Loading...

Follow Health Law Gurus on Feedspot

Continue with Google
Continue with Facebook
or

Valid

Written by guest contributors Kyle Letner, MBA, and Brandon Danz, M.H.A., M.P.A.

This is the second in a two-part article on healthcare data transparency and how providers and payers can leverage data as a population health opportunity. Part one, TRANSPARENCY: Embracing CMS’s Push To Publicize Your Organization’s Performance, reported on ways federal and state agencies are advancing healthcare data transparency as a vehicle to transition to value-based reimbursement. This follow-up article shares promising practices being developed by forward-thinking healthcare organizations to use data in new ways to improve patient care.

New data sources and novel analytics capabilities applied to existing data are being used by providers, payers, and technology firms to innovate in competitive market environments. Ochsner Health System, a large non-profit academic health system in Louisiana, is using cloud-based patient data to predict and prevent inpatient clinical deterioration. By bringing together multiple data sources and applying machine learning and artificial intelligence technology, Ochsner detects potential adverse events more quickly and accurately. Ochsner’s Rapid Response Team reduced adverse events outside of the Intensive Care Unit by 44% in a 90-day pilot.

Data innovation is also a necessary component of successful pursuit of the Triple Aim and value-based reimbursement. Merged claims and clinical data are yielding valuable new predictive analytics capabilities for health systems that are unified under a single EHR system and have access to payor claims data. (Note: it was recently reported that the Trump administration may be issuing an Executive Order mandating the sharing of such information.) WellSpan Health, an integrated health system in central Pennsylvania and northern Maryland (and employer of the authors), is applying predictive analytics to these data sets to identify patients who are most at risk of adverse health scenarios and enroll them in targeted disease management programs. Once enrolled, patients’ historical data is combined with real-time biometric data sourced from “Connected Care at Home” devices sent home with patients. A Connected Care at Home team of nurses then remotely monitors patient vital signs, reviews the patient’s responses to daily questions provided through an issued tablet device, and offers video chats to address identified risk indicators prior to an avoidable trip to the hospital. This orchestra of predictive claims and clinical data analytics that identify targeted populations upstream of preventable health problems, and patient-sourced data to real-time monitor their risks is becoming widely-adopted by health systems as a means to prevent avoidable hospitalizations.

It is no surprise that the U.S. Department of Veterans Affairs is invested in leveraging data and technology to transform healthcare. The Veterans Health Administration (VHA) Office of Connected Care is using telehealth, a personal health record, and mobile app development to “make it easier for veterans to be more actively involved in their health care and [give] VA care teams true mobility of patient data for the first time.” A variety of innovative VHA programs leverage connected data sources, analytics, and personal technology to provide quicker interventions and access to the right care at the right time for veterans. One program tracks and monitors critical lab and imaging tests to standardize follow-up care and ensure quality improvement. This work is a first-generation proof of concept for the types of innovation likely to come from healthcare providers and payers using CMS’s new Blue Button 2.0 (discussed in the previous article.)

Numerous examples of pioneering applications of healthcare data are reported on a regular basis and many players are entering this nascent market. Apple is now hiring doctors to support its data-fueled wellness programs. Comcast recently announced that it is developing an in-home device to monitor patients’ health and will take on financial risk for its ability to reduce E.R. visits. Amazon’s new venture with Berkshire Hathaway and JPMorgan Chase, newly named “Haven”, is using big data analytics to identify and eliminate healthcare waste and inefficiencies. These and other population health initiatives are driven by innovative uses of clinical, claims, pharmaceutical, social determinant of health, biometric, and device-sourced data to deliver on Triple Aim goals.

Important ethical considerations play into new uses of health data including what data to collect, how to use it, when and how to intervene, and how to monitor the efficacy and execution of predictive analytics. The healthcare industry can learn lessons from other industries as they traveled this path. In 2012 Target infamously predicted a teenage girl’s pregnancy by analyzing the data sourced from her shopping habits and in doing so, let her parents in on the secret before she did. Healthcare organizations looking to take advantage of new big data opportunities should include medical ethicists in the development of strategies to use data in new ways that improve patient care while maintaining proper respect for the privacy of patients and populations.

