Health Law Advisor

New from the Diagnosing Health Care Podcast: The recent 2024 elections resulted in a new Trump administration and a Republican-controlled House and Senate.

From policymakers to stakeholders across the industry, everyone is wondering what health policy will look like in 2025 and beyond.

On this episode, Epstein Becker Green attorneys Ted Kennedy Jr., Leslie Norwalk, Philo Hall, and Alexis Boaz discuss the results of the 2024 elections and their impact on the health policy space. What will a second Trump administration look like? How might the election results affect the health care policies addressed during Congress’s 2024 lame-duck session?

From our Thought Leaders in Health Law video series: The U.S. Supreme Court’s 2022 decision in Dobbs v. Jackson Women’s Health Organization to eliminate the federal constitutional right to abortion continues to alter the legal landscape across the country.

On April 26, 2024, the U.S. Department of Health and Human Services (HHS) Office for Civil Rights published a final rule entitled the “HIPAA Privacy Rule to Support Reproductive Health Care Privacy” (the “Final Rule”).

The Final Rule—amending the Standards for Privacy of Individually Identifiable Health Information (the “Privacy Rule”) under the Health Insurance Portability and Accountability Act of 1996 (HIPAA), as well as the Health Information Technology for Economic and Clinical Health (HITECH) Act of 2009—strengthens privacy protections related to the use and disclosure of reproductive health care information. HIPAA’s Privacy Rule limits the disclosure of protected health information (PHI) and is part of HHS’s efforts to ensure that patients will not be afraid to seek health care from, or share important information with, health care providers.

What are the key takeaways from the Final Rule?

Turns out, ignorance really is bliss, at least according to the Office of Civil Rights (“OCR”) within the Department of Health and Human Services (“HHS”), in publishing its final rule on algorithmic discrimination by payers and providers. Our concern is that the final rule,  based on section 1557 of the Affordable Care Act, creates a double standard where more sophisticated organizations are held to a higher level of compliance.  Set to become effective 300 days after publication, health care providers and payers will have a lot of work to do in that time.

In this post, we will lay ...

In this episode of the Diagnosing Health Care Podcast: After nearly two years of combined efforts from the Federal Trade Commission and the Antitrust Division of the Department of Justice, the agencies jointly issued much-anticipated merger guidelines identifying the procedures and enforcement practices they will apply for evaluating potential mergers.

What might these changes mean for hospitals, health systems, and other stakeholders in the health care industry?

On this episode, Epstein Becker Green attorneys Trish Wagner, John Steren, Jeremy Morris, and Dan Fahey discuss some of the key changes in the finalized antitrust merger guidelines and what these guidelines mean for the agencies' approach to enforcement.

On April 1, 2024, the U.S. Department of Health and Human Services (“HHS”) released new guidance which requires hospitals to obtain informed consent from patients before practitioners, or medical or other students, perform important surgical tasks or sensitive or invasive procedures or examinations (“Guidance”). The Guidance aims to address increasing concerns over patient privacy, in particular the performance of sensitive examinations and invasive procedures on anesthetized patients.

The Guidance both revises the Hospital Interpretive Guidelines regarding ...

Healthcare organizations continue to be prime targets of cyberattacks. It is well-established that cyberattacks can lead to financial loss, reputational damage, and, in some cases, risks to patient care and safety. The recent and well-publicized cybersecurity incident affecting Change Healthcare further evidences these risks. As a result of the widespread and disruptive impact of this most recent cyberattack on the healthcare ecosystem, on March 5, 2024 the U.S. Department of Human Services (HHS) issued a public statement and has also announced that it opened an ...

On Friday, October 6, 2023, the Drug Enforcement Administration (“DEA”) and Department of Health and Human Services (“HHS”) filed a Second Temporary Extension of the COVID-19 Telemedicine Flexibilities for Prescription of Controlled Medications (“Second Temporary Rule”), extending the full set of telemedicine flexibilities adopted during the COVID-19 public health emergency (“PHE”) through December 31, 2024. The Second Temporary Rule is scheduled for publication in the Federal Register today (October 10, 2023) and scheduled to take effect on November ...

On August 30, an official at the United States Department of Health and Human Services (HHS) released one of the most significant announcements made at the federal level concerning marijuana reclassification. In a letter dated August 29, 2023, Rachel Levine (HHS Assistant Secretary for Health), provided a formal recommendation to Anne Milgrim (Agency Administrator) at the United States Drug Enforcement Agency (DEA) to reclassify cannabis from a Schedule I drug to a Schedule III drug under the Federal Controlled Substances Act (CSA).

A DEA spokesperson confirmed the department ...

On August 15, 2023, the U.S. Food and Drug Administration (“FDA”) released final guidance on informed consent for clinical investigations (“Final Guidance”). This update follows FDA’s draft guidance, which was issued in July 2014, and supersedes the FDA’s “A Guide to Informed Consent,” which was issued in September 1998. The Final Guidance is intended to assist clinical research stakeholders, such as institutional review boards (“IRBs”), investigators, and sponsors, in complying with FDA’s informed consent regulations for clinical ...

On August 29, 2023, the Centers for Medicare & Medicaid Services (CMS) announced the ten (10) Medicare Part D drugs selected for the first round of negotiations of the Medicare Drug Price Negotiation Program (Program)—a few days before the September 1, 2023, statutory deadline imposed by the Inflation Reduction Act (IRA). The negotiated pricing will go into effect in 2026.

In its announcement, CMS included details about upcoming opportunities for public input regarding the Program, including a series of patient-focused listening sessions CMS plans to hold for each ...

New York State cannabis agencies and related individuals were served with a lawsuit from four New York veterans (Carmine Fiore, William Norgard, Steve Mejia, and Dominic Spaccio, collectively, the “Plaintiffs”) related to the cannabis market and licensing structure on August 2, 2023. The Plaintiffs are alleging that under the Conditional Adult-Use Retail Dispensary (“CAURD”) licenses, state officials have been favoring “Justice Involved” individuals over disabled veterans in the application process. Their lawsuit has thus far led to the issuance of a ...

On August 3, 2023, the U.S. Department of Health & Human Services (“HHS”), the Department of Labor, and the Department of Treasury (collectively, the “Departments”) temporarily suspended the federal Independent Dispute Resolution (“IDR”) process immediately following the issuance of a decision by the U.S. District Court for the Eastern District of Texas (the “Court”) that vacated certain regulations and guidance the Departments issued to implement the No Surprises Act (“NSA”).

The Court’s ruling in Texas Medical Association, et al. v. HHS (“TMA IV”)—which addressed claim “batching” and the $350 administrative fee required to initiate the IDR process—represents the Department’s third significant loss in legal challenges against the Departments’ implementation of the NSA’s IDR process that providers, facilities, air ambulance providers, and plans may use to determine the correct payment amounts for certain out-of-network services. On August 11, 2023, the Departments issued a “Frequently Asked Questions” guidance document to detail their intended approach to address the administrative fee. The Departments plan to issue additional updates on the NSA IDR process after further analysis of the TMA IV decision.

Introduction

Hardly a day goes by when we don’t see some media report of health care providers experimenting with machine learning, and more recently with generative AI, in the context of patient care. The allure is obvious. But the question is, to what extent do health care providers need to worry about FDA requirements as they use AI?

In a previous blog, we discussed the Federal Trade Commission’s (“FTC”) proposed changes to its Guides Concerning the Use of Endorsements and Testimonials in Advertising (the “Endorsement Guides”). The Endorsement Guides are intended to help businesses ensure that their endorsement and testimonial advertising conforms with Section 5 of the FTC Act, which prohibits “unfair or deceptive acts or practices in or affecting commerce,” including false advertising. We specifically highlighted the FTC’s proposed changes related to social media platforms and their users, deceptive endorsements by online “influencers,” businesses’ use of consumer reviews, and the impact of advertising on children. Now, approximately one year later, and after receiving and considering public comments on its proposed changes, the FTC has issued its final rule adopting revisions to the Endorsement Guides. See Guides Concerning the Use of Endorsements and Testimonials in Advertising, 88 Fed. Reg. 48092 (July 26, 2023) (to be codified at 16 C.F.R. pt. 255). In issuing its final revised Endorsement Guides, the FTC stated that the changes are intended to “reflect the ways advertisers now reach consumers to promote products and services, including through social media and reviews.” We summarize below the FTC’s final revisions to the same sections of the Endorsement Guides covered in our earlier blog.

