Category Archives: Lawsuit

Bankrupt hospitals sue feds

Posted on by • Posted in 2020 Election Issues, Bankruptcy, Cash, Cash Reserves, Coronavirus, Crisis, Crisis Management, Economic Crisis, Economy, Financially Distressed, Health Policy, Health System, Hospital, Hospital Industry, Lawsuit, Liquidity, Pandemic, Paycheck Protection Program, Rural Health, Rural Hospital • Leave a comment

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Stifel CEO: Hospitals Will Go Bankrupt in Overlooked Threat

Small hospitals going through bankruptcy are suing the Small Business Administration, arguing it is unlawful for the federal government to deny them loans under the Paycheck Protection Program, Axios’ Bob Herman reports.

Why it matters: Allowing bankrupt hospitals access to PPP loans could keep their doors open, and could force the federal government to reverse its stance and allow other bankrupt firms to get PPP loans.

Driving the news: Faith Community Health System, a small rural hospital in Texas that filed for bankruptcy in February, sued the SBA Thursday.

  • The hospital wants to apply for a $2.4 million PPP loan to pay staff and remain open while it goes through bankruptcy and handles the coronavirus pandemic.
  • However, the SBA says bankrupt companies will not be approved for the bailout money because of their “high risk.”
  • Faith Community argues the government agency doesn’t have the authority to exclude bankrupt firms from PPP funding because the law doesn’t spell out those eligibility requirements.

The big picture: Courts are starting to take hospitals’ side.

  • A bankruptcy judge in Maine said the funding was a “grant of aid necessitated by a public health crisis,” and that two hospitals that sued the federal government are entitled to PPP loans.
  • A separate bankrupt hospital in Vermont also should be eligible for PPP funds, a judge ruled this week.

The bottom line: Rural hospitals have been in dire straits for years, and for those that are on the precipice of or are going through bankruptcy, they may be eligible for this bailout funding despite SBA exclusions.

 

 

 

 

Hoag sues to end Providence affiliation

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https://www.beckershospitalreview.com/hospital-transactions-and-valuation/hoag-sues-to-end-providence-affiliation.html?utm_medium=email

Hoag Memorial Hospital Presbyterian | Visit Newport Beach

Hoag Memorial Hospital Presbyterian, a two-hospital network based in Newport Beach, Calif., is trying to sever its ties to Renton, Wash.-based Providence. 

Hoag announced May 4 that it has filed a lawsuit in an attempt to dissolve its affiliation with Providence. Hoag said it filed the lawsuit after a year of attempted negotiations.

“Hoag must be able to keep local resources and decision making in Orange County to address all the health needs of community members for years to come,” Robert T. Braithwaite, president and CEO of Hoag, said. “The current structure of our relationship with Providence, we believe, is not in the best interest of our patients, the community, our physicians and team members.”

The link up dates back to 2012 when Hoag entered into an affiliation agreement with Irvine, Calif.-based St. Joseph Health, which has since been acquired by Providence, a 51-hospital system.

“Under the existing affiliation, Hoag’s mission and legacy are at risk of being diluted within a large national hospital system,” Mr. Braithwaite said. “We must be able to maintain Hoag’s unique character and role as Orange County’s most trusted health care network, as well as keep local control of community assets.”

Regarding Hoag’s lawsuit, officials from Providence released the following statement to The Orange County Register:

“Now, at a time when all hospitals and health systems are battling the COVID-19 pandemic, the Hoag leaders took legal action to sever its relationship with Providence for reasons that remain unclear,” said the statement from Providence. “Our relationship has been strong since 2012. The Hoag leaders’ so-called ‘realignment’ plan would negatively impact patient care, diminish resources and medical expertise available to Orange County.”

 

 

 

 

Pandemic spurs court fights over mail-in voting

Posted on by • Posted in 2020 Election Issues, Coronavirus, Health Policy, Infection Control, Infectious Virus, Lawsuit, Mail-in Ballots, Pandemic, Partisanship, Public Health, Public Safety, Social Distancing, Supreme Court, Voter Disenfranchisement, Voter Suppression, Wishful Thinking • Leave a comment

https://thehill.com/regulation/court-battles/492135-pandemic-spurs-court-fights-over-mail-in-voting?userid=12325

Pandemic spurs court fights over mail-in voting | TheHill

Election officials are scrambling ahead of the November vote to ramp up alternative methods like mail-in voting as the coronavirus pandemic raises concerns about the safety of in-person voting.

That dash to expand polling options could bring a new wave of court fights around the 2020 election, legal experts say. As states move to bolster balloting options — or face challenges to such plans — both sides in the debate are likely to take those decisions to court.

And when Election Day arrives, questions over the handling of mail-in ballots could lead to more court fights.

