Tag: 2020 News

San Diego-based clinical laboratory Progenity, Inc. admitted that it submitted fraudulent bills to TRICARE, the Department of Defense health care benefit program that covers military service members and their dependents, and to the Federal Health Care Employee Benefits Program (FEHBP), for clinical tests that it knew were not covered or properly payable by either program.

In addition, Progenity, formerly known as Ascendant MDx, Inc., and previously headquartered in Carlsbad, California, admitted that it offered improper incentives to patients and doctors to use its laboratory services.

To account for its fraud, Progenity has agreed to pay a total of $49 million in civil settlements in federal courts in the Southern District of California (SDCA) and the Southern District of New York (SDNY), as well as to multiple states.

Progenity offered noninvasive prenatal testing (“NIPT”) to pregnant women. NIPT refers to a category of genetic tests that screen for fetal chromosomal abnormalities, through analysis of fetal DNA present in a pregnant woman’s blood.

This form of genetic testing, however, did not have FDA approval and was considered by TRICARE as a “laboratory-developed test.” As a result, TRICARE did not cover NIPT tests for its beneficiaries.

Therefore, in order to get reimbursed by TRICARE, Progenity falsely and fraudulently used a medical billing code that TRICARE covered, but that Progenity knew did not accurately reflect that the NIPT test.

The U.S. Attorney’s Office for SDCA launched both a criminal probe into Progenity’s fraudulent billing practices and a civil investigation of the false claims Progenity had submitted to TRICARE and the FEHBP. Separately, SDNY initiated its own investigation into misconduct by Progenity relating to the improper incentives provided to patients and doctors to use its laboratory services. SDNY also coordinated with multiple state Attorneys General to investigate Progenity’s miscoding of NIPT to Medicaid programs in New York and several other states.

Progenity’s settlement agreement requires the company to pay $16.4 million to settle the SDCA civil matter, $19,449,316 to settle the SDNY civil matter, and $13,150,684 to settle the state civil allegations.

The civil settlements were based on an ability-to-pay, payment-over-time basis, following an analysis of financial condition submissions made by Progenity. In light of Progenity’s remedial efforts, cooperation with the investigation, and payment of restitution to TRICARE and the FEHBP, the criminal investigation was resolved via a non-prosecution agreement, requiring that Progenity admit its misconduct and be subject to additional terms and conditions for up to a 24-month period.

In an opinion out of the United States District Court for the District of New Jersey, Osterbye v. United States, 2020 U.S. Dist. LEXIS 116591 , the Court denied Defendant Selective Insurance’s Motion to Dismiss Plaintiff’s suit and allegations that Defendant failed to reimburse Medicare for Osterbye’s medical expenses under the Medicare Secondary Payer Act (MSP) private cause of action pursuant to 42 USC § 1395y(b)(3)(A).

Plaintiffs’ decedent, Anna May Osterbye, a Medicare beneficiary, was injured in a fire at her home allegedly caused by the negligence of a plumbing contractor, insured by the Defendant. Osterbye.

The claim resulted in a settlement in the amount of $740,000 including $13,562.90 that Medicare estimated for reimbursement of conditional payments. On April 29, 2013, the Plaintiffs executed a Release.

After Plaintiffs reimbursed $13,562.90 to Medicare, Medicare issued a final demand letter for an additional amount of $118,071.28 on June 4, 2013. The Plaintiffs then proceeded to exhaust administrative appeals with Medicare. On June 26, 2019, the Medicare Appeals council dismissed Plaintiffs’ request for review.

On August 28, 2019, Plaintiffs elevated the dispute to the United States District Court. Defendant’s Motion to Dismiss asserted two main arguments 1) The statute of limitations time-bars Plaintiff’s MSP claim and 2) Dismissal is appropriate based upon the settlement agreement and release.

With respect to the statute of limitations defense, administrative remedies were not exhausted until June 26, 2019- over 6 years after the settlement and release were executed. Plaintiffs were unable to seek judicial review on their MSP claim until all administrative remedies were exhausted. It was not apparent on the face of Plaintiffs’ Complaint that Plaintiffs’ MSP private cause of action is time-barred and denied the Motion to dismiss on the statute of limitations defense.

Defendant argued that the Court should dismiss Plaintiff’s claims by enforcing the Release Plaintiffs executed on April 29, 2013. The Court ultimately determined that whether the Plaintiffs’ Release should be nullified based on mutual mistake turns on a factual inquiry that was better left for a later time.

