provisions and the part of that, I’m aware of those. I think they are valid and an effective method of rooting out fraud and abuse. I even filed one myself one time as a private lawyer….” At this point this testimony only serves as a mere reverence for FCA, which is not necessarily a clear indication what will be the effect of qui tam healthcare lawsuits or overall healthcare fraud and abuse enforcement during the Trump Administration.

There are two early signs that are leaning towards the continuity of a vigorous fraud and abuse enforcement. First, the budget that has been released by the Trump White House requested additional $70 million to fund for the Healthcare Fraud and Abuse Control program.  Trump’s proposed budget plan envisioned a whopping budget cut for the Department of Health and Human Service, but the additional request of fund for fraud prevention is likely an early sign of continuity of the robust fraud and abuse enforcement. Second, recently the Department of Justice has joined a whistleblower lawsuit, United States of America ex rel Benjamin Poehling v. Unitedhealth Group Inc., No. 16-08697 (Cent. Dist. Cal. Sep. 17, 2010), ECF No. 79, against UnitedHealth Group (United) and its subsidiary, UnitedHealthcare Medicare & Retirement—the nation’s largest provider of Medicare Advantage (MA) plans. This suit was originally filed in 2011 by a former United Healthcare finance director under FCA, and in accordance to FCA this case was sealed for five years while DOJ investigated the claims. The complaint alleged that United Health engaged in an upcoding scheme by falsifying about the severity of patients’ illness. This case is gaining some attention partly due to practitioners’ curiosity to gauge Attorney General Session’s approach to FCA cases. The New York Times has reported that DOJ’s court notice in this case was filed by a lawyer who joined the Civil Division as a part of Trump administration.

Perhaps it is too early to decipher the Trump Administration’s position on this particular matter.  Yet some early signs suggest the effect of FCA is not waning. In sum, ferreting out fraud and abuse has always enjoyed bipartisan support.  Moreover, the ACA made significant strides towards that bipartisan goal and allowed to recover a record amount of money to the government coffers, and those strengthened provisions of FCA as enacted in ACA will likely remain a tool for the government to maintain the integrity of the healthcare system.

Preventing Abuse in Long-Term Care Facilities

Up to one in six nursing home residents may be the victim of abuse or neglect every year. In late 2016, the Centers for Medicare and Medicaid Services (CMS) issued a final rule revising the requirements that Long-Term Care Facilities must meet to participate in the Medicare and Medicaid programs. According to CMS’ chief medical officer Dr. Kate Goodrich, “these are the first comprehensive updates to long-term care requirements since 1991.” One section in particular discusses changes to prevent the abuse of residents of Long-Term Care Facilities.

Provisions related to abuse, neglect, and exploitation are now included in a separate section, which brings more attention and focus to these issues. To more accurately reflect the content, § 483.13 regarding abuse in Long-Term Care Facilities has been re-designated and revised to § 483.12. The title has been changed from “Resident Behavior and Facility Practices” to “Freedom from Abuse, Neglect, and Exploitation.” The focus of this regulation is to ensure that residents are not subjected to abuse, neglect, misappropriation of property, and exploitation, and to establish requirements for the facility’s response to any allegations that has occurred. To prevent abuse of residents in Long-Term Care Facilities, we must recognize that abuse continues to occur. Last month, CNN issued a report from an exclusive analysis of state and federal data and interviews with experts, regulators and the families of victims, and found that abuse in nursing homes is far more prevalent than most people know.  The report focused on caregiver-on-resident abuse. Caregivers in nursing homes are in a position of authority and trust, and too often when they violate that position they are not properly reprimanded due to nursing homes being slow to investigate or report allegations, police dismissal, and state regulators failing to flag patterns of repeated allegations against a single caregiver.

A key difference in the new rule expands the list of individuals whom a facility may not employ or otherwise engage. It prohibits facilities from employing individuals who “have been found guilty of abuse, neglect, exploitation, misappropriation of property, or mistreatment by a court of law; have had a finding entered into the State nurse aide registry concerning abuse, neglect, exploitation, mistreatment of residents or misappropriation of their property; or have a disciplinary action in effect against his or her professional license by a state licensure body as a result of a finding of abuse, neglect, exploitation, mistreatment of residents or misappropriation of resident property.” The new rule now also requires that facilities develop and implement written policies and procedures that prohibit and prevent abuse, neglect, exploitation of residents and misappropriation of resident property, and also requires that facilities establish policies and procedures to investigate any allegations of abuse, neglect, exploitation, or misappropriation of property. Furthermore, facilities must establish policies and procedures to ensure reporting crimes, and investigation into any allegations.

