Category: Health Care Law

CDC COVID-19 Guidance: Safe Workplace and Home Holiday Celebrations

It seems especially important to celebrate the people and events that we care about after all that has been endured this year. Holidays are one of the ways we celebrate, but holidays need to look different in 2020. COVID-19 can spread easily from one person to another during routine activities. Traditional holiday activities, such as workplace parties and family gatherings, are no exception. Bringing together employees, family members (including pets) and friends increases the risk of spreading COVID-19. To mitigate this risk, the U.S. Centers for Disease Control and Prevention (CDC) published updated guidance on November 12, 2020, for holiday celebrations and small gathering as well as guidance for Thanksgiving celebrations.

Celebrate Holidays Virtually or Limit Celebrations to Single Households

The CDC recommends celebrating virtually (i.e., through phone and video chat) or limiting celebrations to personal households. Personal households include individuals who currently live and share common spaces in an apartment or house. People who do not currently live in the same household, including college students who are returning from school for the holidays, are considered to be from different households. Those individuals can be included through interactive virtual experiences. Virtual celebrations also are ideal for the workplace, especially with the continuation of remote work arrangements.

Host and Attend In-Person Gatherings Responsibly

When hosting or attending holiday gatherings in the workplace or at home, take preventative measures to keep everyone safe. Guidance includes these safety steps:

  • Check the COVID-19 infection rates in the area of the gathering to determine if it is safe to host or attend the celebration in person.

  • Limit the number of individuals in attendance to enable social distancing.

  • Host the celebration outdoors.

  • Require attendees to wear face masks whether the celebration takes place indoors or outdoors.

  • Avoid physical contact, including hugs and handshakes, with individuals outside one’s personal household.

  • Avoid touching shared surfaces whenever possible.

  • Encourage attendees to wash their hands often with soap and water or to use hand sanitizer.

  • Plan ahead and ask attendees to avoid contact with people outside their personal households for 14 days before the in-person gathering.

  • Treat pets as you would any other family member and limit their interactions with people outside of the personal household. 

Follow Food Safety Practices

While the CDC acknowledges that there is no evidence to suggest that eating food is associated with directly spreading COVID-19, touching food, food packaging, plates or utensils poses the risk of infection if the object touched has the virus on it. The CDC recommends following food safety practices to reduce the risk of infection. The safety practices are advisable for workplace gatherings as well as in-person home gatherings. 

Avoid Travel or Practice Travel Safety

Travel increases the chance of spreading COVID-19, so the CDC recommends staying at home as the best safety practice. Where travel is desired or necessary, the CDC recommends the now-familiar safety measures: wear a facemask in public, including when using public transportation; maintain social distancing by staying at least six feet apart from others; wash hands often; and avoid touching the face, eyes, nose and mouth. In addition, many states have issued travel advisories with recommendations for individuals traveling from and returning to their home states from states or other destinations with increasing rates of COVID-19 to self-quarantine for 14 days. Check the travel advisories as a first step to planning out-of-state travel to help assess the risks and consequences of travel, including an inability to return to the workplace for 14 days. 

Self-Quarantine If Exposed to COVID-19

Self-quarantine is recommended for individuals exposed to COVID-19 during holiday celebrations. The quarantine should last for 14 days after contact with a person who has COVID-19. The 14-day period is recommended because symptoms of the virus (e.g., fever, cough or shortness of breath) may appear 2 to 14 days after exposure, and some infected individuals never have symptoms but are still contagious.

With Thanksgiving and the winter holidays upon us, it is natural to want to forget about COVID-19, put social distancing behind us, and celebrate with our colleagues, families and friends. Traditional workplace and home holiday activities may help spread the virus. While it is tempting to get together and celebrate as we have in the past, it is important to follow CDC guidance and choose activities with less risk to avoid giving the unwanted gift of COVID-19 to employees, families and friends. Skipping the mistletoe this year, a workplace best practice, also is advisable.

© 2020 Wilson Elser
For more articles on COVID-19, visit the National Law Review Coronavirus News section.

The Death of RBG…and the ACA?

