Health Law Scan

For over a year, the hospice industry, legislators, and state and federal regulators have expressed concerns about the fast growth and potentially unscrupulous activities of new hospices in several states in particular. Those concerns were covered in the press and congressional hearings, with the California legislature leading the way to clamp down on abusive hospice practices with a hospice license moratorium enacted in 2022. Hospice industry leaders had called for the Centers for Medicare and Medicaid Services (CMS) to take additional action to target abusive new hospice practices in certain states and on July 12, 2023, CMS announced targeted oversight of new hospices in Arizona, California, Nevada, and Texas in a “MLN fact sheet.”

Lawyers from the defense and plaintiff’s bar and current and former prosecutors from the US Attorney’s Office for the District of Massachusetts (Office) and the Office of the Massachusetts Attorney General gathered in May at the Boston Bar Association’s White Collar Crime Conference. The conference ran the gamut of thought leadership in the white collar crime space, but the highlight was the panel on healthcare fraud.

The Centers for Medicare & Medicaid Services (CMS) proposed on April 23, 2023 two rules that would affect Medicaid managed care: Ensuring Access to Medicaid Services (CMS 2442-P) and Medicaid and Children’s Health Insurance Program (CHIP) Managed Care Access, Finance, and Quality (CMS-2439-P). The proposed rules recognize the growth of managed care, which currently constitutes more than 70% of the Medicaid population.

As we at Morgan Lewis pride ourselves on excellent client service, we feel it is our duty to provide critical dispatches from the romantic world of healthcare fraud. Specifically, we want to highlight developments in the District of Massachusetts that may make the prospects of an amicable breakup in a federal civil False Claims Act (FCA) case with Boston federal prosecutors more remote.

The US Department of Justice (DOJ) announced on June 8, 2023 that Steven King, a compliance executive of pharmacy holding company A1C Holdings LLC, was convicted of defrauding Medicare out of more than $50 million in a scheme involving dispensing medically unnecessary lidocaine and diabetic testing materials.

The HHS Office of Inspector General (OIG) announced on June 15, 2023 that it plans to initiate a new audit of Medicare payments for hospice general inpatient (GIP) services, focused on hospice GIP services furnished to Medicare beneficiaries who were discharged directly to hospice GIP care from an acute hospital stay.

Medicaid enrollment grew significantly during the public health emergency (PHE). States implemented expanded eligibility and enrollment as well as reduced cost sharing and premiums based on Medicaid program regulatory flexibilities available during the PHE, but many of those will expire on May 11, 2023 and December 11, 2023.

Healthcare providers are scrambling to understand the impacts of the May 11 expiration of the COVID-19 public health emergency (PHE). Luckily for most telehealth providers, the outlook of their operations post-PHE is relatively clear.

The US Department of Health and Human Services Office of Inspector General (OIG) announced on April 25 that it would be updating its Compliance Program Guidances (CPGs).

Throughout the COVID-19 pandemic and related public health emergency (PHE), the US Department of Health and Human Services, Office for Civil Rights (OCR) issued four Notifications of Enforcement Discretion (referred to as “waivers”) designed to offer flexibility to healthcare providers battling the virus. On April 11, the OCR announced that these waivers will officially expire on May 11, 2023, in conjunction with the end of the PHE. While it is not unexpected that the OCR is pulling back these waivers, healthcare providers must ensure that their ongoing operations are fully compliant with the OCR’s HIPAA-related requirements. This blog post details the list of waivers issued by the OCR that will expire on May 11.