A recent enforcement action by the Federal Trade Commission (“FTC”) against 1Health.io—which sells “DNA Health Test Kits” to consumers for health and ancestry insights—serves as a reminder that the FTC is increasingly exercising its consumer protection authority in the context of privacy and data protection. This is especially true where the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) does not reach. The FTC’s settlement with 1Health.io highlights a wide-range of privacy and security issues companies should consider relating to best practices for updating privacy policies, data retention policies, configuration of cloud storage and vendor management, especially when handling sensitive genetic data. 

Introduction

Following the Supreme Court decision in Dobbs v. Jackson Women’s Health Organization overturning Roe v. Wade, the federal government, pursuant to President Biden’s Executive Order (the EO) took several steps to protect reproductive health privacy, some of which we previously discussed here. Specifically, the EO called for agencies to protect “women’s fundamental right to make reproductive health decisions.” Shortly following issuance of the EO, the Biden Administration created its HHS Reproductive Healthcare Access Task Force, requiring all relevant federal agencies to draft measurable actions that they could undertake “to protect and bolster access to sexual and reproductive health care.”  

On April 11, 2023, U.S. Department of Health and Human Services’ Office for Civil Rights (OCR) announced its plan for termination of the existing notifications of enforcement discretion related to the expiration of the COVID-19 public health emergency (PHE) on May 11, 2023. 

On February 1, 2023, the Centers for Medicare & Medicaid Services (CMS) published a final rule outlining its audit methodology and related policies for its Medicare Advantage (MA) Risk Adjustment Data Validation (RADV) program. The final rule codifies long-awaited regulations first proposed by CMS in 2018.

On December 1, 2022, the Office for Civil Rights (OCR) at the U.S. Department of Health and Human Services (HHS) published a bulletin warning that commonly used website technologies, including cookies, pixels, and session replay, may result in the impermissible disclosure of Protected Health Information (“PHI”) to third parties in violation of the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”). The bulletin advises that “[r]egulated entities are not permitted to use tracking technologies in a manner that would result in impermissible disclosures of Protected Health Information (“PHI”) to tracking technology vendors or any other violations of the HIPAA Rules.” The bulletin is issued amidst a wider national and international privacy landscape that is increasingly focused on regulating the collection and use of personal information through web-based technologies and software that may not be readily apparent to the user.

In two recent memoranda, the Centers for Medicare and Medicaid Services (CMS) made changes to previously issued survey guidance related to COVID-19 vaccination issues.

In this episode of the Diagnosing Health Care Podcast:  What challenges are providers likely to face as the Occupational Safety and Health Administration (OSHA) prepares its permanent COVID-19 standard for health care workers?

Attorneys Denise Dadika, Bob O’Hara, and Tim Murphy review the provisions of OSHA’s temporary COVID-19 standard for health care workers and what’s expected to change under the permanent rules. They also discuss how the agency’s current enforcement push is impacting health care providers.

In this episode of the Diagnosing Health Care Podcast:  This term, the Supreme Court of the United States is set to rule in a Medicare reimbursement case that has sparked a fresh look at the historical deference often granted to agencies and whether it should remain, be modified, or even be overruled.

Attorneys Stuart Gerson, Robert Wanerman, and Megan Robertson discuss why Chevron deference matters to health care industry stakeholders and what aspects of deference arguments should be in focus as these cases progress.

The Diagnosing Health Care podcast series examines the ...

On February 1, 2022, the U.S. Department of Justice (DOJ) released its annual False Claims Act (FCA) enforcement statistics for fiscal year (FY) 2021.^[1]

With collections amounting to $5.6 billion, FY 2021 marks DOJ’s largest annual total FCA recovery since FY 2014, and more than twice the $2.3 billion received in FY 2020. FY 2021 was also a record-shattering year for DOJ as it relates to health care fraud enforcement; over $5 billion (90% of the total) was obtained from cases pursued against individuals and entities in the health care and life sciences industries.

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 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.

The New Jersey Department of Health (the “Department”) recently finalized regulations initially proposed in April 2020 that will now require all telehealth organizations providing telemedicine services to patients located in New Jersey to register their business with the Department before October 15, 2021, and annually thereafter.  In addition to annual registrations, telehealth companies will also be required to submit annual reports on activity and encounter data.

On May 17, 2021, the U.S. Department of Justice (“DOJ”) announced the establishment of a COVID-19 Fraud Enforcement Task Force (“Task Force”) to ramp up enforcement efforts against COVID-19-related fraud.[1]

Organized and led by Deputy Attorney General Lisa Monaco, the Task Force convened its first meeting on May 28 and aims to “marshal the resources of the [DOJ] in partnership with agencies across government to enhance enforcement efforts against COVID-19 related fraud.”[2]  The Task Force will involve coordination among several DOJ components, including the Criminal and Civil Divisions, the Executive Office for United States Attorneys, and the Federal Bureau of Investigation.  “Key interagency partners” have also been invited to join the Task Force, including the Department of Labor, the Department of the Treasury, the Department of Homeland Security, the Social Security Administration, the Department of Veterans Affairs, the Food and Drug Administration’s Office of Criminal Investigations, the U.S. Postal Inspection Service, the Small Business Administration, the Special Inspector General for Pandemic Relief, and Pandemic Response Accountability Committee, among others.

The U.S. Department of Health and Human Services’ Office of Inspector General (“OIG”) recently issued Advisory Opinion No. 21-02, regarding a joint investment by a health system, a manager, and certain surgeons in an ambulatory surgery center (“ASC”) (the “Proposed Arrangement”). According to a national survey, most hospitals and health systems are planning to increase their investments in ASCs and anticipate converting hospital outpatient departments to ASCs. Many hospitals with ASCs operate the ASCs as physician joint ventures. As payors and patients continue to show interest in having outpatient procedures performed in ASCs, there is an expected trend to see an increase in investments and joint ventures in ASCs therefore making the Advisory Opinion particularly noteworthy.

In their request to OIG, the health system and the manager (“Requestors”) specifically inquired whether the Proposed Arrangement would constitute grounds for sanctions under the Federal Anti-Kickback statute (“AKS”). Based upon the facts provided in the request for the Advisory Opinion and a supplemental submission, the OIG reached the favorable conclusion that due to the low risk of fraud and abuse, the OIG would not impose sanctions on the health system or the manager in connection with the Proposed Arrangement.

The Proposed Arrangement

Under the Proposed Arrangement, the health system, five orthopedic surgeons, three neurosurgeons employed by the health system, and a manager, would invest in a new ASC. The health system would own 46 percent of the ASC, the surgeons would collectively own 46 percent of the ASC, and the manager would own 8 percent of the ASC. The manager certified that no physician has had, or would have, ownership in the manager that provides management and other services to the ASC. Furthermore, the ASC would operate in a medical facility owned by a real estate company jointly owned by the health system, the surgeons, and the manager. The ASC would enter into space and equipment leases as well as service arrangements with the health system and the real estate company.

OIG’s Analysis

Based on the following criteria, the OIG determined that the following safeguards in the Proposed Arrangement would mitigate the risk and that, as such, the OIG would not impose administrative sanctions in connection with the Proposed Arrangement:

Health System and Physician Investor Interest

(1) Although one or more of the neurosurgeons would fail to meet the Hospital-Physician ASC Safe Harbor Provision requirement that a physician investor derive at least one-third of his or her medical practice income for the previous fiscal year or previous 12-month period from the performance of ASC-qualified procedures, the health system certified that the neurosurgeons would use the ASC on a regular basis as part of their medical practices. Additionally, the health system certified that the surgeons would rarely refer patients to each other.

(2) The Proposed Arrangement would contain certain safeguards to reduce the risk that the health system would make or influence referrals to the ASC or the surgeons. For example, the health system certified that any compensation paid by the health system to affiliated physicians for services furnished would be consistent with fair market value and would not be related, directly or indirectly, to the volume or value of any referrals. In addition, the health system certified that it would refrain from any actions designed to require or encourage affiliated physicians to refer patients to the ASC or the surgeons and would not track referrals made to the ASC.

