Health Law & Policy Matters

Health Care Attorneys | Mintz Levin Law Firm

ML Strategies Posts Weekly Health Care Update on January 20, 2015

Posted in Health Care Reform, Pharma & Medical Devices, Physicians, Reimbursement, Telemedicine

ML Strategies has posted its weekly Health Care Update. This publication provides timely information on implementation of the Affordable Care Act, Congressional initiatives affecting the health care industry, and federal and state health regulatory developments.

Highlights this week include the upcoming departure of CMS Administrator Marilyn Tavenner, and possible bi-partisan supported changes to the ACA that could relate to payment and delivery system reform, telehealth, health IT, and promoting the role of innovative health technology.

Click here to read this week’s full Health Care Update.

Massachusetts Senate Creates Special Committee on Marijuana

Posted in Health Care Reform, Hospitals & Health Systems, Pharmacies

Written by: Rachel Irving Pitts

The Massachusetts Senate has created a Special Senate Committee on Marijuana to assess the Commonwealth’s medical marijuana implementation, to examine marijuana legalization issues in other states, and to make recommendations for the Senate regarding any legalization or ballot initiative on the subject.  Jason Lewis – a Democrat from Winchester – will chair the special committee.  Mr. Lewis also chairs the Senate-House Joint Committee on Public Health.

In an Alert highlighting the various leadership and committee appointments recently announced by the Senate, ML Strategies points out that the creation of this commission is timely, as advocates are considering whether to put a question to legalize marijuana on the 2016 ballot.

To read more about the other Leadership and Special Committee Appointments, see the full ML Strategies Alert.

FDA Proposes to Apply Risk-Based Framework to Accessory Devices

Posted in Clinical Trials & Research/FDA, Pharma & Medical Devices

Written by Ellen Janos

In another effort to bring some clarity to its regulation of devices, the FDA has released draft guidance on how its risk-based framework applies to accessory devices ( the “Draft Guidance”).   This development is welcome news for the mHealth community.

What is an accessory?  The Draft Guidance considers an accessory to be an article that is intended for use with one or more parent devices and is intended to support, supplement, and/or augment the performance of one or more parent devices. While accessories were typically included in the same class as the parent device, the FDA now recognizes that some accessories can have a lower risk profile than that of their parent device and may warrant being regulated in a lower class. For these lower risk products, the Draft Guidance encourages the use of the FDA  de novo classification process to request risk-based classification of accessories of a new type.

The FDA is seeking comments on the Draft Guidance by April 15, 2015.

New York Passes Telemedicine Reimbursement Legislation

Posted in Payors & PBMs, Physicians, Reimbursement, Telemedicine

Written by: Nili S. Yolin

New York became the 22nd state to sign into law legislation that will require commercial and Medicaid plans to provide coverage of telehealth and telemedicine services.  The law, originally intended to take effect on January 1, 2015, will become effective on January 1, 2016.

In addition to providing definitions for telemedicine (two-way audio video communications, including video conferencing) and telehealth (telephone and remote patient monitoring), the new law defines the scope of eligible distant site providers to include not just physicians, physician assistants, and hospitals, but also dentists, home care and hospice agencies, nurses, midwives, podiatrists, optometrists, ophthalmic dispensers, psychologists, social workers, and speech language pathologists and audiologists.

Although the law does not place any restrictions on the site at which a patient is located at the time telemedicine or telehealth services are provided, it permits insurers to delineate appropriate settings for such services.

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Pharmacy Qui Tam Based On U&C Price Billing Survives Motion to Dismiss

Posted in Fraud & Abuse, Payors & PBMs, Pharma & Medical Devices, Pharmacies, Reimbursement, State & Federal Audits, Investigations & Litigation

Written by: Ellyn L. Sternfield

Once again, a pharmacy employee has filed a qui tam involving a drug discount program, alleging that the failure of the pharmacy to use the discounted pricing as the “usual and customary” price in Medicaid and Medicare Part D billings resulted in falsely inflated claims to those programs. And once again, the qui tam case has survived a Motion to Dismiss.

In September of 2013, I blogged about qui tams based on usual and customary billings.  That blog post was prompted by a ruling in U.S. ex rel. Garbe v. K-Mart, that a qui tam Complaint alleging the chain pharmacy’s failure to use discounted pricing as the “usual and customary” price for medications in government program claims, was sufficient to pass muster under Rules 9(b) and 12(b)(6).

Pharmacy claim forms contain a required field for the pharmacy to submit its “usual and customary” price for the billed medication.  That price is often factored into the reimbursement formula for government-funded health care programs.  However, government programs each define how “usual and customary” price is determined, and when it comes to Medicaid, each state is free to define the term differently.  In some instances the term may be defined as inclusive of any discount offered (akin to a most-favored-nation clause), in other instances the term may be defined as an average charged to or paid by any payor, or in still other instances the term may be defined as the amount charged to or paid by any cash-paying customer.

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You’re Invited: Tips for Surviving a HIPAA Audit

Posted in Privacy & Security/HIPAA/HITECH, State & Federal Audits, Investigations & Litigation

Written by: Samantha P. Kingsbury

On Wednesday January 28th, my colleague Dianne Bourque (a member in Mintz Levin’s Health Law practice), will be presenting a webinar on how to survive a HIPAA audit.  As luck would have it, January 28th is also international Data Privacy Day.

With the New Year in full swing, the HHS Office of Civil Rights (“OCR”) is resuming its random audit program to assess compliance with HIPAA privacy, security and breach notification rules.  While Phase I of the OCR audit program involved on-site visits, OCR will conduct Phase II audits by performing desk review of documentation.  Findings during a Phase II audit can lead to enforcement and failure to comply can lead to the imposition of civil monetary penalties.

