The federal government has spent billions to promote adoption and “meaningful use” of health information technology (HIT). There is growing government interest in ensuring that HIT is used to support patient care, but doing so requires electronic exchange of information. Congress, the Department of Health and Human Services (HHS), and States have taken action to identify and prevent “information blocking”—interference with the exchange or use of electronic health information—by health care providers, hospitals, technology developers, and service providers. And there likely will be more guidance, statutory and regulatory changes, and enforcement by federal agencies and states in the coming year.

Congress Requests Information and Takes Action

On December 21, 2014, Congress raised concerns about health information blocking, claiming that such activities “frustrate Congressional intent” under the Health Information Technology for Economic and Clinical Health (HITECH) Act, “devalue taxpayer investments,” and make HIT “less valuable and more burdensome” to hospitals and health care providers. Congress urged the Office of the National Coordinator for Health Information Technology (ONC) at HHS to certify only HIT that does not block health information exchange. Congress also requested ONC publish a detailed report on the scope of health information blocking and a strategy to address it, within 90 days.Continue Reading Health Information Blocking Leads to New Requirements and May Lead to Enforcement Actions

The Department of Justice (DOJ) has further focused its sights on individual executives as responsible parties for corporate misconduct.  On September 9, 2015, Deputy Attorney General Sally Quillian Yates issued a strongly worded seven-page memorandum to all U.S. Attorneys and the Assistant Attorneys General of DOJ’s various divisions nationwide titled “Individual Accountability for Corporate Wrongdoing” (the “Memorandum”).  Overall, the Memorandum imposes further expectations that government attorneys will investigate the acts of individual executives and management personnel before providing cooperation credit to or allowing the resolution of a civil or criminal case against a corporate entity.  Moreover, the Memorandum serves as a tacit warning to defense counsel that it will be even harder to negotiate concessions for corporate liability without providing information about potentially responsible individuals that is satisfactory to the investigating agencies.
Continue Reading DOJ’s Memo on Individual Accountability Tears at the Corporate Veil

Every year, the Department of Justice (DOJ) and the Department of Health and Human Services Office of the Inspector General (OIG) report the results of their fraud prevention and recovery efforts to Congress.  As recounted in the recently released Health Care Fraud and Abuse Control Program (HCFAC) report, the overall amount recovered in FY 2014 was $1 billion less than what the agencies reported in 2013 ($4.3 billion).  Nevertheless, the report touted the $2 increase in the return on investment from DOJ and OIG’s fraud and abuse investigations overall (from $5.70 to $7.70).  The HCFAC report shows that, despite losing $62.1 million in funding beginning in FY 2013 due to sequestration, both DOJ’s and OIG’s antifraud work remains potent  and is growing more sophisticated.

Here is an overall comparison of the FY 2014 and FY 2013 reports:

DOJ Activities FY 2013 FY 2014
New Criminal Investigations 1,013 924
New Civil Investigations 1,083 782
Health Care Fraud Convictions 718 734
Total Allocation $573,667,581 $571,702,217
OIG Activities FY 2013 FY 2014
New Criminal Actions 849 924
New Civil Actions 458 529
Individuals Excluded from Federal Health Care Programs 3,214 4,017
Total Allocation $487,381,848 $485,824,633

Continue Reading FY 2014 HCFAC Report Shows Increasing DOJ and OIG Fraud-Fighting Efficiency

On October 16, 2014, the Centers for Medicare & Medicaid Services (“CMS”) and the Office of the Inspector General (“OIG”) announced the continuation of the Accountable Care Organization (“ACO”) fraud and abuse waivers for an additional year. The Affordable Care Act (“ACA”) authorized creation of the Shared Savings Program to facilitate development of ACOs in

The Office of Inspector General, Department of Health and Human Services, has recently issued guidance for those of its contractors seeking to self-disclose reportable conduct under the Federal Acquisition Regulations (“FAR”). Under federal regulations governing relationships between the federal government and its contractors, any contractors with credible evidence of a potential violation of the False Claims Act or federal criminal law involving fraud, bribery, gratuity, or conflict of interest must make a timely disclosure of such violations to the Office of Inspector General for the agency with which they contract. Failure to timely self-report these potential violations can result in the suspension of contracts or the debarment of the contractor. This requirement applies only to contractors whose contracts are governed by the FAR and which are valued at over $5,000,000.