“We do not want the election resolved in the courts and so I hope it does not come to that,” said Richard Pildes, a law professor at New York University.

Legal experts say the nightmare scenario would be a situation resembling the Supreme Court’s decision on Bush v. Gore, which was seen as an ideological one that undermined both the legitimacy of the court and the 2000 presidential election results among critics of the decision.

“We know that the current partisan divide over the legitimacy of the U.S. Supreme Court can be timed to the release of the Bush v. Gore decision,” said Charles Stewart, a political science professor and election expert at MIT. “So, we have to be worried both about the legitimacy of the result and the legitimacy of the courts.”

States are hoping to avoid the situation Wisconsin faced this week where widespread in-person voting took place, despite last-minute efforts to avoid that outcome amid a virus that had infected some 2,500 and killed nearly 80 in the state by the Tuesday vote.

“There’s nonstop work being done by election officials to plan for November,” Stewart said.

The hope is that the pandemic will have abated enough to allow for in-person voting, which could be done more safely if early voting is expanded to reduce crowding on Voting Day. But given the fears over inciting a second wave of infections, that may not be advisable by the fall.

All states allow at least some mail-in balloting for select voters. While some states have relatively expansive mail voting systems, others have few provisions.

The fight over expanding voting options has already sparked legal battles. Texas is one of the states that has cases pending in court over efforts to expand mail-in balloting.

Under the current state election rules in Texas, only voters with a “qualifying reason” — advanced age, disability, incarceration or planned travel — can mail in ballots, despite public health guidance to avoid public gatherings. But a lawsuit filed by Texas Democrats ahead of the July primary runoff seeks to have that criteria expanded by including social distancing as a qualifying disability.

Progress toward developing a voting failsafe by November is likely to be uneven among the states given that not all are beginning from the same starting point, and because the push has increasingly become riven by partisan politics.

States that have a head start will be better off, though, experts said.

“States that already have a well-developed vote-by-mail program may well have the capacity to supersize it, and states that don’t may well have the capacity to provide some incremental vote-by-mail capacity,” said Justin Levitt, a professor at Loyola Law School.

“But it will be a herculean task for a state without much vote-by-mail capacity to get to almost everyone voting by mail by November. That takes expertise and systems, equipment and personnel, and the capacity to print a lot more ballots. And it is not easy to get any of those quickly.”

Lorraine Minnite, a political science professor at Rutgers University-Camden, put it even more starkly.

“A large-scale change in procedure hastily administered will likely not run smoothly even under the best of conditions,” she said.

Experts warn that expanded mail-in voting could lead to more voter errors and omissions, create more opportunities for fraud or coercion, and pose special challenges for those who move frequently or lack a permanent address. 

Edward Foley, a law professor at Ohio State University, said that if states are too slow to mail out ballots, litigation could arise from those issues.

“The most likely problem to trigger litigation would be if voters request absentee ballots on time, but election officials because they are overwhelmed with the high volume of absentee ballot requests fail to send the ballots to voters in time for voters to return them by the legally specified deadline,” Foley said.

“This, then, creates a problem of wrongful disenfranchisement of eligible voters, through no fault of the voters but because of the government’s own problems, and requires a court to come up with an appropriate remedy,” he added.

Rick Hasen, a professor of law and political science at the University of California Irvine, said that more courts may be drawn into a battle similar to the one playing out in Texas over whether voting by mail should require a valid excuse.

“There are a number of issues courts may address related to the vote by mail and the coronavirus,” he said. “Do states have to expand ballot deadlines to deal with a flood of absentee ballots? Do voters have a right to be told their absentee ballots have been rejected and given the opportunity to ‘cure’ a problem for rejecting a ballot like a purported signature mismatch?”

According to Levitt, one common thread among states is the urgent need for money to ramp up mail-in operations.

“The single most important piece is funding,” he said. “There are a lot of logistics between here and there, including space and machinery and people to process mail ballots, and that takes money.”  

The more than $2 trillion coronavirus stimulus package included $400 million for states to expand early voting, election by mail and for other election matters.

“The recent funding from Congress is an extremely welcome start, but only barely a start,” he added. “There needs to be much more, and quickly: it does little good to get more funding for this in October.”

 

 

 

Geisinger, AtlantiCare sever merger

Posted on by • Posted in Health System, Hospital, Hospital Industry, Lawsuit, Market Consolidation, Market Power, Mergers & Acquisitions • Leave a comment

https://www.beckershospitalreview.com/hospital-transactions-and-valuation/geisinger-atlanticare-sever-merger.html

HFMA: Mergers will significantly impact care delivery system ...

Danville, Pa.-based Geisinger and Atlantic City, N.J.-based AtlantiCare have reached an agreement to part ways, the two health systems announced March 31. 

