The update is designed to bolster protections and improve care for program participants while easing up on the administrative and regulatory burden shouldered by PACE organizations, CMS said.
Non-physician medical providers, such as nurse practitioners (NP) and physician assistants (PA), will be allowed next year to take the place of primary care physicians (PCP) in providing some services for participants in Programs of All-Inclusive Care for the Elderly (PACE), under a final rule released this week.
The change was rolled out Tuesday by the Centers for Medicare & Medicaid Services in what the agency describes as an effort to improve care and protections for PACE participants while also giving programs greater flexibility. This final rule, which marks the first major update since 2006, comes nearly three years after changes were proposed.
"This rule strengthens the PACE program by offering a more flexible and adaptable approach to the coordinated care that patients receive from PACE organizations, which will allow care teams to provide seamless, better-tailored care to individual patients," said CMS Administrator Seema Verma in a statement.
The non-physicians who will be allowed to serve in some capacities as PCPs must be practicing within the scope of their state licensure and clinical practice guidelines, the rule states. The added flexibility may makes things easier both operationally and financially, especially in rural areas, the rule adds.
The agency says it has historically granted waivers for individual PACE providers that sought permission to have an NP or PA fill a PCP's shoes.
"[W]e have typically granted such waivers, and we have not encountered any issues or concerns with the quality of care provided by non-physician primary care providers or community-based physicians acting in this capacity on behalf of and working collaboratively with the PACE primary care physician or medical director," the final rule states.
More than 100 organizations across 31 states use PACE to provide medical and social services to more than 45,000 elderly people who qualify for nursing home care but can continue living in the general community safety, according to a CMS fact sheet. Enrollment in PACE has more than doubled in the past eight years, the fact sheet adds.
The updated rule drew praise from the National PACE Association (NPA).
"These updated regulations build on the success of the PACE model and will improve the ability of PACE organizations to keep even more people out of nursing homes and in the community," said NPA CEO and President Shawn Bloom in a statement.
The final rule also includes changes to the way PACE organizations are audited and their compliance programs are overseen.
A request from federal antitrust regulators effectively delays the Centene-WellCare deal from being finalized for at least a month.
Centene Corp.'s planned $17.3 billion acquisition of WellCare Health Plans hit a bit of a speed bump last week, when the U.S. Department of Justice sent the companies a request for more information on their planned merger.
Centene revealed the DOJ's request for additional information and documentary material in a letter that it sent to shareholders and also filed publicly Thursday with the Securities and Exchange Commission. The request, which effectively delays the finalization of the Centene-WellCare deal by at least 30 calendar days, signals that antitrust regulators want to take a closer look at the companies' plan. Such requests are not uncommon.
The combined entity is expected to be headquartered in St. Louis and serve about 22 million health plan members across all 50 states, plus about 12 million Medicaid beneficiaries and about 5 million Medicare beneficiaries, according to an SEC filing.
Centene Chairman and CEO Michael Niedorff would lead the combined company as chairman and CEO, while WellCare CEO Kenneth Burdick and Chief Financial Officer Drew Asher join the Centene senior leadership team in newly created positions, the filing states.
The DOJ's request comes after the American Hospital Association urged the DOJ earlier this month to scrutinize the Centene-WellCare arrangement, saying it could undermine competition for "tens of millions of consumers across broad swaths of the country."
Shareholders are scheduled vote on the deal June 24. The companies to close the transaction in the first half of 2020.
Trump administration officials are proposing to undo provisions of a healthcare nondiscrimination regulation implemented by the Obama administration, saying they are incongruent with the law.
A notice of proposed rulemaking released Friday morning by the Health and Human Services Office for Civil Rights (OCR) would reduce healthcare nondiscrimination protections for transgender people, unwinding certain provisions of a regulation the Obama administration adopted in 2016 under the Affordable Care Act.
The proposal would maintain portions of the regulation but remove protections based on gender identity and termination of pregnancy. The change is needed, says HHS OCR Director Roger Severino, to bring the regulation into compliance with federal law—the current interpretation of which is up for argument before the nation's highest court.
"The previous administration took an interpretation of 'discrimination on the basis of sex' to cover gender identity and termination of pregnancy. This is a disputed question that has reached the Supreme Court now," Severino said during a press call Friday.
