On July 7th, the House introduced much anticipated bipartisan telehealth legislation. The Medicare Telehealth Parity Act of 2015, introduced by Representative Mike Thompson (D-CA) and co-sponsored by Representatives Gregg Harper (R-MS), Diane Black (R-TN), and Peter Welch (D-VT), would gradually increase the scope of telehealth services covered by Medicare and addresses many of the current limitations in Medicare’s coverage of services provided to patients remotely.
Over a four-year implementation period, the bill, if enacted, would incrementally expand coverage for telehealth services by easing current limitations on coverage. Specifically, the bill would:
- Expand the provider types whose services are covered to include certain allied health professions, including physical and occupational therapists and audiologists;
- Expand the types of services that are covered to include services like audiology and outpatient therapy services;
- Relax the “originating site” requirements for certain services;
- Expand the geographic locations in which telehealth services are covered; and
- Establish coverage for remote patient monitoring for certain chronic conditions.
Notably, the bipartisan measure would, two years after enactment, permit reimbursement under Medicare for certain services provided in a beneficiary’s home, regardless of rural or urban designation. The bill is similar to the Medicare Telehealth Parity Act of 2014, also introduced by Representative Thompson, and is one of a growing number of legislative efforts to expand the use of telehealth in federal healthcare programs. Working groups are being initiated in both chambers of Congress, with introductions of additional measures likely in the coming months. Continue Reading
Earlier this week, FDA issued its final rule implementing statutory requirements for drug manufacturers to report the permanent discontinuation or temporary interruption in the manufacturing of certain drugs and biological products to FDA. The final rule requires enhanced reporting to assist FDA in preparing for and preventing drug shortages, and it is largely unchanged from the proposed rule released in November 2013.
The final rule requires holders of approved applications for certain drugs and biological products, as well as manufacturers of drugs marketed without FDA approval, to submit an electronic notice to FDA of a permanent discontinuance or temporary interruption in the supply of a drug or product. Products covered under the rules are those that are i) life-supporting, ii) life sustaining, or iii) intended for use in the prevention or treatment of a debilitating disease or condition. Applicants must make the electronic report to FDA at least 6 months prior to the date of permanent discontinuance or interruption or as soon as practicable, but no later than 5 business days following the event. Failure to notify FDA may result in the issuance and public posting of a noncompliance letter. Continue Reading
On June 30, 2015, the Department of Health and Human Services’ Office of Inspector General (OIG) announced that it would be staffing a new specialty litigation unit whose sole focus will be on levying civil monetary penalties (CMPs) and excluding individuals and entities from participation in Medicare and Medicaid. The litigation unit will be comprised of approximately 10 attorneys when hiring is complete. The announcement came at the annual meeting of the American Health Lawyers Association (AHLA) in Washington, D.C.
The concept of an OIG unit dedicated to CMPs and exclusions is not new, but was apparently delayed due to budgetary constraints. That the OIG’s budgetary constraints have lessened is not surprising: in a 2015 report, the OIG reported an $8 to $1 return on investment for the Health Care Fraud and Abuse Control Program, to which OIG is a key partner.
Robert M. Penezic, an OIG deputy branch chief in charge of the new team, and a presenter at the AHLA conference, predicts that the new unit will lead to an increase in enforcement.
Recently, South Carolina U.S. District Judge Joseph Anderson, Jr. issued an opinion in which he struggled with how to handle a non-intervened qui tam brought under the Federal False Claims Act (FCA). In his opinion, Judge Anderson requested that the United States Court of Appeals take an interlocutory appeal to determine two issues:
- The extent of the government’s right to object to a reasonable settlement in a non-intervened FCA case; and
- The plaintiff’s right to use statistical sampling to provide liability and damages in an FCA case.
While the second issue has been the subject of much debate recently, the first issue is relatively new. However, with more and more state and federal FCA cases proceeding without government intervention, it is likely an issue that many more state and federal judges will be facing. Continue Reading
On June 23, 2015, the OIG issued two reports focusing on fraud, waste, and abuse in the Part D program, the first “Ensuring the Integrity of Medicare Part D” and the second “Questionable Billing Practices and Geographic Hotspots Point to Potential Fraud and Abuse in Medicare Part D.” The OIG reports that incidents and investigations relating to Part D are increasing, and as of May 2015, the OIG had over 500 pending complaints and cases involving Part D, which demonstrates an increase of over 130% in the last 5 years.
The OIG highlights that after conducting multiple investigations, it believes that the Part D program continues to suffer from two shortcomings that result in fraud and abuse not being detected or avoided as effectively as possible. The OIG assigns fault for these two shortcomings to all three parties that are directly involved in Part D oversight, CMS, the Part D plan sponsors, and the Medicare Drug Integrity Contractor (“MEDIC”). These two categories of shortcomings are: “(1) the need to more effectively collect and analyze program data to proactively identify and resolve program vulnerabilities and prevent fraud, waste, and abuse before it occurs; and (2) the need to more fully implement robust oversight designed to ensure proper payments, prevent fraud, and protect beneficiaries.”
