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January 10, 2015 12:00 AM

Obamacare, fraud top healthcare legal issues for 2015

Lisa Schencker
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    The U.S. Supreme Court's consideration of a case that could cripple Obamacare will dominate the healthcare legal landscape for 2015.

    Beyond that, a number of other important healthcare law and compliance issues will play out in the courts and the regulatory agencies in 2015 in the areas of fraud, antitrust and data security. In addition, the federal government's enforcement of the healthcare reform law's 60-day rule for returning overpayments, as well as pharmacy fraud, may grab attention this year, legal experts say.

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    In March, the Supreme Court will hear the King v. Burwell case, which will decide whether the language of the Patient Protection and Affordable Care Act allows federal premium tax credits to Americans in states that have not established their own insurance exchanges. The case has the potential to severely disrupt or even unravel the healthcare reform law. It's expected to be decided by June and is likely to be a closely divided decision.

    “That permeates, from my lens, a lot of the business decisions taking place in this country and a lot of the directions that hospitals and providers and insurance companies are moving,” said Lois Cornell, president-elect of the American Health Lawyers Association and chief administrative officer and general counsel at Tufts Health Plan in Massachusetts. “It's huge.”

    On a smaller scale, the courts in 2015 likely will continue to handle many healthcare fraud cases, particularly related to the anti-kickback law and the Stark law, which governs physician referrals and financial relationships, said Louis Saccoccio, CEO of the National Health Care Anti-Fraud Association. HHS' Office of Inspector General listed fighting fraud in Medicaid and Medicare among its top management and performance challenges for 2014.

    Saccoccio predicted that fraud allegations involving pharmacies might gain a higher profile in 2015.

    Legal Cases to Watch

    King v. Burwell: The Supreme Court is scheduled to hear the case March 4 and issue a ruling by the end of June. The case centers on whether the language of the Affordable Care Act allows federal premium subsidies for Americans in states that have not established their own exchanges.

    U.S. House of Representatives v. Burwell: House Republicans filed a constitutional challenge in federal court in Washington to the president's executive decision to delay the reform law's penalties on employers for not providing coverage to their workers. The lawsuit also argues that the administration is illegally using funds that were not congressionally appropriated to pay insurers $178 billion over the next 10 years to cover exchange plan enrollees' out-of-pocket costs.

    St. Alphonsus Medical Center v. St. Luke's Health System: Look for a ruling in this major antitrust case from the 9th U.S. Circuit Court of Appeals on whether Idaho-based St. Luke's Health System's acquisition of Saltzer Medical Group in 2012 violated antitrust laws.

    Commonwealth of Massachusetts v. Partners HealthCare: Suffolk Superior Court Judge Janet Sanders will rule on the legality of an agreement between Partners and former Massachusetts Attorney General Martha Coakley allowing Partners to acquire several hospitals in exchange for price and growth restrictions.

    More cases also may be brought in 2015 involving the federal 60-day rule, he said. Under the ACA, healthcare providers have 60 days to return Medicare and Medicaid overpayments once those overpayments are identified, or else they can be found in violation of the False Claims Act. In 2014, a repayment case was brought against Mount Sinai Health System in New York. That case is pending.

    Healthcare lawyers say they expect more antitrust litigation in the coming year as providers try to figure out how to consolidate and form partnerships to reduce costs and improve quality of care without running afoul of laws designed to preserve competition. “The Federal Trade Commission and the Department of Justice have shown they will keep a keen eye on those activities,” said Brian Betner, a shareholder with Hall Render Killian Heath and Lyman in Indianapolis.

    Peter Pavarini, president of the American Health Lawyers Association and a co-leader of the health law practice at Squire Patton Boggs in Columbus, Ohio, said providers are caught in what many see as a contradiction between the ACA's mandate to reduce costs and improve care and the antitrust laws. “As long as the antitrust laws … stay the way they are, this issue will continue,” he said.

    Antitrust cases from 2014, such as one involving St. Luke's Health System in Idaho, may help define the issue moving forward, Cornell said. That case is about whether the St. Luke's acquisition of a large Nampa, Idaho, medical group violates antitrust laws. “There will be some developments and directives given that will give us a sense of how large an organization can get to achieve efficiencies,” Cornell said.

    Deborah Gersh, co-chair of the healthcare practice group at Ropes & Gray in Chicago, said she wouldn't be surprised to see more litigation over data breaches. The courts haven't yet settled whether employers should be held responsible when employees intentionally cause such breaches, she said.

    Follow Lisa Schencker on Twitter: @lschencker

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