On April 8, 2021, the U.S. Department of Justice (“DOJ”) announced the first charges brought in connection with alleged fraud on the Accelerated and Advance Payment Program, administered by the Centers for Medicare & Medicaid Services (“CMS”).[1]  According to the indictment, Francis Joseph, M.D., a Colorado physician, has been charged with misappropriating nearly $300,000 from three different COVID-19 relief programs: the Accelerated and Advance Payment Program, the Provider Relief Fund, and the Paycheck Protection Program.[2]

Accelerated and Advance Payment Program

The Accelerated and Advance Payment Program is intended to provide emergency funds by way of expedited payments to health care providers and suppliers when there is a disruption in claims submission or claims processing.  While CMS has historically utilized this program to provide targeted relief in response to national emergencies or natural disasters affecting certain portions of the country, the program was expanded in March 2020 to apply to a broader group of Medicare Part A providers and Part B suppliers nationwide due to the financial impact of COVID-19.[3]

According to the indictment, Dr. Joseph allegedly submitted an Advance Payment Request Form for a medical practice of which he had relinquished control, and then transferred approximately $92,000 from the medical practice’s operating account to a personal bank account (approximately $87,000 of that amount was paid by the Medicare Administrative Contractor as an advance payment the previous day).

Provider Relief Fund

The Provider Relief Fund is a $178 billion measure appropriated under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act that offers aid to providers who were financially impacted by COVID-19 and treatment and other assistance to individuals suffering from COVID-19.

The indictment marks the second time that DOJ has brought charges related to misuse of Provider Relief Fund distributions (DOJ announced the first charges in February 2021 against a home health provider).  According to the indictment, Dr. Joseph’s former medical practice met the criteria for a Provider Relief Fund distribution of $31,782, but Dr. Joseph allegedly transferred those funds from the medical practice’s operating account to a personal bank account.

On April 29, 2021, the Federal Communications Commission (FCC) will begin accepting applications for the second round of its COVID-19 Telehealth Program (the “Program”). However, the application filing window will only be open for a very short seven day period and will close on May 6, 2021. To give all applicants an equal opportunity to have their applications reviewed, the FCC announced that all applications filed during this period will be reviewed once the application filing window has closed.

Initially, in March 2020, Congress appropriated $200 million for the first round of the COVID-19 Telehealth Program funding under the CARES Act. An additional $249.95 million was provided to the FCC in December 2020, under the Consolidated Appropriations Act (CAA), to helping address inequities in access to health care service. The COVID-19 Telehealth Program was designed to help health care providers purchase telecommunications equipment, broadband connectivity, and other devices necessary for providing telehealth services to rural, low-income and underserved populations.

The Program is limited to nonprofit and public health care providers (47 U.S.C. § 254(h)(7)(B)) that fall within the following categories:

1. Post-secondary educational institutions offering health care instruction, teaching hospitals, and medical schools;
2. Community health centers or health centers providing health care to migrants;
3. Local health departments or agencies;
4. Community mental health centers;
5. Not-for-profit hospitals;
6. Rural health clinics;
7. Skilled nursing facilities; or
8. Consortia of health care providers consisting of one or more entities falling into one of the first seven categories.

In this episode of the Diagnosing Health Care Podcast:  The Centers for Medicare & Medicaid Services ("CMS") and the Office of Inspector General ("OIG") of the Department of Health and Human Services have at last published their long-awaited companion final rules advancing value-based care. The rules present significant changes to the regulatory framework of the federal physician self-referral law (commonly referred to as the “Stark Law”) and to the federal health care program’s Anti-Kickback Statute, or “AKS.”

Epstein Becker Green attorneys Anjali ...

In this episode of the Diagnosing Health Care Podcast, dive into the Biden Administration's first 100 days in office and the potential executive orders, regulations, and new legislation with noteworthy health care policy implications.

Epstein Becker Green attorneys Ted Kennedy, Philo Hall, and Paulina Grabczak discuss President Biden’s priorities, including his COVID-19 response plan, and examines which "midnight rules" put in place by the Trump Administration could be intercepted or retained.

The Diagnosing Health Care podcast series examines the business ...

On Tuesday, September 1, 2020, the Drug Enforcement Agency (“DEA”) proposed 2021 aggregate production quotas (APQs) for controlled substances in schedules I and II of the Controlled Substances Act (“CSA”) and an Assessment of Annual Needs (“AAN”) for the List I Chemicals pseudoephedrine, ephedrine, and phenylpropanolamine. This marks the second year that DEA has issued APQs pursuant to Congress’s changes to the CSA via the SUPPORT Act.  After assessing the diversion rates for the five covered controlled substances, DEA reduced the quotas for four: oxycodone, hydrocodone, hydromorphone and fentanyl.

DEA recently increased the APQ to allow for the additional manufacture of certain controlled substances in response to the COVID-19 pandemic and the need to provide greater access to these medications for patients on ventilator treatment.  According to DEA, that increased demand has been factored into the proposed APQs for 2021.

Comments are due by October 1, 2020.  Because DEA’s APQs determine the amount of quota DEA can allocate to individual manufacturers in 2021, adversely impacted parties should file comments soon.

Background on APQs

The CSA requires the establishment of aggregate production quotas for schedule I and II controlled substances, and an assessment of annual needs for the list I chemicals ephedrine, pseudoephedrine, and phenylpropanolamine.  These aggregate quotas limit the quantities of these substances to be manufactured – and with respect to the listed chemicals, imported –  in the United States in a calendar year, to provide for the estimated medical, scientific, research, and industrial needs of the United States, for lawful export requirements, and for the establishment and maintenance of reserve stocks.

Changes in Setting APQs Under The SUPPORT Act

The Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (“SUPPORT Act”) signed into law October 24, 2018, provided significant changes to the process for setting APQs.  First, under the CSA, aggregate production quotas are established in terms of quantities of each basic class of controlled substance, and not in terms of individual pharmaceutical dosage forms prepared from or containing such a controlled substance.  However, the SUPPORT Act provides an exception to that general rule by giving the DEA the authority to establish quotas in terms of pharmaceutical dosage forms if the agency determines that doing so will assist in avoiding the overproduction, shortages, or diversion of a controlled substance.

Additionally, the SUPPORT Act changed the way the DEA establishes APQs with respect to five “covered controlled substances”: fentanyl, oxycodone, hydrocodone, oxymorphone, and hydromorphone.  Under the SUPPORT Act, when setting the APQ for any of the “covered controlled substances,” DEA must estimate the amount of diversion.  The SUPPORT Act requires DEA to make appropriate quota reductions “as determined by the [DEA] from the quota the [DEA] would have otherwise established had such diversion not been considered.”  Furthermore, when estimating the amount of diversion, the DEA must consider reliable “rates of overdose deaths and abuse and overall public health impact related to the covered controlled substance in the United States,” and may take into consideration other sources of information the DEA determines reliable.

Estimating Diversion  

In accordance with this mandate under the SUPPORT Act, in setting the proposed APQs for 2021 DEA requested information from various agencies within the Department of Health and Human Services (“HHS"), including the U.S. Food and Drug Administration (“FDA”), Centers for Disease Control and Prevention (“CDC”), and the Centers for Medicare and Medicaid Services (“CMS”), regarding overdose deaths, overprescribing, and the public health impact of covered controlled substances.  DEA also solicited information from each state’s Prescription Drug Monitoring Program (“PDMP”), and any additional analysis of prescription data that would assist DEA in estimating diversion of covered controlled substances.

After soliciting input from these sources, DEA extracted data on drug theft and loss from its internal databases and seizure data by law enforcement nationwide.  DEA then calculated the estimated amount of diversion by multiplying the strength of the active pharmaceutical ingredient (“API”) listed for each finished dosage form by the total amount of units reported to estimate the metric weight in kilograms of the controlled substance being diverted.

Earlier this summer, Ethan P. Davis, Principal Deputy Assistant Attorney General for the Civil Division of the U.S. Department of Justice (DOJ) delivered remarks addressing DOJ’s top priorities for enforcement actions related to COVID-19 and indicating that DOJ plans to “vigorously pursue fraud and other illegal activity.”[1] As discussed below, Davis’s remarks not only highlighted principles that will guide enforcement efforts of the Civil Fraud Section under the False Claims Act (FCA) and of the Consumer Protection Branch (CPB) under the Food, Drug, and Cosmetic Act (FDCA) and the Controlled Substances Act (CSA) in response to the COVID-19 public health emergency (PHE), they also provide an indication of how DOJ might approach enforcement over the next few years.