AtlantiCare has been part of the Geisinger system since 2015, when the Danville, Pa.-based system acquired it.

The decision to separate comes after months of negotiations between the two parties after AtlantiCare voted to break away from Geisinger in September 2019.

In response to the September vote, Geisinger sued AtlantiCare in an attempt to stop the health system from leaving. In the lawsuit, Geisinger accused AtlantiCare of violating the signed merger agreement.

The merger agreement, signed in 2014, allowed AtlantiCare to terminate the merger within 10 years, but only if Geisinger became controlled by a for-profit organization or affiliated with a religious organization. Neither of those circumstances occurred, according to the lawsuit.

The lawsuit didn’t disclose the reason the New Jersey health system wanted to regain its independence.

However, now the two parties have reached a mutual agreement to go their separate ways. 

Geisinger has also agreed to drop the lawsuit.

“Throughout this process, both Geisinger and AtlantiCare have been guided by the desire to do what is best for the people and communities we serve in Pennsylvania and New Jersey. We believe this agreement best supports the long-term health and wellness of our communities and makes the best use of our nonprofit resources today and into the future. We remain committed to working together to ensure the continued delivery of high-quality healthcare services,” the two systems said in a joint statement.

The separation of the two organizations is expected to take six to 18 months. 

 

 

 

 

 

Justice Department sues Anthem, alleging Medicare fraud

Posted on by • Posted in Center for Medicare and Medicaid Services (CMS), Dept of Justice (DOJ), Fraud and Abuse, Health Insurance Industry, Lawsuit, Medicare Advantage, Rev Cycle Management • Leave a comment

https://www.axios.com/doj-anthem-lawsuit-medicare-advantage-fraud-11cdba13-eacd-4847-9bb0-20aa993235f9.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

Justice Department sues Anthem alleging Medicare Advantage fraud ...

The Department of Justice has sued Anthem, alleging that the health insurance company knowingly submitted inaccurate medical codes to the federal government from 2014 to 2018 as a way to get higher payments for its Medicare Advantage plans and turned “a blind eye” to coding problems.

Why it matters: This is one of the largest Medicare Advantage fraud lawsuits to date, and federal prosecutors believe they have more than enough to evidence to claim that Anthem bilked millions of dollars from taxpayers.

Background: DOJ has been probing the “risk adjustment” practices of all the major Medicare Advantage insurers for years, but hadn’t pulled the trigger on a lawsuit against a major player.

  • Risk adjustment is the process by which Medicare Advantage companies assign scores to their members based on the health conditions they have. Patients who have higher risk scores lead to higher payments from the federal government to the companies that insure them.
  • Insurers are required to review patients’ medical charts to verify the health conditions, and if insurers find any inaccurate diagnoses, they have to be deleted — which also would require the companies to pay back money to the federal government.

The Department of Justice is alleging that Anthem reviewed medical records, but only focused on finding “all possible new revenue-generating codes” while purposefully ignoring all erroneous diagnoses.

  • For example, according to the DOJ’s lawsuit, Anthem coded one member in 2015 as having active lung cancer.
  • “Anthem’s chart review program did not substantiate the active lung cancer diagnosis,” the DOJ alleges. Instead of deleting that diagnosis, Anthem allegedly added another three codes — leading to a $7,000 overpayment just for that member that year.

The other side: Anthem said in a statement that it intends “to vigorously defend our Medicare risk adjustment practices” and that “the government is trying to hold Anthem and other Medicare Advantage plans to payment standards that CMS does not apply to original Medicare.”

The big picture: Medicare Advantage continues to enroll seniors and people with disabilities at high rates, even as more allegations of fraud come out against the insurers that run the program.

Read the lawsuit.

 

 

 

 

BANKS PRESSURE HEALTH CARE FIRMS TO RAISE PRICES ON CRITICAL DRUGS, MEDICAL SUPPLIES FOR CORONAVIRUS

Posted on by • Posted in Big Pharma, Biotech, Coronavirus, Health Policy, High Drug Prices, Investment Banking, Lawsuit, Market Failure, Market Power, Monopoly, Monopoly Behavior, Monopoly Rights, National Institute of Health (NIH), Opioid Epidemic, Pandemic, Pharmaceutical Industry, Supply Chain • Leave a comment

Banks Pressure Health Care Firms to Raise Prices on Critical Drugs, Medical Supplies for Coronavirus

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IN RECENT WEEKS, investment bankers have pressed health care companies on the front lines of fighting the novel coronavirus, including drug firms developing experimental treatments and medical supply firms, to consider ways that they can profit from the crisis.