"We are taking a position now consistent with the federal government on this question and consistent with the position that had reigned for decades before around 2016, at least with respect to healthcare," Severino added.
Some healthcare providers complained that the Obama administration's final rule effectively sought to coerce them into providing healthcare services that contradicted their own medical judgment on the care their patients need. Opponents of the rule sued and persuaded federal judges to block particular provisions from taking effect. Proponents of the Obama administration's effort to shore up healthcare access for transgender patients, however, argue that it's unreasonable to think "sex discrimination" under the ACA's Section 1557 doesn't include gender identity.
This latest HHS OCR proposal comes about three weeks after the office finalized a rule to bolster the religious and conscience rights of healthcare workers and organizations that may object to assisting in the facilitation of certain healthcare services, including abortion and gender transition care.
When asked by HealthLeaders about the combined impact these two rules would have and what HHS OCR will do to ensure that transgender people have access to healthcare, Severino said HHS exists to make sure everyone has access to healthcare.
"That's part of our mission, to make sure the health and wellbeing of all Americans is furthered. That goal is not changed by this rule," he said. "In fact, this rule is in keeping with it."
Severino said the rule is about narrow interpretations of the ACA and gives healthcare providers freedom to conduct themselves in accordance with the nondiscrimination provisions written by Congress, not the White House.
"We have a lot of diversity in healthcare. We have a lot of options for people. This rule does not go in and tell people how to practice medicine," he said. "It is about nondiscrimination, principles that are enshrined in our law."
Effects for Non-English Speakers
The existing regulation requires covered entities to distribute so-called "tagline" notices annually, which inform patients that they may have significant documents translated into at least 15 other languages. Those notices, however, are more cumbersome than projected and should no longer be required, the Trump administration says.
The taglines were originally projected to cost about $7.2 million in the first five years, but the rule failed to fully account for printing and mailing costs, so the actual cost is more than $3 billion higher than projected, according to HHS OCR's announcement Friday. An across-the-board tagline requirement resulted in billions of notices being sent to English speakers who don't need them, the announcement states.
"As a child of Hispanic immigrants, I know how vitally important it is that people receive quality healthcare services regardless of the language they speak, and this proposal grants providers the needed flexibility for achieving that goal," Severino said in a statement, adding that the unnecessary regulations have impeded healthcare affordability.
Skeptics and Detractors
The proposal was met with skepticism and criticism from a range of healthcare advocacy groups.
"The administration's proposal to roll back protections for many of our most vulnerable populations will worsen existing barriers to access and increase disparities," said Bruce Siegel, MD, MPH, president and CEO or America's Essential Hospitals, in a statement. "Discrimination in any form has no place in health care. Our hospitals embrace this principle and care for all who walk through their doors. They have made progress closing gaps in care and reducing disparities among vulnerable populations, including the LGBTQ community and individuals with limited English proficiency. This is a step backward and undermines their work to build greater equity in care."
"We see no policy justification for this change, and we strongly urge the administration to reconsider its position," Siegel added.
American Medical Association President-elect Patrice A. Harris, MD, MA, said the AMA is assessing what the full effect of the proposal would be.
"The AMA strongly believes that discrimination on the basis of sex includes discrimination on the basis of gender identity and sexual orientation," Harris said in a statement. "Similarly, the AMA does not condone discrimination based on whether a woman has had an abortion."
"Respect for the diversity of patients is a fundamental value of the medical profession and reflected in long-standing AMA ethical policy opposing discrimination based on race, gender, sexual orientation, gender identity, pregnancy, or termination thereof," Harris added.
Leana Wen, MD, president and CEO of the Planned Parenthood Federation of America called the proposal "yet another attack on women and LGBTQ people from the Trump-Pence administration," adding that such groups "already face discrimination and limited access to care."
Wayne Turner, a senior attorney for the National Health Law Program, said this is merely the latest example of the Trump administration seeking to weaken the ACA.
"The proposed regulation changes could ultimately lead to more people becoming uninsured because of the lack of protections from discrimination in health care services and plans," Turner said in a statement.
