On the Horizon: COVID-19 Healthcare Enforcement and Litigation Risks

Date: April 27, 2020
Hello, everyone. My name is Monica Wallace. I’m a partner in the Chicago office of McDermott Will & Emery in the health group. And I am delighted to be speaking with you on behalf of all the panelists today on a very timely topic, healthcare enforcement litigation risks on the horizon due to the COVID 19 pandemic. Before we begin, I want to remind everyone to please take the survey when prompted at the end of the webinar. Please remember to enter the state for which you are requesting credit in the survey, and if you require New York CLE credit, please listen for a code at the end of the webinar. You will need this code in order to get credit for listening to our presentation today. I also want to note, given the technology considerations, that you need to be logged in on the a computer, laptop or PC, rather than a phone, and that this platform does enable the use of Q&A through Zoom, and we have resumed time of the end to answer as many questions as we can. So please feel free to submit questions throughout the presentation. We will be reviewing those, if we can answer it then live, if they relate to the topic that were currently addressing, we’re happy to do that. But we have folks that are tracking those, and we will try to get through as many as we can. Thank you to those of you who submitted questions beforehand. We will try to address those as part of the presentation, and you can also follow up with any of the individual panelists after the presentations well. As I mentioned before, my name is Monica Wallace, I’m a partner in the Chicago office. Along with me I have Laura McLane, a partner in the litigation group in Boston, Lisa Mazur, a partner in the health practice in the Chicago office, and Megan Thibert-Ind, a partner in the litigation group, also, here in the Chicago office. Next slide, please.

The really important thing that we want to get across to you, and know so many of the providers and suppliers out there are still trying to wrap their heads around all of the changes that CMS made over the weekend, on both respect to the Public Health and Social Services Emergency Fund changes that were implemented Friday night into Saturday, as well as changes to the Medicare Advanced and Accelerated Payment Programs, which occurred yesterday. But there really is a key focus of this webinar versus others that are out there that are specifically talking about these programs in general. While we will provide you with an overview, we are focused, really, sort of the foreseeability litigation potential risk that might happen as part of these COVID 19-related changes. Things that you want to be mindful of, both as part of your decision to attest or not to attest, in terms of receiving some of these payments, as well as some of the issues that are now coming to the light as part of telemedicine expansion and the like. And so, we hope we’re able to provide a nice summary overview, especially of changes that occurred in the last 48 hours, as well as give you that specific take on some of the risks you should be mindful of given this, this scoping of error, that we are all having to play in right now.

So, broad overview with respect to the Public Health and Social Services Emergency Fund. The CARES Act has allocated $100 billion to this fund, and Congress, just this past week, has recently approved additional CARES Act funding, including $75 billion for the fund. On April 10th, HHS started distributing the first $30 billion to providers. Those dollars went straight to providers’ bank accounts, so long as they received Medicare fee for service reimbursement in 2019. And so, for a lot of providers and suppliers out there that received these monies in their bank accounts without having to do anything affirmative, the concept of having to figure out whether or not to attest to these funds is something that they’re actively working through. Perhaps have already attested where have now learned that as a result of the additional funds that may be distributed, starting as recently as this Friday, and that providers may be trying to receive, there’s a requirement to actually attest to this first round of funds. And so that is a different, a different factor that people are having to take into account, given the two different sets of distributions. The funds that were initially allocated using a formula that was roughly equivalent to 6.2% of that eligible recipient’s 2019 Medicare fee for service revenue. And all of these relief payments are made to be billing organization according to its tax ID, and so that’s different than payments that might have been made pursuant to a providers NPI and provider number. Some of those tax IDs have multiple accounts tied to them, and in some instances, certain operations may not be eligible, and so providers are actively trying to figure out whether or not they can, in fact, keep, if they want to keep, all of the funds that might be entitled to them. Or if they are, perhaps, only eligible for certain of the amounts because some of their entities are no longer in operations or able to otherwise attest to the Terms and Conditions that we’ll talk about the next slide or two. These are also considered payments, not loans. Thank you, and so we’ll talk a little bit about the distinction between this fund payment versus the accelerated payment loans, for lack of a, lack of a better word, shortly on the presentation. According to HHS guidance, which has literally been changing every single day in the last couple of weeks of this program, within 30 days of receiving payment providers must, they use the word must, sign an attestation confirming receipt of the funds and agreeing to the Terms and Conditions of payment. And so, what Laura will be talking about in a little bit is the concept of whether or not we actively attest to these funds, next slide, please, or whether or not there’s other options that might be a play for her providers and suppliers to consider.

The current version of the Terms and Conditions that’s available on the CMS webpage, HHS webpage, I should say, is basically been revised across the last couple weeks to accommodate the fact that there was this initial $30 billion tranche of payments, and now there’s an additional $20 billion at play that are out of this total general distribution fund. According to the current version of the Terms and Conditions, retention of payments for at least 30 days without contacting HHS is deemed to the acceptance of those Terms and Conditions. There is some confusion, I should say, for how you actually go about contacting HHS if you choose not to accept all, or a portion, of these funds. We’ve reached out, and I know others have as well, to try to get more clarity around that process in terms of what is formal notification and how are you able to resubmit portions of accounts that you either, for reasons may not want the entire amount, or you, again, are not in a position to accept the entire amount because certain of your operations need not meet those Terms and Conditions. So, we, we know that there’s a lot of clients really parsing through all of their various operations as part of those tax IDs to figure out what they received and what they may be eligible to keep, or if they choose not to accept or not want the funds, how-to actually make that happen. The Terms and Conditions also currently state that commitment to compliance is material, that is a direct term, to the Secretary’s decision to disperse funds, and non-compliance with any Term or Condition is grounds for secretary to recoup some or all of the payment. Next slide, please.

