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On June 25, 2019, Illinois Governor J.B. Pritzker signed the Cannabis Regulation and Tax Act (the “Act”) to make Illinois the eleventh state to allow recreational marijuana use. Effective January 1, 2020, adults age 21 and older may purchase and possess up to 1 ounce (30 grams) of marijuana at a time from a licensed dispensary. Non-Illinois residents may possess half the amount (0.5 ounces or 15 grams). The new law will not only bring a new wave of expungements, licensure regulations and system of taxes but also new questions from Illinois employers.

What Does the New Law Mean for Illinois Employers?

The Act is not a license for employees to engage in marijuana use at the workplace or arrive to the workplace under the influence. Nothing in the Act prohibits employers from adopting a reasonable zero tolerance or drug-free workplace policy. Additionally, the Act does not prohibit employment policies that concern drug testing, smoking, consumption, storage or use of marijuana in the workplace or while on call, provided the policy is applied in a non-discriminatory manner.

However, an important part of the Illinois law also amends the Illinois Right to Privacy in the Workplace Act. In doing so, the new law prohibits an employer from taking disciplinary action against an employee who uses cannabis lawfully outside of work. This does not necessarily preclude an employer from disciplining an employee who tests positive at work for cannabis where the employee used it only off duty. That remains to be seen.

Practical Takeaways

Despite the legalization of marijuana in Illinois generally, the new legislation provides employers protection to implement and enforce drug-free workplace policies, such as prohibiting use or intoxication in the workplace, providing for termination of an employee due to impairment or proscribing hiring of an applicant who tests positive. But employers in Illinois should consider whether to accommodate an employee with a disability who uses marijuana lawfully off duty. Indeed, employers should consult with counsel about whether to permit a non-disabled employee to work when he or she used marijuana off duty but who does not come to work under the influence.

Health care employers should be especially cautious about their drug testing results, particularly where the employees perform clinical duties or even indirect patient care. Those employees who test positive could bring risks to the employer on more than one front.

If you have any question about this article, please contact

Special thanks to Emily Beukema, law clerk, for assistance in preparing this article.

The post New Illinois Legislation Legalizing Recreational Marijuana Use and What This Means for Employers appeared first on Law Firm | Health Care Law Firm in the USA | Hall Render.

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This is another article in a series discussing the complete overhaul of Part 483 to Title 42 of the Code of Federal Regulations the Requirements for States and Long-Term Care Facilities (“Final Regulations”) by the Centers for Medicare & Medicaid Services (“CMS”). To view other articles in this series, click here.

Beginning on November 28, 2019, surveyors will use the requirements detailed in 42 C.F.R. Section 483.85 in the Final Regulations to determine whether a skilled nursing facility’s (“Facility”) compliance and ethics program fulfills the requirements in the Final Regulations. One of the required components is that the Facility must respond and take corrective action when a violation is detected.

Background and Purpose of a Compliance and Ethics Program

The Final Regulations created a new Section 483.85 requiring Facilities to have a compliance and ethics program. This regulation arises from Section 6102 of the Affordable Care Act, which added Subsection 1128I(b) to the Social Security Act (the “Act”).

Section 483.85(c) sets forth the required compliance and ethics program components for all Facilities. Under those regulations, a compliance and ethics program means, with respect to a Facility, a program that has been reasonably designed, implemented and enforced so that it is likely to be effective in preventing and detecting criminal, civil and administrative violations under the Affordable Care Act and in promoting quality of care; and includes, at a minimum, the required components specified in the Final Regulations.

Required Component #8 – Respond and Take Corrective Action

Section 483.85(c)(8) of the Final Regulations requires that once a violation has been detected, the Facility should take reasonable steps as identified in its program to respond appropriately to the violation and take corrective action. Depending on the seriousness of the violation, the Facility may need to make modifications to its program.

State Operations Guidance to Surveyors

CMS has not issued guidance on how surveyors will interpret and cite the compliance and ethics program requirement.

Absent guidance from CMS, surveyors will likely ask to see the compliance and ethics program documents. This could include requesting a copy of the Facility’s process on how it will respond and take corrective action when a violation is detected.

OIG Guidance – Resources

In its 2000 memo titled “Publication of the OIG Compliance Guidance for Nursing Facilities,” OIG wrote that “[d]etected but uncorrected deficiencies can seriously endanger the reputation and legal status of the nursing facility.”

Once a violation has been detected, OIG expects the compliance officer or other management staff to “immediately investigate” to determine if a violation has occurred. If a violation did occur, the Facility must take “decisive steps” to correct the problem.

If the violation involves potential fraud, OIG would expect the Facility to conduct an internal investigation. This internal investigation would include document review and witness interviews. The Facility could hire outside consultants, including legal counsel, to assist with the internal investigation depending on the seriousness of the detected violation. OIG also suggests the Facility keep a written file of the internal investigation and corrective action. This would be key evidence in the event of a survey or demand for overpayment.

If employees of the Facility are a subject of the internal investigation, the employee may need to be suspended pending the outcome of the investigation. The Facility should also have a disciplinary policy in place that is consistently enforced when an employee is the subject of the internal investigation.

