Electronic health record (EHR) vendor Allscripts recently disclosed on an earnings call that it has reached a tentative agreement with the Department of Justice (DOJ) to pay $145 million to settle an investigation into the regulatory compliance of one of its recent acquisitions, Practice Fusion. This news, combined with DOJ’s other recent successful enforcement actions against EHR companies, represents a trend and should be a warning that compliance is a priority when it comes health IT. We anticipate that there will be more Anti-Kickback, HIPAA, and False Claims Act cases against similar health IT targets in the pipeline.

Allscripts acquired Practice Fusion, also an electronic health record company, in February 2018. According to the company’s public SEC filing from the first quarter of 2019, the investigation “relates to both the certification Practice Fusion obtained in connection with the U.S. Department of Health and Human Services’ Electronic Health Record Incentive Program and Practice Fusion’s compliance with the Anti-Kickback Statute and HIPAA.”


Continue Reading Allscripts Close to Reaching Deal with DOJ for Health IT Certification, Anti-Kickback Statute, and HIPAA Issues

On August 24, 2016, Judge Edgardo Ramos of the Southern District of New York approved a settlement in which Mount Sinai Health System (Mount Sinai) will pay $2.95 million to New York and the federal government to resolve allegations that it violated the False Claims Act (FCA) by withholding Medicare and Medicaid overpayments in contravention

On Tuesday July 12, 2016, the Senate Finance Committee (“Committee”) will hold a hearing on “Examining the Stark Law: Current Issues and Opportunities.” Crowell & Moring Partner Troy Barsky will be testifying before the Committee as a Stark Law subject matter authority.

In advance of this hearing, the Committee released last week the white paper “Why Stark, Why Now? Suggestions to Improve the Stark Law to Encourage Innovative Payment Models.”  Amid growing support for Stark law reform, the white paper deems the Stark law, as currently drafted, both an impediment to implementing health care reform, e.g., the Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”), and of limited value given shifts from fee-for-service to alternative payment models that reward quality health care rather than the volume of services.

The white paper focuses predominantly on modifications to the Stark law that would remove obstacles to implementing health care reform. After a roundtable held in December, 2015, that was co-moderated by Troy Barsky, the Committee had solicited and received a range of stakeholder comments that proposed various Stark law reform solutions: repeal the law in its entirety; repeal the compensation arrangement prohibitions; implement new exceptions and modify existing exceptions; implement new or expand existing waivers; and expand CMS’s regulatory authority pertaining to waivers, exceptions, and advisory opinions. These comments are catalogued and discussed throughout the white paper. The white paper also examined the need to distinguish between technical, e.g. documentation requirements, and substantive violations of the Stark law.  Commenters generally agreed that a separate set of sanctions should apply to technical violations and that such violations should not give rise to False Claims Act exposure.


Continue Reading In Advance of Senate Finance Committee Hearing on Stark Law Next Week, the Committee Releases Stark Law White Paper

In a unanimous decision last week that impacts healthcare providers, vendors and health plans that receive Medicare and Medicaid reimbursements or contract with federal health care programs, the United States Supreme Court in Universal Health Services v. United States ex rel. Escobar held that a defendant may be liable under the implied certification theory under

Last week, in a case that will have a significant impact on future False Claims Act (FCA) suits against health care entities, the Supreme Court granted certiorari in Universal Health Services, Inc. v. United States ex rel. Escobar.  By agreeing to hear the case, the Court will resolve the circuit split over the so-called

Earlier this month, Judge Karen Bowdre ordered a new trial in the United States v. AseraCare Inc., No. 2:12-CV-245-KOB (N.D. Ala. Nov. 3, 2015).  Judge Bowdre’s decision to do so sua sponte marks yet another unusual turn of events in this qui tam action in which the government intervened, which is the largest brought against

On August 3, 2015, in Kane v. Healthfirst, Inc., No. 1:11-cv-02325-ER (S.D.N.Y. Aug. 3, 2015), Judge Edgardo Ramos of the Southern District of New York decided an issue of first impression under the False Claims Act (FCA) requirement to return identified overpayments from Medicare and Medicaid within sixty (60) days. In denying the defendants’ motion to dismiss, the court provided some guidance on what it means to “identify” an overpayment and start the sixty-day clock created by the Affordable Care Act (ACA). At the very least, a party with an “identified” overpayment increases its risk of incurring FCA liability the longer it takes to quantify and return the overpayment beyond the first sixty days.

The ACA requires that an overpayment must be reported and returned within sixty days of the “date on which the overpayment was identified,” and any overpayment retained beyond this period is considered to be an “obligation” with the potential for FCA liability. 42 U.S.C. § 1320a-7k(d).

The alleged overpayments in Kane stemmed from a glitch in defendant Healthfirst’s computer system which caused its participating providers in a network operated by Continuum Health Partners, Inc. to seek additional payment from Medicaid based on erroneous remittance advices. In 2010, New York state auditors asked Continuum about the incorrect billing, and Continuum tasked its employee Robert Kane (the relator) with determining which claims had been improperly billed to Medicaid. Four days after Kane submitted a spreadsheet containing claims with alleged erroneous overbillings, Continuum fired him. The complaint alleged that Continuum took no further action to investigate or repay the claims until June 2012 when the government issued a Civil Investigative Demand (CID).


Continue Reading S.D.N.Y. Provides First Judicial Guidance on Identifying Overpayments and Effect on FCA Liability