Three Key Things in Health Care
December 15, 2020
- The Department of Justice (“DOJ”) ramps up criminal prosecution of wage-fixing and “no-poach” agreements in the health care industry.
- Last week, in the DOJ’s first criminal antitrust action focused solely on wage-fixing, a federal grand jury returned an indictment charging a former owner of a physical therapist staffing company with fixing prices by lowering rates paid to therapists. The company’s former owner allegedly conspired with co-conspirators to fix wages by providing and receiving non-public rates, communicating rate decreases, discussing and agreeing to decrease rates, and implementing those rates. The indictment is a clear warning shot that employers and staffing agencies sharing wage information may face criminal penalties, including up to 10 years in prison and a maximum $1 million fine for individuals and $100 million for companies. The maximum fines may be increased to twice the gain or twice the loss.
- Previously, the DOJ pursued civil actions for antitrust violations involving labor markets. In 2016, the DOJ and the Federal Trade Commission (“FTC”) announced they were closely watching competition in labor markets, releasing guidance against fixing wages and entering into no-poach agreements, where competitors agree not to recruit each other’s employees. More recently, the DOJ reaffirmed its interest in pursuing wage-fixing and no-poach agreements in health-related industries, specifically filing a statement of interest in a private no-poach case alleging that the University of North Carolina and Duke University formed an agreement not to poach each other’s medical school faculty.
- The recent case may mean the DOJ is looking to resolve labor market issues with more criminal indictments. Recently, the DOJ charged the Florida Cancer Specialists & Research Institute LLC (“FCS”) with a criminal violation of the Sherman Act, entering into a deferred prosecution agreement with FCS to resolve those charges. As part of the market allocation conspiracy, the DOJ charged that FCS agreed with co-conspirators not to employ each other’s oncologists. FCS agreed to pay $100 million and waive any and all non-solicitation and non-compete clauses with employees.
- The FTC and DOJ have also made clear that during the COVID-19 pandemic they will actively investigate anticompetitive measures. The agencies “are on alert” for employers and staffing companies engaging “in collusion or other anticompetitive conduct in labor markets, such as agreements to lower wages or to reduce salaries or hours worked.”
- Key Takeaway: To mitigate risk, employers, staffing agencies and recruiters should review whether any wage information is being shared and continue or draft compliance measures to avoid the sharing of competitively sensitive information. Additionally, all non-solicitation and non-compete clauses should be reviewed by counsel. Finally, companies should update and implement an extensive antitrust compliance program covering those with employment and hiring responsibilities.
- More than 9,000 nursing facilities are set to receive $523 million in performance-based payments under the Nursing Home Quality Incentive Program as a reward for reducing COVID-19 infections and deaths from September to October 2020.
- In early September 2020, the U.S. Department of Health and Human Services (“HHS”) announced the beginning of the Nursing Home Quality Incentive Program, a provider relief fund performance-based incentive payment program that ties payments to nursing facility performance data (the “Program”). The Program will have five rounds, with each round covering one month.
- Under the Program, HHS measures nursing facilities against a baseline level of infection in the community where a given facility is located, using data from the Centers for Disease Control and Prevention (“CDC”). The CDC data include county-level information regarding total confirmed and/or suspected COVID-19 infections per capita and information on COVID-19 test positivity.
- Against the CDC data, facility performance is measured by looking at a facility’s ability to keep new COVID-19 infection rates and mortality rates low among residents.
- In the first round (measuring August to September 2020), HHS found that 10,631 facilities, or more than 77 percent of eligible facilities, satisfied the Program’s infection control criteria. In addition, 10,501 facilities, or 76 percent of eligible facilities, met the Program’s mortality criteria. HHS dispersed approximately $333 million to facilities that satisfied these criteria.
- In the second round (measuring September to October 2020), HHS found that 9,248 facilities, or 69 percent of eligible facilities, satisfied the Program’s infection control criteria. In addition, 9,128 facilities, or 68 percent of eligible facilities, met the Program’s mortality criteria. HHS plans to disperse approximately $523 million to facilities that satisfied these criteria starting December 9, 2020.
