Health Law Advisor

Today, on April 29, 2024, following more than a decade of discourse, the U.S. Food and Drug Administration (“FDA” or the “Agency”) released its long-awaited “Medical Devices; Laboratory Developed Tests” Final Rule (the “Final Rule”) formalizing the Agency’s authority to regulate laboratory developed tests (“LDTs”) as medical devices.

Since FDA issued its Proposed Rule (the “Proposed Rule”) in the Fall of 2023, Epstein Becker Green (EBG) and other industry stakeholders have eagerly awaited FDA’s issuance of the Final Rule and have speculated as to the provisions the Agency would choose to finalize.

Now, with the wait finally over, EBG joins the rest of industry in our review of the Final Rule, and we will be preparing a more in-depth analysis of the Final Rule and its potential impact on laboratories and the nationwide healthcare system. For now, here are important preliminary takeaways from the Final Rule.

Throughout the course of the pandemic, the Health Resources and Services Administration (HRSA) distributed $178 billion in Provider Relief Funds (PRF) to hospitals and health care providers.  The Public Health Emergency has ended, and HRSA is now turning an eye to how the money was spent, and whether it was spent properly. 

PRF funds were distributed with nearly no-strings-attached; hospitals and providers had to simply agree to a few terms and conditions.  Yet a number of facilities and providers have received one of two types of letters from HRSA: (1) a Final Repayment Notice stating the money must be returned, or (2) a letter stating that HRSA will be conducting an audit.  

On January 11, 2022, the Centers for Medicare and Medicaid Services (“CMS”) published an anticipated proposed National Coverage Determination (“NCD”) decision memorandum that begins the process of determining whether the Medicare program will cover FDA-approved monoclonal antibodies directed against amyloid for the treatment of Alzheimer’s Disease. (https://www.cms.gov/medicare-coverage-database/view/ncacal-decision-memo.aspx?proposed=Y&NCAId=305).

The proposed decision, which is subject to public comments that are due to CMS by February 10, 2022, does not endorse nationwide Medicare coverage for these drugs. Instead, CMS chose an alternate pathway known as Coverage with Evidence Development (“CED”).  If the proposal is adopted by CMS, it would set in motion a detailed regulatory process that includes temporary Medicare coverage for the drug but only for certain Medicare beneficiaries who are enrolled in an additional clinical trial intended to test whether these drugs will have a significant benefit for Medicare beneficiaries.  CMS expects to issue a decision by April 11, 2022 to approve or reject the CED process after reviewing comments from interested parties.

On September 30, 2021, the Provider Reimbursement Review Board (the “Board”) issued a revised set of rules that become effective November 1, 2021. These new and revised rules affect all new and some pending Medicare Part A provider appeals. These rules clarify several aspects of Board appeals and simplify some of the Board’s complex procedures.

The most significant change is the requirement that all submissions to the Board must be made electronically through the Office of Hearings Case and Document Management System (“OH-CDMS”) unless the provider or representative ...

On September 15, 2021, CMS published a proposed rule that would repeal a final rule that created an expedited pathway for Medicare coverage of breakthrough devices and established formal criteria for applying the “reasonable and necessary” standard for coverage in Section 1862(a)(1)(A) of the Social Security Act, which has been the basic standard for coverage since the inception of the Medicare program.[1]  CMS has set a short period for comments, and interested parties must submit comments by October 15, 2021.

The new proposed rule reflects a significant policy change.  Where the initial rule focused on expanding access to new innovations, the current approach focuses more on Medicare program goals and outcomes data.

Teaching hospitals should find that their Medicare reimbursement for training physicians will be a little sweeter thanks to a decision by the United States District Court for the District of Columbia.  Milton S. Hershey Medical Center, et al. v. Becerra, No. 19-2680 (D.D.C. May 17, 2021).  The hospitals challenged a 1997 regulation that set out a formula for counting the number of full-time residents and fellows. Under the Medicare statute, the government reimburses hospitals for salaries and administrative costs directly related to graduate medical education (“GME”). The ...

