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AHLA's Speaking of Health Law
Loper Bright and Jarkesy: What Do They Mean for the Health Care Industry?
The health care industry is still parsing the effects of the Supreme Court’s recent decisions in Loper Bright Enterprises v. Raimondo, which ends Chevron deference, and SEC v. Jarkesy, which entitles defendants to a jury trial when the government seeks civil penalties. Chip Hutzler, Partner, HMS Valuation Partners, speaks with Greg Demske, Partner, Goodwin Procter LLP, and Jonathan Porter, Partner, Husch Blackwell LLP, about how these decisions will impact the health care industry. They discuss which health care regulations may come under closer scrutiny after Loper Bright and the kinds of health care civil penalties that may be affected under Jarkesy. Jonathan recently co-authored an article for Health Law Weekly about this topic. From AHLA’s Fraud and Abuse Practice Group. Sponsored by HMS Valuation Partners.
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Speaker 2:Well welcome everyone to this podcast , uh, talking about the Loper Bright case and the ESY case. My name is Chip Husler . I work for HMS Valuation Partners. We're evaluation firm based in New Orleans, and I work in Nashville. Um, I've got two guests with me today that are ideal to talk about these two cases. One is Greg Demsky with the firm of Goodwin Proctor. Greg, as many of you know , uh, used to be the Chief Counsel to the Inspector General in the office of the Inspector General at the Department of Health and Human Services. He had that role for 11 years and was with OIGA total of 32 years. So he's very familiar with the kinds of things we're gonna talk about related to these cases today. The other guest with us is Jonathan Porter . Jonathan works for Husch Blackwell, he does defense work. Um, and prior to that worked at the Department of Justice for , uh, a while in Georgia. So he's also someone who thinks a lot about these kinds of cases and what they mean. So , um, with that, we'll get started. Thank you both for joining us. Uh, but with that we'll get started. And I think where I wanna start with these two cases is , is with Loper in particular, and Jonathan , really for you, wanted to ask you , um, your thoughts on kind of what led the Supreme Court to take this on now and to make this shift now. Uh , it's been a conservative court for a while, but why now are they making this move, do you think?
Speaker 3:Yeah, thanks, chip. Uh, it's great to, great to join you and Greg on this. I'm honored to be joining you too . So , uh, yeah, that, that's a good question. I've heard a lot of cynical takes about why now you , I think the non-cynical take it , which is where I'm, I'm sort of gonna land here, is what sort of what Chief Justice Roberts said at oral arguments in this case, where he said, look, we haven't, we haven't relied on Chevron in 14 years , um, to, to make a decision. It's, it, it actually, the , the Fisheries service rule that led to this was actually sort of a bizarre thing. It was, it was a fairly reckless rule, something where I think if, if, if we got, you know, a bunch of lawyers in a room and said, is this the right process , uh, for rulemaking, I think everyone would say, no, that doesn't make a whole lot of sense. Um, and so I , I , I think it took a rather reckless rule for us to get somewhere where , uh, the Supreme Court had a case where they could overrule Chevron, and it took something where it was, you know, arguably a reasonable position to take. It's just, it , it just went wildly beyond what I think Congress had to have meant when they asked the fishery service to pre to, to prepare this overfishing plan . So I don't think it's any sort of like, you know, conservative, you know, liberal thing. I, I think it's just federal agencies, for the most part, are making pretty good rules. Um, we could disagree about it, but it, it, you know, the, the type of case that would've been required to overrule Chevron just didn't come along until right now.
Speaker 2:That makes sense. Greg, do you have a thought?
Speaker 4:I'll just jump in. I mean, I don't disagree with anything that Jonathan said. I might be a little more cynical than he is. Uh, maybe just, you know, the, the effects of age. Uh, but first of all, it's, it's a pleasure to be with both of you today and the, and appreciate a HLA putting this together. Um, I just did wanna note as we're talking about the context, I mean, we're gonna talk about the Darky case. Uh , we're not gonna talk about the coroner post case, but that also, it's all part of a very broad , um, quote unquote dismantling or weakening of the administrative state. Um, that is a , um, a conservative , um, you know, it , it's been a, a priority for a lot of people , um, who've been thinking about these issues for a long period of time. And it is interesting to see them all happening at the same time. 'cause , you know, corner post , which sort of opens up regulatory challenges for indefinitely in time, sort of goes hand in hand with , uh, this, the decision in Loper , um, to open up a lot more challenges to administrative agencies over, you know , becoming years and decades. So it's just an interesting context.