This initial $30 billion general distribution, as of yesterday, now I should say Saturday night, now has a separate terms and conditions. So, if you are attesting or reviewing the terms and conditions tied to that $30 billion, there’s a separate terms and conditions that you would need to review. Here is some of the criteria that we’ve identified for you that’s in those terms and conditions. One is that you billed Medicare in 2019. That’s how that initial fund was initially allocated. The second, sort of, big Term and Condition that we want to flag for everyone is that the provider or supplier provides, or provided, after January 31st, 2020 diagnoses, testing, or care for individuals with possible or actual cases of COVID 19. That’s the specific language in the Term in Condition. The HHS website guidance currently provides that if you ceased operating as a result of COVID, you are still eligible to receive the funds so long as you have provided this type of care to actual or possible cases of COVID 19, and that HHS broadly views every patient as a possible case. And so, there is some additional flexibility afforded in the guidance that is helpful to providers assessing their compliance with these terms and conditions. There’s some general, non-exclusion language that we typically expect to see, not having Medicare building privileges being revoked or having current termination. Next slide, please.

And then there’s some additional language specific to use of payments. And, I can say that after speaking with many clients and many financial officers, some of these terms and conditions, in terms of operation, have led to some confusion. And we’re still awaiting specific guidance from HHS, HRSA, who is the agency that we understand is now in charge of distribution of these funds, or other government’s representative trying to issue additional guidance to try to help providers who are in a position of trying to ascertain how they actually implement these conditions in practice. One of these specific criterias is that the payment will only be used to prevent, prepare for, and respond to COVID 19 and can be used only for healthcare related expenses or lost revenues that are attributable to COVID 19. And as you can imagine, there’s lot of specific questions with respect to how, how can certain expenses be taken into account? What is the level of documentation needed to actually demonstrate and prove the use of these purposes, compliance with the intent of these terms and conditions? A second one is that payment will not be used to reimburse expenses or losses that have been reimbursed from other sources or that other sources are obligated to reimburse. And the question there, obviously, is, other insurance? Other reimbursement from other types of providers or payers? There’s a lot of questions there that the provider community has with respect to how these will operate in practice. One of these sections of the terms and conditions that actually did get some additional guidance that was helpful in last couple of days, for all care for a presumptive or actual case of COVID 19, there’s a balance billing requirement that has to be satisfied. The original balance billing statement was much broader, and so the additional presumptive actually helped to, sort of, narrow that, which is, which was useful. And then there is a litany of standard appropriations restrictions that are, you know, generally included in some of these types of programs that pertain to financial management and salary limitations. There’s one that’s gotten a lot of attention, and it’s that none of the fund shall be used to pay the salary of an individual at a rate in excess of the current Executive Level II, which is $197,300. And there is some question about what types of guidance will the government be issuing around that provision? Will they be using guidance that HRSA previously utilized in other grant making context in sort of, a proportionality of the time that the grant might apply to that cap? Or is there other types of criteria or accounting the HHS and HRSA would-be inclined to use, given the construct of this fund, versus the traditional grant making authorities that that might have been utilized to, sort of, get this program comes upon place. Next slide, please.

Some of the last remaining terms and conditions we wanted to flag for you specifically were the reporting obligations. There’s multiple levels of reporting, including quarterly reporting for those that receive more than $150,000, so that’s practically nearly all of our provider and supplier clients out there. In the terms and conditions, they do contain fairly detailed guidance with respect to what they expect the reports to look like and we’ve included that here. Again, we have not yet seen any specific criteria or sample reports currently identified by the government in terms of what providers would actually be required to demonstrate. But there is, obviously, throughout the terms and conditions language requiring that, you know, appropriate reporting, submitting copies upon request, ensuring that they cooperate, and all audits ensure compliance. And so, we’re encouraging writers and suppliers to really document, document what they are doing so that they’re in a position to support both by way of the normal reporting obligations, as well as any specific auditing or other investigation that might come down the road, which Laura’s going to talk about. Next slide.

So, we mentioned at the beginning of the presentation, starting on Friday, announced earlier in the week, but actually started payments on Friday, there’s an additional $20 billion that is based in the providers’ 2018 net patient revenue. What CMS has come and said is that the initial $30 billion, in an effort to get payments out to providers as soon as possible, was designed to quickly identify, you know, payments based on fee for service revenue. What they want now is to, sort of, augment and have these payments from this general distribution fund relate back to providers’ 2018 net patient revenue. Some providers would actually receive reimbursement if they had a submitted cost, CMS cost reports, and they may have been entitled to additional reimbursement, so they may have already received those additional funds. Others are in a position to request for additional payment. In both cases, those providers will need to submit appropriate revenue information, and we know there’s a lot of clients doing that right now, as we speak, to try to seek access to those additional funds. We’ve identified here some additional, additional relief efforts that are targeted to specific hospitals. Those hospitals had to submit data earlier this week in order to be eligible for those specific funds. And the government is also focused on rural health clinics, rural providers, and HIS facilities. Next slide.

This $20 billion general distribution that came out, according to HHS, CMS, or HHS issued additional guidance that state that providers to receive funds through this allocation must confirm receipt of funds and agree to the terms and conditions and confirm the CMS cost report. As we mentioned earlier, it appears that you must attest to that first tranche in order to request the second tranche. So, as Laura will talk about, there are some discussions about attestation, and it might impact the provider suppliers who are in a position to and want to receive additional funds versus those that just received funds from that first $30 billion round. Direct quotes all recipients of your required to submit documents sufficient to ensure that these funds were used for healthcare-related expenses or lost revenue attributable to COVID 19, and that there will be significant anti-fraud and auditing work done by HHS, including the work of the Office of Inspector General. So, obviously, those comments about working with firms, working with consultants, you know, there’s a lot of larger accounting and consulting firms that are working on this from a financial and data management perspective. All of those resources that providers are using to try to comply with these provisions and documentation thereof will be critical in the months, and arguably years, to come. Next slide.