The media has mostly focused on individuals who have taken advantage of the market for now-scarce medical and hygiene supplies to hoard masks and hand sanitizer and resell them at higher prices. But the largest voices in the health care industry stand to gain from billions of dollars in emergency spending on the pandemic, as do the bankers and investors who invest in health care companies.

Over the past few weeks, investment bankers have been candid on investor calls and during health care conferences about the opportunity to raise drug prices. In some cases, bankers received sharp rebukes from health care executives; in others, executives joked about using the attention on Covid-19 to dodge public pressure on the opioid crisis.

Gilead Sciences, the company producing remdesivir, the most promising drug to treat Covid-19 symptoms, is one such firm facing investor pressure.

Remdesivir is an antiviral that began development as a treatment for dengue, West Nile virus, and Zika, as well as MERS and SARS. The World Health Organization has said there is “only one drug right now that we think may have real efficacy in treating coronavirus symptoms” — namely, remdesivir.

The drug, though developed in partnership with the University of Alabama through a grant from the federal government’s National Institutes of Health, is patented by Gilead Sciences, a major pharmaceutical company based in California. The firm has faced sharp criticism in the past for its pricing practices. It previously charged $84,000 for a yearlong supply of its hepatitis C treatment, which was also developed with government research support. Remdesivir is estimated to produce a one-time revenue of $2.5 billion.

During an investor conference earlier this month, Phil Nadeau, managing director at investment bank Cowen & Co., quizzed Gilead Science executives over whether the firm had planned for a “commercial strategy for remdesivir” or could “create a business out of remdesivir.”

Johanna Mercier, executive vice president of Gilead, noted that the company is currently donating products and “manufacturing at risk and increasing our capacity” to do its best to find a solution to the pandemic. The company at the moment is focused, she said, primarily on “patient access” and “government access” for remdesivir.

“Commercial opportunity,” Mercier added, “might come if this becomes a seasonal disease or stockpiling comes into play, but that’s much later down the line.”

Steven Valiquette, a managing director at Barclays Investment Bank, last week peppered executives from Cardinal Health, a health care distributor of N95 masks, ventilators and pharmaceuticals, on whether the company would raise prices on a range of supplies.

Valiquette asked repeatedly about potential price increases on a variety of products. Could the company, he asked, “offset some of the risk of volume shortages” on the “pricing side”?

Michael Kaufmann, the chief executive of Cardinal Health, said that “so far, we’ve not seen any material price increases that I would say are related to the coronavirus yet.” Cardinal Health, Kaufman said, would weigh a variety of factors when making these decisions, and added that the company is “always going to fight aggressively to make sure that we’re getting after the lowest cost.”

“Are you able to raise the price on some of this to offset what could be some volume shortages such that it all kind of nets out to be fairly consistent as far as your overall profit matrix?” asked Valiquette.

Kaufman responded that price decisions would depend on contracts with providers, though the firm has greater flexibility over some drug sales. “As you have changes on the cost side, you’re able to make some adjustments,” he noted.

The discussion, over conference call, occurred during the Barclays Global Healthcare Conference on March 10. At one point, Valiquette joked that “one positive” about the coronavirus would be a “silver lining” that Cardinal Health may receive “less questions” about opioid-related lawsuits.

Cardinal Health is one of several firms accused of ignoring warnings and flooding pharmacies known as so-called pill mills with shipments of millions of highly addictive painkillers. Kaufmann noted that negotiations for a settlement are ongoing.

Owens & Minor, a health care logistics company that sources and manufactures surgical gowns, N95 masks, and other medical equipment, presented at the Barclays Global Healthcare Conference the following day.

Valiquette, citing the Covid-19 crisis, asked the company whether it could “increase prices on some of the products where there’s greater demand.” Valiquette then chuckled, adding that doing so “is probably not politically all that great in the sort of dynamic,” but said he was “curious to get some thoughts” on whether the firm would consider hiking prices.

The inquiry was sharply rebuked by Owens & Minor chief executive Edward Pesicka. “I think in a crisis like this, our mission is really around serving the customer. And from an integrity standpoint, we have pricing agreements,” Pesicka said. “So we are not going to go out and leverage this and try to ‘jam up’ customers and raise prices to have short-term benefit.”

AmerisourceBergen, another health care distributor that supplies similar products to Cardinal Health, which is also a defendant in the multistate opioid litigation, faced similar questions from Valiquette at the Barclays event.

Steve Collis, president and chief executive of AmerisourceBergen, noted that his company has been actively involved in efforts to push back against political demands to limit the price of pharmaceutical products.

Collis said that he was recently at a dinner with other pharmaceutical firms involved with developing “vaccines for the coronavirus” and was reminded that the U.S. firms, operating under limited drug price intervention, were among the industry leaders — a claim that has been disputed by experts who note that lack of regulation in the drug industry has led to few investments in viral treatments, which are seen as less lucrative. Leading firms developing a vaccine for Covid-19 are based in Germany, China, and Japan, countries with high levels of government influence in the pharmaceutical industry.

