Compliance News Roundup: The NIH and the Potential for Financial Conflicts of Interests

Compliance News Roundup: The NIH and the Potential for Financial Conflicts of Interests

Posted by Healthicity
Oct 16, 2019 10:10:48 AM

1. $5 Million False Claims Act Settlement - Beaver Medical Group, Redlands, California, and one of its physicians, Dr. Sherif Khalil, will pay a total of $5 Million to resolve allegations they reported invalid diagnoses to Medicare.

As you may already know, Medicare Advantage (also known as the Medicare Part C program), beneficiaries can obtain coverage through private insurance plans operated by private insurers known as Medicare Advantage Organizations (MAOs). Medicare pays MAOs a fixed, monthly amount to provide healthcare coverage to beneficiaries. Medicare then adjusts these monthly payments to reflect the health of each beneficiary. MAOs will then contract with providers to deliver care to beneficiaries. In this case, several MAOs contracted with Beaver to provide care to beneficiaries enrolled in their plans. The MAOs then compensated Beaver with a share of the payments that the MAOs received from Medicare. Thus, Beaver had a financial incentive to submit additional diagnosis codes to the MAOs in order to increase the payments that the MAOs received from Medicare. Get the full story on Beaver and Dr. Khalil here >>

2. Whistleblower Lawsuit and Investigation Nets $1.2 Million Settlement - Baldwin Bone & Joint, of Daphne, Alabama, agreed to pay $1.2 million to resolve a lawsuit alleging that it violated the False Claims Act.

The lawsuit was filed by John Seddon, a former employee of Baldwin Bone & Joint, under the qui tam provisions of the False Claims Act. The suit alleged that Baldwin Bone & Joint violated the False Claim Act by billing Medicare and TRICARE for physical therapy services performed by unauthorized providers. The allegations violated the Stark Law because the compensation Baldwin Bone & Joint paid to its shareholder physicians directly, or indirectly, related to the volume of each shareholder physician’s referrals. As a part of this settlement, under qui tam law, Mr. Seddon will receive $200,000 for his part in the suit. For more on this story, read the DOJ press release here >>

3. The NIH and the Potential for Financial Conflicts of Interests - In the healthcare research world, the National Institute of Health (NIH) awards more than 70 percent of its $37 billion budget to universities and other grantee institutions. But how are those grants protected from conflicts of interest?

The OIG recently audited the safeguards the NIH currently has in place to understand how it manages the potential financial conflicts of interest when the NIH awards its contracts. The OIG published the report of its findings last month. To get the full report, read CJ Wolf’s most recent Deeper than the Headlines here >>

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