With respect to the terms and conditions we hit upon, pretty much all of the ones that are that are contained in the $30 billion one are also included in the $20 billion terms and conditions. There are two additional ones. One is we indicated there is some additional revenue data that’s required in order to receive payments, and validation of payments is part of the $20 billion distributions. The second, sort of, larger term and condition that is a new is that the recipient will consent. The HHS will be publicly disclosing the payment that recipients may receive or possibly will be doing this. And that such disclosure may allow some third parties to estimate some of the more specific data and financial positions of providers or suppliers who requested those payments. Okay, next slide.

In contrast to the relief funds, which, again, are payments as opposed to loans, the CMS Accelerated and Advanced Payment Program that initially was announced on March 28th, is more akin to a loan, certainly an overpayment determination as opposed to the ones that we were talking about here. What’s important to note about this payment program is that it also underwent some significant changes this past weekend. We’ll talk about that in a second. With respect to the program, the CARES Act directed CMS to expand Medicare Part A acceleration program payments, perhaps schools and critical access hospitals, while CMS itself expanded payment pursuant to the advanced payment for Medicare Part B providers and suppliers. And so, what was, what was initially done by providers and suppliers here was they were able to request advance payment or accelerated payment in accordance with the amounts below. So, the amounts and the percentages varied by type of provider or supplier, either six-month or three-month periods and either 100% or 125% of their Medicare payment amounts for specific periods. Next slide.

After 120 days, CMS begins to offset claims for the amounts of these various programs. The time period ranges between one year for certain type of hospitals. There’s additional limitations or provisions that abide by certain provider or supplier types of smaller subsets. But the vast majority off other Part A and Part B providers is 210 days from the date of the accelerated or advance payment is made to repay the balance. And so, if providers and suppliers can’t work off by seeing additional patients, the additional amounts that were, in fact, received in advance, then interest will apply at the standard overpayment rate, which is currently 9.625%, to any of those amounts that are not recouped. It will be issued in accordance with the demand letter and it will be treated as a CMS overpayment. There is a congressional push, another push to see if that interest rate can be lowered or waived, if the time frames could, in fact, be lowered or extended in these instances, to give providers and suppliers additional time frames to work those dollar amounts off. We’ll see if those gain traction, and certainly, if those amounts are actually converted to, effectively, payments, sort of, a forgivable loan and that will consider or possibly require some additional considerations that Laura is going to get into in terms of enforcement and what providers and suppliers attested to in order to get those payments. Next slide.

So, here’s the eligibility criteria in order to get the accelerated or advance payment programs. So, as opposed to the terms and conditions for the fund, there are specific criteria that CMS identify for the advanced payment programs. They’re listed here, and what is, what is important to note is that there was no specific guidance or definition given for some of these criteria, most notably, not be under active medical review or program integrity investigation. At the time, I know there was a certain clients who, in the absence of getting guidance from CMS, had exhibited disclosures, qualifications, noting, you know, this is what we assume you mean here, this is what we assume you do not mean here. We’ve now understood that over the course of the last number of weeks, the individual Medicare administrative contractors who are actually issuing these funds have been reviewing the forms that they initially had used, revising those forms, doing their own specific criteria reviews and, in some cases, posting FAQs on their websites. Again, this is not statutory, you notice I’m calling them rule making, I’m saying this is how we have been interpreting these various criteria. And in some instances, providers on targeted … are being rejected for these funds. And so again, it does create this constant moving target, constant changing in terms of what these requirements are, can create some difficulties for providers and suppliers who are seeking to receive these funds, hold onto these funds, possibly apply for more funds. Next slide.

And this is the slide that talks through, talks through the changes that occurred as recently as last night. CMS announced that they’ve approved over 21,000 applications that total almost $60 billion in payments to Part A providers. On the part B side, that’s your physician’s, suppliers practices the approved over 24,000 applications advancing $40 billion. They’ve announced that they’re now reevaluating the amounts that will be paid under these programs. And so, for providers and suppliers that did not get these funds out the door, they may be foreclosed from using this program on a going forward basis. Currently, CMS has said that they’re suspending the Advanced Payment Program to Part B suppliers effective immediately. They will not be accepting any new applications for advanced payment. We are hopeful, because we know many providers and suppliers have pending applications out there that they will continue to process those tending application. And they indicated that they were going to be reevaluating all pending and new applications of accelerated payments for hospitals and other Part B providers. They make a reference to your historical payments that are made available through the relief funds, so, we’re not sure how CMS and HRSA and HHS are going to be reviewing these and looking across the board in terms of what providers and suppliers received. But it is important to note that there were significant changes made to this program last night and that these funds may not be a source of revenue for folks to consider. And with that, I’m going to turn it over to Laura to talk through the enforcement and potential liabilities associated with these various two funding options.

