On December 12, 2014, the U.S. Department of Health & Human Services Office of Inspector General (OIG) published a report titled: “States’ Collection of Offset and Supplemental Medicaid Rebates” (OEI-03-12-00520). This report was based on the findings of a 2013 OIG survey of all fifty states and the District of Columbia relating to their collection and reporting of the federal ”offset rebates”. Very basically, the offset rebates are the amounts attributed to the Medicaid drug rebate increase required by the Affordable Care Act (ACA) that must be remitted by the states to the Centers for Medicare & Medicaid Services (CMS). While the report is relatively technical with respect to the state offset rebates (which the OIG finds were accurate), it also includes some interesting background data and recommendations regarding states’ supplemental rebate agreements (SRA) with pharmaceutical manufacturers.
OIG Report Encourages States to Explore Alternate Methods for Calculating Medicaid Supplemental Rebates
Yesterday, the U.S. Food and Drug Administration (FDA) announced a proposed rule to require electronic distribution of the prescribing information intended for health care professionals (often called the “PI”) for human prescription drugs, including biological products (the “Proposed Rule”). Currently, although manufacturers often voluntarily make their product PIs available electronically, they are required to distribute the PI in paper form on or within the package from which a prescription drug or biological product is dispensed. However, under the Proposed Rule, manufacturers would be prohibited from distributing the PIs in paper form, except under limited circumstances. The Proposed Rule is expected to be published in the Federal Register on December 18, 2014, and written or electronic comments from the public will be accepted until 90 days after the date of Federal Register publication (expected to be March 18, 2015).
On December 8, 2014, the U.S. Department of Health and Human Services’ Office for Civil Rights (“OCR”) announced that Anchorage Community Mental Health Services (“ACMHS”) has agreed to settle potential violations of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”). ACMHS will pay a $150,000 penalty and also enter into a two year Corrective Action Plan (“CAP”) to improve its HIPAA security compliance program.
Beth Israel Deaconess Medical Center (Beth Israel) reached a settlement with the Massachusetts Attorney General’s Office for a data breach in which a physically unsecured laptop was stolen containing personal and protected health information of nearly 4,000 patients and employees. In May 2012, a physician’s laptop was stolen from his desk at the hospital. The laptop contained health information of 3,796 patients and hospital employees, as well as personal information, such as Social Security numbers, of 194 other Massachusetts residents. Continue reading
The Department of Justice (DOJ) announced this week that it recovered a record $5.69 billion in civil False Claims Act (FCA) settlements during fiscal year 2014. This recovery included $2.3 billion for FCA cases involving federal health care programs, such as Medicare, Medicaid and TRICARE. Some of the significant health care fraud recoveries included $1.1 billion for Johnson & Johnson’s civil FCA settlement ($2.2 billion total) in November 2013 and $116 million for Omnicare’s civil FCA settlement ($124 million total) in June 2014, as well as cases involving hospitals, home health service providers, and medical device companies. This was the 5th consecutive year that the DOJ recovered more than $2 billion in health care fraud cases due, in part, to the HEAT program.
Additionally, the DOJ disclosed that of the $5.69 billion recovered, nearly $3 billion related to lawsuits filed under the FCA’s qui tam whistleblower provisions. Whistleblowers received $435 million in payouts in the last fiscal year. There also are over 700 qui tam cases pending for the second consecutive year.
The Centers for Medicare and Medicaid Services (CMS) held a webinar today to address the process for correcting and resubmitting records that were removed from the Open Payments system in August 2014 by CMS due to data integrity issues. CMS started the webinar by stating that of the 4.4 million records disclosed to the public on September 30, 2014, 1.7 million records ($2.2 billion) were “deidentified” due to these data integrity issues. CMS also disclosed that another 199,000 records ($1.1 billion) were not published because (i) the payments were under dispute at the time of publication; (ii) applicable manufacturers had requested delayed publication of the research payment; (iii) the payment was a research payment related to a non-covered recipient; or (iv) records that were submitted or attested to on July 7th, the last day of data submission and attestation, were excluded due to a technical issue by CMS when it pulled the data for publication.
The Connecticut Supreme Court held that the federal Health Insurance Portability and Accountability Act (HIPAA) does not bar individuals from bringing negligence and emotional distress claims under state common law for breach of confidentiality against medical providers who unlawfully exposed their protected health information (PHI). In an opinion released this week, which will be officially released November 11th, the court recognized that HIPAA does not provide a private right of action for the disclosure of PHI. However, the court stated that the availability of a private right of action under state law does not “preclude, conflict with, or complicate health care providers’ compliance with HIPAA.” The court went on to say that state law claims support HIPAA’s goals by providing a “disincentive to wrongfully disclose” PHI.
The court stated that to the extent that adherence to HIPAA has become common practice for health care providers, HIPAA may be used to inform the standard of care related to negligence claims. Connecticut follows a series of other states in holding that plaintiffs may bring claims for unlawful disclosures of medical records under state common laws.