THE INFORMATION CONTAINED IN THIS PUBLICATION SHOULD NOT BE CONSTRUED AS LEGAL ADVICE, IS NOT A SUBSTITUTE FOR LEGAL COUNSEL, AND SHOULD NOT BE RELIED ON AS SUCH. FOR LEGAL ADVICE OR ANSWERS TO SPECIFIC QUESTIONS, PLEASE CONTACT ONE OF OUR ATTORNEYS. THE VIEWS AND OPINIONS REPRESENTED IN THIS POST ARE SOLELY THOSE OF THE AUTHOR, AND DO NOT NECESSARILY REFLECT THE VIEWS OR POSITION OF OBERMAYER REBMANN MAXWELL & HIPPEL LLP ATTORNEYS OR THE FIRM.

Kyle Letner, MBA is Director of Connected Health at WellSpan Health and responsible for the growth and development of the digital programs, apps and services directly delivering clinical care (i.e. telemedicine) or enhancing patients’ experience of care. https://www.linkedin.com/in/kyleletner/

Brandon Danz, M.H.A., M.P.A. is Director of Government Risk Programs at WellSpan Health and former Senior Advisor to the Secretary of the Pennsylvania Department of Human Services. https://www.linkedin.com/in/brandondanz

The post TRANSPARENCY: How Healthcare Providers Are Using Data To Advance Population Health Strategies appeared first on Health Law Gurus.

  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

(This is the first in a two-part article on healthcare data transparency and how providers and payers can leverage transparency as a population health opportunity.)

The Centers for Medicare and Medicaid Services (CMS) is launching new value-based programs with great fervor as a central strategy to bend the healthcare cost curve. Value-based reimbursement models linked to achieving the Triple Aim have received broad bipartisan support and are widely seen as a new ‘normal’ within healthcare. In a recent new program announcement, CMS Director Seema Verma stated that “as we seek to unleash innovation in our health care system, we recognize that the road to value must have as many lanes as possible.”

Traveling these lanes requires meaningful investments in care redesign and a willingness to loosen ties to traditional fee-for-service strategies. But there is a largely under-utilized companion hitching a ride in most of the lanes leading to value-based reimbursement: data transparency.

Transparency has been an important component to CMS reforms. Take Medicare Accountable Care Organizations (ACO) as an example. A health system or large physician group that becomes a traditional Medicare ACO agrees to have their quality, cost, and utilization data publicly reported by CMS on Public Use Files that can be downloaded by anyone to compare the quality and cost of competing health systems and physician groups. In fact, CMS requires each ACO to post their performance data on their own organization’s website (Google the name of a Medicare ACO near you, followed by “public reporting information” and it will probably appear in the first result).

This movement toward greater data transparency is also impacting individual physicians. Starting this year physicians’ quality data based on their performance within the MIPS program is publicly reported on Medicare’s Physician Compare website with a sleek and simple physician lookup tool.

At The Fingertips of Consumers:

The importance of this movement to publicly report performance data – and the opportunities that it presents — deserves consideration. CMS is now acting to maximize the sharing and transparency of healthcare data directly to consumers. In February of this year, CMS issued a proposed rule which would require Medicare Advantage plans, Medicaid, CHIP, and health plans sold on the federal exchange to electronically share claims data with their enrollees by 2020. This would make comprehensive healthcare data available to 85 million consumers in a standardized digital format. Leadership at CMS is painting a clear picture to providers and payers who resist making this data available. When asked if CMS Director Verma would “name and shame” bad actors under the new rule, she responded that “we are going to use every lever that we have to drive patients getting access to their records” (source: ).

Perhaps the most groundbreaking transparency reform of all is CMS’s new “Blue Button 2.0”. This is a tool available to Medicare beneficiaries, allowing them to access and share their claims data. The tool is currently under development with a host of app developers (including forward-thinking health systems) looking to capitalize on this new market opportunity. Once available, beneficiaries will be able to access their data using their smartphone and securely share their data with their doctor, researchers, or approved app developers.

An Opportunity Or A Threat?