I need to unmute myself. Thank you, Monica, very much. That was a great overview of the evolving landscape. As Monica said at the get-go of this webinar, I am a partner in our Boston office, and I am a litigator. I do a lot of health care fraud or, exclusively, health care fraud, enforcement defense, primarily false claims act investigations and litigation. So, I’m looking at a lot of these evolving issues through that lens, and I just wanted to talk briefly about some of the sort of things that are top of mind for those in my, kind of, enforcement defense space. And so, you know, this is a huge amount of funding and the overall size of it is going to attract scrutiny, it already is attracting scrutiny. And, you know, there are a number of different avenues through which that scrutiny is going to occur. The CARES act itself establishes a number of oversight bodies that actually have subpoena power and the ability to make referrals to the Department of Justice. So, these are actually, sort of new entities that will be exercising oversight over those who have received the relief funds. But, in addition, there’s also just the Department of Justice, and it’s kind of original mandate to monitor, deter and prosecute fraud. And DOJ has been very overt about publicly stating that it will be watching, investigating and prosecuting Corona variety, Coronavirus-related fraud schemes. And here on this slide, I just have a snippet from the deputy attorney general’s report in late March or memo in late March which sort of highlights this issue and the importance to DOJ of monitoring how these funds are, are retained by those who received them and not returned, if they’re not returned and should have been. Further to that end, the government that DOJ has mandated that the US attorney’s offices throughout the country have civil and criminal COVID 19 coordinators in each of their offices so that each jurisdiction will be watching this issue. And so, people should be, you know, aware, our providers should be aware that this is sort of top of mind for DOJ and it associated AUSAs and US attorneys throughout the country. In addition to DOJ enforcement, HHS OIG, as Monica mentioned, will be exercising its audit authority and its oversight authority. And it does that, as probably everyone on this call knows, both, you know, on its own, but also in conjunction with investigations by US. Attorney’s offices in the Department of Justice. So, we can expect to see that type of activity. And then finally, there is the ever present Qui Tam Relators’ Bar, who most on this call probably are aware are, are the attorneys who represent, so called, relators or whistleblowers who bring concerns to the government under seal, usually in the form of a sealed complaint. And the government then has to investigate the allegations and sometimes that leads to a False Claims Act lawsuit, either by the government or the relator or both. And so, I think we can expect to see the relators are paying very much attention to, sort of, how these funds have been distributed, to whom, and whether they’re being properly retained, and whether the certifications, in particular, in connection with the terms and conditions were, you know, quote unquote accurate, although accuracy in this contacts is kind of an interesting concept, given the evolution of these in the short timeline. And I will say this as well, you know, in the enforcement context, right now, we’re in the midst of a very intense, very acute healthcare crisis in this country, that everyone on this call is probably dealing with on the front lines, or everyone that’s a healthcare provider on this call is. And so, you know, but in a matter of months or maybe years, but not too distant future, I think hindsight will become 2020. And these types of enforcement issues will become more attractive to whistleblowers and to prosecutors when the, sort of, you know, severe nature of the health crisis that everyone’s focused on now has passed. So, just something to be aware of. And I’m not, not trying to be doom and gloom because I think there are things we can do now to be thinking ahead to this. And I’ll talk about those in the coming slides. If you could go to the next slide, please.

So, as Monica pointed out, the relief funding rules have been evolving, I think, you know, four or five times within the past couple of weeks. And in many respects, they are ambiguous or at least subject to different interpretations, I would say. You know, there’s the terms and conditions that have changed multiple times, but then there’s also website guidance that’s out there. As Monica mentioned there are some FAQs, things of that nature. And that ambiguity has, you know, from a defense lawyer standpoint, implications for enforcement cases. And, you know, sometimes ambiguity of this type makes enforcement cases more difficult, you know. Particularly, we’re on, you’re on a tight, the relief funds 30-day timeline and the rules are changing as you go. And so, you know, I think as I look at it defensively, there would be a lot of, kind of, good things to say, you know, in the course of an investigation or litigation. But the, the problem is you don’t want to get there. Nobody wants to have to be that far down the road. on. And the fact of the matter is that, irrespective of the way that things have changed and the rules of kind of evolved with the course of the past few weeks, there will be scrutiny. There will be microscopic scrutiny by both relators and government regulators, so it’s important to be aware of that and be thinking ahead to it, even know it’s, it’s probably the last thing anyone wants to think about right now, frankly, and I get at that. Some of the issues are those standard recoupments. Repayments may be sought if funds are retained in error. But there’s also, as I alluded to before, potential False Claims Act liability, which, you know, is something that I’m watching closely. And, as I think about how this type of theory would evolve in the case of the relief funding, at least the first tranche of relief funding, which has already been paid, is if it’s not returned and the government or relator takes the view that it should have been, it will be a Reverse False Claims act, theory. I’m sure most people in this call are pretty well versed in the False Claims Act. But if not, I mean, in very simple terms, it prohibits keeping money to which you were not otherwise entitled or which you were not entitled should hold onto and that, you know, there are a number of other hurdles that a plaintiff, whether a government plaintiff or a private plaintiff, to have to establish to make a reverse False Claims Act case. But in general terms, what I just describe it as. And so that’s how I would see it kind of play out. Why does it matter? You know, False Claims Act pieces are, you know, pretty draconian in terms of the recoveries that can be, be, you know, providers and defendants can be stocked with in the case of a loss. So, you’ve got not only the damages, but you’ve also got those automatically troubled, which can ratchet up the stakes very quickly. And then there are automatic penalties which also are tapped onto that. And so, you end up with potentially a really, really big, sometimes catastrophic liability, which is why it’s important. There’s also a criminal oversight element that the government has been clear that it’s going to pursue in connection with some of this relief funding if it sees there are bad actors, sort of, violating the criminal healthcare fraud and other criminal laws on and other risks. I mean, there are a variety of other sort of risks out there, including, just, you know, publicity related risks and PR risks and things like that. So, there’s a lot to keep in mind in terms of the down the road. Tyler, could you advance the slide? Thanks.

So, you know, I think one of the biggest questions is all right, we’ve got potential risks in the future. We’re trying to deal with the ambiguities now, getting time on the answers to something within this 30-day window, at least a 30-day window applicable to the relief funds is unlikely, if not impossible. And so, so what can somebody who has these funds and believes is entitled to keep them do? And there are a few, sort of, straightforward things to either do or think about. One, document compliance. And by document compliance, I mean document why you, recipient of funds, reasonably believe that you’re entitled to keep them. Do you meet all the eligibility requirements and the terms and conditions? And document that so you can point to your reasonable belief and the thinking around it if you’re ever asked about it down the road. And so, that’s a straightforward thing. And same for, sort of, the ongoing conditions and record keeping requirements that kind of extend out into the future that Monica talked about. Document, now, how not only you believe you’re able to satisfy them, but how you would plan to satisfy them going forward so that you’ve got, sort of a, you’ve got both the plan, but also a record of your, your reasonable belief in your compliance. As Monica indicated, there is this affirmative attestation of compliance requirement due within 30 days of funding, which I think, Monica is it May 10th? Is that the date or thereabout?

