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Compliance Update
Federal prosecutors increasingly target individual healthcare execs in anti-fraud efforts Print E-mail
Written by Health Law Offices of Anthony Vitale   
Thursday, 16 July 2015 11:07

Last month's sentencing of the former president and CEO of OtisMed Corporation to two years in prison should serve as yet another example that federal prosecutors are not holding back when it comes to holding corporate executives accountable.
Charlie Chi was sentenced for intentionally distributing a medical device used in knee replacement surgery despite the fact that the Food and Drug Administration had denied the company's application for marketing clearance. In December 2014, Chi admitted to distributing, with the intent to defraud and mislead, adulterated medical devices into interstate commerce in violation of the Federal Food, Drug, and Cosmetic Act.
In addition to the 24-month prison sentence, Chi was ordered to serve one-year of supervised release and to pay a $75,000 fine. Prior to his own sentencing, OtisMed Corp., in September 2014, was hit with a criminal fine of $34.4 million and ordered to pay $5.16 million in criminal forfeiture.

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Last Updated on Tuesday, 18 August 2015 11:22
Court Upholds CMS' Prohibition on 'Under-Arrangements' Transactions, Strikes Down CMS' Prohibition on 'Per-Click' Equipment Rental Arrangements Print E-mail
Written by   
Monday, 29 June 2015 00:00

A 2008 rule change from the Centers for Medicare and Medicaid (CMS)-which effectively prohibited referring physician-owned companies from furnishing hospital services "under arrangements"-has withstood a challenge by a urology trade association. On June 12, 2015, the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) held that the 2008 rule change, which redefined an "entity furnishing designated health services" to include entities that perform the services, not just bill for them, constituted a reasonable construction of the Stark Law and was entitled to deference. The appellate court, however, held that CMS' prohibition on "per-click" equipment rental arrangements lacked a rational basis in light of the agency's "tortured reading" of a relevant conference report, which, the court noted, was "the stuff of caprice." Accordingly, the court struck down CMS' 2008 prohibition on per-click equipment rental arrangements involving referring physician-owned equipment leasing companies.

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Governing Boards in Healthcare: Making Compliance a Priority Print E-mail
Written by Jackie Bain | Florida Healthcare Law Firm Blog   
Tuesday, 16 June 2015 00:00

Does your healthcare entity have a governing Board? How involved is that Board in overseeing your business? Would your Board members be able to respond to questions about your business' compliance-related activities? 

Recently, the Office of the Inspector General ("OIG"), in conjunction with a host of non-profit healthcare associations, released guidance on achieving compliance for healthcare governing boards. The guidance is not based on abstract principals of compliance, instead it points to applicable federal law, OIG guidance, case law, and sentencing guidelines.

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The Saga Continues: CMS Further Delays Enforcement of Medicare Enrollment Requirements for Prescribers of Part D Drugs Print E-mail
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Thursday, 11 June 2015 00:00

The Centers for Medicare & Medicaid Services (CMS) on June 1, 2015, published its "Medicare Part D Prescriber Enrollment Requirement Update" (Update). The Update further delays-until June 1, 2016-enforcement of the regulatory requirement that health care professionals eligible to enroll in the Medicare Program (referred to herein as eligible to be a Medicare Prescriber) either enroll or opt out in order for drugs they prescribe to be covered under Medicare Part D. Besides providing additional time for prescribers to comply with the enrollment requirement, the Update also provides guidance for Part D Plan Sponsors (Sponsors), their pharmacy benefit managers (PBMs), and contracted pharmacies concerning how to alert prescribers to the enrollment requirement. The Update also explains Sponsors' obligations to verify that Part D claims contain an active and valid prescriber National Provider Identifier (NPI), as well as to issue notices to affected members.

Prescriber Enrollment Requirement Finalized in May 2014 Final Rule and Modified by the Interim Final Rule

In May 2014, CMS promulgated a final rule finalizing the requirement that Sponsors reject (or direct their PBMs to reject) a pharmacy claim or member reimbursement request for a Part D drug if (i) the claim does not contain the prescriber's active and valid NPI, or (ii) the physician or eligible professional, as the terms are defined in the Social Security Act, is neither enrolled in Medicare nor has a valid opt-out affidavit on file.

On May 6, 2015, CMS published an interim final rule with comment period (Interim Rule) requiring prescribers of Part D drugs to become Medicare Prescribers by January 1, 2016.

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OCR Launches Phase 2 HIPAA Audit Program Print E-mail
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Thursday, 28 May 2015 00:00

Health Insurance Portability and Accountability Act of 1996 (HIPAA) covered entities have reported that the U.S. Department of Health and Human Services Office for Civil Rights (OCR) recently sent pre-audit screening surveys to a pool of covered entities that may be selected for a second phase of audits (Phase 2 Audits) of compliance with the HIPAA Privacy, Security and Breach Notification Standards, as required by the Health Information Technology for Economic and Clinical Health Act (HITECH Act). OCR had originally planned to issue these screening surveys in the summer of 2014.

Unlike the pilot audits conducted in 2011 and 2012 (Phase 1 Audits), which focused on covered entities, OCR is conducting Phase 2 Audits of both covered entities and business associates. The Phase 2 Audit program will focus on areas of greater risk to the security of protected health information (PHI) and on pervasive non-compliance based on OCR’s Phase I Audit findings and observations, rather than a comprehensive review of all of the HIPAA Standards. OCR also intends for the Phase 2 Audits to identify best practices and uncover risks and vulnerabilities that OCR has not identified through other enforcement activities. OCR has stated that it will use the Phase 2 Audit findings to identify technical assistance that it should develop for covered entities and business associates. In circumstances where an audit reveals a serious compliance concern, OCR may initiate a compliance review of the audited organization that could lead to civil money penalties.

The following sections describe the Phase 2 Audit program and identify steps that covered entities and business associates should take to prepare for Phase 2 Audits.

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