March 2 Webcast: What the New Federal Discrimination Laws Mean to You

March 2, 2017 | 3:00-4:00pm EST

Section 1557 prohibits health care providers that receive Medicare, Medicaid or other federal funding sources from discriminating on the basis of race, color, national origin, sex, age, or disability.  The requirements of the Section 1557 Rules, which were recently adopted by DHHS, requires providers to take many affirmative steps to comply with the law including, adopting nondiscrimination policies, providing free language assistance to individuals with limited English proficiency, and accommodating individuals with disabilities.

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Robb Leandro

Robb Leandro

Robb Leandro assists his client with a broad range of legal issues relating to health care, administrative law and public policy. His legal practice focuses on helping health care providers navigate the minefield of regulations that they face in their practices. Robb routinely assists his clients with issues including Medicaid and Medicare regulations; Medicaid and Medicare audits; Certificate of Need Applications and litigation; licensure, surveys, and certification issues; and HIPAA and privacy laws. Robb also provides counsel to health care providers with complex government contract procurement issues.

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Portions of Section 1557 of the Affordable Care Act Enjoined by Texas Federal Court – Majority of Regulation Remains Intact

In May 2016, the Office of Civil Rights (“OCR”) of the U.S. Department of Health and Human Services (“DHHS”) issued a Final Rule implementing Section 1557 of the Affordable Care Act (“ACA”).  Section 1557 prohibits “covered entities” from discriminating on the basis of race, color, national origin, sex, age, or disability.  The term “covered entities” includes all health care providers that receive payments from the federal government (e.g.,. Medicare, Medicaid, Veterans Affairs, TRICARE).

The requirements of the Section 1557 Regulation are sweeping.  The law requires providers to adopt nondiscrimination policies, provide free language assistance to individuals with limited English proficiency, and accommodate individuals with disabilities.  Under the law, providers must also post a specific notice of their nondiscrimination policies and inform patients that they will provide language assistance free of charge to patients with limited English proficiency.  Health care providers with more than fifteen employees are required to adopt a patient discrimination grievance policy and appoint a civil rights coordinator who will oversee implementation of the law’s requirements and investigate and issue decisions relating to patients’ allegations of discrimination.

The Section 1557 Regulation also for the first time creates binding rules that define sex discrimination to include discrimination on the basis of gender identity.  These rules require providers to treat patients based on the patient’s preferred gender.  These new rules also require providers to amend their policies on the boarding of transgendered patients and the use of public facilities, such as bathrooms, to ensure equal treatment to transgendered patients based on their stated gender identity.

In addition to these new requirements, the Section 1557 Regulation requires nondiscrimination in the treatment of female patients including treatment and coverage decisions based on pregnancy status.  One notable requirement of the law precludes providers from treating female patients differently on the basis of the patient’s decision to terminate a pregnancy.

On December 31, 2016, Judge Reed O’Connor of the United States District Court for the Northern District of Texas issued a nationwide injunction halting the implementation of the portions of the law that govern the treatment of transgendered patients as well as rules that would bar discrimination in treatment and coverage of female patients on the basis of their decision to terminate a pregnancy.  Until the court determines whether DHHS had the authority to create these legal requirements, these portions of the Regulation are not enforceable.  You can read the entire decision here.

Providers that have read the news coverage of this recent decision should be aware that all of the other requirements of the law remain intact.  Violations of the remaining provisions of the regulation continue to be subject to investigation and regulatory action by the  Office of Civil Rights, which has the authority to terminate a provider’s participation in Medicare, Medicaid, and TRICARE for violations of the law.  Providers also continue to be subject to private discrimination lawsuits filed by patients for alleged violations of Section 1557.

If you are a health care provider and are not familiar with the requirements of Section 1557 or have not taken steps to comply with the law, you should quickly take steps to ensure that you become compliant with the law as soon as possible to avoid the risk of an OCR investigation or a lawsuit being filed by current patient.

If you have any questions please feel free to reach out directly to Robb Leandro at RobbLeandro@parkerpoe.com  or 919.835.4636.

