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being sued by the Department of Justice over alleged fraudulent billing of Medicare and other government programs for outdated prescriptions for elderly and disabled people.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ligitation accusing Omnicare of billing federal healthcare programs for hundreds of thousands of drugs based on out-of-date prescriptions for individuals in assisted living facilities, group homes, independent living communities and other long-term care facilities between 2010 and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.

 

 

 

 

Beyond the ACA: Healthcare legal fights to watch in 2020

Posted on by • Posted in 2020 Election Issues, ACA, Antitrust, Cost Sharing Reduction Payments, Essential Health Benefits, Health Insurance Coverage Adequacy, Health Insurance Industry, Health Policy, Health System, Hospital, Hospital Industry, Individual Mandate, Out of Pocket Expenses, Preexisting Conditions, Price Transparency, Short Term Health Insurance, Skinny Health Plans, Supreme Court, Texas v. United States • Leave a comment

https://www.healthcaredive.com/news/beyond-the-aca-healthcare-legal-fights-to-watch-in-2020/569793/

All eyes were on the legal drama over the Affordable Care Act as 2019 drew to a close — and while that case remains a focus for this year — a lot more is also at stake.

Payers and providers are fiercely contesting a price transparency push from the Trump administration that would force privately negotiated rates out into the open. The administration is also being challenged over regulations regarding risk corridor payments to payers and the expansion of association health plans.

Antitrust concerns are also front and center, as payers clash over exclusive broker policies in Florida.

As policy debates rage on this year through presidential debates and on Capitol Hill, courthouses will also be a key battleground for the industry in 2020.  Below are the big cases to watch.

ACA and the high court

The most consequential case still making its way through the court system is the challenge to the Affordable Care Act. At the end of last year, an appeals court notched a win for the red states fighting the law by declaring the individual mandate was no longer constitutional after the penalty was zeroed out by a Republican-controlled Congress.

The three-judge panel, however, stopped short of declaring the entire ACA void, instead asking the lower court that made the argument that the rest of the law is not severable from the individual mandate to revisit and clarify its ruling.

Supporters of the ACA are trying to speed up what is almost certainly the next major step for the court case by petitioning the Supreme Court on Friday to hear the case before the November presidential election.

“States, health insurers, and millions of Americans rely on those provisions when making important — indeed, life-changing — decisions. The remand proceedings contemplated by the panel majority would only prolong and exacerbate the uncertainty already caused by this litigation,” according to the Jan. 3 petition filed by California Attorney General Xavier Becerra and a coalition of 19 other states and D.C.

Five justices are needed to approve the suggested expedited timeline while four are needed to agree to hear the case at all. More will be clear in the next couple of months as justices make their decisions. The ultimate decision — whether it comes in months or years — will have huge ramifications across the healthcare landscape.

Price transparency pushback

The legal clash between hospitals and the administration over forcing providers to reveal negotiated rates is set to heat up quickly in the new year.

The federal judge overseeing the case recently released a timeline for how it is expected to proceed in the coming months. Hospitals are seeking a swift ruling and summary judgment. HHS faces a Feb. 4 deadline to file its opposition motion to the summary judgment, while deadlines for motions extend through March 10.

“That is an extremely accelerated schedule,” James Burns, a partner at Akerman, told Healthcare Dive. “My strong suspicion is that we’ll get a ruling from the judge late spring or earlier summer at the latest, which is obviously all before the election.”

Hospital groups including the American Hospital Association and health systems have alleged that the administration’s push to force negotiated rates out into the open exceeds the government’s authority and violates the First Amendment because it compels hospitals to reveal confidential and proprietary information. Legal experts say the principal argument will center around whether the government exceeded its authority, not the First Amendment.

Risk corridor payments

On last month’s Supreme Court docket was a case regarding an ACA risk adjustment program. At issue are $12 billion in payments insurers say they are owed from losses on state exchanges.

Early participants in the marketplaces were hit hard in some cases as they attempted to adjust to people gaining coverage under the ACA. A few nonprofit co-ops were driven to close when CMS declared the program had to be budget neutral and therefore only about one-eighth of the expected risk corridor amount could be paid out.

A number of justices seemed to lean toward ruling in favor of the insurers during arguments in front of the high court, Tim Jost, health law expert and professor emeritus at Washington and Lee University School of Law, told Healthcare Dive​. “Only a couple of the justices that spoke seemed inclined to support the government, but we’ll see what happens there,” he said.

If the payers do prevail, there’s still the question of exactly how much they are owed and how the money will be distributed. It could ultimately affect medical loss ratio rebates or premiums down the road, he said.

CSR fight in court this week

The legal fight over canceled payments to insurers​ under the ACA drags on as oral arguments begin this week in a federal appeals court.

