Commercial Reasonableness and ACOs: Installment 1 of 3
The application of the federal healthcare fraud and abuse laws to Accountable Care Organizations (ACOs) is fraught with uncertainty and confusion. The Centers for Medicare and Medicaid Services (CMS), along with the Office of Inspector General (OIG) of the U.S. Department of Health and Human Services (HHS), released waivers of certain fraud and abuse laws for ACO participants in the federal Medicare Shared Savings Program (MSSP) in November 2011, and extended these waivers in its October 2014 interim rule. However, as discussed in Part 1 of this Health Capital Topics series, entitled "Definitions of Commercial Reasonableness and ACOs," these waivers have never been adopted in finalized regulations, resulting in uncertainty relating to the ongoing permissibility of these waivers. In addition, both the OIG and, more recently, the U.S. Department of Justice (DOJ), are intensifying their regulatory scrutiny toward individual corporate executives for corporate regulatory violations. For the reasons listed above, maintaining compliance with the federal healthcare fraud and abuse laws is becoming an even more pressing issue for ACOs. This second installment of the three-part Health Capital Topics series will address the uncertainty surrounding the continued viability of the fraud and abuse waivers in the future as well as the need for a commercial reasonableness opinion related to ACOs to protect both the health system and the Board of Directors in today's heightened regulatory environment. (Read more...)

Impact of the "Per-Click" Ruling on Valuing Diagnostic Outpatient Enterprises
In recent years, the trend toward an increased volume of qui tam actions in healthcare fraud and abuse cases has manifested with an unlikely source of potential qui tam relators - professional appraisers. Specifically, a commercial real estate appraiser from Tennessee has filed two qui tam suits under the federal False Claims Act (FCA) against his clients, alleging violations of the Stark Law and Anti-Kickback Statute.. This Health Capital Topics article will first discuss the facts and circumstances of the two lawsuits, the allegations contained therein, and the potential impacts of the suits on FCA litigation in the future. In addition, this article will discuss the possible ethical implications of appraisers filing qui tam lawsuits against their clients and the potential manner in which qui tam lawsuits may impact the relationship between an appraiser and their client. (Read more...)

Venture Capital Funding in Healthcare Industry Remains Strong in Second Quarter 2015
Healthcare startups in the U.S. have received generous amounts of venture capital funding through the first half of 2015, totaling over $7.8 billion for the first half of 2015, which includes $3.89 billion in venture capital investment during the second quarter (2Q) of 2015. Due in part to the increase in analytical tools that help predict clinical trial success, as well as growing investor confidence in digital health startup companies, venture capital investments in the healthcare start-up industry have steadily increased since 2010. However, certain sectors of healthcare startups, such as digital health and late-stage biotechnology, are obtaining more funding than other sectors, including medical devices and early-stage biotechnology ventures. This Health Capital Topics article will discuss the trends associated with healthcare startup funding, what these trends seem to suggest, and best practices for investors in the current investing environment. (Read more...)

Potential Repeal of the Medical Device Tax: Another ACA Challenge
¬¬¬Resistance to increasing the taxes on medical devices is beginning to manifest in Congress. The medical device tax, which became effective on January 1, 2013, has been viewed as an additional method to promote the goals of the Patient Protection and Affordable Care Act (ACA). Imposing a 2.3% tax on the manufacturers and importers of certain medical devices is expected to generate nearly $30 billion in revenue from 2013 to 2023, which the federal government would subsequently apply to balance the costs associated with Medicaid expansion and operation of the health insurance exchanges. Many proponents of the tax argue that device manufacturers deserve to be taxed, because the expansion of health coverage was expected to also expand the market of medical device users, thus theoretically boosting sales and profits for these manufacturers. However, the medical device industry has emphatically opposed the financial concessions required by the tax since the infancy of the ACA. This Health Capital Topics article will discuss the circumstances surrounding the potential repeal of the medical device tax as well as possible implications of a successful repeal. (Read more...)