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Growing Number of States Enact Drug Pricing Transparency Laws

January 23, 2020 | Blog | By Rachel Yount

Drug prices continue to be a hot button issue in American politics.  While many of the Trump Administration’s efforts to curb increasing drug prices stalled in 2019, a number of state legislatures have adopted drug price transparency laws in recent years.  Since 2015, Vermont, Nevada, California, Maryland, Louisiana, New York, Oregon, Colorado, Connecticut, Maine, Texas, and Washington have all adopted drug pricing transparency laws.  These laws are designed to incentivize manufactures to lower drug prices by requiring them to report information about drug price increases and their justification for how drug prices are set.  We have been tracking and summarizing these laws, and you can find our summary here. 
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On December 16, 2019, a nationwide coalition of hospitals sued HHS to block implementation of the 340B rate cuts contained in the 2020 Hospital Outpatient Prospective Payment System (“OPPS”) Final Rule. As detailed in our prior blog post, the 2020 OPPS Final Rule reduces by nearly 30% the Medicare Part B reimbursement for certain drugs provided by hospitals to outpatient beneficiaries that are acquired through the 340B Program. The final rule purports to continue the reimbursement cuts for 340B drugs first implemented in 2018, despite the fact that those cuts (and the 2019 OPPS rule continuing those cuts) are the subject of ongoing litigation in which the cuts were determined to be unlawful. For a detailed walk-through of the 2020 OPPS Final Rule and litigation up to this point, please see our prior three blog posts here, here, and here. 
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At the end of July 2019, the U.S. Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA) jointly published the Safe Importation Action Plan, which outlined the Trump Administration’s two-part plan to allow foreign prescription drugs to be imported into the United States in an effort to reduce drug prices. We wrote about the release of the Safe Importation Action Plan here, and the detailed proposals made public by the Administration on December 18, 2019, follow the framework that the agencies sketched out earlier this year. Specifically, HHS and FDA have proposed two different pathways: one that is being implemented via notice-and-comment rulemaking, and one that is being implemented via an FDA guidance document. HHS Secretary Alex Azar touted the two pathways together in a same-day FDA press release as “historic actions…[that] represent the bold nature of President Trump’s agenda for lowering drug costs.”
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As reported previously, the Department of Health and Human Services (HHS) Office of Inspector General (OIG) recently published two proposed rules that seek to implement wholesale changes to the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (commonly known as the Stark Law). This final post in our blog series focuses on a proposed new safe harbor that would protect patient engagement and support arrangements designed to improve quality, efficiency of care, and health outcomes. The OIG is also proposing modifications to the existing safe harbor for local transportation and a new safe harbor for remuneration provided in connection with certain payment and care delivery models developed by the Centers for Medicare & Medicaid Innovation Center or by the Medicare Shared Savings Program. Lastly, the OIG is codifying an existing statutory safe harbor for Accountable Care Organization (ACO) beneficiary incentives and an existing statutory exception to the Civil Monetary Penalty (CMP) rules on beneficiary inducement for telehealth technology related to in-home dialysis services.
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FCC Simplifies Evaluations of Certain Wireless Medical Devices

December 11, 2019 | Blog | By Laura Stefani

The Federal Communications Commission (FCC) regulates wireless medical devices in conjunction with the Food and Drug Administration (FDA), with the FCC’s role related to certain technical concerns such as the successful sharing of wireless frequency bands. Another area that FCC regulates is radio frequency (RF) safety – the possible harmful effects to human health from RF energy created by wireless devices. The FCC looks to health and safety agencies such as the FDA, EPA, and OSHA, to provide guidance and recommendations on what level of RF emissions are deemed “safe,” and then sets rules for how responsible parties must evaluate compliance with these limits. These rules on safe emission levels apply generally to devices that produce RF signals. The FCC proposed modifications to its RF safety rules in 2013, and finally on December 4, 2019, issued a decision that adopts many of its proposals.
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As we previously reported, the Department of Health & Human Services (HHS) recently issued two proposed rules intended to reduce the regulatory burden associated with the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (commonly known as the Stark Law). Although the rules’ main focus is on value-based arrangements, the proposed rule issued by the Centers for Medicare & Medicaid Services (CMS) also includes a number of provider-friendly changes and clarifications to the Stark Law. As discussed below, CMS is proposing several changes to key Stark Law requirements as well as modifications to existing Stark Law exceptions.
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CMS Finalizes Changes Expanding the Scope of the Open Payments Program