DOJ'S KEY CONSIDERATIONS & ENFORCEMENT STRATEGY FOR COVID-19

Davis highlighted two key principles that would drive DOJ’s COVID-related enforcement efforts: the energetic use of “every enforcement tool available to prevent wrongdoers from exploiting the COVID-19 crisis” and a respect of the private sector’s critical role in ending the pandemic and restarting the economy.[2] Under that framework, DOJ plans to pursue fraud and other illegal activity under the FCA, which Davis characterizes as “one of the most effective weapons in [DOJ’s] arsenal.”[3]

However, as DOJ pursues FCA cases, it will also seek to affirmatively dismiss qui tam claims that  DOJ finds meritless or that interfere with agency policy and programs.[4] DOJ also plans to collect certain information from qui tam relators regarding third-party litigation funders during relator interviews.[5] DOJ’s emphasis on qui tam cases—cases brought under the FCA by relators or whistleblowers—for COVID-related enforcement highlights the impact such matters have on DOJ’s enforcement agenda.[6]

1. DOJ will consider dismissing cases that involve regulatory overreach and are not otherwise in the interest of the United States.

Although Davis emphasized that the majority of qui tam cases would be allowed to proceed, in order to “weed out” cases that lack merit or that DOJ believes should not proceed, DOJ will consider dismissing cases that “involve regulatory overreach or are otherwise not in the interest of the United States.”[7] This is consistent with the principles reflected in the 2018 Granston Memo that instructed DOJ attorneys to consider “whether the government’s interests are served” when considering whether cases should proceed and listed considerations for seeking alternative grounds for dismissal of FCA cases.[8] Davis gave examples throughout his speech of actions DOJ might consider dismissing:

• Cases based on immaterial or inadvertent mistakes, such as technical mistakes with paperwork
• Cases based on honest misunderstandings of rules, terms, and conditions
• Cases based on alleged deviations from non-binding guidance documents
• Cases against entities that reasonably attempted to comply with guidance and “in good faith took advantage of the regulatory flexibilities granted by federal agencies in the time of crisis.”[9]

DOJ litigators have been advised to inform relators of the possibility of dismissal.[10] Additionally, qui tam suits based on behaviors temporarily permitted during the COVID-19 pandemic, particularly in circumstances in which agencies exercised discretion to waive or not enforce certain requirements, might
“fail as a matter of law for lack of materiality and knowledge.”[11]

2. DOJ will now include a series of questions during relator interviews to identify third-party litigation funders.

During each relator interview, DOJ has instructed line attorneys to ask a series of questions to identify whether the relator or their counsel has a third-party litigation funding agreement,[12] which is an agreement in which a third party—such as a commercial lender or a hedge fund—finances the cost of litigation in return for a portion of recoveries.[13] Under the new policy detailed in Davis’s speech, if a third-party funder is disclosed, DOJ will ask for the following:

• the identity of the third-party litigation funder,
• information regarding whether information of the allegations has been shared with the third party,
• whether the relator or their counsel has a written agreement with the third party, and
• whether the agreement between the relator or their counsel and the third party includes terms that entitles the third-party funder to exercise direct or indirect control over the relator’s litigation or settlement decisions.

Relators must inform DOJ of changes as the case proceeds through the course of litigation.[14] While Davis characterizes these changes as a “purely information-gathering exercise for the purpose of studying the issues,” the questions are in furtherance of DOJ’s ongoing efforts to uncover the potential negative impacts third-party litigation financing may have in qui tam actions. [15] The questions Davis referenced in his remarks reflect DOJ’s concerns with third-party litigation funding as expressed by Deputy Associate Attorney General Stephen Cox in a January 2020 speech.[16] Davis emphasized that DOJ particularly sought to evaluate the extent to which third-party litigation funders were behind qui tam cases DOJ investigates, litigates, and monitors; the extent of information sharing with third-party funders; and the amount of control third-party funders exercised over the litigation and settlement decisions.[17] While the Litigation Funding Transparency Act of 2019 has remained inactive since its introduction in February 2019 by Senator Grassley[18] and the 2018 proposal by the U.S. Court’s Advisory Committee on Civil Rights’ Multidistrict Litigation Subcommittee to require disclosure of third-party litigation funding remains under consideration,[19] DOJ’s plans to include this line of questioning potentially signals DOJ’s intention to take more concrete and significant steps to address third-party litigation funding in the future.

On July 20, 2020, the United States Food and Drug Administration (FDA) announced a six-month extension of its enforcement discretion policy for certain regenerative medicine products requiring pre-market review due to the COVID-19 pandemic. Included in a final guidance document entitled, “Regulatory Considerations for Human Cells, Tissues, and Cellular and Tissue-Based Products: Minimal Manipulation and Homologous Use,” this extension will give manufacturers additional time to determine whether they need to submit an investigational new drug (IND) or marketing ...

On March 17, 2020, the Office for Civil Rights’ (“OCR”) announced that—for the duration of the COVID-19 emergency—it would exercise enforcement discretion and waive any potential penalties for HIPAA violations relating to health care providers’ use of “everyday communications technologies” in the provision of services via telehealth (the “HIPAA Waiver”). This move has resulted in a drastic increase in the number of telehealth encounters. The HIPAA Waiver has enabled many providers to immediately leverage these technologies to render services via telehealth for the first time, without the need to expend significant resources to quickly ramp up a HIPAA-compliant telehealth platform. A summary of the HIPAA Waiver can be found in a recent blog post. While the HIPAA Waiver applies only temporarily, it is likely that the increased reliance on telehealth evidenced over the past three months is here to stay.

The COVID-19 pandemic’s impact on the regulatory landscape of telehealth was the topic of a June 17, 2020 hearing before the Senate Health, Education, Labor & Pensions Committee.  As Chairman Lamar Alexander acknowledged during his opening statement, the health care sector and government “have been forced to cram 10 years’ worth of telehealth experience into just the past three months.” Indeed, this “cramming” has resulted in thirty-one temporary changes to telehealth policy at the federal level. Of these temporary changes, Chairman Alexander included the OCR enforcement discretion / HIPAA waiver as one of the three changes he considers most important. However, of the three changes the Chairman views as most important, he declined to include the enforcement discretion in the temporary changes he believes should be made permanent, and instead called upon his colleagues to consider whether to extend the HIPAA waiver.[1]

The FDA has issued the Temporary Policy on Prescription Drug Marketing Act Requirements for Distribution of Drug Samples During the COVID-19 Public Health Emergency.  The Prescription Drug Marketing Act of 1987 (PDMA) describes manufacturers’ drug sample storage, handling, and recordkeeping obligations as well as the written request and receipt requirements for prescribers.

Many manufacturers utilize their field sales representatives to deliver drug samples directly to, and collect written receipts from, prescribers at prescriber offices during sales calls. The COVID-19 crisis has disrupted field sales representatives’ ability to have face to face visits with prescribers, preventing them from delivering samples and collecting required receipts.  In addition, as a result of the crisis, many prescribers are providing telehealth services from their homes, impacting prescribers’ ability to receive, store and distribute samples at their offices.

Certifications, Acknowledgments,
and Reports

The CARES Act[1], passed by Congress and signed into law on March 27, 2020, provides $100 billion for the Public Health and Social Services Emergency Fund (“Relief Fund”) to support eligible health care providers. Less than a month later, Congress passed the Payroll Protection Program and Health Care Act[2], providing an additional $75 billion to the Relief Fund, raising the total funds available to $175 billion. As of the end of April 2020, the Department of Health and Human Services (“HHS”) released to providers two tranches of Relief Funds totaling $50 billion.[3] HHS disbursed the first $30 billion tranche (“Tranche 1”) between April 10 and April 17, 2020. Currently, HHS is disbursing the second $20 billion tranche (“Tranche 2”). Because these are grant funds – not loans – repayment is not required. What HHS requires is that the Recipients attest to and follow the Relief Fund’s Terms and Conditions. Before we turn to the Terms and Conditions, it is important to understand HHS’ Relief Fund disbursement process.