Speaker 2:Yeah, I mean, to the extent that it's , um, you know, maybe the agenda of one side or another, obviously Chevron itself came out of a , you know , conservatives initially, but , um, you know, maybe it's a be careful what you wish for thing in terms of can the courts handle this job any better than the administrative agencies were? Um, I think that's one of those controversies of , before we drive into how it impacts healthcare, which we're gonna talk about , um, you know , it's one of those controversies they went all the way back in this Loper case to talking about Marbury versus Madison, very old , uh, case, which has been very controversial almost since it was decided. Right. And I think he cited Hamilton's Federalist papers too, as pointing to the courts having the authority to , uh, for judicial review and so on. And while that general concept may be settled, that the courts are, have judicial review, the sort of breadth of it, the reach of it , um, maybe has been what's been more debatable over the years. And , uh, you know, I don't know if you have a thought on where that ought to land , um, theoretically, but if not, we can dive into the healthcare stuff. But I'll throw it open, see if either of you have a thought on that before we get into healthcare.
Speaker 4:I, I just, I would just, just , um, add into what you just said, chip is, it's one thing when you're talking about who pays for the monitor on a fishing boat , um, it's one side or the other , um, applying this as we're about to talk about in the context of Medicare, Medicaid, the, our , our healthcare system with its incredible complexity with multiple , uh, stakeholders involved in a lot of statutory interpretation questions, it be , uh, in the context of medical scientific , uh, and major financial issues, it becomes , uh, a lot more complex.
Speaker 2:Yeah. I don't know . Jonathan , do you have a thought on that?
Speaker 3:Yeah, I , I mean, look, the , the Fishery's rule was sort of very easy to digest and pretty clear on, on how , how it interplayed with the statute. Um, I , I think healthcare is, is , is a totally different game. Um, and so, you know, it'll be interesting to see how, how , uh, interpreting courts are going to treat local Brett . I think that's a lot more important than the fact that Chevron's been overturned, because you gotta replace it with something and, and what, you know, what it get , what its practic practical impact is, is, I , I don't think any anyone knows what it'll be yet, but it'll be interesting to follow.
Speaker 2:Yeah. So as we dive into healthcare, I , I mean, I just make the observation, maybe you guys would agree that in many cases, healthcare laws, in particular, the ones I deal with a lot, Congress was pretty explicit what the agency's role is. And so maybe this case doesn't change much in that, in that instance, but then there may be situations where despite that explicit , uh, statement that the agency handles this, there were some ambiguities in the rules and so on. There's certainly always some ambiguities. And so, you know, comment, if you will, on how much of an impact you think this will have generally on healthcare. And then we'll talk about some specific rules too in a minute.
Speaker 4:Well, I mean, Jonathan , you touched on this in the article that you wrote for HLA , um, but I think you're right, chip, a big part of , uh, the Medicare and Medicaid statute, Congress has been explicit in delegating certain responsibilities for , uh, making the calls, administering, figuring out what's a reasonable, necessary service or item that should be covered under the Medicare program, for example, recognizing that that's not something that Congress can realistically be taking on. Um, and that CMS , um, should make those sort of determinations based on its own expertise and hopeful, hopefully consistently in a way where there's clarity for the , uh, industry in where they might go , um, and make the tough calls. Um, so there is a lot of that , uh, there is a , a lot of that. And the Supreme Court was clear where Congress has explicitly delegated responsibility to the agency. That's, that's different from what we're talking about in a loper of , uh, statutory interpretation of an ambiguous term in the statute. But the Medicare statute, the Medicaid statute, FDA's, you know, authorizing statutes, et cetera, our very big complex pieces of legislation. And there are gonna be terms in there that are not , uh, you know, where there's not a clear delegation , um, and that CMS or another agency is interpreting it. And those are gonna be circumstances where there's more likely to be a challenge .
