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47 Cards in this Set
- Front
- Back
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Core reasoning in hospital staff closure from Mahan
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It would be completely illogical to first impose a duty of
reasonable care upon a hospital, and then later strip the hospital of the ability and power to implement the policies and programs required to fulfill that duty. |
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Does Stark require an Agreement for conviction?
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The plain meaning of the statutory language, as well as its context, purpose, and history, support a conclusion that a violation occurs whenever an individual or entity knowingly and willfully offers or pays anything of value, in any manner or form, with the intent of exercising influence over a physician’s reason or judgment in an effort to cause the referral of program-related business. Nothing in the statutory language explicitly or implicitly requires an agreement, nor can the legislative history or case law on the anti-kickback statute reasonably be read to require an agreement.
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What are the sources of tax law?
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general counsel letters, irs code, treasury regs, revenue ruling =force of law, pprovate letter rulings binding on IRS for party not binding on anyone else , closing agreement, cpe texts, feild service audit guidelines, speeches etc of execs at irs = no force of law
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Why is tax-exemption important?
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large public subsidies
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What does it mean for an organization to be tax-exempt?
a. What taxes are we talking about? |
federal income tax, possibly state
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What is the difference between tax-exemption and non-profit status?
a. Can a nonprofit organization make a profit? |
non-profit = state law through articles of incorporation tax emplt = federal or state
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How does an organization become nonprofit?
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through state incorporation
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How does an organization become tax-exempt?
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meet the tests - paper or articles tests and activity tests
form 5500 |
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Is there a difference between the tests for federal and state tax-exemption?
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states have their own tests from constitution = federal the single test
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What is the test for eligibility to become tax-exempt?
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community benefit standard 501c3 gold standard give donation exclusion- c4 civic leagues, c6 trade organization, frats, teacher retirement, c12
life insurance 1 organized operate exclusively for religious, scientific, charitable etc = primarily = non-profit corp for purpose charitable with restrictions in by-laws operations test - no private benefit no inurement |
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What is a community benefit?
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community participation - serves greater good
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What is a private benefit?
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not serving a private interest more than insubstantially - serves public benefit - public benefit out weighs private benefit
quanitative private benefit = money is insubstantial compared to public benefit is private benefit reasonable qualitative = do I need to offer private benefit in order to gain public benefit |
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What is inurement?
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profit does not flow to private interests - no unlimited dividend like payments - compensation must be reasonable
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What is the interplay of charity care and tax-exemption?
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community benefit is broader than just charitable care - federal level emergency room, community education, publicinitiatives, keeping serveices that drain
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What is unrelated business income (“UBI”)?
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tax exempt org conducts activities that are taxable - small operations that resemble private services - these are taxed
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What happens if you violate your tax-exempt status?
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could lose status - Draconian, excess benefit rules - statuse and regs - intermediate penalties - actors penalized - 200% penalty
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What is an “excess benefit” and how does tax law redress this?
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profit that no taxes were paid for 200% penalty -
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Can a tax-exempt entity be the sole member/shareholder of a for-profit entity?
a. If yes, what special concerns arise and how are they addressed? |
only primarily involved in charitable - single mcdonalds versus chain of mcdonald example - can't be a lot of for profit activities - substantialty test
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Can a tax-exempt entity participate in a joint venture with a for profit entity?
a. What safeguards must be in place? |
yes - reveenue rulings cases involve joint ventures - redlands - hospital doctor joint venture - protect tax exm partner - majority control by TE or JV activities should reflect community service goals
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What are the hot issues in tax-exemption law at the federal level?
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after reform -everyone has insurance - can hospitals keep tax exmpt status - compensation issues for health system execs
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20. What are the hot issues in tax-exemption law at the state level?