November 18, 2019 | Blog | By Brian Dunphy, Rachel Yount

On November 15, 2019, the Centers for Medicare & Medicaid Services ("CMS") finalized changes to the Open Payments Program as part of the CY 2020 Physician Fee Schedule Final Rule. Perhaps most importantly, CMS broadened the list of Covered Recipients. Starting for data collection for CY 2021, manufacturers will be required to track and report payments and transfers of value made to physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and certified nurse midwives. CMS also added three new nature of payment categories – debt forgiveness, long-term medical supply or device loan, and acquisitions. CMS also consolidated the two payment categories for continuing education programs – accredited/certified and unaccredited/non-certified – into one payment category for all continuing education programs. Lastly, in a move expected to impose a substantial burden on medical device manufacturers, CMS added a reporting requirement for the ‘device identifier’ component of the unique device identifier for devices and medical supplies.
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The Centers for Medicare and Medicaid Services (CMS) recently published the 2020 Hospital Outpatient Prospective Payment System (OPPS) rule, which finalizes a proposed reduction in Medicare Part B reimbursement for certain drugs provided by hospitals to outpatient beneficiaries that are acquired through the 340B drug discount program. Through the final rule, CMS purports to continue Medicare reimbursement cuts for 340B drugs first implemented in 2018, despite the fact that those cuts (and the 2019 OPPS rule continuing those cuts) are the subject of ongoing litigation in which the cuts were determined to be unlawful. That ruling, and a Court-imposed stay of the cuts, are the subject of a just-argued appeal.  For a detailed walk-through of the litigation up to this point, please see our prior blog post.
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This post is the fourth installment of our blog series on significant, proposed changes to the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (commonly known as the Stark Law) recently announced by the Department of Health & Human Services (HHS).  The proposed rule issued by the Centers for Medicare & Medicaid Services (CMS) offers new and revised definitions on key Stark Law terms, some of which CMS has previously neglected to define or provide significant guidance.  In addition, CMS proposes a new Stark Law exception for limited remuneration to a physician, which offers health care entities more flexibility for unwritten, short-term compensation arrangements with physicians.
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To anyone who has been following government enforcement and private litigation trends related to the over-the-counter (OTC) homeopathic drug industry over the past several years, the Food and Drug Administration’s (FDA) announcement on October 24, 2019 likely came as no surprise. But to stakeholders in this industry, it was certainly unwelcome news and may portend a coming wave of unapproved drug enforcement actions by the FDA.
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This post is the third installment of our blog series on recent proposed rules from the Department of Health & Human Services (HHS) that, if finalized, would implement major changes to the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (commonly known as the Stark Law). Below is an in-depth summary of the Office of Inspector General’s (OIG) proposed modifications to the safe harbors for personal services and management contracts, which includes a proposed new provision protecting outcomes-based payments. We also cover the OIG’s proposed modifications to the warranties safe harbor.
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HHS Proposes Sweeping Changes to AKS and Stark Law, Part 2: Cybersecurity Technology and Electronic Health Records

October 21, 2019 | Blog | By Karen Lovitch, Dianne Bourque, Theresa Carnegie, Rachel Yount

On October 17, 2019, the Department of Health & Human Services published two proposed rules that, if finalized, would implement significant changes to the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (commonly known as the Stark Law). This post is the latest installment in our blog series covering these proposed rules.
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HHS Proposes Sweeping Changes to AKS and Stark Law, Part 1: Value-Based Arrangements

October 15, 2019 | Blog | By Theresa Carnegie, Matt Mora, Michelle Caton

As we reported last week, the Department of Health & Human Services (HHS) recently issued two proposed rules (one by the Office of Inspector General (OIG) and one by the Centers for Medicare & Medicaid Services (CMS)) that, if finalized, would implement sweeping changes to the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (commonly known as the Stark Law). The proposed rules seek to reduce barriers to value-based contracting in several ways, including: (1) creating new safe harbors to the AKS; (2) adding new exceptions to the Stark Law; and (3) retooling existing AKS safe harbors, along with the Civil Monetary Penalties rules regarding beneficiary inducements. Below are key takeaways from both the OIG’s and the CMS’s proposed rules as they relate to the new value-based arrangements safe harbors and Stark Law exceptions.
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HHS Proposes Sweeping Changes to Anti-Kickback Statute and Stark Law