- Key Takeaway: Decreasing infection and mortality rates among nursing facility residents is undoubtedly good news. However, comparing a facility’s COVID-19 infection and mortality rates against a community baseline may have the effect of skewing payment distributions to facilities located in states that have done a poor job of containing community spread, thereby disadvantaging facilities in states that have more effectively contained COVID-19 but still struggle with rising infection and mortality rates among nursing facility residents. This will certainly be an area to watch as three rounds of the Program remain.
- In early September 2020, the U.S. Department of Health and Human Services (“HHS”) announced the beginning of the Nursing Home Quality Incentive Program, a provider relief fund performance-based incentive payment program that ties payments to nursing facility performance data (the “Program”). The Program will have five rounds, with each round covering one month.
- The Centers for Medicare & Medicaid Services (“CMS”) confirmed a delay to the implementation of its radiation oncology alternative payment model and revised certain related policies in response to stakeholder concerns about commencing the new model during the COVID-19 pandemic.
- In a prior issue, we provided an overview of CMS’s new Radiation Oncology (“RO”) Model and relayed the agency’s October 21, 2020, announcement that it would delay implementation of the RO Model’s 5-year performance period until July 1, 2021.
- On December 2, 2020, CMS released its Calendar Year 2021 Hospital Outpatient Prospective Payment/Ambulatory Surgery Center Payment Systems final rule and, within it, an interim final rule with comment period (the “RO Model Interim Final Rule”) addressing, in part, delayed implementation of and modifications to the new RO Model.
- As expected, the RO Model Interim Final Rule finalized CMS’s COVID-related decision to delay commencement of the RO Model performance period to July 1, 2021, and confirmed a shorter, 4.5 year performance period. Performance Year (“PY”) 1 will be 6 months long, with the remaining four PYs each lasting a full calendar year.
- CMS also explained that the shortened performance period required revisions to certain other components of the RO Model. Modifications include:
- Modifications to the method for determining eligibility for the low-volume RO Model opt out for PY 3.
- Delay of the RO Model quality measure requirements to PY 2.
- Revisions to the form, manner and timing policy for data reporting such that RO participants must, beginning in PY 2, submit quality measures data by March 31, 2023.
- Revisions to the pay-for-performance measures.
- Delay in CMS-approved contractor administration of Consumer Assessment of Healthcare Providers and Systems (“CAHPS”) surveys from April 2021 to October 2021.
- Delay in commencement of certain mandated RO participant clinical data collection to January 1, 2022, with the first submission due in July 2022.
- Elimination of the 2 percent quality withhold from each adjusted professional episode payment for PY 1.
- Revisions to the reconciliation payment and repayment amounts for PY 1.
- Confirmation that the modifications to the RO Model, and specifically the absence of quality measures data collection in PY 1, mean that it will not meet the criteria to be an Advanced Alternative Payment Model (“APM”) or a Merit-based Incentive Payment System (“MIPS”) APM under the Quality Payment Program in PY 1.
- Confirmation that the requirements for review and certification of the individual practitioner list will remain in place for PY 1, but will only be used to assign an automatic 50% score for the improvement activity performance category in MIPS for RO participants.
- Delay to the Certified EHR Technology (“CEHRT”) requirements for RO participants to PY 2.
- CMS will accept public comment for 60 days following the RO Model Interim Final Rule’s Federal Register publication date, currently scheduled for December 29, 2020.
- Key Takeaway: The COVID-related delay to implementation of the RO Model, along with modifications to the RO Model that primarily impact PY 1 of the 4.5 year performance period, are responsive to stakeholder concerns about implementation of the new payment model during the mist of the national public health emergency. CMS’s intent is to give RO participants an additional 6 months to learn and train staff on RO Model billing requirements and new procedures, and an additional 12 months to prepare for required quality measure and clinical data reporting requirements.