The guidance details the information required to be included on the disclosure form, including the date the issue was discovered, detailed descriptions of any internal investigation undertaken, and a quantification of the financial harm to the government and any potential overpayments. In addition to the guidance, issued in April of 2014, OIG has provided FAQs for contractors covered by the FAR who may be considering a disclosure.Continue Reading OIG Issues Self-Disclosure Guidance for Contractors

The Centers for Medicare & Medicaid Services (CMS) identified over $210 million in savings during the second year of implementation of its predictive analytics-based Fraud Prevention System (“FPS”), according to a June 2014 report released last week. CMS claimed that these “identified savings” reflected a return of $5 for every dollar spent on the program, a $2 increase over the program’s first year.

But the Department of Health and Human Services Office of the Inspector General (OIG), based on a new metric called “adjusted savings,” calculated a much lower return on investment—only $1.34 for every dollar spent, or $54.2 million. This “adjusted savings” metric uses historical experience in the Medicare program to determine how much of the “identified savings” CMS will actually recover.

The FPS, established in 2010, was designed to prospectively analyze Medicare fee-for-service claims to identify suspicious transactions. Certain triggering criteria are used to identify a claim or a provider as suspicious. For instance, a claim submitted under an ID number reported as stolen would trigger review, as would a physician who billed 100 patient encounters on a single day (as opposed to an average of 30). Claims and providers identified as suspicious are referred to Zone Program Integrity Contractors (ZPICs) for investigation, which can include prepayment claim review, site visits, and other measures.Continue Reading CMS, OIG Disagree on Fraud Program Effectiveness

On June 25, 2014, the U.S. Department of Health and Human Services Office of Inspector General (“OIG”) issued a special fraud alert titled Laboratory Payments to Referring Physicians, identifying “specific vulnerabilities with Medicare payments for lab services that need to be addressed to more effectively safeguard the Medicare program.” In 2010, the Centers for

In issuing Advisory Opinion 14-03 (the “New Opinion”) in early April, OIG also took the highly unusual step of rescinding another advisory opinion issued in 2011, Opinion 11-18 (the “2011 Opinion”). Both opinions involve electronic health record (EHR) interfaces that facilitate physician referrals to outside providers and suppliers for ancillary services. As OIG continues to signal its increasing interest in policing EHR-related fraud, this action only serves to reinforce the idea that not only should providers using such systems should be vigilant in ensuring that their systems are compliant with established meaningful use requirements, they should also ensure that vendor relationships that involve EHR coordination comply with federal anti-kickback and Stark law rules as well.

The 2011 Opinion originally examined and found acceptable an arrangement whereby a provider of electronic practice management services (the “First Requestor”) offered a package of EHR software to clients for a discounted monthly subscription fee. The First Requestor charged a small per-transaction fee for the service of facilitating electronic referrals between health professionals and other physicians and ancillary service providers who were not “trading partners,” meaning that they had not enrolled in First Requestor’s service. The total amount of fees that the First Requestor could collect from a provider was capped at the amount of the discount on the overall package. Services provided included the transfer of relevant records, tracking communications between the providers, tracking orders by referring providers, and issuing patient referral reminders. The First Requestor provided trading partners with access to a database of information about providers offering certain services (i.e., labs, pharmacies, DME suppliers, and imaging services) that included both trading partners and non-trading partners.Continue Reading OIG Terminates Prior Opinion on EHR Exchange Fee Structure

In Advisory Opinion 13-09, the HHS-Office of Inspector General (OIG) determined that a company’s offer of equity to members of its subsidiary group purchasing organization (GPO), partially in exchange for certain commitments to purchase through the GPO, could constitute a violation of the federal anti-kickback statute, 42 U.S.C. § 1320a–7b(b) (the “AKS”). While Advisory Opinion 13-09 is significant for GPOs, it also resonates more broadly, as to the AKS’s discount safe harbor, as well as any instance where the acquisition of equity is connected to items or services reimbursable under a federal health care program.


The opinion’s Requestor was a company providing financial and performance improvement technology-based products and services. The GPO at issue was wholly-owned by the Requestor, and contributed approximately 60 percent of the Requestor’s revenue. On behalf of its members, the largest of which were hospital systems and integrated delivery systems, the GPO negotiated discounts and other contractual terms with vendors. Continue Reading OIG Issues Unfavorable Opinion on Proposed Offer of Equity Interest to GPO Members