Health Law & Policy Matters

Health Care Attorneys | Mintz Levin Law Firm

Upcoming Webinar on September 23, 2014: What Your Company Needs to Know to Protect Itself from FCPA Liability

Posted in Fraud & Abuse, Pharma & Medical Devices, State & Federal Audits, Investigations & Litigation

Please join us on September 23rd, 2014 at 1:00 p.m. for a webinar where we’ll discuss the recent statements from the Department of Justice and the U.S. Securities and Exchange Commission describing the susceptibility of pharmaceutical and medical device companies in regards to FCPA enforcement. Key questions that will be addressed include:

  • Why does the FCPA seem to attract government investigations into the practices of health care companies specifically, and what should my company be worried about?
  • What FCPA enforcement actions have the DOJ and SEC brought against health care companies in recent years, and what are the lessons learned from these actions?
  • Does the increased level of focus on China indicate a new trend of global anti-bribery enforcement?
  • What simple best practices can health care companies implement to reduce the chances of governmental FCPA scrutiny?

The discussion will be led by our colleagues in the FCPA Practice,  Paul Pelletier and Aaron Tidman.

We hope you can join us. Please click here to register.

Federation of State Medical Boards Releases Interstate Licensure Compact

Posted in Physicians, Telemedicine

Written by: Kate Stewart

As previously reported by the team from ML Strategies, one of the many telehealth developments to watch this year has been the Federation of State Medical Board’s (FSMB) Interstate Licensure Compact.   On September 5, the FSBM released its Interstate Licensure Compact model legislation (the “Compact”).  Under the Compact, a physician who is licensed in his or her home state and meets educational, certification, and disciplinary criteria would be eligible to apply to receive an expedited medical license in another state that has adopted the Compact. 

For many physicians engaged in interstate practice, particularly through telemedicine, the Compact would ease requirements for practicing across state lines.  However, the Compact would still require full medical licensure in each state in which the physician practices.  Some telemedicine proponents have, instead, argued for an interstate compact that would permit physicians using telemedicine to practice based on their home state licenses alone.  Additionally, the Compact, as drafted by the FSMB, would not alter states’ so-called consultation exceptions to medical licensure, whereby certain states permit out-of-state physicians who are merely consulting with in-state physicians to practice without obtaining an in-state license. 

State boards of medicine are not required to adopt the Compact, but physician and health care providers interested in telemedicine and interstate practice should monitor the states that do adopt it.  

ML Strategies Posts Weekly Health Care Update on September 8, 2014

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

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

Among other newsworthy items, this edition of the Health Care Update summarizes reactions to the news that hackers breached’s security and uploaded malware to the website earlier this summer, provides details about the Department of Health and Human Services’ efforts to make the second enrollment period for the ACA’s health insurance exchanges run smoothly, and notes that the Federation of State Medical Boards finalized its model legislation to allow states to enter interstate medical licensure compacts.

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

Telehealth Momentum Continues: 46 Telehealth Bills Under Consideration in Congress

Posted in Payors & PBMs, Physicians, Telemedicine

Written by:  Theresa C. Carnegie and Ellen L. Janos

As members of Congress return from summer vacation, they will be facing at least 46 telehealth related bills covering a wide range of topics from reimbursement to physician licensure. The growing demand for telehealth reflects the important role telemedicine plays in reducing costs while also increasing quality, access, and satisfaction.  The health care and life sciences team from ML Strategies will be watching and reporting on all of these bills as well as the many public and private policy initiatives already underway.  To help stakeholders evaluate the current opportunities in this area, ML Strategies has put together a comprehensive Telemedicine and Health IT Alert.

Government Issues New Rules for Religious Employers, But Health Plans, TPAs, and PBMs are still on the Hook to Provide Contraceptive Coverage

Posted in Health Care Reform, Payors & PBMs, Pharma & Medical Devices, Pharmacies

Written by: Bridgette A. Wiley

The Affordable Care Act (“ACA”) requires that non-grandfathered health plans make preventive care and screenings available to their members at no cost (i.e. no deductibles, coinsurance, or co-payments). The Department of Health and Human Services (“HHS”) determined that contraceptive services, including all Food and Drug Administration (“FDA”)-approved contraceptives, are part of the essential preventive care that must be made available to women.

This requirement was met with protests from religious employers who believe that forcing them to offer and pay for contraceptive services violates their first amendment right to religious freedom. To address these concerns, the Department of Labor (“DOL”) and HHS promulgated regulations creating an exception to the contraceptive coverage mandate for religious employers that qualify as an “eligible organization.” An “eligible organization” is one that self-certifies that it is an “eligible organization” and therefore is not required to contract, arrange, pay or refer for coverage of contraceptive services for its plan members.  These regulations, discussed on our blog in greater detail here, result in a system where health plans and third party administrators (which include pharmacy benefit managers (“PBMs”) for the purpose of this regulation), must pay for these contraceptive services and then receive reimbursement for the services more than a year later, if at all.

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The Increasingly Murky World of 340B: What’s Next?

Posted in Health Care Reform, Hospitals & Health Systems, Payors & PBMs, Pharma & Medical Devices, Pharmacies

Written by: Ellyn L. Sternfield

For the past 18 months, health care providers and the pharmaceutical industry have been hoping for some clarity regarding 340B Drug Discount Program operations.  But things just keep getting murkier.

In a March 2013 article describing the history of the 340B Program, I wrote that “Twenty years after the 340B Program was created, there are competing views of its purpose. And those competing views frame the current pressures for 340B Program reform.”  And in a July 2013 post, I wrote that the heart of the controversy over the 340B Program operations comes down to purpose – Is the 340B Program intended to provide uninsured safety net patients with access to outpatient drugs, or is it intended to provide safety net providers with enhanced revenue to increase patient access to health services?   It is hard to bring clarity to 340B Program operations when there is intense disagreement as to the end the 340B Program is meant to achieve.

