An administrative law judge (“ALJ”) recently ruled that the University of Texas MD Anderson Cancer Center (“MD Anderson”) in Houston must pay a $4.3 million fine to HHS Office of Civil Rights (“OCR”) for HIPAA data privacy and security violations. It is the fourth largest HIPAA-related settlement ever paid to the OCR. The ALJ fines included daily fines for MD Anderson’s non-compliance over a 22-month period and annual fines of $1.5 million for each of two calendar years. With respect to the $4.3 million penalty, the ALJ noted that MD Anderson is a “multi-billion dollar per year business” and “remedies
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The Office of the Inspector General (“OIG”) at the U.S. Office of Personnel Management (“OPM”) alleged in a report dated February 12, 2018 that Health Net of California (“Health Net”) obstructed a federal IT audit, thereby violating its contract with the OPM. In the report, OIG refers to Health Net’s refusal to comply with the planned testing as “unprecedented”. The report further states that Health Net, on February 7, 2018, responded to a formal request from OPM, indicating that it would not provide the requested documentation, nor would it allow the agency to conduct testing. OPM stated that Health Net’s
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The recent enactment of the Tax Cuts and Jobs Act (the “Act”) represents the most sweeping reform of tax laws in over 30 years. It also represents, by far, the most significant legislative accomplishment of the Trump administration in 2017. The following paragraphs highlight the Act’s impact on the healthcare industry: 1. Starting in 2019, the Act repeals the Obamacare “individual mandate” that requires all Americans under 65 to have health insurance or pay an annual penalty, $695 per person or 2.5 percent of income—whichever is higher. Per the Congressional Budget Office’s November 2017 analysis, “Repealing the Individual Health Insurance
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The U.S. Court of Appeals (8th Circuit) recently affirmed the grant of summary judgment by the District Court for the Western District of Arkansas to Johnson Regional Medical Center (“JRMC”) in a breach of contract action against Dr. Robert Halterman, a former employee physician.  Halterman was ordered to pay JRMC $64,931.81 in principal, interest, attorney fees, and additional costs for breaching a recruitment agreement (including an employment agreement and a promissory note) entered into with JRMC. JRMC and Halterman entered into a recruitment agreement in which JRMC provided Halterman with a $50,000.00 signing bonus, payable in monthly installments. The monthly
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A new accounting rule, known as ASC 606, was adopted recently by the U.S. Financial Accounting Standards Board and the International Accounting Standards Board.  This new rule requires fundamental changes to the manner in which health care organizations will report revenue.  The rules go into effect for public companies in 2018 and for all other companies in 2019.  These changes to revenue recognition rules could create an increase in healthcare fraud investigations and prosecutions, as various healthcare industry sectors (including hospitals, physician practices, skilled nursing facilities etc.) transition from fee-for-service to value-based payments. Upon the effective date of ASC 606,
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Arising from Stark Law Improprieties On September 13, 2017 the Justice Department announced that MediSys Health Network Inc. (“MHS”) agreed to pay $4 million to settle allegations that it violated the False Claims Act by engaging in improper financial relationships with referring physicians. MHS owns and operates Jamaica Hospital Medical Center and Flushing Hospital and Medical Center in Queens, New York. The settlement resolves allegations that the MHS hospitals submitted false claims to the Medicare program for services rendered to patients referred by physicians with whom the MHS hospitals had compensation arrangements that did not comply with the requirements of
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Earlier this month, the Centers for Medicare & Medicaid Services (“CMS”) introduced plans to implement a new strategy for fraud audits used by Medicare administrative contractors (“MACs”). Under the new program, MACs will target only those providers and suppliers with the highest claim error rates or billing practices that vary significantly from their peers. Current processes permit MACs to largely flag and challenge claims at random, which has led to a crushing backlog of pending appeals. The new program is designed to address such concerns. It is expected that this new audit strategy will result in fewer providers and suppliers
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