Rules Don't Apply to Short-Term Plans
The proposal also seeks to redefine the scope of the Section 1557 regulation. Any entity that does not receive money from HHS and any component that is "not principally engaged in the business of providing health care," would fall outside the scope of the proposed regulation's nondiscrimination provisions.
"If an entity, such as a health insurance issuer, receives Federal financial assistance from [HHS] to further a health program or activity but is not principally engaged in the business of providing health care, the proposed regulation would apply to the entity’s specific operations which receive Federal financial assistance from [HHS], but it would not apply to the entity's entire operations," the proposal states. "Thus, for example, the proposed rule would generally not apply to short term limited duration insurance (STLDI) because, as [HHS] understands it, providers of STLDI are either (1) not principally engaged in the business of health care, or (2) not receiving Federal financial assistance with respect to STLDI plans specifically."
Trump administration officials have expanded access to these short-term plans, touting them as a cheaper alternative to ACA-compliant insurance and prompting concern that healthier people could migrate to less-comprehensive health plans and leave sicker populations behind with higher premiums in ACA-compliant markets.
Editor's note: This story was updated Friday, May 24, 2019, to include additional information from the proposed rule and commentary from several advocacy groups.
After selling more than 80 hospitals in three years, leaders of the large for-profit hospital operator are suggesting the worst may be behind them.
Times have been tough for Community Health Systems Chairman and CEO Wayne T. Smith, who is voicing an optimistic message this year as the hospital operator continues to navigate choppy waters.
Smith and fellow CHS senior executives told investors this month that the company expects to complete its massive and long-running divestiture plan by the end of 2019, having already shed 81 hospitals from its portfolio in the three preceding years. The company, based in Franklin, Tennessee, operated 106 hospitals across 18 states as of the end of the first quarter.
While the divestitures give CHS cash to pay down its debt, they are also part of a strategic effort to align CHS operations with the geographic areas where the company sees the greatest growth potential, Smith said.
"This has allowed the company to shift more of our resources to more sustainable markets, ones with better population growth, better economic growth, and lower unemployment, which provides us an opportunity for sustainable growth," Smith said during the first-quarter earnings call this month.
"As we complete additional divestitures, we expect our same-store metrics to further improve," he added. "This will lead to not only additional debt reduction but also better cash flow performance and lower leverage ratios."
Executive Vice President and Chief Financial Officer Thomas J. Aaron echoed that message at the Goldman Sachs Leveraged Finance Conference this month. While CHS was truly a rural hospital company 15 years ago, Aaron said the post-selloff organization is investing strategically in markets where it anticipates growth.
"We'd rather compete in a growing pie than have more market share in a pie that's shrinking," Aaron said.
"We feel like we're well-positioned," he said.
But the positive forecast is a bit of a tough sell, especially when you consider how bad the past five years have been:
Questionable HMA Acquisition: In 2014, CHS completed its $7.6 billion acquisition of Florida-based hospital operator Health Management Associates, Inc. (HMA), in what is widely viewed in hindsight as a bad move. In addition to a $260 million settlement with the U.S. Department of Justice, a subsidiary of HMA pleaded guilty to criminal fraud last year for alleged misconduct that predated the acquisition by CHS—allegations that Smith knew about before the deal was final. "We were aware of the issues they had," Aaron said this month. "We went ahead and closed on the transaction, confident that we could get the cost synergy, and we felt like they had some great assets."
Major Stock Market Woes: In 2015, the price of CHS shares peaked at nearly $53 apiece, according to New York Stock Exchange data. But by the end of that year, shares had lost more than half of that value. Share prices continued to slide the following year and haven't made a meaningful recovery since. They have been trading below $5 so far this year.
Lackluster Quorum Spin-off: In 2016, CHS spun off 38 hospitals to form Quorum Health Corporation. The spin-off severely underperformed expectations, and investors began asking questions. Quorum formally responded to those investors with a letter that acknowledged several reasons to question the "operational competence" of CHS leaders who backed the spin-off. A related dispute between Quorum and CHS ended in arbitration earlier this year.
Ongoing Hospital Divestitures: In 2017, CHS sold 30 hospitals, followed by another 13 hospitals in 2018, Aaron said. So far this year, CHS has announced the sale of at least seven more: one in Tennessee, two in Florida, and four in South Carolina. A spokesperson for CHS did not respond to HealthLeaders' request for additional information and comment.
