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California Bill (AB-3129) Targets Private Equity and Hedge Fund Health Care Transactions

March 1, 2024 | Blog | By Kathryn Edgerton, Deborah Daccord, Karen Lovitch

California Attorney General Rob Bonta (AG) and Assembly Speaker pro Tempore Jim Wood recently introduced legislation (AB-3129) that would authorize the AG to review private equity group and hedge fund health care transactions. The proposed legislation’s stated intention is to address price increases and lower quality of and decreased accessibility to services associated with private equity acquisitions of certain health care entities, including physician practices. This article provides an overview of the proposed bill, an analysis of the key issues raised by the proposed legislation, and suggestions for next steps for those potentially affected by the proposal.
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New York City's Health Care Price Transparency Law Takes Effect

February 29, 2024 | Blog | By Jean D. Mancheno, Cody Keetch

In summer of 2023, New York City Mayor Eric Adams signed Intro. 844-A (Local Law 844-A) and amended the New York City Charter. Local Law 844-A directs Mayor Adams to establish an Office of Healthcare Accountability that will serve to increase health care price transparency in New York City. Though health care price transparency laws have been enacted at the state level across the nation, New York City has become the first municipality in the nation to implement a price transparency law. Indeed, New York City Councilmember Julie Menin, who sponsored Local Law 844-A, emphasized “the positive impact of price transparency measures in other states, and it’s time for New York City to curb excessive health care prices” alongside other states during the bill’s signing ceremony. The law took effect on February 18, 2024.
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CMS Releases Part Two of Guidance for the Inflation Reduction Act’s Medicare Prescription Payment Plan

February 27, 2024 | Blog | By Tara E. Dwyer, Lauren Moldawer, Madison Castle

On February 15, 2024, the Centers for Medicare and Medicaid Services (CMS) released the Medicare Prescription Payment Plan Draft Part Two Guidance (Part Two Guidance) as part of the Inflation Reduction Act’s (IRA) efforts to tackle high prescription drug costs. The Medicare Prescription Payment Part Plan (the Program), which was previously referred to as the “OOP Smoothing Program”, was established as part of the IRA and requires Part D plans (PDPs) to offer their members an option to pay for out-of-pocket (OOP) prescription drug costs in monthly capped payments, as opposed to all at once, at a pharmacy. Meaning, for members who opt-in to the Program, they will pay $0 at the pharmacy and the PDP must pay the pharmacy the full cost-sharing amount of the drug and then bill the member the amount of the cost-sharing over the remainder of the calendar year.
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California’s Health Care Transactions Review Law: Preparing for What Comes Next

February 26, 2024 | Blog | By Kathryn Edgerton, Deborah Daccord, Karen Lovitch

California’s health omnibus trailer bill SB-184 and the final cost and market impact review (CMIR) regulations (CMIR Regulations), which went into effect on December 18, 2023, have ushered in a significant change in California’s health care regulatory landscape with the creation of the Office of Health Care Affordability (OHCA). On January 2, 2024, OHCA began accepting notices of covered transactions through its notice of material change transaction submission portal.
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New Mexico recently became the latest state to receive Centers for Medicare & Medicaid Services (CMS) approval to expand the state’s behavioral health service offerings through mobile crisis intervention teams. Under its new state plan amendment, among other items, New Mexico will make available mobile (i.e., outside of a hospital or other facility setting) crisis and mobile response and stabilization services for individuals at the location in which they are experiencing a crisis, 24 hours a day, 7 days a week, 365 days per year. Mobile crisis services include stabilization of the person in crisis, prevention of further deterioration, and provision of immediate treatment and intervention but may also include telephonic follow-up interventions, such as additional intervention and de-escalation services and coordination with other supports and community partners, for up to 72 hours after the initial mobile response. New Mexico also will offer children’s mobile response and stabilization services (MRSS), which are mobile crisis services but specific to child, youth, and families and include up to 56 days of stabilization services.
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After a long wait, the U.S. Food and Drug Administration (FDA) recently published a Final Rule to harmonize the Quality System Regulation (QSR) codified at 21 C.F.R. Part 820 with the internationally accepted standard for medical device quality management systems established by the International Organization for Standardization, the 2016 edition of ISO 13485, “Medical devices - Quality management systems - Requirements for regulatory purposes” (known as “ISO 13485:2016”). We previously mentioned back in January 2021 that FDA had plans to initiate notice-and-comment rulemaking to describe the harmonization process sometime in 2021, plans that the agency had been discussing for years prior. FDA finally published a Notice of Proposed Rulemaking for the harmonization in February 2022 and, then, following the agency’s consideration of stakeholders’ submitted comments, it issued the Final Rule on February 2, 2024.
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With the goal of enhancing health care quality and outcomes for individuals with moderate to severe behavioral health conditions and substance use disorders (SUD), the Centers for Medicare & Medicaid Services (CMS) recently announced it will launch the state-based, voluntary Innovation in Behavioral Health (IBH) Model in fall of 2024.