Transparency will become the new normal and embracing it early on as a necessary companion to true value-based transformation can position a provider or payer for long-term success. Conversely, transparency may become a threat to providers who resist redesigning traditional fee-for-service care models to focus on quality over cost. In a follow-up article, I will share strategies underway by providers and payers to leverage transparency as an opportunity to advance population health strategies. In the meantime, I will leave you with this anecdote: Last year, Yelp gained access to various states’ Departments of Health restaurant inspection scores and is now publishing those scores on restaurant review pages within the Yelp app. If Yelp did this in the restaurant industry, how long until a company realizes the newfound ability to do it within healthcare? In the near future, an Apple watch will tell its wearer, who it knows (from claims data) to have high blood pressure and (from its own biometrics) to have too little exercise that based on Apple’s proprietary analytics, the person is at rising risk of an adverse health event and should schedule a doctor’s appointment. It might also tell the wearer the average quality performance and costs of various cardiology or primary care groups operating in the region and serve up the phone number of the best pick. Or it could go a step further and ask the person if they would like a consult with an Apple- employed physician. Sound far-fetched? Apple hired their first 50 physicians in 2018.

The information contained in this publication should not be construed as legal advice, is not a substitute for legal counsel, and should not be relied on as such. For legal advice or answers to specific questions, please contact one of our attorneys. The views and opinions represented in this post are solely those of the author, and do not necessarily reflect the views or position of Obermayer Rebmann Maxwell & Hippel LLP attorneys or the firm.

Author: Brandon Danz, M.H.A., M.P.A. is Director of Government Risk Programs at WellSpan Health and former Senior Advisor to the Secretary of the Pennsylvania Department of Human Services. 

The post TRANSPARENCY: Embracing CMS’s Push To Publicize Your Organization’s Performance appeared first on Health Law Gurus.

  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

The U.S. Supreme Court has just issued a unanimous decision in the case Cochise Consultancy Inc. et al. v. U.S. ex. rel Hunt (decided on May 13, 2019), that qui tam whistleblowers can invoke the ‘”government knowledge” three-year tolling provision in the False Claims Act (the “FCA”) suits. The qui tam provisions in the FCA have been the federal government’s most powerful tool for combatting fraudulent contracts and healthcare false claims to the U.S. government, and continue proliferation of fraud recovery actions.

Under the FCA, cases must be filed within the six years of the alleged violation or within three years after material facts become known or should have become known “by the official of the United States charged with responsibilities under the circumstances.” The Supreme Court in Cochise Consultancy interpreted the FCA statute and held that the limitations period, which provides that a FCA action must be brought within three years after the official learns of the of the relevant facts, but not more than 10 years after the violations, applies to a qui tam suit in which the federal government has declined to intervene.

The underlying case was brought by a whistleblower, Billy Joe Hunt, against his former employer Parsons Corporation and its subcontractor Cochise Consultancy, Inc., alleging that they defrauded the U.S. Department of Defense  on contracts worth over $60 million for munitions cleaning in Iraq. Allegedly, Cochise violated the FCA when it provided gifts to an Army official to get the contract. The district court dismissed the case because it was filed seven years after the cause of action arose, and because the government declined to intervene. Importantly, the FBI agents interviewed Hunt regarding the alleged fraud less than three years before Hunt initiated the suit. Under the district court’s reading of the statute, Hunt would have had three years from the time of the interview with the agents, had the federal government intervened. But because the government declined to intervene, the suit was dismissed as untimely. The Eleventh Circuit reversed on appeal finding that “the government knowledge” three-year statute of limitations applies even if the government does not intervene. This position conflicted with decisions in some circuits, and the case reached the Supreme Court by the contractors’ petition challenging the Eleventh Circuit ruling, saying that Hunt’s claims would have failed in the Fourth, Fifth, and Tenths Circuits.

