News at a Glance – Nov 2015

HCA Settles Allegations of Unnecessary Testing/Double Billing for $2 Million. HCA Holdings, Inc. (formerly called Hospital Corporation of America) has settled health care fraud allegations relating to diagnostic testing for $2 million—including payment of damages and penalties. The claims stem from a whistleblower or qui tam lawsuit brought by an HCA employee under the False Claims Act against HCA and affiliated entities. The United States Attorney’s Office for the District of South Carolina with the State of Florida asserted that HCA hospitals submitted claims for unnecessary tests and double billed for other tests. Specifically, the government alleged HCA claims were improperly submitted:

• For “direct count low density lipids (LDL) when the tests were not ordered and/or not medically necessary.”

• For standalone non-stress testing when claims were submitted for fetal biophysical profiles with nonstress tests.

The U.S. Attorneys Office reports that the whistleblower in the case will receive $400,000—20 percent of the settlement as provided under the False Claims Act.

FDA Challenges Four DTC Genetic Tests. The U.S. Food and Drug Administration recently issued four untitled letters regarding direct-to-consumer (DTC) genetic tests, asserting that the agency was unable to identify any FDA clearance for enumerated tests and requesting the recipients provide either a clearance number or the reasons they believe that FDA clearance is not required for those tests. DTC startup DNA4Life received a letter from the FDA questioning the company’s marketing of an unapproved genetic test that predicts response to 120 commonly prescribed medications based on analysis of 12 genes tied to drug metabolism. The FDA asserted the test is being marketed as an unapproved medical device. A similar letter was issued to DNA-Cardiocheck, Inc. noting that its direct-to-consumer test, DNA-CardioCheck, which tests for DNA genetic markers relating to cardiovascular disease, deep-vein thrombosis and stroke, is a device for which no FDA clearance has been sought. Interleukin Genetics Inc. was also queried about three separate genetic tests which detect predisposition for increased risk of heart attack and diabetes and other obesity related conditions. Finally, the FDA also issued a letter to Harmonyx regarding its direct-to-consumer genetic tests for antiplatelets, statins, ADHD and pain, which test whether medications will be safe and effective for specific patients.

Latest False Claims Act Settlement Involves 457 Hospitals in 43 States. The Department of Justice recently announced the latest major settlement of False Claims Act allegations, involving hundreds of providers. This time 70 settlements with 457 hospitals across 43 states has yielded over $250 million. The allegations related to implanted cardiac devices that the government claimed violated Medicare billing rules. The government alleged that between 2003 and 2010, implantable cardioverter defibrillators were implanted in Medicare beneficiaries during 40- and 90- day waiting periods following heart attacks and bypass/angioplasty, respectively. A National Coverage Determination generally bars implantation of ICDs during those waiting periods. The DOJ statement announcing the settlement cited an “extensive investigation” involving thousands of patient records and a panel of leading cardiologists. The settlement arises out of qui tam cases brought against most of the hospitals, filed in Florida federal court. The DOJ reports that still more hospitals and health systems remain under investigation.