CMS will circulate a Notice of Funding Opportunity (NOFO) in spring of 2024 and select up to eight states to participate in the IBH Model, which is expected to last for eight years. Selected states will align with their respective state Medicaid agencies (SMAs) on clinical policies for integrated care and work with Medicaid Managed Care Organizations (MCOs) or other partners for model development and implementation.
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OCR Releases Long Awaited Final Rule Regarding the Conscience Protections for Religious and Moral Objections in Health Care

January 29, 2024 | Blog | By Madison Castle, Kathryn Edgerton, Maya Lytje, Matthew Tikhonovsky, Rachel Wang

On January 11, 2024, the Office of Civil Rights (OCR) issued its highly anticipated Final Rule regarding conscience protections. The Final Rule clarifies the religious beliefs and moral convictions protections practitioners and entities may assert in their health care practices. The Final Rule, entitled Safeguarding the Rights of Conscience as Protected by Federal Statutes, becomes effective March 11, 2024.
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Health Care Privacy and Security in 2024: Six Critical Topics to Watch

January 25, 2024 | Blog | By Dianne Bourque, Madison Castle, Lara Compton, Ellen Janos, Pat Ouellette, Cassandra Paolillo

As we reflect on the flurry of activity in the health care data privacy and security space in 2023 and look ahead to what will continue to be a busy 2024, we are seeing the early stages of federal agency movement to align the regulatory environment with modern health care delivery, cutting-edge technologies, and innovative data-sharing techniques. Some of this work has been done in the form of federal agency guidance in which health care organizations will be looking for additional updates and there are also a handful of pending U.S. Department of Health and Human Services (HHS) Office for Civil Rights (OCR) proposals that call for substantial changes to the HIPAA Privacy Rule.
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A Virginia Federal Judge recently rejected a challenge to a negative Advisory Opinion issued by the Department of Health & Human Services’ Office of Inspector General (OIG) that disapproved of a proposal where certain pharmaceutical manufacturers would fund financial assistance for the manufacturers’ Part D oncology drugs. The Advisory Opinion was requested by the Pharmaceutical Coalition for Patient Access (PCPA), which is a charitable organization formed and fully funded by pharmaceutical manufacturers of oncology drugs. Subsequently, PCPA brought the lawsuit alleging that the negative Advisory Opinion violated the Administrative Procedure Act (APA).
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The Department of Health and Human Services (HHS) was tasked with formalizing and coordinating efforts to regulate artificial intelligence (AI) in health care under the November 2023 Executive Order on the Safe, Secure, and Trustworthy Development and Use of Artificial Intelligence (AI EO) and has already begun its regulation of AI within certain certified health IT. HHS and Office of the National Coordinator for Health Information Technology (ONC) recently published the Health Data, Technology, and Interoperability: Certification Program Updates, Algorithm Transparency, and Information Sharing (HTI-1) Final Rule.
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The Office of Inspector General (OIG) started 2024 with a flurry of activity by issuing four new Advisory Opinions on January 3, 2024. In one of these Advisory Opinions, the OIG approved a vendor’s referral program that offered gift cards to physician practices that are existing customers in exchange for recommending the vendor’s services to prospective physician customers. In doing so, the OIG adopts a position that directly contradicts the position that the Department of Justice (DOJ) espoused in multiple False Claims Act (FCA) settlements involving similar referral programs offered by electronic health record (EHR) vendors in which the DOJ alleged these programs violated the federal Anti-Kickback Statute (AKS).
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White House Launches Initiative on Women’s Health Research

January 3, 2024 | Blog | By Joanne Hawana, Maya Lytje, Rachel Wang

An important new initiative focused on women’s health research – defined as “the study of health across a woman’s lifespan in order to preserve wellness and to prevent, diagnose, and treat disease” – was recently kicked off in the United States. On November 13, 2023 the White House announced the Initiative on Women’s Health Research, to be led by First Lady Jill Biden and the Gender Policy Council. The Initiative aims to recognize and address the historic and persisting gaps in women’s health research and, by extension, in our collective knowledge about women’s health as well as how women experience certain conditions or respond to certain treatments differently than men.
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Looking Back and Moving Forward: MoCRA Regulatory Developments Ring in the New Year

