When the same health plan administrator both administers a benefit plan and pays the benefits due under the plan, it is considered by courts to have a structural conflict of interest.  That conflict of interest is not problematic on its own – it is perfectly legal, and it is not a breach of fiduciary duty.  However, when a plan member files a lawsuit challenging the administrator’s denial of the member’s benefits, a court can consider the conflict of interest as a factor in whether the administrator’s denial was arbitrary and capricious. Over the last several years, courts have provi ..read more

On November 6, 2023, the Office of Inspector General (“OIG”) issued its long-awaited General Compliance Program Guidance (“Guidance”) “to help advance the industry’s voluntary compliance efforts in preventing fraud, waste, and abuse in the health care system.” Although the Guidance is nonbinding, it reflects the OIG’s expectation that compliance programs become increasingly sophisticated in their approach to identifying and managing compliance risks as healthcare delivery and payment models continue to evolve. In light of the new Guidance, healthcare entities—and nonhealthcare entities that ar ..read more

In July of this year, the California Office of Health Care Affordability (“OHCA”) released draft regulations requiring the advance reporting of certain healthcare transactions that could affect the cost of healthcare or adversely impact the healthcare market in California. These reporting requirements implement provisions of amendments to the California Health and Safety Code enacted in 2022, which authorized OHCA to review proposed transactions and, if appropriate, undertake a detailed cost and market impact review (“CMIR”) to determine the potential impact on the health care economy of Calif ..read more

Many long-term care residents live in Missouri nursing homes for years. But occasionally circumstances may change such that it is no longer appropriate for the resident to continue to reside at the facility. In certain cases, nursing homes may discharge or transfer a resident even if the resident does not consent to the discharge or transfer – this is known as an “involuntary discharge” or an “involuntary transfer.” In this case, the resident has the right to appeal the involuntary discharge or transfer. To best position the nursing home for the most successful outcome at the appeal hearing, t ..read more

Evaluation and management (E/M) services have been called “the core” of healthcare billing.[1] E/M is a catch-all claim, allowing medical professionals to bill for diagnosing or treating nearly any illness or injury. E/M is also divided into fairly subjective levels depending on complexity, and the differences between levels is often merely a difference of opinion. While the DOJ has brought cases based on disputes over E/M services before, those cases are typically civil and part of a more complex upcoding or unbundling scheme.[2] This is because nearly everything involving some effort expende ..read more

Distances in rural health care can be hard to fathom. A 2018 study found it took rural Americans, on average, 17 minutes to get to a hospital, but only 10 minutes in an urban center.[i] The distance between rural hospitals can be vastly further – in 2019, a National Institutes of Health study noted that hospitals in one rural state were generally at least 50 miles apart.[ii] These areas have been described (without meaning to be pejorative) as “health deserts.”[iii] Small populations, and a growing shortage of physicians in rural areas,[iv] often lead to hospitals in these areas having only on ..read more

Large managed care plans have been squarely in DOJ’s crosshairs for years, but a late July 2023 Justice Department settlement agreement with one regional healthcare provider’s Medicare Advantage Plan offers a glimpse into an issue health systems and providers with their own managed care plans need to track. This post examines the recent DOJ settlement, analyzes the trend towards enforcement of provider-owned managed care plans, and offers a prediction on what might be coming on the enforcement side. The Black-and-White Issue: Unsupported Diagnosis Codes Medicare compensates Medicare Advantage ..read more

Consistent with the Biden Administration’s whole-of-government approach to address perceived consolidation in a variety of industries, including in the healthcare industry, the Federal Trade Commission (FTC) and U.S. Department of Justice (DOJ) Antitrust Division (collectively, the Agencies) are continuing to make good on their promise to increase scrutiny of mergers and acquisitions through newly proposed HSR rules and revised merger guidelines. The draft Merger Guidelines were published on July 19, 2023, by the Agencies just weeks after the FTC issued newly proposed rules under the Hart-Scot ..read more

On July 31, 2023, the California Office of Health Care Affordability (“OHCA”) released draft regulations concerning pre-transaction review of so-called “Material Change Transactions” as part of its legislative mandate to review transactions which could have potential impacts on the costs of health care in the State of California.  When approved, final regulations would be effective January 1, 2024. The draft regulations contemplate a dramatic expansion of state review of transactions affecting health care services.  The draft regulations are to be discussed at a public regulatory wor ..read more

Last week, the Centers for Medicare & Medicaid Services issued a Proposed Rule that, if finalized, would extend the application of the “36-Month Rule” from home health agencies (“HHAs”) to also include hospice agencies as well.  The 36-Month Rule, found at 42 C.F.R. § 424.550(b), provides that where there is a change in majority ownership (“CIMO”) of an HHA by sale (including asset sales, stock transfers, mergers and consolidations) within 36 months after the effective date of the HHA’s initial enrollment in Medicare or within 36 months after the HHA’s most recent CIMO, the provi ..read more