The Daily Scan

October 23, 2018

Last Updated: 1:00 PM EST

Legislation

  • The U.S. Departments of the Treasury, Health and Human Services, and Labor today issued a proposed regulation that expands the usability of health reimbursement arrangements (HRAs). HRAs are designed to give working Americans and their families greater control over their healthcare by providing an additional way for employers to finance quality, affordable health insurance. Because medical expense reimbursements from HRAs are tax-preferred, HRAs - that workers and their families use to purchase coverage of their choosing - provide the same tax advantage enjoyed by traditional employer-sponsored coverage. The proposed regulation would not alter the tax treatment of traditional employer-sponsored coverage. It would merely create a new tax-preferred option for employers of any size to use when funding employee health coverage. While the employer would fund the cost of individual health insurance coverage, the employee would own the coverage, allowing the employee to keep the coverage even if he or she left the employer and was no longer covered by the HRA. In the near term, the proposed regulation, if finalized, would provide opportunities to employers, especially small and mid-size employers who have struggled to offer coverage, to fund the cost of individual health insurance coverage on a tax-preferred basis. (DOL.gov: Press Release, Proposed Regulation)

 

  • FDA Commissioner Scott Gottlieb, M.D., released a statement today on the agency’s ongoing commitment to improving efficiency, transparency of tobacco product application review process as part of FDA’s comprehensive framework to reduce tobacco-related disease and death: "We set out to tackle the leading cause of preventable death in the U.S. by focusing on two key areas: reducing the nicotine levels in combustible cigarettes to render them minimally or nonaddictive; and harnessing new forms of nicotine delivery that could allow currently addicted adult smokers to get access to nicotine without all the risks associated with lighting tobacco on fire. As we continue to advance these policies to significantly reduce tobacco-related disease and death, including a particular emphasis on protecting kids from the dangers of nicotine, it’s critical that we have an efficient regulatory process that puts novel products like e-cigarettes through an appropriate series of regulatory gates to fully evaluate their risks and their potential benefits. As part of this ongoing work, this week we’re holding a two-day public meeting to discuss the policies and processes for tobacco product application review. The discussion on the tobacco product review process is important because the regulatory review of individual products gives the FDA the ability to evaluate important factors such as ingredients, product design and health risks, as well as their appeal to youth and non-users." (FDA.gov)

Litigation

  • Cooley Medical Equipment, Inc., an Eastern Kentucky medical equipment supplier, has agreed to pay $5,254,912 to resolve allegations that it violated the False Claims Act by submitting false or fraudulent claims that misrepresented the ingredients used in certain compounded medical creams. Compounding pharmacies, like Cooley’s, prepare customized medications for individual patients, usually by mixing ingredients in order to create a prescription cream. Cooley billed these prescriptions to government insurers, including Medicare, Kentucky Medicaid, and the Department of Veterans Affairs, Veterans Health Administration (known as CHAMPVA). Cooley was required by CHAMPVA and Kentucky Medicaid to obtain their prior authorization in order to use bulk powder forms of Lidocaine and Prilocaine as ingredients in its compounded creams. Medicare, through its Part D program, does not cover bulk powder ingredients at all. Rather than go through the prior authorization process, or face limited reimbursement from Medicare Part D, Cooley misrepresented the nature of its Lidocaine and Prilocaine ingredients in its claims to federal insurers, falsely stating that Cooley’s compounded medical creams were made with cream-based Lidocaine and Prilocaine ingredients, instead of the bulk powder Cooley actually used. This practice led to the submission of thousands of false claims by Cooley between January 2015 and December 2016, and millions of dollars in improper reimbursements. (Justice.gov

 

  • Four residents of Pittsburgh, Pennsylvania, were charged yesterday in federal court with conspiracy to defraud the Pennsylvania Medicaid program. Travis Moriarty, Tiffhany Covington, Autumn Brown, and Brenda Lowry Horton were charged in separate but related criminal Informations with one count of conspiracy to commit health care fraud. According to the Informations filed in their respective cases, the defendants were employees of one or more of four related entities operating in the home health care industry—Moriarty Consultants, Inc. (MCI), Activity Daily Living Services, Inc. (ADL), Coordination Care, Inc. (CCI), and Everyday People Staffing, Inc. (EPS). Between around January 2011 and around April 2017, MCI, ADL, and CCI, collectively, received more than $87,000,000 in Medicaid payments based on claims submitted for home health services, with PAS payments accounting for more than $80,000,000 of the total amount. During that time, allegedly Moriarty, Covington, Horton, and Brown, along with numerous other individuals, participated in a wide-ranging conspiracy to defraud the Pennsylvania Medicaid program for the purpose of obtaining millions of dollars in illegal Medicaid payments through the submission of fraudulent claims related to PAS, service coordination, and non-medical transportation services that were never provided to the consumers identified on the claims. (Justice.gov)

 

  • Eight New Orleans, Louisiana-area defendants have pleaded guilty for their participation in a conspiracy to obtain oxycodone through fraud by using fictitious prescriptions. Six of the eight defendants have also pleaded guilty for the roles in a scheme to possess with intent to distribute oxycodone on the black market. “These defendants were responsible for over 10,000 Oxycodone pills flowing onto the streets in and around New Orleans,” said Assistant Attorney General Brian Benczkowski of the Justice Department’s Criminal Division. “I commend the prosecutors in the Medicare Fraud Strike Force and the U.S. Attorney’s Office, along with our law enforcement partners, for their outstanding efforts to disrupt the illegal sale of opioids on the black market.” (Justice.gov)

Medicaid

  • Ohio’s Medicaid Department says a report by the federal inspector general that says the agency paid for medical care for dead people is wrong. Ohio Medicaid Department spokesman Tom Betti takes issue with the federal inspector general who says the department paid more than $51 million for dead people on the program. “No provider was paid for services for a deceased person and nearly a year ago, as part of ongoing work to modernize the system, safeguards went online that prevent it from happening," Betti says. Betti says the federal inspector general used a limited sample that included incorrect data generated before the agency modernized its system. He says it was a computer error and adds the agency is appealing the claim. (Radio.WOSU.org)

 

 

 

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