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PBM Regulatory Landscape Roundup (Summer 2021): A Flurry of Regulations, Rutledge, and a Crucial 8th Circuit Decision
September 28, 2021 | Blog | By Hassan Shaikh, Bridgette Keller
As our colleagues predicted, the Supreme Court’s decision in Rutledge v. Pharmaceutical Care Management Association (PCMA) encouraged state efforts to expand regulation of pharmacy benefit managers (PBM) and related practices. And as expected, this year has already seen an aggressive round of state legislation that aims to expand regulation in this area.
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Five Takeaways from DOJ’s Latest National Enforcement Action, Including Continued Focus on Opioids and Telemedicine
September 27, 2021 | Blog | By Brian Dunphy, Karen Lovitch
The U.S. Department of Justice (DOJ) recently announced its latest national enforcement action related to health care fraud (National Enforcement Action) in which DOJ filed criminal charges against 142 defendants. The National Enforcement Action, which alleges losses of $1.4 billion due to false or fraudulent billings, follows similar DOJ “take downs” over the last several years in that it focuses on telemedicine providers and the opioid crisis. This post provides five takeaways from the National Enforcement Action.
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OIG Report Highlights Importance of Telehealth in Providing Behavioral Health Services, but Emphasizes Need for Additional Oversight
September 23, 2021 | Blog | By Cassandra Paolillo
As we’ve previously covered, the COVID-19 pandemic has brought about a major increase in the prevalence of telehealth services, due in large part to regulatory flexibilities at the federal and state levels. Beginning in March 2020, state Medicaid programs across the country loosened requirements for coverage of telehealth services provided to Medicaid beneficiaries, reducing barriers by allowing audio-only services and covering a broader scope of services delivered via telehealth. The increase in telehealth has resulted in improved access to behavioral health services in particular, but according to an OIG report issued earlier this week, state Medicaid programs will need to increase their oversight of these services if the telehealth flexibilities become permanent.
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California Health Privacy Information Legislation Update
September 22, 2021 | Blog | By Lara Compton, Stephnie John
When it comes to the privacy of health information, California belongs to the select group of states that have implemented broad consumer privacy protections above and beyond those provided by the federal Health Insurance Portability and Accountability Act (HIPAA) and the Federal Trade Commission Act (FTCA). This year, the state’s ongoing legislative efforts to protect the health information of its residents included: Assembly Bill 1436 (AB 1436) which if enacted would have revised California’s existing Confidentiality of Medical Information Act (CMIA), and Senate Bill 41 (SB 41), which if enacted will create the new Genetic Information Privacy Act (GIPA). As further discussed below, only SB 41 is moving forward, and if signed by Governor Newsom GIPA will go into effect on January 1, 2022.
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FTC Personal Health Records Breach Rule Applies to Health App and Connected Device Developers
September 21, 2021 | Blog | By Lara Compton
On September 15, 2021, in response to the “proliferation of apps and connected devices that capture sensitive health data” the Federal Trade Commission (FTC) issued a Policy Statement ( the Statement) offering guidance on the scope of the FTC’s Health Breach Notification Rule (Breach Rule). According to the Statement, the Breach Rule applies outside of the traditional health care context (e.g. health care involving diagnosis and treatment by a licensed health care provider) and the FTC intends to bring enforcement actions for noncompliance involving up to $43,792 in civil penalties per violation, per day.
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OIG Issues Favorable Advisory Opinion on Hospital’s Warranty Program for Joint Replacement Procedures
September 20, 2021 | Blog | By Rachel Yount
On September 15, 2021, the Office of Inspector General for the Department of Health and Human Services (OIG) issued a favorable Advisory Opinion regarding a hospital’s proposal to implement a program through which patients who experience complications after specific joint replacement procedures can receive free items and services to treat the complications. The OIG likened the program to a warranty for joint replacement procedures.
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FDA and FTC Coordination Appears to Be Escalating
September 15, 2021 | Blog | By Joanne Hawana
Agencies of the federal government with a consumer protection mission have always tended to work closely together and to share information, but the COVID-19 pandemic has made those cooperative efforts even more visible to the general public. We blogged in 2020 about the increasing use of warning letters jointly issued by the Food and Drug Administration (FDA) and the Federal Trade Commission (FTC) Division of Advertising Practices in the apparently never-ending fight against fraudulent COVID-19 products (see prior post here). While coordinated FDA and FTC enforcement activities specific to the ongoing public health emergency continue at a brisk pace – as of September 9, 2021, FDA has issued more than 200 warning letters to companies claiming that a product is an effective cure, treatment, or preventative for COVID and the FTC has issued more than 400 pertaining to unsubstantiated health claims for COVID-related products, with many of those being signed by both agencies – these powerhouse regulators also appear to have become more comfortable with announcing joint actions in non-COVID contexts. This trend makes it even more important for manufacturers and marketers of consumer-facing products to be fully aware and compliant with all of their legal and regulatory obligations.