The Supreme Court repaired the circuit split and affirmed the Eleventh Circuit holding that relators can invoke a three-year statute of limitation period after the government learns of the fraud, regardless when the relator discovers the violation. The Court, however, refused to give a relator as many as 10 years to bring suit when the relator learned of the fraud on the day it occurs, and the government does not discover the fraud. The other holding in the case came in response to Cochise’s fallback argument that in a suit in which the government does not intervene, the relator should be considered “the official of the U.S. charged with the responsibility to act in the circumstances” and bring the suit within three years.  This argument failed when the Court refused to view relators as government officials because “[t]he statute provides no support for reading “the official of the United States” to encompass a private relator.” The Court held that the relator is not an official whose knowledge triggers the three-year limitation period.

The outcome that allows relators more time to pursue qui tam claims was not a surprise. The federal government recovers over $3 billion in fraudulent expenses annually, and the extended timeline may help the federal government recover more money from whistleblower cases in the long run.

If you have further questions regarding this decision, please contact attorneys Lawrence Tabas, Esq. or Alina Chuklin.

The post Blow a Whistle! New Relator-Friendly Standard Under the False Claims Act appeared first on Health Law Gurus.

  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 
Health Law Gurus by Alina Chuklin, Lawrence J. Tabas - 6M ago

Summing up the results of the previous year, regulatory experts have noted that more than half of the businesses punished for HIPAA lapses in 2018 involved well-known big business entities making it a notable theme of the year. While some experts say that regulators may be relaxing the enforcement of the regulation, others remain confident that the Department of Health and Human Services (HHS) will be committed to a robust HIPAA enforcement in 2019.

To make predictions for the new year, experts are looking at the enforcement trends in the past few years, and 2018 in particular. On the one hand, the number of entities punished in 2018 looks less impressive compared to 2016, when the HHS’s Office of Civil Rights (OCR) announced 13 enforcement actions, collecting a record $23.5 million in settlements and fines. On the other hand, although year 2018 saw only 10 enforcement actions, the total payouts reached $25.7 million including the standout record-smashing $16 million settlement with Anthem, Inc. for data breach involving 79 million people. While the HHS OCR supports deregulation by Trump’s administration, experts are skeptical that OCR enforcement will slow down in the new year.  As was announced by the OCR Director Roger Severino in October 2018 at the 11th annual HIPAA conference by the National Institute of Standards and Technology, his statement made one year earlier that OCR was looking for “big, juicy, egregious” cases, allowed the federal agency to collect $45M in penalties in the period between January 2017 and October 2018. According to some experts, the 2018 enforcements targeting deep-pocketed healthcare entities confirmed the agency’s desire for big settlements. Others believe that sanctions against high-profile entities could be a mere coincidence and the tendency in 2018 showed that OCR’s enforcement strategies are changing. One thing is clear, some changes to HIPAA requirements are on the way. According to Severino, OCR is currently seeking to eliminate certain regulatory requirements that obstruct the provision of healthcare, and the agency is working hard to eliminate the burdens to allow providers to concentrate on patient treatment.

In mid-December of 2018, the HHS OCR requested public comments on potential changes to HIPAA regulations. The Request for Information (RFI) seeks public input on improving care coordination and reducing the regulatory burden. The effort is to get input from providers, patients and industry professionals on how to improve some of the administrative aspects of HIPAA. The main focus of the RFI is on HIPAA privacy rule which could be modified to promote coordinated, value-based healthcare by promoting information sharing for adults in healthcare emergencies. The OCR is concerned that current regulation “impedes the transformation to value-based health care, and limits or discourages coordinated care” without enhancing patient privacy. The agency is considering to require the sharing of protected health information (PHI) among health care providers, not simply allow it. Such mandatory, rather than permissive PHI sharing could potentially improve coordination of care, improve the value-based care of mental disorders and promote the fight against the opioid crisis. “We are looking for candid feedback about how the existing HIPAA regulations are working in the real world and how we can improve them,” said Severino. “We are committed to pursuing changes needed to improve quality of care and eliminate the undue burdens on covered entities while maintaining robust privacy and security protections for individuals’ health information.” Public comments are due by February 11, 2019; the RFI is available at https://www.federalregister.gov/public-inspection/

The post HIPAA Enforcement Expectations and Updates for 2019 appeared first on Health Law Gurus.