AmerisourceBergen, Collis continued, has been “very active with key stakeholders in D.C., and our priority is to educate policymakers about the impact of policy changes,” with a focus on “rational and responsible discussion about drug pricing.”

Later in the conversation, Valiquette asked AmerisourceBergen about the opioid litigation. The lawsuits could cost as much as $150 billion among the various pharmaceutical and drug distributor defendants. Purdue Pharma, one of the firms targeted with the opioid litigation, has already pursued bankruptcy protection in response to the lawsuit threat.

“We can’t say too much,” Collis responded. But the executive hinted that his company is using its crucial role in responding to the pandemic crisis as leverage in the settlement negotiations. “I would say that this crisis, the coronavirus crisis, actually highlights a lot of what we’ve been saying, how important it is for us to be very strong financial companies and to have strong cash flow ability to invest in our business and to continue to grow our business and our relationship with our customers,” Collis said.

The hope that the coronavirus will benefit firms involved in the opioid crisis has already materialized in some ways. New York Attorney General Letitia James announced last week that her lawsuit against opioid firms and distributors, including Cardinal Health and AmerisourceBergen, set to begin on March 20, would be delayed over coronavirus concerns.

MARKET PRESSURE has encouraged large health care firms to spend billions of dollars on stock buybacks and lobbying, rather than research and development. Barclays declined to comment, and Cowen & Co. did not respond to a request for comment.

The fallout over the coronavirus could pose potential risks for for-profit health care operators. In Spain, the government seized control of private health care providers, including privately run hospitals, to manage the demand for treatment for patients with Covid-19.

But pharmaceutical interests in the U.S. have a large degree of political power. Health and Human Services Secretary Alex Azar previously served as president of the U.S. division of drug giant Eli Lilly and on the board of the Biotechnology Innovation Organization, a drug lobby group.

During a congressional hearing last month, Azar rejected the notion that any vaccine or treatment for Covid-19 should be set at an affordable price. “We would want to ensure that we work to make it affordable, but we can’t control that price because we need the private sector to invest,” said Azar. “The priority is to get vaccines and therapeutics. Price controls won’t get us there.”

The initial $8.3 billion coronavirus spending bill passed in early March to provide financial support for research into vaccines and other drug treatments contained a provision that prevents the government from delaying the introduction of any new pharmaceutical to address the crisis over affordability concerns. The legislative text was shaped, according to reports, by industry lobbyists.

As The Intercept previously reported, Joe Grogan, a key White House domestic policy adviser now serving on Donald Trump’s Coronavirus Task Force, previously served as a lobbyist for Gilead Sciences.

“Notwithstanding the pressure they may feel from the markets, corporate CEOs have large amounts of discretion and in this case, they should be very mindful of price gouging, they’re going to be facing a lot more than reputational hits,” said Robert Weissman, president of public interest watchdog Public Citizen, in an interview with The Intercept.

“There will be a backlash that will both prevent their profiteering, but also may push to more structural limitations on their monopolies and authority moving forward,” Weissman said.

Weissman’s group supports an effort led by Rep. Andy Levin, D-Mich., who has called on the government to invoke the Defense Production Act to scale up domestic manufacturing of health care supplies.

There are other steps the government can take, Weissman added, to prevent price gouging.

“The Gilead product is patent-protected and monopoly-protected, but the government has a big claim over that product because of the investment it’s made,” said Weissman.

“The government has special authority to have generic competition for products it helped fund and prevent nonexclusive licensing for products it helped fund,” Weissman continued. “Even for products that have no connection to government funding, the government has the ability to force licensing for generic competition for its own acquisition and purchases.”

Drug companies often eschew vaccine development because of the limited profit potential for a one-time treatment. Testing kit companies and other medical supply firms have few market incentives for domestic production, especially scaling up an entire factory for short-term use. Instead, Levin and Weissman have argued, the government should take direct control of producing the necessary medical supplies and generic drug production.

Last Friday, Levin circulated a letter signed by other House Democrats that called for the government to take charge in producing ventilators, N95 respirators, and other critical supplies facing shortages.

The once inconceivable policy was endorsed on Wednesday when Trump unveiled a plan to invoke the Defense Production Act to compel private firms to produce needed supplies during the crisis. The law, notably, allows the president to set a price ceiling for critical goods used in an emergency.

