Payer Roundup—Ex-lab CEO, employees to pay $114M for fraud scheme; CMS revises home health demonstration

Judge banging gavel on stack of money
The former CEO and two employees of a Virginia lab will have to pay $114 million for orchestrating a kickback scheme. (Getty/AndreyPopov )

CMS looks to revive home health demonstration  

The Centers for Medicare & Medicaid Services (CMS) wants to revive a demonstration project to reduce inappropriate payments from home health providers.  

The proposal comes more than a year after a similar demonstration project in Illinois was shut down after providers said it limited access to care.  

The revised program would resume the project in Illinois and add Ohio, North Carolina, Florida and Texas, with the option to expand to other states. Home health providers could participate in either preclaim or postpayment reviews until they reach a target preclaim review affirmation rate or a postpayment approval claim approval rate.

Providers that decline to participate in the program would be hit with a 25% payment reduction. CMS Administrator Seema Verma said the demonstration offers "new flexibility and choice for providers" while ensuring billing compliance within a historically high-risk program. (Proposal

Health Diagnostic lab CEO, employees hit with $114M judgment

The former CEO of Health Diagnostics Laboratory and two other employees will pay $114 million for overseeing a fraud scheme in which they paid physicians for patient referrals.  

In January, a jury ruled that LaTonya Mallory, HDL's former CEO, along with two sales and marketing employees violated the False Claims Act and the Anti-Kickback Statute by paying physicians to refer patients to the Richman-based lab and Calilfornia-based Singulex Inc. A U.S. District Court in South Carolina awarded the government a judgment of $114 million, including $63.8 million in penalties.  

“Improper financial relationships between physicians and laboratories can distort a physicians’ best judgment for their patients, in addition to undermining patient health and trust,” Acting Assistant Attorney General for the Justice Department’s Civil Division Chad Readler said in a statement. “Executives and other individuals who break the law will be held personally accountable for their actions." (Release

New Jersey adds individual mandate 

New Jersey became the second state to enact an individual mandate, months after Republicans repealed the federal mandate included in the Affordable Care Act. 

Gov. Phil Murphy signed legislation on Wednesday that requires residents to acquire health coverage or pay a penalty beginning in 2019, according to Politico. New Jersey joins Massachusetts, which has had an individual mandate since 2006. Vermont lawmakers recently passed a bill that also establishes a state mandate, but that law won't go into effect until 2020. (Politico)  

CA legislature furthers bills that would give healthcare to immigrants 

The California Senate and Assembly passed two bills that would help nearly 150,000 residents qualify for Medi-Cal regardless of immigration status. 

"For too long, struggling immigrant communities have suffered and delayed seeking care due to exclusion from comprehensive Medi-Cal. Today our Senate and Assembly have listened to our urgent calls for inclusion, and voted in support of the core principle that health care is a right, not a privilege,” said Cynthia Buiza, executive director of the California Immigrant Policy Center, in a statement. (Release