  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

The Trump administration has issued a 119-page report Reforming America’s Healthcare System Through Choice and Competition that reaffirms the administration’s effort to deregulate the healthcare industry in an attempt to encourage competition and lower costs. This healthcare manifesto is a blueprint to reform the delivery of care and consumer choice by relaxing state and federal laws.

The report issued on December 3, 2018, aligns with the position on healthcare reform the Trump administration has taken and announced since Trump’s election. Created as a response to the President’s October 12th executive order on health care, the report criticizes laws and regulations that govern the health care industry and describes how they stifle competition, and as a result, lead to ever-growing health care spending.

According to the report co-authors Alexander Acosta, Labor Secretary, Steven Mnuchin, Treasury Secretary, and Alex Azar, HHS Secretary, “This report identifies barriers on the federal and state levels to market competition that stifle innovation, lead the higher prices, and not incentivize improvements in quality.” The administration believes, and the report concludes, that the course can be reversed if addressed at four general areas: the health care workforce, the provider market, the insurance markets and consumer-focused aspect of health care.

Several recommendations to promote competition in the workforce include broadening the scope of practice for physician assistants and dental hygienists; enabling policies that broaden workforce mobility through multi-state licensing and telehealth; and reallocating federal funding for graduate medical education to address shortage of physicians. The report makes recommendations to improve competition in the provider and insurance markets by reducing the restrictions on physician-owned hospitals, repealing the certificate-of-need statutes that limit the emergence of new hospitals, repealing Obamacare’s employer insurance mandates, promoting and expanding health savings accounts, encouraging the development of flexible value-based care models, and promoting Medicare Advantage plans that “encourage value, competition and choice.” According to the report, health care may become more consumer-focused by increased price transparency and easier access to medical records.

In the light of the results in the midterm elections and Republican’s lost control of the U.S. House of Representatives, some of these proposals may face a strong push back, while some recommendations may find bipartisan support. The report drew immediate responses from different health care groups, and some reacted with criticism. The American Hospital Association (AHA) and the Federation of American Hospitals (FAH) immediately announced that they would oppose the lifting of Obamacare’s ban on physician-owned hospitals, and as Chip Kahn, FAH’s president and CEO said: “Too many elements of the Administration’s report resort to the same old bromides that got us here in the first place, and would reverse the progress the hospitals and others are at work on.”

To the contrary, the report’s urge to ease scope-of-practice state laws that limit services delivered by various types of health care professionals received a positive response by the American Nurses Association. The ANA is convinced that if implemented, the propositions in the report will allow nurses to practice to the top of their license and full skill set, will improve consumers’ access to quality care by nurses, and will remove barriers to delivery of care for underserved populations in rural areas.

Likewise, the Small Business and Entrepreneurship Council president and CEO, Karen Kerrigan believes that the report offers productive ideas that will help small businesses with high health coverage costs. “Regulatory actions to date have been very positive, including the establishment of small business health plans and changes to transition health insurance that will give entrepreneurs, small business and their workers more affordable options,” Kerrigan said.

The report was prepared by HHS in collaboration with the Department of Treasure and Labor, the FTC, the White House and other federal agencies, and is available here.

The information contained in this publication should not be construed as legal advice, is not a substitute for legal counsel, and should not be relied on as such. For legal advice or answers to specific questions, please contact one of our attorneys.

The post Trump’s Administration Plans to Fix U.S. Healthcare System through Choice and Competition appeared first on Health Law Gurus.

  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

A Health Law Gurus blog post, “Is Your Mobile Health App HIPAA Compliant?” was referenced in a LexBlog Network article, “Apple’s ResearchKit is Living Up to the FTC’s Expectations for the Internet of Things,” written by Zosha Millman. To read a copy of the article, click here.

The post LexBlog Network References Health Law Gurus™ Blog Post appeared first on Health Law Gurus.

