RISE summarizes the latest regulatory headlines that impact Medicare, Medicare Advantage (MA), and Medicaid.

Sutter Health and affiliates settle FCA allegations of mischarging the MA program

The Department of Justice announced this week that Sutter Health, a California-based health care services provider, and several affiliated entities, have agreed to pay $90 million to resolve allegations that Sutter Health violated the False Claims Act by knowingly submitting inaccurate information about the health status of beneficiaries enrolled in MA plans.

The government alleged that Sutter Health knowingly submitted unsupported diagnosis codes for certain patient encounters for beneficiaries under its care. These unsupported diagnosis codes caused inflated payments to be made to the plans and to Sutter Health. The lawsuit further alleged that once Sutter Health became aware of these unsupported diagnosis codes, it failed to take sufficient corrective action to identify and delete additional unsupported diagnosis codes.

“The government relies on health care providers, including those furnishing services to Medicare Part C beneficiaries, to submit accurate information to ensure proper payment,” Deputy Assistant Attorney General Sarah E. Harrington of the Justice Department’s Civil Division said in the announcement. “Today’s result sends a clear message that we will hold health care providers responsible if they knowingly provide or fail to correct information that is untruthful.”

In connection with the settlement, Sutter Health, Sutter Bay Medical Foundation, and Sutter Valley Medical Foundation entered into a five-year Corporate Integrity Agreement (CIA) with the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG). The CIA requires, among other things, that Sutter Health implement a centralized risk assessment program as part of its compliance program and hire an Independent Review Organization to annually review a sample of Sutter Health’s MA patients’ medical records and associated diagnoses data.

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by Kathleen Ormsby, a former employee of Palo Alto Medical Foundation. Under those provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The Act permits the government to intervene in such lawsuits, as it has done in this case as to claims submitted for the Palo Alto Medical Foundation. Although the United States did not intervene as to claims submitted by the remaining Sutter affiliates, Ormsby continued to pursue those claims, some of which are also being resolved by this settlement.

COVID-19 a leading cause of death in the U.S. in August 2021

An updated Kaiser Family Foundation issue brief examines COVID-19’s effect on mortality rates, and finds that as of August 2021, COVID-19 has risen once again to number three on the list of the top 10 leading causes of death in the United States.

As recently as January 2021, COVID was the number one leading cause of death, with an average of 3,066 people dying daily, KFF reported. Amid widespread availability of vaccines, that COVID rank had briefly dropped to the 8th leading cause of death in July 2021.

As of August 25, about 73 percent of adults in the U.S. have received at least one COVID-19 vaccine dose.

CMS announces leadership appointments, including first-ever chief dental officer

The Centers for Medicare & Medicaid Services (CMS) has announced the following appointments to the agency’s leadership:

  • Ellen Montz, Ph.D., as deputy administrator and director of the Center for Consumer Information and Insurance Oversight (CCIIO). She previously served as chief deputy and chief health economist at Virginia’s state Medicaid department, playing a central role in the state’s Medicaid expansion, pandemic response, and investment in value-based care, particularly for underserved communities. In addition, Dr. Montz also served in several roles during the Obama-Biden Administration at the Department of Health and Human Services and the White House Domestic Policy Council, where she focused on implementing provisions of the Affordable Care Act, as well as with the U.S. Senate Finance Committee.
  • Natalia Chalmers as its first-ever chief dental officer in the Office of the Administrator. In the new role, Dr. Chalmers will advance the administration’s commitment to care for the whole person, a key to reducing health disparities and advancing health equity. She is a board-certified pediatric dentist, oral health policy expert, and public health advocate who brings more than 20 years of clinical, research, industry, and regulatory experience to CMS. Since completing coursework with the Faculty of Dental Medicine of the Medical University of Sofia, she has had a residency in pediatric dentistry at the University of Maryland School of Dentistry and completed a Ph.D. in oral microbiology from the Graduate Partnerships Program of the University of Maryland School of Dentistry and the National Institute for Dental and Craniofacial Research at the National Institutes of Health.
  • Dara Corrigan as deputy administrator and director of the Center for Program Integrity (CPI). Corrigan most recently served as a vice president at Fresenius Kabi, a global health care company and has more than 20 years of government experience, including tenure as associate commissioner for global regulatory policy at FDA. Corrigan previously drafted regulations under the Affordable Care Act to overhaul the private insurance markets, served as the acting inspector general at the Department of Health & Human Services, and practiced law at the Department of Justice for nearly a decade. Combined with her private sector experience, she adds to CPI a deep knowledge of health care systems, drug development, safety/quality issues, and the challenges facing private and public payors—a powerful combination for preventing fraud and abuse. Corrigan received her juris doctorate from the University of Virginia and her undergraduate degree from Baylor University.

CMS issues guidance to boost COVID-19 vaccinations, testing among those on Medicaid, CHIP

CMS issued guidance Monday to help boost vaccination rates and COVID-19 testing among children and adults enrolled in Medicaid and the Children’s Health Insurance Program. The guidance highlights Medicaid and CHIP coverage for diagnostic and screening COVID-19 testing in a variety of settings, including schools. The guidance also reinforces that COVID-19 vaccines are available to nearly all Medicaid and CHIP beneficiaries for free.

Under the American Rescue Plan Act of 2021, states can receive a temporary increase in the Federal Medical Assistance Percentage (FMAP) if they newly extend Medicaid coverage to certain low-income adults. Additionally, the legislation temporarily makes 100 percent federal matching funds available for states’ Medicaid and CHIP expenditures for COVID-19 vaccine administration. Also, state expenditures for Medicaid services received through Urban Indian Organizations and certain Native Hawaiian health care entities will receive a temporary match at 100 percent FMAP.