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tax exempt status may be removed because budget problems
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U.S. v. Parke Davis 4 major points
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Case never went to trial
Legal theories of Judge Saris never subject to Appeal P-D settled with government for $430 Million P-D could not risk potential catastrophic damages associated with trial/appeal |
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U.S. ex rel Hess v. Sanofi-Synthelabo 5 major points
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U.S. ex rel Hess v. Sanofi-Synthelabo
• Sales rep qui tam FCA action – Government did not intervene • Allegations regarding off-label promotion of Eloxatin, a chemotherapy drug initially approved as second line treatment for Stage IV Colorectal Cancer • Drug approved by FDA August, 2002 • Medicare approved reimbursement for other uses in November, 2002 – First Line use – Adjuvant [with other drugs] Use • Also claims for off-label promotion of Elitek – Elitek approved for certain cancer treatment in Pediatric Patients |
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U.S. ex rel Hess v. Sanofi-Synthelabo
•2 nd five major points - did this go same way as Parke Davis? |
U.S. ex rel Hess v. Sanofi-Synthelabo
• Defendant filed Motion to Dismiss • Sought dismissal under both 9(b) and 12(b)(6) • Noted that claim form required diagnosis, but not stage of cancer and use • Suggestion that stage of cancer not material to reimbursement decision – If material, government would have asked for information • Off-label uses ultimately became subject of application to FDA for additional indications |
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What are 9(b) and 12(b)(6)
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9(b) failure to plead with particularity and 12(b)(6) does not state a cause of action
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U.S. ex rel Hess v. Sanofi-Synthelabo decision
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U.S. ex rel Hess v. Sanofi-Synthelabo
• Magistrate Granted Motion to Dismiss complaint alleging off-label promotion for cancer drug • Promoting off-label uses through “immature, unreliable, and misleading clinical data” • No allegations of misrepresentations to doctors or the Govt. • No allegations of false representations in physician claims for reimbursement • No allegation of nature or content of claims that were fraudulent • No allegation of anything “false” in physician claims • Held: Must be a false statement that misleads the government |
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Differences between Hess and Parke Davis?
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Parke-Davisand Hess
• Are the decisions reconcilable? • What are the differences in the facts? • Is there a different rule for Oncology Drugs? – Note that Off-Label is most common for Chemotherapy Agents • Was it material that Manufacturer subsequently sought FDA approval for other indications? • In Hess, Magistrate noted that government did not seek any information beyond diagnosis – Suggested that any further information was not material • In Parke-Davis, government did not even seek information diagnosis on Pharmacy claim form – If government did not seek information on use of drug, why was it material? |
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Describe Purdue settlement
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Purdue Settlement
• Manufacturer of Oxycontin, a time-release pain control opiate • Due to the time release nature of product, marketed as safer, not providing a “high” and less prone to abuse • Manufacturer did not foresee people crushing pills to defeat time release • Many deaths and injuries due to abuse of “Hillbilly Heroin” • Government extracted a $635 Million Settlement for “misbranding” • Three top execs excluded for 15 years |
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describe lilly zyprexa settlement
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Lilly Settlement
• Largest Healthcare Settlement to Date in Jan., 2009 • Predicated on off-label promotion of Zyprexa • Total Settlement: $1.4 Billion, including $615 Million in criminal penalties for violation of the FDCA prohibition on off-label promotion, plus $800 Million in FCA settlement • No court decision in connection with allegations considering application of FCA to off-label promotion cases • |
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Describe Pfizer settlement circa 2010 why?
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Reported $2.3 Billion Settlement pending by Pfizer in connection with off-label promotion of Bextra (Cox 2 inhibitor) contributes to aheart attacks
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describe logic behind omnicare settlement
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Omnicare Settlement
• Principal allegation: – Filling Ranitidine prescriptions with capsules rather than tablets – Filling Fluoxetine precriptions with tablets rather than capsules – Press release inaccurately suggests that one dosage form was “cheaper” and suggests that Omnicare had an obligation to fill “cheaper” costs to Medicare were higher - obligation to fill with cheaper form -generic |
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What was reality behind Omnicare?