The death of Supreme Court Justice Ruth Bader Ginsburg, and alongside it the high probability of a conservative successor to the open seat she left behind, is likely to shift the Court substantially to the right. Among the most notable cases that will likely be presented before the newly constituted Court is the pending challenge to the Affordable Care Act (the “ACA”).

We have previously examined the case history of Texas v. the United States (the “Case”), from the initial district court opinion, to its appeal to the Fifth Circuit, the Department of Justice’s brief in support of eliminating the ACA through this case, and the final decision from the Fifth Circuit, which can be seen here and here.

With Justice Ginsburg on the Court, stakeholders anticipated that the ACA would likely survive. While there was a conservative majority on the Court, consisting of Chief Justice Roberts, and Justices Alito, Gorsuch, Thomas and Kavanaugh, Chief Justice Roberts has consistently come to the ACA’s rescue. With Justice Ginsburg gone, the outlook seems a bit different.

By way of background, under the District Court ruling the judge determined that the ACA’s individual mandate, which was reduced to $0 as a result of the Tax Cuts and Jobs Act of 2017, was no longer considered a tax – meaning Congress no longer had the authority to enforce it. The District Court then held the individual mandate inseverable from the ACA, such that the whole law was unconstitutional. In a controversial turn of events, the Fifth Circuit, while upholding the unenforceability of the individual mandate, remanded the case back to the same District Court judge without ruling on the severability of the mandate. Now the time has come for the Supreme Court to take up the question of the ACA’s continuing viability.

Currently, the Supreme Court is set to hear arguments for the Case after elections, on November 10th. There are a few scenarios that may play out here. First, if no replacement is sworn in by that time to hear this case, there is a chance that one of the conservative justices, most likely Chief Justice Roberts, joins the liberals in their support of the ACA – resulting in a 4-4 deadlock that keeps the Fifth Circuit’s decision as is. There is a chance that the law will then continue on through the judicial process and eventually make its way back up to the Supreme Court. On the other hand, if the conservative justices band together on their decision, or if a conservative justice is appointed by then, it could very well be the end of the ACA as we know it. There’s a third option – Justice Kavanaugh has previously privately indicated that he may not support the argument that the mandate is inseverable, suggesting that holding one piece of the ACA invalid may not invalidate the ACA in its entirety.  A chance remains that more than one conservative will break ranks and prevent the entirety of the ACA from being held unconstitutional. The most likely outcome, however, appears that the Fifth Circuit decision will be upheld in a 5-4 decision, with Justice Roberts siding with the Court’s liberal wing against a 5 Justice conservative majority.

Top Contenders

Of course, the outcome also depends on the potential new conservative pick’s view on the ACA and particularly whether the nominee falls more in the Justice Roberts camp or aligns more fully with Court’s more conservative majority.

A top contender is Judge Amy Coney Barett, who has been particularly vocal in her criticisms of elements of the ACA. For one, she has previously signed a petition against the ACA’s mandate for employers to provide birth control access through their insurance plans, arguing it infringed on religious freedom. For another, she has previously written an article against the 2012 Supreme Court ruling that upheld the ability for Congress to enforce the requirement that Americans obtain health insurance or then face the tax penalty. Her rationale was that this was not a tax, and thus the statute should have been invalidated as it fell outside of Congress’ power to enforce. In this article, she was particularly critical of Chief Justice Roberts and what she noted as a “deference to democratic majorities.” Given Judge Barett’s history in speaking out against the ACA, and in particular against Chief Justice Roberts’ decisions in this arena, as well her previous willingness to see the ACA invalidated as a whole, it seems particularly likely that if chosen she will vote to uphold the Fifth Circuit’s decision.

Barbara Lagoa, another candidate at the top of the list, has been far less vocal about her stance on the ACA. However, she has previously referred to Roe v. Wade as “settled law” and “binding precedent of the Supreme Court.” Given this precedent, there’s a chance she may be more likely to break ranks with the conservative majority. Moreover, she was confirmed by the Senate in a bipartisan vote with a far less narrow margin than Judge Barett, making her an attractive choice to put forward.

Other Options?