Recurring Bankruptcy Questions: Industry analysts have wondered for years whether bankruptcy may be on the horizon for CHS. Those questions were renewed again this month when Ryan Heslop, a portfolio manager for Firefly Value Partners LP, took a short position against the company and said a CHS bankruptcy is likely in the next few years, as Reuters reported. About that same time, Smith invested more than $3 million in CHS stock, according to two Securities and Exchange Commission filings. (Smith, 73, who has been CEO for 22 years, now directly and indirectly controls about 2.8% of the company, as the Nashville Post reported.)
Call for CEO's Ouster: With the release of a report this month titled "Other People's Money," the National Nurses United (NNU) group accused Smith of squandering CHS' assets and called for him to be removed. "The fact that Smith remains at CHS' helm, given a series of fatal calculations that set the company on a downward spiral, is a real wonder," the NNU report states. Shareholders, however, voted overwhelmingly in favor of keeping Smith as a director and significantly increasing his incentive plan compensation, according to SEC filings.
Despite the light-at-the-end-of-the-tunnel rhetoric coming from CHS executives, there's still real concern the company could come undone. That's because CHS' problems run deeper than its balance sheets, says Mark Cherry, MFA, a principal analyst at Market Access Insights for Decision Resources Group.
"Given the national trend toward provider consolidation, CHS might not remain intact even if it were financially healthy," Cherry tells HealthLeaders in an email, adding that CHS seems to be unsuited for the industry's ongoing shifts toward value-based payments and outpatient care delivery.
"There are only a few markets, like Scranton, Knoxville, and Northwest Arkansas, where CHS has enough presence to act as a stand-alone health system that can influence physician and patient behaviors," Cherry says.
Related: CHS Reports $118M Loss as Revenues Dip 8.5% in Q1 2019
The structural problem is rooted in a bad strategic bet a decade ago, Cherry says.
"As markets and regions were coalescing around large integrated delivery networks focused on value-based care, CHS continued to invest in suburban facilities and demand high fee-for-service reimbursement," Cherry says.
"Whereas operating a couple of suburban hospitals within a larger market once gave CHS access to better insured patients and leverage against payers who wanted to offer broad provider networks, the post-ACA landscape does not have as wide a uninsured discrepancy between urban and suburban areas," he adds, "and payers are shifting to high-performance narrow networks, allowing them to cut CHS facilities out entirely if they are unwilling to compromise."
A spokesperson for CHS did not respond to HealthLeaders' requests for an interview.
The CMS administrator says a team is working hard to hammer out details to alleviate concerns that the law can impede value-based care arrangements.
Centers for Medicare & Medicaid Services Administrator Seema Verma said she hopes the government's work to address Stark Law concerns raised by healthcare providers will result in a proposed regulation by the end of this year.
Verma, who set a similar expectation last year, made the comment during an in-person meeting Wednesday with reporters at the CMS office in Washington, D.C., where she noted that her team is working with representatives from the Health and Human Services (HHS) Office of Inspector General (OIG) on a plan to loosen Stark's restrictions.
"The original concern with Stark is that providers would be referring their patients to other providers that they had a financial relationship with," Verma said, according to an audio recording CMS released online. "If you go to value-based care, where there's more capitation and that incentive isn't necessarily there—they're incentivized to manage cost—then you have to sort of rethink how Stark applies."
In a request for information last year, CMS asked for input on potential Stark tweaks. Many of those comments focused on the impact on value-based payment arrangements. Many also highlighted technical issues that add unnecessary bureaucracy and cost, Verma said.
The states involved in the case are asking the judge for 10 minutes to speak during a hearing early next month.
Five state attorneys general who joined federal antitrust regulators in approving CVS Health's Aetna acquisition have urged the federal judge overseeing the transaction not to forget about them.
California, Florida, Hawaii, Mississippi, and Washington have been coplaintiffs with the U.S. Department of Justice since they filed a complaint in federal court last October to enforce a conditional approval of the CVS-Aetna deal, which requires the divestiture of Aetna's Medicare Pn-appeal-pay-hca-hospitalart D plans to WellCare Health Plans.