 

 

 

 

CVS long-term care pharmacy sued by DOJ over fraudulent prescribing practices

Posted on by • Posted in Compliance Issues, Dept of Justice (DOJ), False Claims Act, Fraud, Fraud and Abuse, Lawsuit, Pharmacy Benefits Management, Prescription Drugs, Retail Pharmacy, Rev Cycle Management, Whistleblower Lawsuit • Leave a comment

https://www.healthcaredive.com/news/cvs-long-term-pharmacy-sued-by-doj-over-fraudulent-prescribing-practices/569268/

Dive Brief:

  • CVS Health and its Omnicare business are being sued by the Department of Justice over alleged fraudulent billing of Medicare and other government programs for outdated prescriptions for elderly and disabled people.
  • The DOJ suit, filed Tuesday in New York, joins whistleblower ligitation accusing Omnicare of billing federal healthcare programs for hundreds of thousands of drugs based on out-of-date prescriptions for individuals in assisted living facilities, group homes, independent living communities and other long-term care facilities between 2010 and 2018. The lawsuit seeks civil penalties and other damages.
  • “We do not believe there is merit to these claims and we intend to vigorously defend the matter in court,” CVS spokesperson Joe Goode told Healthcare Dive. “We are confident that Omnicare’s dispensing practices will be found to be consistent with state requirements and industry-accepted practices.”

Dive Insight:

The suit alleges Omnicare, the nation’s largest long-term care pharmacy, kept dispensing antipsychotics, anticonvulsants, antidepressants and other drugs based off invalid prescriptions for months, and sometimes years, without obtaining fresh scripts from patients’ doctors.

Managers at the long-term care business allegedly ignored prescription refill limitations and expiration dates and forced staff to fill prescriptions quickly, pressuring some facilities to process and dispense thousands of orders daily. When prescriptions expired, Omnicare “rolled over” the scripts, assigning them a new number, allowing the pharmacy to dispense the drug indefinitely without need for doctor involvement.

This practice allowed Omnicare to continually dispenses drugs for seniors and disabled occupants in more than 3,000 residential long-term care facilities, at an ongoing risk to their health, according to DOJ. Many of the prescription drugs were meant to treat serious conditions like dementia, depression or heart disease and have side effects when not closely monitored by a physician — particularly when taken in tandem with other medications.

The pharmacy then submitted knowingly false claims to Medicare, Medicaid and TRICARE, which serves military personnel, for the illegally dispensed drugs over an eight-year period; and lied to the government about the status of the prescriptions. CVS Health senior management was also aware of the scheme, according to DOJ.

“A pharmacy’s fundamental obligation is to ensure that drugs are dispensed only under the supervision of treating doctors who monitor patients’ drug therapies,” Manhattan U.S. Attorney Geoffrey Berman said in a statement. “Omnicare blatantly ignored this obligation in favor drugs out the door as quickly as possible to make more money.”

The government joined the lawsuit originally brought by Uri Bassan, an Albuquerque, New Mexico pharmacist for Omnicare, filed in June 2015. The original whistleblower suit said Omnicare’s compliance department was aware of the “rolling over” process, but did nothing to stop it.

This is by no means the first time the CVS subsidiary, established in 1981 and acquired in 2015 for about $12.7 billion, has been under the federal microscope for fraud.

Omnicare has a history of friction with the DOJ
  • 2006Omnicare pays almost $50 million over improper Medicaid claims

  • 2009Omnicare shells out $98 million to settle kickback allegations

  • 2012Omnicare enters into a $50 million settlement following a DOJ investigation finding its pharmacies dispensed drugs to long-term care facility residents without valid prescriptions

  • Feb. 2014Omnicare pays the government more than $4 million to settle kickback allegations

In the May 16, 2017 suit, the government accused Omnicare of designing an automated label verification system that purposefully inflated profits by submitting claims for generic drugs different than those given to patients. CVS said that all happened before it acquired Omnicare.

​Omnicare provides pharmacy benefits for post-acute care and senior living care, including in skilled nursing facilities, hospitals and health systems and assisted living communities.

Despite the lucrative market in an aging U.S. population with complicated drug needs, Omnicare is an underperforming business in otherwise healthy times for CVS. The unit triggered a $2.2 billion goodwill impairment charge following a late 2018 test, according to CVS’ fourth quarter filing last year.

Omnicare operates 160 pharmacies in 47 states. During the eight years under investigation, Omnicare submitted more than 35 million claims for drugs dispensed to Medicare beneficiaries in assisted living facilities alone, DOJ says.

