Health Law Advisor

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]

FDA recently published its “Good Manufacturing Practice Considerations for Responding to COVID-19 Infection in Employees in Drug and Biological Products Manufacturing Guidance for Industry” (“Guidance”) which provides suggestions on managing the potential risk of products being contaminated by SARS-CoV-2, the virus behind COVID-19 infections for drug and biological product manufacturers, 503B outsourcing facilities, and 503A compounding pharmacies.

The Guidance builds on the current Good Manufacturing Practices (cGMPs) regulations for drugs and biological products, which require personnel with an illness that could adversely affect drug safety or quality be excluded from direct contact with drugs and drug components used in manufacturing.[1]  As the Guidance states, preliminary research indicating that SARS-CoV-2 “is stable for several hours to days in aerosols and on surfaces,” and that it has an incubation period of 2 to 14 days, which are both factors that increase the risk of spread and introduction into products.  The actual health risk is hard to calculate – FDA itself notes that there have not been documented transmissions through pharmaceuticals to date.  The regulatory risk, however, is an easier formula – FDA has a clear expectation that drug and biological product manufacturers evaluate the potential for COVID-19 contamination of their products under existing controls, or risk being out of compliance with cGMPs.

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.

On January 1, 2020 California Consumer Privacy Act (“CCPA”) largely came into effect, albeit with several last-minute modifications and a need to promulgate regulations.  As our colleagues have discussed previously here, CCPA joins other California laws safeguarding California residents’ privacy rights under the California Constitution.  Despite uncertainty around the final regulatory parameters of the law, CCPA grants the California Attorney General (AG) the authority to begin enforcement on July 1, 2020. Further, there have been no indications that such enforcement will be delayed.

Re-issued Proposed CCPA Regulations

After the California legislature passed several amendments to the CCPA in October 2019, the California AG has been working on proposed regulations.  The proposed regulations, initially introduced on October 12, 2019, went through three rounds of comment periods and were recently amended and reissued as the “Final Text of Regulations” on June 1, 2020.  These proposed regulations notably add new aspects and regulatory hurdles to CCPA implementation most notably: (i) increasing requirements for initial notices; and (ii) adding new requirements on the contents in business’s privacy policies.  These reissued proposed regulations were submitted to the California Office of Administrative Law (OAL) for review.  The OAL has thirty working days to review these regulations, plus an additional sixty calendar days under the California Governor’s Executive Order N-40-20 related to the COVID-19 pandemic, to review the regulations for procedural compliance with state law.

CCPA Proposed Regulatory Framework

The CCPA applies to any for-profit business that: (i) collects personal information on California residents; (ii) does business in the state of California; and (iii) satisfies one or more of the following thresholds: (a) has annual gross revenues in excess of $25,000,000; (b) alone or in combination, annually buys, receives for the business’s commercial purposes, sells, or shares for commercial purposes, alone or in combination, the personal information of 50,000 or more consumers, households, or devices; or (c) derives 50 percent or more of its annual revenues from selling consumers’ personal information.  Businesses that hit the thresholds will be covered even if they are located outside the state of California.

Notably, companies subject to CCPA must “at or before the point of collection” of personal information provide notice to consumers informing them of the categories of personal information the company collects and what purpose the information is used by the company.  In addition, CCPA requires businesses to post a clear and conspicuous link on their website that says "Do Not Sell My Personal Information" and then to enable consumers to opt-out of the sale of their data to third parties.  CCPA also establishes a wide-range of rights to consumers (as specified below).  Companies should be aware of the potential added cost of business in responding to these rights and ensure that they do not discriminate against any individual who exercises their rights under CCPA.

On Tuesday June 16^th, the U.S. Court of Appeals for the District of Columbia Circuit upheld a District Court decision that invalidated a Department of Health and Human Services (“HHS”) rule requiring pharmaceutical companies to include the wholesale prices of their drugs in direct to consumer TV advertising.  See Regulation to Require Drug Pricing Transparency, 84 Fed. Reg. 20732 (May 10, 2019) (the “Disclosure Rule”).  Ruling in favor of Merck & Co., Inc., Eli Lilly and Company and Amgen, Inc., the Appeals Court held that HHS lacked statutory authority to establish the Disclosure Rule.

The Court found that HHS “acted unreasonably in construing its authority to include the imposition of a sweeping disclosure requirement that is largely untethered to the actual administration of the Medicare or Medicaid programs.  Because there is no reasoned statutory basis for its far-flung reach and misaligned obligations, the disclosure rule is invalid and is hereby set aside.”

Just a few months ago, the idea of a virtual jury trial probably seemed inconceivable to most judges and lawyers.  Now, with the COVID-19 pandemic shuttering courthouses throughout the nation and most in-person proceedings suspended, many judges and attorneys are left wondering when and how civil jury trials will be able to safely resume.  We suspect that most prospective jurors will not be enthralled with the idea of sitting shoulder to shoulder in a jury box while the outbreak is still raging.  As litigators and the courts become comfortable with Zoom and other videoconferencing tools, it is apparent that we have the technology to hold virtual trials – the questions is should we?

The prospect of remote jury trials raises a host of serious issues ranging from how to overcome the constitutional hurdles to ensuring that witnesses, parties and jurors have access to high-speed internet so that they can participate in the first place.  Some potential solutions for accessibility concerns are having pre-wired government offices for those who lack access or distributing common technology (such as an iPad, with a cellular connection).  In addition to technology access, there will also be questions of whether a potential juror has access to a room where they can be alone and deliberate in private.