While amici curiae have argued U.S. District Judge Richard Leon should reject the deal, the DOJ and CVS have argued the stipulated agreement is sufficient to alleviate any anticompetitive concerns raised by the nearly $70 billion merger. A hearing with six witnesses—three each from the amici and DOJ/CVS positions—is scheduled for early next month, after Leon said he wished to hear more testimony before deciding whether to sign off on the parties' proposed final judgment.
Now the five states involved in the case are asking Leon to give them 10 minutes to speak during the hearing, according to court records.
"Plaintiff States bring a unique local perspective to our joint investigations with our federal counterparts when evaluating the merger's effects on the marketplace," their filing states. "Healthcare markets are of particular concern to state attorneys general in part because many of the effects of healthcare mergers are local, rather than national."
"Additionally, the states provide and fund healthcare for many of its citizens," the filing adds.
The states noted that they investigated the CVS-Aetna merger for 11 months in close collaboration with the DOJ. At the conclusion of that investigation, they there were anticompetitive concerns with the merger and that the proposed divestiture would be sufficient to address those concerns, which is the same conclusion reached by DOJ investigators.
The states, therefore, intend to urge Leon to greenlight the DOJ-approved CVS-Aetna merger.
The therapies have price tags as high as $425,000, which some say is a worthwhile investment.
In a brief statement Friday, the Centers for Medicare & Medicaid Services announced a delay in its final national coverage determination on certain innovative and expensive cancer treatments, but CMS signaled that "a decision is forthcoming."
The agency issued had a proposed decision memo for Chimeric Antigen Receptor (CAR) T-cell therapy for cancers last February, outlining a plan for how it would pay for such treatments, which genetically modify a patient's own cells to fight cancer throughout the body.
Some stakeholder organizations, including America's Health Insurance Plans (AHIP), said a national coverage determination may be beneficial but told CMS to proceed with caution. Others said making such a national determination would be premature for a burgeoning area of medicine.
A year ago, the Food & Drug Administration approved a second CAR-T therapy: Novartis AG's Kymriah. This came after the FDA approved Gilead Sciences Inc.'s Yescarta in 2017. Kymriah and Yescarta each have U.S. prices of $373,000 for patients with advanced lymphoma, and Kymriah has a price tag of $425,000 for pediatric leukemia patients, as Reuters reported last month.
"While the cost of the treatment is quite significant now, it is likely to decline as better manufacturing and increased competition between commercial providers," said Mounzer E. Agha, MD, director of the Mario Lemieux Center for Blood Cancers at UPMC Hillman Cancer Center, in a comment recommending that CMS approve CAR-T coverage.
"Furthermore, the cost of the successful CAR-T therapy is significantly lower than multiple lines of therapy, that are unlikely to yield a meaningful response, but are offered for the lack of effective therapy," Agha added.
The health system had taken aim at the FCA's qui tam provisions, but the case had some hurdles still to overcome.
Intermountain Healthcare has formally asked that the Supreme Court dismiss its pending petition regarding a long-running False Claims Act dispute between the nonprofit health system and a cardiologist.
The concise motion filed Wednesday by Intermountain's legal team doesn't mention a reason for the timing of the dismissal request, but it comes after the Salt Lake City–based system signaled late last month that it expected to settle the dispute out of court rather than wait on the justices to decide whether they would take up the case.
Intermountain had sought to use the case as a vehicle to rein in FCA whistleblower litigation. But observers said the case was a bit of a long shot for procedural and precedential reasons. Even so, the case contains some important lessons for healthcare executives.
"[P]erhaps the best advice for most healthcare providers is to take this as kind of an early warning sign and do everything possible to proactively get ahead of the curve," said Jason P. Mehta, JD, a Bradley partner based in Tampa, Florida, who defends businesses and individuals involved in FCA cases and other matters.
Researchers compared the latest hospital quality ratings to rates observed three years prior, finding both progress and opportunities for much more improvement.
The estimated number of avoidable deaths in U.S. hospitals each year has dropped, according to updated analysis prepared for The Leapfrog Group by Johns Hopkins University School of Medicine researchers.