Robb Leandro

Robb Leandro

Robb Leandro assists his client with a broad range of legal issues relating to health care, administrative law and public policy. His legal practice focuses on helping health care providers navigate the minefield of regulations that they face in their practices. Robb routinely assists his clients with issues including Medicaid and Medicare regulations; Medicaid and Medicare audits; Certificate of Need Applications and litigation; licensure, surveys, and certification issues; and HIPAA and privacy laws. Robb also provides counsel to health care providers with complex government contract procurement issues.

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N.C. DHHS Announces Timeline for LME/MCO Mergers

In a letter dated March 17, 2016, Richard Brajer, Secretary of the North Carolina Department of Health and Human Services, announced that the Local Management Entity-Managed Care Organization (“LME/MCO”) merger process would be moving forward beginning this summer.  Currently, there are eight LME/MCOs that manage Medicaid- and State-funded mental health, intellectual and developmental disability, and substance abuse services through a federal waiver.  After the newly announced mergers, these eight LME/MCOs will be organized into four regional organizations to include: an East Regional LME/MCO (consisting of  a merger between Trillium Health Resources and Eastpointe); a North Central Regional LME/MCO (consisting of a merger between Cardinal Innovations and CenterPoint); a South Central Regional LME/MCO (consisting of a merger between Alliance Behavioral and Sandhill Center); and a Western Region LME/MCO  (consisting of a merger between Smoky Mountain Center and Partners Behavioral Health).

The Department believes these mergers will decrease the administrative burden on providers, who are currently required to follow the requirements and deal with the credentialing and billing systems of as many as eight LME/MCOs and will result in better coordination of care and scalability of services. However, providers who have previously experienced these types of transitions know that such a massive process will almost certainly have some negative short-term effects on business and clinical operations.  Providers should look to actively engage in the planning and transition process as much as possible over the coming months and keep a close eye on potential pitfalls that may arise during this process.  Parker Poe will be closely monitoring this processing going forward as well and are happy to work with providers to best manage these uncertain times in the life of their business.

Robb Leandro

Robb Leandro

Robb Leandro assists his client with a broad range of legal issues relating to health care, administrative law and public policy. His legal practice focuses on helping health care providers navigate the minefield of regulations that they face in their practices. Robb routinely assists his clients with issues including Medicaid and Medicare regulations; Medicaid and Medicare audits; Certificate of Need Applications and litigation; licensure, surveys, and certification issues; and HIPAA and privacy laws. Robb also provides counsel to health care providers with complex government contract procurement issues.

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Challenging Medicaid Prepayment Review

When the North Carolina Division of Medical Assistance (“DMA”) decides to place a Medicaid provider on prepayment review, it can be the equivalent of a death sentence for a small business.  The primary problem is that there are few avenues to appeal the decision to be placed on prepayment review, even when there is little or even no justification for DMA’s decision.  Prepayment review then becomes a waiting game reducing cash flow and overwhelming providers with a paper chase gotcha game. Although the initial decision to place a provider on prepayment review cannot be challenged, this does not mean that a Medicaid provider has no options to challenge the prepayment review process.

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Robb Leandro

Robb Leandro

Robb Leandro assists his client with a broad range of legal issues relating to health care, administrative law and public policy. His legal practice focuses on helping health care providers navigate the minefield of regulations that they face in their practices. Robb routinely assists his clients with issues including Medicaid and Medicare regulations; Medicaid and Medicare audits; Certificate of Need Applications and litigation; licensure, surveys, and certification issues; and HIPAA and privacy laws. Robb also provides counsel to health care providers with complex government contract procurement issues.

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Pharmacy Board Proposed Regulations: The Next Step for Telemedicine in North Carolina

The future of telemedicine has become a hot topic in the health care industry nationwide, and the momentum seems to be in telemedicine’ s favor.   Indeed, the North Carolina Medical Board recently issued revised policy statements that loosened restrictions on prescribing medication through a telemedicine encounter.