Speaker 3:Yeah, I , I , I totally agree with Greg. I mean, the, to me, the, the , the areas that are ripe for challenge. Now, first of all, if you're hitting any hot takes saying, oh, all Medicare regs are going away, go ahead and ignore those. It's just that , that's just not, not, not the truth. The fact of the matter is the, the types of regs that are gonna be , um, vulnerable under LOPA Bright are gonna be the ones that are just totally disconnected from , um, any, any sort of statute. And so, you know, the example that, that my co-authors, Jim May and Tom Clarkson and I, the what we talked about in the articles like the, the, the ENM code systems , sort of like the backbone of, of healthcare billing, e and m codes, that's found in statutory text. You know, Congress created the concept of e and m codes. Um, it's, it is, it was then CMS that built that built it out, and they said, okay, well, we're gonna, we're gonna pay more for, we're new patient visits. We're gonna pay more for complex medical decision making , and we'll pay less for repeat visits, less for sort of simple stuff. Um, I is , are e and m codes going away? Are the, are the, you know, levels one through five going away? No, those are, those are, those are close enough to what Congress enacted close , close enough to what Congress had in mind that those are gonna be fine . There's a bunch of other things , um, that, that could be right for challenge. But the, the vast majority of regulations that are , uh, in the healthcare space are probably really, you know, closely tailored to what Congress told CMS to do in the first place. And so I, I don't think this is gonna have too much of a radical shift, but there will be certainly areas that are, that are ripe for challenge.
Speaker 2:Yeah, I would say one thing I've noticed is CMS and OIG in particular, who I've read their regs a lot and I've read other regs of other agencies from time to time IRS and so on , um, and Treasury Department. But CMS and OIG go to great pains to say, Hey, we're following exactly what we were charged with doing by Congress, and by the way, we're not gonna go down a road that we can't go down because Congress is not giving us authority to . So they seem to take great pains on that , um, when they're coming up with regulations. But is there anywhere where Congress might, or, or sorry, where a court might disagree with them on that and say, oh , you didn't quite have the authority to go there, and you did , um, that you see out there , um, as potential problems ?
Speaker 3:Yeah, so there, there are a few that I've heard people talk about. Uh , you know, drug pricing is, is one where I've heard other people, smarter people than me say that there's, there could potentially be some, some problems. I know there's a statutory hook for CMS negotiating drug pricing with the pharmaceutical industry, but I, I know there's also been a ton of challenges to the, the way that CMS has gone about implementing its statutory directives on that front. And, you know, to my knowledge, I don't think Chevron was a deciding factor in those cases, but you know, who, who knows how courts are going to sort of view , um, stuff like that going forward. Um , the other big , uh, area that I've heard the industry talk about , um, and I want to hear Greg's take on this one, but it's OIGs anti Kickback statute, safe Harbors. So the A KS has some built-in statutory exceptions, but then oig g promulgated safe harbors by regulations. And there have been some battles over the years as to how those two fit together. Uh, I know OIG has said that they fit together just fine , uh, but some in the healthcare industry have, have disagreed and said that OIG safe harbors are , are perhaps more rigorous in some areas than what Congress envisioned. And so, you know, I I'm, I'm curious whether Loper Bright will give the healthcare industry some chance to ask the courts , uh, to give some sort of fresh analysis to the , uh, a KS safe harbors. And I'd love to hear Greg's, Greg's take on that with his background.
Speaker 2:Me, me too, Greg, anything
Speaker 4:<laugh> ? I , yeah , I will. But let me just, first of all, lemme just talk , uh, on, on Jonathan's first point on the , um, yeah , on the drug price negotiation , um, most of the challenges have been on constitutionality of that provision. And I would say that that's actually an example where Congress got very granular in the statutory language in a way. CM there's still a lot for CMS to build out, but it, it's not as general as some other provisions. Um, we , we've seen in statute in the past implementing programs. So it , that may be the, the ro uh, roadmap for what Congress needs to do in the future. And we'll see how those challenges play out to Jonathan's point, because , um, there's still, there's still discretion that CMS is applying in, in , um, looking at those statutory terms. Okay. So on Safe Harbors, Jonathan's e Exactly. Right. Um, you know, there are a few statutory exceptions , uh, which most prominently , uh, for this purpose of this discussion include discounts where it's a , you know, pretty, you know, I don't know, 50 word , um, statutory exception for discounts , um, from prosecution under the anti-kickback statute. OIG had issu for all those statutory exceptions, OIG implemented regulation regulatory safe harbors with , um, with more details. And in the context of discounts, it's a lot more details , uh, about how OIG feels , uh, or what OIG says are the requirements to be immune from prosecution for any discount. Um, then there's the additional safe harbors that OIG has been authorized by Congress to, to issue on their own without any statutory , um, analog. To me, those are probably not affected at all by this, but I would point to those ones where there's a statutory exception and a regulatory safe harbor as an area , uh, where there's , uh, someone , uh, the industry's in a much better position to argue that they meet the statutory exception, notwithstanding, they haven't ticked all the boxes in the regulatory safe harbor. Um, and if they have a reasonable reading of the statute , um, I think they have a much stronger argument and a defense in a , uh, in an enforcement action in that context, of course , where you have , um, some level of intent that the government has to establish. Um, so applying Supreme Court , uh, decision from last year, super value , um, if one wanted to take a broader reading of the discount exception , uh, to justify your conduct, I would recommend , uh, contemporaneously documenting your rationale for why you think that is reasonable , um, notwithstanding , uh, that it might not fit the regulatory safe harbor. But that is definitely an area where there's, there's daylight now betwe , um, between the statute and the regulations.