  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

As noted by the Joint State Government Commission, a non-partisan, bicameral research arm of the Pennsylvania General Assembly, “Diabetes remains a serious and growing public health problem causing great suffering to individuals affected by it and placing a major financial toll on the state or agency programs.” [1]  The American Diabetes Association has noted that the growth of Diabetes in the United States is growing at epidemic proportions.[2]  The Centers for Disease Control noted that as of 2017, over 9 percent of the population has been diagnosed with diabetes.[3]

What is truly concerning about the diabetes epidemic is the insidious nature of the disease.  For many, the disease presents no overt symptoms.  In fact, 23.8% of the diabetic population had no idea that they suffered from the disease.[4]  As people, who are seemingly symptom free, defer primary care physician visits due to rising health care costs, the diabetes epidemic will worsen.

Recognizing the growing prevalence of diabetes in their patient population, Pennsylvania optometrists decided that they needed to find away to move patients into treatment.  Interestingly, diabetes is one of 273 specific diseases that manifest in the eye.[5]  Before a patient has overt symptoms of diabetes, it is not unusual for there to be signs of diabetic retinopathy.  This medical reality allows optometrists to provide patients with early notice of the need for diabetic treatment and management.

Providing earlier notice of the presence of diabetes is key to managing the disease.  It affords patients the opportunity to change diet and lifestyle before complications arise.  It allows for management of the disease rather than treatment of life-altering complications.  This recognition provided the basis for the Pennsylvania Optometric Association to form the Pennsylvania Diabetic Eye Health Alliance, a group of optometrists dedicated to the identification, treatment, and referral of diabetic patients.

This group of dedicated primary eye care professionals recognized that to truly make a difference it was necessary to find partners in the efforts to identify patients who were diabetic.  Importantly, health insurers also had a similar interest in assuring that diabetic patients were identified and placed in treatment.  Health insurers have two significant financial interests in treatment of diabetes.  First, controlling the disease reduces costs of treatment.  Prevention is always less costly than treatment of complications.  Second, carriers’ effectiveness in disease management is measured through HEDIS and STARR scores.  The ability to keep people in treatment is a metric used in determination of these scores.  For every percentage increase in these scores carriers can realize 1.5 million dollars in indirect financial benefit.

Combining the desire of doctors of optometry to identify diabetic patients with the desire of carriers to more effectively keep diabetic patients in care, led to the creation of a partnership between the Pennsylvania Optometric Association and the Geisinger Health Plan.  Geisinger Health Plan administrators identified those patients who were diabetic and were also patients of members of the Diabetic Eye Health Alliance.  Working with the PADEHA doctors, Geisinger provided lists of patients who had been lost to follow-up.  These doctors then contacted their patients to encourage a return to treatment.  This effort resulted in returning up to 70% of patients to care.  This program proved to be the most effective effort to manage a specific disease in the Geisinger Health Plan history, having achieved recapture rates greatly in excess of any prior programs.

The program was so successful other health insurers have expressed interest in working with the POA and the PADEHA.  The Joint State Government Commission has also recognized the success of this program in its most recent diabetes report. It has suggested that partnerships like this need to be explored and expanded. Bringing together normally antagonistic parties to find common ground can produce amazingly productive partnerships.

[1] JOINT STATE GOVERNMENT COMMISSION General Assembly of the Commonwealth of Pennsylvania

DIABETES IN PENNSYLVANIA:   PREVENTION AND  MAINTENANCE PROGRAMS,  STAFF STUDY

MARCH 2018, p. 1.

[2] American Diabetes Association. The Burden of Diabetes in Pennsylvania, http://main.diabetes.org/dorg/PDFs/Advocacy/burden-of-diabetes/pennsylvania.pdf (accessed August 29, 2017)

[3] Centers for Disease Control, National Diabetes Statistics Report 2017

[4] Ibid.

[5] AOA

The information contained in this publication should not be construed as legal advice, is not a substitute for legal counsel, and should not be relied on as such. For legal advice or answers to specific questions, please contact one of our attorneys.

Joseph A. Ricci, Esq., the Executive Director of the Pennsylvania Optometric Association

The views represented in this post are solely those of the author, and do not necessarily reflect the views of the Pennsylvania Optometric Association.

  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

Ever since the FDA approved advertisements for prescription drugs on television, pharmaceutical companies have been heavily relying on them and collectively represent the third highest spender of any industry in national TV advertising. Despite the rapidly developing alternative media platforms, TV drug marketing is still thriving, as pharma companies generally target the 65-plus population that still watches live television.