A number of insurers including Maine Community Health Options and Sanford Health claim they’re owed millions in cost-sharing reduction payments that the government failed to pay out after the Trump administration said Congress failed to appropriate the funds. The payments were intended to repay insurers for lowering the cost of care to make coverage affordable for those with low incomes.

Health Options and Sanford both won in the lower courts after judges ruled they were entitled to the unpaid CSR payments. The cases have been consolidated within the appeals court and oral arguments start Thursday.

A ruling in favor of insurers in the risk corridor case could be a good sign for their fight to be reimbursed for CSRs as well, Jost said.

Oscar antitrust argument

Health insurer Oscar has alleged that Blue Cross Blue Shield of Florida is enforcing a broker policy that is impeding Oscar’s ability to sell individual exchange plans and undermines competition in Florida.

The key question in this case is whether Florida Blue, a dominant insurer in the sunshine state, can lawfully bar independent brokers from working with other carriers like Oscar by threatening to cut off their ability to sell all other Florida Blue plans if they sell Oscar’s individual plans.

A lower court ruled against Oscar and found that such arrangements are shielded from antitrust scrutiny. A federal law excludes the “business of insurance” from antitrust scrutiny in some cases, legal experts say this case shouldn’t be exempt from antitrust enforcement.

A group of 10 antitrust scholars called the ruling “dangerous” and “plainly incorrect,” in an amicus brief Dec. 23 to the U.S. Court of Appeals for the 11th District.

“The practice at issue here — forming exclusive deals with industry gatekeepers to box out potential entry by competitors — is a quotidian business strategy that appears across many industries and raises well-recognized antitrust concerns,” according to the amicus brief.

Oscar alleges that consumers are harmed if brokers are barred from discussing other plan options outside Florida Blue.

The Department of Justice also intends to file an amicus brief, according to a recent filing in the appeals case.

Association, short-term health plans

The federal court of appeals in D.C. heard arguments late last year to review a judge’s decision in March 2019 declaring association health plans an “end-run” around the ACA. AHPs are offered by business or professional associations and aren’t bound by ACA requirements protecting pre-existing conditions and mandating essential benefits.

U.S. District Judge John Bates had strong language in March for the Trump administration, which is being challenged for loosening restrictions on what groups can offer AHPs — and therefore expanding their presence in the marketplace.

The D.C. appeals court is expected to rule on the case in the coming months. Jost’s take from the oral arguments is that the court seem inclined to reverse Bates’ decision, though he warned the outcome is not certain. “It’s a technical case that really has more to do with interpreting ERISA than the Affordable Care Act, though both are relevant,” he said.

A similar challenge has risen on short-term health plans, which were originally meant as stopgap coverage but have been expanded by the Trump administration to offer up to three years worth of coverage.

U.S. District Judge Richard Leon ruled in favor of the administration in July, saying the plans did not undermine the ACA. The plaintiffs, including the Association for Community Affiliated Plans, the National Alliance on Mental Illness and AIDS United, quickly appealed to the U.S. Court of Appeals in D.C.

Briefs are due this month and argument is likely in the spring, Jost said.

If AHPs and short-term plans are allowed to continue as the Trump administration has pushed for, it presents a concern for the viability of ACA risk pools. Consumer warnings against short-term plans, however, may be working, he said.

“There’s been a lot of publicity about how risky these plans are and I think they probably have not been achieving the same market strength they were hoping for,” he said.

 

 

 

Supreme Court says ACA opponents have until Friday to respond to motion to expedite

Posted on by • Posted in 2020 Election Issues, ACA, Health Policy, Individual Mandate, Supreme Court, Texas v. United States • Leave a comment

https://www.healthcaredive.com/news/blue-states-ask-supreme-court-to-weigh-aca-case-ahead-of-2020-election/569788/

UPDATE: Jan. 7, 2019: The Supreme Court on Monday set a Friday afternoon deadline for challengers of the ACA to respond to the blue state coalition’s motion to expedite the case.

California Attorney General Xavier Becerra and a coalition of 19 other states and D.C. on Friday asked the Supreme Court to hear the case seeking to overturn the Affordable Care Act, following an appeals court ruling that a key element of the law is unconstitutional.   

The ruling warrants an immediate and expedited review, the group said in its petition filed to the Supreme Court. The coalition laid out an aggressive timeline, in an effort to get an answer on the case before the November 2020 presidential election.

Although the court is made of nine justices, five of whom lean conservative, just four justices are needed to agree to hear the case. However, five are needed to approve the expedited timeline, according to University of Michigan law professor Nicholas Bagley.

The landmark Affordable Care Act drastically altered the healthcare industry and ushered in insurance coverage for millions of Americans. Its provisions regulate a substantial portion of the nation’s economy and any further delay in a final outcome stokes uncertainty, the petition argues.