The ultimate outcome of this case is yet to be determined; however, there are several clear warning signals and reminders found within this case. Relying on an initial Conditional Payment Letter, and not a Final Demand amount can leave a primary payer open to significant exposure. Understanding the Conditional Payment Recovery process also includes understanding the inner workings of the Medicare Administrative Appeals process, and the associated delay.

Several legal experts say workplace safety rules may clash with federal protections for individual rights if employees resist potential employer efforts to require them to take a prospective COVID-19 vaccine, but safety considerations will likely carry more weight in court.

According to the report in Business Insurance, “When there is a vaccine, it will be a gamechanger, but it will raise issues,” said Dennis Brown, managing shareholder in the San Jose, California, office of Littler Mendelson P.C., which represents employers.

“Because COVID-19 is highly contagious and dangerous for some people – there will be a big rush by employers to require vaccinations, and part of that is driven by fear,” he said. “Employers will be under tremendous pressure to require the vaccine.”

Yet Mr. Brown and other employment law attorneys say they are bracing for challenges to vaccine requirements.

Employers may require vaccines to comply with regulations such as the U.S. Occupational Safety and Health Administration’s general duty clause, which calls for employers to provide safe work sites. But they also face requirements to comply with legal exemptions for individuals on the basis of health or religion.

Title VII of the Civil Rights Act, for example, bars employment discrimination on the basis of religion, among other things, and the Americans with Disabilities Act states that a disabled person can be exempt from receiving a mandatory vaccination under certain conditions.

“The Title VII and ADA disability accommodations are not new to employers, but this context is new,” said Casey Denson, a New Orleans-based employment law attorney for her own firm, Casey Denson Law LLC, which represents employees. She said there’s no legal precedence concerning vaccine exemptions for COVID-19, so it’s unclear how courts will rule.

Mr. Brown said courts are “less hospitable” to religious exemptions than to medical concerns “as a general rule” and that the pandemic could further tip the scales away from accepting personal religious exemptions in favor of protecting all workers and businesses. Overall, in health care settings, exemptions almost never stand as “the balancing test you go through between individual liberty and public health and safety tilts heavily to public safety,” he said.

How the EEOC guidance would pertain to a COVID-19 vaccine remains to be seen, Ms. Denson said.

“It’s going to depend on the type of business you have, whether you are interacting with coworkers, customers or older individuals” shown to be at risk for COVID-19 complications, she said. “Even though we have legal frameworks for decisions on vaccines it’s going to be a complicated decision.”

“We will have to see how things play out,” said David Kurtz, Boston-based partner with Constangy, Brooks, Smith & Prophete LLP, which represents employers.

“When it came to influenza vaccines, the EEOC said employers should consider encouraging people to get vaccines but not force them. (COVID-19) will absolutely shake things up. One of the things that is so unusual with COVID-19 is when people have the flu they know it; when it comes to COVID-19 you hear that people are asymptomatic. That’s part of the problem employers are facing.”

Samuel Burgess, Syracuse, New York-based senior counsel with Bond, Schoeneck & King PLLC, said courts will likely side with employers seeking to protect their entire workforce through compulsory vaccinations.

“We’ve seen this in the schools context with the measles and the flu shot requirements in the health care setting, and how courts aim to look at protection for the public and the greater good,” he said.

According to an American Medical Association report, physician employment has grown 13 percent since 2012, with the percent of employed physicians surpassing their cohorts in physician-owned practices for the first time in 2018. A new report suggests that this phenomena will be accelerating.

More than half of independent physicians reported they are worried about their practices surviving the COVID-19 pandemic indicating there may be a sharp uptick in future partnerships and consolidation, the new report found.

Consulting firm McKinsey & Co. surveyed physicians nationally in both 2019 and, again, six weeks into the pandemic, to understand physician sentiment. Nearly half of the physicians surveyed in the six weeks after the pandemic was declared said they had less than four weeks cash on hand.

Nearly seven in ten (68%) of those who were looking for partners listed financial support as the primary driver, the report said.

“While autonomy has remained a priority for physicians, respondents indicated that they will consider partnerships or joining a health system as a result of financial uncertainty resulting from the COVID-19 pandemic,” authors Kyle Gibler, M.D., Omar Kattan, M.D., Rupal Malani, M.D., and Laura Medford-Davis, M.D., wrote in the report..