On the other hand, if Vice President Biden wins the election in November and Democrats are able to take control of both houses of Congress, he would be able to simply replace the ACA with a new law that meets the legal challenges the ACA is currently facing (although to achieve this objective in the Senate, the budget reconciliation process would likely need to be utilized or, in the alternative, the filibuster eliminated, which would be a highly controversial move). If this were to happen, the new law could be more extensive than the ACA in its current form (e.g., by including a public option).

The idea of eliminating the filibuster in the Senate and expanding the size of the Supreme Court has been a subject of recent discussion in Democratic circles, and if such were to occur it would be reasonable to assume that President Biden and a Democratic Senate would likely fill the newly created seats with Justices sympathetic to the ACA and other Democratic causes.  However, this outcome seems unlikely given the current political environment and various on-the-record statements of stakeholders who would have to drive this process.

The Future 

As we have speculated in prior analyses of the Case, the impact of the ACA’s repeal or invalidation would be sure to be great. Not only would there be a massive loss in coverage by tens of millions of Americans, but absent a legislative fix, the ACA’s protections for those with pre-existing conditions would could find insurance difficult or impossible to procure,and children between the ages of 18 – 26 would no longer be able to remain on their parents insurance. We will monitor and provide updates as they come.

Copyright © 2020, Sheppard Mullin Richter & Hampton LLP.
For more articles on the ACA, visit the National Law Review Health Law & Managed Care section.

Overconsumption of Black Licorice Linked to Fatality in Massachusetts

A 54-year-old Massachusetts man died of cardiac arrest after his consumption of a substantial quantity black licorice. The man reportedly consumed a bag and a half of black licorice each day for several weeks.

The Food and Drug Administration (FDA) has warned consumers about the potential risks of overconsumption of black licorice.  Specifically, FDA has warned people 40 or older that eating 2 ounces of black licorice a day for at least two weeks may cause an irregular heart rhythm or arrhythmia.

Licorice root and black licorice contain glycyrrhizin, which can cause potassium levels in the body to fall, potentially triggering abnormal heart rhythms, as well as high blood pressure, edema, lethargy, and congestive heart failure.

FDA advises consumers not to eat large amounts of black licorice at one time, to stop eating black licorice if experiencing irregular heart rhythm or muscle weakness, and to consult a healthcare professional regarding possible interactions that licorice may have with drugs or supplements.

© 2020 Keller and Heckman LLP
For more articles on food and drug law, visit the National Law Review Biotech, Food, Drug section.

CDC Issues Temporary Halt in Residential Evictions Nationwide to Prevent the Spread of COVID-19

On September 1, 2020, the Centers for Disease Control and Prevention (“CDC”) issued an Order under the Public Health Service Act Section 361 to temporarily halt residential evictions nationwide through December 31, 2020, to prevent the further spread of COVID-19.

Under the Order, a landlord, residential property owner, or other person with a legal right to pursue eviction action, cannot evict any tenant, lessee, or resident of a residential property from the property. The Order applies to all State, local, territorial, or tribal area in which there is no moratorium on residential evictions that provides the same or greater level of protection than this Order.

The Order does not relieve any tenant of its obligation to pay rent, make a housing payment, or comply with any other obligation under a tenancy, lease, or similar contract. The Order also does not preclude a landlord’s ability to charge or collect fees, penalties, or interest as a result of the failure to pay rent or other housing payment in a timely manner. Tenants are still required to pay rent and follow all the other terms of their lease, and may still be evicted for reasons other than not making a housing payment.

To invoke the CDC’s Order, tenants must sign and provide an executed copy of a Declaration form (or a similar declaration under penalty of perjury) attesting to their current circumstances and inability to pay, to the party attempting to enforce an eviction. A sample Declaration form is attached to the CDC Order and requires that the tenant seeking relief from eviction attest that the tenant: (1) expects to earn no more than $99,000 in annual income for Calendar Year 2020 (or no more than $198,000 if filing a joint tax return), (2) is unable to pay the full rent due to substantial loss of household income or extraordinary out-of-pocket medical expenses, and (3) will likely have no other option if evicted other than homelessness or living with more people in close proximity.

