contained in the specific provisions of a contract. Noncompliance with guidance, therefore, may not be treated as a violation of a regulation or statute unless explicitly authorized by law. The HHS final rule is consistent with DOJ’s earlier Brand Memo, which provided that DOJ attorneys “may not use its enforcement authority to effectively convert agency guidance documents into binding rules.” 34 Not surprisingly, the change in administrations led to a different approach toward the weight given to regulatory guidance. In a Memorandum issued July 1, 2021, Attorney General Garland rescinded the Brand Memo, describing it as “overly restrictive,” and a discouragement to the “development of valuable guidance,” and noted that it generated collateral disputes and hampered DOJ’s litigation of cases. 35 DOJ attorneys now will be provided with internal guidelines for utilizing agency guidance and guidance may be used in any “appropriate and lawful circumstances,” such as for advancing agency deference and persuasive weight for the meaning of the applicable legal requirements. The Memo noted that guidance documents can “serve as an important tool to promote transparency, fairness, and efficiency” and directed that the Justice Manual be revised accordingly. In October 2021, less than a year after formalizing its final rules on use of guidance, HHS published a proposed rule that would repeal regulations issued by the Trump administration that limited HHS’s use of guidance documents. 36 Comments related to the proposed rule were
including the FCA, in concert with DOJ’s criminal enforcement remedies. 30 DOJ has highlighted the FCA’s treble damages and penalty provisions as crucial to “return funds to strapped federal health care programs and serve to deter those who seek to profit from the opioid crisis.” 31 As the opioid crisis worsens in the shadow of the COVID-19 pandemic, DOJ will almost certainly continue to utilize both criminal and civil enforcement actions in an effort to stem the tide. THE CONTINUED IMPACT OF ALLINA In 2019, the Supreme Court held in Azar v. Allina Health Servs. that HHS must comply with notice and comment requirements pursuant to administrative rulemaking processes when issuing any new substantive legal standards. 32 The Supreme Court’s decision may very well impact healthcare fraud enforcement decision-making from the government’s perspective, as well as the defenses available to healthcare companies facing allegations of a failure to comply certain alleged billing requirements. Allina involved a challenge by hospitals to a retroactive Medicare rate calculation posted on the internet as guidance, which the Supreme Court determined effectively described and established a new substantive legal standard. Because that new legal standard had not been subjected to the required agency notice and comment rulemaking process, the Supreme Court determined that the standard had been impermissibly imposed by HHS. In January 2021, at the end of the Trump administration, HHS issued formal rules setting forth the proper use of guidance documents. 33 The rules prohibited the government’s use of guidance as a means of creating requirements or prohibitions unless authorized by law or 30 https://www.justice.gov/opa/speech/acting-assistant-attorney-general-brian-m-boynton-delivers-remarks- federal-bar. 31 https://www.justice.gov/opa/speech/acting-assistant-attorney-general-brian-m-boynton-delivers-remarks- federal-bar. 32 Azar v. Allina Health Servs ., 139 S. Ct. 1804 (2019). 33 86 Fed. Reg. 3010 (Jan. 14, 2021), codified in 45 C.F.R. Part 1; https://hhs.gov/about/news/2021/01/12/hhs- improves-agency-procedures-relating-transparency-fairness-civil-enforcement-actions.html. While the primary target of DOJ’s opioid enforcement actions has been pharmaceutical companies, DOJ has committed to investigating those in the opioid distribution chain, including pharmacies, clinics and individual doctors who prescribe and dispense unnecessary opioids.
due to HHS in November of 2021. The proposed rule stated that previous guidance created “unnecessary hurdles” to bringing enforcement actions, as well as other limitations, and frustrated HHS’s ability to operate as needed, making operations too “cumbersome and burdensome.” The government’s evolving view on the extent of the use and impact of agency guidance in connection with FCA enforcement will continue to be an issue to watch in the highly regulated healthcare industry.
The government’s evolving view on the extent of the use and impact of agency guidance in connection with FCA enforcement will continue to be an issue to watch in the highly regulated healthcare industry.
34 https://www.justice.gov/file/1028756/download. The Brand Memo was codified in the DOJ Justice Manual at https://www.justice.gov/jm/1-19000-limitation-issuance-guidance-documents-1. 35 https://www.justice.gov/opa/page/file/1408606/download. The Attorney General also rescinded the earlier Sessions Memo from 2017, which prohibited DOJ from creating and enforcing policies through guidance documents. 36 86 Fed. Reg. 58042-53 (Oct.20, 2021); https://www.federalregister.gov/ documents/2021/10/20/2021-22503/department-of-health-and-human-services-proposed-repeal-of-hhs- rules-on-gidance-enforcement-and.
ISSUES TO WATCH BASS, BERRY & SIMS | 6
Powered by FlippingBook