Healthcare Fraud Scheme Indictment Starts the New Year

The U.S. Attorney arrested 13 people in a $100 Million healthcare fraud scheme in NY and NJ involving automobile insurance claims.  Some of the facts alleged include—

  • Bribed 911 operators and hospital employees for confidential information of insured drivers
  • Unnecessary and painful medical procedures
  • A non-physician owning medical clinics
  • Paying hundreds of thousand of dollars to “runners” who used the money to bribe people

Healthcare businesses that largely serve people injured in motor vehicle accidents remain a top tier focus for law enforcement and special investigative units (SIUs) of insurers.  But so do many other providers in the healthcare sector, such as pharmacies, durable medical equipment (DME) providers, addiction treatment providers and labs.  Payer and governmental presumption is often that financial motives are driving clinical behavior, NOT documented medical necessity.  Hence the need for active compliance plans and policies and procedures that don’t sit on a shelf, but rather are woven into daily business and clinical operations.  Nothing less than the right contracts, the right compliance plan and the right business culture will establish and maintain a sustainable healthcare business!

Gov. DeSantis Vetoes No-fault Repeal Legislation

Today marks a big win for Chiropractors, the Florida Chiropractic Association, and other medical providers that treat patients as a result of a motor vehicle accident. Legislation was presented earlier this year which would have completely changed how the personal injury protection (“PIP”) industry would impact medical providers. The legislation is known as Senate Bill 54 (“SB 54”).

SB 54 was sought to end the requirement that Floridians purchase $10,000 in PIP coverage and would instead require mandatory bodily injury (“MBI”) coverage that would pay out up to $25,000 for a crash-related injury or death. This would have meant that for each case before a provider would be paid by the patient’s car insurance coverage, fault would have to be determined through litigation which would have increased the time it would have taken providers to be paid. In today’s landscape providers are able to bill the patient’s PIP coverage for the initial $10,000, and be paid 80% of the billed charges immediately, and if this law would have passed each treating provider would have had to either bill the patient’s health insurance, or treat patients on letters of protection.

In Governor DeSantis’s veto letter he wrote, “While the PIP system has flaws and Florida law regarding bad faith is deficient SB 54 does not adequately address the current issues facing Florida drivers and may have unintended consequences that would negatively impact both the market and consumers.”

Due to the potential repercussions this legislation would have had on an entire industry it is very important for all medical providers today to continue and evolve with the changing landscape. Although providers can take a breather today, because the battle is now over, they must begin to think about how their practices would have been impacted if they could have only billed patient’s health insurance or treated patients on letters of protection. Many providers that I have spoken with were not sure what they would have done, and one piece of advice I always give is that now is the time to start thinking ahead to the future. Meaning, if this law were to present itself again you all have to ask yourself would your practice be able to survive not being paid for months or years? Providers need to start considering how they can better evolve to provide better care to their patients while still being able to survive in the event PIP is repealed in the future.

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Medical Spa Industry Is Booming But is Regulation Keeping Up?

medical spa law

medical spa lawMedical Spas nationwide, but specifically in Florida, have been opening up at a staggering pace. For many reasons, including new services, technological advances, and lax regulations, the opportunities for medical spa businesses are endless.

In 2010, there were about 1,600 medspas operating in the United States generating about $1.1 billion in revenue (about $700,000 per medspa on average). By 2018, these numbers increased to over 5,000 medspas generating about $7 billion-$8 billion in revenue (about $1.4 million per medspa on average). The number is expected to grow to over 10,000 medspas by 2023 with about $18 billion-$20.7 billion in revenue.

While medical spa owners have taken advantage of these opportunities, state authorities have yet to keep up. The medical spa industry is largely unregulated, whether that be due to the nature of the services provided, or the explosive growth in this alternative type of medical clinic. On top of that, there’s been a expansion in scope of practice and supervision requirements for certain providers, including nurse practitioners.Continue reading

Avoiding HIPAA Violations During COVID-19

telehealth laws after covid-19

telehealth laws after covid-19By: Steven Boyne

The COVID-19 virus has and will probably continue to change the way healthcare providers and business associates interact and help their patients. As many providers are aware, a HIPAA violation is a serious issue, and can cost a healthcare entity large amounts of time and money to respond to any regulatory investigation. Recognizing that the COVID-19 pandemic has strained every corner of the economy and is THE MOST IMPORTANT issue for almost every industry, the federal government has rolled back some HIPAA protections. It is unclear how long these rollbacks will last, and it is possible that some of them may be permanent, but for now healthcare providers and their business associates can take some comfort that they can focus on delivering care and not dealing with overly burdensome regulations and investigations. The major changes include:

  • Telehealth. Changes include allowing physicians and other healthcare providers to offer telehealth services across State lines, so State licensing issues should not be a concern. Additionally, Providers are essentially free to choose almost any app to interact with their patients, even if it does not fully comply with the HIPAA rules. The HHS allows the provider to use their business judgment, but of course, such communications should NOT be public facing – which means DO NOT allow the public to watch or participate in the visit!
  • Disclosures of Protected Health Information (PHI). A good faith disclosure of such information will not be prosecuted. Examples include allowing a provider or business associate to share PHI for such purposes as controlling the spread of COVID-19, providing COVID-19 care, and even notifying the media, even if the patient has not, or will not grant his or her permission.
  • Business Associate Agreement (BAA). As most healthcare providers know, a BAA agreement between a provider and an entity that may have access to PHI is required by law. During the COVID-19 pandemic, the lack of a BAA is not an automatic violation.

