The Weekly Scan

December 21, 2018

FHAS, Inc. extends its best wishes to FHASTpulse readers for a healthy and happy holiday season and a prosperous new year. We will be taking next week off, and we hope to see you back here on Friday, January 4. We look forward to continuing to be your source for the latest in public and private healthcare news in 2019. 

Last Updated: 12:00 PM EST

Litigation

  • Last Friday, December 14, a federal judge in Texas issued a sweeping ruling in a lawsuit that attempts to invalidate the entire Affordable Care Act (ACA). The decision by Judge Reed O’Connor of the Northern District of Texas in Texas v. Azar holds that the ACA is unconstitutional. O’Connor built his rationale for the ruling on the landmark 2012 decision in National Federation of Independent Business v. Sebelius, in which the Supreme Court upheld the ACA individual mandate as a tax. The mandate, through which people were charged a penalty for failure to obtain health insurance, was eliminated by Congress in 2017. O’Connor reasoned that the removal of the penalty must mean the individual mandate no longer can be considered a tax. He further declared the mandate to be an “essential” component of the law, without which the entire ACA cannot properly function. He ruled that the entire law — 974 pages that cover a wide variety of provisions integral to the US health care system — must be struck down as an improper exercise of the Commerce Clause of the Constitution. He also said that Congress must have intended for the whole ACA to be struck down if the mandate were deemed unconstitutional. (CHCF.org)

 

  • HHS issued the following statement in response to the Texas v. Azar ruling: “The recent U.S. District Court decision regarding the Affordable Care Act is not an injunction that halts the enforcement of the law and not a final judgment. Therefore, HHS will continue administering and enforcing all aspects of the ACA as it had before the court issued its decision. This decision does not require that HHS make any changes to any of the ACA programs it administers or its enforcement of any portion of the ACA at this time. As always, the Trump Administration stands ready to work with Congress on policy solutions that will deliver more insurance choices, better healthcare, and lower costs while continuing to protect individuals with pre-existing conditions.” (HHS.gov)

 

  • Antonio Perez Jr. was sentenced on Tuesday by U.S. District Judge Federico A. Moreno of the Southern District of Florida, who also ordered Perez to pay $8,415,824 in restitution and to forfeit the same amount. Perez was ordered to forfeit four Miami-area properties worth approximately $700,000 and multiple bank accounts totaling over $250,000.  Perez previously pleaded guilty to one count of conspiracy to commit health care fraud. According to admissions made as part of his plea agreement, Perez was the owner of A.R.A. Medical Services Inc., which did business under the name Valles Pharmacy Discount.  Perez admitted to agreeing to pay illegal health care kickbacks to Medicare beneficiaries in exchange for a promise from the beneficiaries to fill their prescriptions at Valles Pharmacy Discount, and to allow Valles Pharmacy Discount to submit claims to Medicare for prescription drugs that were not provided to the beneficiaries.  Perez also admitted that he submitted claims to Medicare for expensive prescription medications that Valles Pharmacy never purchased, and were never provided to Medicare beneficiaries. During the course of the scheme, Medicare paid Valles Pharmacy Discount over $32 million, of which at least $8.4 million was for prescription drugs that Valles Pharmacy never purchased and never provided to Medicare beneficiaries, Perez admitted. (Justice.gov)

 

  • Eight Dallas, Texas-area pharmacy owners and marketers were charged in an indictment unsealed Wednesday for their roles in a scheme involving approximately $92 million in compound drug claims to TRICARE and the U.S. Department of Labor (DOL), which were allegedly the product of over $9.1 million in illegal kickbacks. According to the indictment, from May 2014 to September 2016, Richard Hall, Scott Schuster, Dustin Rall, George Paret, John Le and their co-conspirators allegedly engaged in a scheme to pay kickbacks and bribes for the referral of TRICARE and DOL beneficiaries to obtain expensive compound drugs. Hall, Shuster and Rall were co-owners of Rxpress Pharmacy and Xpress Compounding, compound pharmacies located in Fort Worth. As alleged in the indictment, Rxpress and Xpress were separate in name only; Rxpress Pharmacy and Xpress Compounding employed the same staff, operated out of the same building, and utilized a call center to direct prescriptions depending on whether the prescriptions were for private or federal insurance. The indictment alleges that both companies utilized the same marketers but paid them differently depending on whether they were receiving a commission on a federal or private prescription, in order to disguise the illegal kickback payments on federal prescriptions. Specifically, Hall, Schuster, Rall, Paret and Le allegedly devised a scheme to make kickback payments to marketers through Xpress Compounding for the referral of federal prescriptions. These marketers were allegedly set up as sham “W-2” employees to appear as though they were bona fide employees of Xpress Compounding. At the same time, these marketers were paid as 1099 contractors by Rxpress Pharmacy, the indictment alleges. (Justice.gov)

 