Relief Fund Disbursement Process

HHS disbursed the Tranche 1 Relief Funds as well as some of the Tranche 2 Relief Funds directly to providers participating in Medicare Part A and Part B. (“the Recipients”). Other Recipients must apply for the Relief Funds through the HHS’ on-line portal. No matter how the Recipient received the funds, either through direct payments or through the on-line application, all Recipients must attest to HHS’ published Terms and Conditions through the HHS on-line portal within 45 days after receiving the Relief Funds. Each tranche requires a separate attestation. If the Recipient retains the funds for at least 30 days without contacting HHS regarding the funds’ remittance, HHS deems the Recipient to have accepted the Terms and Conditions discussed below. There are two important considerations in determining whether to accept these funds:

1. The Terms and Conditions for Tranche 2 Relief Funds differ in several respects from the Terms and Conditions for the Tranche 1 Relief Funds; and
2. The Terms and Conditions listed provisions are not exhaustive and Recipients must also comply “with any other relevant applicable statutes and regulations”.

On April 21, 2020, the Drug Enforcement Administration (DEA) published a Request for Information (“RFI”) that reopened the comment period for an interim final rule that was published March 31, 2010 (75 FR 16236) (the “2010 IFR” or the “IFR”). The IFR is being revisited in response to the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act) mandate for the DEA to update the requirements for the biometric component of multifactor authentication with respect to electronic prescriptions of controlled substances. Prior to the 2010 IFR, the only way that controlled substances could be prescribed was in writing, on paper with a wet signature. The IFR was the first time that an electronic alternative was made available for prescribing controlled substances and the DEA leveraged the technologies that were available at the time to ensure that electronic prescribing applications could not be misused to divert controlled substances.

To that end, the DEA fashioned their regulations to include measures that ensure that the prescriber verifies that they are who they said they are and that they are authorized and have the appropriate credentials to prescribe the medications that are being ordered. In other words, in order for a prescriber to be granted access to the technologies that would create, sign and transmit prescriptions for controlled substances electronically, they have to be appropriately authenticated and credentialed. In addition to requiring identity proofing and logical access controls that relied on multi-factor authentication, credentialing had to be conducted by federally approved credential service providers (CSPs) or by certification authorities (CAs). The IFR also included requirements for audit trails, security event reporting and provisions that governed the signing and transmission of electronic prescriptions to ensure that there was a process to address and resolve transmission failures.

While the IFR contemplated using biometrics to identify and authenticate prescribers, those technologies were still developing and evolving in 2010. Recently, under the SUPPORT Act, Congress required the DEA to update its regulations to identify the biometric component of the multi-factor authentication used to identity proof prescribers. The DEA is looking to the health care provider community who are currently using e-prescribing applications to share their experiences, offer suggestions and recommend new approaches that will encourage broad adoption for e-prescribing for controlled substances while still meeting the DEA’s objectives of ensuring the security and accountability necessary to identify fraud and prevent diversion.

Recently, the Defense Health Agency (DHA) announced a rewrite of the TRICARE Autism Care Demonstration (ACD) program that encompasses “significant changes to the ACD.” It will move the ACD from the current Applied Behavior Analysis (ABA)-centric model to one focused on the beneficiary and family. Without specific details, the DHA states these comprehensive changes will provide an opportunity to improve support to beneficiaries and their families by:

1. Providing more information about Autism Spectrum Disorder (ASD) and potential services;
2. Linking beneficiaries to the right care at the right time; and
3. Increasing services to eligible family members – especially parents.

Two announcements made by FDA in late October signal a marked change to FDA’s regulatory approach to “homeopathic” drugs. On October 25, 2019, FDA withdrew the 1988 Compliance Policy Guide (“CPG”) 400.400 Conditions Under Which Homeopathic Drugs May Be Marketed, and, concurrently, published revised draft guidance titled Drug Products Labeled as Homeopathic (the “Revised Homeopathic Draft Guidance”).

Homeopathy—an alternative medical approach that began in the late 18^th century—is based on the belief that (1) a substance that causes symptoms in a healthy ...

Today, a final rule issued by the Centers for Medicare & Medicaid Services (CMS) establishing new enforcement initiatives aimed at removing and excluding previously sanctioned entities from Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP) goes into effect.[1] Published September 10 with a comment period that also closed today, the new rule expands CMS’s “program integrity enhancement” capabilities by introducing new revocation and denial authorities and increasing reapplication and enrollment bars as part of the Trump Administration’s efforts to reduce spending. While CMS suggests that only “bad actors” will face additional burdens from the regulation, the new policies will have significant impacts on all providers and suppliers participating in Medicare, Medicaid, and CHIP.[2]

AN OVERVIEW OF THE NEW RULE

The New “Affiliations” Revocation Authority

The new “affiliations” enforcement framework—the regulation’s most significant expansion of CMS’s revocation authority—permits CMS to revoke or deny a provider’s or supplier’s enrollment in Medicare if CMS determines an “affiliation” with a problematic entity presents undue risk of fraud, waste, or abuse. Generally to bill Medicare, providers and suppliers not only must submit an enrollment application to CMS for initial enrollment, but also must recertify enrollment, reactivate enrollment, change ownership, and to change certain information.[3] In the rule’s current form, providers or suppliers submitting an enrollment application or recertification to CMS (“applicants”) will be required to submit affiliation disclosures upon CMS’s request if the agency determines the entity likely has an affiliation with a problematic entity as described below.[4] CMS will base its request on a review of various data, including Medicare Provider Enrollment, Chain, and Ownership System data and other CMS and external databases that might indicate problematic behavior, such as patterns of improper billing.[5] Upon CMS’s request, applicants identified as having at least one affiliation with a problematic entity would be required to report any current or previous direct or indirect “affiliations” to CMS.[6]

On October 22, 2019, the Centers for Medicare and Medicaid Services (“CMS”) issued a Request for Information (“RFI”) to obtain input on how CMS can utilize Artificial Intelligence (“AI”) and other new technologies to improve its operations.  CMS’ objectives to leverage AI chiefly include identifying and preventing fraud, waste, and abuse.  The RFI specifically states CMS’ aim “to ensure proper claims payment, reduce provider burden, and overall, conduct program integrity activities in a more efficient manner.”  The RFI follows last month’s White House ...

The Centers for Medicare & Medicaid Services (CMS) and the Department of Health and Human Services Office of Inspector General (OIG) issued their long-awaited proposed rules in connection with the Regulatory Sprint to Coordinated Care today.  Transforming our healthcare system to one that pays for value is one of the Department’s top four priorities, and the Deputy Secretary launched the Regulatory Sprint to remove potential regulatory barriers to care coordination and value-based care.

OIG’s proposed rule revising the safe harbors under the anti-kickback statute ...

Based on findings of the Payment Accuracy Report recently issued by the Department of Health and Human Services (DHHS), six Democratic United States Senators questioned the Centers of Medicare and Medicaid Services’ (CMS) oversight and enforcement of Medicare Advantage (MA) plans. In a letter dated September 13, 2019, the Senators highlighted their belief that MA plans have been overbilling the federal government for years, specifically in excess of $30 billion dollars over the last three years.

The Senators requested that CMS provide a response on how the Agency intends to ...

On September 10, 2019, the Office of Inspector General of the Department of Health and Human Services (“OIG”) published Advisory Opinion 19-04.  In this favorable opinion, OIG approved a technology company’s proposal to make its online healthcare directory search results visible to federal healthcare beneficiaries in locations where the company charges the healthcare professionals a per-click or per-booking fee to be included in the directory.  It also approved the company’s proposal to make sponsored advertisements that appear on its online healthcare directory and ...

In an effort to address the challenge of increasing drug prices for patients and families, the U.S. Food and Drug Administration (“FDA”) and the U.S. Department of Health and Human Services (“HHS”) recently outlined a proposal for facilitating the importation of pharmaceuticals originally intended for foreign markets.  The Safe Importation Action Plan (the “Action Plan”), jointly announced on July 31, 2019, describes two different potential pathways for importing certain drugs. The Action Plan offers only a limited overview of the proposed pathways and does not ...