Although the Medical Board’s position represented a major sea change, an existing regulation applicable to pharmacists licensed in North Carolina has made those changes difficult to implement.  Specifically, North Carolina Rule 21 NCAC 46.1801 bars a pharmacist, except in limited circumstances, dispensing prescription drugs if the pharmacist has knowledge that the prescriber has not conducted a physical examination of the patient.  Although, as a practical matter, a pharmacist would likely not know whether a physical examination has occurred, there have been several reported cases of pharmacists refusing to dispense medication after learning from their customers that the orders were obtained from a telemedicine encounter.

It now appears that the Board of Pharmacy is ready to lift this restriction based on a recently proposed amendment to 21 NCAC 46.1801.  The proposed regulation, which was published in the April 15, 2015 edition of the North Carolina Register, replaces the prohibition on dispensing medication without a physical examination with new language that allows pharmacists  to use their professional judgment to refuse to fill a prescription in cases in which the order’s accuracy, validity, or authenticity or the patient’s safety is at issue.  The revised regulation also states that a prescription order is valid if it is a lawful order, made for a legitimate medical purpose, and in the course of legitimate professional practice “as recognized by the occupational licensing board governing the health care provider.”  This proposed change is important because it expressly incorporates the North Carolina Medical Board’s new position that orders for prescriptions that result from telemedicine examinations are not prohibited but must meet appropriate standards of care.

The proposed effective date of the new regulation is August 1, 2015.  A public hearing on the proposed revision to 21 NCAC 46.1801 will be conducted by the North Carolina Board of Pharmacy on June 16, 2015 at 9:00 a.m.  Further, comments to this proposed regulation may be directly submitted to the Board of Pharmacy.  Given the current tenor of the telemedicine debate in North Carolina and elsewhere,  it is likely that the new regulation will be adopted.  On August 1, 2015 North Carolina will take one more step to embracing what many see as the future of health care.

Robb Leandro

Robb Leandro

Robb Leandro assists his client with a broad range of legal issues relating to health care, administrative law and public policy. His legal practice focuses on helping health care providers navigate the minefield of regulations that they face in their practices. Robb routinely assists his clients with issues including Medicaid and Medicare regulations; Medicaid and Medicare audits; Certificate of Need Applications and litigation; licensure, surveys, and certification issues; and HIPAA and privacy laws. Robb also provides counsel to health care providers with complex government contract procurement issues.

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False Claims Act – 2014 Year in Review

 

 

The False Claims Act (FCA) imposes liability on individuals and companies who defraud or submit false claims to the federal government. The FCA allows the federal government to seek treble damages, civil penalties and attorney’s fees for violations of the Act. Further, the FCA contains qui tam, or whistleblower, provisions which award whistleblowers up to 30% of the amount recovered by the federal government. FCA suits and recoveries have exploded in recent years. The federal government reports that FCA recoveries have topped $22 billion since 2009. Accordingly, the FCA is widely considered the fastest growing area of federal litigation and has been described as the “government’s most potent civil weapon in addressing fraud.”

Historically, FCA claims have targeted the health care industry, and 2014 was no exception. According to the Department of Justice, more than 60% of new matters were health care related, and 2014 health care-related recoveries exceeded $2.3 billion. This is the fifth straight year the federal government has recovered more than $2 billion from companies in the health care industry.

Pharmaceutical companies accounted for a substantial part of the $2.3 billion recovered from the health care industry in 2014. For example, Johnson & Johnson and two of its subsidiaries paid $1.1 billion to resolve FCA claims involving allegations it violated the Anti-Kickback Statute by making improper payments to physicians and a pharmaceutical provider and engaged in off-label marketing of three prescription drugs.

The federal government also focused on hospitals, nursing homes, home health and hospice agencies and physician practices in 2014. For example, one large hospital chain paid more than $98 million dollars to resolve allegations it improperly billed Medicare, Medicaid and TRICARE for inpatient services which could have been provided in a less costly setting. A large nursing home provider paid $3.75 million to resolve allegations that it billed Medicare for unnecessary rehabilitation services. A Tennessee-based home health agency paid over $25 million relating to allegations that it upcoded services provided unnecessary care.

Given the risk and devastating effect that an FCA allegation can have, health care providers should take internal reports of misconduct seriously. Although whistleblowers have a great financial incentive to report alleged misconduct to the government, studies show that most whistleblowers report their conduct internally before going to the government. Emphasizing the your compliance plan and conducting timely internal investigation when internal reports of misconduct are made by staff or patients may defuse a FCA suit before it begins.

