Fraud & Abuse
The current Deputy Secretary of the Department of Health and Human Services and former Loyola University Chicago School of Law professor Eric D. Hargan was sworn into his position as the Deputy Secretary on October 6, 2017. Since then, he has been working on assisting providers to help them better understand the intricacies of the Stark law by gathering provider concerns about present governing efforts. All of this work is being done in an effort to shift the healthcare system away from fee-for-service care and towards value-based care in what Hargan is calling the “Regulatory Sprint to Coordinated Care.” Hargan stated that “removing unnecessary government obstacles to care coordination is a key priority for this Administration.”
Although the nation’s longest-ever government shutdown has ended, agencies forced to furlough employees and shutter temporarily are still facing the effects of the funding gap. On January 25th, President Trump agreed to sign a continuing resolution that will reopen and fund the federal government through February 15th. The government reboot means that the roughly 800,000 federal employees furloughed or forced to work without pay should expect to receive their back pay soon, but the thirty-five-day suspension of government functions comes with significant aftershock. While various regulatory agencies scramble to address their backlog of work, life for Americans who interact with these agencies has been hindered indefinitely.
On January 31, 2019, the Trump administration proposed yet another regulation in efforts to control rising prescription costs for Americans. If the regulation becomes final, drug manufacturers and Pharmacy Benefit Managers (“PBM”) will no longer be able to harbor from Anti-Kickback violations when negotiating discounts with Medicare and Medicaid managed care programs. The Administrations, continuing the tone of transparency, will instead provide Medicare Part D beneficiaries with the ability to receive discounted prices at the pharmacy counter. The administration hopes this will allow patients to not endure high out-of-pocket costs by purchasing medications at a more affordable price necessary to sustain their health.
On Christmas Day 2013, The Wolf of Wall Street debuted to rave reviews and quickly became director Martin Scorsese’s top-grossing film. Audiences loved Leonardo DiCaprio’s portrayal of Jordan Belfort, an aggressive stockbroker who rapidly rises to wealth through smooth talking and high-pressure sales tactics. The film is filled with outrageous partying, unethical Wall Street stockbrokers and bankers, and culminates in the arrest of Belfort and the downfall of his criminal enterprise. While certain scenes from the film were arguably embellished, the film is based on a true story. The more amazing true story, however, is that The Wolf of Wall Street was funded and produced through a massive fraud that makes Jordan Belfort’s escapades look miniscule. On November 1, 2018, Timothy Leissner, a Goldman Sachs partner, plead guilty to conspiring to launder money and violating foreign antibribery laws for his role in a massive scandal that involves the prime minister of Malaysia, Middle Eastern sovereign wealth funds, and even Paris Hilton.
In August, the U.S. Department of Health and Human Services (“HHS”) Office of Inspector General (“OIG”) made an additional focus in its Work Plan for the oversight of nursing facility staffing levels. These changes were made in the light of backlash from a July 2018 news article which reported that nearly 1,400 nursing homes had fewer qualified staff on duty than they were required or failed altogether to provide reliable staffing information to the Centers for Medicare and Medicaid Services (“CMS”).
On September 7, 2018, the United States District Court in the District of Columbia (“D.C. District Court”) vacated Medicare’s overpayment “report and return” rule as applied to Medicare Advantage Organizations (“MAOs”). The Patient Protection and Affordable Care Act (PPACA) created the requirement to report and return overpayments. The Centers of Medicare and Medicaid (CMS) issued rules to provide definitions that the PPACA did not define, create a procedure, payment options and timeframes. MAOs may no longer need to comply with CMS’ overpayment rule, but the PPACA remains intact. Providers who service Medicare beneficiaries will need to conduct the same analysis in order to comply with the PPACA “report and return” requirement.
On October 24, President Trump signed a new bill aimed at combatting issues arising from the opioid epidemic. This bill, entitled the Substance-Use Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (the “SUPPORT” Act) is a combination of seventy bills that effect the healthcare industry. This act includes new and revised Medicaid and Medicare laws that relate to the opioid crisis through the expansion of substance use disorder services. However, this bill, primarily aimed to combat the opioid epidemic, contains key provisions that will affect healthcare providers. Healthcare providers should be especially mindful of this new Act, as there are new anti-kickback provisions that require compliance officers and departments to ensure that their healthcare entities are in compliance with this new law.
The FDA regulationson human subject protection and Institutional Review Boards(IRBs) provide guidance to protect the rights, safety, and welfare of subjects who participate in FDA-regulated clinical investigations. The regulations conform with the requirements set forth by the Department of Health and Human Services (HHS) Federal Policy of Human Research Subjects(45 CFR 46, part A). In order to reduce confusion and burdens associated with complying with both the FDA regulations and the HHS policies regarding human subject protections, the FDA is revising the current “common rule”.
Judge P. Kevin Castel of the U.S. District Court for the Southern District of New York entered an Order for Final Judgment and Consent Order for Final Judgment (“the Orders”) early this month, resolving charges of a Commodity Futures Trading Commission (the “CFTC”) Complaint against a New York Corporation, Gelfman Blueprint Inc. (“GBI”) and its Chief Executive Officer, Nicholas Gelfman. The CFTC’s complaint, filed in January of 2017, marked the first anti-fraud enforcement action involving Bitcoin filed by the Commodity Futures Trading Commission. The Orders found that from approximately January of 2014-January 2016 Defendants Gelfman and GBI, through its officers and agents and employees, operated a Bitcoin Ponzi scheme in which they fraudulently solicited more than $600,000 from at least 80 customers.
In the age of digitization, data seems less secure than ever. Public companies constantly attempt to safeguard both personal and financial data, yet their efforts fail due to new outbreaks of malicious encryption viruses and persistent email phishing attempts. Data breaches and cyber fraud carry severe financial implications for public companies who fall victim to these types of attacks. But a new Securities and Exchange Commission (SEC) report says that public companies that are easy targets of cyber scams could also be in violation of federal securities laws and accounting regulations that call for firms to safeguard their assets. Although the SEC has issued its warning to public companies about the compliance and financial risks posed by cyber fraud, many companies are still struggling to implement effective protections against newly-evolved forms of cyber-attacks.