Yeah, it’s based upon when providers and suppliers first received payment. The ones that got it via automated clearinghouse, that initial trance went out in in April 10th. So, that’s right for the earliest.

Okay, yeah. Okay, so though, and that’s not far off, right? That’s in like two weeks so, or thereabouts. And so, you know, one thing to consider and I, you know, with your advisors and just think through is, at least with respect to that initial tranche, you know, are you going to attest? Does the attestation, you know, affirmative attestation make sense? And that’s something that, you know, I think’s it’s something that providers and other recipients should be, you know, talking to their advisors about and really thinking through. Obviously, for the second tranche of funds, as Monica mentioned, you know, attestation, you know, is required. So, if that’s, if that’s something you’re going to apply for then that consideration isn’t really relevant. But if it’s not, I think it is. And then this is not something that’s on the slide, but, you know, is there any benefit to considering, and it’s something to consider with your advisors as well, making some kind of disclosure or written document when, you know, in connection with attesting or in connection with keeping the funds, at least explaining, sort of, you know, why you’re interpreting ambiguities in whatever way you are such that the government regulators are kind of on notice that this is what you thought? So that it would make it really hard down the road to say that you were trying to defraud anybody by keeping the funds. So that’s one thing. I mean there are, the reasons, the reason I keep saying is talk to your advisors about it’s because it is going to be case by case, and there are, you know, there are going to be upsides and downsides I think to everything. But there are things that you could be thinking about now that will, kind of, you know, serve to protect you or at least go, you know, take some steps to protect yourself in the future. There is just one other point I want to make on this, and this is really relating again to, focused heavily on the relief funds here, particularly given the changes to the Advance Payment Program that occurred last night. But there is this preamble that says that if you just keep the money and don’t reach out in the 30 days, you’ve deemed to accepted that, you’ve deemed to have accepted the terms and conditions. I expect there to be a fair amount of litigation around that. It’s something to be aware of, but I think that we’re going to see a lot of activity in the enforcement litigation space as this starts to unfold relating to that and, sort of, you know, its legitimacy. But we’ll have to see. Could we go to the next slide?

Okay. I just want to say a few words on the advance payments. As Monica said, it sort of really changed significantly last night. So, so, so much remains to be seen, but, and while this program isn’t about, sort of, you know, obviously giving back money, it’s applying for, you know, applying for money, in essence, it still requires these certifications. And so, a lot of the same considerations I just articulated in connection with the relief funds are really kind of equally applicable or should be taken into account in connection with the advance payments, you know, depending on what happens with the entire Advance Payment Program. But, you know, are you accurately representing that you meet the criteria? Have you documented why, at least, you know, internally and potentially, you know, with the government, to the extent you and your advisors determined that that’s been, been useful? And so, as we will be providing many updates on the Advance Payment Program as it, sort of, plays out. But the same types of, kind of, risk mitigation steps in connection with the relief funds, or at least many of the same ones, are also fairly applicable here. So, I just see, we got some questions, but I think we’ll hold him till the end, and I’ll turn it over now to Lisa Mazur is going talk about some of the, switch gears a bit to some of the telehealth issues that we’re seeing.

Thank you, Laura. So, as Laura said, I’m Lisa Mazur. I’m a partner in our Chicago office, and I spend a lot of time in my practice working on telehealth programs. So, as you can imagine, we have all been quite busy in our telehealth group. These are just some pull from the headlines type snapshots of different things that we’re seeing and hearing. You know, telehealth is now being fast tracked by hospitals and health systems. We’ve seen significant changes to reimbursement requirements, expanded coverage by Medicare, Medicaid and commercial payers. We’ve seen states make drastic changes to their state licensure requirements and to their scope of practice and practice standards to encourage the use of telehealth. We can go to the next slide to illustrate why we’re seeing all these changes.

So, this is a side that illustrates the tripling goals. We have improve access, improve experience, we have reducing costs, and we have improving health. Right now, we are all very, very focused on the top circle, which is improving access. The goal is to keep patients in their homes, to keep them out of healthcare facilities to the greatest extent possible for infection control and for many other very good reasons. And for that purpose, telemedicine has really risen to the challenge and has been identified as one of the key vehicles for accomplishing that goal. We’re also seeing remote patient monitoring and different apps in health. Email, texting, digital health, perhaps more broadly, being the real key to accomplishing the improvement of, getting patients access to the care they need, keeping them at their homes and keeping the spread of the pandemic down as much as possible. We can go to the next slide.

And then this is an illustration of the longer-term strategy. So, after we improve access and we get people the care that they need, and the curve is flattened and we’re on the downside of that, then we can, then, again, start focusing on reducing costs and improving overall health of patients. Right now, we’re just in a, at a time where we need to focus on getting patients that care that they need, and telehealth, you know, is the way to do that virtually. Let’s go to the next slide.