In a previous post, we discussed the appropriate use of the Provider Relief Funds authorized and appropriated by Congress under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, Public Health and Social Services Emergency Fund (“Relief Fund”) for healthcare providers and facilities. Within that post, we specifically discussed the limitation imposed on use of the Relief Funds for payment of salaries, a topic of great interest to many recipients. Under the Terms and Conditions, recipients are prohibited from using the funds for salaries in excess of the Senior Executive Service Executive Level II amount – an annual salary of $197,300 – or $16,441 a month. We noted that, although the Department of Health and Human Services (“HHS”) had not spoken to this requirement with respect to the Provider Relief Funds, HHS permits other HHS grant Recipients to pay individuals’ salaries in excess of the $197,300 limit with non-federal funds.[1] Also, HHS’ federal contract regulations similarly limit use of federal contract funds for salary costs to the Executive Level II amount, but allow for amounts in excess of that limit to be paid with non-federal funds.[2]

The Supreme Court of New Jersey unanimously held in Linda Cowley v. Virtua Health System (A-47-18) (081891) that the “common knowledge” exception of the Affidavit of Merit Statute applies only when a simple negligence standard is at issue, and does not apply when a specific standard of care must be evaluated.  In this case involving if and how to reinsert a removed nasogastric tube, the Court reversed the judgement of the Appellate Division and dismissed the plaintiff’s complaint with prejudice because she failed to submit an affidavit of merit within the time required by the Affidavit of Merit Statute.

Enacted in 1995, the Affidavit of Merit Statute requires that plaintiffs in medical malpractice cases “provide each defendant with an affidavit of an appropriate licensed person that there exists a reasonable probability that the care, skill or knowledge exercised or exhibited in the treatment, practice or work that is the subject of the complaint, fell outside acceptable professional or occupational standards or treatment practices.” N.J.S.A. 2A:53A-27. The statute’s primary purpose “to require plaintiffs in malpractice cases to make a threshold showing that their claim is meritorious, in order that meritless lawsuits readily [can] be identified at an early stage of litigation.” Cornblatt v. Barow, 153 N.J. 218, 242 (1998). Failure to provide an affidavit or its legal equivalent is “deemed a failure to state a cause of action,” N.J.S.A. 2A:53A-29, requiring dismissal with prejudice.

An exception to this rule is the judicially-created “common knowledge” exception which provides that an expert is not needed to demonstrate that a defendant professional breached some duty of care “where the carelessness of the defendant is readily apparent to anyone of average intelligence.” Rosenberg v. Cahill, 99 N.J. 318, 325 (1985). In those exceptional circumstances, the “jurors’ common knowledge as lay persons is sufficient to enable them, using ordinary understanding and experience, to determine a defendant’s negligence without the benefit of the specialized knowledge of experts.” Hubbard v.  Reed, 168 N.J. 387, 394 (2001). Thus, a plaintiff in a malpractice case is exempt, under the common knowledge exception, from compliance with the affidavit of merit requirement where it is apparent that “the issue of negligence is not related to technical matters peculiarly within the knowledge of [the licensed] practitioner[].” Sanzari v.  Rosenfeld, 34 N.J. 128, 142 (1961).

On March 23, 2020, Governor Phil Murphy signed Executive Order 109, which “limit[ed] non-essential adult elective surgery and invasive procedures, whether medical or dental, [in order to] assist in the management of vital healthcare resources during this public health emergency.” The purpose of EO 109 was to “limit[] exposure of healthcare providers, patients, and staff to COVID-19 and conserve[] critical resources such as ventilators, respirators, anesthesia machines, and Personal Protective Equipment (‘PPE’) [that] are essential to combatting the spread of the virus.” At the time EO 109 was executed, coronavirus cases were rapidly increasing within the State. On March 23rd, New Jersey had 2,844 coronavirus cases in all 21 counties, an increase of 935 over the previous day, and at least 27 people had died.

In the weeks that followed, New Jersey saw the surge in cases for which it was preparing. On April 4, the three-day average of new confirmed positive COVID-19 cases peaked at 4,064 cases, and by April 14th, there were 8,084 of COVID-related hospitalizations and a staggering 1,705 patients on ventilators. But since that time, thanks to social distancing and New Jersey’s ability to flatten the curve, these numbers have fallen drastically. By May 11th, the three-day average of new, positive cases had fallen to 1,572 new cases—a 61 percent decrease. Likewise, the three-day average of new hospitalizations had fallen to 4,277 patients—a 48 percent decrease.

In light of this decreased burden on the healthcare system, Governor Murphy signed Executive Order 145, which allows for elective surgeries to resume as of 5 am on May 26, 2020. EO 145 provides that elective surgeries and invasive procedures may proceed at both licensed healthcare facilities and in outpatient settings not licensed by the Department of Health (e.g., health care professional offices, clinics, and urgent care centers), subject to limitations and precautions set forth in policies to be issued by the Division of Consumer Affairs, in consultation with the Department of Health, by Monday, May 18, 2020. EO 145 further states that the Department of Health and/or the Division of Consumer Affairs may issue supplemental or amended policies concerning elective surgeries and elective invasive procedures on or after Monday, May 18, 2020.

Our colleagues Adam C. Abrahms, Steven M. Swirsky, and Brock Olson at Epstein Becker Green has recently published a post on the Management Memo blog that will be of interest to our readers in the health care industry: “Tie Goes to the Employer: National Labor Relations Board Overrules Past Precedent Regarding Dual-Marked Ballots."

Following is an excerpt:

The National Labor Relations Board (“Board” or “NLRB”) on Wednesday, May 13, 2020, overruled decades of convoluted Board precedent regarding “dual-marked ballots” in union representation elections – ...