Legal Roundtable Texas Ambulatory Surgery Center Society March 2 nd - - PDF document

3/6/2017 1

Legal Roundtable

Texas Ambulatory Surgery Center Society March 2nd 2017

 Scott Nichols, Partner

Strasburger & Price, LLP (713) 951‐5600 scott.nichols@strasburger.com

 Justo Mendez, Partner McCullough Sudan,

PLLC (281) 757‐1305 mendez@dealfirm.com

 Stuart Miller, Shareholder

Baker Donelson, PC (713) 210‐ 7447 stuartmiller@bakerdonelson.com

Today’s topics:

 Out of Network (OON) Litigation update:

• Aetna vs. Humble Surgical Hospital
• Cigna vs. Humble Surgical Hospital
• Cigna vs. Elite Surgical Associates
• TX SB No. 507 – Mediation of OON Charges

 Changes to the HOPD regulations  Forest Park Med Center federal indictment

3/6/2017 2

Cigna vs. Humble Surgical Hospital (Hon. Kenneth Hoyt)

“Cigna’s complaints regarding Humble’s fraudulent billing practices and/or scheme were irrelevant to Cigna’s independent duty to process Humble’s claims pursuant to the plans and establish the proper MRC, UCR, or APC and pay the claims accordingly.”

Cigna vs. Humble

“Cigna’s claim that it overpaid Humble on certain assigned benefit claims between August 2, 2010 and March 25, 2014, is unsupported by the evidence.”

Cigna vs. Humble

“Humble prevails on its underpayment counterclaims under ERISA in the amount of $11,392,273 because the evidence supports the conclusion that Cigna abused its discretion in its unwarranted interpretation of the MRC and/or terms of the plans.”

3/6/2017 3

Cigna vs. Humble

 “Humble is entitled to recover penalties in the amount

• f $2,299,000 for Cigna’s bad faith and breach of

fiduciary duties, together with attorney’s fees, pursuant to ERISA and Declaratory Judgment Act.”

 Cigna appealed decision to the 5th Circuit

 Opinion focused on Debt and Truculence:

“Because the hospital’s dishonest bills and illegal payments tricked the insurer into overpaying claims, the insurer can elect to take one

• f three remedies.”

“Aetna wants to recoup the money Humble tricked it into paying for no benefit at all to the patients; the plans are merely the context of Humble’s fraud.”

Aetna vs. Humble Surgical Hospital (Hon. Lynn Hughes) Aetna vs. Humble  “Aetna’s hands are clean. Humble is filthy up to the

elbows from lies and corrupt bargains.”

 “Humble has conducted guerrilla warfare against

this Court, Aetna, the patients and common decency.”

3/6/2017 4

CIGNA vs. Elite Ambulatory Surgery (Hon. Keith Ellison)

 Cigna’s interpretation of the plan language

was legally incorrect.

 Collateral Estoppel – already decided in Cigna

• vs. Humble

CIGNA vs. Elite

Mixed bag:  Cigna’s ERISA claims survive  Cigna’s claims for fraud, negligent misrepresentation and civil conspiracy survive  Cigna’s claims for unjust enrichment, money had and received and promissory estoppel are dismissed  Cigna’s claims for tortious interference with contract are dismissed for plans governed by ERISA but not for ERISA‐exempt plans

TX SB No. 507: Mandatory Mediation of OON Charges

 Enrollee may request mediation for settlement of OON claim if:

• 1. amount of patient responsibility, after copayments, deductibles,

coinsurance, and amount unpaid by administrator / insurer, is greater than $500; and

• 2. the health benefit claim is for:

‐ emergency care; or ‐ a medical service or supply provided by a facility‐based

provider in a facility that is a preferred provider or that has a contract with the administrator

3/6/2017 5

TX SB No. 507: OON Disclosure

"Except in the case of an emergency and if requested by the enrollee, a facility‐based provider shall, before providing a health care or medical service or supply, provide a complete disclosure to an enrollee that: (1) explains that the facility‐based provider does not have a contract with the enrollee’s health benefitplan; (2) discloses projected amounts for which the enrollee may be responsible; and (3) discloses the circumstances under which the enrollee would be responsible for those amounts."