October 10, 2019 | Blog | By Karen Lovitch, Theresa Carnegie, Rachel Yount

On October 9, 2019, the Department of Health & Human Services (HHS) announced significant changes to the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (known as the Stark Law) through proposed rules issued by the Office of Inspector General (OIG) and the Centers for Medicare & Medicaid Services (CMS). The proposed rules are part of HHS’s Regulatory Sprint to Coordinated Care, which aims to promote value-based care and ease regulatory burden on health care providers, particularly with respect to the AKS and the Stark Law.
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On September 26, 2019, FDA released a six revised digital health guidances. The primary objective of these revisions was to bring the guidances into alignment with the software function exemptions described in Section 3060 of the 21st Century Cures Act (the “Cures Act”). The medical device community has anticipated these changes since Congress passed the Cures Act almost three years ago in December 2016.
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As promised, the Department of Health and Human Services (HHS) filed a brief in the United States Court of Appeals for the District of Columbia Circuit challenging the district court’s holding that the Secretary lacked the authority to compel drug manufacturers from disclosing drug prices in direct-to-consumers television advertisements (DTC rule). On September 23, 2019, HHS filed its appeal in the D.C. Circuit against plaintiffs Merck & Co., Eli Lilly and Co., and Amgen Inc. The brief argues that the district court erred in holding that HHS lacks the statutory authority through the Social Security Act (SSA) to force the DTC rule upon drug manufacturers because they are not direct participants in the Medicare and Medicaid programs.
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The Department of Justice (DOJ) recently announced that it has agreed to a $21.36 million settlement with compounding pharmacy Diabetic Care Rx LLC d/b/a Patient Care America (PCA), private equity firm Riordan, Lewis & Haden Inc. (RLH), and two PCA executives to resolve a pending False Claims Act (FCA) case. As discussed in a previous post regarding DOJ's decision to intervene, this case is notable because a private equity firm does not typically find itself subject to FCA action, and it is reported to be the first case against a private equity firm in which DOJ has chosen to intervene.
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ML Strategies Health Care Preview: Surprise Billing Issue Heats Up

September 16, 2019 | Blog | By Alexander Hecht

This week, Congress is working towards passage of a continuing resolution that would fund the government through the middle of November. This will give policymakers and appropriators enough time to hash out differences in funding priorities as well as work on policies addressing drug pricing, surprise billing, and funding for public health programs. The surprise billing issue is really heating up with outside stakeholder groups weighing in and Congress carefully considering its next steps. We cover this and more in this week's preview, which you can find by clicking here.
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Key Takeaways from CMS’s Final Rule Requiring the Disclosure of Affiliates during Provider Enrollment

September 12, 2019 | Blog | By Daryl Berke, Sarah Beth Kuyers, Karen Lovitch

The Centers for Medicare & Medicare Services (CMS) recently published a final rule with comment period (the “Final Rule”) that is designed to increase CMS’s ability to identify and prevent bad actors from participating in Medicare, Medicaid, and CHIP. Providers and suppliers should take note because implementation will be costly and burdensome. Among other things, the Final Rule requires the disclosure of certain provider and supplier affiliations and permits CMS to revoke or deny enrollment where those affiliations pose an undue risk of fraud and abuse. The Final Rule also grants CMS several additional authorities to revoke or deny a provider’s Medicare enrollment and increases the duration of such revocations and denials. The Final Rule takes effect on November 4, 2019. Comments on the Final Rule are due by 5:00 p.m. on that same day.
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On Monday, the U.S. Court of Appeals for the Eleventh Circuit issued its long-awaited and closely watched decision in United States v. AseraCare Inc.. The court ruled that a claim cannot be deemed false under the False Claims Act (FCA) based on a difference in clinical judgment.  Instead, there must be proof of an objective falsehood. More than three years have passed since the U.S. District Court for the Northern District of Alabama issued the series of rulings that gave rise to the Eleventh Circuit case. 
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