Health Law Advisor

On April 13, 2021, a New York-based chiropractor, was sentenced to nine years in prison, and ordered to pay close to $20 million, for running what the federal government alleged was a large scale scheme to defraud Medicare and other third party insurers.[1]   The sentencing stems from a case originally filed under seal on August 29, 2018, in which the U.S. Attorney’s Office for the Southern District of New York alleged that two New York chiropractors – James and Jeffery Spina – improperly owned and controlled multiple medical practices and engaged in submission of fraudulent health care claims from 2011 until September 2017.

On March 26, 2021, the U.S. Department of Justice (“DOJ”) reported on the agency’s heightened criminal and civil enforcement activities in connection with COVID-19-related fraud.[1]  As of that date, DOJ had publicly charged 474 defendants with criminal offenses in connection with COVID-19-related schemes across 56 federal districts to recover more than $569 million in U.S. government funds.

The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act is a federal law, enacted on March 29, 2020, designed to provide emergency financial assistance to the millions of Americans who are suffering the economic effects caused by the COVID-19 pandemic.  The CARES Act provides relief through a number of different programs, including the Paycheck Protection Program (“PPP”), Economic Injury Disaster Loans (“EIDL”), the Provider Relief Fund, and Unemployment Insurance (“UI”).[2]  With the promulgation of these programs, DOJ has ramped up efforts in identifying and investigating fraud to protect the integrity of the $2.2 trillion in taxpayer funds appropriated under the CARES Act.

Criminal Enforcement Activities

The majority of fraud cases brought by DOJ have originated in the Criminal Division’s Fraud Section, accounting for at least 120 defendants charged with PPP fraud.[3]  The PPP allows qualifying small businesses and other organizations to receive loans with a maturity of two years and an interest rate of 1 percent.  PPP loan proceeds must be used by businesses for payroll costs, interest on mortgages, rent, and utilities.  Most of these defendants are facing charges for allegedly misappropriating loan payments for prohibited purposes, such as luxury purchases, while another significant portion are charged in connection with allegedly inflating payroll expenses in order to obtain larger PPP loans.[4]

DOJ also announced that it has seized over $580 million in fraudulent application proceeds in connection with the EIDL program, which is designed to provide loans to small businesses and agricultural and nonprofit entities.  DOJ’s primary concerns with respect to this program have related to fraudulent applications for EIDL advances and loans on behalf of shell or nonexistent businesses.

In response to a rise in UI fraud schemes, DOJ has established the National Unemployment Insurance Fraud Task Force to investigate domestic and international organized crime groups targeting unemployment funds through the use of identity theft.  Since the start of the pandemic, over 140 defendants have been publicly charged with federal offenses related to UI fraud.[5]

At the end of March, Florida joined the roster of states that have erected legal shields for health care providers against COVID-19-oriented liability claims. Concerned about uncertainty surrounding the emergency measures taken in response to COVID-19 and the effects that lawsuits could have on the economic recovery and the ability of health care providers to remain focused on serving the needs of their communities, the Florida Legislature passed CS/SB 72 on March 29, 2021.  Governor Ron DeSantis signed CS/SB 72 into law as Laws of Florida 2021-1.  This law creates two new statutory provisions - section 768.38 and section 768.381, Florida Statutes – effective on passage.

What Are the Liability Protections?

Section 768.381, Florida Statutes provides protection for health care providers regarding COVID-19-related claims, as follows:

• Complaints alleging claims subject to the law must be pled with particularity, or will be dismissed. This is a higher pleading standard than typically required for a civil complaint, and requires a greater degree of specificity.
• Plaintiffs must prove gross negligence or intentional misconduct. This is a higher standard than ordinary negligence or professional malpractice.
• Health care providers are provided with several affirmative defenses which, if proven, preclude liability. These defenses primarily relate to a provider’s substantial compliance with government-issued standards regarding COVID-19, infectious disease generally in the absence of standards specifically applicable to COVID-19 or the inability to comply with applicable standards in light of medical supply shortages.
• There is a one-year statute of limitations on COVID-19-related claims against health care providers, which is substantially shorter than that for simple and medical negligence claims. When this statute starts to run depends on whether the claim arises out of the transmission, diagnosis, or treatment of COVID-19, or from other circumstances such as a delayed or canceled procedure. Actions for COVID-19 related claims that accrued before the law’s effective date must commence within one year of the effective date.

