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

3/6/2017 Legal Roundtable Texas Ambulatory Surgery Center Society March 2 nd 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 1

3/6/2017 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.” 2

3/6/2017 Cigna vs. Humble  “Humble is entitled to recover penalties in the amount of $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 5 th Circuit Aetna vs. Humble Surgical Hospital (Hon. Lynn Hughes)  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 of 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  “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

3/6/2017 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 4

3/6/2017 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 5

3/6/2017 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 ownership 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 6

3/6/2017 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 7

3/6/2017 FPMC federal indictment  Charges:  Conspiracy to pay and receive health care bribes and kickbacks  Offering or paying and soliciting or 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: Manner & Means of the Conspiracy:  bribes & kickbacks to surgeons  waiving patient responsibility payment  bribes & kickback to PCPs  surgery and referral tracking  bribes & kickbacks to other  sham services contracts (MSOs) referral sources  sham marketing contracts  gifts to physicians  sham real estate investments  “selling” Medicare & Medicaid patients 8

3/6/2017 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 9