With much of the new rule now in effect, residents and families will hopefully see a significant decline in the rate of nursing home abuse, but much will depend on implementation and enforcement. Medicare will issue guidance this summer on exactly how nursing homes must comply.

In the House: Military Hunger Prevention Act

On February 15, 2017, a bipartisan group of members in the House of Representatives introduced the Military Hunger Prevention Act, a bill that would help active-duty military members qualify for the Supplemental Nutrition Assistance Program (SNAP), more commonly known as food stamps. SNAP was implemented to address food insecurity and access to a sufficient quantity of affordable nutritious food. It was also designed to improve the long-term health and economic well-being of children.

Military members face unique financial challenges inherent to being active-duty, such as costs incurred from changes of station, deployment, and underemployment among military spouses. According to a survey conducted by Blue Star Families (a nonprofit that raises awareness of issues unique to military life) and the Institute for Veterans and Military Families (an interdisciplinary academic institute that publishes research on the social, economic, and policy issues that affect veterans and their families), 75% of active duty spouses reported that being a military spouse has had a negative impact on their ability to pursue employment.

Consequently, active-duty military members have reported facing food insecurity; some have indicated that they are seeking food assistance through a food bank or charitable organization. Yet, thousands of military members and their families are disqualified from SNAP because they receive a monthly Basic Allowance for Housing (BAH), which is then counted as part of their income when their eligibility for SNAP is determined. This is inconsistent with how other federal programs treat the BAH. For instance, the Internal Revenue Service (IRS) does not consider the BAH as earned income for purposes of assessing Earned Income Tax Credit. Nor is it accounted under the Health and Human Services’ Poverty Guidelines, which determines eligibility for other federal benefits programs such as the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) nor the Head Start Program.

It is also worth noting that SNAP is a federal entitlement program, which means that everyone who is eligible for the benefits will receive them. Receiving benefits will not be at the cost of another beneficiary.

The proposed Military Hunger Prevention Act intends to alleviate the food insecurity issue prevalent among active-duty military members who would otherwise qualify if it not for the current provisions under the Food and Nutrition Act of 2008 under 7 U.S.C. 2014(d). Thus, the Act would be an amendment excluding housing allowance “from any calculation of income, assets, or resources” when determining eligibility for any federal program issuing benefits in nutrition assistance.

According to Congresswoman Susan A. Davis, a senior member of the House Armed Services Committee, the Military Hunger Prevention Act would “make good on our national commitment to take care of all those who proudly serve in our armed forces.”

The Act is currently being reviewed by the Committee on House Armed Services and the Committee on House Agriculture.

Trump, Biotech, and the FDA Drug Approval Process

During his Joint Address to Congress on the evening of February 28, President Donald Trump denounced the decades-old prescription drug approval process, pledging to “slash the restraints” of the current regulatory landscape at the US Food and Drug Administration (“FDA”).  “Our slow and burdensome approval process at the Food and Drug Administration keeps too many advances…from reaching those in need,” President Trump said, giving a nod to his guest, 20-year-old Megan Crowley. Crowley, a college student who was diagnosed with a rare and typically terminal ailment – Pompe Disease – at 15 months old, was not expected to live past age 5. Since her diagnosis, Crowley’s father went on to launch Amicus Therapeutics, a biotechnology company that aims to be the frontrunner of advancing therapies for rare and devastating diseases.  

To many, the President’s harsh opinion of the FDA drug approval process was seen as misleading. Not only is the drug review process in the United States recognized worldwide as the gold standard, FDA is the fastest regulatory agency in the world. Today, the average total review time of a single drug is 8.5 months, down from an average of 30 months in the 1980s.

While most drug and biologic companies must successfully maneuver their compounds through three phases of clinical trials, proving not only safety but efficacy (via two “well-controlled and adequate studies”), there are several other expedited processes that may be utilized to obtain agency approval, at least preliminarily. Breakthrough, priority review, fast track, and accelerated approvals are all programs created to speed up the market availability.

