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Mike Lieberman is a partner in Crowell & Moring's Litigation, Health Care, and White Collar & Regulatory Enforcement groups. He actively litigates complex civil and criminal matters in federal, state, and arbitral forums, with a particular focus on health care, fraud, the False Claims Act, and class actions. Mike represents a wide range of commercial and criminal clients, including managed care companies, health benefit plans, government contractors, transportation providers, and corporate and individual criminal defendants.

On November 2, President Obama signed the Bipartisan Budget Act of 2015. As an offset for near-term increases in federal spending, the new law extends by one year – to 2025 – two-percent sequestration reductions in federal spending for mandatory federal programs including Medicare.  The end result is that Medicare Advantage Organizations (MAOs) can expect their capitated payments from Centers for Medicare and Medicaid Services (“CMS”) to continue to be reduced, and Medicare fee-for-service providers can also expect to have sequestration reductions on their CMS reimbursements until at least 2025.

First established by the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA), “sequestration” is a process of automatic, largely across-the-board reductions enacted to constrain federal spending. Sequestration in its current form began on March 1, 2013, when President Obama, pursuant to the Budget Control Act of 2011, ordered cuts to federal spending effective April 1, 2013, after Congress and the President failed to reach a budget compromise.

Under the Budget Control Act of 2011, the size of reductions to the Medicare program is limited to two-percent. As required by President Obama’s sequestration executive order, on March 8, 2013, CMS notified providers that a “2 percent reduction in Medicare payment[s]” would apply to “Medicare FFS claims with dates-of-service or dates-of-discharge on or after April 1, 2013.” In other words, due to sequestration, as of April 1, 2013, CMS reduced the amount it pays to providers for fee-for-service Medicare claims by two-percent.

Continue Reading Sequestration Extended to 2025 in Federal Budget Deal

On September 2, 2014, the Ninth Circuit, in the case of Coons and Novack v. Jacob L. Lew, et. al., rejected a constitutional appeal by an uninsured plaintiff and Arizona physician challenging two critical pieces of the Affordable Care Act: (1) the Independent Payment Advisory Board (IPAB), which monitors Medicare spending (referred to by its critics as “death panels”); and (2) the individual mandate, which imposes a tax penalty for certain individuals that do not obtain mandated health coverage.

On the IPAB, Dr. Novack, an Arizona physician, challenged the establishment of the IPAB on the ground that it violated Article I’s non-delegation principle. The Ninth Circuit rejected this claim on ripeness grounds, without addressing the merits of Dr. Novack’s argument. Dr. Novack had claimed that his challenge was ripe because, as an orthopedic surgeon who received 12.5% of his patient care payments from Medicare, he could reasonably anticipate suffering financial harm from IPAB’s actions in the future. The Ninth Circuit found this claim of future financial harm to be “highly speculative” and “certainly not impending” because the IPAB is prohibited from recommending reduction in payment to providers until January, 1, 2019. The Court directed the District Court to dismiss Dr. Novack’s claims related to IPAB for lack of jurisdiction.

Continue Reading Ninth Circuit Rejects Challenges to Affordable Care Act’s Individual Mandate and Independent Payment Advisory Board