James C. Lesnett, Jr. and Eric H. Cottrell have substantial experience investigating and litigating FCA issues.  They have also successfully helped clients avoid FCA litigation through direct pre-trial settlement negotiations with governmental authorities.

Robb Leandro

Robb Leandro

Robb Leandro assists his client with a broad range of legal issues relating to health care, administrative law and public policy. His legal practice focuses on helping health care providers navigate the minefield of regulations that they face in their practices. Robb routinely assists his clients with issues including Medicaid and Medicare regulations; Medicaid and Medicare audits; Certificate of Need Applications and litigation; licensure, surveys, and certification issues; and HIPAA and privacy laws. Robb also provides counsel to health care providers with complex government contract procurement issues.

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Certificate of Need Opportunities in 2015

While many of us were shopping for last-minute gifts for our families, Governor McCrory was busy approving the 2015 State Medical Facilities Plan (“SMFP”). The SMFP is a document created annually by the State Health Coordinating Council that sets forth the methodology and allocations of available Certificates of Needs (“CON”) for the upcoming year.  Under North Carolina law, the SMFP must be approved by the Governor.  On December 22, 2015,  the Governor approved the need allocations that will be available for the award of CONs in 2015 by signing the SMFP.  Although the 2015 SMFP does not allocate a large number of potential CONs, there are some significant healthcare projects in the 2015 SMFP for which providers may wish to apply in the coming months.

In terms of technology and equipment, a CON for a fixed MRI scanner in Harnett County will be up for review in 2015.  Applications for the fixed MRI scanner are due on August 17, 2015.  Otherwise, 2015 looks to be a relatively quiet year for equipment applications.

Adult care home CONs provide one bright spot in the 2015 SMFP.  The 2015 SMFP allocated 340 beds to Brunswick County.  Applications for this allocation are due August 17, 2015.  Providers should be mindful that they can apply for all or part of the 340 available beds.  This allocation provides a good opportunity for adult care home providers to grow in a part of the state that is seeing an increased number of retirees.

On the home care and hospice front, the 2015 SMFP has no allocation for additional  home health offices.  However, the SMFP allocates one CON for a hospice home care Medicare-certified office in Cumberland County.  Applications for the Cumberland County hospice home care CON are due June 15, 2015.  Read More

Robb Leandro

Robb Leandro

Robb Leandro assists his client with a broad range of legal issues relating to health care, administrative law and public policy. His legal practice focuses on helping health care providers navigate the minefield of regulations that they face in their practices. Robb routinely assists his clients with issues including Medicaid and Medicare regulations; Medicaid and Medicare audits; Certificate of Need Applications and litigation; licensure, surveys, and certification issues; and HIPAA and privacy laws. Robb also provides counsel to health care providers with complex government contract procurement issues.

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Do You Know the 60-Day Rule? You Better…

Ask healthcare providers if they have an obligation under the law to report and repay overpayments made by a government payor like Medicare or Medicaid, and you almost always will receive an enthusiastic “yes.”  However, many providers are not aware that a lesser-known provision in the Affordable Care Act (“ACA”) creates specific liability under the Federal False Claims Act if a provider fails to disclose or refund Medicare and Medicaid overpayments within 60 days after the date the overpayment is identified.  This requirement means exactly what it says.  Once an overpayment is identified, the clock starts ticking, and the provider has 60 days to repay the funds or face False Claims Act liability.

False Claims Act actions can be very costly because they come with a penalty that ranges between $5,500 and $11,000 on each claim for which the provider failed to return funds.  For example, if you discover that you were overpaid for 25 Medicaid claims and failed to report and repay the funds within 60 days, you could be subject to a penalty of 25 times $11,000 or $275,000.  This is true even if those 25 claims only amounted to $500.00.   Providers also can be subject to treble damages, meaning the actual recoupment could be increased by three times the amount paid.  The government has the authority to enforce the False Claims Act, however unlike most laws, the Federal False Claims Act also allows outsiders, such as current or former employees to file a qui tam action on behalf of the government and receive between 15% and 30% of any recovery or settlement.