Implementation Time Frame

Beginning on November 28, 2019, surveyors will use the requirements detailed in Section 483.85 to determine whether a Facility’s compliance and ethics program fulfills the requirements in the Final Regulations.

Action Items

Facilities should:

  • Implement a policy and procedure on how to respond and take corrective action when violations are detected;
  • Assess what will be required to investigate and respond to the alleged violation;
  • Keep a detailed file of any investigation; and
  • Have a disciplinary process in place for employees who commit violations and ensure it is consistently enforced.
Compliance and Ethics Program Toolkit Available

Hall Render has developed a compliance and ethics program toolkit to assist skilled nursing facilities in achieving compliance with Section 483.85 and the Final Regulations. For more information about the toolkit, please contact Sean Fahey at (317) 977-1472 or sfahey@hallrender.com.

If you have questions about this topic or would like assistance with the Phase 3 compliance and ethics program requirements, please contact:

The post Countdown to Phase 3 Skilled Nursing Compliance Programs – Component #8 – Respond and Take Corrective Action appeared first on Law Firm | Health Care Law Firm in the USA | Hall Render.

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House Subcommittee Passes Surprise Billing Measure Despite Member Disagreement

On Thursday, the Energy and Commerce Health Subcommittee approved 10 bills, including a measure addressing surprise medical billing. The “No Surprises Act” (H.R. 3630), introduced by Energy and Commerce Chairman Frank Pallone (D-NJ) and Ranking Member Greg Walden (R-OR), would prohibit surprise billing and limit patient cost-sharing to the in-network amount for emergency services. Additionally, the bill would prohibit surprise medical bills from facility-based providers that patients cannot reasonably choose, whether arising from emergency care or scheduled care. The bill also establishes a payment benchmark to resolve out-of-network payment disputes between providers and insurers. This is similar to the approach approved by the Senate Health, Education, Labor, and Pensions (“HELP”) Committee last month.

However, several members of the subcommittee, led by Rep. Raul Ruiz, M.D. (D-CA), oppose the benchmark provision claiming that doctors and hospitals would have little say over certain payments if the measure becomes law. A bipartisan group of lawmakers is asking committee leaders to include provisions from H.R. 3502 that would let an independent entity arbitrate disputes over payments between insurers and providers before next week’s full committee markup. In the meantime, lawmakers held votes on amendments to the bill hoping a compromise can be reached before next week. Health Subcommittee Chair Rep. Anna Eshoo (D-CA) said there needs to be “some real serious negotiation” before the full committee takes up this legislation.

Health Subcommittee Passes DSH Cut Delay and Other Medicaid and Transparency Bills

Along with the surprise medical bill measure, the Energy and Commerce Health Subcommittee moved nine other health-related bills. The measures would reauthorize public health and Medicare programs, improve drug pricing transparency and increase Medicaid funding for U.S. territories. Notably, the Subcommittee approved a measure to delay Disproportionate Share Hospital (“DSH”) cuts for two years and decrease the cuts in fiscal year 2022. The delay was approved as part of H.R. 2328, the Community Health, Investment, Modernization and Excellence Act, which would reauthorize community health centers at $4 billion annually and the National Health Service Corps at $310 million annually through fiscal year 2024. Both House Democratic and Republican members applauded the delay of the cuts.

Other measures passed by the subcommittee include:

  • R. 2781, the “EMPOWER for Health Act of 2019,” introduced by Rep. Jan Schakowsky (D-IL) and Health Subcommittee Ranking Member Michael Burgess (R-TX), would provide a five-year reauthorization for the Public Health Service Act Title VII health care workforce development grant programs, including Area Health Education Centers, and Health Professions Training for Diversity.
  • R. 728, the “Title VIII Nursing Workforce Reauthorization Act of 2019,” introduced by Reps. David Joyce (R-OH) and Doris Matsui (D-CA), would reauthorize federal nursing workforce development grant programs administered by the Health Resources and Services Administration for five years.
  • R. 776, the “Emergency Medical Services for Children Program Reauthorization Act of 2019,” introduced by Reps. Peter King (R-NY) and Kathy Castor (D-FL), would reauthorize the Emergency Medical Services for Children Program at $22.3 million each year through FY 2024.
  • R. 2296, the “FAIR Drug Pricing Act of 2019,” introduced by Reps. Jan Schakowsky (D-IL) and Francis Rooney (R-FL), would require certain drug manufacturers to submit documentation to the Secretary of the Department of Health and Human Services 30 days before increasing the price of a qualifying drug.

The full Energy and Commerce Committee is expected to vote on the bills next week.

Health-Related Bills Introduced This Week

Rep. Judy Chu (D-CA) introduced H.R. 3711 to amend Title XVIII of the Social Security Act to provide coverage of medical nutrition therapy services for individuals with eating disorders under the Medicare program.

Sen. Richard Durbin (D-IL) introduced S. 2103 to improve access to affordable insulin.

Sen. Jeanne Shaheen (D-NH) introduced S. 2102 to provide funding for programs and activities under the SUPPORT for Patients and Communities Act.