During this webinar, Dianne will discuss lessons learned from Phase I of the audit program and how best to incorporate those lessons into Phase II preparations.  She will also discuss how to identify and eliminate compliance gaps, in case you are chosen for an audit.

 Phase II audits can happen to covered entities and business associates alike.  Learn more about how you should be preparing and register for this webinar by clicking here.

FCA Supreme Court Case to Watch For in 2015

Posted in Fraud & Abuse, Hospitals & Health Systems, Physicians

Written by: Ryan J. Cuthbertson

The Supreme Court heard oral arguments on January 13, 2015 in a government contracts whistleblower case that could have a far-reaching impact on more than just federal contractors.

The case involves the tolling of claims for any “offense” involving fraud against the federal government until 5 years after the formal end to a conflict under the Wartime Suspension of Limitations Act (WSLA).  The Fourth Circuit Court of Appeals construed the WSLA broadly to find that an “offense” under the WLSA included civil claims under the FCA and that the WSLA could be triggered without a formal declaration of war.  The Fourth Circuit did not restrict its decision to war-related contracts or procurement activities and the Department of Justice, likewise, argued for a very broad interpretation of the WSLA.

In a recent Law360 article (which extensively quoted Larry Freedman of Mintz Levin’s Health Law Practice), experts including Freedman discuss how broad and significant the impact of a ruling affirming the Fourth Circuit would be.  In the article, Freedman says that the outcome will affect anyone who accepts federal funding, including health care providers, financial services companies, and grant programs.  He also notes that the Fourth Circuit’s interpretation could allow for indefinite tolling of FCA actions.  For more details on the case and its potential impacts, see the article published by Portfolio Media, Inc. here.

ML Strategies Posts Weekly Health Care Update on January 12, 2015

Posted in Clinical Trials & Research/FDA, Health Care Reform, Hospitals & Health Systems, Pharma & Medical Devices, Physicians, Reimbursement

ML Strategies has posted its weekly Health Care Update. This publication provides timely information on implementation of the Affordable Care Act, Congressional initiatives affecting the health care industry, and federal and state health regulatory developments.

Highlights this week include an update on the Congressional landscape with respect to the Sustainable Growth Rate patch, commonly referred to as the “Doc Fix,” and a list of medical device guidance documents that the FDA is planning to publish in 2015.

Click here to read this week’s full Health Care Update.

Mintz Levin Attorneys Discuss Top Health Care Fraud Issues to Watch in 2015

Posted in Fraud & Abuse, Home Health & Hospice, Hospitals & Health Systems, Pharma & Medical Devices, State & Federal Audits, Investigations & Litigation

Bloomberg BNA recently published a Health Care Fraud Report entitled Outlook 2015: Uptick Expected in Stark, Anti-Kickback FCA Cases, Self-Disclosures, which examines the top issues for health care providers and suppliers to watch in 2015.  

My colleagues Tom Crane and Larry Freedman were quoted extensively in the article, and they discussed a broad range of health care fraud and abuse issues to watch, including the:

  • Continuing growth of provider self-disclosures to the Centers for Medicare & Medicaid Services (“CMS”) and the Office of Inspector General (“OIG”);
  • Possible collateral uses by relators of the information about financial relationships between drug and device manufacturers and physicians and teaching hospitals disclosed as part of CMS’s Open Payments program (i.e., the “Sunshine Act”);
  • Proposed new safe harbors to the Anti-kickback Statute and the so-called “gainsharing” Civil Monetary Penalties Law;
  • Use of statistical sampling as evidence of a wider scope of false claims to prove liability in litigation under the False Claims Act (“FCA”);
  • Increasing focus by the Department of Justice and relators on FCA claims based upon physician compensation arrangements with hospitals, including potential Stark Law violations;
  • Continuing questions about the viability of a “worthless services” theory of liability under the FCA; and
  • Recovery Audit Contractor program changes.

Court Rules Antitrust Claim May Proceed Against Celgene

Posted in Antitrust, Clinical Trials & Research/FDA, Pharma & Medical Devices, Pharmacies

On December 22, 2014, a federal district court in New Jersey found that Mylan Pharmaceuticals, Inc. (“Mylan”) alleged facts sufficient to plead an antitrust claim under Section 2 of the Sherman Act against defendant, Celgene Corporation (“Celgene”), for denying a generic rival access to samples of its branded drugs that are distributed pursuant to a Risk Evaluation and Mitigation Strategies (“REMS”) program.  Citing the Supreme Court’s decisions in Otter Tail Power Co. v. United States, and other relevant cases that discuss the scope of an affirmative duty to deal with rivals, the District Court preserved the Plaintiff’s Section 2 claim by finding that Celgene’s conduct fit within one of the limited exceptions to the general rule that there is no duty to deal with competitors, concluding that antitrust liability could be found without allegations of a prior course or history of dealing with the Plaintiff.  The attached antitrust alert, “Court Rules Antitrust Claim May Proceed Against Celgene,” highlights the noteworthy aspects of this decision, including the fact that this is one of the few cases to address potential liability under Section 2 in connection with FDA-required REMS programs and is likely to be instructive on such issues as litigation in this area unfolds.  The Court’s analysis also adds to the continuing debate over the application of Section 2 to situations involving a refusal to deal with a rival, as lower courts continue to adopt disparate interpretations of the Supreme Court’s 2004 decision in Verizon Communications Inc. v. Law Offices of Curtis V. Trinko.