Matt Austin, PhD, an assistant professor in the school's Armstrong Institute for Patient Safety and Quality, and Jordan Derk, MPH, used the latest data from Leapfrog's semiannual hospital safety grades to estimate that there are 161,250 such deaths each year, down from the 206,000 deaths they estimated three years prior, according to their report.
Austin and Derk said they used 16 measures from Leapfrog's spring 2019 data to identify deaths that could clearly be attributed to a patient safety event or closely related prevention process. The reduction is the result of two main factors, they wrote: One, hospitals have made some improvement on the performance measures included in Leapfrog's safety grades. And, two, some of the measures "have been re-defined and rebaselined" in the past three years, they wrote.
Furthermore, these data likely represent an undercount, Austin and Derk wrote, noting that other studies have estimated anywhere from 44,000 to 440,000 deaths due to medical errors.
"The measures included in this analysis reflect a subset of all potential harms that patients may encounter in U.S. hospitals, and as such, these results likely reflect an underestimation of the avoidable deaths in U.S. hospitals," they wrote.
"Also, we have only estimated the deaths from patient safety events and have not captured other morbidities that may be equally important," they added.
The updated analysis was released to coincide with the latest release of Leapfrog's controversial scores, which came out Wednesday, having assessed quality data from more than 2,600 hospitals and assigned each an "A" through "F" letter grade.
"The good news is that tens of thousands of lives have been saved because of progress on patient safety. The bad news is that there's still a lot of needless death and harm in American hospitals," Leapfrog Group President and CEO Leah Binder said in a statement.
Less than one-third (32%) of hospitals secured an "A" grade. More than a quarter (26%) earned a "B." The group gave a "C" to another 36%, a "D" to 6%, and an "F" to less than 1% of hospitals.
The analysis from Austin and Derk found that the rate of avoidable deaths per 1,000 admissions was 3.24 at "A" hospitals, 4.37 at "B" hospitals, 6.08 at "C" hospitals, and 6.21 and "D" and "F" hospitals combined. That means patients admitted to a "D" or "F" hospital face nearly double the risk of those admitted to an "A" hospital, the Leapfrog group said.
There are important lessons to be learned from the case, even though the nonprofit health system has signaled it expects to back away from its pending Supreme Court petition.
The number of healthcare fraud lawsuits filed under qui tam provisions of the False Claims Act has swelled steadily over the past three decades, putting pressure on hospitals and other healthcare organizations that do business with the U.S. Department of Health and Human Services.
The law is designed to give whistleblowers an incentive and protections to come forward with allegations of fraud in federal programs, such as Medicare and Medicaid. But some contend qui tam litigation, which allows individuals to sue on the U.S. government's behalf, has gone too far.
In fiscal year 1988, there were just five new HHS-related qui tam FCA cases filed, according to data released by the U.S. Department of Justice. Thirty years later, in fiscal year 2018, there were 446 such new cases. And that was by no means an outlier.
"There is no question that healthcare providers are dealing with whistleblower lawsuits in increasing frequency like never before," says Jason P. Mehta, JD, a Bradley partner based in Tampa, Florida, who defends businesses and individuals involved in FCA cases and other matters.
"For most healthcare providers, it's a question of when, not if, they're going to have to deal with one of these whistleblower lawsuits," Mehta tells HealthLeaders.
This proliferation of these lawsuits is especially noteworthy because the DOJ intervenes in only about 20% of these cases. It's one thing for a hospital to be accused of fraud by both a whistleblower and the DOJ; it's another thing entirely for a whistleblower's lawsuit to proceed even after the DOJ declined to get involved.
Intermountain Healthcare, based in Salt Lake City, Utah, has been fighting one such case for nearly seven years. The nonprofit system appealed all the way to the U.S. Supreme Court, saying heavily regulated industries "are forced to bear the brunt of overzealous litigation."
Intermountain argues the allegations in this case were insufficiently particular and that the FCA's qui tam provisions are unconstitutional. It has sought to use the case as a vehicle to rein in whistleblower litigation. But the health system may face long odds for procedural and precedential reasons. Intermountain failed to raise its constitutional claims at the District Court level, so it forfeited the ability to raise them on appeal, according to the Tenth Circuit Court's decision. And the parties disagree as to whether the health system's arguments contradict a decision the court reached in 2000 on a related matter.
