Author: Veronica Walsh

By Veronica Jean Walsh

The COVID-19 pandemic (pandemic) urged healthcare providers to rapidly adapt to the changing healthcare landscape, especially while Americans were encouraged to stay home to stop the spread of COVID-19. Accordingly, telehealth medicine, delivering and facilitating health services via telecommunications and digital communication technologies, became a safer and more accessible option to patients seeking healthcare.   

Before the pandemic, telehealth medicine was relatively uncommon. Providers were inexperienced with telehealth services and the technologies they required; telehealth was also  discouraged under the 2008 Ryan Haight Act, which prevented providers from prescribing controlled substances to patients without an in-person visit. The Ryan Haight Act sought to deter over-prescription of controlled substances to combat the ever-growing opioid epidemic; however, following the pandemic’s inception, the Drug Enforcement Agency (‘DEA’) saw the detrimental effects  the pandemic had on individuals requiring controlled substance prescriptions. Thus, the DEA waived the in-person visit requirement associated with the Ryan Haight Act for the public health emergency, allowing individuals requiring controlled substance prescriptions to obtain prescriptions without meeting their provider in-person.  

Nearly three years after the in-person waiver, the DEA seeks to create a permanent ruling to address telehealth medicine and controlled substance prescribing. In March 2023, the DEA proposed prohibiting providers from prescribing Schedule II and narcotic controlled substances. Providers are also limited from prescribing through telehealth and no in-person encounter Schedule II through V non-narcotic controlled substances, including buprenorphine, for more than 30 days. During the 30-day period, the patient must obtain an in-person medical examination unless referred by a provider who conducted an in-person medical evaluation.  

Following the proposed rule’s release, the DEA received many comments. Advocates of the DEA rule claim that the regulations seek to prevent the growth of the opioid epidemic. Proponents of the DEA proposed rule urge that while COVID-19 concerns have lessened, the flexibilities granted to controlled substance prescribing should be drawn back to prevent the opioid epidemic from spiraling.  

Critics of the proposed rule, however, are concerned with placing unnecessary barriers to care for vulnerable populations, since, prescribing buprenorphine, a controlled substance used to treat substance use disorder, would now require in-person evaluation. The barriers placed on buprenorphine, a medication used among vulnerable patients, are arguably counterintuitive to the DEA’s desired goal of fighting the opioid epidemic. This concern is especially prominent, as lack of access to care has exacerbated the effects of the opioid epidemic.  

Given the public outcry against the DEA’s proposed rule, the DEA decided to extend the Ryan Haight Act waivers through November 2024 while trying to find an acceptable solution. Earlier this month, the DEA held a listening session to receive additional input on whether to permit telemedicine prescribing of controlled substances without in-person evaluation. The in-person evaluation waiver for controlled substance prescribing remains in place; however, the DEA will be forced to issue a more permanent option as the extension proceeds to run. 

The False Claims Act (“FCA”), which is mainly used to litigate fraudulent Medicare claims, is being challenged in the Supreme Court. In U.S. ex. Rel. Polansky v. Executive Health Resources, Inc., Polansky argues that in granting the Department of Justice (“DOJ”) the ability to move to dismiss the realtor’s FCA complaint, the FCA deprives realtors of their status and rights. Oral arguments commenced in January 2023, and a decision is expected this Summer regarding the future of the FCA.

The FCA was enacted in 1863 during President Lincoln’s tenure. The FCA allows individuals (“whistleblowers”) to pursue litigation against those the whistleblower believes have fraudulently billed the federal government. In 2022, 90% of all FCA settlements and judgments were related to healthcare fraud. Healthcare fraud may be billing for medical services not rendered, misrepresentation of covered medical procedures as non-covered medical procedures, altering patient’s diagnoses to receive a higher payment, billing for services not performed, accepting kickbacks for referrals, or unbundling procedures and billing a single procedure at every stage of the interaction to receive a higher payment.

The consequence of Medicare fraud is higher insurance premiums for Medicare Advantage policyholders. To make up for Medicare’s payments to fraudulent claims, Medicare Advantage plans adjust premium prices for the coming year to make up for fraudulent claims . Thus, policyholders pay more monthly to mitigate the Medicare Advantage plans’ payments toward fraudulent claims.

The FCA provides a pathway for whistleblowers who have experienced Medicare fraud. The DOJ has intervened in 261 cases this past year, the highest amount since 1993. However, in 2022, for the first time in history, the recovered amount for cases where the DOJ has not intervened surpassed the amount recovered in DOJ-intervened cases. Additionally, in that same year, about half of all awards for claims under the FCA were from cases where the DOJ declined to intervene.