TX SB No. 507: OON Disclosure

 Likely result of failure to disclose: Enrollee

prevails in mediation

 ERISA preemption?  Will the proposed legislation survive judicial

scrutiny?

HOPD Regulations

 Bipartisan Budget Act of 2015: site‐neutral payment reductions

for Medicare services furnished in off‐campus “non‐excepted” provider‐based hospital outpatient departments (HOPDs)

 No new HOPDs after Nov 2, 2015  Non‐excepted HOPDs would not be eligible for reimbursement

under CMS’ outpatient prospective payment system (OPPS) beginning Jan 1, 2017, paid instead under applicable Part B payment system

3/6/2017 6

HOPD Regulations

 “Excepted” HOPDs after Nov 2, 2015:

• a dedicated emergency department;
• off‐campus HOPD operating & billing prior to Nov 2, 2015, that

has not impermissibly relocated or changed ownership; or

• HOPD is “on‐campus,” within 250 yards of hospital

 Pay attention to change of ownership regulations, still being

developed by CMS

HOPD’s and Commercial Insurance

 Look in hospital’s provider agreement  Provider agreement is the law between the parties  Some provider agreements state that voids in the terms will be

filled by CMS’ regulations

 Effect of serving notice of HOPD to Insurance Carrier:

• “Dear Insurance Co: ABC Hospital will add the following facility as a

hospital outpatient department”

• Comply with NOTICE requirements in provider agreement

HOPD: Provider Based Conditions

 Entity created or acquired by main provider to furnish health care

services different from those of the main provider under the

• wnership and administrative and financial control of the main

provider.

 Provider‐based entity (HOPD) comprises both the specific physical

facility (site of service), and the personnel and equipment needed to deliver the services at that facility

3/6/2017 7 HOPD: Provider Based Conditions

 Billing entity must have control of the brick & mortar,

personnel, equipment, delivery of care, & liabilities

 HOPD structure must show fiscal, administrative,

managerial, and clinical INTEGRATION

Forest Park Medical Center federal indictment:

FPMC federal indictment

 21 individuals indicted:

• physicians
• chiropractors
• health care entrepreneurs
• marketers
• lawyer
• health care executives

 Individuals employed, contracted, or who had informal business

dealings with FPMC

3/6/2017 8

FPMC federal indictment

 Charges:

• Conspiracy to pay and receive health care bribes and kickbacks
• Offering
• r

paying and soliciting

• r

receiving illegal remuneration, as well as aiding and abetting

• Travel Act and Aiding and Abetting (Commercial Bribery)
• Conspiracy to Commit Laundering of Monetary Instruments

FPMC federal indictment

Federal law violations:

 42 USC 1320a‐7b(b)(2) – offering/paying to induce recipients to

refer (FECA and Tricare)

 42 USC 1320a‐7b(b)(1) – soliciting/receiving $$$ in return for

FECA/Tricare referrals; soliciting in return for referring Medicare/Medicaid to non‐FPMC facility

 18 USC 1952 (Federal Travel Act) – Use of interstate commerce to

promote and distribution of proceeds of illegal activity (i.e. commercial bribery)

 18 USC 1956(h) – Conspiracy Money Laundering

FPMC indictment: Illegal Acts vs. Manner & Means

Illegal Acts:

 bribes & kickbacks to surgeons  bribes & kickback to PCPs  bribes & kickbacks to other

referral sources

 gifts to physicians  “selling” Medicare & Medicaid

patients Manner & Means of the Conspiracy:

 waiving patient responsibility payment  surgery and referral tracking  sham services contracts (MSOs)  sham marketing contracts  sham real estate investments

3/6/2017 9

Q & A

 Scott Nichols, Partner

Strasburger & Price, LLP (713) 951‐5600 scott.nichols@strasburger.com

 Justo Mendez, Partner McCullough Sudan,

PLLC (281) 757‐1305 mendez@dealfirm.com

 Stuart Miller, Shareholder

Baker Donelson, PC (713) 210‐ 7447 stuartmiller@bakerdonelson.com