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Biden Administration’s Drug Pricing Plan Calls for Bold Action by Congress
September 10, 2021| Blog|
Flagging Judgment: Medical Necessity as a Focus of Fraud and Abuse Enforcement Actions
August 18, 2021 | Blog
Physician judgment and medical necessity increasingly are a focus of fraud and abuse enforcement actions, with statistical analysis of procedure volumes used to flag potential cases. Last week, the Atlantic published this recent article discussing a significant 2018 decision of the Tenth Circuit Court of Appeals in United States ex rel. Polukoff v. St. Mark’s Hospital, et al., No. 17-4014 (10th Cir. Jul. 9, 2018), in which the court held that a physician’s medical judgment concerning medical necessity of a particular treatment for two specific cardiac conditions could be “false or fraudulent” under the federal False Claims Act (FCA). Our colleague, Brian Dunphy, covered the 2018 decision on this blog here. The Tenth Circuit ultimately held that a “doctor’s certification to the government that a procedure is ‘reasonable and necessary’ is ‘false’ under the FCA if the procedure was not reasonable and necessary under the government’s definition of the phrase.”
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PhRMA Updates its Code on Interactions with Health Care Professionals in Response to the OIG's Special Fraud Alert on Speaker Programs
August 17, 2021 | Blog | By Rachel Yount, Cody Keetch, Joe Ort
On Friday, August 6, 2021, Pharmaceutical Research and Manufacturers of America (PhRMA), the preeminent trade association representing pharmacies companies, announced revisions to its Code on Interactions with Health Care Professionals (PhRMA Code) that will become effective January 1, 2022. The PhRMA Code is a voluntary code for pharmaceutical companies, but its standards are considered to be best practices and are commonly adhered to by pharmaceutical and medical device companies. Moreover, some states (e.g. California, Massachusetts, Nevada, and the District of Columbia) require pharmaceutical companies to adopt a code consistent with the PhRMA Code.
The changes to the PhRMA Code are undoubtedly in response to a November 16, 2020, Special Fraud Alert from the Department of Health and Human Services’ Office of the Inspector General (OIG), on “fraud and abuse risks associated … speaker programs.” (For additional information on the OIG’s Special Fraud Alert, please see our November 25, 2020 blog post.) Speaker programs are a common practice in the industry and generally entail pharmaceutical and medical device companies retaining health care professionals (HCPs) to speak or present to educate their peers on the companies’ drugs or devices.
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The changes to the PhRMA Code are undoubtedly in response to a November 16, 2020, Special Fraud Alert from the Department of Health and Human Services’ Office of the Inspector General (OIG), on “fraud and abuse risks associated … speaker programs.” (For additional information on the OIG’s Special Fraud Alert, please see our November 25, 2020 blog post.) Speaker programs are a common practice in the industry and generally entail pharmaceutical and medical device companies retaining health care professionals (HCPs) to speak or present to educate their peers on the companies’ drugs or devices.
Telehealth Update: New Bill Seeks to Understand the Impact of Telehealth During COVID-19 as State COVID-19 Orders Expire
August 11, 2021 | Blog | By Cassandra Paolillo
As previously discussed, many of the telehealth flexibilities in place during the COVID-19 pandemic are set to expire at the end of the federal Public Health Emergency (PHE), unless federal and state legislators act to make the changes permanent. A recent bill introduced by Representative Robin Kelly (D-IL) suggests that Congress is interested in expanding access to telehealth services for Medicare and Medicaid beneficiaries if the benefits of increased access to telehealth can be demonstrated. According to a press release issued by Representative Kelly’s office, “Telehealth has the potential to help equalize healthcare access for underserved populations. However, we need data to understand utilization, cost, fraud, privacy and how to serve those left behind by the digital divide.”
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Bioethics in a Pandemic: Misinformation and Mandates
August 9, 2021 | Blog | By Bridgette Keller, Amy Martin
As the spread of the Delta variant of COVID-19 and the reality of inconsistent vaccine uptake lead to growing case numbers across the country, many of us are wondering, how did we get here and what’s next?
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Ushering in a New Era: FDA Approves First Interchangeable Biosimilar
August 4, 2021 | Blog | By Joanne Hawana
Has the Food and Drug Administration (FDA) finally ushered in a new era for the U.S. biosimilar marketplace? Many in the industry are hopeful after the Agency approved its first interchangeable biosimilar, Mylan’s Semglee (insulin glargine) on July 28, 2021. Mylan’s Semglee is a long-acting human insulin analog indicated to improve glycemic control in adults and pediatric patients with type 1 diabetes mellitus and in adults with type 2 diabetes mellitus. It is both biosimilar to and interchangeable with Lantus (insulin glargine) meaning it can be substituted for Lantus at the pharmacy-level without the need for a prescription from a healthcare professional. This approval is important because it furthers FDA’s commitment to supporting a competitive marketplace for insulin products. The availability of interchangeable biosimilar products can provide more treatment options to patients, lowering the treatment costs and enabling greater access for more patients. One can hope that this approval marks the beginning of a trend in the biosimilar marketplace.