So, not surprisingly, to many of you on the phone, telehealth is incredibly regulated. There are lots of different regulators who play a role in overseeing telehealth. Digital health, more broadly. So, this is the slide that I have to refer to as the scary, you know, policing agency type side. It just identifies the different state and federal agencies that really play a key role in overseeing either the reimbursement of telehealth services or the regulation of the delivery of telehealth services. As I mentioned before, we we’ve seen significant temporary relief being issued to encourage the use of telehealth. One great example is the Boards of Medicine. Almost every state has passed some type of emergency declaration order or proclamation. And in many of those cases, the states have included language that is intended to waive professional licensure altogether or to create an expedited pathway for healthcare providers so that they can go into to each other’s states and provide services that they’re licensed in good standing in another state, and they comply with the terms of that state proclamation or order. We’ve also seen CMS eliminate very longstanding and strict barriers to telehealth reimbursement. So, as many of you know, traditionally for telehealth services to be covered by Medicare, the patient has to be located within an approved originating site, which is one of 11 different types of healthcare facilities. And, the patient has to be within a health professional shortage area outside of a metropolitan statistical area. So, in a rural area. So, Medicare reimbursement for telehealth has traditionally been like a rounding error of overall Medicare spending. It’s practically nothing. But Medicare has decided that they’re going to waive that originating site requirement and the geography requirement to allow patients to get care in their home. Because, once again, the goal is to keep patients in their homes. We’ve also seen expanded types of telehealth services now be covered by Medicare. We’ve seen additional healthcare providers being able to provide, being categorized as qualified healthcare professionals who can now deliver services via telehealth. Medicaid and commercial payers have also been following that trend. So we’ve, we’ve seen significant enhancements on what is now covered by health plans, and we have an entire large population of healthcare providers who were not billing for telehealth services before, who may have had self-pay programs or have just been focused on certain commercial markets, participating in specific types of telehealth pilot projects that are now able to bill government payers for telehealth services, provided that they enroll and meet other types of requirements. But the doors have been opened, and a lot of healthcare providers are rising to that challenge. So, we can go to the next slide.

So, this is intended to be one illustration where we’ve seen a significant loosening of regulatory requirements. The Office of Civil Rights has announced that it’s going to exercise discretion for good faith provision of telehealth services using certain communication technologies during the COVID 19 public health emergency and won’t impose certain penalties for HIPPA violations against those healthcare providers who use those technologies.

It is really, you can go to the next slide, it’s really specific to the use of certain non-public facing platforms, like Apple FaceTime and Facebook Messenger. It does not apply to things like Tik Tok and Facebook Live, and a bunch of other platforms, and most of us on this on this call would probably have never even heard of before. But they’re intended to allow healthcare providers to use platforms that are readily accessible, that are easy to use, that are already in place. Because what we’ve seen is a lot of our clients who didn’t have existing telehealth programs didn’t have the sophisticated technology platforms that are necessary to comply with HIPAA and state privacy laws and many other the laws regulations that are required to deliver telehealth in a safe and secure way. So, OCR is enforcement discretion is one really meaningful example of a federal agency, kind of, lowering, you know, what is viewed to be a traditional barrier to telehealth access. We can go to the next slide.

Another illustration of this is the OIG has waived, it now allows healthcare providers who are delivering services via telehealth to waive coinsurance and deductibles as long as they delivered the telehealth service in accordance with coverage and payment rules. So this guidance, additional guidance came out that made it very clear that the waiver is not just applicable to your traditional telehealth services, which have been, you know, narrowly defined in Medicare rules, but it also is intended to cover things like, you know, other remote patient monitoring, and other E-visit virtual care services as well. So, we could go to the next slide.

So, onto the scary side. So, like I mentioned before, we’re seeing a lot of healthcare providers that were not able to bill federal payer programs and commercial programs for the delivery of telehealth services. We’ve seen organizations who have recognized a significant need for telehealth services and are now moving at rapid pace to set up telehealth programs. OCR, for example, has made it easier for healthcare providers to use readily accessible technology platforms that are available on, on patient smartphones to deliver those services. So, it’s kind of like a perfect storm, unfortunately. We’re seeing growth stage, early stage companies creating telehealth programs to meet this significant demand. And it opens the door to significant risk because there is often not time to build a meaningful billing and coding compliance infrastructure so that services are built in a way that meets somewhat complicated requirements. One example on the slide that we’ve flagged for you is a recent study that came out that shows that 96% of South Carolina’s Medicaid fee for service telemedicine payments were insufficiently documented or otherwise unallowable. And that was pre-pandemic. This, these were telehealth services that have been provided post pandemic—or pre-pandemic, which indicates that there should have been time to invest thoughtful development of a compliance program so that services are billed in a way that that needs payer requirements. So, you can imagine, now we’re in a pandemic and everyone’s moving really fast, and there’s, there are lots of changing rules. And, like Laura said, those rules are changing on a near daily basis. There’s different place of service codes that should be used. There’s different modifiers that should be used. There’s expanded codes that can be used. And, and this opens the door to a lot of confusion. So, so our hope is today to flag for you that, that we’re all moving fast and that we need to move fast, and there’s recognition of that, but we also need to take a second and pause when, when we can to think about what our billing compliance policy should cover. How do we put in place an infrastructure that integrates workflows and processes and integrates them into our technology system that we’re developing, that we’re using to, to deliver telehealth services in a way that allows us to submit claims that are accurate and complete and we’re not resulting in an upcoding type situation or inappropriate submission of codes or claims for services that are, in fact not covered? We’d also like to flag for you that there are lots of good resources out there. In addition to your consulting with legal counsel, CMS has published a tool kit that is incredibly helpful. There is guidance out there in the form of video and written and interactive tools that can help telehealth providers figure out how they need to bill for these services in a legally compliant way. The American Medical Association has also come out with very helpful descriptions of, of, you know, unique coding situations to help advise healthcare providers on how they should be quoting for services rendered via telehealth. And we would just also encourage our clients, I think, you know, to involve legal counsel on exploring some of these innovative collaborations that we’re seeing between healthcare provider organizations and pharmaceutical companies and DME providers and lab companies. Because we all need to be innovative and we all need to think outside the box and be creative and get patients access to the care that they need during this pandemic, but we also need to be thoughtful about lots of the different fraud abuse laws that may, may come into play and how we can design these collaborations in a way that accomplished the very important goals of improving, increasing access to patient care while at the same time, building in a lot of those important guardrails and parameters so that we operate the programs in a way that are legally compliant. So, with that, I’d love to turn it over to Megan to discuss some of the different contractual considerations.