Speaker 2:Uh, excellent. That's a great take. And , um, and we'll hold you to that, Greg, but <laugh> that said , um, no , really helpful to get your thoughts on that. And I think similarly about the Stark Law, you know, where there's statutory exceptions, there's regulatory exceptions, there's some debate about how CMS interpreted some of the statutory exceptions in their analy , uh, analogous regulatory exceptions. Um, which they would probably argue is just explaining what Congress said. And in most cases, that's probably gonna be all right . But there's a few places where they deviate a little bit or where it, it's hard to square the two up that may be , um, an issue. And I deal with that all the time. The big three is, one, I worry about the fair market value definition's a little bit different than the statutory definition, and I wonder to what extent that , um, might be impacted. I think CMS would argue it just expands on the statutory definition, but , um, and clarifies it , uh, helpfully for the most part, in my opinion. But we'll have to see what , or whether that gets challenged. I think there's some other things in the Stark regulations that maybe , uh, worry about in <inaudible> in your comments, if you have any on any of them. Things like stand in the shoes, indirect arrangements, the whole group practice definition. Some of those things are, you know, not well spelled out in the statute, obviously. And CMS has done a lot there. Maybe it's fine, but I'm interested in what the thoughts are.
Speaker 4:Well, I am , uh, I'm not, I'm not an expert on Stark, I will say, I , I would always look at the statute, does the statute say as implemented in regulations or authorized regulations to implement? Um, that would be my starting point. 'cause in the Safe Harbor example that we were just talking about, those statutory safe harbors do not refer to, you know, sort of as implemented by regulation for those provisions. It's a separate provision that says OIG can go and do their own safe harbors. Um, I think it was expected that CMS would be , um, operationalizing the complex , uh, application of the star law as a payment mechanism , uh, or a payment, you know , uh, deciding factor for Medicare payment, which is how the statute is set up, even though it's enforced under the False Claims Act. Yep . That CMS would have responsibility for, for figuring that out at a program level.
Speaker 2:Yeah, it's obviously a complicated law, and, and that's what a lot of healthcare laws kind of fall into that category. And I wanna get your thoughts on some other ones, whether they, you know, they're impacted things like hipaa, things like Tala , um, things even like the Affordable Care Act , um, come to mind. Um, not to mention some of the, the pandemic related , uh, laws that came out where the regulations were issued fairly quickly , uh, because there was an negligent circumstance. And I know the court would take that into account, but the question is, you know, to what extent are some of those thrown into doubt by the decision?
Speaker 3:Yeah, I chip, I'll be really interested to see what, what courts do with this. I mean, the , I I , I don't think that that a lot of those that you just mentioned are , are just gonna get to totally thrown out. You know, tho those are regulatory structures that are still pretty close. I, I would, I would watch things like, you know , um, deas Controlled Substances Act regulations. You know, one , one of the big areas that I'm hearing is, is that, you know, the way physicians are prosecuted under Title 21 for what, what DEA says are illegal opioid prescriptions is an entire regulatory scheme that's really not found in the statute. I mean, the , um, doctors that are prosecuted , uh, for illegal opioid prescriptions, that's under the, the Federal Drug Dealing Statute. It's 21 USCA 41. That's what you use to like, you know, prosecute , uh, the Mexican , the , the , the cartels. And so what the, the , the fact that doctors are being prosecuted under that when there's really no, like Congress didn't go and ask DEA, hey, figure out the way that , um, figure out the guidelines where doctors would be prosecuted for , uh, writing controlled substance prescriptions that sort of fall outside the bounds of ordinary professional practice that that didn't happen. And so that , uh, we're talking about all these things within, within healthcare where , um, where, where the HHS agencies were, were pretty thoughtful about how they fit in with, with the statutory grant. That's, that's something that, that I think is more likely the DEA world , um, where there's not a really strong connection to something that Congress said, Hey, go and do this so and so in , in my mind, maybe there's gonna be an impact on, on things like hipaa. But I, I think those are, are relatively closely tailored. I haven't , I'm not an expert on, on HIPAA or anything, but I think those are relatively tailored to , uh, the statutory grant. This DEA stuff is interesting though.