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Senator Grassley and Others Propose Amendments to the False Claims Act
August 2, 2021 | Blog | By Samantha Kingsbury, Brian Dunphy, Laurence Freedman
Earlier this week, a bipartisan group of Senators led by Senator Chuck Grassley (R-Iowa) introduced two pieces of proposed legislation, one of which would amend the existing False Claims Act (FCA) and the other of which would amend the Program Fraud Civil Remedies Act of 1986 (the PFCRA) to create the Administrative False Claims Act of 2021 (AFCA). The AFCA would focus on smaller claims than does the FCA. Senator Grassley described the bills as being intended to “help recoup even more money by clarifying confusion after the Escobar case” and as being needed more than ever “to fight the significant amounts of fraud we are already seeing” related to the trillions of dollars Congress has appropriated for COVID relief.
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Combatting Patient Leakage by Directing Physician Referrals: What is Permitted under the Stark Law?
July 29, 2021 | Blog | By Karen Lovitch, Rachel Yount
For many health care systems, patient leakage – when patients leave a health care system’s network in favor of out-of-network providers – is a rampant problem that results in substantial lost revenue. While sometimes patient leakage is just a result of patient choice, often the issue lies with employed or contracted physicians referring patients for services outside the network. Many health care systems may be wary of including in their physician contracts requirements that physicians refer patients exclusively within the network (otherwise known as directed referral requirements) based on concerns with interfering with physicians’ medical judgment and/or the common misconception that the Stark Law prohibits directed referral requirements.
To the contrary, the Stark Law actually permits directed referral requirements, provided that certain conditions are met. CMS recently enacted changes to the Stark Law regulations, effective January 19, 2021, that provide additional clarity on how health care providers can permissibly use directed referral requirements. These recent changes have seemingly triggered new awareness and interest in how health care systems can utilize directed referral requirements to combat patient leakage.
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To the contrary, the Stark Law actually permits directed referral requirements, provided that certain conditions are met. CMS recently enacted changes to the Stark Law regulations, effective January 19, 2021, that provide additional clarity on how health care providers can permissibly use directed referral requirements. These recent changes have seemingly triggered new awareness and interest in how health care systems can utilize directed referral requirements to combat patient leakage.
Are You a Medical Device Servicer or Remanufacturer? FDA’s New Guidance May Help…Or Not
July 21, 2021 | Blog | By Benjamin Zegarelli, Cody Keetch
On June 24, 2021, the Food and Drug Administration (FDA) issued the long-awaited Remanufacturing of Medical Devices Draft Guidance, which describes the agency’s current thinking on activities that meet the definition of remanufacturing and a process for determining whether an act done to an original equipment manufacturer’s (OEM’s) legally marketed finished device is considered remanufacturing (the “Draft Remanufacturing Guidance”).
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California Health Care Legislative Update
June 15, 2021 | Blog | By Lara Compton
Not surprisingly, in the wake of the COVID-19 pandemic, California legislators proposed hundreds of health-related bills in 2021. For those who are unfamiliar with the intricacies of the Golden State’s legislative process, June 5, 2021 was the deadline for the California Legislature to pass bills introduced in their house of origin. Accordingly, during the week of June 7th, the Senate and Assembly resumed policy committee hearings, reviewing measures from the opposite house.
Along with proposed legislation addressing health care funding, health care access, mental health and substance abuse treatment, disaster preparedness, and other issues brought to the forefront by the pandemic, there are multiple bills that seem to be aimed at various concerns raised by corporate involvement in the provision of health care. Below is an update on a few of the bills that fall into the latter category, including SB 642, which we discussed in more detail in a prior post.
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Along with proposed legislation addressing health care funding, health care access, mental health and substance abuse treatment, disaster preparedness, and other issues brought to the forefront by the pandemic, there are multiple bills that seem to be aimed at various concerns raised by corporate involvement in the provision of health care. Below is an update on a few of the bills that fall into the latter category, including SB 642, which we discussed in more detail in a prior post.
Viewpoint Editors
Karen S. Lovitch
Chair, Health Law Practice & Co-Chair, Health Care Enforcement Defense Practice
Joanne S. Hawana
Member
Rachel E. Yount
Of Counsel
Pat G. Ouellette
Associate
Stephnie A. John
Associate
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