After arguing last January that its appeal is legally sound, Intermountain told the Supreme Court late last month that it expects to back away from the pending petition without the justices deciding whether to take the case because a settlement in principle has been reached.
That doesn't mean, however, that healthcare executives can afford to disregard it.
"Regardless of what the Supreme Court does or does not do, this should be an early warning sign for healthcare providers out there that the stakes are very high," Mehta says.
What You Can Do Proactively
Since whistleblower claims are nearly inevitable for most healthcare organizations, leaders should be taking steps now not only to prevent FCA violations but also to anticipate them. That demands more than simply waiting to see how Intermountain's case shakes out, Mehta says.
"Healthcare providers should be monitoring these developments. They should be monitoring what the Supreme Court says and what other courts say," he says, "but perhaps the best advice for most healthcare providers is to take this as kind of an early warning sign and do everything possible to proactively get ahead of the curve."
On the one hand, that means systematically reviewing your organization's claims to make sure your people are staying within bounds, Mehta says.
On the other hand, it also means developing strong internal reporting structures that whistleblowers can trust—such as hotlines to report suspected FCA violations—so they don't feel the need to become external whistleblowers seeking government intervention, he adds.
If you earn whistleblowers' trust, then you can respond directly to their complaints, problem-solve internally, and self-report violations to the government if needed.
What You Can Do Reactively
Having the ability to self-report FCA violations could enable providers to persuade the DOJ to go easier on them. Under new guidance issued this month, FCA litigators in the DOJ's Civil Division are directed to give credit to defendants that cooperate with investigators.
That meaningful assistance may include voluntary disclosure of FCA violations that the DOJ didn't know about already, which is "the most valuable form of cooperation," said Assistant Attorney General Jody Hunt in a statement. But it could also include cooperating in an ongoing DOJ investigation or taking remedial steps in response to a violation, Hunt said.
Even if the DOJ is already investigating your organization, you may be able to secure credit for voluntarily disclosing additional misconduct beyond the existing investigation; for preserving relevant information and documents beyond what is typically required; for identifying people who are aware of the relevant information or conduct; or for facilitating the government's review of information embedded within specialized or proprietary technologies, the DOJ said.
Furthermore, the DOJ will consider corrective actions your company has taken. That could include a thorough analysis of what led to the violation, disciplining or replacing the responsible individuals, or accepting responsibility as an organization and enacting or enhancing internal compliance measures, the DOJ said.
The benefits of cooperating with FCA investigators will most frequently come in the form of a reduction in civil penalties and the damages multiplier, the DOJ said. But the DOJ may also publicly acknowledge the organization's help and notify another agency of that assistance to inform the agency's administrative enforcement approach.
The details are outlined in the DOJ's guidance. But be sure to consult with competent legal counsel before deciding whether to voluntarily disclose information to the government and what information to disclose, says Mehta, a former federal prosecutor.
"The way that the government can use information is often opaque to outsiders and experienced lawyers can help clients navigate these perilous waters," he says.
More Cases, More Dismissals?
While it seems that Intermountain's effort to deflate the power of FCA whistleblowers is headed for a settlement, rather than a Supreme Court decision, there's another FCA-related case that could give whistleblowers greater leeway moving forward.
The FCA says relators have six years after an alleged violation to file their claims or a maximum of three years after a U.S. official responsible knew or reasonably should have known of the alleged violation. There was a dispute on how to properly interpret that passage of the law, but the Supreme Court decided Monday that the FCA gives whistleblowers up to a decade to file in some circumstances.
Some defense attorneys who expected the court to rule in favor of the longer time frame said the decision could potentially lead to an increase in the number of FCA cases, higher settlement costs for those accused, and encouragement for the government to move for dismissal more often, as Lydia Wheeler reported for Bloomberg Law.
The decision comes after Michael Granston, director of the DOJ's Civil Fraud Section, issued a memo last year outlining factors the DOJ should consider in deciding whether to ask courts to dismiss an FCA case in which the government has declined to intervene. That memo, as Dykema attorneys wrote last year for the American Bar Association, may offer a blueprint on how defendants can buddy up with the DOJ and seek dismissal of FCA whistleblower claims.