Speaker 2:Yeah. Uh, gr great take on it. Greg, any thoughts?
Speaker 4:Yeah, I just, it'll be interesting to see how courts interpret this over time. And of course, Chevron was reinterpreted or fine tuned over the years. And I think there , you know, at some point, courts and per se , perhaps the Supreme Court would recognize , um, some of these concepts of how complex Medicare, Medicaid, FDA these areas are and talk , uh, build out a little bit of the discussion that's in the decision about respect for agencies , um, in factual , um, and policymaking areas, particularly for longstanding interpretations. Um, and sort of how that, you know, so that's like, it's different from Chevron deference , but the Skidmore respect concept can apply to result in a similar outcome where the agency has been thoughtful and as Jonathan's saying, and, and is , um, where they're going can be tied directly to the statutory language, a, a , a good , uh, maybe not the , well, you know, this , a single best reading of the statute , um, could be the same as what the agency has come up with. Uh, if they are showing that they're being careful with their work , um, and they're not, there's not a result that the court is offended by.
Speaker 2:Yeah, I , I see , uh, you all guys talked earlier about the fee schedule and sort of how that works. And I think the good news on that one is Congress often has weighed in on, you know, at the end of the year or sort of at the 11th hour on sort of the conversion rates and things related to the fee schedule. So in some ways they've been involved in that process. Um, and that's probably helpful to arguing that, that that process is working the way Congress intended. Um, who's gonna challenge , uh, things do we see out there? I mean, are defendants going to raise this on a regular basis? I mean, maybe if they don't have any success, it'll kind of calm down, but what do you guys think about who's gonna challenge this? I don't, we talked yesterday a little bit about the idea that don't see the, the government trying to use it as a sword , but, but hopefully , um, hopefully it , it ends up not being a tremendous tie up for things. But I don't know, Greg or , or Jonathan , what you think about how this is gonna tie things up.
Speaker 4:I think when provi , when there's some group that where a decision that say CMS has made has a big monetary impact , um, it just opens the door at least a little bit more to go back to the statute and argue for an alternative interpretation. You know, there was a , um, one of the amicus briefs before the Supreme Court talked about a series of, of circuit court decisions that had relied on Chevron for the definition of certain terms. Like what's a geographic area for setting hospital reimbursement? What is a , does a certain service fall within , uh, you know, a certain definition for nursing services where these, the decision that the agency made had a big monetary impact on some group of providers. And, you know, if it's millions and millions of dollars, well, maybe it's worth hiring some lawyers and making that , uh, argument. Those cases were brought, even when Chevron was good law, it just o to me opens up the door in that area a little bit more.
Speaker 3:Yeah, I, I think federal programs at DOJ is about to be busy. I, I , I think there's gonna be a , uh, I I , I think there's gonna be a lot of challenges here. A lot of lawyers, a lot of people do what , what, you know, Greg and I do are have been, you know, talking on LinkedIn about how, you know, hi , hire me and I'll, I'll go take down whatever, whatever you want. I , I, you know , so I think you're gonna see a lot of challenges. Um, what'll be interesting is to see the first few challenges that are actually successful. I mean, there , there are, there are some areas out there where I , I'm, I'm probably not in the healthcare space, but there's some other, other areas where I think they'll be successful. And, and I think that's gonna be the one that , um, that really guides everyone else to say, okay, what are the types of challenges that have been successful? I, I, I'm waiting to see the , the successful challenges. Um, but before you sort of figure out, is this gonna be a huge thing or a not so huge thing?
Speaker 2:Yeah. So day before the Loper case, the JARAs case was decided , um, you know, this one said that if the government wants to level a , a levy civil penalties , uh, there needs to be, or there's a right anyway to a jury trial, I guess the defendant could opt out of that, right? But , um, but they have a right to a jury trial if there's gonna be civil penalties. Um, and let , let's start off with, you know, what kinds of penalties in healthcare might this even apply to? I think , um, there probably are a few, but like, to get your thoughts on where this case might impact us in healthcare.
