The U.S. Department of Justice (DOJ) kicked off the new year by issuing two internal memoranda that are directly relevant to actions brought under the False Claims Act. The January 2018 memoranda offer valuable insight into how the DOJ intends to prosecute, or opt to dismiss, pending and future civil enforcement actions. These memoranda may have their biggest impact in the health care industry, with its plethora of qui tam matters and heavy reliance on manuals and other sub-regulatory guidance. Each memorandum is discussed more fully in “A New Year, a New, Firmer DOJ: Recently Released Parameters for DOJ in False Claims Act Litigation.”
The first such memorandum, issued January 10, 2018, emphasizes the DOJ’s “important gatekeeper role” in preserving resources, protecting government interests, and avoiding unfavorable precedent caused by weak cases. While the False Claims Act contains a dismissal provision, 31 U.S.C. § 3730(c)(2)(A), which explicitly gives the DOJ the power to seek to dismiss a case over the objection of a relator (who stands to gain financially if their lawsuit leads the government to recover money), the DOJ historically has been hesitant to exercise that authority. The January 10 memorandum, however, encourages DOJ attorneys to consider not only their power to seek dismissal, but also their responsibility to do so, and outlines seven common, but not exclusive, factors for U.S. attorneys to consider in deciding whether to dismiss a qui tam.
Authored by:
Thomas H. Barnard, 410.862.1185, tbarnard@bakerdonelson.com
Marisa Rosen Dorough, 407.367.5406, mdorough@bakerdonelson.com
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The OIG added three items to its Work Plan with the February 2018 update, as listed in the chart below. Two of the items concern annual reports, one addressing the performance of Medicaid Fraud Control Units and the other reporting on the use of price substitution in Medicare Part B drug purchasing. The third item relates to statistical sampling in Medicare fee-for-service administrative appeals of findings by program integrity contractors.
Program integrity contractors utilize statistical sampling to review payments to providers and to identify payments that may be improper. If the contractor identifies “a sustained or high level of payment error,” the contractor may use statistical sampling to extrapolate a total overpayment based on a larger population of claims. The statistical estimate for the sample is subject to challenge on appeal. Medicare Administrative Contractors (MACs) and Qualified Independent Contractors (QICs) are responsible for the first two levels of the appeals process, and, according to the OIG, “thus play a critical role in deciding which extrapolations will be upheld.”
Authored by:
Meredith N. Larson, 410.862.1123, mlarson@bakerdonelson.com
Reviewed by:
William T. Mathias, 410.862.1067, bmathias@bakerdonelson.com
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The wide-reaching Bipartisan Budget Act of 2018 (BBA), passed by Congress and signed by the President on February 9, 2018, extends and modifies dozens of health care programs, including extending funding for two years for community health centers and extending the Children’s Health Insurance Program (CHIP) for an additional four years through Fiscal Year (FY) 2027. The bill also provides funding for a number of Medicare extenders and incorporates policy reforms from the CHRONIC Care Act and the Medicare Part B Improvement Act – affecting Stark Law compliance, physician payment plans, telehealth, home health services, and other programs. The bipartisan legislation also includes funding for the National Institutes of Health (NIH) and for efforts to combat the opioid crisis. Finally, the legislation repeals the Affordable Care Act’s (ACA) Independent Payment Advisory Board (IPAB) and eliminates the Medicaid Disproportionate Share Hospital (DSH) reductions scheduled for FY18 and FY19. Of note, the legislation does not include ACA market stabilization measures to address ongoing uncertainty and turmoil in the individual insurance market. Congress will now turn to enacting a full-year omnibus appropriations measure for FY18 under the newly passed BBA.
Authored by:
Sheila P. Burke, 202.508.3457, sburke@bakerdonelson.com
Amit Rao, 202.508.3472, arao@bakerdonelson.com
Sam E. Sadle, 202.508.3476, ssadle@bakerdonelson.com
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The President’s fiscal year 2019 (FY19) budget proposal for the Department of Health and Human Services (HHS) reflects the Trump Administration’s priorities to repeal and replace the Affordable Care Act (ACA) and implement significant reductions in federal spending for health care entitlements and domestic health programs. The budget assumes Congress will replace the ACA’s Medicaid expansion funding and insurance exchange subsidies with market-based block grants to the states (citing the Graham-Cassidy-Johnson-Heller proposal), generating $679 billion in net savings over the ten-year budget window. Like last year, the budget includes a proposed restructuring of Medicaid from an open-ended federal and state entitlement program to a per capita cap or block grant system beginning in FY20, projected to save approximately $1.4 trillion over ten years. However, unlike last year’s budget proposal, this year’s budget calls for substantial reforms and cuts in Medicare, producing $532 billion in total savings over ten years. The budget proposes reductions in Medicare reimbursements to post-acute care providers, graduate medical education programs, hospitals providing uncompensated care, and hospital-owned physician practices. The budget also proposes savings through efforts to lower Medicare payments and beneficiary out-of-pocket cost sharing for prescription drugs.
Related Resource: President’s FY19 budget Medicare legislative proposals and estimated budget impacts
Authored by:
Sheila P. Burke, 202.508.3457, sburke@bakerdonelson.com
Amit Rao, 202.508.3472, arao@bakerdonelson.com
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Co-Chairs, Health Care Regulatory Group
Jonell B. Beeler
Jackson
601.351.2427
jbeeler@bakerdonelson.com
Catherine A. Martin
Baltimore
410.862.1120
cmartin@bakerdonelson.com
www.bakeroberhealthlaw.com