The Order, which does not include any provisions for rental and unemployment assistance, is being met with mixed responses. While many housing advocates welcome the action by the CDC, rental property owners are expressing concerns that the Order would negatively affect the stability of the rental housing sector. “An eviction moratorium will ultimately harm the very people it aims to help by making it impossible for housing providers, particularly small owners, to meet their financial obligations and continue to provide shelter to their residents,” said Doug Bibby, president of the National Multifamily Housing Council.

A full copy of the CDC Order can be found here.

© 2020 SHERIN AND LODGEN LLP

This article was authored by Trang Pham of  Sherin and Lodgen. 

For more articles on real estate, visit the National Law Review Real Estate, Transportation, Utilities and Construction Law News section.

Asset Protection for Doctors and Other Healthcare Providers: What Do You Need to Know?

As a doctor or other healthcare professional, you spend your career helping other people and earning an income upon which you rely on a daily basis—and upon which you hope to be able to rely in your retirement. However, working in healthcare is inherently risky, and a study published by Johns Hopkins Medicine which concluded that medical malpractice is the third-leading cause of death in the United States has led to a flood of lawsuits in recent years. As a result, taking appropriate measures to protect your assets is more important now than ever, and physicians and other providers at all stages of their careers would be well-advised to put an asset protection strategy in place.

What is an asset protection strategy? Simply put, it is a means of making sure that you do not lose what you have earned. Medical malpractice lawsuits, federal healthcare fraud investigations, disputes with practice co-owners, and liability risks in your personal life can all put your assets in jeopardy. While insurance provides a measure of protection – and is something that no practicing healthcare professional should go without – it is not sufficient on its own. Doctors and other healthcare providers need to take additional steps to protect their wealth, as their insurance coverage will either be inadequate or inapplicable in many scenarios.

“In today’s world, physicians and other healthcare providers face liability risks on a daily basis. In order to protect their assets, providers must implement risk-mitigation strategies in their medical practices, and they must also take measures to shield their wealth in the event that they get sued.”

What Types of Events Can Put Healthcare Providers’ Assets at Risk?

Why do doctors and other healthcare providers need to be concerned about asset protection? As referenced above, medical professionals face numerous risks in their personal and professional lives. While some of these risks apply to everyone, it is doctors’ and other medical professionals’ additional practice-related risks – and personal wealth – that makes implementing an asset protection strategy particularly important. Some examples of the risks that can be mitigated with an effective asset protection strategy include:

  • Medical Malpractice Lawsuits – All types of practitioners and healthcare facilities face the risk of being targeted in medical malpractice litigation. From allegations of diagnostic errors to allegations of inadequate staffing, plaintiffs’ attorneys pursue a multitude of types of claims against healthcare providers, and they often seek damages well in excess of providers’ malpractice insurance policy limits.
  • Contract Disputes and Commercial Lawsuits – In addition to patient-related litigation, medical practices and healthcare facilities can face liability in other types of civil lawsuits as well. By extension, their owners’ assets can also be at risk, as there are laws that allow litigants to “pierce the corporate veil” and pursue personal liability in various circumstances.
  • Federal Healthcare Fraud Investigations – Multiple federal agencies target healthcare providers in fraud-related investigations. From improperly billing Medicare or Medicaid to accepting illegal “kickbacks” from suppliers, there are numerous forms of healthcare fraud under federal law. Healthcare fraud investigations can either be civil or criminal in nature, and they can lead to enormous fines, recoupments, treble damages, and other penalties.
  • Drug Enforcement Administration (DEA) Audits and Inspections – In addition to healthcare fraud investigations, DEA audits and inspections present risks for healthcare providers as well. If your pharmacy or medical practice is registered with the DEA, any allegations of mishandling, diverting, or otherwise unlawfully distributing controlled substances can lead to substantial liability.
  • Liability for Personal Injury and Wrongful Death in Auto and Premises-Related Accidents – In addition to liability risks related to medical practice, doctors, other practitioners, and healthcare business owners can face liability risks in their personal lives as well. If you are involved in a serious auto accident, for example, you could be at risk for liability above and beyond your auto insurance coverage. Likewise, if someone is seriously injured in a fall or other accident while visiting your home (or office), you could be at risk for liability in a personal injury lawsuit in this scenario as well.

