Health Law

Published on: September 2, 2025

Healthcare Fraud, Waste, and Abuse Laws

Entities operating in the healthcare industry, especially those that submit claims to government-funded programs like Medicare or Medicaid, must navigate a complex landscape of laws designed to prevent fraud, waste, and abuse. The most critical federal statutes in this area include the Physician Self-Referral Law (commonly known as the “Stark Law”), the Anti-Kickback Statute (AKS), and the Eliminating Kickbacks in Recovery Act (EKRA). Even seemingly straightforward business relationships can demand intricate legal analysis when these laws are involved.

The Stark Law (42 U.S.C. § 1395nn) restricts physicians from referring patients for certain healthcare services, referred to as “designated health services,” to entities with which they or their immediate family members have a financial relationship, unless a specific exception applies. These financial ties can take various forms, including employment arrangements, compensation agreements, or investment interests. Notably, the Stark Law doesn’t cover all services under Medicare or Medicaid, only those specifically listed as designated health services. Although the law includes a number of exceptions, such as those for in-office ancillary services or arrangements based on fair market value, each exception has detailed criteria that must be satisfied fully for it to be valid.

Similarly, the Anti-Kickback Statute (42 U.S.C. § 1320a-7b(b)) prohibits the offer, payment, solicitation, or receipt of anything of value in exchange for referrals or to induce business for services reimbursable by federal healthcare programs. The AKS has a broader scope than the Stark Law, covering any service billed to these federal programs, and defines “remuneration” broadly to include cash, gifts, discounts, or anything else of value. The statute is accompanied by a set of “safe harbors,” regulatory provisions that protect certain arrangements from enforcement actions if all specified conditions are met.

Published on: August 28, 2025

Concierge Medicine and Medicare Opt-Out

by Wachler & Associates, P.C.

Physicians and other healthcare professionals who labor under the decreasing reimbursement and increasing administrative burden of insurance companies and government healthcare programs, especially Medicare, may wonder if there is a way to accept payment directly from patients and avoid the obstacles presented by billing third-party payors.

While a strictly cash-pay or “concierge” practice is not a viable business model for many providers, for certain providers responding to the needs of certain patient populations, it can be a highly successful model that avoids many of the costs, delays, and administrative issues created by the need to bill third-party payors and comply with payors’ endlessly complex and shifting rules. Practice structures and pricing models can be highly variable and customizable to the needs of the practice and its patients. State law and licensing rules may in some cases limit certain structures or activities, but these would apply to a provider regardless and are generally far less burdensome than the restrictions imposed by payors.

Some practices may choose a more limited route and choose to accept commercial insurance plans, while not accepting Medicare or Medicaid plans. This approach can often limit many of the worst downsides of accepting third-party payment, while still leaving the practice open to a large patient population.

Published on: August 13, 2025

CY 2026 Medicare Physician Fee Schedule: CMS Proposes Permanent Telehealth Changes

by Wachler & Associates, P.C.

Recently, the Centers for Medicare & Medicaid Services (CMS) published the calendar year (CY) 2026 Medicare Physician Fee Schedule (PFS) Proposed Rule. The Proposed Rule includes significant changes to Medicare telehealth policies, among other proposals. Healthcare providers that utilize telehealth in their practices should understand the proposed changes and be prepared to comply with any shifts in Medicare policy if the proposed changes become final.

In the proposed rule, CMS proposes simplifying the current five-step process to determine if a service qualifies for the Medicare Telehealth Services List. Under the new process, CMS would only keep three criteria: the service must be separately payable under the PFS; fall within the scope of certain federal laws regulating telehealth services; and be deliverable through real-time, two-way interactive communication. This change aims to lower provider burden and speed up access to new telehealth services.

Based on the revised review process, CMS proposes adding five new services to the Medicare Telehealth Services List for CY 2026:

Published on: July 25, 2025

CY 2026 Physician Fee Schedule: Proposed Overhaul of Skin Substitutes

by Wachler & Associates, P.C.

Recently, the Centers for Medicare & Medicaid (CMS) released the CY 2026 Physician Fee Schedule (PFS) Proposed Rule, introducing sweeping changes to Medicare Part B payment policy. Among the most significant updates is a restructuring of how Medicare pays for skin substitute products commonly used by wound care providers.

Skin Substitutes Reclassified as Incident-to Supplies

Historically, Medicare has paid for skin substitutes as biological products under the Social Security Act, using the Average Sales Price (ASP) methodology to determine reimbursement rates. However, CMS has raised concerns about increasing costs and utilization rates, noting that Medicare Part B spending on skin substitutes rose from millions in 2019 to billions in 2024.