We recently outlined key provisions of the Environmental Protection Agency’s (EPA’s) Final Rule modifying the standards governing industry management of hazardous waste pharmaceuticals, which become effective August 21, 2019. Client Alert

Impacted industries must immediately comply with the nationwide ban on the sewering of hazardous waste pharmaceuticals as of the August 21^st effective date.  The ban applies to a wide range of stakeholders, including, but not limited to reverse distributors, pharmacies, hospitals, and wholesalers.

Additional regulatory changes ...

On December 14, 2018 the Department of Health and Human Services, Office for Civil Rights (“OCR”) formally issued a Request For Information (“RFI”) seeking public input on “ways to modify the HIPAA Rules to remove regulatory obstacles and decrease regulatory burdens in order to facilitate efficient care coordination and/or case management and to promote the transformation to value-based healthcare, while preserving the privacy and security of PHI.”  OCR is seeking comments for a series of 54 different specific questions (many with additional subparts ...

During a November 29, 2018 speech, Deputy Attorney General Rod Rosenstein announced changes to Department of Justice (“DOJ”) policy concerning individual accountability in corporate cases.  The announcement followed the DOJ’s year-long review of its individual accountability policies and the September 2015 memorandum issued by then-Deputy Attorney General Sally Yates, commonly known as the “Yates Memo.”

While making clear that pursuing individuals responsible for corporate wrongdoing remains a top priority in every investigation conducted by DOJ, Mr ...

On November 30, 2018, the Department for Health and Human Services (“HHS”) Health Resources and Services Administration (“HRSA”) will publish its final rule to change the effective date for its 340B Drug Pricing Program ceiling price and manufacturer civil monetary penalty final rule to January 1, 2019.

After two years of proposed rulemaking, HHS published a final rule on January 5, 2017 outlining requirements of manufacturers to calculate the 340B ceiling price for a covered outpatient drug and the process by which HRSA can levy civil monetary penalties on drug ...

On November 1, 2018, the Office of the Inspector General (“OIG”) for the U.S. Department of Health and Human Services (“HHS”) published an audit report finding that the U.S. Food and Drug Administration’s (“FDA”) policies and procedures were “deficient for addressing medical device cybersecurity compromises.” (A copy of OIG’s complete report is available here and Report in Brief is available here.) Specifically, the OIG found that FDA’s policies and procedures were “insufficient for handling postmarket medical device cybersecurity events” and ...

On October 26, 2018, the Federal Trade Commission (FTC) announced that it will hold four days of hearings between December of 2018 and February of 2019 to examine the FTC’s authority to deter unfair and deceptive conduct in data security and privacy matters.[1] The two days of December hearings will focus on data security, while the two days of February hearings will focus on consumer privacy. This announcement comes as part of the agencies Hearings on Competition and Consumer Protection in the 21^st Century, an initiative that has already scheduled hearings on closely related ...

Recent comments by the Federal Trade Commission (FTC) Commissioner Rohit Chopra should have companies on notice for increased enforcement actions across the board. During the “Privacy. Security. Risk.” Conference in Texas last week, Chopra made comments regarding his views on increasing enforcement, including the imposition of greater civil monetary penalties. “I’ve already raised concerns about settlements we do with no monetary penalties. I want to see monetary consequences for egregious breaking of the law” said Chopra as reported by the IAPP during a live ...

The American Clinical Laboratory Association (“ACLA”) challenged the final rules promulgated by the Department for Health and Human Services (“HHS”) pertaining to how the Medicare Clinical Laboratory Fee Schedule (“CLFS”) payment rates are established for laboratory services (Am. Clinical Lab. Ass’n v. Azar, No. 17-2645 ABJ, 2018 U.S. Dist. LEXIS 161639, 2018 WL 4539681 (D.D.C. Sept. 21, 2018)). The U.S. District Court of the District of Columbia granted HHS’ motion for summary judgment to dismiss the complaint after concluding that the court lacked subject ...

On September 20, 2018, the U.S. Food and Drug Administration (“FDA”) released draft guidance “Civil Money Penalties Relating to the ClinicalTrials.gov Data Bank” (“Guidance”). The purpose of this Guidance is to explain FDA’s protocol in (1) determining how the centers will identify whether responsible parties failed to comply with submission and certification requirements to the ClinicalTrials.gov or submitted false or misleading documents to the data banks and (2) deciding when, why, and what civil monetary penalties will be assessed against the ...

On Monday, August 12, 2018, the U.S. Department of Justice (“DOJ”) announced a new addition to its regional Medicare Fraud Strike Forces: a Newark/Philadelphia Regional Medicare Strike Force that will target both healthcare fraud and opioid overprescription.[1] The newly-formed Newark/Philadelphia Strike Force joins nine existing regional Medicare Strike Forces, all of which are focused in geographical areas of high healthcare fraud risk: Miami, Florida; Los Angeles, California; Detroit, Michigan; Southern Texas; Southern Louisiana; Brooklyn, New York; Tampa ...

The Office of Inspector General (“OIG”) of the U.S. Department of Health and Human Services issued Advisory Opinion No. 18-03 in support of an arrangement where a federally qualified health center look-alike (the “Provider”) would donate free information technology-related equipment and services to a county health clinic (the “County Clinic”) to facilitate telemedicine encounters with the County Clinic’s patients (the “Proposed Arrangement”).  The OIG concluded that although the Proposed Arrangement could potentially generate prohibited ...

Eighty years ago today, President Roosevelt signed the Federal Food, Drug, and Cosmetic Act (“FD&C Act”).  In recognition of this anniversary, EBG reviews how the FD&C Act came to be, how it has evolved, and how the Food and Drug Administration (“FDA”) is enforcing its authority under the FD&C Act to address the demands of rapidly evolving technology.

I’m Just a Bill

The creation of the FD&C Act stems from a sober event in American History.  In 1937, a Tennessee drug company marketed elixir sulfanilamide for use in children as a new sulfa drug.  The diethylene ...

On June 20, 2018, the Centers for Medicare and Medicaid Services (“CMS”) published an advance copy of a request for information seeking public input on reforms to the Physician Self-Referral Law (or “Stark Law”).

The request for information stems from on-going efforts by the Department of Health and Human Services (“HHS”) to accelerate the government’s transformation from a fee-for-service to a value-based system focused on care coordination.  Dubbed the “Regulatory Sprint to Coordinated Care” (#RS2CC), HHS expressed an intent to first identify regulatory ...

The Health Care Compliance Association (HCCA) kicked off its 22^nd Annual Compliance Institute on Monday, April 16, 2018. During the opening remarks, Inspector General Daniel Levinson, of the Department of Health and Human Services (HHS) Office of Inspector General Office (OIG), announced the rollout of a new public resource to assist companies in ensuring compliance with Federal health care laws. The Compliance Resource Portal on the OIG’s website features:

• Toolkits
• Advisory opinions
• Provider Compliance Resource and Training
• Voluntary Compliance and Exclusions ...

The National Defense Authorization Act (“NDAA”) - passed in late 2016 - provides numerous changes to military health care. One of the changes, NDAA Sec. 706, establishes the Military-Civilian Integrated Health Care Delivery Systems – a sweeping new change for the Defense Health Agency (“DHA”) and the Military Treatment Facilities (“MTFs”) to provide health care services for non-active duty beneficiaries through partnerships with the private sector.

These private sector partnerships require the Secretary of Defense by January 1, 2018, to enter into Memoranda ...

The Federal Trade Commission's ("FTC") recently submitted Congressional Budget Justification and Annual Performance Plan and Report contains helpful insight into the FTC's focus and expectations for the coming fiscal year.  Of particular note, is a slight shift of funds from activities designed to "protect consumers" to activities intended to "promote competition."  High on the FTC's list of actions designed to promote competition is continued scrutiny of the health care industry.  And to that end, the FTC reiterated its intention to, among other things:

Take action against ...

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 August 31, 2016, FDA issued a notification of public hearing and request for comments on manufacturer communications regarding unapproved uses of approved or cleared medical products. The hearing will be held on November 9-10, 2016, and individuals wishing to present information at the hearing must register by October 19, 2016. The deadline for written comments is January 9, 2017.

In the notice, FDA posed a series of questions on which it is seeking input from a broad group of stakeholders, including manufacturers, health care providers, patient advocates, payors, academics ...

