News & Insights


October 2, 2023

Health Headlines – October 2, 2023

Congress Avoids Shutdown, Funds Federal Government Through November 17, and Extends Certain Health Programs – On the afternoon of Saturday, September 30, 2023, Congress passed H.R. 5860, the Continuing Appropriations, 2024 and Other Extensions Act, averting a government shutdown and funding the federal government for forty-five days through November 17, 2023.  The House approved H.R. 5860 by a vote of 335-91, with 209 Democrats joining with 126 Republicans to approve the bill.  Ninety Republicans and one Democrat voted against the measure.  The Senate approved the legislation by a vote of 88-9, and President Biden signed the bill into law that evening. 

In addition to continuing federal government funding, H.R. 5860 provided $16 billion in disaster relief funding in the wake of fires in Hawaii and Louisiana, flooding in Florida due to Hurricane Idalia, as well as flooding in Vermont in July.  Additional military aid to Ukraine was not included in the legislation.

H.R. 5860 delayed the Medicaid disproportionate share hospital (DSH) cuts scheduled to take effect on October 1, 2023; those cuts will be delayed to November 18, 2023.  The bill extended authorizations for several expiring health programs through November 17, 2023, including:

  • Community Health Centers;
  • National Health Service Corps;
  • Teaching Health Center Graduate Medical Education Program;
  • Special Diabetes Programs for Type I Diabetes; and
  • Certain Pandemic Preparedness Authorities, including the ability to appoint National Disaster Medical System personnel, to reassign state and local personnel during a public health emergency, and to extend selected disaster advisory committees.

Health program authorizations expiring on October 1, 2023, and not extended via the continuing appropriations legislation include:

  • Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act) programs;
  • Children’s Hospital Graduate Medical Education;
  • Maternal health programs including the PREEMIE Reauthorization Act and the Preventing Maternal Deaths Reauthorization Act;
  • The Pandemic and All-Hazards Preparedness Act (PAHPA); and
  • The President’s Emergency Plan for AIDS Relief (PEPFAR), which funds foreign HIV/AIDS assistance.

A summary of legislative activity on H.R. 5860 can be found here, and legislative text can be found here

Reporter, Allison Kassir, Washington, D.C., +1 202 626 5600,

Court Finds Hospitals’ Lawsuit Challenging HHS’s Calculation of the IPPS Standardized Amount Was Premature and Remands to the PRRB – On September 27, 2023, Judge Royce Lamberth of the United States District Court for the District of Columbia dismissed a lawsuit challenging HHS’s calculation of the standardized amount used in calculating Medicare Inpatient Prospective Payment System (IPPS) payments.  The Court ruled that the hospitals failed to exhaust administrative remedies under the Medicare Act and declined to exercise mandamus powers to order the Provider Review Reimbursement Board (PRRB) to rule on its jurisdiction within a particular time.

More than twenty hospitals alleged that the HHS Secretary used invalidly low standardized amounts in calculating IPPS payments for hospital inpatient services for fiscal years 2019, 2020, and 2021. 

The hospitals initiated a challenge to the standardized amounts before the PRRB, where they filed a request for an expedited judicial review (EJR).  The EJR process permits parties to bypass the PRRB hearing process when the PRRB has jurisdiction but lacks authority to decide a question of law regarding the matters in controversy.  The Medicare statute requires the PRRB to decide EJR requests within thirty days and states that if the PRRB fails to do so, the party requesting EJR may bypass the PRRB and file a civil action in a federal district court.  CMS’s regulation states that the 30-day clock only starts after the PRRB has determined it has jurisdiction and places no time limit on the PRRB’s jurisdictional determination.    

The PRRB dismissed the hospitals’ initial EJR request, but it simultaneously requested additional briefing and allowed the hospitals to refile at a later date.  The hospitals filed a second EJR request and, after the PRRB declined to rule on its jurisdiction within 30 days, the hospitals filed their civil action in the Federal District Court for the District of Columbia.  The hospitals argued that the 30-day limit should apply to both the PRRB’s determination of jurisdiction and authority.    

The HHS Secretary moved to dismiss the hospitals’ lawsuit.  The District Court ruled that it lacked jurisdiction over the hospitals’ lawsuit because the hospitals failed to exhaust administrative remedies when they filed their civil action in federal court before the PRRB had determined whether it had jurisdiction.  The Court accepted CMS’s position that the 30-day clock for the PRRB to rule on its authority to address a legal issue only starts after the PRRB accepts jurisdiction.  In addition, the Court declined to exercise its mandamus power to order the PRRB to rule on its jurisdiction within 30 days. 

The case is Saint Francis Medical Center et al. v. Becerra, No. 1:22-cv-01960-RCL (D.D.C., Sep. 27, 2023).  A copy of the Court’s order is available here.

Reporter, Doug Comin, Atlanta, +1 404 572 3525,

Compliance Column

Hospice Medical Director Sentencing Underscores Continued Hospice Enforcement Focus – In a press release dated September 27, 2023, the U.S. Attorney's Office in the Southern District of Texas announced that Jesus Virlar-Cadena was sentenced to serve 50 months in federal prison for his alleged role involving the submission of over $150 million in purported false claims to Medicare for hospice and other services. The court also ordered Virlar-Cadena to pay $9 million in restitution and $9 million in forfeiture.

From 2009 to 2018, Virlar-Cadena served as the medical director of the Merida Group, a healthcare company that operated multiple locations throughout Texas. Merida Group hired Virlar-Cadena and other medical directors but allegedly made payment of their medical director fees contingent upon an agreement to certify Medicare patients for hospice who were not terminally ill. According to the press release, evidence at trial allegedly demonstrated that Merida Group marketers falsely told patients they had less than six months to live. In addition to medical director fees, Virlar-Cadena allegedly received luxury trips and other perks. Virlar-Cadena was previously licensed as a physician, but the Texas Medical Board later suspended his medical license. A federal jury convicted co-conspirators Rodney Mesquias, Henry McInnis, and Francisco Pena in October 2019. Additional information regarding Mesquias and McInnis is available in a 2020 DOJ press release available here.

This development underscores the continued enforcement focus on the hospice industry and the government’s focus on holding individuals accountable for alleged wrongdoing. Hospice medical directorships have been, and continue to be, a key enforcement area.

The DOJ press release regarding Virlar-Cadena is available here.

Reporter, Lauren S. Gennett, Atlanta, + 1 404 572 3592,