On February 25, 2015, in a 6-3 decision authored by Justice Kennedy, the Supreme Court upheld the Federal Trade Commission’s decision finding that the North Carolina Board of Dental Examiners, although a state agency, was not exempt from federal antitrust laws when it sent 47 official cease-and-desist letters to non-dentist teeth whitening service providers.
Mintz Levin’s Bruce Sokler and Helen Kim have prepared an Alert that reviews the Supreme Court’s reasoning in North Carolina State Board of Dental Examiners vs. FTC, which makes it clear that unless state agencies or boards made up of market participants are acting under the direct supervision of the state, their anticompetitive activities are not protected. Click here to read the full Alert.
Last week, the Centers for Medicare & Medicaid (CMS) released its 2016 Advance Rate Notice and draft Call Letter (2016 Call Letter) for the Medicare Advantage (MA) and Medicare Part D programs. The 2016 Call Letter outlines proposed changes to the Part C risk adjustment and Part D payment methodologies, as well as policy modifications for calendar year 2016. With the final 2016 Call Letter to be released April 6, 2015, CMS is providing interested stakeholders until next Friday, March 6th to provide comments.
Starting on Monday, we will offer a 5-part series analyzing several key provisions of the 2016 Call Letter that could have a significant impact on plans, PBMs, pharmacies, and providers in the coming year. This series will cover the following provisions of the 2016 Draft Call Letter: (i) Star Ratings; (ii) PBM and Pharmacy Issues; (iii) Risk Adjustment; (iv) D-SNPs, MMPs, and Low-Income Subsidy Issues; and (v) MA Contracting Issues. Continue Reading
ML Strategies has posted its weekly Health Care Update. This publication provides timely information on the Affordable Care Act implementation and other federal regulatory initiatives, and covers other updates affecting the health care industry.
With less than one week until arguments in King v. Burwell, the IRS is in the spotlight as lawmakers deliberate potential outcomes if the Supreme Court does not uphold the constitutionality of federal tax subsidies for individuals in states that did not create their own health care exchanges. This comes on the heels of Secretary Burwell’s announcement that about 11.4 million consumers selected a plan or re-enrolled through the health insurance exchanges since the beginning of this year’s Open Enrollment under the Affordable Care Act.
The update also highlights the public health workshop held this week by the DOJ and FTC, examining competition and reviewing provider frameworks and network organization, along with changes in payment models. As we mentioned here yesterday, Mintz Levin’s Dionne Lomax took part in a closing roundtable at the workshop. Stay tuned to this blog for takeaways from the two-day event.
Click here to read this week’s full Health Care Update.
The U.S.’s pursuit of lower health care costs and higher quality health care services has included the incentivizing of new organizational structures and payment models that trigger long standing concerns about maintaining competition in the health care system. As a result of these developments, the Federal Trade Commission and the U.S. Department of Justice is hosting its second “Examining Health Care Competition” public workshop. The workshop could not be more timely: earlier this month, the Ninth Circuit Court of Appeals affirmed a district court’s ruling that the merger of St. Luke’s Health Systems, Ltd. and Saltzer Medical Group violated Section 7 of the Clayton Act, agreeing with the district court that the anticompetitive effects outweighed the potential efficiencies of the merger.
The workshop began yesterday and continues through this evening. It will be exploring five main themes:
- early observations regarding accountable care organizations;
- alternatives to traditional fee-for-service payment models;
- trends in provider consolidation;
- trends in provider network and benefit design strategies; and
- early observations regarding health insurance exchanges.
Mintz Levin’s Dionne Lomax will be participating as a panelist in tonight’s Summation Roundtable in which the various panelists will discuss the antitrust implications of evolving provider and payment models. Today’s workshop events, including Dionne’s panel at 5:30pm tonight, can be streamed live from the FTC’s website. Video of both days as well as transcripts of the entire event will also be available.