To be clear, an asset protection strategy mitigates the risk of losing your wealth as a result of these types of concerns—it does not mitigate these concerns themselves. The means for addressing medical practice-related concerns is through the adoption and implementation of an effective healthcare compliance program.

Are Asset Protection Strategies Legal?

One of the most-common misconceptions about asset protection is that it is somehow illegal. However, there are various laws and legal structures that are designed specifically to provide ways for individuals and businesses to protect their assets, and it is absolutely legal to use these to your full advantage. Just as you would not expect your patients to ignore treatment options that are available to them, you are not expected to ignore legal tools and strategies that are available to you.

What are Some Examples of Effective Asset Protection Tools for Doctors and Other Healthcare Providers?

Given the very real liability risks that doctors and other healthcare providers face, for those who do not currently have an asset protection strategy in place, implementing a strategy needs to be a priority. With regard to certain issues, asset protection measures need to be in place before a liability-triggering event occurs. Some examples of the types of tools that physicians, healthcare business owners, and other individuals can use to protect their assets include:

1. Maximizing Use of Qualified Retirement Plans

Qualified retirement plans that are subject to the Employee Retirement Income Security Act (ERISA) can offer significant protection. Of course, obvious the limitation here is that these assets placed in a qualified plan will only be available to you in retirement. However, by maximizing your use of a qualified retirement plan to the extent that you are preserving your assets for the future, you can secure protection for plan assets against many types of judgments and other creditor claims.

2. Utilizing Nonqualified Retirement Plans as Necessary

If you operate your medical practice as a sole proprietor, then you are not eligible to establish a qualified retirement plan under ERISA. However, placing assets into a nonqualified retirement plan can also provide these assets with an important layer of protection. This protection exists under state law, so you will need to work with your asset protection attorney to determine whether and to what extent this is a desirable option.

3. Forming a Trust

Trusts are the centerpieces of many high-net-worth individuals’ asset protection strategies. There are many types of irrevocable trusts that can be used to shield assets from judgment and debt creditors. When you place assets into an irrevocable trust, they are no longer “yours.” Instead they become assets of the trust. However, you will still retain control over the trust in accordance with the terms of the trust’s governing documents. Some examples of trusts that are commonly used for asset protection purposes include:

  • Domestic asset protection trusts (DAPT)
  • Foreign asset protection trusts (FAPT)
  • Personal residents trusts
  • Irrevocable spendthrift trusts

4. Offshore Investing

Investing assets offshore can offer several layers of asset protection. Not only do many countries have laws that are particularly favorable for keeping assets safe from domestic liabilities in the United States; but, in many cases, civil plaintiffs will be deterred from pursuing lawsuits once they learn that any attempts to collect would need to be undertaken overseas. Combined with other asset protection strategies (such as the formation of a trust or limited liability company (LLC)), transferring assets to a safe haven offshore can will provide the most-desirable combination of protection and flexibility.

5. Forming a Limited Liability Company (LLC) or Other Entity

If you are operating your medical practice as a sole proprietor, it will almost certainly make sense to form an LLC or another business entity to provide a layer of protection between you and any claims or allegations that may arise. However, even if you have a business entity in place already—and even if you are an employee of a hospital or other large facility—forming an LLC or other entity can still be a highly-effective asset protection strategy.

6. Utilizing Prenuptial Agreements, Postnuptial Agreements, and Other Tools

Depending on your marital or relationship status, using a prenuptial or postnuptial agreement to designate assets as “marital” or “community” property can help protect these assets from your personal creditors (although debts and judgments incurred against you and your spouse jointly could still be enforced against these assets). Additionally, there are various other asset protection tools that will be available based on specific personal, family, and business circumstances.

7. Gifting or Transferring Assets

If you have assets that you plan to give to your spouse, children, or other loved ones in the future, making a gift now can protect these assets from any claims against you. Likewise, in some cases it may make sense to sell, transfer, or mortgage assets in order to open up additional opportunities for protection.

Ultimately, the tools you use to protect your assets will need to reflect your unique situation, and an attorney who is familiar with your personal and professional circumstances can help you develop a strategy that achieves the maximum protection available.