In January 2014, I predicted that the year 2014 would be a game-changer for the 340B Program, in part because of an on-going challenge by PhRMA to HRSA rules intended to implement the statutory Orphan Drug exception to 340B pricing, and in part because HRSA publicly declared its intent to issue an omnibus rule governing many aspects of 340B Program operations by the end of June 2014. 

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Health Care Providers Among Those at Risk from “Backoff” Malware

Posted in Privacy & Security/HIPAA/HITECH

If your health care organization swipes credit cards, such as for the collection of copayments, parking fees, or even gifts in a gift shop, you should read this important update regarding “Backoff” Malware, which includes practical steps for protecting your credit card data.   “Backoff” Malware is responsible for more than 1,000 breaches of credit card information, including the Target mega breach.  Check out the Mintz Levin Privacy and Security Matters blog for more information on this and other privacy and security issues.

ML Strategies Posts Weekly Health Care Update on August 25, 2014

Posted in Health Care Reform, Payors & PBMs, Pharma & Medical Devices, Pharmacies

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 Obama Administration’s release of updated contraception coverage rules.

On August 22nd, the Obama Administration proposed to extend a religious exemption to providing contraception coverage to closely held for-profit corporations. As we noted in an earlier update, the interim final rule, a result of the Supreme Court’s recent decision involving Wheaton College and Hobby Lobby, allows eligible organizations to notify the Department of Health and Human Services (HHS) of an objection to contraception coverage. In turn, HHS and the Department of Labor will work with insurers and third-party administrators. Under the rule, female employees may still receive contraception, but without cost sharing.

Closely held for-profit entities will be defined in two ways: 1) the entity could not be publicly traded, and ownership of the entity would be limited to a certain number of owners; or 2) the entity could not be publicly traded, and a minimum percentage of ownership would be concentrated among a certain number of owners. A Centers for Medicare & Medicaid Services (CMS) fact sheet on the changes can be found here.

CMS is taking comments on the proposal, including solicitation feedback on how to define “closely held,” alternative approaches to the rule, and on documentation, and disclosure of for-profits. Comments will be open for 60 days.

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

Another Court Weighs in on Rule 9(b)’s Requirements Under the False Claims Act

Posted in Fraud & Abuse, Hospitals & Health Systems

Written by: Thomas S. Crane, Brian P. Dunphy, and Laurence J. Freedman

A federal district court recently dismissed a qui tam relator’s complaint in a declined case against the Hospital for Special Surgery (“Hospital”), its former CEO, and an outside billing company alleging that they violated the federal False Claims Act (FCA) and the New York FCA resulting from alleged violations of the Anti-Kickback Statute (AKS) and the Stark Law.  Relator, Corporate Compliance Associates (CCA), asserted nine claims apparently based in part on information obtained from the Hospital’s former Chief Compliance Officer and former Associate Vice President of Physician Services.  CCA alleged, among other things, that the Hospital sought to induce patient referrals to the hospital by purportedly paying kickbacks to its contract physicians in the form of (1) compensation arrangements that included salary payments tied to referral volumes, and (2) payments for allegedly sham administrative and teaching responsibilities.  The court’s wide-ranging and thorough decision to dismiss is notable for at least two reasons, as discussed below. Continue Reading

Prescription Drugs: Refocusing the False Claims Act Microscope on the Rest of the Transaction

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

Written by:  Tara E. Swenson

Over the last decade, it has often felt as though the pharmaceutical industry has been the government’s and whistleblowers’ main, and at times only, target for False Claims Act (“FCA”) investigations.  While manufacturers are likely not out from underneath the microscope, it seems as though the lens may have shifted slightly to focus on the rest of the prescription drug transaction.  As a result of this refocusing, parties that regularly contract with manufacturers, including Medicare Part D plan sponsors, pharmacy benefit managers (“PBMs”), and pharmacies, have been increasingly confronted with various forms of investigations arising under the FCA, Medicare Part D regulations, and complicated state Medicaid regulations. 

Applying the FCA to conduct under the Medicare Part D program can be an inviting option for the government and whistleblowers.  The Part D program consumes an enormous amount of tax-payer and beneficiary money and each party in a Part D transaction must comply with voluminous regulations that touch on every part of a pharmacy transaction, from a plan sponsor submitting a bid, to a pharmacy collecting the accurate co-payment for a given prescription, ending with the plan sponsor ultimately reporting to and reconciling with CMS all remuneration the plan sponsor received from any party that effectively reduced drug costs.  The complexity of the program and the various certifications that plan sponsors must submit to CMS create many opportunities for things to go wrong.  In the fall of 2012, RxAmerica L.L.C. settled an FCA case alleging that, in the second and third years of the Part D program, the plan sponsor had submitted inaccurate drug prices to CMS’ Plan Finder which resulted in beneficiaries enrolling in the plan based on significantly lower drug prices than they ultimately received.  Even companies that are very familiar with the Part D rules and federal fraud and abuse laws can find themselves the subject of an investigation if all levels of employees are not properly trained.  For example, Walgreens settled a FCA suit in 2012 for close to $8 million when its retail employees regularly accepted Walgreens’ promotional gift cards from federal health program beneficiaries even though the gift cards expressly stated that they were not valid for such individuals.    

Many of the Part D regulations are very complicated and proving that payment was contingent, either expressly or implicitly, upon compliance with a given regulation can be very challenging.  As a result, whistleblowers relying on so-called false certifications are generally having trouble establishing that violations of technical Part D rules resulted in actual false claims being submitted to the government.  A good example of this was provided by the recently dismissed Fox Rx, Inc. case.   

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