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Omnicare Settlement
• Reality: – Omnicare and other pharmacies charge the patients and third party payors exactly the same for tablets or capsules • Point in press release re charging more misleading and incorrect – >75% of the time, physician does not designate a dosage form on the prescription – Government concedes that tablets and capsules equally effective |
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three Omnicare points
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Omnicare Settlement
• Pharmacy that dispensed less popular dosage form on average could expect higher reimbursement • But: not always the case, sometimes reimbursement for more common dosage form was higher • Is it a false claim to fill prescription with a dosage form with same charge but prospect of higher reimbursement? |
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describe failure to provide quality care
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Failure to Delivery Quality Care
• Federal law separately regulates quality • Enforcement by Survey Deficiency Reports and Plans of Correction • Failure to correct gross and flagrant can lead to administrative penalties or exclusion • No private right of action or action for damages for US Attorneys • Developing attempts to attack under FCA |
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describe Anatomy of Nursing Home criminal Case
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Anatomy of Nursing Home Case
• First Example of a CriminalQuality of Care Case • Note the unique factual aspects • Allegations of diversion of assets from nursing/misuse of Medicaid payments • Cost Report Allegations: Reported as costs items not yet paid; failure to liquidate in 12 mos. |
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2nd set of 3 points in crimina; hursing home care case
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Anatomy of Nursing Home Case
• Compliance with law certifications, but unclear legal import • Failure to purchase enough critical supplies: food, soap, linens, wound care supplies, gloves, disinfectants • Arguably, deficiencies so severe as to go to the very essence of what service required |
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three related kinds of fraud associated with nursing home fraud
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Anatomy of Nursing Home Case
• Other aspects of fraud: – Pension fund fraud (diversion of 401(k) funds) – Mail fraud through intentional misrepresentation to vendors – Money laundering: converting nursing home funds to an asset of an unrelated company |
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is FCA Criminal?
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Hard to believe the False Claims statute provides notice that it is criminal to fail to meet licensure regulations
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generally what percent of SNF have regulatory deficiencies?
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virtually all - anecdotally 98%
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describe Mercy Douglass SNF
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US v. Mercy Douglass
• Example of one of several settlements from AUSA for ED Pa. • Complaint alleges violations of FCA • Claims false since care provided was not adequate • Complaint cites a number of statutory and regulatory provisions • All go to whether facility meets Conditions of Participation |
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2nd 4 points on Mercy Douglass
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US v. Mercy Douglass
• Defendant was a facility with a history of marginal compliance with COP • Politically popular to go after nursing facility • Had been terminated, but made it back in with Plans of Correction • Continued to provide inadequate care |
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worst alleged abuses of Mercy Douglass
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US v. Mercy Douglass
• Complaint focuses on 2 specific patients • Bad clinical outcomes • Resident 1: Death due to sepsis and extensive decubiti • Resident 2: Weight loss; nutrition; antipsychotic medication overused |
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FCA Theory ans Alternate theory in Mercy v Douglass
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US v. Mercy Douglass
• FCA Theory – False claims “for nutritional, nursing, dietary and wound care services that were not adequately rendered” – Defendant did not ascertain truth or falsity of claims submitted – Acted in reckless disregard when billing – Representative of inadequate care • Alternative theory: Unjust enrichment |
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Mercy Douglass case Outcomes-results
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US v. Mercy Douglass
• Consent Order and Settlement – $80,000 payment in installments – Development of Policies and Procedures • Largely cover same ground, in different formulations, as COPs – Agree to “comply fully with the particular provisions of the Nursing Home Reform Act and Titles XVIII and XIX – Submission of POCs and acceptance by HCFA does not necessarily constitute compliance (15) |
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Mercy Douglass Consent order content
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US v. Mercy Douglass
• Consent Order – Need approval of changes to policies, procedures or protocols – Ensure residents free from mistreatment, abuse, punishment, neglect, misappropriation of prop. – Ensure Physicians review tests, complete notes, etc. – Federal Monitors oversee compliance with protocols (Cost: $100,000) – Hire new temporary manager – Adopt Corporate Compliance Program – Violations: $10,000 per day – Possible exclusion |
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Points about Requirement to refund Over payments
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Failure to Refund Overpayments
• OIG: Need policies to identify and refund over-payments • Where clear knowledge of over-payment: Need to refund • Unclear if no attempt to identify over-payments • Issue: cost of refund greater than amount to be refunded - absolute duty to refund no matter the cost |
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describe Mayers v. Dept. of HHS
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Mayers v. Dept. of HHS
• Behavior: using provider numbers of recruited foreign physicians to bill for non-covered chiropractic services • Challenge constitutionality of CMPA penalties – 307 false bills – 2702 items and services – $145,550 in reimbursement sought – $24,697.73 received – Assessment of $1,791,100 plus suspension for 25 years |
