The Department of Justice (DOJ) requested yesterday that the U.S. Supreme Court hear its appeal of the decision of a three-judge panel of the Eleventh Circuit Court of Appeals. The Eleventh Circuit held 2-1 that the individual mandate provision of the Affordable Care Act (ACA) is unconstitutional.
The DOJ filed its Supreme Court petition two days after announcing that it would not request review from the full Eleventh Circuit. The DOJ’s petition requests review of the “matter of grave national importance” and requests that the Supreme Court address whether Congress had the power to enact the minimum coverage provision. The DOJ argues that the “fundamentally flawed” decision of the Eleventh Circuit “denies Congress the broad deference it is due in enacting laws to address the nation’s most pressing economic problems and set tax policy.”
The Supreme Court was likely to weigh in due to the split among the federal appeals courts that have reviewed the constitutionality of the ACA. However, the timing of the DOJ’s appeal is unexpected because the Supreme Court may now rule during an election year.
In a hearing last week, the U.S. House of Representatives Energy and Commerce Subcommittee on Health considered legislation that would repeal the medical loss ratio (MLR) provision of the Affordable Care Act (ACA).
The MLR provision (Section 2718 of the ACA) requires health insurers to spend 80%-85% of all premium dollars on medical care or activities that improve health care quality. Insurers that fail to meet the MLR targets must provide their customers with rebates for the difference between actual expenditures and the target. The U.S. Department of Health and Human Services issued regulations implementing the MLR requirements in November 2010 (75 Fed. Reg. 74864). However, certain group or individual plans in effect before March 23, 2010 may be exempt from certain MLR requirements. The exemptions and requirements for grandfathered status were published in June 2010 (75 Fed. Reg. 34538).
The House Subcommittee hearing considered the MLR Repeal Act of 2011 (H.R. 2077) and a discussion draft of the legislation that would prevent enforcement of the grandfathered plan regulation. After hearings are completed, the legislation may be considered in a subcommittee and/or committee mark-up session before the committee can report the bill for consideration by the full House of Representatives.
The Health Law team at von Briesen will continue to monitor the progress of the MLR Repeal Act of 2011.
The Ohio Valley Health Education & Services Corp.—a two-hospital system with hospitals in Wheeling, West Virginia and Martins Ferry, Ohio—has agreed to pay $3.8 million to settle Stark and anti-kickback allegations. U.S. Attorney William J. Ihlenfeld II said OVHES did not admit liability but agreed to pay the fines after self-disclosing the arrangements to the authorities. Attorney Ihlenfeld reports that the compensation arrangements that the hospitals had with local physicians were “improper and were for significant sums.” Even though the fine is severe, the statement suggests that OVHES’ self-reporting and cooperation with the investigation led to a lower fine than would have been warranted if it had not been self-disclosed.
The government will now pursue reimbursement from the physicians involved with the improper arrangements.
More information regarding OVHES and the settlement are available at: http://www.theintelligencer.net/page/content.detail/id/559306/-3-8M–Fine-For-Hospital-Group.html?nav=515 and Attorney Ihlenfeld’s Press Release.
The U.S. Department of Health and Human Services (HHS) announced yesterday the release of its final rule for the Medicaid Recovery Audit Contractor (RAC) Program. RACs detect and correct past improper payments by reviewing claims after payments have been made.
HHS projects that the Medicaid RAC Program will save $2.1 billion over the next five years, $900 million of which will be returned to the states. The Medicaid RAC program will be largely self-funded, with HHS paying RAC auditors a contingency fee based on any improper payments auditors recover that took place in the previous three years.
The Medicaid RAC program is based on the Medicare RAC program, which has recovered almost $670 million to date in 2011. However, the Medicaid RAC program allows for increased state flexibility with states responsible for development of their own policies, including the appeals process, applicability of RACs to Medicaid managed care, and payment to RACs for identifying underpayments.
The final rule was released in conjunction with a cabinet meeting convened to discuss waste reduction at federal agencies. Vice President Biden announced a new initiative, the Campaign to Cut Waste, and HHS Secretary Sebelius discussed the waste-cutting Medicaid RAC program.
State Medicaid RAC programs must be implemented by January 1, 2012. The HHS press release on the Campaign to Cut Waste and Medicaid RAC Program is available here.
WellPoint and IBM have partnered to develop applications using IBM’s Watson technology to assist physicians in diagnosing and treating patients. Watson is the computer system that won $1 million on Jeopardy in February 2011. In its new role, Watson technology will help achieve an evidence-based approach to medicine. Watson-based technology could process information on a patient and a database of medical knowledge to produce diagnoses and treatments options for a specific patient. WellPoint plans to initiate a pilot program for the technology in 2012.
You may access WellPoint’s press release here or learn more about Watson here.
The U.S. Court of Appeals for the Fourth Circuit issued two rulings today regarding challenges to the insurance mandate provision of the Affordable Care Act (ACA). In the first ruling, the court ruled that a constitutional challenge to the mandate provision was filed prematurely. In the second ruling, the Fourth Circuit held that the state of Virginia had no legal standing to bring a challenge to the mandate.
The Fourth Circuit panel found that the insurance mandate and corresponding financial penalty is a form of federal tax, and the Anti-Injunction Act (AIA) bars lawsuits attempting to block enforcement of a tax measure before it officially goes into effect. The insurance mandate does not officially go into effect until 2014. Subsequently, the lawsuit is premature. Further, the court held that no federal court has jurisdiction to hear such a challenge at this point. The Fourth Circuit is the first federal appeals court to dismiss constitutional challenges to the ACA based on the Anti-Injunction Act. The Obama administration had argued for the AIA theory in previous cases, but the theory was abandoned with the appeal to the Fourth Circuit. Though the theory was not advanced on appeal, the Fourth Circuit came to the AIA theory on its own.
The Fourth Circuit is the third federal appellate court to rule on the constitutionality of the ACA’s mandate provision. The Sixth Circuit supported the mandate, and the Eleventh Circuit ruled against the individual mandate portion of the law. All three federal appellate court rulings were 2-1 decisions.
Federal investigators announced yesterday that 91 individuals have been charged in Medicare fraud schemes totaling approximately $295 million in false billing, the highest amount of false Medicare billings in a single takedown in Medicare Fraud Strike Force history. Attorney General Eric Holder, Health and Human Services (HHS) Secretary Kathleen Sebelius, and HHS Inspector General Daniel R. Levinson joined individuals from the FBI and the U.S. Department of Justice’s Criminal Division in announcing the coordinated strike.
The 91 individuals were charged in six cities across the country for health care fraud-related crimes, including violations of the anti-kickback statute, conspiracy to defraud the Medicare program, health care fraud, and money laundering. The fraud schemes involved submitting Medicare claims for treatments that were medically unnecessary or never performed as well as providing recruiters with kickbacks in return for supplying beneficiary information for use in false billing. The schemes focused on services in home health care, mental health services, occupational and physical therapy, DME, and HIV infusion. Medicare Fraud Strike Force teams are working with attorneys from the Fraud Section of the Justice Department’s Criminal Division and the U.S. Attorney’s Office to investigate and prosecute the cases.
