Health Law Advisor

Six months from the date of closing. That’s how long acquiring companies have under the newly announced Department of Justice (DOJ) Mergers and Acquisitions (M&A) Safe Harbor Policy to disclose misconduct discovered in the context of a merger or acquisition – whether discovered pre or post-acquisition.  And the acquiring company has one year from the date of closing to remediate, as well as provide restitution to any victims and disgorge  any profits.

Over the last two years, the DOJ has made clear its priority to encourage companies to self-disclose misconduct aiming to ...

When the COVID-19 Public Health Emergency (“PHE”) ended on May 11, 2023, many physician groups furnishing certain medical equipment, devices, and/or supplies to their Medicare patients became in violation of the federal Physician Self-Referral Law (the “Stark Law”), which has draconian penalties, such as clawback of Medicare payments plus additional stiff monetary penalties and possible exclusion from participation in federal health care programs. 

During the COVID-19 PHE, CMS issued temporary waivers, including a waiver of the “location requirement” of the In-Office Ancillary Services (“IOAS”) exception. That waiver allowed physician groups that furnish certain durable medical equipment, orthotics, prosthetic devices – including intermittent urinary catheters (“IUCs”) – and other medical supplies (collectively referred to here as “DME”) to provide home delivery of such DME to their Medicare patients without facing sanctions for violating the Stark Law.[1] With the end of the PHE having occurred over three months ago, that temporary waiver of sanctions ended and can no longer be relied upon for legal compliance with the Stark Law.[2]     

The Department of Health and Human Services Office of Inspector General (OIG) recently published a new frequently asked question (FAQ) and advisory opinion addressing how to analyze arrangements that may involve providing cash, cash equivalents, and/or gift cards to Medicare and/or Medicaid beneficiaries under the beneficiary inducements prohibition provision in the Civil Monetary Penalty Law (Beneficiary Inducements CMP) and Anti-Kickback Statute (AKS).

Announced in the Consolidated Appropriations Act of 2021, Rural Emergency Hospitals (REHs) will be a new type of Medicare provider starting January 1, 2023.  REHs are meant to help address the stressed health care system of rural providers by providing an option to closure for distressed critical access hospitals (CAHs) and small rural hospitals.

Existing CAHs and rural hospitals with fewer than 50 beds will be eligible to convert to an REH.  CMS is streamlining this process so that this conversion to be an REH can be accomplished through a change of information on an existing Medicare 855A enrollment rather than through a new provider application, which carries potentially significant delays and potential gaps in payment.  REHs are designed to provide primarily emergency department, observation, and outpatient services.  Because REHs will not provide inpatient care, an area that often creates a significant financial and operational burden on CAHs and small rural hospitals, REHs will allow locally-delivered healthcare to continue to be furnished by existing providers.

On August 19, 2022, the Department of Health and Human Services Office of Inspector General (“OIG”) posted Advisory Opinion 22-16 (“AO 22-16”) to its website, a favorable opinion concluding that the OIG would not impose sanctions in connection with a program that offered $25 gift cards to Medicare Advantage (“MA”) plan enrollees who completed an online educational program about the potential risk, benefits, and expectations related to surgery. AO 22-16 is the latest in a string of recent OIG advisory opinions addressing arrangements involving remuneration to Federal health care program beneficiaries - the ninth such advisory opinion in 2022 alone.

The company that requested this advisory opinion contracts with Medicare Advantage Organizations (“MAOs”) to offer the educational program to MA plan enrollees and charges the MAOs a per-member, per-month fee for the program. MA plan enrollees who take the educational program and complete a survey receive a $25 gift card, which may be for a big box store or online retailer that offers a wide variety of items. The company that offers the educational program sends mailings and email correspondence to MA plan enrollees about the educational program but does not advertise or market the program to individuals who are not enrollees of a MA plan that has contracted with the company. The MAOs are prohibited by their contract with the company from including information about the gift cards offered under the program in marketing materials to prospective enrollees.

On November 12, 2021, the Centers for Medicare and Medicaid Services (“CMS”) released final guidance confirming that hospitals can be co-located with other hospitals or healthcare providers.

CMS’ aim for the guidance is to balance flexibility in service provision for providers with ensuring patient confidence in CMS’ quality of care oversight functions.

The final guidance provides direction to state surveyors in the evaluation of a hospital’s compliance with the Medicare Conditions of Participation (“CoPs”) when it is sharing space or contracted staff through service arrangements with another co-located hospital or healthcare provider.  CMS also reiterated a key tenet of co-location arrangements: that each provider must independently meet its applicable CoPs, but, overall, the final guidance is less prescriptive than the draft guidance CMS released in May 2019, and in its wake raises new questions for providers.