Early last week, HHS Secretary Alex Azar announced a proposed rule that will require pharmaceutical manufacturers to reveal the list prices of their medicines in television advertisements to consumers. The rule will  obligate drug companies to include the price in an ad for any medicine covered through Medicare and Medicaid that costs more than $35 a month and will contain the following statement: “The list price for a [30-day supply of] [typical course of treatment with][name of prescription drug or biological product] is [insert price]. If you have health insurance that covers drugs, your cost may be different.”  As a penalty for the failure to provide the statement, a pharmaceutical company will be included on a “shame” list on CMS’s web site, but without fines. The Department believes that the main enforcement mechanism will be implemented by the drug companies themselves. It is anticipated that pharmaceutical manufacturers will refrain from violations out of the threat of private litigation under the Lanham Act for unfair competition and false advertising.

The purpose of the rule, as stated in the preamble to this regulation, is to reduce the cost of prescriptions by providing relevant information.  According to Azar, it is “common-sense to lower prices.” However, the critics, seem to have no good reason to believe that such transparency will ease drug prices. They claim that such a policy could confuse patients, as consumers practically never pay the listing price for a drug. As a result of price disclosures, patients can be intimidated by a high price and refrain from discussing the medication with their physician as an option for treatment. Further, this price transparency seems to be irrelevant to Medicare and Medicaid beneficiaries, whose copays are minimal or virtually non-existent. In response to these concerns, CMS explained that over 40% of people are enrolled in high-deductible plans and have to pay cash for their prescriptions in the deductible period. CMS also declared that transparency of prices is relevant to patients who pay a percentage of a list price as co-insurance, and for this category of patients it could be an indicator of out-of-pocket costs and could help to make an informed decision. Although the legal justification for the rule is based on the responsibility of CMS to operate in a manner that “minimizes reasonable expenditures,” the justification of lowering costs may be weak because most drugs are marketed to a wider population than Medicare and Medicaid recipients.

The rule must also withstand constitutional challenges. Commentators and potential litigants question whether the rule violates the First Amendment’s free speech guarantee, which encompasses a right not to speak. CMS responded to the objection in the preamble and explained that “courts have upheld required disclosures in the realm of commercial speech where the disclosure reasonably relates to a government interest and is not unjustified or unduly burdensome such that it would chill protected speech.”

The proposed rule was published in the Federal Register on October 18 and CMS will accepts comments until December 17.

The information contained in this publication should not be construed as legal advice, is not a substitute for legal counsel, and should not be relied on as such. For legal advice or answers to specific questions, please contact one of our attorneys.

  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

Cybersecurity and data breaches have been in public spotlight in the past several years as a result of recurring cyber-attacks on numerous organizations, business, its customers and communities in general. Media have been actively discussing cybersecurity trends and looking at the rise of identity technologies and web intelligence.

According to the U.S. Department of Health and Human Services Office of Civil Rights, more than 170 million American health records have been exposed since 2009. Such exposures lead to data breaches, causing the healthcare industry losses exceeding $5 billion per year.

Recent hacks of hospitals and infiltrations into healthcare providers’ computer systems evidenced that healthcare organizations are largely unprepared to protect patient information against the continuously developing landscape of cyber threats.

Furthermore, the pervasive use of new healthcare technology and electronic medical devices escalated the threat of cyberattacks and patient information theft. Such medical devices store the vulnerable information and come in different shapes and forms. They can be wireless portable data-management devices like fit-bits, iwatches and ipads, or huge diagnostic machines used in hospitals like ICU monitors, MRI, ultra sound equipment, CT, PET, infusion pumps, ventilators and other. The flow of data from and to medical devices can put protected health information at risk, not only causing substantial financial losses, but also triggering violation of federal and state privacy regulations.

In response to the rising concerns, on October 1, 2018, the U.S. Food and Drug Administration has released a statement from its Commissioner Scott Gotlieb, on FDA’s efforts to strengthen the agency’s medical device cybersecurity program as part of its mission to protect patients. The announcement states that the FDA will provide guidance on how medical device manufacturers should build safety controls to protect against both directed cyber-attacks and non-deliberate breaches.