January 2, 2024 | Blog | By Madison Castle, Joanne Hawana, Jean D. Mancheno

A year has passed since Congress enacted the Modernization of Cosmetics Regulation Act (MoCRA) and enhanced the Food and Drug Administration’s (FDA) authority to regulate the cosmetics industry. Although MoCRA implementation efforts steadily increased throughout the calendar year, as the December 29, 2023 compliance date for most MoCRA provisions approached, FDA’s release of information and deployment of new systems for the industry came to a climax. Several recent MoCRA-related developments will influence how cosmetic industry stakeholders, consumers, and even the FDA will approach and navigate the law’s requirements over the next year. In this blog post, we will discuss each of these developments and forecast the law’s future as we move into 2024.
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Approved: California Regulations for the Pre-Closing Review of Health Care Transactions Finalized

December 28, 2023 | Blog | By Kathryn Edgerton, Deborah Daccord, Lara Compton

California’s new Office of Health Care Affordability (OHCA) is set to start pre-closing regulatory review of certain health care transactions on January 1, 2024. As further explained in our previous post, subject to certain exceptions, a broad range of health care entities (collectively, Health Care Entities) soon will be subject to potential pre-closing transaction review.
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2023: Another Year Chock Full of Challenges for FDA

December 20, 2023 | Blog | By Joanne Hawana, Benjamin Zegarelli

In 2023, the FDA navigated challenges while achieving significant public health milestones. Member Joanne Hawana and Of Counsel Benjamin Zegarelli highlight key takeaways from the year, addressing multifaceted issues such as CBD regulation, the overhaul of in vitro clinical tests, and the management of manufacturing failures. These pivotal topics underscore the FDA’s proactive approach to evolving healthcare regulations and technological advancements.
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The U.S. Department of Health and Human Services (HHS) released a concept paper on December 6, 2023 outlining its action plan to enhance cyber resiliency in the health care sector by proposing certain voluntary cybersecurity actions and standards that may ultimately become requirements. For health care organizations such as hospitals, “cyber resiliency” generally means how organizations anticipate, operate during, respond to, and recover from cyber attacks such as ransomware attacks, cloud exploitations, phishing or spear-phishing attacks, software and zero-day vulnerabilities, or distributed denial of service attacks.
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Mintz recently launched a new series of Health Law Diagnosed titled Women Leaders in Health Care. This new series highlights women leaders in the health care industry and includes discussions on key issues in the health care industry, women leaders’ reflections on their career, and the impact of mentorship. In our inaugural episode, Leah Pollema, Vice President and General Counsel at InhibRx, and Serene Katranji, Chief Operating Officer, Chief Compliance Officer, and Corporate Counsel at Orchard Laboratories, join host Bridgette Keller to share personal stories about their experiences as both mentees and mentors, shedding light on the invaluable impact mentorship has had on their professional journeys.
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This July, we detailed the Supreme Court’s surprising revival in United States ex rel. Polansky v. Exec. Health Resources, No. 21-1052 (S. Ct. June. 16, 2023), of the question of whether the qui tam provisions of the False Claims Act (“FCA”), see 31 U.S.C. § 3730(b)(1), violate the Executive Branch’s exclusive grant of authority under Article II of the United States Constitution. In Polansky, a lengthy dissent by Justice Thomas questioned whether the False Claims Act qui tam provisions violated the Appointments Clause and Take Care Clause of Article II of the United States Constitution, arguments that had been endorsed by the Department of Justice (“DOJ”) in the 1989, though ultimately repudiated by DOJ just seven years later. A concurrence by Justice Kavanagh, joined by Justice Barrett, stated that “the Court should consider the competing arguments on the Article II issue in an appropriate case.” Shortly after Polansky was decided, a defendant in a declined qui tam case pending in the United States District Court for the Northern District of Alabama accepted Justice Kavanagh’s invitation, and moved to dismiss on Article II grounds. In a decision entered in November, the District Court rejected that challenge.
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HHS Court Filings Indicate that Agency Intends to Preserve Copay Accumulators

December 4, 2023 | Blog | By Theresa Carnegie, Xavier Hardy, David Gilboa

As we wrote about in our prior blog post, on September 29, 2023, John D. Bates of the U.S. District Court for the District of Columbia struck down a federal rule that permitted health plans and pharmacy benefit managers (PBMs) to exclude drug manufacturer copayment (copay) assistance from a patient’s cost sharing limits. In two separate filings this week, HHS signaled that it intends to support the continued use of copay accumulator programs as the industry has been using them since 2021.
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