 

 

 

 

Health Care in 2019: Year in Review

Posted on by • Posted in 2020 Election Issues, ACA, Consumerism, Data Control, Data Management, Data Ownership, Data Privacy, Data Sharing, Disruption, Disruptive Technology, Health Insurance Coverage Adequacy, Health Policy, High Deductible Health Plans, High Drug Prices, Lawsuit, Medicaid, Medicaid Expansion, Out of Pocket Expenses, Private Equity, Single Payer Health System, Single Payer Healthcare System, Supreme Court, Surprise Bills, Texas v. United States, Underinsured, Uninsured • Leave a comment

https://www.commonwealthfund.org/blog/2019/health-care-2019-year-review

Health care was front and center for policymakers and the American public in 2019. An appeals court delivered a decision on the Affordable Care Act’s (ACA’s) individual mandate. In the Democratic primaries, almost all the presidential candidates talked about health reform — some seeking to build on the ACA, others proposing to radically transform the health system. While the ACA remains the law of the land, the current administration continues to take executive actions that erode coverage and other gains. In Congress, we witnessed much legislative activity around surprise bills and drug costs. Meanwhile, far from Washington, D.C., the tech giants in Silicon Valley are crashing the health care party with promised digital transformations. If you missed any of these big developments, here’s a short overview.

 

1. A decision from appeals court on the future of the ACA: On December 18, an appeals court struck down the ACA’s individual mandate in Texas v. United States, a suit brought by Texas and 17 other states. The court did not rule on the constitutionality of the ACA in its entirety, but sent it back to a lower court. Last December, that court ruled the ACA unconstitutional based on Congress repealing the financial penalty associated with the mandate. The case will be appealed to the U.S. Supreme Court, but the timing of the SCOTUS ruling is uncertain, leaving the future of the ACA hanging in the balance once again.

 

2. Democratic candidates propose health reform options: From a set of incremental improvements to the ACA to a single-payer plan like Medicare for All, every Democratic candidate who is serious about running for president has something to say about health care. Although these plans vary widely, they all expand the number of Americans with health insurance, and some manage to reduce health spending at the same time.

 

3. Rise in uninsured: Gains in coverage under the ACA appear to be stalling. In 2018, an estimated 30.4 million people were uninsured, up from a low of 28.6 million in 2016, according to a recent Commonwealth Fund survey. Nearly half of uninsured adults may have been eligible for subsidized insurance through ACA marketplaces or their state’s expanded Medicaid programs.

 

4. Changes to Medicaid: States continue to look for ways to alter their Medicaid programs, some seeking to impose requirements for people to work or participate in other qualifying activities to receive coverage. In Arkansas, the only state to implement work requirements, more than 17,000 people lost their Medicaid coverage in just three months. A federal judge has halted the program in Arkansas. Other states are still applying for waivers; none are currently implementing work requirements.

 

5. Public charge rule: The administration’s public charge rule, which deems legal immigrants who are not yet citizens as “public charges” if they receive government assistance, is discouraging some legal immigrants from using public services like Medicaid. The rule impacts not only immigrants, but their children or other family members who may be citizens. DHS estimated that 77,000 could lose Medicaid or choose not to enroll. The public charge rule may be contributing to a dramatic recent increase in the number of uninsured children in the U.S.

 

6. Open enrollment numbers: As of the seventh week of open enrollment, 8.3 million people bought health insurance for 2020 on HealthCare.gov, the federal marketplace. Taking into account that Nevada transitioned to a state-based exchange, and Maine and Virginia expanded Medicaid, this is roughly equivalent to 2019 enrollment. In spite of the Trump administration’s support of alternative health plans, like short-term plans with limited coverage, more new people signed up for coverage in 2020 than in the previous year. As we await final numbers — which will be released in March — it is also worth noting that enrollment was extended until December 18 because consumers experienced issues on the website. In addition, state-based marketplaces have not yet reported; many have longer enrollment periods than the federal marketplace.

 

7. Outrage over surprise bills: Public outrage swelled this year over unexpected medical bills, which may occur when a patient is treated by an out-of-network provider at an in-network facility. These bills can run into tens of thousands of dollars, causing crippling financial problems. Congress is searching for a bipartisan solution but negotiations have been complicated by fierce lobbying from stakeholders, including private equity companies. These firms have bought up undersupplied specialty physician practices and come to rely on surprise bills to swell their revenues.

 

8. Employer health care coverage becomes more expensive: Roughly half the U.S. population gets health coverage through their employers. While employers and employees share the cost of this coverage, the average annual growth in the combined cost of employees’ contributions to premiums and their deductibles outpaced growth in U.S. median income between 2008 and 2018 in every state. This is because employers are passing along a larger proportion to employees, which means that people are incurring higher out-of-pocket expenses. Sluggish wage growth has also exacerbated the problem.

 

9. Tech companies continue inroads into health care: We are at the dawn of a new era in which technology companies may become critical players in the health care system. The management and use of health data to add value to common health care services is a prime example. Recently, Ascension, a huge national health system, reached an agreement with Google to store clinical data on 50 million patients in the tech giant’s cloud. But the devil is in the details, and tech companies and their provider clients are finding themselves enmeshed in a fierce debate over privacy, ownership, and control of health data.