In this episode of the Diagnosing Health Care Podcast:  The Centers for Medicare & Medicaid Services ("CMS") and the Office of Inspector General ("OIG") of the Department of Health and Human Services have at last published their long-awaited companion final rules advancing value-based care. The rules present significant changes to the regulatory framework of the federal physician self-referral law (commonly referred to as the “Stark Law”) and to the federal health care program’s Anti-Kickback Statute, or “AKS.”

Epstein Becker Green attorneys Anjali ...

2021 is set to be a landmark year for the number of jurisdictions raising wage floors across the country. According to a National Employment Law Project report, as of January 1, 2021, 20 states and 32 municipalities raised their minimum wage. By the end of 2021, the report tracks that as many as 24 states and 50 municipalities will increase wages for the lowest-paid workers.

Perhaps as a reaction to the steadily growing Fight for $15 movement or in response to the COVID-19 pandemic, 40 cities and counties will have met or exceeded a $15 minimum wage by the end of 2021. Eight states — ...

New from the Diagnosing Health Care Podcast:  The Biden administration has invoked the Defense Production Act ("DPA") to speed up the production of vaccines and increase the domestic production of COVID-19 tests, personal protective equipment (or “PPE”), and other essential supplies. Epstein Becker Green attorneys Neil Di Spirito, Constance Wilkinson, and Bonnie Odom discuss the administration's reliance on the DPA as it continues to operationalize its pandemic response, and the challenges these actions are likely to present for medical product suppliers.

Our colleague Robert O'Hara of Epstein Becker Green has a new post on the Workforce Bulletin blog that will be of interest to our readers: "OSHA Launches New COVID-19 Initiatives: With More to Come".

The following is an excerpt:

President Biden’s January 21, 2021 Executive Order (EO) on COVID-19 tasked the Occupational Safety and Health Administration (OSHA) to: launch a national enforcement program, review and correct any shortcomings in their prior enforcement strategies and to determine whether any Emergency Temporary Standards (ETS) were necessary and, if so, to issue an ...

Artificial Intelligence (“AI”) applications are powerful tools that already have been deployed by companies to improve business performance across the health care, manufacturing, retail, and banking industries, among many others. From largescale AI initiatives to smaller AI vendors, AI tools quickly are becoming a mainstream fixture in many industries and will likely infiltrate many more in the near future.

But are these companies also prepared to defend the use of AI tools should there be compliance issues at a later time? What should companies do before launching AI tools ...

The Illinois Coalition to Protect Telehealth, a coalition of more than thirty Illinois healthcare providers and patient advocates, announced its support for a bill that would, among other things, establish payment parity for telehealth services and permanently eliminate geographic and facility restrictions beyond the COVID-19 pandemic. Like many states, Illinois issued an executive order at the outset of the pandemic temporarily lifting longstanding barriers to consumer access to telehealth via commercial health plans and Medicaid.[1]  The executive order expanded the definition of telehealth services, loosened geographical restrictions on physician licensing requirements, and barred private insurers from charging copays and deductibles for in-network telehealth visits.

Now, House Bill 3498 seeks to make permanent some of those temporary waivers by aligning coverage and reimbursement for telehealth services with in-person care. If enacted, it would also establish that patients could no longer be required to use an exclusive panel of providers or professionals to receive telehealth services, nor would they be required to prove a hardship or access barrier in order to receive those services.  The bill does not include a provision that would permanently allow out-of-state physicians or health care providers to provide services in the state beyond the pandemic.[2]

In the Coalition’s announcement of support for this bill, it states that the use of telehealth over the last year has shown an increased adherence to patient care plans and improved chronic disease management.  “In recent surveys, over 70% of Illinois hospital respondents and 78% of community-based behavioral healthcare respondents reported that telehealth has helped drive a reduction in the rates at which patients missed appointments. Surveys of Illinois physicians, community health centers, and specialized mental health and substance use disorder treatment providers have also revealed similar dramatic reductions in missed appointments.”

Medical providers are often asked, or feel obligated, to disclose confidential information about patients.  This blog post discusses when disclosures of confidential medical information involve law enforcement, but the general principles discussed herein are instructive in any scenario.  To protect patient confidentiality and avoid costly civil liability arising from improper disclosures, it is imperative that providers ask questions to assess the urgency of any request and to understand for what purpose the information is sought by authorities.  Knowing what questions to ask at the outset prepares providers to make informed decisions about disclosing confidential information in a manner that balances the obligation to maintain patient confidentiality and trust with legitimate law enforcement requests for information aimed at protecting the public.