Oberheiden P.C. © 2020  

ARTICLE BY Dr. Nick Oberheiden of Oberheiden P.C.

For more articles on healthcare providers, see the National Law Review Health Law & Managed Care section.

Federal Court Strikes Down Portions of Department of Labor’s Final Rule on COVID-19 Leave, Expands Coverage

On August 3, 2020, the United States District Court for the Southern District of New York struck down portions of the DOL’s Final Rule regarding who qualifies for COVID-19 emergency paid sick leave under the Emergency Paid Sick Leave Act (“EPSLA”) and the Emergency Family and Medical Leave Expansion Act (“EFMLEA”), collectively referred to as the Families First Coronavirus Response Act (“FFCRA”).

Of particular importance to retail employers, the Court invalidated two provisions of the DOL’s Final Rule pertaining to: (1) conditioning leave on the availability of work and (2) the need to obtain employer consent prior to taking leave on an intermittent basis.

Neither the EPSLA nor the EFMLEA contains an express “work availability” requirement. The EPSLA grants paid leave to employees who are “unable to work (or telework) due to a need for leave because” of any of six COVID-19-related criteria. FFCRA § 5102(a). The EFMLEA similarly applies to employees “unable to work (or telework) due to a need for leave to care for . . . [a child] due to a public health emergency.” FFCRA § 101(a)(2)(A).  In its Final Rule, the DOL concluded that these provisions do not reach employees whose employers “do not have work” for them, reasoning a work-availability requirement is justified “because the employee would be unable to work even if he or she” did not have a qualifying condition set forth in the statute.

In rejecting the DOL’s interpretation, the Court stated that “the agency’s barebones explanation for the work-availability requirement is patently deficient,” given that the DOL’s interpretation “considerably narrow[s] the statute’s potential scope.”  Under the Court’s interpretation, employees are entitled to protected leave under either the EPSLA or EFMLEA if they satisfy the express statutory conditions, regardless of whether they are scheduled to work during the requested leave period.

The Court also rejected part of the DOL’s interpretation that employees are not permitted to take the protected leave on an intermittent basis unless they obtain their employer’s consent.  As an initial matter, the Court upheld the DOL’s interpretation that employees cannot take intermittent leave in certain situations in which there is a higher risk that the employee will spread COVID-19 to other employees (i.e., when the employees: are subject to government quarantine or isolation order related to COVID-19; have been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19; are experiencing symptoms of COVID-19 and are taking leave to obtain a medical diagnosis; are taking care of an individual who either is subject to a quarantine or isolation order related to COVID-19 or has been advised by a healthcare provider to self-quarantine due to concerns related to COVID-19).

In those circumstances, the Court agreed that a restriction on intermittent leave “advances Congress’s public-health objectives by preventing employees who may be infected or contagious from returning intermittently to a worksite where they could transmit the virus.”  Therefore, in those situations, employees are only permitted to take the protected leave in a block of time (i.e., a certain number of days/weeks), not on an intermittent basis.  As a result, the Court upheld the DOL’s restriction on intermittent leave “insofar as it bans intermittent leave based on qualifying conditions that implicate an employee’s risk of viral transmission.”

The Court, however, rejected the requirement that employees obtain their employer’s consent before taking intermittent leave in other circumstances (i.e., when an employee takes leave solely to care for the employee’s son or daughter whose school or place of care is closed).  In doing so, the Court ruled that the DOL failed to provide a coherent justification for requiring the employer’s consent, particularly in situations in which the risk of viral transmission is low.  The Court’s opinion brings the EPSLA and EFMLEA in line with the existing FMLA, which does not require employer consent.

It is unclear if the DOL will challenge the Court’s decision or revise its Final Rule to bring it in compliance with the Court’s opinion.  Regardless, the Court’s decision takes effect immediately and retail employers should be mindful of this ruling and revisit their COVID-19 leave policies.

Copyright © 2020, Hunton Andrews Kurth LLP. All Rights Reserved.