If your organization has missed an opportunity to participate in the voluntary Medicare Bundled Payments for Care Initiatives and/or the mandatory CJR program, CMS' Centers for Medicare and Medicaid Innovation has issued a proposed rule introducing three new mandatory Episode Payment Models (EPMs) and a Cardiac Rehabilitation incentive payment model intended to be tested with a broad scope of hospitals which may not have otherwise participated in innovative payment model testing.

In the proposed rule issued August 2, 2016, CMS introduced EPMs for Acute Myocardial infarction ...

Our colleagues, Michael S. Kun, Member of the Firm, and Jeffrey H. Ruzal, Senior Counsel, at Epstein Becker Green, have written an Act Now Advisory that will be of interest to many of our readers: DOL's New "White Collar" Exemption Rule Goes Into Effect on December 1, 2016.

On May 18, 2016, the U.S. Department of Labor ("DOL") announced the publication of a final rule that amends the "white collar" overtime exemptions to significantly increase the number of employees eligible for overtime pay. The final rule will go into effect on December 1, 2016.

What Is New

The final rule ...

On October 26, 2015, the Federal Trade Commission ("FTC") and the Antitrust Division of the U.S. Department of Justice ("DOJ") (collectively the "Agencies") issued a joint statement to the Virginia Certificate of Public Need ("COPN") Work Group encouraging the Work Group and the Virginia General Assembly to repeal or restrict the state's certificate of need process.  The Virginia COPN Work Group was tasked by the Virginia General Assembly to review the current COPN process and recommend any changes that should be made to it.

Thirty-six states currently maintain some form of ...

In February 2012, two years after the passage of the Affordable Care Act ("ACA"), the Centers for Medicare & Medicaid Services ("CMS") issued a proposed rule, which was subject to significant public comment, concerning reporting and returning certain Medicare overpayments ("Proposed Rule"). On February 12, 2016, four years from the issuance of the Proposed Rule (and six years after passage of the ACA), CMS issued the final rule, which becomes effective on March 14, 2016 ("A and B Final Rule").

The A and B Final Rule applies only to providers and suppliers under Medicare Parts A and B ...

On September 28, 2015, the Centers for Medicare & Medicaid Services ("CMS") issued a request for information ("RFI") seeking comments on two key components of the physician payment reform provisions included in the Medicare Access and CHIP Reauthorization Act of 2015 ("MACRA"), the law enacted on April 16, 2015, repealing the sustainable growth rate formula used to update payment rates under the Medicare Physician Fee Schedule.  The RFI was originally open for a 30-comment period.  However, CMS has announced that it is extending the comment period for an additional 15 days.  Comments ...

In January 2015, CMS announced that it was considering developing voluntary clinical templates to help physicians adequately document their encounters with Medicare patients who receive home health services.[1] CMS initially proposed a sample paper template progress note and suggested clinical template elements for an electronic progress note. CMS hosted three Special Open Door Forums to solicit feedback on the proposed templates from physicians, home health agencies, and other interested stakeholders to provide feedback on the proposed templates.

On August 12, 2015, CMS ...

By Arthur J. Fried, Patricia M. Wagner, Adam C. Solander, Evan Nagler, and Jonathan Hoerner

On September 2, 2015, the U. S. Department of Health and Human Services ("HHS") announced a $750,000 settlement with Cancer Care Group, P.C. ("CCG"), a radiation oncology practice in Indiana, for Health Insurance Portability and Accountability Act of 1996 (HIPAA) Privacy and Security Rules violations. The alleged violations occurred in 2012, but a subsequent HHS Office for Civil Rights (OCR) investigation led to allegations from OCR that there was a lack of compliance with HIPAA Privacy and ...

The Health Resources and Services Administration ("HRSA") issued a notice proposing guidance under the 340B Drug Pricing Program.  The proposed Omnibus Guidance was issued in pre-publication format and is available online at https://s3.amazonaws.com/public-inspection.federalregister.gov/2015-21246.pdf.  The notice is scheduled to be published in the Federal Register on August 28, 2015 and will be available at https://www.federalregister.gov/articles/2015/08/28/2015-21246/guidance-340b-drug-pricing-program-omnibus.

HRSA intends to finalize the proposed ...

On Tuesday, September 1, 2015, from 1:00 PM to 2:00 PM ET, George Breen, Chair of Epstein Becker Green's National Health Care and Life Sciences Practice Steering Committee, will co-present "Opportunities and Obstacles: Preparing for the Transition to the ICD-10 Code Set," a webinar hosted by Bloomberg BNA.

With the transition to the ICD-10 code set coming in October, the health-care industry is grappling with adopting new technology and making last-minute preparations. The switch to ICD-10 also presents new opportunities to increase productivity and improve patient ...

On April 2, 2015, Thomas Galassi, Director of the Directorate of Enforcement for OSHA, sent a memorandum to all Regional Directors announcing that the agency's National Emphasis Program on Nursing and Residential Care Facilities would be extended until replaced by updated guidance or removed by the agency.  Mr. Galassi went on to state that, because the health care industry reports more work-related injuries and illnesses than any other general industry,

By Alan J. Arville, Constance A. Wilkinson and Selena M. Brady

The House of Representatives Energy and Commerce Committee ("the Committee") circulated draft language to include in its 21^st Century Cures legislation earlier this week to reform the 340B drug discount program (the "340B Program"). Although the draft 340B language was pulled from the legislation yesterday, the language proposed provides insight into what future legislative reform may include. The draft language, if adopted, would have a substantial impact on all 340B Program stakeholders, including, covered ...

On March 24, 2015, the House of Representatives Energy and Commerce Health Subcommittee^[1] (the "Subcommittee") held a 340B Program hearing with testimony from the Deputy Administrator of Health Resources and Services Administration ("HRSA"), the Director of the Office of Pharmacy Affairs ("OPA") of HRSA,[2] the Director of Health Care of the Government Accountability Office ("GAO"), and Assistant Inspector General of the Office of Evaluation and Inspection of the U.S. Department of Health and Human Services ("HHS") Office of Inspector General ("OIG").

The purpose of the ...

The Centers for Medicare & Medicaid Services ("CMS") expects Qualified Health Plan ("QHP") Issuers to be more familiar with Marketplace requirements and better reflect those standards in Issuers' written policies and procedures, officials stated at the recent 2015 QHP Certification Conference held at CMS Headquarters in Baltimore, Maryland.

Twenty-three Issuers across fifteen Federally-facilitated Marketplace ("FFM") States were audited for compliance with Federal QHP requirements during 2014.  The audits focused largely on QHP's policies and procedures relating to ...

CMS announced on February 13  (and to be published in a Federal Register notice this week) that despite the general guideline that final rules be issued within 3 years of a proposed or interim final rule, CMS will be taking an additional year to finalize the "Medicare Program; Reporting and Returning of Overpayments" final rule.   In February 2012 (see EBG's February 22, 2012 Client Alert), CMS issued a proposed rule on the requirements under the ACA to report and return overpayments within 60 days to the Medicare program for providers and suppliers of services under Parts A and B.  CMS ...

In the most recent updates to the Medicare Home Health Prospective Payment System,[1] CMS made significant changes to the face-to-face encounter documentation requirements by eliminating the physician narrative requirement for most home health services for care episodes beginning on or after January 1, 2015.[2] In making this change, CMS stated that the medical records of the certifying physician or the acute/post-acute care facility (if a patient in that setting was directly admitted to home health) must contain sufficient documentation to support the physician's ...

By Arthur J. Fried.

In what is being called an historic announcement, Department of Health and Human Services Secretary Sylvia Mathews Burwell announced on Monday the setting of clear goals and timeframes for moving Medicare from volume to value payments.  The stated goals are to tie 30% of all Medicare provider payments to quality and cost of care by 2016, moving to 50% by 2018.   Nearly all fee-for-service payments will be aligned with quality and value – 85% by 2016 and 90% in 2018.  This transformation will be achieved by the expansion of mechanisms already in use – Accountable Care ...

In response to multiple requests, the Centers for Medicare and Medicaid Services ("CMS") have extended the deadline for comments on the proposed changes to the home health conditions of participation ("CoPs").  Home health providers and other interested stakeholders now have until 5:00 p.m. EST on January 7, 2015 to submit comments to CMS.

