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Health Law & Life Sciences
Newsletter - August 2000
 
In this Issue...
Health Law Notes
 
 August 1, 2000
 

  • On May 3, 2000, three online pharmacies were charged with violating state licensing and consumer protection laws when they allegedly sold prescription drugs over the Internet to at least three agents from the Bureau of Consumer Protection without a state medical license or pharmacy permit. See Pennsylvania v. Kwikmed Inc., Pa. Commw. Ct., No. 229 MD 2000; Pennsylvania v. Cyber Health Services Inc., Pa. Commw. Ct., No. 230 MD 2000. Attorney General Mike Fisher claimed that in less than 10 minutes, his agents bought various quantities of Viagra, Propecia, and Xenical by logging on to sites that had their own pharmacies and prescribing doctor.
  • On April 26, 2000, the OIG issued a final rule that codified a civil money penalty to address health care fraud involving other federal health care programs involved with the funding or provision of health care items and services. The rule can be accessed on the Web at: http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=2000_register&docid=00-10142-filed. This rule expands on new CMPs for “excluded individuals retaining ownership or control interest in an entity, for upcoding and claims for medically unnecessary services, for offering inducements to beneficiaries, ... for false certification of eligibility for home health services. . . [and for] a number of technical corrections to the regulations governing OIG’s sanction authorities.”
  • The U.S. Supreme Court announced on June 12, 2000, its decision in Pegram v. Herdrich to remove mixed treatment eligibility decisions by HMO physicians from the purview of ERISA. In doing so, the Supreme Court unanimously reversed the Seventh Circuit, and thereby declared that physicians and HMOs cannot be sued under federal benefits law for using bonuses and other means of risk-sharing and financial incentives as a means to provide cost-effective care.
  • The U.S. Supreme Court found that a hospital billing consultant was guilty of fraud and bribery in Fischer v. United States. This Florida hospital billing consultant was convicted under 18 U.S.C. §666 when he gave a $10,000 bribe to the CFO of the company from which he received a $1.2 million loan. The loaning company received federal money; therefore the consultant was convicted under 18 U.S.C. §666, which prohibits fraud and bribery involving an organization that receives federal funds. Fischer v. United States, No. 99-116 (U.S. filed May 15, 2000).
  • A recent OIG advisory opinion found that waiver of Medicare Parts A and B co-payments and deductibles in clinical trials sponsored by the HCFA and the National Heart, Lung, and Blood Institute would violate the anti-kickback statute if the requisite intent to induce referrals present. However, the OIG declined to subject the requestors to sanctions under the anti-kickback statutes or civil money penalties statute based on the totality of the circumstances presented. Additionally, the OIG posted its June list of individuals and entities excluded from and reinstated to participation in federal health care programs. The advisory opinion can be found at: http://www.hhs.gov/oig/advpn/2000/ao00_5.htm. The list can be found at: http://www.hhs.gov/oig/cumsan/2000.index.htm
  • On June 20, 2000, the Montana Supreme Court permitted discovery of hospital information relating to a patient’s hospital care and treatment. Specifically, a man whose father died following surgery for colon cancer was entitled to discover incident reports related to his father’s treatment. The court distinguished “health care information” and “data,” and found that all “health care information” that is reviewed or generated by medical staff committees should be available to the subject patients. Huether v. District Court of the Sixteenth Judicial District of Montana, Mont., No. 99-032, 6/20/00.
  • The HCFA published its Medicare+Choice final rule in the June 29, 2000 Federal Register. The rule set a Medicare prospective payment system for home health care services, but it did not embrace the industry’s recommendation for a higher overall payment level. Additionally, the final rule removed the requirements for reporting credible information on violations of the law by Medicare+Choice Organizations. The final regulation is available at: http://www.hcfa.gov/regs/mplusc/default.htm.
  • Although it will retain its original name, the Agency for Health Care Administration will become an official Florida department on October 1, 2000. The agency was originally created by the Legislature in 1992 and placed administratively under the Department of Business and Professional Regulation. Under the new law, it will be headed by a Secretary instead of its executive director.