Perhaps most misleading about Mr. Trump’s statements was the approval process for rare diseases like that of Megan. The term “Rare Diseases” is a term of art, defined as afflicting less that 200,000 people nationally. Drug manufacturers of potential treatments of rare diseases, like Pompe, may participate an expedited approval program depending on the seriousness of the ailment. ON the other hand, they may participate in the Orphan Drug Designation process, by which they are incentivized by the FDA to increase research and development on novel drugs via seven years of patent exclusivity, tax credits, and expanded access to Investigational New Drugs (IND). In other words, those who have rare diseases, to the extent to which therapies are being developed, have access to treatment faster than average.

Moreover, many biotech and pharmaceutical companies are skeptical of the deregulation of the industry. “People often argue that the FDA is too restrictive, [but] [w]e have the sense that the balance is pretty right … you have to have a well-characterized risk/benefit profile,” said Roger Perlmutter, head of Research and Development at pharmaceutical heavy hitter Merck. Similarly, Alnylam Pharma CEO John Maragarone stated what, to some, may be obvious: while deregulation seems like a good idea, “payors are looking for evidence of value.” As it is, insurance companies have already shunned some approved treatments that have not demonstrated strong effectiveness.

In 1962, in response to several children dying from ingesting elixir, Congress enacted the Drug Efficacy Amendment to Food, Drug and Cosmetic Act of 1938, explicitly requiring the pre-market approval process to include not only safety profiles, but proof of effectiveness by a showing of substantial evidence. Deviation from this would deem the product false and misleading if placed on the market, and likely open the manufacturer up to liability.

Where does Neil Gorsuch Stand on key Public Health Issues?

President Trump announced Neil Gorsuch as his Supreme Court nominee in late January 2017.  Judge Gorsuch, a 49-year-old federal appellate judge based in Colorado, currently sits on the Tenth Circuit Court of Appeals.  His legal career reflects a rapid ascent to the upper echelons of the American judicial system.  After graduating from Harvard Law School in 1991, Judge Gorsuch clerked for the Supreme Court, worked at a high-profile Washington law firm, and served as a Principal Assistant to the Deputy Attorney General in the Department of Justice.  Then, in 2006,  President George W. Bush appointed him to the Tenth Circuit.

Since his nomination, public health advocates have been anxious to understand where he stands on key public health issues.  Judge Gorsuch has a reputation for being an originalist, and many hail Judge Gorsuch as the “most natural successor to [the late] Justice Antonin Scalia.”  In his eleven years on the 10th circuit, Judge Gorsuch has stuck to conservative values and support of religious freedom.  But he also has a history of pushing back on federal agencies and regulations—including the centers for Medicare and Medicaid Services.

So where does Judge Gorsuch stand on key healthcare issues?  First, he’s against assisted suicide.  In fact, Judge Gorsuch authored a book, The Future of Assisted Suicide and Euthanasia, which argued against the practice.  In The Future of Assisted Suicide and Euthanasia, Judge Gorsuch railed against assisted suicide, with the argument that all human life is fundamentally valuable and that it’s always wrong to intentionally kill.  Unsurprisingly, organizations that support assisted suicide publicly opposed Judge Gorsuch’s nomination.

Second, he’s against the ACA Contraceptive Mandate.  In two separate 2013 cases, Judge Gorsuch sided with the corporations’ right to exemption of the Affordable Care Act’s contraceptive mandate on religious grounds.  See Hobby Lobby Stores v. Sebelius, 723 F.3d 1114 (10th Cir. 2013); Little Sisters of the Poor Home for the Aged v. Burwell, No. 13-1540 (10th Cir. July 14, 3015).  According to Judge Gorsuch, “[t]he ACA’s mandate requires them to violate their religious faith by forcing them to lend an impermissible degree of assistance to conduct their religion teaches to be gravely wrong.”

Third, Judge Gorsuch supported defunding Planned Parenthood in Utah.  In October 2016, the 10th Circuit sided with Planned Parenthood holding that Utah Governor Gary Herbert had likely pulled $270,000 in grants from Planned Parenthood in retaliation for the group’s abortion advocacy.  Judge Gorsuch dissented, however, arguing that Governor Herbert had lawfully defunded Planned Parenthood because he believed the group was involved in fetal tissue trafficking.

Finally, Judge Gorsuch’s stance on abortion is unclear, however, his opinions on contraception and assisted suicide signal that he opposes it.  Gorsuch’s ruling in favor of Hobby Lobby and Utah’s Planned Parenthood further support this assumption.  Thus, his nomination is concerning for abortion rights advocates.

