A recent settlement demonstrates the importance of compliant structuring of lending arrangements in the health care industry. The failure to consider health care fraud and abuse risks in connection with lending arrangements can lead to extremely costly consequences.

On April 27, 2017, the Department of Justice (“DOJ”) announced that it reached an $18 Million settlement with a hospital operated by Indiana University Health and a federally qualified health center (“FQHC”) operated by HealthNet. United States et al. ex rel. Robinson v. Indiana University Health, Inc. et al., Case No. 1:13-cv-2009-TWP-MJD (S.D. Ind.).  As alleged by Judith Robinson, the qui tam relator (“Relator”), from May 1, 2013 through Aug. 30, 2016, Indiana University Health provided HealthNet with an interest free line of credit, which consistently exceeded $10 million.  It was further alleged that HealthNet was not expected to repay a substantial portion of the loan and that the transaction was intended to induce HealthNet to refer its OB/GYN patients to Indiana University.

While neither Indiana University Health nor HealthNet have made any admissions of wrongdoing, each will pay approximately $5.1 million to the United States and $3.9 million to the State of Indiana. According to the DOJ and the Relator, the alleged conduct violated the Federal Anti-Kickback Statute and the Federal False Claims Act.

For more details on the underlying arrangement and practical takeaways . . .


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What will the telehealth landscape look like under the Donald J. Trump Administration?

The Trump Administration is likely to drive telehealth advancement in a positive direction. For example, President Trump’s plan to reform the Veteran’s Affairs Department includes improved patient care through the use of telehealth technology. There are also some indications that the newly confirmed Secretary of the Department of Health and Human Services (“HHS”), Tom Price, is “telehealth friendly.” Recently, during the congressional confirmation hearings, Price mentioned a tele-stroke program in Georgia as a model of success, and he said he thought there were many things that can be done to mirror that kind of technological expansion. Price also said he is interested in promoting telehealth because it “holds great promise, particularly for rural areas experiencing physician shortages and for patients with limited mobility.” Moreover, Trump’s pick to be the next Administrator of the Centers for Medicare and Medicaid Services (“CMS”), Seema Verma, said in her recent congressional confirmation hearings that she wants to work with Congress to promote the use of telehealth technology. Specifically, she said, “telehealth can provide innovative means of making healthcare more flexible and patient-centric. Innovation within the telehealth space could help to expand access within rural and underserved areas.” Finally, Maureen Ohlhausen, the recently appointed acting chair of the Federal Trade Commission (“FTC”), has in the past spoken favorably regarding the potential of telehealth and has said that the current professional licensure system needs to be rethought given telehealth technology’s potential.

Despite the current focus in Congress on repealing and replacing the Affordable Care Act, telehealth legislation continues to gain traction and bipartisan support on the Hill. In February, a bipartisan group of 37 Senators sent a letter to Tom Price encouraging HHS to support telehealth and remote patient monitoring. Congress also has embraced telehealth advancement with a consistent stream of proposed legislation seeking to enhance the provision of telehealth services. Most recently, Rep. Joyce Beatty (OH-03) and Rep. Morgan Griffith (VA-09) reintroduced the Furthering Access to Stroke Telemedicine (“FAST”) Act that would expand access to stroke telemedicine (also called “telestroke”) treatment in Medicare. Congress also recently introduced HR 766 which would establish a pilot program to expand telehealth options under the Medicare program for individuals living in public housing. Additionally, Congress is poised to consider at least two bipartisan pieces of legislation focused on telehealth. The first is known as the Creating High-Quality Results and Outcomes Necessary to Improve Chronic (“CHRONIC”) Care Act of 2016, which seeks to modernize Medicare payment policies focused on improving the management and treatment of chronic diseases using telehealth technologies. The second is known as the Creating Opportunities Now for Necessary and Effective Care Technologies (“CONNECT”) for Health Act, which seeks to mandate Medicare reimbursement for telehealth services (beyond the current, limited reimbursement framework). Finally, Senator Orrin Hatch (R-UT), the Chairperson of the Senate Finance Committee, recently released his “innovation agenda for the 115th Congress” which encourages the promotion of the “internet of things,” greater broadband investment, and increased device-to-device communication and cross-border data flows.


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