“States, health insurers, and millions of Americans rely on those provisions when making important — indeed, life-changing — decisions. The remand proceedings contemplated by the panel majority would only prolong and exacerbate the uncertainty already caused by this litigation,” the petition states.

Rob Henneke, the attorney representing the two individual plaintiffs in this case, said the push for a Supreme Court review this fast is unreasonable and unrealistic. “This is more influenced by the political calendar now that we are in 2020 than a valid litigation strategy,” he told Healthcare Dive.

The closely-watched case has fueled jitters in healthcare markets as the litigation has made its way through the courts.

A federal appeals court recently affirmed part of a lower court’s ruling that found the individual mandate is unconstitutional because it no longer has a financial penalty attached. The lower court went one step further and found that because the mandate is unconstitutional, so too is the entire law. The Texas-led coalition of Republican states seeking to overturn the law has argued that when Congress zeroed out the financial penalty associated with forgoing insurance, it invalidated the entire law.

This group of red states and two individual plaintiffs argue that the law cannot stand on its own without the individual mandate and that the entirety of the law must be struck down. That mandate’s financial penalty was nixed in a subsequent tax bill.

“The individual mandate is unconstitutional because it can no longer be read as a tax,” the majority wrote in the federal appeals court ruling. But on the key question of whether the rest of the law can stand, the majority sent that back to the lower court to provide more detailed analysis on what can stay or go.

The blue states intervened to defend the ACA after the Trump administration’s DOJ waffled on its position and is not actively defending to uphold the law throughout the country.

 

 

 

Despite provider claims, hospital M&A not associated with improved care, NEJM finds

Posted on by • Posted in 2020 Election Issues, Agency for Healthcare Quality and Research (AHRQ), Antitrust, Dept of Health and Human Services (HHS), HCAHPS, Health Policy, Health System, High Deductible Health Plans, High Premiums, High Prices, Hospital, Hospital Industry, Market Consolidation, Market Power, Mergers & Acquisitions, Monopoly, Monopoly Behavior, Out of Pocket Expenses, Price Transparency, Quality, Quality of Care • Leave a comment

https://www.healthcaredive.com/news/despite-provider-claims-hospital-ma-not-associated-with-improved-care-ne/569671/

Dive Brief:

  • Hospital consolidation is associated with poorer patient experiences and doesn’t improve care, according to a study published Thursday in the New England Journal of Medicine, refuting a common provider justification for rampant mergers and acquisitions.
  • The study funded by HHS’ health quality research division, the Agency for Healthcare Research and Quality, found that acquired hospitals saw moderately worse patient experience, along with no change in 30-day mortality or readmission rates. ​Acquired hospitals did improve slightly in clinical process, though that can’t be directly chalked up to the results of an acquisition, researchers found.
  • It’s further evidence that bigger isn’t always better when it comes to hospitals, and adds onto a heap of previous studies showing provider mergers lead to higher prices for commercially insured patients.

Dive Insight:

Hospitals continue to turn to M&A to navigate tricky industry headwinds, including lowering reimbursement and flatlining admissions as patients increasingly turn to alternate, cheaper sites of care. Provider trade associations maintain consolidation lowers costs and improves operations, which trickles down to better care for patients.

Though volume of deals has ebbed and flowed, hospital M&A overall has steadily increased over the past decade. The hospital sector in 2018 saw 90 deals, according to consultancy Kaufman Hall, up 80% from just 50 such transactions in 2009.

Thursday’s study analyzed CMS data on hospital quality and Medicare claims from 2007 through 2016 and data on hospital M&A from 2009 to 2013 to look at hospital performance before and after acquisition, compared with a control group that didn’t see a change in ownership.

American Hospital Association General Counsel Melinda Hatton took aim at the study’s methods to refute its findings, especially its reliance on a common measure of patient experience called HCAHPS.

“Using data collected from patients to make claims about quality fails to recognize that it is often incomplete, as patients are not required to and do not always respond comprehensively,” Hatton told Healthcare Dive in a statement. “The survey does not capture information on the critical aspects of care as it is delivered today.”

The results contradict a widely decried AHA-funded study last year conducted by Charles River Associates that found consolidation improves quality and lowers revenue per admission in the first year prior to integration. The research came quickly under fire by academics and patient advocates over potential cherrypicked results.

A spate of previous studies found hospital tie-ups raise the price tag of care on payers and patients. Congressional advisory group MedPAC found both vertical and horizontal provider consolidation are correlated with higher healthcare costs, the brunt of which is often borne by consumers in the form of higher premiums and out-of-pocket costs.

A 2018 study published in the Quarterly Journal of Economics found prices rose 6% after hospitals were acquired, partially due to limiting market competition. Groups like the left-leaning Center for American Progress have called for increased scrutiny from antitrust regulators as a result, but — despite snowballing M&A — there’s been little change in antitrust regulation since the 1980s. The Federal Trade Commission won several challenges to hospital consolidation in the 2010s, but the agency only contests 2% to 3% of mergers annually, according to MedPAC analysts.