GenomeDx Biosciences Corp., which markets a genomic test (Decipher®) intended to assess the aggressiveness of prostate cancer, has agreed to pay $1.99 million to the U.S. Department of Justice to resolve allegations that it violated the False Claims Act (31 U.S.C. §§ 3729 et seq.)(“FCA”) by submitting claims to Medicare for tests conducted to evaluate treatment options for men after prostate surgery.

The government and a whistleblower alleged that between September 2015 and June 2017, GenomeDx knowingly submitted Medicare reimbursement claims for the Decipher® test ...

The long-running saga of the Medicare appeals backlog added a new chapter that may give frustrated stakeholders a new remedy.[1]  On March 27, 2018, the United States Court of Appeals for the Fifth Circuit ruled that a home health agency may pursue a claim against the Secretary of HHS for failing to provide a hearing before an Administrative Law Judge within a reasonable time.  Family Rehabilitation, Incorporated v. Azar, No. 17-11337 (5^th Cir., Mar. 27, 2018).

In this case, Family Rehabilitation (“Family”) received a notice from a Medicare Zone Integrity Program Contractor ...

This is the 7th and final installment in the Medicare Secondary Payer Compliance series. All titles in this series can be viewed below. Subscribe to our blog to receive these future updates. Prior installments of this series can be accessed using the links provided.

• Medicare Secondary Payer Compliance: An Introduction (Part I)
• Medicare Secondary Payer Compliance: Conditional Payments (Part II)
• Medicare Secondary Payer Compliance: Group Health Plans (Part III)
• Medicare Secondary Payer Compliance: Non-Group Health Plans (NGHPs) (Part IV)
• Medicare Secondary Payer Compliance:

This is part 6 of 7 in the Medicare Secondary Payer Compliance series. All titles in this series can be viewed below. Subscribe to our blog to receive these future updates. Prior installments of this series can be accessed using the links provided.

• Medicare Secondary Payer Compliance: An Introduction (Part I)
• Medicare Secondary Payer Compliance: Conditional Payments (Part II)
• Medicare Secondary Payer Compliance: Group Health Plans (Part III)
• Medicare Secondary Payer Compliance: Non-Group Health Plans (NGHPs) (Part IV)
• Medicare Secondary Payer Compliance: Providers (Part V)

This is part 5 of 7 in the Medicare Secondary Payer Compliance series. All titles in this series can be viewed below. Subscribe to our blog to receive these future updates. Prior installments of this series can be accessed using the links provided.

• Medicare Secondary Payer Compliance: An Introduction (Part I)
• Medicare Secondary Payer Compliance: Conditional Payments (Part II)
• Medicare Secondary Payer Compliance: Group Health Plans (Part III)
• Medicare Secondary Payer Compliance: Non-Group Health Plans (NGHPs) (Part IV)
• Medicare Secondary Payer Compliance: Providers (Part V)

This is part 4 of 7 in the Medicare Secondary Payer Compliance series. All titles in this series can be viewed below. Subscribe to our blog to receive these future updates. Prior installments of this series can be accessed using the links provided.

• Medicare Secondary Payer Compliance: An Introduction (Part I)
• Medicare Secondary Payer Compliance: Conditional Payments (Part II)
• Medicare Secondary Payer Compliance: Group Health Plans (Part III)
• Medicare Secondary Payer Compliance: Non-Group Health Plans (NGHPs) (Part IV)
• Medicare Secondary Payer Compliance: Providers (Part V)

This is part 3 of 7 in the Medicare Secondary Payer Compliance series. All titles in this series can be viewed below. Subscribe to our blog to receive these future updates. Prior installments of this series can be accessed using the links provided.

• Medicare Secondary Payer Compliance: An Introduction (Part I)
• Medicare Secondary Payer Compliance: Conditional Payments (Part II)
• Medicare Secondary Payer Compliance: Group Health Plans (Part III)
• Medicare Secondary Payer Compliance: Non-Group Health Plans (NGHPs) (Part IV)
• Medicare Secondary Payer Compliance: Providers (Part V)

This is part 2 of 7 in the Medicare Secondary Payer Compliance series. All titles in this series can be viewed below. Subscribe to our blog to receive these future updates. Prior installments of this series can be accessed using the links provided.