A key question that a provider should ask when considering the 60-day repayment and reporting requirement:  what does it mean for an overpayment to be “identified”?  In 2012, CMS clarified its interpretation of “identify.”  The proposed regulation defines “identify” to mean the date a person has actual knowledge of the overpayment or acts in reckless disregard or deliberate ignorance of the existence of the overpayment.  CMS commented that, when a provider receives information regarding a possible overpayment, it has an obligation to make a reasonable inquiry with “deliberate speed” to determine whether there was an overpayment.  Thus, under CMS’ interpretation of the law, if the provider conducts an investigation of potential overpayments with deliberate speed, the 60-day time period for reporting and returning any overpayment begins at the conclusion of the provider’s investigation determining there was in fact an overpayment.  In contrast, if the provider receives information that an overpayment may have occurred and fails to make a reasonable inquiry, the 60-day repayment/reporting window starts on the date the provider received the information that the possible overpayment existed.

Because the calculation of the 60-day timeframe hinges on conducting an investigation with deliberate speed, providers should make sure that they have a policy in place that requires their employees to document the steps they are taking to investigate the alleged overpayment.  Providers should also have a clear chain of reporting, so that potential overpayments do not sit on an employee’s desk for weeks or months without inquiry.

Although there is little case law interpreting how this provision will be applied, a False Claim Act lawsuit was recently filed in New York against a large provider that had identified an overpayment and repaid the funds to the federal government.  The basis of the lawsuit is that the provider failed to report and repay the identified overpayment within 60 days. Although this case has not been decided by a court, it is telling that federal prosecutors joined the lawsuit.  This indicates that the government believes that the affirmative duty to repay within 60 days is important and will be enforced through the False Claims Act.

Robb Leandro

Robb Leandro

Robb Leandro assists his client with a broad range of legal issues relating to health care, administrative law and public policy. His legal practice focuses on helping health care providers navigate the minefield of regulations that they face in their practices. Robb routinely assists his clients with issues including Medicaid and Medicare regulations; Medicaid and Medicare audits; Certificate of Need Applications and litigation; licensure, surveys, and certification issues; and HIPAA and privacy laws. Robb also provides counsel to health care providers with complex government contract procurement issues.

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One Potential Way to Dismiss a Petition for Judicial Review…

Contested cases heard at the North Carolina Office of Administrative Hearings (“OAH”), that result in a final agency decision are subject to appeal under a process called “judicial review.”  In most cases, these appeals are filed in Superior Court.  N.C. Gen. Stat. § 150B-145 mandates that a petition for judicial review of an Administrative Law Judge’s (“ALJ”) final decision must be filed in the Superior Court in the county where the “person aggrieved by the administrative decision resides.”

In 2011, the General Assembly determined that an agency can now file petitions for judicial review in the Superior Court appealing the final decision of an ALJ.  When an Agency is appealing a final decision of an ALJ, a question has arisen regarding where the Agency should file its appeal – in Wake County or in the county where the provider resides?

A recent decision by the Wake County Superior Court concluded that, when the State agency files a petition for judicial review, it must file its petition in the county where the provider is located since under the APA a “person aggrieved” by the administrative decision is defined to be the provider challenging the agency’s decision and not the Agency.  (Click here to view)

If you have recently prevailed in a contested case against an Agency and the Agency filed or is planning to file a petition for judicial review, your counsel should be aware that if the Agency files the petition in the wrong county, you may be able to have the appeal dismissed before having to spend exorbitant fees fighting the underlying challenge made by the agency.

Robb Leandro

Robb Leandro

Robb Leandro assists his client with a broad range of legal issues relating to health care, administrative law and public policy. His legal practice focuses on helping health care providers navigate the minefield of regulations that they face in their practices. Robb routinely assists his clients with issues including Medicaid and Medicare regulations; Medicaid and Medicare audits; Certificate of Need Applications and litigation; licensure, surveys, and certification issues; and HIPAA and privacy laws. Robb also provides counsel to health care providers with complex government contract procurement issues.

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