For example, more than half (54%) of large independent practice docs and 30% of small independent practice physicians said the pandemic “has shown me the benefits of working for a large practice outweigh the benefits of working in a smaller practice.”

Four in 10 physicians who responded said they are now more likely to pursue employment as a result of COVID-19.

Meanwhile, more than a quarter of independents are considering selling their practice or partnering with a larger entity due to COVID-19.

In 2019, 75% of responding physicians said they preferred to join an independent physician group while 41% said they preferred to join a hospital or health system. After COVID-19, nearly 90% of respondents said they preferred to join an independent group while 28% preferred to join a health system.

However, the report said, 26% of physicians who joined a practice or health system reported “buyer’s remorse,” stating that they were interested in returning to self-employment.

“As health systems explore the next chapter of physician acquisition, our research in the healthcare sectors suggests all parties should deepen their understanding of physicians’ needs,” the authors wrote. “Clear communication between health systems and physicians on the expectations and benefits of alignment, including the implications for physicians, their teams, and their patients, will be important considerations in building longer-term successful relationships.”

Amid ongoing scrutiny of its business practices, physician-staffing giant TeamHealth is now facing a California based class action suit accusing the company of fraudulent patient billing and racketeering.

TeamHealth, based in Knoxville, Tennessee, is one of the largest providers of outsourced clinical staffing and administrative services for hospital-based and freestanding emergency departments in the country.

The company, which was acquired by private equity firm Blackstone Group LP in 2017, operates within 47 states and runs about 3300 acute and post-acute facilities. TeamHealth contracts with hospitals to staff and manage various departments, including emergency, critical care, radiology, and anesthesiology services. The company currently controls about 17% of the emergency medicine market in the United States, according to the legal challenge.

The lawsuit, filed July 10 in US District Court for the Northern District of California, contends that TeamHealth vastly inflates the rates it charges patients and aggressively pursues debt collection if patients fail to pay the inflated prices. The complaint alleges TeamHealth is illegally engaging in the corporate practice of medicine and is avoiding state bans of this practice by operating a web of subsidiaries and purportedly independent organizations.

In a statement to Medscape Medical News, TeamHealth denied the claims and indicated that the company plans to aggressively fight the lawsuit.

“TeamHealth is confident that our billing practices and organizational structure are fully compliant with long established laws and precedents,” TeamHealth said in an emailed statement. “TeamHealth maintains a long-standing practice against balance billing. We believe these claims are wholly without merit and we look forward to vigorously defending ourselves.”

The class action suit claims that TeamHealth is practicing corporate medicine but is able to skirt state laws that prohibit the practice through a spectrum of so-called subsidiaries and “independent” contractors.

As director of the enterprise, TeamHealth controls the terms of its physicians’ employment, all physician staffing decisions, and all the rates its physicians and practice groups charge patients, according to the suit. The complaint claims these rates are inflated far above what is reasonable and customary for the services provided.

The suit’s lead plaintiff, Sia Fraser, claims she experienced just such inflated bills after an emergency department visit. Fraser was treated for emergency gallstone surgery by a physician in a TeamHealth-owned physician group in September 2019 at Tri-City Medical Center in Oceanside, California. TeamHealth billed Fraser $1082 for an hour of observation care during the visit, according to the suit. For the same hospital visit, TriCity Medical Center billed Fraser $63 per hour for observation care performed by hospital physicians.

Craig Briskin, an attorney for Fraser with the law firm Justice Catalyst Law, said his team intends to obtain substantial monetary relief for consumers in the case and aim to return fairness and common sense to medical billing.

The suit comes at the heels of growing skepticism about TeamHealth’s practices. The company has come under fire in recent months for reportedly sending surprise bills to patients and slashing physicians’ hours during the coronavirus health crisis, according to ProPublica. One analysis of the company’s records by the news organization found that TeamHealth is substantially marking up medical bills to boost profits. Two TeamHealth affiliates in Texas, for instance, billed 7.7 times more than their actual costs for clinicians and support services, according to the June ProPublica report.

Most ER doctors are not employees of the hospital where they work. Historically they belonged to doctors’ practice groups. In recent years, wealthy private investors have bought out those practice groups and consolidated them into massive nationwide staffing firms like TeamHealth and its largest competitor, KKR-owned Envision Healthcare.