• Medicare Secondary Payer Compliance: An Introduction (Part I)
• Medicare Secondary Payer Compliance: Conditional Payments (Part II)
• Medicare Secondary Payer Compliance: Group Health Plans (Part III)
• Medicare Secondary Payer Compliance: Non-Group Health Plans (NGHPs) (Part IV)
• Medicare Secondary Payer Compliance: Providers (Part V)

All titles in this series can be viewed below. Subscribe to our blog to receive these future updates. Prior installments of this series can be accessed using the links provided.

• Medicare Secondary Payer Compliance: An Introduction (Part I)
• Medicare Secondary Payer Compliance: Conditional Payments (Part II)
• Medicare Secondary Payer Compliance: Group Health Plans (Part III)
• Medicare Secondary Payer Compliance: Non-Group Health Plans (NGHPs) (Part IV)
• Medicare Secondary Payer Compliance: Providers (Part V)
• Medicare Secondary Payer Compliance: The False Claims Act (FCA) for ...

Congress is currently considering two bills that would dramatically alter the ways in which all federal agencies develop and publish rules. If enacted, both would create significant new obligations for agencies such as CMS and the FDA, expand the scope of judicial review of rules, and would increase the potential for political influence over the rulemaking process. Both bills passed the House on party-line votes, and are under consideration by the Senate.

The first bill, H.R. 5, would overhaul multiple phases of the federal rulemaking process. These proposed changes would make the ...

On October 24, 2016 the Food and Drug Administration ("FDA") in conjunction with the Centers for Medicare & Medicaid Services ("CMS") announced their intention to extend the Parallel Review pilot program indefinitely. The Parallel Review process is intended to provide timely feedback on clinical data requirements from FDA and CMS, and minimize the time required for receiving Medicare coverage nationally.  Sounds good.  So, why have so few manufacturers taken advantage of the program to date?

Despite its admirable goals, the current Parallel Review Process is too limited in scope ...

Where does the line fall between good faith and criminal intent? That was the question that a Massachusetts federal jury faced in July as it deliberated criminal charges against William Facteau and Patrick Fabian, ex-Acclarent executives, who were indicted on multiple charges of fraud and misbranding a medical device. Acclarent's device, the Relieva Stratus Microflow Spacer ("Stratus"), was cleared by the FDA for use as a spacer to maintain an opening in the sinus. Although the FDA expressly rejected Acclarant's request to expand the indicated use of the device to include delivery ...

On July 7, 2016, the Centers for Medicare and Medicaid Services ("CMS") imposed several administrative penalties on Theranos, a clinical laboratory company that proposed to revolutionize the clinical laboratory business by performing multiple blood tests using a few drops of blood drawn from a finger rather than from a traditional blood draw that relies on needles and tubes. However, after inspecting the laboratory, CMS concluded that the company failed to comply with federal law and regulations governing clinical laboratories and it posed an immediate jeopardy to patient ...

[caption id="attachment_1475" align="alignright" width="113"] Robert E. Wanerman[/caption]

A group of conservative members of Congress have introduced a pair of bills (S. 2724 and H.R. 4768) that would sweep away one of the basic principles of administrative law if they became law. The proposed amendments would make it easier to challenge many determinations involving the Department of Health and Human Services in federal courts by legislatively overruling the deference commonly applied to agency interpretations of the law.

Even before the Administrative Procedure Act was ...

[caption id="attachment_1475" align="alignright" width="113"] Robert E. Wanerman[/caption]

Even after the Secretary of HHS admitted that the current backlog of Medicare Part B appeals would take ten years to adjudicate at current staffing and funding levels, that was not enough for a hospital to obtain any relief from a court. Cumberland County Hospital System, Inc. v. Burwell, No. 15-1393 (4th Cir., Mar. 7, 2016).  In that case, a North Carolina hospital had initially been paid for over 900 claims, but those claims were subsequently determined to be ineligible after a ...

The Physician Payment Sunshine Act, which was incorporated into Section 6002 of the Affordable Care Act, requires pharmaceutical, medical device, biological and medical supply manufacturers to file annual reports on payments to physicians and teaching hospitals. Despite the requirement in the law that manufacturers submit their first report in March 2013 disclosing payments made during 2012, two events have pushed back that obligation or taken the sting out of noncompliance.

First, although Centers for Medicare & Medicaid Services (CMS) was required to publish standards for ...