Providers, like most actors across the healthcare ecosystem, are increasingly under fire for high prices and predatory billing practices. President Donald Trump’s administration finalized a rule late last year that would force hospitals to reveal secret negotiated rates with insurers, relying on the assumption that transparency would shame both actors into lowering prices.

A cadre of provider groups led by the AHA sued HHS over the regulation, arguing it violates the First Amendment and would place undue burden on hospitals, while potentially stifling competition. The lawsuit is currently being reviewed by the U.S. District Court for the District of Columbia.

 

 

 

Hospital M&A spurs rising healthcare costs, MedPAC finds

Posted on by • Posted in 2020 Election Issues, American Hospital Association (AHA), Antitrust, Center for Medicare and Medicaid Services (CMS), Federal Trade Commission (FTC), Health Insurance Industry, Health Policy, Health System, High Deductible Health Plans, High Premiums, Horizontal Consolidation, Horizontal Integration, Hospital, Hospital Industry, Market Consolidation, Market Power, Medicare Payment Advisory Commission (MedPAC), Mergers & Acquisitions, Monopoly, Monopoly Behavior, Mortality, Out of Pocket Expenses, Quality, Quality of Care, Readmission, Vertical Consolidation, Vertical Integration • Leave a comment

https://www.healthcaredive.com/news/hospital-ma-spurs-rising-healthcare-costs-medpac-finds/566858/

Dive Brief:

  • Both vertical and horizontal hospital consolidation is correlated with higher healthcare costs, according to a congressional advisory committee on Medicare, in yet another study finding rampant mergers and acquisitions drive up prices for consumers.
  • The Medicare Payment Advisory Commission found providers with greater market share see higher commercial profit margins, leading to higher costs per discharge, though the direct relationship between market share and cost per discharge was not statistically meaningful itself.
  • MedPAC also found vertical integration between health systems and physician practices increases prices and spending for consumers. The top-down consolidation leads to higher prices for commercial payers and Medicare alike, as hospitals have more bargaining heft and benefit from Medicare’s payment hikes for hospital outpatient departments.

Dive Insight:

Hospital consolidation has become a major point of concern for policymakers, antitrust regulators and patient advocacy groups. A slew of prior studies have found unchecked provider M&A contributes to higher healthcare costs, with the brunt often borne by consumers in the form of higher premiums and out-of-pocket costs.

Since 2003, the number of “super-concentrated” markets has increased from 47% to 57%, according to the MedPAC analysis of CMS and American Hospital Association data. Those markets, with a high amount of consolidation, rarely see new providers enter, which stifles competition, and are rarely reviewed by the government.

There’s been little change in antitrust regulation since the 1980s and, though the Federal Trade Commission has won several challenges to hospital consolidation in the 2010s, the agency only challenges 2% to 3% of mergers annually.

MedPAC also found super-concentrated insurance markets actually led to lower costs per discharge compared to lower levels of payer concentration, deflating somewhat hospital lobbies’ arguments that payer consolidation is driving prices higher.

Committee members called for more analysis of how macro trends like an aging population and federal policy could be driving consolidation and impacting prices, leading some to call for a revamp of the hospital payment framework itself.

“We have to change the way hospitals are paid. I don’t see another solution,” said Brian DeBusk, CEO of Tennesse-based DeRoyal Industries, a medical manufacturer. “Are you going to undo a thousand hospital mergers? Are you going to enact rate setting? I don’t see another way.”

MedPAC also looked at vertical integration, where hospitals snap up physicians practices downstream. According to the Physician Advocacy Institute, only 26% of physician practices were owned by hospitals in 2012, but by last year that number had spiked to 44%.

Since 2012, billing has shifted from physician offices to hospital outpatient departments, especially in specialty practices. In chemotherapy administration, for example, physician offices saw almost 17% less volume between 2012 and 2018, while outpatient centers saw a 53% increase in volume, according to MedPAC.

Physicians in hospital-owned practices also refer more patients to the hospital’s facilities and, despite a common stumping point that integration improves quality through care coordination, its effect on quality is “ambiguous,” MedPAC analyst Dan Zabinski said Thursday at the committee’s November meeting.

Despite the mountain of evidence, the AHA published a widely-decried study in September claiming acquired hospitals see a reduction in operating expenses and a statistically significant drop in readmission and mortality rates. The study was criticized for not using actual claims data in its analysis among other methodological and conflict of interest concerns.

Republican leaders in the House Energy and Commerce Committee asked MedPAC to study provider consolidation in August, and the body’s full findings will be included in its March report to Congress.​