Rep. Anthony Brindisi (D-NY) introduced H.R. 3672 to provide relief for small rural hospitals from inaccurate instructions provided by certain Medicare administrative contractors.

Sen. Robert Casey Jr. (D-PA) introduced S. 2067 to amend Title XIX of the Social Security Act to encourage states to disregard parental income and assets when determining Medicaid eligibility for disabled children.

Rep. Richard Hudson (R-NC) introduced H.R. 3656 to improve patient access to health care services and provide improved medical care by reducing the excessive burden the liability system places on the health care delivery system.

Next Week in Washington

Congress returns for a full work week. There are only 10 legislative days until the August recess, which gives lawmakers little time to advance their priorities. The Energy and Commerce Committee will likely mark up health-related bills addressed next week. On the Senate side, lawmakers will continue working on a sweeping legislative package aimed to lower health costs. Also on the horizon for Congress is lifting the debt ceiling since Treasury Secretary Steven Mnuchin is warning that the government could run out of cash in September. Although lawmakers could act before leaving for the August recess, it is more likely that they will address the issue after Labor Day.

For more information, please contact:

The post Hall Render’s This Week in Washington – July 12, 2019 appeared first on Law Firm | Health Care Law Firm in the USA | Hall Render.

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On June 26, 2019, Florida Governor Ron DeSantis signed into law a bill dramatically limiting substantial portions of Florida’s Certificate of Need (“CON”) program. The new law takes effect in two phases. Effective July 1, 2019, general hospitals, comprehensive rehabilitation and “tertiary”[i] health services, such as pediatric cardiac catheterization, pediatric open-heart surgery and neonatal intensive care units, will no longer be required to obtain a CON.[ii] Effective July 1, 2021, specialty medical, rehabilitation, psychiatric and substance abuse hospitals will no longer be subject to CON requirements.[iii]

Key Takeaways
  1. Some Health Care Facilities Remain Subject to Florida’s CON Requirements.

Although providers and developers will no longer need a CON for new general hospitals and “tertiary services,” other types of new developments in Florida will still need approval from Florida’s Agency for Health Care Administration (“AHCA”). For example, CON approval will still be necessary for many post-acute care facilities (e.g., nursing homes).[iv] It appears this exclusion from the repeal resulted from lobbying from the Florida Health Care Association, which pointed to other states like Indiana and Texas where new post-acute facilities found it difficult to fill their beds.[v]

  1. Other States May Consider Legislation Repealing CON Requirements.

Florida is not the first state to limit or repeal its CON program in recent years. Fifteen states have already eliminated their CON programs,[vi] seemingly without regard for political ideology. Republican-dominated Texas and Democrat-led California each repealed their CON programs, and New Hampshire became the newest member of the group, eliminating its CON requirements less than two years ago.[vii] Legislators in at least three more states (North Carolina, Georgia, and Alaska) introduced legislation seeking to repeal or otherwise reform their states’ CON programs.[viii]

Other states found more indirect ways of limiting CON programs. Some states have included sunset provisions in the CON statute requiring the program to be approved again at a later date.[ix] Other state CON programs exempt broad categories of health care facilities, as, for example, Connecticut exempts many post-acute facilities and hospital rehabilitation facilities.[x] As more states like Florida largely repeal their CON statutes, providers should expect other states to find either direct or indirect ways of removing CON requirements.

  1. Florida May See Increased Development of Micro-Hospitals.

Health care systems in states without CON programs have seen a growth in the number of micro-hospitals located for a number of years. There is no specific regulatory definition of a “micro-hospital,” but they typically have less than 10 beds and often an even smaller average daily census, but a significant outpatient component: ER, imaging and various ancillaries built around the small inpatient footprint and therefore eligible for hospital reimbursement. In 2017, CMS issued a clarification on how it applies the longstanding statutory requirement that a facility must be “primarily engaged” in providing inpatient care to be considered a hospital for Medicare purposes.[xi] The main takeaway was that state licensure as a hospital is not sufficient to guaranty Medicare hospital status. Additional requirements must be met to obtain an initial Medicare survey and maintain hospital status if approved.

The micro-hospital business model in other areas of the country is often presented to health care systems as a joint venture opportunity with an investor/management company to operate this smaller footprint facility. This joint venture model may have some merit, but it effectively precludes the new hospitals from qualifying for Medicare add-on payments and 340B status that system facilities commonly obtain. Some systems instead deploy the “micro-remote location” model, in which the micro-facilities operate as separate inpatient campuses of an existing hospital, with or without a management company. Systems interested in the “micro” concept should be sure to evaluate all the considerations that come along with the various models.

  1. Florida Health Care Systems Effectively Have New Strategic Options.

Apart from the micro-hospital model, the ability to open new inpatient sites without CON approval presents significant new strategic opportunities and threats for Florida providers. In evaluating these situations, systems should understand the many legal and regulatory considerations in creating new inpatient facilities, including, without limitation:

  • Licensure considerations;
  • Accreditation considerations;
  • Medicare certification and start-up gaps;
  • Medicare start-up capital cost reimbursement opportunities;
  • Medicare add-on payment differences for a new hospital vs. an existing provider;
  • 340B eligibility;
  • The Medicare multi-campus/remote location structure; and
  • State Medicaid implications.
  1. The Effect on Lowering Health Care Costs Remains an Open Question.

