StatLaw – September 2014

CMS Plans More On-Site HIPAA Audits than Originally Intended: CMS has announced an indefinite delay in the commencement of the next phase of HIPAA compliance audits. Due to the delay in implementation of this next stage, which was due to begin this fall, CMS is advising that they will be planning far more on-site compliance audits than they had originally intended to perform. Not surprisingly, the delay is a result of the failure of the software CMS is relying on to perform the desk-audits, or off-site audits, being timely installed and updated. CMS is refusing to provide a timeline for when the next phase of audits will actually begin; however, they are anticipating cutting the number of desk-audits by 50%. It is expected that the reduction in desk-audits will be directly proportional to the increase in on-site audits.

Full District of Columbia Circuit Court to Re-Hear Case Challenging ACA Subsidies: As we previously reported in July 2014, within a span of two hours the U.S. Court of Appeals for the District of Columbia Circuit and the U.S. Court of Appeals for the Fourth Circuit issued conflicting rulings concerning insurance subsidies that help millions of Americans pay for insurance under the Affordable Care Act (“ACA”). The issue is over a particular clause within the ACA that provides subsidies to those Americans who purchase their insurance through an exchange “established by the State.” The ACA does not expressly mention, however, the federal exchange. The challengers to the ACA argued, and the U.S. Court of Appeals for the District of Columbia Circuit agreed, that the language is clear and that tax credits are available only for purchases through the state exchanges. The District of Columbia decision was seen as a victory for opponents of the ACA. It is anticipated that the announcement and decision to re-hear the case with a full panel of judges is suggesting a reversal of the prior decision. The re-hearing will certainly delay any potential consideration of the case by the United States Supreme Court.

Electronic Prescription Monitoring Leads to Indictments for Federal Drug Offenses: The U.S. Attorney for the Southern District of New York announced the indictment of a physician’s assistant and two other individuals for federal drug offenses in connection with an oxycodone distribution ring that they operated out of a Staten Island based medical clinic. As alleged, the physician assistant wrote medically unnecessary prescriptions for large quantities of oxycodone in exchange for cash on a number of occasions. The indictment alleges that the physician assistant issued prescriptions in the names of fictitious individuals or individuals whom the physician assistant had never seen. The other two individuals recruited and paid individuals to pose as “patients” in order to obtain the medically unnecessary prescriptions from the physician assistant. The prescriptions were then allegedly filled at pharmacies, and the two individuals collected the resulting pills for distribution, according to the indictment. The physician assistant prescribed oxycodone to “patients” who had no medical need for oxycodone. According to the indictment, the physician assistant was typically paid $250 in cash for “doctor visits” that usually lasted a minute or two, which involved no actual examination, and consistently resulted in the issuance prescriptions for large doses of oxycodone. The physician assistant also received a separate fee of approximately $500 in cash for each medically unnecessary oxycodone prescription that he issued.