Thank you, Lisa. And again, my name is Megan Thibert-Ind. I’m a partner here in the Chicago office at McDermott. My practice focuses primarily on business-to-business disputes in healthcare space, largely on the provider side. And, if, if Laura’s topic was the last thing that folks want to hear about, my topic is the thing that no one wants to hear about ever, until they wish that, they wish that they would have. So, civil litigation is certainly a downstream issue here. We recognize this really isn’t where people’s focus is right now. We have a very rapidly evolving regulatory and compliance marketplace. But given that evolution and given our financial markets as well, I can safely say that we will see an uptick in business disputes in the future in the healthcare space. You’ve heard about a lot of those we’re thinking about as our providers now start to move towards some equilibrium, what types of disputes are they, are they sure to see. I suspect we’re going to see, and are beginning to see already, percolating EHR system disputes. The EHR vendors are just simply unable to keep up with this changing regulatory billing climate. You heard Lisa talk about these issues and voting and billing issues in the, in the telehealth space. Specifically, I think on the back end, we’re going to see a lot of, revenue issues on the provider side, which was, and finger pointing on the HER side. We’ve heard a lot about contractual force majeure issues in the last six weeks. I think another place we’re going to see contractual issues are really indemnity claims. Many of the professional service agreements that we deal with require compliance with state and federal program requirements, and no one ever really knows what that means. And no one’s ever quite sure whose responsibility is what. Is it, is it the professional services providers at the hospital? Whose responsibility is it? And often these agreements are as clear as they could be, or the agreements are old, they’ve been amended over time, and these particular issues haven’t been addressed. We also see some brewing conflicts between payers and providers, particularly payers are holding funds because of the decrease in elective procedures, and, and how and when that surplus will be distributed seems to be an area that’s right for controversy. We expect that the effects of this disruption from COVID 19 will be felt for years to come. That’s not a surprise to anyone on this webinar today. Some of the areas in which we think we’ll see particular business-related issues, certainly inability to pay on service contracts. What I also think what that means is we’re likely to see an uptick in pretextual breaches to avoid term contracts. So, many, again, professional services agreements are three or five years in length, and if we’re newly renewed or we’re only halfway through these agreements, expect to see more critical, more criticism of performance under these agreements. And, I think, whether you’re doing the criticizing or the one being criticized, be aware of, be aware of the pretextual breach. We’re also, I expect, going to see more disputes in the practice group space. Decisions made now will reverberate. Obviously, I think we’ll expect to see physician noncompete issues, but I also think that we’re likely to see a rise in oppression claims for dissatisfied members. That could include how CARES Act funds were spent. It could include many of the things that we’re talking about today. It may also just include that, you know, we’re going to see changes in how practice groups are run, and not everyone’s going to agree. And so, I expect we’re going to see a fair bit of controversy there. Also, software services agreements, particularly in the telehealth space, I expect we’ll be talking to Lisa a lot more in the coming months and years. But really, really whether these software services agreements were ever designed to, or can keep up with this rapidly developing and changing space, particularly in telehealth. And then I also think in the business, in business associate agreements, I think we’re going to see a lot of disputes around this area. Particularly disputes about, between covered entities and business associates. Whose data is it? And I expect, again, in telehealth as we’re seeing, it’s huge expansion of this area. Everyone’s wanting to move faster. Everyone’s wanting to develop and make the space everything that it can be. But doing anything on an accelerated, on an accelerated scale will have, will have impacts. So, let’s go to the next slide, Tyler.

Some very simple ways that we hope that we can help prevent or contain future business disputes, is these issues really start now. And I know that for all of you on this call, you, you are treading and keeping your heads barely above water right now. We appreciate that, and what I hope to do with these next couple slides is really just give you, whether you’re an attorney or on the business side or whether you’re someone communicating with folks on the business side, a few quick tips and things that you may be able to do now that can help contain these issues in the future. The first is, is really to define the scope of your role or the role of your third-party partners in your agreements. As I noted earlier, many of our agreements are vague about who has responsibility for what. This is particularly true with long-term contracts where party’s roles have evolved over time. I think these, in some ways, are the most dangerous contracts. We don’t we don’t want to rock the boat and I appreciate that. We also have some comfort with those partners that we’ve worked with for a long time. But again, I expect to the extent your role is unclear, it is not easily defined or that of your vendor is unclear and not easily defined, you may think about trying to define those rules now. Document and clearly defined changes to payment or other terms. It’s, it’s only natural that we’re going to see changes and are already seeing changes to certain payment terms. If you have to make changes or your vendors due to particular payment terms, be sure that you’re clearly documenting them, not only how long, but also the why. Is it because of COVID 19? These are things that can help protect you on the back end if there are civil disputes about ability to pay or inability to pay. Also, to the extent there are performance metrics that are influx on any of your contracts, consider whether you should hit the reset button, agree to a standstill. I’m thinking, specifically, if you’ve got upcoming launch dates, migration schedules, are there metrics that are going to be impossible to make in this current environment? And, you know, assessing those and assessing whether or not there should be open communication about those so that you don’t have a scenario where, again, the inability to meet one of these metrics is used as a basis for termination down the road. And again, and lastly, and I think most importantly, particularly for the businesspeople, is an issue that’s on the bottom of everyone’s list right now. It’s worrying about whether our communications will be discoverable by a relator or opposing counsel or the government down the road. But I, from experience, can tell you that no one wants to see a hastily, poorly written email placed in front of them in a deposition two years from now. So, we’d like to give you just a few quick tips in our last moments before we move to some questions about how you can help protect internal communications. So, Tyler, let’s go to the next slide.