Although the financial effect of the new law may not be known for years, the expected growth in the development of Florida facilities previously requiring a CON may lead to greater competition in the industry. The existing CON program created a barrier to entry for many Florida providers or developers who may not have been able to afford steep CON costs, or who otherwise may have been unable to obtain a CON (from February 2017 to February 2019, Florida’s AHCA rejected a little over a third (14 of 40) of CON applications).[xii] As more facilities are constructed and, as a result, consumers have more options for care, providers may reduce costs to attract patients. For example, the number of outpatient services and facilities rose in Pennsylvania following the repeal of its CON program.[xiii]

At the same time, less restricted growth may lead to unnecessary duplication and overutilization of health care services, potentially accelerating health care spending. Without CON requirements, there is at least a possibility that such spending could also increase as providers spend more money on capital expenditures (i.e., constructing a new facility). Further, most providers are currently reimbursed at a prospective rate based on specific diagnoses, irrespective of an individual facility’s or provider’s actual spending. As a result, providers have little motivation to invest in expensive projects with low projected financial return.

If you have any questions or would like more information, please contact:

Special thanks to Danielle Elalouf and Makda Gebremichael for their assistance with the preparation of this article.

For more information on Hall Render’s real estate services, click here.

[i] See Fla. Stat. § 408.032 (repealed in part 2019), providing examples of tertiary services, including, but not limited to, “pediatric cardiac catheterization, pediatric open-heart surgery, organ transplantation, neonatal intensive care units, comprehensive rehabilitation, and medical or surgical services which are experimental or developmental in nature to the extent that the provision of such services is not yet contemplated within the commonly accepted course of diagnosis or treatment for the condition addressed by a given service.”

[ii] Florida House Bill 21 § 13 (2019), https://www.flsenate.gov/Session/Bill/2019/00021.

[iii] Id.

[iv] Certificate of Need State Laws, Nat’l Conf. St. Legislatures (Feb. 2019), http://www.ncsl.org/research/health/con-certificate-of-need-state-laws.aspx.

[v] Christine Sexton, House Approves Bill Repealing Certificate of need Regulations on Hospitals, South Fla. Sun Sentinel (Mar 21, 2019), https://www.sun-sentinel.com/news/florida/fl-ne-nsf-house-approves-con-health-bill-20190321-story.html.

[vi] U.S. Dep’t of Health & Human Servs., U.S Dep’t of Treasury, U.S. Dep’t of Labor, Reforming America’s Healthcare System Through Choice and Competition 51 (2018), https://home.treasury.gov/system/files/136/Reforming_Americas_Healthcare_System_Through_Choice_and_Competition.pdf

[vii] Nat’l Conf. St. Legislatures, supra note 3.

[viii] Eric Oliver, 4 States Considering CON Reform, Becker’s ASC Rev. (Apr. 24, 2019), https://www.beckersasc.com/asc-coding-billing-and-collections/4-states-considering-con-reform.html.

[ix] U.S. Dep’t of Health & Human Servs, supra note 4 at 51.

[x] Conn. Gen. Stat. Ann. § 19a-638.

[xi] Brian Jent, Regan Tankersley & Lauren Hulls, CMS Clarifies Definition of Hospital: What It Means to Be “Primarily Engaged,” Hall Render (Sept. 6, 2017), https://www.hallrender.com/2017/09/07/cms-clarifies-definition-hospital-means-primarily-engaged/?zoom_highlight=primarily+engaged.

[xii] CON Decisions & State Agency Action Reports, Florida Agency for Health Care Administration (last visited July 1, 2019), https://ahca.myflorida.com/MCHQ/CON_FA/Batching/decisions.shtml.

[xiii] Maria Castellucci, Weighing CON Laws Against Push for Greater Transparency, Mod. Healthcare (Apr. 11, 2017), https://www.modernhealthcare.com/article/20170411/NEWS/170419979/weighing-con-laws-against-push-for-greater-price-transparency.

The post What You Need to Know about Florida’s Partial Repeal of Its Certificate of Need Law appeared first on Law Firm | Health Care Law Firm in the USA | Hall Render.

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Thanks to a final rule issued by the Centers for Medicare & Medicaid Services (“CMS”) this spring, Medicare Advantage (“MA”) plans will now be able to offer additional telehealth benefits to enrollees starting in 2020. Historically, MA plans have been able to offer more telehealth services compared to Original Medicare as part of their supplemental benefits. The final rule, which allows MA plans to provide “additional telehealth benefits” to enrollees and treat them as basic benefits, is expected to provide MA enrollees with greater access to telehealth services and create additional opportunities for providers.