Last week, the Florida Senate Health Policy Committee removed language from proposed telehealth legislation that would require Medicaid reimbursement for telemedicine services at the same rates as face-to-face examinations. Disagreements over compensation for telemedicine services were a major sticking point and a key reason a telemedicine bill did not pass the Florida Legislature last year. The revised bill defines telehealth as the use of synchronous or asynchronous telecommunications to perform services that include, but are not limited to:
- Patient assessment;
- Transfer of medical data; and,
- Provision of patient and professional health related education.
Explicitly excluded from the definition of telehealth are audio-only transmissions, email messages, or facsimile transmissions. A telehealth provider is prohibited from solely using telehealth to prescribe lenses, spectacles, eyeglasses, contact lenses, or other optical devices or prescribe based solely on the use of a computer-controlled device such as an autorefractor. Additionally, controlled substances may not be prescribed through telehealth for chronic non-malignant pain, but a physician may use telehealth to order a controlled substance for an inpatient admitted to a licensed hospital or to a hospice patient.
The bill also clarifies that all health care practitioners as defined under Section 456.001 of the Florida Statutes as well as naturopaths, nursing home administrators, radiological personnel, EMTs and certified paramedics may provide services via telehealth. Consistent with the telemedicine regulations promulgated by the Florida Board of Medicine last year, the bill provides that the standard of care for services delivered via telehealth must be comparable to in-person health care services. Telehealth providers must also maintain patient records that are comparable to the records that must be maintained for in-person services.
The Centers for Medicare & Medicaid Services (CMS) recently announced a one-year delay in finalizing the long-awaited and closely watched rule addressing the 60-day deadline to return Medicare and Medicaid overpayments (the “60-day rule”). In its notice, CMS acknowledged that it must address “significant policy and operational issues” before finalizing a workable 60-day rule. As a result of “exceptional circumstances” (including more than 400 public comments), “internal stakeholder feedback,” and ongoing collaboration with both the Office of Inspector General for the Department of Health and Human Services and the Department of Justice, CMS will publish the final 60-day rule more than three years after it published the proposed rule.
As background, the 60-day rule will implement Section 6402(d) of the Affordable Care Act (ACA), which created section 1128J(d) of the Social Security Act requiring a person or entity who has received an overpayment to report and return the overpayment to the appropriate entity by the later of: (1) 60 days after the date on which the overpayment was identified; or (2) the date any corresponding cost report is due (if applicable). Significantly, the ACA also made retaining an overpayment past the 60-day deadline an “obligation” under the False Claims Act’s (FCA) “reverse” false claim provision and therefore the basis of FCA liability. As a result, the contours of the final 60-day rule will have a substantial bearing on the scope of FCA liability.
CMS published a proposed rule three years ago on February 16, 2012, which my colleague Karen Lovitch discussed in detail in a blog post. One central, thorny issue that may be causing the delay in finalizing the 60-day rule is how to define when an overpayment has been “identified” and the 60-day clock starts to run. The proposed rule defined the term “identified,” but left many questions unanswered. According to the proposed rule, an overpayment is “identified” if the provider or supplier has actual knowledge of the existence of the overpayment or acts in reckless disregard or deliberate ignorance of the overpayment. This definition is consistent with the definition of “knowledge” under the FCA but may be difficult to apply in practice.
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.
Open Enrollment through the health insurance exchanges ended on February 15th. On February 11th, the Department of Health and Human Services (“HHS”) reported that 7.75 million consumers selected a plan or were automatically re-enrolled through HealthCare.gov since the beginning of this year’s Open Enrollment. HHS also extended the deadline for enrollment by one week for users affected by technical glitches on the website.
In other news, the Centers for Medicare and Medicaid Services released final rules for Medicare Advantage and Part D prescription drug plans. We posted a blog this week explaining the new requirements for plans in 2016.
Click here to read this week’s full Health Care Update.
Last week, HHS, along with the Department of Labor and the Treasury, provided long overdue guidance regarding the third category of supplemental “excepted benefits” as defined by Section 2791 of the Public Health Services Act, Section 733 of ERISA and Section 9832 of the Internal Revenue Service Code. Coverage that meets the definition of supplemental excepted benefits is not required to comply with a variety of requirements, including certain requirements established under the Affordable Care Act.