You know, again, encourage people, writing clearly and carefully, and we can still pick up the phone. I know in the age of Zoom and text and otherwise, we are, I, picking up the telephone is sometimes the last thing that I want to do, but I would encourage your businesspeople to do it when there’s a lack of certainty around whether they should be communicating on certain issues. Communications should stick to the facts. It should be objective, not speculative. I know in this, this climate where we’re all very stressed out, everyone’s tired, there’s a tendency towards sarcasm. There’s a tendency toward opinions about what the right thing to do is. There’s a tendency toward making jokes, to try to, to try to break the ice, and I think we just have to focus on the facts when it comes to written communications. And, of course, choosing the right message in the right tone to, not only the audience that you’re communicating to now, but the one you may be communicating to down the road. That might be a regulator might be an opposing counsel. It may be a jury down the road. Later readers will not understand your job. They won’t understand your business. They won’t really care about the stress that’s created by this crisis, unfortunately. Not, that that’s not what I meant, isn’t the explanation that any of us want to be giving for our communications that are happening right now. And, you know, I encourage folks, I appreciate this as a very obvious tip, but it’s one in this fast-moving climate that we’re all not necessarily adhering to. And that is, you know, read your emails for tone. Correct the emails of others if they’re sent and, and, you know from the email, it’s not what that person meant. The tone came across in a way that, you know, it wasn’t intended. Ask yourself, do I care if a regulator, do I care for opposing counselor a jury reads this email later? And lastly, protect and maintain attorney client privilege and work product when possible. Tyler, we’ll go to the last slide.

And so, just a very quick two-minute primer on privilege. Something that in our day-to-day business life we forget about. And I think often on the business side folks think, well, I, you know, I put a lawyer on the email, certainly it’s privileged. And it’s important, especially in a time like this, where we’re really operating in a crisis that we remember a few key things with respect to privilege. Keep these communications confidential. Beware of who you’re circulating them to. Obviously, they need to include an attorney and they need to be seeking or giving legal advice. There are different rules and varying states with respect to who can maintain a privilege within an organization. And by that, I mean, there are control group tests, depending on where you are. Is the individual or individuals on the email, are they in the sphere of folks who are making decisions? Copying a bunch of people on an email that really don’t have anything to do with the underlying decision may ultimately destroy the privilege for that communication. And as I noted, it must relate to legal advice. Copying counsel is not enough. And for those of us who are giving a legal advice, making sure that when we’re responding to these communications, doing our best help out. Often the emails will come from the business scope, so they won’t say, hey, I’m seeking legal advice. Seems I’m overly obvious, but it’s important for us as counsel to say I’m providing advice based on your question regarding. And those there are ways in which hopefully on the back end, we can protect that privilege. And with that, I know we have some questions. So, I will, see my time over to Laura.

Thanks, Megan. Real quick, can I give the password just so we don’t forget it for New York?

Yes.

For all of you, it’s APPLE 27. APPLE 27. Thank you.

Yeah, and I think we’ve gotten a number of questions. If we don’t get to yours, folks, we will reach out directly to those who have not done them anonymously so that we can try to, try to get them answered. But Monica, I think this one’s for you as the first one that came in, so we’ll, we’ll start with it. It says, are there funds available to rural health clinics that are not nonprofit or public health organizations? And this is in the context of the relief, obviously.

Sure so, and I’m happy in the minute that we have, and I think there’s been one for a Lisa, that I could just kind of take threes if that makes sense, I was trying to read them most as we were going along. If the person that emailed that specific question could reach out to me directly, I think that would be helpful. And I think there’s some additional follow up in in questions that we want to kind of walk through, so we’ll be happy to follow up with you after this call, after this webinar. With respect to the question about are MA plans not required to offer providers accelerated advanced payments. That program is, is applicable, to parts A and B, not C and D, and the payments are issued by the Medicare administrative contractor. We also have another question about allocations being based on Medicare billings, and how are amounts calculated, especially taking into account Medicare Advantage plans and who could receive those payments? And while the initial $30 billion transfer funds was based upon Medicare fee for service on 2019 revenue, the overall goal of the additional $20 billion is to augment that so that the overall percentage of funds given to providers and suppliers that are eligible is an approximation of their 2018 net patient revenue. And HHS did issue of formula to give an estimate to providers and suppliers, and it’s their individual provider 2018 revenue over 2.5 trillion X 50 billion. So, it’s, it’s we’ll see if those denominators and other numbers are accurate in the long run. And I think the last one is one for Lisa.

The question was, whether or not we’re seeing any state boards starting to work on post COVID efforts to expand licensure and scope of practice, I’m assuming, and how will that play into the provider patient relationships created during this time? So, we’re seeing a lot of activity with the Federation of State Medical boards. Governors of different states have also gotten together and I thought a bit about ways in which we can make licensure more streamlined and consistent across states, if there’s a way to do something similar, what’s been done with the VA, writers to the VA, you know, provide care through Medicare to Medicare beneficiaries. There’s been discussions of expanding the interstate medical licensure compact. So, there are lots of conversations, but unfortunately, we really haven’t seen any, you know, like dominating proposals come out of that or any clear, you know, guidance as to what, you know, post COVID licensure might look like, but there’s a lot of great conversations happening, so I think that that’s a really positive development. And then the second part of the question, well, how will that play into the provider patient relationships created during this time? If the provider patient relationship has been created and there’s been a, you know, a telehealth visit that creates that relationship, for purposes of the practice standards, you don’t have to start over -post COVID. That relationship has been created and may continue post COVID as well. And I think this person was specifically talking about certain professional practice standards in the telehealth context, where some states require there be an existing physician patient relationship in order to use telehealth in certain ways, including remote prescribing. So, I think that the relationships that have been created now, if they continue post COVID, you’ve been able to check the box on certain state professional practice standards. But I’d be happy to brainstorm with the person who sent the question. It’s a great question, and it’s something that we’re thinking a lot about these days.

Thanks everyone for joining, and obviously reach out to us, any of us, with any questions or follow ups. We appreciate your time.

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