Published on: July 16, 2025

Heightened FCA Scrutiny for Providers: DOJ and HHS Renew Enforcement Task Force

by Wachler & Associates, P.C.

The False Claims Act (FCA) remains a crucial focus for healthcare providers and hot-button issue under the current Administration. On July 2, 2025, the U.S. Department of Justice (DOJ) and the Department of Health and Human Services (HHS) announced they are teaming up once again. This signals a resurgence of the DOJ-HHS False Claims Act (FCA) Working Group and a revival of another healthcare enforcement initiative from the past. The main goal of the Working Group is to move fast, improve interagency collaboration, and strengthen FCA oversight with advanced data analysis tools, all focused on healthcare.

What Providers Need to Know: Enforcement Priorities

The Working Group will be co-led by senior officials from HHS’s Office of the General Counsel (OGC), the HHS Office of Inspector General (OIG), and DOJ’s Commercial Litigation Branch. U.S. Attorneys’ Offices and CMS’s Center for Program Integrity will also be actively involved.

Published on: June 30, 2025

Increasing Scrutiny of Medicare Hospice Providers

by Wachler & Associates, P.C.

The Department of Health and Human Services Office of Inspector General (“OIG”) recently announced that it would closely examine data relating to new Medicare hospice provider enrollments. These efforts build on existing practices by the Centers for Medicare & Medicaid Services (“CMS”) to increase oversight of certain Medicare hospice providers.

Hospice provides palliative care and support for patients who are terminally ill and for their families. Medicare covers hospice care only where certain criteria are met, including that a qualifying physician has certified that the patient has a terminal illness and a life expectancy of six months or less. Medicare-enrolled hospice providers are also required to be certified by CMS, be licensed as required by State and local law, and meet Medicare Conditions of Participation to receive payment.

For the past several years CMS has been concerned with hospice compliance and with fraud, waste, and abuse by hospice providers. To this end, CMS has increased audits of hospice providers, adjusted the 36-month rule restricting certain sales of hospice providers, and implemented the Provisional Period of Enhanced Oversight (“PPEO”) pilot program. Pursuant to the PPEO program, since mid-2023, CMS audits all “newly-enrolled” hospice providers in Arizona, California, Nevada, and Texas. “Newly-enrolled” is not limited to hospice providers enrolling in Medicare for the first time, but also includes those that undergo a Change of Ownership (“CHOW”) as that term is defined under the Medicare program, those that undergo a 100% change in ownership, and those reactivating Medicare enrollment after being in a deactivated status. PPEO audits function similar to TPE audits, but tend to be more rushed and less forgiving in terms of the education provided to the hospice under review. Hospices under PPEO audits should treat them with due caution and take measures to ensure that their claims and documentation meet Medicare requirements.

Published on: June 24, 2025

Are Medicare DME Surety Bond Requirements About to Go Up?

by Wachler & Associates, P.C.

The Department of Health and Human Services Office of Inspector General (“OIG”) recently announced that it would conduct a detailed review of the use of surety bonds by the Centers for Medicare & Medicaid Services (“CMS”) in regard to suppliers of durable medical equipment (“DME”).

Medicare-enrolled DME suppliers are required to maintain a surety bond against which CMS and its contractors can make claims and collect alleged Medicare overpayments. The required amount for the posted surety bond is generally $50,000 for each NPI the supplier maintains, but can be increased in certain circumstances. In theory, the bond provides a ready pool of funds from which CMS can collect overpayments without having to rely on recouping Medicare payments or forcing the supplier to pay the debt.

OIG asserts that it has long-raised concerns about fraudulent practices among DME suppliers and has reported that CMS underutilized surety bonds as a tool to protect Medicare from overpayments to DME suppliers. For example, OIG cites that CMS recovered only $263,000 from surety bonds of $50 million in overpayments identified for collection between October 2009 and April 2011. It is unclear why OIG is citing such out-of-date data or whether more recent data is available.

Published on: April 18, 2025

Congress Again Extends Telemedicine Flexibilities

by Wachler & Associates, P.C.

Congress recently passed another limited extension of certain flexibilities relating to Medicare coverage of telemedicine. While the current extension is another stop-gap measure that expires September 30, 2025, it may further signal Congressional acknowledgement of the importance of these flexibilities to healthcare providers and patients across the country and an intent to eventually make them permanent.

