Administrative

Federal Agencies Break Up $1.2 Billion Medicare Fraud Scheme

Federal officials on Tuesday announced breaking up a $1.2 billion Medicare scheme that preyed on elderly and disabled patients, The New York Times reports. Investigators say the racket that involved the prescription of unnecessary support braces is one of the largest health care frauds in United States history. The defendants — made up of both medical professionals and telemarketers — would allegedly contact Medicare beneficiaries and coerce them into getting free or low-cost back, shoulder, wrist and knee braces that were then paid for by the organization. The defendants are also accused of laundering the money received through shell companies, then using it to buy items such as exotic cars, yachts and luxury real estate.

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Trump Administration Punts on Medicare Policy Changes

The Trump administration is punting on premium spikes for Medicare, seeking to delay policy changes until after his 2020 reelection bid, The Washington Post reports. An up to 19 percent increase is expected with the president’s plans to do away with Medicare rebates paid to firms that manage pharmacy insurance by drug makers. Proponents of health care reform have long derided these rebates as a kickbacks and an incentive to drive up the cost of medications. Pharmacy benefit managers, which will be directly affected by the plans to halt rebates, maintain that they stabilize premiums and argue that nixing them will drive up premiums, which the administration's actuaries confirmed. Long lead times to put the plan into place was cited as the reason for the delay.

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TennCare Block Grant Bill Moving Through House

Legislation that would allow Gov. Bill Lee to negotiate with the federal government to obtain a federal block grant to supplement TennCare sailed through the House Finance, Ways and Means Committee this week, the Tennessean reports. The bills — HB1280/SB1428 — sponsored by Rep. Timothy Hill, R-Blountville, and Sen. Paul Bailey, R-Sparta, would make Tennessee the first state to adopt such a measure. As submitted, the law calls for a lump-sum payment from the federal government, with Tennessee given autonomy to decide how to best apply the funds. Lee has signaled his support for the block grant concept despite concerns that he would block the measure out of opposition to Medicaid expansion in the state. The legislation has been referred to the Calendar & Rules Committee for review.
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Rural Clinics Grapple with Frozen TennCare Payments

An estimated 20 rural health clinics that opened in the last 15 months are facing financial distress due to promised TennCare payments being temporarily frozen until the state establishes new payment rules, The Tennessean reports. Many of these clinics are the only health provider in the area due to several rural hospital closures. While national and state health care organizations have expressed the necessity of ending the moratorium, a TennCare spokeswoman defended the freeze due to the complicated nature of creating required rules for billing procedures for all of the state’s 150 rural clinics.  The moratorium has been extended twice; the current freeze is scheduled to end in April but could be extended again.  

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East Tennessee Meatpacking Plant Owner Admits Tax Evasion

The owner of the East Tennessee Southeastern Provision meatpacking plant, James Brantley, agreed to plead guilty to federal charges of tax evasion, wire fraud and employing unauthorized immigrants, the Knoxville News Sentinel reports. In April, I.C.E. agents and I.R.S. investigators conducted the nation’s largest single immigration crackdown in more than 10 years at the plant; they rounded up 97 people on illegal entry charges. This action sparked statewide protests and unsuccessful attempts to toughen punishments for employers who knowingly hire undocumented workers. Brantley’s hiring of undocumented workers allowed him to pocket millions of dollars by ignoring safety regulations, violating federal wage and hour laws and avoiding unemployment and workers’ comp premiums. He will enter a formal plea in court on Sept. 12.

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Program to Help Vulnerable, Elderly Crime Victims Expands Across Tennessee

The Collaborative Response to Elderly and Vulnerable Adult Abuse (CREVAA) program will be expanding to 13 additional counties across the state: Bedford, Coffee, Franklin, Giles, Hickman, Lawrence, Lewis, Lincoln, Maury, Marshall, Moore, Perry and Wayne counties, The Elk Valley Times reports. It will be administered through the South Central Tennessee Development District, and it aims to help vulnerable, elderly and adult victims of crime. CREVAA advocates work closely with victims and provide emergency services as well as personalized long-term support systems. In order for victims to receive services, they must be officially referred to the program by law enforcement agencies, Adult Protective Services, District Attorneys or Vulnerable Adult Protective Investigative Teams.

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Council of Economic Advisers Releases Report on Work Requirements for Social Programs

The Council of Economic Advisers recently released a report titled "Expanding Work Requirements in Non-Cash Welfare Programs," that addresses controversial work requirement issues according to a Whitehouse press release. In April, President Trump signed an executive order giving states more autonomy over their Medicaid programs, allowing them to request waivers to add stipulations such as work requirements. Kentucky was the first state to try and implement work requirements for Medicaid recipients, however, a federal judge vacated the approval, sending the state’s program back to the federal Department of Health and Human Services for further review. So far, four states' applications have been approved by the Centers of Medicare and Medicaid Services: Arkansas, Indiana, Kentucky and New Hampshire, while seven other states have applications pending: Arizona, Kansas, Maine, Mississippi, Utah, Ohio and Wisconsin. You can read the full report here.

