The Daily Scan

October 2, 2018

Last Updated: 1:00 PM EST

Litigation

  • HealthCare Partners Holdings LLC, doing business as DaVita Medical Holdings LLC (DaVita), has agreed to pay $270 million to resolve its False Claims Act liability for providing inaccurate information that caused Medicare Advantage Plans to receive inflated Medicare payments, the Justice Department announced yesterday. DaVita operated an Medical Services Organization (MSO) and contracted with Medicare Advantage Organizations (MAOs) in various states, including California, Nevada, and Florida, to provide care to the MAOs’ enrolled Medicare beneficiaries. In connection with the medical services it provided to those beneficiaries, DaVita collected and submitted diagnoses to the MAOs. As payment for its services, DaVita received from the MAOs a share of the payments that the MAOs received from CMS for the beneficiaries under DaVita’s care. The settlement also resolves allegations made by a whistleblower that HealthCare Partners engaged in “one-way” chart reviews in which it scoured its patients’ medical records for diagnoses its providers may have failed to record. It then submitted these “missed” diagnoses to MAOs to be used by them in obtaining increased Medicare payments. At the same time, it ignored inaccurate diagnosis codes that should have been deleted and that would have decreased Medicare reimbursement or required the MAOs to repay money to Medicare. (Justice.gov)

 

  • The Department of Justice announced yesterday that AmerisourceBergen Corporation and its subsidiaries AmerisourceBergen Specialty Group (ABSG), AmerisourceBergen Drug Corporation (ABDC), Oncology Supply Company (OSC), and Medical Initiatives Inc. (MII) (collectively, “ABC”) have agreed to pay $625 million to resolve allegations arising from its operation of a facility that improperly repackaged oncology-supportive injectable drugs into pre-filled syringes and improperly distributed those syringes to physicians treating vulnerable cancer patients. ABC is one of the nation’s largest wholesale drug companies and ranked number 11 on the Fortune 500 list. The drugs involved in ABC’s scheme were Procrit®, Aloxi®, Kytril® and its generic form granisetron, Anzemet® and Neupogen®. The United States contends that ABC sought to profit from the excess drug product or “overfill” contained within the original FDA-approved sterile vials for these cancer supportive injectable drugs by establishing a pre-filled syringe program through a subsidiary that it claimed was a pharmacy. The United States alleged that the “pharmacy” was in reality a repackaging operation that created and shipped millions of pre-filled syringes to oncology practices for administration to cancer-stricken patients. As part of this operation, ABC purchased original vials from their respective manufacturers, broke their sterility, pooled the contents, and repackaged the drugs into pre-filled syringes. (Justice.gov)

Medicare

  • The Office of Inspector General of Department of Health and Human Services released a study last week titled Medicare Advantage Appeal Outcomes and Audit Findings Raise Concerns About Service and Payment Denials." The study was conducted because a central concern about the capitated payment model used in Medicare Advantage is the potential incentive for MAOs to inappropriately deny access to services and payment in an attempt to increase their profits. The study found that when beneficiaries and providers appealed preauthorization and payment denials, Medicare Advantage Organizations (MAOs) overturned 75% of their own denials during 2014-16, overturning approximately 216,000 denials each year. During the same period, independent reviewers at higher levels of the appeals process overturned additional denials in favor of beneficiaries and providers. The high number of overturned denials raises concerns that some Medicare Advantage beneficiaries and providers were initially denied services and payments that should have been provided. (OIG.HHS.gov)

Medicaid

  • The July 2018 Medicaid and CHIP Application, Eligibility Determinations, and Enrollment Report, which represents state Medicaid and Children's Health Insurance Program (CHIP) agency activity for the month, was released late last week. The report is one of a series of reports on state Medicaid and CHIP data, and it includes point-in-time data reported by states. Of note, nearly 15.6 million additional individuals were enrolled in Medicaid and CHIP in July 2018 as compared to the period prior to the start of the first Marketplace open enrollment period (July - Sept. 2013), in the 49 states that reported relevant data for both periods, representing nearly a 28% increase over the baseline period. (Medicaid.gov)

 

  • The Government Accountability Office (GAO) released a new report yesterday titled "Medicaid Home and Community-Based Services: Selected States' Program Structures and Challenged Providing Services." All state Medicaid programs finance coverage of long-term services and supports (LTSS), which help beneficiaries with physical, cognitive, or other limitations perform routine daily activities, such as eating, dressing, and making meals. When these services are provided in beneficiaries' homes or other community settings instead of nursing homes, the services are known as home- and community-based services (HCBS). GAO did this study because the need for LTSS to assist individuals with limited abilities for self-care is expected to increase, in part due to the aging of the population. (GAO.gov)

Private Sector

  • Pfizer Inc. announced yesterday that its Board of Directors has unanimously elected Dr. Albert Bourla, Pfizer Chief Operating Officer (COO), to succeed Ian Read as CEO effective January 1, 2019. Ian Read will transition from his current role as Chairman and CEO to Executive Chairman of Pfizer’s Board of Directors. “It’s been an honor to serve as Pfizer’s CEO for the past eight years,” stated Ian Read. “However, now is the right time for a leadership change, and Albert is the right person to guide Pfizer through the coming era. Albert is an energizing leader who has an unwavering commitment to serving patients. With 25 years at Pfizer, he has developed an extensive knowledge of the industry and demonstrated an ability to build and grow businesses. With Albert at the helm, our dedicated colleagues across the globe are poised to deliver the next stage of growth. I look forward to working with Albert and the Board to continue serving patients and delivering value for shareholders.” (Pfizer.com)

 

 

 

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