Speaker 4:Well , uh, near and dear to my heart are all the OIG uh, uh, civil money penalties. CMS has, it's a whole , uh, group of civil money penalties, for example, in the nursing home. And the , um, FDA also has civil money penalties for , uh, good manufacturing practices, et cetera. Um, for, for OIG, you know, a lot of those remedies are similar or seem similar to me, to the SEC's , um, uh, basis in, in the JARAs case, fraud based , uh, claims that would be analogous to a common law fraud claim, which the court talks about. And it sound , it seemed , it certainly seems to me that , uh, it calls into question OIGs ability to bring those cases , uh, at least the civil money penalty. Uh, part of them, unlike the SEC , oig G doesn't have the alternative of going and filing a case. Um, in the first instance in federal court, they only have the A LJ Administrative Law Judge , uh, process that's set out in statute. So , um, whereas the Supreme Court's told SEC , well, now you can just, you can just bring your cases in federal court. OI , uh, arguably, OIG doesn't have an avenue to bring civil money penalty cases, at least those that are , uh, uh, legal in nature , um, and fraud based . They have a lot of CMPs for tala and other things that are not necessarily fraud based . I'm not sure where those play out or how those might fall out in this , um, after the JAR decision. Um, that does leave open the question of the exclusion remedy, which is more equitable in nature , um, that OIG has. So I think that that's a big, I mean , OIG settles, you know, well , you know, generally over a hundred cases a year, a lot of those are , are self disclosures where, where entities may still want to come in and resolve those matters, but for a actions initiated by OIG , uh, I think this is , uh, this is gonna have a big impact, and we'll see what it is. It could be that they're not in a position to bring those cases. Um , but I'm interested in what Jonathan thinks as well.
Speaker 3:Yeah. Greg ? Greg, I agree with you. I think, I think this is gonna have a, a really big impact. And we're, by the way, we're sparing our listeners the seventh Amendment, like case law analysis. No one wants to hear that. But the, the big thing , the , like the, the high level view on this is there are a lot of , uh, CMPs in healthcare there . It's, it's OIG, it's CMS, it's FDA , and a lot of those are legal in nature rather than equitable. And so, you know, I I , I think there's gonna be a, a, this is , I think it's gonna have a big impact. I think Jars C is gonna have a big impact on, on healthcare. Um, you know, there are a lot of CMPs that punish specific acts, and so I think these are, a lot of CMPs are on the, are on the legal side, and Jar SY is gonna gonna apply to them. You know , the last few months alone, you've seen OIG take CMP action against, you know, an orthopedic group for submitting claims that exceeded the allowable number of services , um, similar, you know, CMPs against pharmacies for not submitting timely pricing data. I don't know that those are, I I , those sound awfully legal to me. Uh, and then on the FDA side, you've see seen a sa slew of CMP complaints filed recently against companies that have run afoul of FDA's pre-market authorization regulations. The , again, I think those are, are, are legal in nature gonna be subject to darky ? I , so I think while , uh, I think we've agreed that LOPA Brighton in the healthcare , uh, world may not have like this revolutionary impact, I think Jar Cay is gonna have a fairly impact , a fairly large impact, because a lot of these CMPs are, are, you know, fundamentally legal.
Speaker 2:And I guess, Jonathan, the question for you, is government going to trial on a lot of these, or is it just gonna mean, hey, more of them are gonna end up in settlements maybe with lower recoveries , uh, because the government's not gonna risk trial any more than they used to? Um, thoughts on that? Yeah.
Speaker 3:That , that's, that's the , that's the question, Greg, is, or I'm sorry, I that's the question Chip is , um, is what, what exactly is gonna happen here? Uh, you know, I I think that , uh, federal agencies love going before ajs. It's sort of a , you know, it's , it's a bit of a , a home court advantage , um, going to federal courts different, and, and I think a lot of, you know, borderline cases might not be , um, might not be going forward now, but maybe that's a good thing. Maybe the borderline cases shouldn't be, you know, resulting in, in, in CMPs in the first place. And so I may , I , I think the cases that agencies feel strongly about, they're gonna push those in a federal court, it's gonna be those other ones where maybe, maybe that's, that's not gonna happen.