Background

MA plans are currently required to provide certain telehealth services to enrollees as basic benefits paid through the capitation rate. Telehealth services required to be provided as basic benefits are generally limited to services covered by Medicare Part B that are furnished by a physician or other specified practitioner[1] to a Medicare beneficiary via an interactive telecommunications system. The form of telecommunications system must permit a two-way, real-time interactive communication and excludes store-and-forward technologies other than for services provided as part of a federal telemedicine demonstration program.[2] In addition, the beneficiary must be located at an eligible originating site, which is limited both to specific geographic locations and type of care settings.[3] Currently, MA plans have the option to provide other telehealth services as supplemental benefits funded through the use of rebate dollars or supplemental premiums paid by enrollees.

Summary of Changes

Beginning in plan year 2020, MA plans may now elect to offer certain additional telehealth benefits as basic benefits rather than as supplemental benefits. Specifically, MA plans will be able to treat as basic benefits those benefits that are available under Medicare Part B that have been identified by the MA plan for the applicable year as clinically appropriate to furnish through electronic exchange when the physician or practitioner providing the service is not in the same location as the enrollee (“additional telehealth benefits”). Changing the form of funding to be part of the capitation rate, rather than through rebate dollars or supplemental premiums, makes it more likely that MA plans will offer, and MA enrollees will have access to, additional telehealth benefits. The ability to offer additional telehealth benefits is optional, as MA plans will not be required to offer additional telehealth benefits to their enrollees.

Additional Telehealth Benefits Defined

To qualify as an additional telehealth benefit, the benefit must be available under Medicare Part B and identified by the MA plan for the applicable year as clinically appropriate to furnish through electronic information and telecommunications technology. CMS explained in the final rule that MA plans are in the best position to identify telehealth benefits that are clinically appropriate to furnish through electronic exchange but that an MA plan’s determination will require the MA plan to consult with its contracted network providers as part of the MA plan’s medical policy.[4]

Forms of Electronic Exchange

Additional telehealth benefits must be provided through electronic exchange, which is defined as electronic information and telecommunications technology. CMS provided examples of electronic information and telecommunications technology in the final rule to include secure messaging, store and forward technologies, telephone, videoconferencing, other internet-enabled technologies and other evolving technologies as appropriate for non-face-to-face communication. However, CMS made it clear that the list of examples is not intended to be a comprehensive list of permitted technologies but rather is intended to allow for flexibility needed based on the service being offered and to allow for technological advances that may develop in the future.

Requirements to Cover Additional Telehealth Benefits as Basic Benefits

MA plans may treat additional telehealth benefits as basic benefits if the following requirements are met:

  1. In-Person Services upon Request. The MA plan must provide in-person access to the specified Part B service upon the request of the enrollee.
  2. Use of Contract Providers. The MA plan must provide additional telehealth benefits through contracted providers. Preferred provider organizations, which are otherwise required to furnish all services both in-network and out-of-network, will not be exempt from this requirement and will be required to use contracted providers to provide additional telehealth benefits.
  3. Disclosure of the Availability of In-Person Services. The MA plan must advise an enrollee that he or she may receive the specified Part B service through an in-person visit or through electronic exchange.
  4. Provider Selection and Credentialing. The MA plan must comply with the provider selection and credentialing requirements at 42 C.F.R. § 422.204. The MA plan must also, through its contract with the provider, ensure that the provider meet and comply with applicable state licensing requirements and other applicable state law in which the enrollee is located and is receiving the service. This is no small task. Many states have yet to comprehensively address the requirements attendant to the practice of telemedicine, giving rise to a lack of clarity regarding permissible practices. There also continues to be significant variation among the states, particularly with respect to the permissible uses/modalities of telemedicine, prescription of controlled and non-controlled substances, practitioner/patient relationships, consent requirements and other related practice considerations.
  5. Information Provided to CMS upon Request. The MA plan must make information about coverage of additional telehealth benefits available to CMS upon request, including statistics on use or cost, the manner or method of electronic exchange, evaluations of effectiveness and demonstration of compliance with the requirements of providing additional telehealth benefits.
  6. Differential Cost Sharing. The regulations permit an MA plan offering additional telehealth benefits to maintain different cost sharing for services furnished through an in-person visit and through electronic exchange. CMS made it clear that the primary purpose of any differential in cost sharing must parallel the actual cost of administering the service and not steer enrollees or inhibit access.
Open Issues

CMS did not address a number of issues in the final rule, indicating that future sub-regulatory guidance would be provided. These issues include the following:

  1. Advising Enrollees of Availability of In-Person Services. An MA plan enrollee must have the choice to receive a service offered as an additional telehealth benefit service through an in-person visit or as an additional telehealth benefit. The final rule requires that MA plans advise enrollees of the right to choose the specified Part B service through an in-person visit or electronic exchange. CMS intends to issue sub-regulatory guidance regarding this requirement.
  2. Provider Directories. An MA plan must maintain an accurate provider directory of active, contracted providers. CMS proposed, but did not finalize, a requirement that an MA plan ensure its provider directory identify those providers who offer services for additional telehealth benefits and in-person visits or offer services exclusively for additional telehealth benefits. Rather, CMS intends to address any provider directory requirements in sub-regulatory guidance, including model language for the directory.
  3. Evidence of Coverage. An MA plan is required to disclose the benefits offered under the plan annually through the MA plan’s Evidence of Coverage (“EOC”). CMS proposed, but did not finalize, a requirement that an MA plan advise enrollees through the EOC that the specified Part B service(s) can be received through an in-person visit or through electronic exchange. CMS intends to issue guidance as to how an MA plan is to address additional telehealth benefits in the EOC and the Annual Notice of Change, including model language for the EOC.
  4. MA Network Adequacy Policies. An MA plan is required to meet network adequacy criteria to show that the plan maintains a network of appropriate providers sufficient to provide adequate access to covered services to meet the needs of the population served. The final rule did not address the potential impact that MA additional telehealth benefits will have on network adequacy policies, if any. CMS intends to update sub-regulatory guidance to reflect any changes in policy.
Practical Takeaways

Expanding access to telehealth services for MA beneficiaries is another example of CMS’s efforts to modernize the MA and Part D programs and improve quality among MA plans. As payment for the delivery of telehealth services continues to evolve, additional opportunities for providers and health plans will be created. To capitalize on these opportunities, providers should familiarize themselves with applicable federal and state laws to ensure they know the extent of covered services and are appropriately paid for these services. These new opportunities also create additional flexibility and incentives for health plans to explore new relationships with telehealth providers.

We will continue to monitor developments in this area. In the meantime, if you have any questions or would like additional information about this topic, please contact:

[1] Specified practitioners include physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, certified nurse-midwives, clinical social workers, clinical psychologists and registered dietitians and nutrition professionals. 42 U.S.C. § 1395m(m)(1); 42 U.S.C. § 1395u(b)(18)(C).

[2] An interactive communications system requires, at a minimum, equipment that permits two-way, real-time interactive communication between the beneficiary and the practitioner and excludes telephones, fax machines and e-mail. 42 C.F.R. § 410.78(a)(3). The statute does provide an exception for federal telemedicine demonstration programs conducted in Alaska or Hawaii, in which case providing for the asynchronous transmission of health care information is permitted.

[3] Eligible originating sites are limited to: (i) the office of a physician or practitioner, (ii) a critical access hospital, (iii) a rural health clinic, (iv) a Federally Qualified Health Center, (v) a hospital, (vi) a hospital-based or critical access hospital-based rental dialysis center, (vii) a skilled nursing facility or (viii) a community mental health center; provided that the site must be located (a) in an area designated as a rural health professional shortage area, (b) in a county that is not included in a Metropolitan Statistical Area or (c) from an entity that participates in a federal telemedicine demonstration project approved by the Secretary of Health and Human Services as of December 31, 2000. A notable exclusion from an eligible originating site is a beneficiary’s home. 42 U.S.C. § 1395m(m)(4)(C).

The post Additional Telehealth Benefits Coming to Medicare Advantage in 2020 appeared first on Law Firm | Health Care Law Firm in the USA | Hall Render.

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NATIONAL

NORTHEAST

(Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island, Vermont)

CONNECTICUT

MAINE

MASSACHUSETTS

NEW HAMPSHIRE

NEW YORK

RHODE ISLAND

VERMONT

MID-ATLANTIC / EAST                                                                 

(Delaware, District of Columbia, Maryland, New Jersey, Pennsylvania, Virginia, West Virginia)

DELAWARE

DISTRICT OF COLUMBIA

MARYLAND

NEW JERSEY

PENNSYLVANIA

VIRGINIA

WEST VIRGINIA

CENTRAL

(Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota)

IOWA

KANSAS

MINNESOTA

MISSOURI

NEBRASKA

NORTH DAKOTA

SOUTH DAKOTA

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On July 5, 2019, the United States Court of Appeals, District of Columbia Circuit issued an opinion enforcing Supreme Court precedent that the False Claims Act (“FCA”) should be reserved for true fraud against the government—not “garden-variety regulatory violations.”

In U.S. ex rel. Kasowitz Benson Torres LLP v. BASF Corp.,[1] the D.C. Circuit reviewed a district court’s dismissal of an FCA action for failure to state a claim for relief. The whistleblowers alleged that several chemical manufacturers produced chemicals with adverse health effects and failed to disclose this information to the EPA, as required under the Toxic Substances Control Act (“TSCA”).[2] The whistleblowers argued that although the EPA took no regulatory action against the defendants, the chemical manufacturers violated the FCA by “depriving the government of money by failing to pay TSCA civil penalties and by concealing their liability from the EPA.”[3]  The whistleblowers also argued that the chemical manufacturers deprived the government of “property” by failing to disclose adverse health information about the chemicals they manufactured.[4]

The D.C. Circuit, unimpressed with the whistleblowers’ allegations, held:

  • An unassessed potential penalty for regulatory noncompliance does not constitute an obligation that gives rise to a viable FCA claim; and
  • A regulatory agency’s statutory right to be informed does not constitute a traditional property right.[5]

