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The Ninth Circuit Court of Appeals recently allowed a False Claims Act (FCA) case based on an alleged lack of medical necessity to proceed, rejecting the lower court's decision that subjective medical opinions about the necessity of hospitalization cannot be "objectively false." The Ninth Circuit joins several other circuits (including the Third Circuit, which recently issued the Druding decision that we posted about a few weeks ago) in reaching this decision, which has been a rapidly evolving area of FCA law.
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Five Suggested Updates for 340B Covered Entities Facing COVID-19 Challenges

April 2, 2020 | Blog | By Ellyn Sternfield, Daryl Berke

The Health Resources and Services Administration (HRSA) recently published guidance regarding the evolving impact of COVID-19 on 340B stakeholders. This new guidance is one part of the U.S. Department of Health and Human Services’ broader effort to maximize regulatory flexibility for health care providers scrambling to meet patient needs during the COVID-19 crisis. While HRSA’s new guidance begins by acknowledging “it is appropriate to take into account the realities of the COVID-19,” HRSA offers little in the way of substantive relief when it comes to 340B. Long on generalities and short on specifics, HRSA merely advises entities to ensure they “have policies and procedures in place to address the proper dispensing of 340B drugs.”
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CMS Releases Several Stark Law Waivers for Use during the COVID-19 National Emergency

April 1, 2020 | Blog | By Theresa Carnegie, Rachel Yount

On March 30, 2020, the Centers for Medicare & Medicaid Services (CMS) issued blanket waivers to the Stark Law that permit certain arrangements between physicians and health care providers implemented in response to COVID-19 that would otherwise violate the Stark Law. The waivers, which are numerous and fairly broad, offer health care entities significant flexibility to combat COVID-19 in ways that may have otherwise violated the Stark Law, such as the ability to pay physicians hazard pay and provide personal protective equipment to physicians at a price that is below fair market value (FMV). Importantly, the waivers only apply to remuneration and referrals related to COVID-19 purposes.
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FCC Chairman Proposes Plan to Implement CARES Act Funding for Telehealth Program

March 31, 2020 | Blog | By Jane Haviland, Ellen Janos

On Monday, FCC Chairman Ajit Pai circulated a plan to his fellow Commissioners detailing how the $200 million the agency will receive via the CARES Act should be deployed for a telehealth program to combat COVID-19.  The telehealth program will enable eligible healthcare providers to purchase telecommunications, broadband connectivity and information services, and devices necessary to provide telehealth services to beneficiaries.  The increased access to the tools needed to provide care via telehealth will allow COVID-19 patients to receive care and providers to give it, while reducing opportunities for further exposure.
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As a follow up to our recent blog post, FDA User Fees: Highlights from FDARA & Our Forecast for the Next Round, President Trump signed the bipartisan over-the-counter (OTC) monograph teform bill into law on March 27, 2020.  The passage of the OTC monograph reform bill is a surprise addition into the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the third COVID-19 stimulus bill enacted since the pandemic began. The reform legislation represents the first significant update to federal oversight of OTC drug products since 1972. It enables the Food and Drug Administration (FDA) to quickly respond to safety concerns and keep pace with innovation in hopes of protecting consumers from unsafe drugs and permitting manufacturers to market new products more expeditiously. 
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On March 25, 2020, the Food and Drug Administration (FDA) issued a temporary policy relating to enforcement of regulatory requirements for face masks and respirators during the COVID-19 crisis. Since the public health emergency began, the United States has experienced a shortage of masks, respirators, and other personal protective equipment (PPE) which are critically needed for health care workers caring for COVID-19 patients in all states. FDA previously created emergency use authorizations (EUAs) for NIOSH-approved disposable respirators for use in health care settings and imported non-NIOSH-approved disposable respirators, but the temporary enforcement policy represents an attempt to open the manufacturing, importation, and distribution flood gates to make more masks and respirators available as quickly as possible.
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Yesterday, we blogged on how scammers are trying to monetize on the COVID-19 health crisis for their personal gain. Though the U.S. Food & Drug Administration (FDA) issued a consumer update yesterday saying that there is still no approved vaccine or drug to prevent or treat this disease, companies have continued to market products that claim to prevent, treat, or even cure COVID-19 in an attempt to “help” or profit from distressed, vulnerable Americans. While the FDA is working tirelessly to review possible vaccines, treatments, and cures, Americans should avoid endangering their health or lives by self-medicating. Per the FDA, self-medicating with any new product on the shelf (real or virtual) could not only lead to adverse effects but also could interfere with crucial medications. We are closely monitoring whether Congress will take specific actions on these increasingly prevalent issues in the context of the COVID-19 pandemic.
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As authorized by Section 1135 of the Social Security Act, the Centers for Medicare & Medicaid Services (CMS) has announced that it will extend temporary Medicare billing privileges to physicians and non-physician practitioners via telephone and that it will expedite pending enrollment applications submitted by all other providers and suppliers, including DMEPOS.  CMS made the announcement on March 13th and followed up with the publication of FAQs related to enrollment relief earlier this week.

