Health Law Advisor

Our colleagues Alaap Shah and Stuart Gerson of Epstein Becker Green have written an Expert Analysis on Law360 that will be of interest to our readers: "Health Cos. Must Prepare for Growing Ransomware Threat."

The following is an excerpt (see below to download the full version in PDF format):

Ransomware attacks have become big business, and they are on the rise. And entities in the health care and life sciences space have become primary targets of opportunity for attackers.

As the recent Colonial Pipeline Co. ransomware event illustrates, a small group of black hat hackers, living in ...

Only a few days remain before the enforcement delay that the Centers for Medicare & Medicaid Services (CMS) exercised due to COVID-19 will end and the agency will require certain payors to publish a Patient Access application programming interface (“API”) and a Provider Directory API under the requirements of the CMS Interoperability and Patient Access Final Rule. Starting on July 1, 2021, all health plans that offer Medicare Advantage, Medicaid and Children’s Health Insurance Program (CHIP) and most Qualified Health Plans offered through the Federally-facilitated ...

The roll out of the Office of the National Coordinator’s (ONC) 21^st Century Cures Act Interoperability and Information Blocking Rules is reminiscent of the way HIPAA has rolled out over the course of the past 25 years. As of May 1, 2021, Actors have been required to comply with the Information Blocking rules. However, it will take some time before all Actors know who they are and for complaints of Information Blocking to be determined to be actual instances of Information Blocking, by which time the penalties that have not yet been finalized may also need to be adjusted.

While ONC defined ...

In this episode of the Diagnosing Health Care Podcast:  The Departments of Labor, Health and Human Services, and the Treasury jointly released a set of frequently asked questions (“FAQs”) related to recent changes made to the Mental Health Parity and Addiction Equity Act effective as of February 10, 2021, and enacted by the Consolidated Appropriations Act at the end of 2020. Accordingly, health plans and insurers must ensure that they understand, and are prepared to provide regulators with documentation of their compliance with, parity requirements on at least a small ...

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.

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 ...

In this episode of the Diagnosing Health Care Podcast:  Federal and state cannabis regulation and enforcement appear to be moving in different directions. While the Food and Drug Administration (“FDA”) has broadened its net to target businesses making claims that their products can treat specific conditions, a growing number of states have passed bills that, among other things, legalize adult-use cannabis.

Epstein Becker Green attorneys Delia Deschaine, Nathaniel Glasser, and Megan Robertson discuss how developments in 2021 impact the cannabis industry and why ...

Our colleagues Susan Gross Sholinsky, Lauri F. Rasnick, Jennifer Barna, Gretchen Harders, Nathaniel M. Glasser, and Nancy Gunzenhauser Popper of Epstein Becker Green have recently published an Act Now Advisory that will be of interest to our readers: "EEOC Updates Guidance on COVID-19 Vaccination Policies, Including Mandates, Incentives, and Accommodations."

The following is an excerpt:

On May 28, 2021, the U.S. Equal Employment Opportunity Commission (“EEOC”) announced the release of updated guidance regarding the COVID-19 vaccine, providing welcome ...

In a move that reminds us that successful defendants can—and should—seek attorneys’ fees in the right case, a magistrate judge in the U.S. Court of Appeals for the Ninth Circuit awarded pharmaceutical company Aventis Pharma SA (“Aventis”) attorneys’ fees in a False Claims Act (“FCA”) case brought by a competitor, Amphastar Pharmaceuticals Inc. (“Amphastar”). The FCA contains a fee-shifting component, permitting prevailing parties to recover attorneys’ fees from the opposing party—but the playing field is not equal. This fee-shifting provision entitles a prevailing plaintiff to an award of reasonable attorneys’ fees and costs, regardless of whether the government elects to intervene in the case. 31 U.S.C. § 3730(d)(1)-(2). A defendant, on the other hand, can only be awarded attorneys’ fees in cases in which the government has declined to intervene and where the defendant can show that the opposing party’s action was “clearly frivolous, clearly vexatious, or brought primarily for purposes of harassment.” 31 U.S.C. § 3730(d)(4).

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.