New York Compounding Pharmacy Settles Fraudulent Billing and Kickback Allegations in Whistleblower Lawsuit

Upstate New York pharmaceutical companies FPR Specialty Pharmacy (now defunct) and Mead Square Pharmacy, along with their owners, agreed to pay $426,000 to settle fraudulent claims and kickback allegations brought forth by a whistleblower. According to the U.S. government, the pharmacies submitted fraudulent claims for reimbursement to federal healthcare programs for compounded prescription drugs in violation of the False Claims Act and the Anti-Kickback Statute. The pharmacies allegedly sold prescription drugs to federal healthcare program beneficiaries in states without a license, improperly induced patients to purchase expensive custom compounded medications by waiving all or part of the substantial co-payments required under the federal healthcare programs, and paid sales representatives per-prescription commissions to illegally induce writing more prescriptions.

“The rules governing federal healthcare programs require pharmacies dispensing prescriptions to their members to be licensed with the appropriate state authorities to request reimbursement for the cost of the medications.  The pharmacies violated the False Claims Act by dispensing and requesting reimbursement for hundreds of prescriptions of “Focused Pain Relief” cream dispensed to federal healthcare program beneficiaries located in states where the pharmacies were not licensed to operate by the appropriate state authorities, and by failing to disclose that they were not licensed.  The Pharmacies also violated the False Claims Act by billing federal healthcare programs for prescriptions dispensed in states where they had obtained their state licenses under false pretenses, including by failing to inform state authorities that they had previously dispensed drugs in the states without a license and by failing to disclose” one of the pharmacy owners’ “criminal history on pharmacy license applications.”

Additionally, the pharmacies violated the Anti-Kickback Statute by engaging in two separate illegal practices, according to the government.  First, the pharmacies regularly charged federal healthcare program beneficiaries co-payments substantially below program requirements (which often exceeded $100) to induce them to purchase its pain cream, “Focused Pain Relief,” for which the federal healthcare programs paid hundreds and sometimes thousands of dollars each.  Second, the Pharmacies often paid illegal kickbacks to their sales representatives by giving sales commissions for the number of prescriptions written by the physicians the sales reps marketed.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Pharmacies, like other participants in the healthcare industry, must follow the rules.  The defendants here brazenly flouted basic rules on licensing and kickbacks to line their pockets with dollars from federal healthcare programs.  That is a prescription for intervention by my office and our partners.”

Similar to this case, there have been many instances in which whistleblowers exposed company fraud against the Medicare system.

© 2020 by Tycko & Zavareei LLP

For more on pharmaceutical fraud, see the National Law Review Biotech, Food & Drug law section.

New York Compounding Pharmacy Settles Fraudulent Billing and Kickback Allegations in Whistleblower Lawsuit

Upstate New York pharmaceutical companies FPR Specialty Pharmacy (now defunct) and Mead Square Pharmacy, along with their owners, agreed to pay $426,000 to settle fraudulent claims and kickback allegations brought forth by a whistleblower. According to the U.S. government, the pharmacies submitted fraudulent claims for reimbursement to federal healthcare programs for compounded prescription drugs in violation of the False Claims Act and the Anti-Kickback Statute. The pharmacies allegedly sold prescription drugs to federal healthcare program beneficiaries in states without a license, improperly induced patients to purchase expensive custom compounded medications by waiving all or part of the substantial co-payments required under the federal healthcare programs, and paid sales representatives per-prescription commissions to illegally induce writing more prescriptions.

“The rules governing federal healthcare programs require pharmacies dispensing prescriptions to their members to be licensed with the appropriate state authorities to request reimbursement for the cost of the medications.  The pharmacies violated the False Claims Act by dispensing and requesting reimbursement for hundreds of prescriptions of “Focused Pain Relief” cream dispensed to federal healthcare program beneficiaries located in states where the pharmacies were not licensed to operate by the appropriate state authorities, and by failing to disclose that they were not licensed.  The Pharmacies also violated the False Claims Act by billing federal healthcare programs for prescriptions dispensed in states where they had obtained their state licenses under false pretenses, including by failing to inform state authorities that they had previously dispensed drugs in the states without a license and by failing to disclose” one of the pharmacy owners’ “criminal history on pharmacy license applications.”