 

10. House passes drug-cost legislation: For the first time, the U.S. House of Representatives passed comprehensive drug-cost-control legislation, H.R. 3. Reflecting the public’s distress over high drug prices, the legislation would require that the government negotiate the price of up to 250 prescription drugs in Medicare, limit drug manufacturers’ ability to annually hike prices in Medicare, and place the first-ever cap on out-of-pocket drug costs for Medicare beneficiaries. This development is historic but unlikely to result in immediate change. Its prospects in the Republican–controlled Senate are dim.

 

 

 

Sutter Health to pay $575M to settle antitrust case

Posted on by • Posted in Attorney General, Competition, Health System, Hospital, Hospital Industry, Lawsuit, Lawsuit Settlement, Market Consolidation, Market Exclusivity, Market Power, Monopoly, Monopoly Behavior, Out of Network, Out of Pocket Expenses, Out-of-Network, Price Regulation, Pricing • Leave a comment

https://www.beckershospitalreview.com/legal-regulatory-issues/sutter-health-to-pay-575m-to-settle-antitrust-case.html?origin=CFOE&utm_source=CFOE&utm_medium=email

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Sutter Health, a 24-hospital system based in Sacramento, Calif., has agreed to pay $575 million to settle an antitrust case brought by employers and California Attorney General Xavier Becerra.

The settlement resolves allegations that Sutter Health violated California’s antitrust laws by using its market power to overcharge patients and employer-funded health plans. The class members alleged Sutter Health’s inflated prices led to $756 million in overcharges, according to Bloomberg Law.

Under the terms of the settlement, Sutter will pay $575 million to employers, unions and others covered under the class action. The health system will also be required to make several other changes, including limiting what it charges patients for out-of-network services, halting measurers that deny patients access to lower-cost health plans, and improving access to pricing, quality and cost information, according to a Dec. 20 release from Mr. Becerra.

To ensure Sutter is complying with the terms of the settlement, the health system will be required to cooperate with a court-approved compliance monitor for at least 10 years.

Mr. Becerra said the settlement, which he called “a game changer for restoring competition,” is a warning to other organizations.

“This first-in-the-nation comprehensive settlement should send a clear message to the markets: if you’re looking to consolidate for any reason other than efficiency that delivers better quality for a lower price, think again. The California Department of Justice is prepared to protect consumers and competition, especially when it comes to healthcare,” he said.

A Sutter spokesperson told The New York Times that the settlement did not acknowledge wrongdoing. “We were able to resolve this matter in a way that enables Sutter Health to maintain our integrated network and ability to provide patients with access to affordable, high-quality care,” said Flo Di Benedetto, Sutter’s senior vice president and general counsel, in a statement to The Times.

The settlement must be approved by the court. A hearing on the settlement is scheduled for Feb. 25, 2020.

 

Hospitals vs. the world

Posted on by • Posted in Health Policy, Health System, Hospital, Hospital Industry, Lawsuit, Price Transparency • Leave a comment

https://www.axios.com/newsletters/axios-vitals-3635dfb2-f6b2-4986-b8f0-15acd9436ea4.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosvitals&stream=top

A hospital sign with the 'H' replaced with a dollar sign

Hospitals sued the Trump administration yesterday over its requirement that they disclose their negotiated rates, the latest of the industry’s moves to protect itself from policy changes that could hurt its revenues.

Why it matters: Hospitals account for the largest portion of U.S. health costs — which patients are finding increasingly unaffordable.

The big picture: Hospitals are going to war against Trump’s price transparency push while simultaneously trying to kill Democrats’ effort to expand government-run health coverage.

  • The industry is one of the main forces behind the Partnership for America’s Health Care Future, the group that’s gone on offense against “Medicare for All” and every other proposal that would extend the government’s hand in the health system, as Politico recently reported.
  • It’s also emerging victorious from blue states’ health reforms so far, which all started as proposals much more threatening to hospitals than the watered-down versions that eventually replaced them.

Between the lines: The industry has a lot to lose; even non-for-profit systems are, as my colleague Bob Herman put it, “swimming in cash.”

  • The Trump administration’s transparency measure could lead to either more pricing competition or further regulation, if it exposes egregious pricing practices.
  • And Democrats’ proposals often feature government plans that pay much lower rates than private insurance does.

Hospitals argue that the transparency measure could end up raising prices if providers with lower negotiated rates see what their competitors are getting. They also warn that Democrats’ plans could put hospitals and doctors out of business and threaten patients’ access to care.

The bottom line: Politicians are reacting to patients’ complaints about their health care costs, but the industry has historically been excellent at getting its way.

Go deeper: Hospitals winning big state battles