Congress has yet to confirm Judge Gorsuch, but whoever becomes the ninth Supreme Court Justice will undoubtedly affect public health law and policy.  Advocates on both sides are holding their breath to see what happens next.  At the moment, all eyes are on Judge Gorsuch.

Attacking the Opioid Epidemic: 21st Century Cures Act and America’s Reefer Referendum

Notwithstanding the Patient Protection and Affordable Care Act of 2009 (“Obamacare” or “the ACA”), the 21st Century Cures Act is the largest health care innovation treatment-based American law in over a decade. Signed by President Barack Obama in December 2016 as one of his last major acts as the head of the executive branch, the Cures Act has been hailed as a bipartisan, bicameral success. “‎We are now one step closer… helping people seeking treatment for opioid addiction finally get the help they need,” Obama said in a statement. The legislation primarily seeks to implement several approaches to improve the health industry, including establishing accelerated discovery, development, and delivery of novel treatments in the biotechnology and medical device industries, as well as cost savings plans. Yet within the primarly pharma/device focused bill, albeit awkwardly placed, comes language that addresses what has steadily become a major public health risk facing the nation’s heartland: supporting state prevention activities and responses to mental health and substance use disorder need vis-à-vis the opioid epidemic.

According to the Centers for Disease Control and Prevention (CDC), drug overdose and opioid-involved deaths continue to increase in the United States. The majority of drug overdose deaths involve an opioid. From 2000 to 2015, more than half a million people died from drug overdoses, and 91 Americans die every day from an opioid overdose. The epidemic has hit the Appalachian region particularly hard, where it has wreaked havoc in states like West Virginia, Ohio, Kentucky, and Pennsylvania; in some cases Heroin deaths have surpassed gun homicides  and car crashes. Likewise, in New England states like Massachusetts, New Hampshire, and Delaware, drug addicts are collapsing in the streets.

The Cures Act has allocated $1 billion of federal funds over two years for grants to states to supplement opioid abuse prevention and treatment activities, such as improving prescription drug monitoring programs, implementing prevention activities, training for health care providers, and expanding access to opioid treatment programs. Further, money will be appropriated toward treatment, recovery, and transition for the homeless, incarceration diversion programs, as well as grants for suicide prevention.

Outside of the Cures Act, marijuana proponents are rallying around research that seems to suggest a correlation between fewer opioid-caused deaths in states where marijuana has been legalized. Researchers have found that when legal medical marijuana dispensaries begin to operate in a state, deaths from opioid overdoses drop within that state. In what could be deemed a reefer referendum, after the 2016 election cycle in which a record number of states sought to legalize marijuana in some capacity, as of early 2017, a total of 25 states – half of the states in the Union – have legalized marijuana (for either recreational medical use). In 2014, studies suggested that states with medical marijuana laws had an overall 25% lower rate of death from opioid overdoses than other states. There was a 20 percent lower rate of opioid deaths within the laws’ first year, 24% by year three, and 33% by year six. By the end of the study in 2010, there were 1,729 fewer deaths than expected in medical marijuana states. Moreover, another study examined data from 1999 to 2013 and found  opioid abuse in states that have legalized medical marijuana was reduced. The research showed an association between a state legalizing medical marijuana and a reduction in testing positive for opioids after dying in a car accident, particularly among drivers ages 21 to 40.

 

A further study suggests that medical marijuana may simultaneously drive down prescription drug spending, and subsequently likely use. Per the CDC, “we now know that overdoses from prescription opioids are a driving factor in the 15-year increase in opioid overdose deaths. Since 1999, the amount of prescription opioids sold in the U.S. nearly quadrupled, yet there has not been an overall change in the amount of pain that Americans report.” Recent research found that states that legalized medical marijuana — which is sometimes recommended for symptoms like chronic pain, anxiety or depression — saw declines in the number of Medicare prescriptions for drugs used to treat those conditions and a dip in spending by Medicare Part D, which covers the cost on prescription medications.

On February 23, Press Secretary Sean Spicer asserted the Department of Justice will likely be further looking into marijuana in a recreational capacity. Unlike his predecessor who chose not to aggressively pursue marijuana prosecutions, the President Donald Trump has already decidedly taken a more hardnose stance. Still, it remains to be seen whether marijuana will be utilized by the public health community to mitigate America’s growing opioid.