  • United States Attorney Maria Chapa Lopez announced Thursday that Dr. Jonathan Daitch, M.D. has agreed to a civil settlement that will pay $1.718 million to the United States to resolve allegations that he violated the False Claims Act by receiving illegal kickbacks associated with the provision of anesthesia services and by causing the submission of medically unnecessary urine tests. During the relevant period, Dr. Daitch was a practicing interventional pain management specialist and one of two principal owners of Advanced Pain Management Specialists, P.A., which is located in Fort Myers. The other principal owner, Dr. Michael Frey, previously pleaded guilty to two counts of conspiracy to receive healthcare kickbacks and has agreed to a civil settlement with the United States for $2.8 million. The civil settlement announced today resolves allegations that, from 2013 through 2016, Dr. Daitch caused the submission of false claims to Medicare and Tricare by causing the submission of definitive Urine Drug Testing (“UDT”) in circumstances where such testing was not reasonable or medically necessary. Definitive UDT testing was financially lucrative for Dr. Daitch because the testing was performed at Advanced Pain’s own in-house laboratory and was billed for by the practice. (Justice.gov)

Medicare & Medicaid

  • A Medicare group gaining influence in Washington as a champion for Medicare beneficiaries is bankrolled by major health insurance companies that are trying to cash in on private coverage offered through the federal health insurance program. The Better Medicare Alliance claims a far-flung network of seniors, with a Facebook community of more than 380,000 and 110,000 signed up to receive email alerts. Its website displays profiles of “BMA Seniors” who describe private Medicare plans in glowing terms. The Associated Press found that one of the featured seniors, David Kievit, died in March at age 91. The multimillion-dollar budget for the alliance isn’t supplied by seniors, but by UnitedHealthcare, Aetna and Humana, according to the group’s president and its federal tax returns. The three insurance giants together account for close to 50 percent of all enrollees in private “Medicare Advantage” plans and stand to benefit as that part of Medicare keeps growing.The organization’s website and Facebook page don’t say where its money comes from, making it easy to miss the industry tie. (APNews.com)

 

  • On Wednesday, the Centers for Medicare & Medicaid Services (CMS) released the weekly enrollment snapshot through the December 15 midnight Eastern Time deadline for the 2019 Open Enrollment Period, and the preliminary data show enrollment remained steady. Open Enrollment for 2019 coverage ended with approximately 8.5 million people enrolled compared to 8.8 million people at the same time last year. These numbers are preliminary and do not represent final 2019 Exchange Open Enrollment figures. (CMS.gov)

 

  • On Wednesday, the Centers for Medicare & Medicaid Services (CMS) released Part I of the 2020 Advance Notice of Methodological Changes for Medicare Advantage Capitation Rates and Part D Payment Policies (the Advance Notice), which contains key information about proposed updates to the Part C Risk Adjustment Model and the use of encounter data. The 2020 Advance Notice is being published in two parts again this year due to requirements in the 21st Century Cures Act, which mandated certain changes to the Part C risk adjustment model and a 60 day comment period for these changes. Changes to other payment methodologies proposed for the following calendar year that are typically contained in the Advance Notice only require a 30 day comment period and will be released in accordance with that statutory deadline. The payment policies for 2020, proposed in both Part I and Part II of the Advance Notice, will be finalized in the annual Rate Announcement. (CMS.gov)

 

  • Today, the Centers for Medicare & Medicaid Services (CMS) issued a final rule that dramatically redesigns and sets a new direction for the Medicare Accountable Care Organizations or “ACOs.” ACOs are groups of healthcare providers that take responsibility for the total cost and quality of care for their patients, and in exchange they can receive a portion of the savings they achieve. To ensure the ACO program delivers the most value, Pathways to Success is designed to advance five goals: Accountability, Competition, Engagement, Integrity, and Quality. “Pathways to Success is a bold step towards quality healthcare at a lower cost through competition and beneficiary engagement,” said CMS Administrator Seema Verma. (CMS.gov)

Private Sector

  • Pfizer Inc. and GlaxoSmithKline announced Wednesday they have entered into an agreement to create a premier global consumer healthcare company with robust iconic brands. The Boards of Directors of both companies have unanimously approved the transaction under which Pfizer will contribute its consumer healthcare business to GlaxoSmithKline’s existing consumer healthcare business. The 2017 global sales for the combined business were approximately $12.7 billion. The joint venture will be a category leader in pain relief, respiratory, vitamin and mineral supplements, digestive health, skin health and therapeutic oral health and will be the largest global consumer healthcare business. In addition, the joint venture is expected to be the first or second largest consumer healthcare player in key geographies, including the United States, Europe, China, India, and Australia. The joint venture will operate globally under the GSK Consumer Healthcare name. (Pfizer.com)

 

  • On Wednesday, GE filed confidential paperwork to spin out GE Healthcare in an initial public offering, according to people familiar with the matter. A public filing will likely mid-2019, they said. GE’s stock jumped more than 6 percent on the news. (CNBC.com)

 

 

 

 

 

 

 

 

 

 

 

 

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