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COVID-19 Fraud Alerts and Government Actions

March 24, 2020 | Blog | By Rachel Irving Pitts

In the past couple of days, the Department of Health and Human Services Office of Inspector General (HHS-OIG) and the Department of Justice (DOJ) each issued warnings about fraudulent schemes relating to COVID-19. While we are all taking precautions to stay safe and #flattenthecurve -- with many under orders to shelter in place -- scammers are preying on fears and insecurities and hawking test kits and vaccines for the virus. These scams are reminders to trust our medical professionals and access them when we feel sick and to think twice when something sounds too good to be true. 
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FDA Issues Guidance Addressing COVID-19 Interference with Clinical Trials

March 21, 2020 | Blog | By Dianne Bourque, Benjamin Zegarelli

In recognition of the widespread disruptions the COVID-19 crisis is posing to planned and ongoing clinical trials at sites throughout the United States (and global clinical sites), the Food and Drug Administration (FDA) issued on Wednesday, March 18 a guidance describing potential considerations for adjusting trial processes and, potentially, protocols and statistical analysis plans to mitigate any difficulties meeting trial objectives due to interference from the virus and related social and governmental restrictions. The document, titled FDA Guidance on Conduct of Clinical Trials of Medical Products during COVID-19 Pandemic, describes various potential complications, such as subjects being unable to travel to the trial site, loss of access to investigational product, or the need to screen subjects for COVID-19, as well as general recommendations for addressing them.
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In the midst of the upheaval caused by social distancing and related efforts to minimize and contain COVID-19-related risks, we have been monitoring steps taken by the Department of Justice (DOJ), the U.S. Attorneys’ Offices (USAOs), and federal courts to adapt to these circumstances.  Any steps taken are sure to affect ongoing government investigations and related proceedings and how we, as defense counsel, approach them. 
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Congress and the White House Continue Efforts to Respond to Coronavirus

March 19, 2020 | Blog | By Anthony DeMaio, David Chorney

The response to the coronavirus situation is fluid and fast-moving – particularly by Congress’ standards.  In response to the coronavirus pandemic, three phases of legislation have been considered in Congress: Coronavirus Supplemental Appropriations Act (signed into law March 6th); Families First Coronavirus Response Act (signed into law March 18th); and a large ($1 trillion+) economic recovery package (currently being drafted). This post provides details about these legislative efforts and other recent actions by the White House to address the coronavirus pandemic.
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The Department of Health and Human Services (HHS) has taken many actions to loosen or waive requirements on the provision of health care during the current coronavirus pandemic, as we discussed yesterday and Tuesday. In addition to HHS’s waiver of certain HIPAA requirements, HHS’s Office for Civil Rights (OCR) recently announced that it will not be imposing penalties for providers who use communication devices or other technologies that do not meet HIPAA’s requirements in order to treat patients via telehealth.
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FDA’s Ongoing Response to the COVID-19 (Coronavirus) Outbreak

March 18, 2020 | Blog | By Joanne Hawana, Aaron Josephson, Benjamin Zegarelli

As we write this update on the actions of the Food and Drug Administration (FDA), more state and local governments (along with private businesses and employers) are taking sweeping actions to protect the public from the continued spread of COVID-19. The federal response to what is now a pandemic of COVID-19 started off slowly, but we are now seeing frequent and promising announcements from FDA and other agencies within the Department of Health and Human Services.

We published our first installment highlighting FDA’s role in this public health emergency on March 4, 2020 (see our prior post here). In the two weeks that have elapsed since then, FDA has taken several actions related to COVID-19 testing and other important public health protections which are explained below. One of the most striking things about the list of actions included in this post may be how diverse and broad FDA’s authorities are and what a substantial role the agency plays in protecting Americans from a variety of different types of harm.
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HIPAA Compliance in a National Emergency: What Does It Look Like in Real Life?