Additionally, the pharmacies violated the Anti-Kickback Statute by engaging in two separate illegal practices, according to the government.  First, the pharmacies regularly charged federal healthcare program beneficiaries co-payments substantially below program requirements (which often exceeded $100) to induce them to purchase its pain cream, “Focused Pain Relief,” for which the federal healthcare programs paid hundreds and sometimes thousands of dollars each.  Second, the Pharmacies often paid illegal kickbacks to their sales representatives by giving sales commissions for the number of prescriptions written by the physicians the sales reps marketed.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Pharmacies, like other participants in the healthcare industry, must follow the rules.  The defendants here brazenly flouted basic rules on licensing and kickbacks to line their pockets with dollars from federal healthcare programs.  That is a prescription for intervention by my office and our partners.”

Similar to this case, there have been many instances in which whistleblowers exposed company fraud against the Medicare system.

© 2020 by Tycko & Zavareei LLP

HHS Laboratory Data Reporting Guidance for COVID-19 Testing

On June 4, 2020, the U.S. Department of Health and Human Services (HHS) issued new Laboratory Data Reporting Guidance for COVID-19 Testing (Guidance) and related Frequently Asked Questions. Under the Guidance, in addition to providing the results of COVID-19 testing, laboratories will be required to report demographic information, including the patient’s age, race, ethnicity, sex, residence zip code, and county. The Guidance further recommends reporting the patient’s name, street address, date of birth, ordering provider address, and ordering provider phone number to state and/or local public health departments, although this data would not be collected by the Centers for Disease Control and Prevention (CDC) or HHS. Data for each test completed must be submitted within 24 hours of the results being known or determined, providing public health officials with “nearly real-time data.

Reporting is required for both diagnostic and serologic testing, and the Guidance specifically includes laboratory testing that relies on home-based sample collection. Laboratories, defined to include “laboratories, non-laboratory testing locations, and other facilities or locations offering point-of-care testing or in-home testing related to SARS-CoV-2,” must comply with the new requirements by Aug. 1, 2020. The Guidance specifies that reporting should be made through existing channels to state or local public health departments that will, in turn, submit de-identified data to the CDC.

According to HHS, “[t]he new reporting requirements will provide information needed to better monitor disease incidence and trends by initiating epidemiologic case investigations, assisting with contact tracing, assessing availability and use of testing resources, and anticipating potential supply chain issues.” HHS also indicated that the requirements may help officials understand and address disproportionate impacts of COVID-19 on certain demographic groups and ensure equitable access to testing.

Although this reporting requirement is being imposed by HHS, it is unclear what impact the new data may have at a national level. Under HHS’s COVID-19 Strategic Testing Plan issued on May 24, 2020, states are largely responsible for developing and implementing their own COVID-19 testing strategies.

©2020 Greenberg Traurig, LLP. All rights reserved.

For more on COVID-19 testing, see the National Law Review Coronavirus News section.

The CDC Warns Against Using Antibody Testing Results to Make Workplace Decisions

This week, the Centers for Disease Control and Prevention (the “CDC”) released interim guidelines addressing COVID-19 antibody testing. The CDC expressed concerns about the current accuracy of antibody testing and advised businesses against using the results of antibody testing (also known as serologic testing) to make any decisions about returning workers to the workplace.

Although the guidance notes that antibodies may offer some protection from reinfection and may decrease the likelihood that an individual infects others, the CDC has determined that there are myriad issues with the effectiveness of current antibody testing, including widespread false positive results. The CDC guidance states that “additional data are needed before modifying public health recommendations based on [antibody] test results, including decisions on discontinuing physical distancing and using personal protective equipment.” The CDC also recommends that even if individuals have tested positive for COVID-19 antibodies, they should continue to take precautionary measures (such as wearing facemasks) to prevent the spread of infection.

As the U.S. Equal Employment Opportunity Commission (“EEOC”) has not weighed in on this issue to date, it is still unclear whether employers’ use of antibody testing to inform workplace return decisions might implicate the Americans with Disabilities Act (“ADA”) or other discrimination laws.  But given the direct affirmative guidance from the CDC, employers should continue to refrain from using antibody or serologic testing results to determine which workers may return to the workplace.

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ARTICLE BY Corbin Carter at Mintz.
For more CDC Guidance, see the National Law Review Coronavirus News section.