In its opinion, the D.C. Circuit noted that the TSCA grants the EPA the authority to impose civil penalties, but does not require them to do so.[6] The Court held that an obligation “arises only if and when the EPA decides to impose a penalty”[7] and without an obligation to impose a civil penalty, the defendants’ non-compliance with the TSCA did not equate to a claim of conversion, or any other appropriate claim for relief under the FCA.[8]

The whistleblowers’ argument that the defendants violated the reverse false claims provision by knowingly avoiding an obligation to transmit property to the government was just as quickly dismissed. The Court held that the TSCA gave the EPA only an interest in the chemical manufacturers’ substantial risk information.[9] The Court noted that this information is not transmitted to the EPA by chemical manufacturers for the EPA’s benefit, but to allow the EPA to “carry out its regulatory mission.”[10] The Court held that because the EPA’s concern is regulatory, the defendants’ obligation to inform the EPA of substantial risk information is not an obligation to transmit an interest in property.[11]

This opinion reinforces both the demanding materiality standard created by the Supreme Court’s Escobar holding, as well as the First Circuit’s ruling in U.S. ex rel. D’Agostino v. ev3, Inc., et al.,[12] which held that a whistleblower cannot take the place of a regulatory agency. To do so would create a chilling effect on a manufacturer’s reporting obligations and the EPA’s ability to perform its duties.[13]

Takeaways

This opinion serves as useful caselaw in combating unique regulatory arguments for liability under the FCA. Potential penalties under a statute or by a regulatory agency do not automatically create FCA liability, nor can a whistleblower rely on those potential penalties without placing themselves in the shoes of a regulatory agency.

If you have any questions, please contact:

[1] No. 18-7123, 2019 WL 2896005 (D.C. Cir. July 5, 2019)

[2] Id. at *2.

[3] Id.

[4] Id. at *3.

[5] Id. at *2.

[6] Id. at *3.

[7] Id.

[8] Id.

[9] Id. at *4.

[10] Id.

[11] Id.

[12] 845 F.3d 1 (1st Cir. 2016).

[13] Id. at 8.

The post Greed and Creative Pleading: A Formula for Dismissal Under the FCA appeared first on Law Firm | Health Care Law Firm in the USA | Hall Render.

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For-profit businesses are generally organized and operated to maximize shareholder value. For this reason, for-profit organizations have inherent limitations in pursuing goals or purposes that conflict with increasing the bottom line for shareholders. While for-profit companies have traditionally had these limitations, in recent years, many for-profit organizations have been presented with a new legal structure that was designed specifically to allow them to organize and carry on their business to maximize more than just profit. Introducing, the Benefit Corporation.

What Are Benefit Corporations?

A Benefit Corporation is a for-profit entity that is recognized by state law and specifically directs the business to operate for social, environmental and other permitted purposes. Under the Model Benefit Corporation Legislation,[1] Benefit Corporations must have a purpose of creating general public benefit and must also meet certain accountability and transparency standards.

General public benefit is defined as “a material positive impact on society and the environment, taken as a whole, from the business and operations of a benefit corporation assessed taking into account the impacts of the benefit corporation as reported against a third-party standard.”[2] In addition to a general public benefit, Benefit Corporations may also choose to pursue one or more special public benefit purposes, such as, providing low-income individuals or communities with beneficial products or services, improving human health, promoting the arts, sciences, or advancement of knowledge, etc.[3]

As for accountability, a Benefit Corporation requires its directors, in discharging their duties of their respective positions, to consider the interests of various constituencies, such as its employees, customers, community and local and global environment, rather than solely the corporation’s shareholders. As such, directors are legally obligated to consider more than just the financial value of the corporation.

Lastly, a Benefit Corporation must prepare a public annual benefit report that assesses its performance in creating general public benefit against a third-party standard. The report is intended to allow shareholders to evaluate and measure the Benefit Corporation’s performance of creating general or specific public benefit (similar to financial statements for a regular for-profit corporation) and to give the general public a means of judging whether the business is operating as a benefit corporation.

At the time of writing this article, 34 states, including Indiana, Wisconsin, Maryland, Texas, Colorado and Washington D.C., have passed Benefit Corporation legislation, while 6 states have legislation pending.[4]

The Certified B Corporation Alternative

In those states that have not adopted Benefit Corporation legislation, a for-profit entity looking to operate like a Benefit Corporation can become a “Certified B Corporation.”[5] A Certified B Corporation is a for-profit company certified by the non-profit B Lab to “meet the highest standards of verified social and environmental performance, public transparency, and legal accountability to balance profit and purpose.”[6] To obtain certification, a business must obtain a minimum score on an online assessment that evaluates the company’s business model and operational effect on the company’s employees, customers, community and environment; integrate stakeholder consideration in the business’s governance structure; and pay an annual certification fee ranging from $500 to $50,000 based on annual sales. In addition to meeting such performance standards, a Certified B Corporation must meet certain accountability and transparency standards similar to those of a Benefit Corporation. Some health care companies that are a Certified B Corporation include:

  • ResolutionCare Network; Eureka, CA. ResolutionCare describes itself as “a people powered, technology-enabled palliative care initiative providing services in the home via a combination of telemedicine and face-to-face home visits to the seriously ill in rural, underserved counties in Northern California and beyond.”[7]
  • Success Rehabilitation; Quakertown, PA. Success Rehabilitation provides residential and outpatient programs for acquired and traumatic brain injury.[8]
  • Workit Health, Inc.; Ann Arbor, MI. Workit Health is an online/offline addiction care program that provides prevention, intervention and medication-assisted treatment.[9]
  • Tenfold Health; Bend, OR. Tenfold Health is a company that designs and implements new payer and care delivery models that are designed to improve health and lower costs for health systems, insurers and other health care stakeholders.[10]
Is the Benefit Corporation or Certified B Corporation Status Right for Your Organization?

