Health Law Advisor

Through a January 9, 2020, press release, the Department of Justice (“DOJ”) reported more than $3 billion in total recoveries from settlements and judgments from fraud-related civil matters brought under the False Claims Act (“FCA”) for fiscal year (“FY”) 2019. An increase over the $2.9 billion recovered in FY 2018, FY 2019 reflected the ninth highest amount of recoveries in the past 30 years. The accompanying statistics released by DOJ reflect several themes related to FCA enforcement concerning the health care and life sciences industry.

The Health Care and Life Sciences Industry Accounted for Approximately 87 Percent of FY 2019 Recoveries

Consistent with previous years, fraud actions involving the health care and life sciences industries continue to drive DOJ’s FCA recoveries. Health care-related fraud recoveries alone have now exceeded $2 billion for 10 consecutive years. In FY 2019, health care-related matters generated approximately $2.6 billion in recoveries, or 85 percent of recoveries from all sectors combined, which does not include recoveries from state-based Medicaid actions with which DOJ may have assisted. The $71 million increase in recoveries from health care-related matters between FY 2018 and FY 2019 marks the third consecutive year of increasing health care-related recoveries. Notably, recoveries from health care-related cases brought directly by DOJ increased from $568 million to $695 million between FY 2018 and FY 2019, the second highest amount recovered in 30 years.

Based on their extensive experience advising health care industry clients, Epstein Becker Green attorneys and strategic advisors from EBG Advisors are predicting the “hot” health care sectors for investment, growth, and consolidation in 2020.  These predictions for 2020 are largely based on the increasing confluence of the following three key “drivers” of health industry transformation that is substantially underway:

1. The ongoing national imperative of reducing the cost of health care, via disease prevention and detection, and cost-effective, quality treatment, including more efficient care in ambulatory and retail settings;
2. Extraordinary advances in technologies which enhance disease prevention, detection and cost-effective treatment (e.g., artificial intelligence (AI)-driven diagnosis and treatment, virtual care, electronic medical record (EMR) systems, medical devices, gene therapy, and precision medicine); and
3. The aging baby-boomer population, with tens of millions of Americans entering into their 70s, 80s, and above.

A bill to amend the New Jersey Millville Dallas Airmotive Plant Loss Job Notification Act, also commonly referred to as the New Jersey WARN Act (“NJ WARN Act”), which the New Jersey Senate passed on December 16, 2019, if enacted, will create significant financial liability for covered New Jersey employers that undergo a mass layoff, or a transfer or termination of operations, by requiring the employer pay severance to both full-time and part-time employees.

The NJ Warn Act, enacted in 2007, requires New Jersey private employers with 100 or more full-time workers to provide 60-day ...

On December 19, 2019, New Jersey enacted legislation amending the New Jersey Law Against Discrimination (“NJLAD”) to add a definition for “Race” - which has always been a protected category under the NJLAD – and for the term “Protective hairstyle.”  The Amendment, referred to as the “CROWN Act” (short for “Create a Respectful and Open Workspace for Natural Hair Act”), amends the NJLAD to add the following to the statute’s list of definitions:

“Race” is inclusive of traits historically associated with race, including, but not limited to, hair texture ...

Our colleague Steven M. Swirsky at Epstein Becker Green has recently published a post on the Management Memo blog that will be of interest to our readers in the health care industry: “NLRB Reverses Position on Confidentiality Concerning Workplace Investigations – Holds That Confidentiality Requirements Are Presumptively Lawful.”

Following is an excerpt:

The National Labor Relations Board, in its December 17^th decision in Apogee Retail LLC d/b/a Unique Thrift Store, has reversed its prior rule and held that employer requirements that employees treat ...

With 2019 nearly rolled up, it is time to exhale and recap the latest dose of marijuana laws affecting the workplace.  In the last twelve months, Illinois became the eleventh state to legalize recreational marijuana use by adults[1] and several other jurisdictions passed or modified their existing laws governing marijuana and the workplace.  Below is a summary of this year’s developments and some thoughts about what 2020 might bring.

Illinois Legalizes Recreational Marijuana Use

On June 25, 2019, Governor Pritzker signed the Illinois’ Cannabis Regulation and Tax Act into law ...

Our colleague Steven M. Swirsky at Epstein Becker Green has recently published a post on the Management Memo blog that will be of interest to our readers in the health employment and labor services industry: “NLRB Issues Proposed Rule to Scale Back 2014 Expedited Election Rules.”

Following is an excerpt:

The National Labor Relations Board (“Board” or “NLRB”) has announced that it is publishing proposed changes to its Rules and Regulations that will begin to reverse the Board’s 2014 changes, which took effect in 2015, to its representation election ...

Our colleague Sharon L. Lippett at Epstein Becker Green has recently published a post on the Financial Services and Employment Law blog that will be of interest to our readers in the health employment and labor services industry: “Monitoring ERISA Investment Fiduciaries.”

Following is an excerpt:

Fiduciaries of employee benefit plans subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) that appoint investment managers (“Appointing Fiduciaries”) will be interested in the opinion of the U.S. District Court for the Western ...

Two announcements made by FDA in late October signal a marked change to FDA’s regulatory approach to “homeopathic” drugs. On October 25, 2019, FDA withdrew the 1988 Compliance Policy Guide (“CPG”) 400.400 Conditions Under Which Homeopathic Drugs May Be Marketed, and, concurrently, published revised draft guidance titled Drug Products Labeled as Homeopathic (the “Revised Homeopathic Draft Guidance”).

Homeopathy—an alternative medical approach that began in the late 18^th century—is based on the belief that (1) a substance that causes symptoms in a healthy ...

Today, a final rule issued by the Centers for Medicare & Medicaid Services (CMS) establishing new enforcement initiatives aimed at removing and excluding previously sanctioned entities from Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP) goes into effect.[1] Published September 10 with a comment period that also closed today, the new rule expands CMS’s “program integrity enhancement” capabilities by introducing new revocation and denial authorities and increasing reapplication and enrollment bars as part of the Trump Administration’s efforts to reduce spending. While CMS suggests that only “bad actors” will face additional burdens from the regulation, the new policies will have significant impacts on all providers and suppliers participating in Medicare, Medicaid, and CHIP.[2]

AN OVERVIEW OF THE NEW RULE

The New “Affiliations” Revocation Authority

The new “affiliations” enforcement framework—the regulation’s most significant expansion of CMS’s revocation authority—permits CMS to revoke or deny a provider’s or supplier’s enrollment in Medicare if CMS determines an “affiliation” with a problematic entity presents undue risk of fraud, waste, or abuse. Generally to bill Medicare, providers and suppliers not only must submit an enrollment application to CMS for initial enrollment, but also must recertify enrollment, reactivate enrollment, change ownership, and to change certain information.[3] In the rule’s current form, providers or suppliers submitting an enrollment application or recertification to CMS (“applicants”) will be required to submit affiliation disclosures upon CMS’s request if the agency determines the entity likely has an affiliation with a problematic entity as described below.[4] CMS will base its request on a review of various data, including Medicare Provider Enrollment, Chain, and Ownership System data and other CMS and external databases that might indicate problematic behavior, such as patterns of improper billing.[5] Upon CMS’s request, applicants identified as having at least one affiliation with a problematic entity would be required to report any current or previous direct or indirect “affiliations” to CMS.[6]