RISE summarizes recent regulatory-related and news headlines.
HHS issues guidance that only recognizes two sexes
As a follow up to President Donald Trump’s recent executive order that the federal government would recognize only two sexes, the Department of Health and Human Services (HHS) this week issued guidance that the agency will promote policies that state women are biologically female and men are biologically male. The guidance includes definitions for sex, female, male, woman, girl, man, boy, mother, and father.
“This administration is bringing back common sense and restoring biological truth to the federal government,” said HHS Secretary Robert F. Kennedy, Jr. in the announcement. “The prior administration’s policy of trying to engineer gender ideology into every aspect of public life is over.”
Dorothy Fink, M.D., deputy assistant secretary for Women’s Health, said that in health care, sex distinctions can influence disease presentation, diagnosis, and treatment differently in females and males. “HHS recognizes that biological differences between females and males require sex-specific practices in medicine and research to ensure optimal health outcomes,” she said.
Dr. Oz will divest health care companies if confirmed to lead Medicare and Medicaid
Dr. Mehmet Oz, who President Trump has tapped to lead the Centers for Medicare & Medicaid Services (CMS), has outlined the steps he’ll take to divest his health care investments if he is confirmed to lead the agency. In a filing with the Office of Government Ethics, Dr. Oz listed his investments, which include health care companies that have contracts with the federal government, and said he would resign from key advisory positions at these companies and divest his investments within 90 days if the Senate confirms his nomination. His holdings include, but are not limited to, UnitedHealth Group, AbbVie, Eli Lily, HCA Healthcare, and PanTheryx. The Senate Finance Committee has yet to set a date for Oz’s confirmation hearing.
St. Vincents to pay $29M to resolve alleged FCA violations
The Department of Justice announced that SVCMC Inc., formerly known as Saint Vincents Catholic Medical Centers of New York, has agreed to pay $29 million to resolve allegations that it violated the False Claims Act by knowingly keeping inaccurate payments the organization received from the Department of Defense for health care services provided to retired military members and their families.
Saint Vincent is one of six health plans participating in the Uniformed Services Family Health Plan program, which is a federal health insurance program funded by the Defense Health Agency (DHA), a component of the Department of Defense. Under the program, DHA pays Saint Vincent capitated rates to provide health care services to military personnel, retirees, and their families. The complaint alleged that, in 2012, Saint Vincent learned that errors had been made in the calculation of the capitated rates resulting in substantial overpayments to Saint Vincent and the other five plans over the preceding four years. According to the government’s complaint, instead of notifying the government of the overpayments or repaying the funds, Saint Vincent, along with the other five plans, took steps to conceal the existence of the overpayments from DHA, continued to submit invoices at the inflated payment rates, and conspired to avoid paying the money back.
The civil settlement resolves claims brought under the qui tam or whistleblower provisions of the False Claims Act by Jane Rollinson and Daniel Gregorie in the District of Maine. From 2007 to 2015. Rollinson worked at Martin’s Point Health Care, one of the health plans participating in the program, including as its interim chief financial officer. Gregorie was a consultant to the CEO and board of Martin’s Point Health Care and later served on its Board of Trustees. As part of the settlement, Rollinson and Gregorie will receive $5.655 million.
DOJ announces charges in $161M Affordable Care Act enrollment fraud scheme
Cory Lloyd, 46, of Stuart, Fla., and Steven Strong, 42, of Mansfield, Texas, have been indicted in connection with their alleged participation in a scheme to submit fraudulent enrollments to fully subsidized Affordable Care Act insurance plans (ACA plans) in order to obtain millions of dollars in commission payments from insurance companies, according to the Department of Justice.
Court documents state that Lloyd and Strong conspired to enroll consumers in ACA plans that were fully subsidized by the federal government by submitting false and fraudulent applications for individuals whose income did not meet the minimum requirements to be eligible for the subsidies. Lloyd allegedly received commission and other payments from an insurance company in exchange for enrolling consumers in the ACA plans. In turn, Lloyd allegedly paid commissions to Strong in exchange for consumer referrals.
According to the indictment, Lloyd and Strong targeted vulnerable, low-income individuals experiencing homelessness, unemployment, and mental health and substance abuse disorders, and, through “street marketers” working on their behalf, sometimes offered bribes to induce those individuals to enroll in subsidized ACA plans. Marketers working for Strong’s company allegedly coached consumers on how to respond to application questions to maximize the subsidy amount and provided addresses and Social Security numbers that did not match those of the consumers who were applying. As a result of being enrolled in subsidized ACA plans for which they did not qualify, some of these consumers experienced disruptions in their medical care.
The indictment alleges that Lloyd and Strong used misleading sales scripts and other deceptive sales techniques to convince consumers to state that they would attempt to earn the minimum income necessary to qualify for a subsidized ACA plan, even when the consumer initially projected having no income. Lloyd and Strong also allegedly conspired to bypass the federal government’s attempts to verify income and other information. Lloyd and Strong allegedly engaged in the scheme to maximize the commission payments they received from insurers, resulting in their companies’ receiving millions of dollars in commissions.
As alleged in the indictment, Lloyd and Strong’s scheme caused the federal government to pay at least $161,900,000 in subsidies.
Cory Lloyd and Steven Strong are each charged with conspiracy to commit wire fraud, three counts of wire fraud, conspiracy to defraud the United States, and two counts of money laundering. If convicted, each faces a maximum penalty of 20 years in prison on each count of conspiracy to commit wire fraud and wire fraud, five years in prison for conspiracy to defraud the United States, and 10 years in prison for each count of money laundering.