The proposed changes to the CoPs were published on October 9, 2014[1] and represent the most significant changes to the home health CoPs in seventeen years.  According to CMS, the new CoPs are intended to better reflect modern home health practice by ...

Our colleaguesEmily E. Bajcsi, Clifford E. Barnes, Marshall E. Jackson Jr., and Serra J. Schlanger recently published a client alert on legislative and regulatory efforts impacting the hospice and home health industries:

• President Obama signed the Improving Medicare Post-Acute Care Transformation Act of 2014 ("the IMPACT Act") into law;
• The Centers for Medicare and Medicaid ("CMS") published the Medicare Home Health Prospective Payment System final rule for calendar year 2015 ("Final Rule"); and
• CMS published proposed changes to the home health conditions of participation ...

The 2014 outbreak of the Ebola Virus Disease ("Ebola") is the largest in history and continues to affect multiple countries in West Africa. Although reports of new Ebola cases in the U.S. – potential or confirmed – have slowed down in recent weeks, the Centers for Disease Control and Prevention ("CDC") and its various domestic and international partners continue their efforts to prevent further transmission of Ebola in the U.S. as well as abroad. Earlier this week, in fact, the CDC released two new pieces of guidance regarding treatment of Ebola that will be of particular interest ...

On October 29, 2014, the Office of Medicare Hearings and Appeals ("OMHA") hosted its second Medicare Appellant Forum ("Forum") to address the status of the Medicare appeals backlog and related processing delays of Administrative Law Judge ("ALJ") appeals, which are the third level of the Medicare appeals process that is available to suppliers, providers, and Medicare beneficiaries to challenge denied claims. Last week's Forum was a follow-up to OMHA's February 2014 Appellant Forum, which offered few assurances to stakeholders at the time that any effective remedies to the ...

In response to the ongoing threat of the Ebola Virus Disease ("EVD" or "Ebola") and the increased risk of individuals traveling from the affected countries to the United States, The Joint Commission recently launched an Ebola Preparedness Resources portal on its website.  The portal contains information addressing various safety actions for health care providers to consider, such as ensuring that all staff and clinicians who may come in contact with Ebola patients are educated and trained on Ebola guidance, re-evaluating infection control plans to ensure proper guidelines ...

The Office of the Inspector General ("OIG") of the U.S. Department of Health and Human Services ("HHS") has extended the deadline, to December 28, 2014, for comments to the non-binding criteria used by OIG in assessing whether to impose a permissive exclusion, which were first published in 1997.  See our previous blog post for information on the OIG's initial solicitation for comments.

Please reach out to George Breen, Jonah Retzinger, or Marshall E. Jackson, Jr., for assistance with the preparation and submission of comments.

Our Epstein Becker Green colleagues have released a new Take 5 newsletter: "Five ACA Issues that Employers Should Be Following" by David W. Garland, Adam C. Solander, and  Brandon C. Ge.  Below is an excerpt:

Employers have about three months to finalize their employer mandate compliance plans under the Affordable Care Act ("ACA"). While most employers are in the final stages of planning, this month's Take 5 will address five ACA issues that employers should be aware of as they move forward:

1. ACA-related litigation
2. Employer mandate reporting
3. Section 510 liability
4. Alternatives to ...

By Stuart Gerson

In this blog and subsequently in an article on the subject under the aegis  of the American Health Lawyers Association that can be found at http://www.lexology.com/library/detail.aspx?g=b68c51ae-2bdb-490e-ac3d-02c351a19310 EBG analyzed the DC Circuit's decision  in  In re Kellogg Brown & Root, 2014 U.S. App. LEXIS 12115 (D.C. Cir. 2014).  The DC Circuit's holding reinforces the protections established by the Supreme Court 30 years ago in Upjohn Co. v. United States, 449 U.S. 383 (1981), that afford privilege to confidential employee communications ...

By Stuart Gerson

In the wake of the Hobby Lobby ruling with respect to the Affordable Care Act's contraceptive coverage mandate, the Administration (which already has taken steps to fund contraception for employees affected by their employers' exemption) is attempting also to deal with the issue by a recently-published DHHS regulation setting forth the procedures that "religious" employers might follow to gain exemption from having to provide contraceptive coverage in their sponsored health plans. The proposed rule covers both religious not-for-profits and closely held ...

By Adam Solander, Ali Lakhani and Wenxi Li

The increasing prevalence of mobile technology in the healthcare sector continues to create compliance concerns for physician practices and other health care entities.  While the Office of Civil Rights (OCR) of the Department of Health and Human Services, has traditionally focused on technology breaches within larger health systems, smaller physician practices and health care entities must also ensure that their policies and practices related to mobile technology do not foster non-compliance and create institutional risk.

By Patricia Wagner, Ali Lakhani and Jonathan Hoerner

On May 20, 2014, the Secretary of the Department of Health and Human Services (HHS) submitted the agency's Annual Report to Congress on Breaches of Unsecured Protected Health Information for Calendar Years 2011 and 2012 ("Breach Report"). This report provides valuable insight for healthcare entities regarding their data security and enforcement priorities.

Section 13402(i) of the Health Information Technology for Economic and Clinical Health Act (HITECH) requires the Secretary of Health and Human Services ...

By Constance Wilkinson, Alan Arville, and Jonathan Hoerner

On July 23, 2014, the Health Resources and Services Administration ("HRSA") issued an "interpretive rule" entitled "Implementation of the Exclusion of Orphan Drugs for Certain Covered Entities under the 340B Program" (the "Interpretive Rule").[1] The Interpretive Rule follows the ruling by the U.S. District Court for the District of Columbia on May 23, 2014, that vacated the final rule previously released by HRSA on the treatment of orphan drugs under the 340B program (the "Final Rule").[2]

By way of background, the 340B ...

Our colleagues at Epstein Becker Green released a client alert: "Medicare's Proposed Home Health Rule for 2015: CMS Suggests Only Limited Relief to the Face-to-Face Encounter Documentation Requirements but Continued Compliance Burdens on Home Health Agencies," by Emily E. Bajcsi and Serra J. Schlanger.

Following is an excerpt:

On July 7, 2014, the Centers for Medicare & Medicaid Services ("CMS") published proposed changes to the Medicare Home Health Prospective Payment System ("HH PPS") for calendar year 2015 ("Proposed Rule"). The Proposed Rule would update the HH PPS payment ...

The Office of the Inspector General ("OIG") of the U.S. Department of Health and Human Services ("HHS") is soliciting comments, recommendations, and other suggestions on the non-binding criteria used by OIG in assessing whether to impose a permissive exclusion, which were first published in 1997 (https://oig.hhs.gov/authorities/docs/2014/2014-16222.pdf).  The OIG's permissive exclusion criteria currently are organized into four general categories, including: (1) the circumstances and seriousness of the underlying misconduct; (2) the defendant's response to the ...

By Arthur J. Fried

The Controversy - 2012 Rulemaking Attempts

Roughly two years ago, the Centers for Medicare and Medicaid Services of the Department of Health and Human Services ("CMS") published final regulations announcing two controversial rule changes addressing hospital governance.  The industry was taken by surprise, to say  the least, as neither of these requirements had been in the proposed rule.  The changes, promulgated as amendments to the Governing Body Condition of Participation (CoP) included (i) the requirement that a hospital's board include at least one member of ...

By Alan J. Arville

Last week, the 2014 340B Coalition Winter Conference was held in San Diego, California (the "Winter Conference"), where representatives from the Health Resources and Services Administration ("HRSA") of the United States Department of Health and Human Services ("HHS"), the Office of Inspector General ("OIG") of HHS, and industry stakeholders (including Epstein Becker Green) presented on current developments with the 340B drug discount program (the "340B Program"). A brief summary of the 340B Program, including contract pharmacy arrangements, can be found ...

Our colleagues at Epstein Becker Green have issued a client alert: "OIG Issues Updated Guidelines for Evaluating State False Claims Acts: Is More State Litigation on the Horizon?," by George B. Breen, Wendy C. Goldstein, and Daniel C. Fundakowski.

Following is an excerpt:

On March 15, 2013, the U.S. Department of Health and Human Services' Office of Inspector General ("OIG") released the Updated OIG Guidelines for Evaluating State False Claims Acts ("2013 Guidelines), which replaces the original version released in 2006.

The 2013 Guidelines describe OIG's methodology for ...