In Polansky, the DOJ declined to intervene after investigating the claim for two years but maintained the right to move to dismiss. About seven years after the case’s inception, the DOJ then moved to dismiss the lawsuit, citing that the cost of litigating the claim did not outweigh the benefit of an award. Polansky is claiming the DOJ’s dismissal of the claim, stopping litigation in its tracks, is a deprivation of the whistleblower’s rights. Currently, the DOJ has broad discretion in dismissing claims under the FCA. If the Supreme Court finds Polansky’s arguments convincing, then the ability of whistleblowers to sue medical care providers for fraudulent billing would increase, as the DOJ would be barred from dismissing claims freely. However, the DOJ states that its broad discretion, which allows the DOJ to dismiss claims where the cost of litigating will not benefit the government or whistleblower, should be maintained.

Today, committing Medicare fraud is less of a challenge than one would assume. A fake company was set up in Florida as a Medicare fraud front. All that was required was setting up a P.O. box for the fake company. The fake company billed Medicare over $500,000 for patients that did not exist. On average, taxpayers lose more than $100 billion annually to Medicare and Medicaid fraud.

Furthermore, Medicare fraud creates expensive repercussions for policyholders. Although the FCA creates an avenue for individuals to sue billers who have engaged in fraudulent practices, if the Supreme Court agrees with the government, the decision may result in a chilling effect among policyholders,  reducing FCA litigation and compounding the damaging impacts for individuals. 

The Final Rule for the No Surprises Act was released in August 2022, containing changes to the materials an independent dispute resolution (IDR) entity must consider in the IDR process. The No Surprises Act, a part of the 2021 Consolidated Appropriations Act, restricted healthcare providers from balance billing patients enrolled in job-based and individual health plans when receiving out-of-network emergency care, non-emergency care from out-of-network providers within in-network facilities, and air-ambulance services from out-of-network providers. The July 2021 Interim Rules for the No Surprises Act established an IDR process to place the burden of negotiating a fair price for any out-of-network services on providers and health plans.

Before the No Surprises Act, insured patients who received services from an out-of-network provider could receive a bill for the difference between the provider’s charge and their health plan’s allowed amount, a practice referred to as balance billing. Patients receiving emergency care from out-of-network facilities and non-emergency care from out-of-network doctors within in-network facilities could be subjected to balance billing. As a result of a provider being out-of-network and non-contracting with a patient’s health plan, the provider could bill the patient over the plan’s allowed amount. Typically, the allowed amount is a pre-negotiated rate a contracted provider will receive from the health plan and the patient based on the services rendered. Contracted providers cannot balance bill a patient to exceed the patient’s health plan’s allowed amount. However, if a patient received a balance bill from an out-of-network provider, they were responsible for the bill on their own. The No Surprises Act intends to prevent these unfair balance billing practices from plaguing patients.

Throughout this past year, the Act created to safeguard patients’ rights was met with resistance from the American Hospital Association (AHA) and the American Medical Association (AMA). The AHA and AMA criticized the Act’s IDR process, which established a negotiating forum for health plans and out-of-network providers unable to determine appropriate payment. The Act’s July 2021 Interim Rules required government-certified IDR entities to select the settlement offer closest to the health plan’s qualifying payment amount (QPA). The QPA is the health plan’s median contracted rate for the same or similar services in the geographic area relevant to the dispute.  Healthcare providers were quick to point out that the IDR process heavily favored health plans, as a health plan’s QPA swayed the IDR process’ possible outcome.

Medical providers pursued litigation in early 2022 regarding the legality of the IDR process. In February 2022, Texas Medical Associates sued the U.S. Department of Health & Human Services, claiming the IDR process skewed arbitration results in favor of health plans. The District Court found that the October 2021 Interim Rules created unbalanced arbitration processes and caused a procedural injury to providers. Thus, the court vacated the Act’s Interim Rules relating to the IDR process.

In response to the lawsuit, the Act’s Interim Rules were revised in August 2022, removing the regulations the District Court vacated. The Final Rules of August 2022 specify that an IDR entity should select the offer that best represents the value of the service after considering the QPA and all permissible information submitted by the parties to reflect the appropriate out-of-network rate. While the QPA will continue to be a factor in the IDR process, the settlement offer is not predetermined by the QPA alone.  To facilitate health plan transparency, the updated Final Rules also require health plans to disclose “downcode” information, which is the health plan’s reasoning for changing or removing the coding of a disputed claim.

Between April 2022 and August 2022, over 46,000 IDR claims were initiated, a substantially higher amount than the Department for Health & Human Services anticipated for the whole year. Further litigation can be expected regarding the IDR process. While the August 2022 Final Rules substantially adjusted the IDR bargaining field, the AMA and AHA have stated they intend to “make their voices heard in court” soon about ongoing issues with the Act’s IDR process still favoring health plans through the use of the QPA.