The FDA had previously published two guidance documents related to the management of cybersecurity in medical devices, in 2014 and 2016. The first guidance specifies the content of pre-market submissions and recommends that manufacturers integrate risk management into the development of medical devices and provide the FDA with certain documents when they submit for approval. The 2016 guidance outlines post-market management and recommends that manufacturers continually monitor cybersecurity for products already on the market to account for new threats and vulnerabilities. The new draft guidelines, per Mr. Gotlieb, will highlight the importance of providing customers and users with software and hardware components of a device that could be susceptible to cyber-attacks and will be released in the coming weeks.

Although the FDA guidance are advisory in nature and not enforced by law, failure to comply with these recommendations can result in penalties for unsafe products and privacy violation of privacy laws.

The Health Law Gurus will continue to monitor FDA’s releases and publications. Be sure to check for updates.

The information contained in this publication should not be construed as legal advice, is not a substitute for legal counsel, and should not be relied on as such. For legal advice or answers to specific questions, please contact one of our attorneys.

  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

Several months ago Senate Finance Committee members Chuck Grassley, R-Iowa, and Chair Orrin G. Hatch, R-Utah, stirred the hornets’ nest again for nonprofit hospitals by asking the IRS for answers regarding its oversight of nonprofit hospitals.  This request for information is expected to lead to additional IRS scrutiny of nonprofit hospitals’ nationwide;  additional scrutiny that comes at a time when nonprofit hospitals are already scrambling to comply with the tax law changes under the 2017 Tax Cuts and Jobs Act.  

Requirements Under IRC Section 501(r)

In 2010, the Patient Protection and Affordable Care Act (the “ACA”) implemented additional reporting and operational requirements for nonprofit hospitals under Section 501(r) of the Internal Revenue Code.  For a nonprofit hospital to maintain its tax-exempt status it must:

  • Conduct a community health needs assessment (“CHNA”) once every three years and adopt and implementation a strategy to meet the community health needs identified in the assessment;
  • Adopt and implement a written policy with respect to the hospital’s financial assistance and emergency medical care;
  • Limit charges for emergency or other medically necessary care to patients who qualify for financial assistance under the hospital’s financial assistance policy; and
  • Refrain from taking extraordinary collection actions before the hospital has used reasonable efforts to determine whether the patient qualifies for financial assistance under its financial assistance policy.

IRS Audits of Nonprofit Hospitals

The ACA mandates that the IRS examine each nonprofit hospital once every three years to ensure compliance with Section 501(r).  According to the American Hospital Association, based on its 2016 sampling there were 2,849 nonprofit hospitals in the United States.  In 2017, the IRS examined 1,193 of those hospitals and referred 388 hospitals for further field examinations.  The issues for which referrals were made included: (i) the lack of a CHNA; (ii) failure to put in place a financial assistance and/or emergency medical policy; and (iii) failure to meeting billing and collection requirements.  Generally, a nonprofit hospital that fails to meet the CHNA requirement is subject to a $50,000 excise tax.  However, since the enactment of the ACA the IRS has already revoked the tax-exempt status of at least one hospital.

Based on these statistics and the recent political interest, nonprofits hospitals should confirm that the required policies have been adopted and a process is in place that continuously monitors compliance with the CHNA requirements, proper application of the financial and emergency care policies, and conformity to the billing and collection restrictions.  Failing to adopt and implement the proper policies and procedures may cause a nonprofit hospital to be at a higher risk for an IRS audit which may result in the payment of excise tax or even worse, the loss of its tax-exempt status.

The Health Law Gurus will continue to monitor the IRS’ audit behavior. Be sure to check back for updates.

The information contained in this publication should not be construed as legal advice, is not a substitute for legal counsel, and should not be relied on as such. For legal advice or answers to specific questions, please contact one of our attorneys.

Read for later

Articles marked as Favorite are saved for later viewing.
close
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

Separate tags by commas
To access this feature, please upgrade your account.
Start your free month
Free Preview