Prior to the COVID-19 Public Health Emergency (PHE), Medicare coverage of services provided by telemedicine was very limited. Two of the most important limitations related to the “originating site” of the telemedicine service, that is, where the patient is located while receiving the service via telemedicine. Specifically, Medicare would only cover telemedicine services where the originating site (1) was located in specified rural area and (2) was a specified clinical setting, such as a physician’s office or other facility. These rules generally precluded the use of telemedicine in urban or suburban areas and precluded nearly all patients from receiving telemedicine services in their homes.

During the COVID-19 PHE, the Centers for Medicare & Medicaid Services (CMS) waived these requirements and allowed telemedicine services in more settings, including in patients’ homes and in more than just rural areas. When the PHE ended, so too did CMS’ authority to continue these regulatory flexibilities. However, by that point, telemedicine services had become widespread and providers and patients acknowledged that it had a valuable role to play in the delivery of healthcare services. Therefore, Congress by statute extended these flexibilities past the end of the PHE, but at the time included an expiration date of December 31, 2024.

Published on: April 16, 2025

HHS OIG Discovers What Medicare Providers Have Long Known

by Wachler & Associates, P.C.

The US Department of Health and Human Services (“HHS”) Office of Inspector General (“OIG”) recently released a report wherein it found what Medicare providers have long known, that Medicare Administrative Contractors (“MACs”) frequently commit significant errors and do not comply with Medicare requirements when they conduct audits of Medicare providers.

Specifically, OIG reviewed MAC audits of Medicare costs reports and found that, for federal fiscal years 2019–2021, each of the 12 MAC jurisdictions failed to comply with the contract requirements for audit and reimbursement desk review and audit quality for at least 1 of the 3 years. The Centers for Medicare & Medicaid Services (“CMS”) also identified 287 total audit issues among all MAC jurisdictions during that period, including MACs not performing proper reviews; inadequate review of graduate medical education and indirect medical education reimbursement; improper review of allocation, grouping, or reclassification of charges to cost centers; improper calculation and reimbursement for nursing and allied health programs; and inadequate review of bad debts.

Issues with MAC reviews are nothing new to Medicare providers. In addition to auditing cost reports, MACs also audit claims under Medicare fee-for-service and perform the first level of claims appeals, referred to as Redetermination. In regard to audits, MACs are often criticized for misinterpreting criteria, applying the wrong criteria, using nurse reviewers with little to no experience in the clinical area under review, and taking excessive amounts of time to complete reviews. However, MAC audit issues might not present such a significant issue if MACs did not also perform the first level of appeal – Redetermination – of their own audits.

Published on: April 1, 2025

What Do Changes at HHS Mean for Medicare Appeals and Compliance?

by Wachler & Associates, P.C.

Multiple changes have been announced or proposed at the federal Department of Health and Human Services (“HHS”), which will likely impact healthcare providers engaged in Medicare audit appeals and regulatory compliance activities. Although, in some ways, these changes may simply be a return to the status quo experience 5 to 10 years ago.

HHS has announced that that it will further reduce its head count and rearrange some of its many divisions. Specifically, it will cut another 10,000 full-time employees in addition to the approximately 10,000 employees that have left the department since January. The bulk of the new cuts will be to the FDA, CDC, and NIH. The Centers for Medicare and Medicaid Services (“CMS”), which oversees the Medicare program and the many Medicare contractors, is expected to lose about 300 employees. While the reduction at CMS may be small relative to other divisions, the loss of experienced decision-makers is being keenly felt as established agency norms, contacts, and priorities can no longer be relied upon. For CMS to change is not necessarily a bad thing in the long term, but it in the short term, it creates significant uncertainty among providers.

Several divisions relating to Medicare appeals and compliance are also being rearranged. The Health Resources and Services Administration (“HRSA”) is being combined with several other divisions into the new Administration for a Healthy America (“AHA”). HRSA has administered – often poorly – the Provider Relief Fund (“PRF”) and the many provider disputes related thereto. It is not clear whether this change will reinvigorate HRSA’s handling of PRF disputes, but given the policy statements of the new AHA, PRF disputes do not appear to be a priority. Further, two divisions closely related to Medicare appeals, the Office of Medicare Hearings and Appeals (“OMHA”) and the Departmental Review Board (“DAB”), will both be reassigned under a new assistant secretary of enforcement. OMHA and DAB already work together closely, so providers in the various Medicare appeals processes are unlikely to experience significant disruption from this change.