According to recent studies, global consumers are increasingly more likely to choose goods that come from a business that demonstrates an authentic commitment to social and environmental impact.[11] Many companies have purpose driven missions to have a positive impact on the world and want to convey that mission to investors, employees and clients. Becoming a Benefit Corporation or a Certified B Corp may give your business a competitive advantage in the marketplace and will display to the public that your company is committed to a socially conscious purpose.

If you have any questions or would like more information on benefit corporations, please contact:

Special thanks to Spencer Hatfield, law clerk, for his assistance with the preparation of this article.

[1] The Model Benefit Corporation Legislation is a template model act for B Corporations and is available at: https://benefitcorp.net/sites/default/files/Model%20benefit%20corp%20legislation%20_4_17_17.pdf.

[2] Id. at Section 102.

[3] Id.

[4]  State by State Status of Legislation, B Lab Company, https://benefitcorp.net/policymakers/state-by-state-status (last accessed July 2019).

[5] While a Benefit Corporation may also become a Certified B Corp, there is no requirement for a Benefit Corporation to receive any certification.

[6] What are B Corps, Certified B Corp., https://www.bcorporation.net/what-are-b-corps (last accessed July 2019).

[7] B Impact Report, ResolutionCare Network, https://bcorporation.net/directory/resolutioncare-network (last accessed July 2019).

[8] B Impact Report, Success Rehabilitation, https://bcorporation.net/directory/success-rehabilitation (last accessed July 2019).

[9] B Impact Report, Workit Health, Inc., https://bcorporation.net/directory/workit-health-inc (last accessed July 2019).

[10] B Impact Report, Tenfold Health, https://bcorporation.net/directory/tenfold-health (last accessed July 2019).

[11] Richard Stammer, It Pays to Become a B Corporation, Harvard Business Review, December 6, 2016. https://hbr.org/2016/12/it-pays-to-become-a-b-corporation.

The post Thinking of Forming a New For-Profit Health Care Enterprise? Why a Benefit Corporation May Be Right for Your Organization appeared first on Law Firm | Health Care Law Firm in the USA | Hall Render.

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On June 12, 2019, the United States Court of Appeals for the Seventh Circuit joined the Second, Sixth and Eighth Circuits in determining that without evidence of an underlying physiological disorder, a plaintiff’s weight does not qualify as a disability under the Americans with Disabilities Act (“ADA”).

In the Seventh Circuit case Richardson v. Chicago Transit Authority, the plaintiff, a bus driver weighing over 550 pounds and suffering from high blood pressure and sleep apnea, claimed that his employer fired him because of his obesity. However, his employer argued that the plaintiff exceeded the weight requirement to operate the bus safely and therefore had a legitimate reason for its employment decision.

In deciding the case, the court considered whether the plaintiff “can demonstrate: (1) his extreme obesity is an actual impairment; or (2) Chicago Transit Authority perceived his extreme obesity to be an impairment.”

“Without evidence that [plaintiff’s] extreme obesity was caused by a physiological disorder or condition, his obesity is not a physical impairment under the plain language of the EEOC regulation,” the three-judge panel said, declining the plaintiff’s argument that amendments made by Congress to the ADA in 2008 relaxed the standard for what qualifies as a disability.

The court also rejected the plaintiff’s argument that his employer took adverse action against him because it perceived his obesity to be a disability. For the plaintiff’s claim to succeed, he had to demonstrate that his employer discriminated against him not just based on its knowledge of his obesity but also on its certainty that this characteristic was an impairment under the ADA. The panel found that plaintiff failed to make this showing because the evidence suggested that his employer perceived the plaintiff’s weight as a physical characteristic that made it unsafe for him to drive, not as a disability.

While the Seventh Circuit is the fourth circuit to hold that obesity is not a physical impairment under the ADA, the First Circuit, has reached the opposite conclusion. The First Circuit has held that morbid obesity, independent of an underlying physiological disorder or disease, can be a physical impairment. Therefore, employers should continue to be cautious when making employment decisions involving this subject and should consult with counsel to ensure compliance.

If you have questions about this case or managing employee disability matters, please contact Kevin Stella at kstella@hallrender.com or at (317) 977-1426 or your regular Hall Render attorney.

Special thanks to Claire Bailey, law clerk, for her assistance in preparing this article.

The post Seventh Circuit: Obesity Alone Is Not Protected Under the ADA appeared first on Law Firm | Health Care Law Firm in the USA | Hall Render.

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