The first two categories of supplemental excepted benefits were relatively well-defined as coverage meeting the definition of Medicare supplemental health insurance and Tricare supplemental programs, but the third category of “similar” supplemental coverage had left policy issuers scratching their heads.
The agencies last provided substantive guidance on what qualifies as supplemental excepted benefits in 2008. In their announcement last week, the agencies repeated their previous guidance and addressed whether supplemental coverage that provided additional categories of benefits, rather than just reducing coinsurance and deductibles under the insured’s primary coverage, could qualify as “excepted.” The agencies responded with the age old legal answer of “it depends.”
The Department of Justice (DOJ) recently announced that ev3 Inc. (which acquired Fox Hollow Technologies, Inc. (“Fox Hollow”), a medical device manufacturer, in late 2007) agreed to pay $1.25 million to resolve allegations that Fox Hollow violated the False Claims Act (FCA) by causing certain hospital clients to submit false claims to the Medicare program.
Fox Hollow manufactures the Silver Hawk Plaque Excision System, which is a device used in atherectomy procedures. Atherectomy is a minimally invasive surgical procedure that utilizes a small cutting device to remove atherosclerosis (or hardening of the arteries) from large blood vessels. The goal of atherectomy procedures is to open up narrowed coronary arteries and increase blood flow and circulation.
A former Fox Hollow sales representative, Amanda Cashi, filed an FCA qui tam action in December 2009 alleging that in 2006 and 2007, Fox Hollow caused 12 hospitals located in nine states to submit claims to Medicare for medically unnecessary inpatient stays for beneficiaries receiving elective atherectomy procedures. More specifically, DOJ alleged that Fox Hollow, in an effort to increase hospital purchases of the Silver Hawk device, advised hospitals to bill atherectomy procedures as more expensive inpatient procedures even though many of those patients should have received less costly outpatient procedures. As a result, those hospitals allegedly received higher reimbursement than they were entitled to for treating certain beneficiaries receiving Silver Hawk atherectomy procedures. Ms. Cashi will receive $250,000 as her share of the government’s settlement with ev3. Continue Reading
Earlier this month, the Centers for Medicare & Medicaid Services (CMS) released its final rules on policy and technical changes to the Medicare Advantage (MA) and Prescription Drug Benefit programs (Part D) for contract year 2016. More than a year has passed since we alerted our clients to the publication of the controversial proposed rules. While CMS released the 2015 final rule in May, it left open many of the most controversial proposals. But as of this week, we know what is in and what is out.
The most interesting part of the new rules are the provisions that CMS abandoned. As expected and as we previously posted, CMS is not finalizing provisions that would have lifted the protected class designation for three of its drug classes, required Part D plans (PDPs) to allow any willing pharmacy to participate in its preferred network, and clarified its interpretation of the non-interference provision to allow CMS to intervene in the negotiations between a Part D plan and a pharmacy. Other notable provisions not being finalized in this rule include:
- CMS’ ability to terminate MA plans offering Part D plans (MA-PD) for achieving less than 3 stars on both Parts C and D summary Star ratings in the same contract year for 3 consecutive years.
- A two-year limitation on submitting a new bid in an area where MA plans were terminated due to low enrollment.
- Requirements that MA plans and PDPs demonstrate they provide “good quality health care” by scoring 3 or higher on several CMS performance standards.
- Flexibility that would have allowed MA plans to separate their Evidence of Coverage document from the Annual Notice of Change (ANOC).
- Medication Therapy Management Program requirement to develop an outreach strategy to “effectively engage all at-risk beneficiaries enrolled in the plan.”
- Authority for CMS to passively enroll members in a non-renewing D-SNP to another D-SNP that is affiliated with the member’s Medicaid plan.
- Requirements that PDP sponsors of Employer Group Waiver Plans (EGWPs) disclose to each employer group the discount payments under the Discount Program.
CMS indicated that it would not finalize many of these provisions without undergoing new rulemaking processes.