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Several States to Issue Waivers on Work Requirements for Medicaid Recipients

As more states impose mandatory work requirements on their Medicaid programs, some have come under fire for policies that would protect many rural residents from the impact of the new rules, Business Insider reports. In Kentucky, Michigan and Ohio, the waiver proposals would exempt the counties with the highest unemployment rates, which critics argue skew towards white, GOP-leaning residents. Some health law experts say the waivers — already approved for Kentucky, pending for Ohio, and advancing in Michigan — may violate Title 6 of Civil Rights Act of 1964, which prohibits race-based discrimination in federal assistance programs. The waiver in Kentucky, the first state to approve the work requirements, will exempt eight counties where the percentage of white residents is over 90 percent. Tennessee's work requirement bill for TennCare recipients, HB1551/SB1728, was signed into law on May 3.

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Supreme Court Case to Determine Constitutionality of Administrative Law Judge Appointments

The U.S. Supreme Court on April 23 will hear arguments in Lucia v. Securities and Exchange Commission (SEC), a case that could potentially have a big impact on administrative agencies, The National Law Review reports. In this case, the court will consider arguments – including those from the U.S. Solicitor General – that the way that the SEC’s administrative law judges (ALJs) are appointed violates the U.S. Constitution’s Appointments Clause
 
SEC ALJs are hired through the government’s civil service process and are not treated as “inferior officers” who are appointed pursuant to the Appointments Clause. Lucia asks whether hiring ALJs this way violates the Appointments Clause, because they have all the hallmarks of an “inferior officer” under Supreme Court precedent, an argument that failed to convince the D.C. Circuit Court. There the SEC argued successfully that its ALJs were not “inferior officers” because they did not issue “final” decisions and did not exercise “significant authority” under federal law.
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Bill Could Define How Tennessee Addresses 'Gig Economy Workers'

The House Consumer and Human Resources Committee advanced legislation that is drawing criticism from national workers' rights advocates reports The Nashville Post. HB 1978 proposes amendment to Tennessee Code Annotated, Title 50; Title 56 and Title 62, relative to employment relationships and has already passed the Senate and is likely to pass the House, given the Republican supermajority.
 
This would further most gig workers, ‘marketplace contractors,’  as independent contractors and not benefit eligible employees. Currently, the distinction between a contractor and an employee hinges on the idea of control. Telling a worker when and how to perform a job, providing training or supplies, monitoring their activity and determining the rate of pay are all factors that would support a finding that the worker is an employee, freeing them from having to pay workers' compensation premiums and unemployment taxes or obeying state anti-discrimination and minimum wage laws.
 
The bills have provoked a response from the National Domestic Workers Alliance, a national nonprofit advocacy group. Palak Shah, the organization's director of social innovations, recently went to Tennessee to caution lawmakers that the bill would permanently carve many workers out of rights to which they would be entitled as employees. "It's just such a sorry excuse for a business model to make vulnerable workers more vulnerable just so you can tell your investors that one day you might be solvent," Shah said. "This legislation basically ensures that domestic workers online will never have protection."
 
House sponsor Rep. Pat Marsh (R-Shelbyville) said most people working for gig economy platforms are doing so part-time and aren't expecting and don't need the protections offered to standard full-time employees. "We already have people who go out and do yard work on their own," said Marsh. "If they get on a platform it gives them access to more customers." Others point out that these platforms take a cut from their workers, along with possible additional fees, while the individual has to cover their own costs like equipment, transportation, insurance and self-employment taxes.
 
Critics have said they fear the laxer regulations will drive down wages, ultimately forcing them to subcontract to compete. Rep. Dwayne Thompson (D-Cordova) voiced similar concerns, comparing some platforms to Walmart's effect on businesses in a small town. Thompson was the only vote against the legislation. One of the other platforms with an interest in the legislation passing is Brentwood-based Takl, which counts Senate Commerce Committee Chairman Jack Johnson (R-Franklin) as an executive. Johnson co-sponsored the bill in the Senate.
 
Gov. Bill Haslam's administration was opposed to the version that passed the Senate, but a state Department of Labor official told the House committee that the amended version has addressed some of their concerns. Haslam spokesperson Jennifer Donnals said the governor "is deferring to the will of the legislature on this bill as amended." The main Senate sponsor, Sen. Bo Watson (R-Hixson), has not seen the amended wording, said his aide Tres Whittum, but is fine in "principle" with the changes.
 
The house will vote on these amendments today. You can track the progress of this legislation using this link.
 
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