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Genetic Testing HIPAA Warning: Legal Considerations

genetic testing hipaaBy: Jacqueline Bain

You might have recently received a holiday gift of a direct-to-consumer genetic testing kit from Ancestry.com or 23andMe.com (or any other number of companies). So exciting! In our melting pot society, one can’t help but be curious about where they come from and if they are more likely than any other person to be subject to any number of ailments.

Not so fast though! Before you swab yourself and send away your genes for testing, you might consider what you’re exposing yourself to. Direct-to-consumer genetic testing companies, which provide genetic testing directly to consumers without any intervening healthcare provider, are not bound by HIPAA. They are not considered “covered entities”, and therefore not required to use the same protections for genetic information the way a hospital or your doctor would.Continue reading

Litigation Alert: Pharmacies with Prescription Refill Reminder Programs Take Note

Florida Electronic Prescription Mandate

Prescription Refill Reminder ProgramsBy: Michael Silverman

Pharmacies using automated dialers for prescription refill reminders and relying on the statutory prescription refill reminder exemption to the TCPA’s prohibition on the use of automated dialing equipment as an impenetrable blanket against liability need to think again.

The case of Smith v. Rite Aid Corporation, 2018 WL 5828693 (W.D.N.Y. Nov. 7, 2018), revolves around a Rite Aid pharmacy’s use of a prescription refill reminder program to contact a patient to pick up a prescription. The pharmacy placed several calls per week intended to remind the patient to come into the store to pick up their prescription. However, an innocent bystander instead of the intended recipient of the mediation received the calls; either due to error in taking the phone number down or a due to the number being reassigned (which happens to thousands of numbers on a daily basis!). The unintended recipient of the multiple prescription refill reminder calls filed a class action lawsuit under the federal Telephone Consumer Protection Act (“TCPA”), which provides for statutory penalties of $500-$1,500, per call.Continue reading

Time out! Keeping Healthcare Lead Generation in Check

healthcare lead generation

healthcare lead generationBy: Michael Silverman

There are perfectly compliant ways to engage with healthcare marketers, and then there’s this; here are some of the latest real-life examples:

“DME BRACE CAMPAIGN – $40 to $150 PER LEAD PER BRACE”

“DME DIABETIC LEADS $40 PER LEAD, INSURANCE AND DOC INFO INCLUDED”

“PAIN CREAM/LIDOCANE LEADS FOR SALE, RX INCLUDED”

These marketers are seemingly holding auctions for the sale of federally protected patient health information out to the highest bidder! Couldn’t make this stuff up – if you’re in this industry, a quick gander at your (business) social media platforms will quickly confirm it.Continue reading

Healthcare Transactions Today: Selling a Medical Practice to Private Equity Buyers

private equityBy: Jeff Cohen

Private money (e.g. private equity) is in full swing purchasing medical practices with large profit margins (e.g. dermatology). This is NOT the same thing as when physician practice management companies (PPMCs) bought practices the 90s.  Back then, the stimulus for the seller was (a) uncertainty re practice profits in the future, and (b) the stock price.  Selling practices got some or all of the purchase price in stock, with the hopes the purchasing company stock would far exceed the multiplier applied to practice “earnings” (the “multiple”).  Buyers promised to stabilize and even enhance revenues with better management and better payer contracting.  If the optimism of the acquiring company and selling doctors was on target, everyone won because the large stock price made money for both the buyer and seller. The private equity “play” today is a little different.

Today’s sellers are approaching the private equity opportunity the same way they did with PPMCs, except for the stock focus since most private equity purchases don’t involve selling doctors obtaining stock.  Sellers hope their current practice earnings will equate to a large “purchase price.”  And they hope the buyer have better front and back office management that will result in more stable and even enhanced earnings.  And for this, the private equity buyer takes a “management fee,” which they typically promise (though not in writing) to offset with enhanced practice earnings.    Continue reading

The Federal Opioid Fraud and Abuse Detection Unit: An Enforcement Initiative Lacking in Resources for Prevention and Treatment of Opioid Abuse

By: Jacqueline Bain

Earlier this month, Attorney General Jeff Sessions announced the formation of the Opioid Fraud and Abuse Detection Unit, which is a pilot program of the United Stated Department of Justice. AG Sessions noted that there are three components to approach the opioid crisis that our nation faces: prevention, treatment and enforcement.

  1. Prevention. AG Sessions noted briefly that the DOJ is undertaking that component through raising awareness, through drug take-back programs, and through DEA’s 360 Strategy program, which incorporates law enforcement, diversion control and community outreach to tackle the cycle of violence and addiction in US cities. He also stated that law enforcement is a component of prevention.
  2. Treatment. AG Sessions articulated that treatment can help break the cycle of addiction and crime and help people get their lives back together.
  3. Enforcement. AG Sessions dove deep in the area of enforcement, reasoning that enforcing our laws helps keep drugs out of the hands of our citizens, decreases their availability, drives up their price, and reduces their purity and addictiveness. He added, “Enforcement will make a difference in turning the tide in this epidemic.”

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Trend Watch: Usual and Customary Rate on the Decline

By: Karina Gonzalez

Most of the commercial payors are paying PHP (Partial Hospitalization Plan) and IOP (Intensive Treatment Plan) at a bundled daily rate. Many of the plans are now adding urine drug screens to the bundled daily rate and imposing a cap on the number of screens that can be done during an admission.  Plans are paying rates that are much nearer to a Medicare rates.  Payments based on a reasonable percentage of a provider’s charge are becoming harder to find, as the calculation of what is a usual and customary rate of payment continues to decline.

Yet, a great portion of substance abuse facilities are operating with more clinical staff, at a higher level through licensure, with better Electronic Medical Systems, more programs to combat some of the symptoms of addiction and with a greater awareness of compliance with state and federal guidelines.  Even with these necessary improvements, reimbursements continue to decline.Continue reading