Speaker 4:Yeah . And I , I would just say, you know what , uh, one thing OIG has tried to do is bring relatively small CMP cases to , uh, compliment what the Department of Justice is doing. So, DOJ would bring a big civil case against a lab or a pharmaceutical company's paying kickbacks to doctors. OIG would pursue some CMPs against the doctors, 50,000, a hundred thousand , uh, $200,000 settlements. Um, another way this dynamic could play out is DO J's gonna bring those cases , um, and you could still settle the case , uh, if you're gonna litigate it, it's a lot, it's a much more extensive process , uh, in federal court civil litigation than it is administratively as a CMP matter. Now, very few of those cases, just like with civil cases, very few of those administrative cases get litigated. Um, but it , it is a , it's a different process, different rights, different , um, you know, in both , um, particularly in discovery and then in the actual court proceeding. And that's part of the logic that the Supreme Court was looking at , um, in making its decision. But we, I don't know, just like as in , uh, Loper , how this plays out is not necessarily certain where you've got , particularly with healthcare fraud enforcement, where you already have a robust Department of Justice civil enforcement machine that is out there. Um, so while , while OIG doesn't have that, that remedy to go directly as a party, they have their partners at the Department of Justice who bring these cases every day .
Speaker 2:Yeah. I'll throw out the one other area I deal with that this could come up is the Intermediate Sanctions rules IRS rule dealing with nonprofits and their tax exemption. A lot of healthcares are nonprofits and obviously enjoy tax exemption, and no one wants to get rid of the tax exemption, but the intermediate sanction rule was designed as a way to avoid that remedy in favor of a more , um, fair, I wouldn't say more fair. Uh , maybe the word is a , a simpler remedy, maybe a remedy that still keeps them as a viable entity rather than completely knocks them out the water. Um, and yet I wonder whether IRS will be able to impose those , uh, remedies without , um, you know, a jury trial under the ACY case. It remains to be seen. Uh , but that could impact the healthcare industry as well. I don't know if either of you ever deal with that, but I certainly deal with those IRS fair market value opinions all the time. There's a fair market value , uh, construct in the intermediate sanction law that helps reduce the penalty , uh, for people that take advantage of it. So that comes up. Um, well , I really appreciate the time today, everyone. Uh , what I'd like both of you to do is kinda give last thoughts on this topic, and then we'll wrap it up. Uh , I don't know who wants to go first, Greg?
Speaker 4:Oh , I guess I , um, I would just say, you know, this is part , uh, these cases are part of some really significant changes, and there's gonna , as we mentioned at the top , um, there's interplay , um, with these and other decisions, and it also just , um, they reflect a certain approach , um, and attitude about it , the administrative state, so to speak, that the Supreme Court has, and that there , therefore courts are gonna have , um, and there's, while these decisions will have , will explicitly drive some results, I think it's also part of a , an atmosphere where administrative actions in general are gonna be much more, courts are gonna bring a much more skeptical eye. Um, even if it's not something that is driven directly by one of these cases.
Speaker 3:And Chip, I'll, I'll, I'll add on , uh, to what Greg said. You know, I, I, I think that , uh, it is just too early for us to know exactly what the, what the result is gonna be here. I mean, clearly there're gonna be more challenges now than there were before, and I wanna see if there's successful , um, that that's gonna be the, the , the big, the big tell is to see is this having a real impact? Um, I , I don't know that it's gonna have a huge impact in , in healthcare outside of the, the CMP world. Um, but I'm, I'm like , like everyone else, I'm excited to see what , uh, what comes of this, this is why lawyers are always gonna have , uh, jobs, is stuff like this where all of a sudden there's a big, big change and we'll see what comes of it.
Speaker 2:Yeah. A follow on to that is, you know, what happens if we get sort of the circuit split thing on whether a particular , uh, rule, you know, gets knocked out under Loper , then what do we have to wait for the Supreme Court and goodness knows, right? Yeah .
Speaker 4:That , that's a really important point. You know, we, one of the advantages of having an administrative agency decide these things is there's much more uniformity and certainty than there is when it's a battle between , um, you know, various litigants in various circuits. So yeah , bring more uncertainty.
Speaker 2:I didn't think about that one until now. But in any event, thank you both Greg and Jonathan for joining me today. Really appreciate that. Uh, with that we'll sign off and thanks everyone for listening. Have a great day.
Speaker 4:Thank you.
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