March 18, 2020 | Blog | By Dianne Bourque, Matt Mora

Amidst the novel coronavirus (COVID-19) outbreak, the Secretary of the U.S. Department of Health and Human Services (HHS), Alex M. Azar, took steps on March 15, 2020, to waive sanctions and penalties related to certain provisions of the HIPAA Privacy Rule (the “Waiver”). However, the HIPAA Privacy Rule is not suspended, and the Waiver only applies: (1) in the emergency area identified in the public health emergency declaration; (2) to hospitals that have instituted a disaster protocol; and (3) for up to 72 hours from the time the hospital implements its disaster protocol. To demonstrate how the Privacy Rule and Waiver provisions work in real life, let’s look at an example: A patient at a hospital reports contact with a confirmed COVID-19 diagnosis. How can this information be shared?
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Telehealth is going to play a critical role in the delivery of care in the coming weeks and months as health care providers respond to the COVID-19 pandemic. As the CDC and other public health agencies continue to recommend social distancing and self-quarantine after exposure, telehealth is a vital tool for getting both sick and healthy individuals access to health care services they need if in-person services are not necessary. The use of telehealth services should help alleviate the ever-growing pressures on health care systems as they respond to the outbreak.  In light of these benefits, the Emergency Appropriations Bill passed by Congress last week includes provisions that allow the Secretary of Health and Human Services (HHS) to lift certain restrictions that are currently required for Medicare  reimbursement of telehealth services. 
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Following years of discussion, on March 5, 2020, U.S. Representatives Larry Buchson (R-IN) and Diana DeGette (D-CO) and U.S. Senators Richard Burr (R-NC) and Michael Bennet (D-CO) introduced identical versions of the Verifying Accurate and Leading-edge IVCT Development (VALID) Act in both chambers of Congress. The bipartisan legislation closely tracks existing medical device laws, with some notable exceptions, discussed below and in a prior post. If enacted, many regulatory elements familiar to in vitro diagnostic (IVD) and other medical device manufacturers would be applied to clinical laboratories that develop their own tests, commonly known as laboratory developed tests (LDTs). The bill also includes elements that are priorities for the Food and Drug Administration (FDA), including a program conceptually similar to pre-certification, third-party review, and Collaborative Communities. Unlike previously-circulated discussion drafts, the introduced bills include specific language designed to address public health emergencies, including COVID-19.
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Last week, the Third Circuit joined several other appellate courts in finding that medical opinions related to medical necessity of hospice services can be subject to scrutiny and found to be “false” for purposes of proving a violation of the False Claims Act (FCA) in U.S. ex rel. Druding v. Care Alternatives. Our Health Care Enforcement Defense Group has been closely tracking recent qui tam cases brought under the FCA based on allegations that health care services or procedures lacked the requisite medical necessity, including the conclusion of the landmark AseraCare case last week.  As we’ve previously discussed on the blog, several district courts across the country have determined that differences of opinions between physicians and medical experts alone cannot be used to prove the FCA’s falsity requirement. However, some appellate courts have reached different conclusions. The Third Circuit’s decision last week in Care Alternatives joins those appellate courts in rejecting this argument and finding that “a difference of medical opinion is enough evidence to create a triable dispute of fact regarding FCA falsity.”
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Some clinical trial sponsors and principal investigators will be digging through their archives soon as a result of a recent ruling in the case of Seife v. U.S. Department of Health and Human Services, case number 1:18-cv-11462 (S.D.N.Y. 2018). In Seife, the plaintiffs – an investigative journalist and a former Associate Commissioner at the Food and Drug Administration (FDA) – challenged a Department of Health and Human Services (HHS) final rule that implemented clinical trial reporting requirements mandated by the Food and Drug Administration Amendments Act (FDAAA).
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FDA’s Evolving Response to the COVID-19 (Coronavirus) Outbreak

March 4, 2020 | Blog | By Aaron Josephson, Joanne Hawana

Within the U.S. Department of Health and Human Services (HHS), many agencies have responsibility for responding to public health emergencies. The Centers for Disease Control and Prevention (CDC), as its name implies, is at the forefront of the COVID-19 (coronavirus) outbreak as the government seeks to control and prevent the spread of the virus in the United States. The National Institutes of Health (NIH), particularly the National Institute of Allergy and Infectious Diseases, are also involved, primarily conducting research into the sources, cause, and means of transmission of the new virus and coordinating vaccine development efforts. The Food and Drug Administration (FDA) is responsible for assuring the safety and effectiveness of medical products and therefore has oversight over any clinical trials for promising coronavirus treatments (drugs, vaccines, devices), as well as authority to authorize the marketing of any such product. The agency oversees the drug supply chain and monitors drug and device shortages. This blog post covers steps that FDA has taken to mitigate potential drug and device shortages related to coronavirus and to otherwise respond to the coronavirus situation.
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