On June 30, 2015, a mere day before the product tracing deadline for dispensers was to go into effect, FDA published a compliance policy guidance that delays enforcement of the applicable product tracing requirements until November 1, 2015 (Compliance Policy). As we previously discussed, pursuant to the Drug Supply Chain Security Act, most pharmacies in the U.S. are required to have systems in place by July 1, 2015, to receive so-called “3T information” (that is, Transaction History, Transaction Statement, and Transaction Information) regarding the prescription drugs they purchase from suppliers.
In the Compliance Policy, FDA notes that dispensers have expressed concern that electronic systems used to exchange, capture, and maintain product tracing information will not be operational by the original July 1 deadline. Although the agency acknowledges that paper-based transmission may be acceptable in some cases, FDA also notes that many dispensers intend to utilize electronic systems to capture and maintain the 3T information. Accordingly, the Compliance Policy concedes that dispensers may need additional time beyond July 1, 2015 to work with their trading partners to ensure that the 3T information is captured and maintained as required by the DSCSA.
Consequently, FDA does not intend to take action prior to November 1, 2015, against dispensers who, in either case: (i) accept ownership of a covered drug product without receiving the 3T information; or (ii) do not capture and maintain the 3T information provided by the dispenser’s trading partner. Continue Reading
Last week, FDA announced that more than 1,050 websites had illegal drugs and devices seized or received warning letters as part of the Eighth Annual International Internet Week of Action (IIWA). IIWA is an international effort of law enforcement, customs, and regulatory bodies (including FDA, the U.S. Department of Homeland Security, and INTERPOL) that fights against illegal online sales of drugs and devices, which are potentially counterfeit and could be harmful to consumers.
Representatives from over 115 countries came together for this year’s effort, called “Operation Pangea VIII,” which ran from June 9th to 16th. The goal of Operation Pangea VIII was to identify the manufacturers and distributors of illegal drugs and medical devices sold online and eliminate those products from the marketplace. Continue Reading
Health care is big business in Massachusetts, and it is a highly regulated business. But Governor Charlie Baker hopes to simplify the Massachusetts regulatory regime. This past March, Governor Baker initiated a year-long review of each and every regulation under the Executive Department’s jurisdiction, which includes the regulations falling under the primary oversight agency for health care in Massachusetts – the Executive Office of Health and Human Services.
As the Secretary of Health & Human Services, Marylou Sudders leads the largest executive agency in Massachusetts – there are nearly twenty departments and divisions under her oversight, including the Department of Public Health, Department of Mental Health, and the Division of Health Care Finance and Policy. These agencies (and others) promulgate health care rules and regulations about licensing and certification, quality and data reporting, clinical, recordkeeping, operational and facility requirements, and more – leaving providers and payors to wind through a labyrinth of legal requirements.
Enter Executive Order 562.
The 340B Drug Discount Program has operated for more than 20 years with just a few governing regulations codified in 42 CFR Part 10. Through the Affordable Care Act (“ACA”), Congress adopted several amendments to the 340B Program. One of those amendments required the Department of Health and Human Services (“HHS”) to impose a maximum $5000 civil monetary penalty on participating manufacturers for each instance in which the manufacturer knowingly and intentionally charged a participating 340B entity a purchase price for a 340B drug that exceeds the statutory ceiling price. Congress specifically authorized the Health Resources and Services Administration (“HRSA”) to promulgate regulations implementing this requirement within 180 days of the ACA enactment, i.e. by September 2010.
And in fact, in September 2010 HRSA published an Advance Notice of Rulemaking on this requirement, seeking stakeholder input on the requirement.
Finally, on June 17, 2015, HRSA issued proposed rules to implement that requirement. What took so long? HRSA’s commentary to the proposed rules, combined with the recent history of the 340B Program, provide the answers. These proposed rules may be the first steps, but not the last, in what may be major changes to the 340B Program. Continue Reading
As we discussed yesterday, the Medicare Fraud Strike Force’s eighth annual nationwide takedown resulted in charges in 17 districts against 243 individuals for approximately $712 million in false billings.
It is the most significant of the Strike Force’s nationwide takedowns to date. By way of comparison, as we noted in our January 2015 year-in review, in 2013, the Strike Force brought charges in eight districts against 89 individuals for approximately $223 million in false billings, and in 2014, the Strike Force brought charges in six districts against 90 individuals for approximately $260 million in false billings. The number of individuals charged and the total amount of false billings alleged this year has nearly tripled. Indeed, the takedown this year in the Southern District of Florida (Miami) alone involved charges against 73 individuals for approximately $263 million in false billings — results on par with the entirety of each of the 2013 and 2014 takedowns. Additionally, 46 of the individuals just charged were doctors, nurses or other licensed medical professionals, as compared to 27 last year. Moreover, the Strike Force’s efforts have expanded beyond the districts that are part of the Strike Force to the District of Alaska, the Southern District of California, the District of Connecticut, the Southern District of Georgia, the Western District of Kentucky, the District of Maryland, and the Northern District of Ohio.
What is responsible for the vastly increased scope of this year’s takedown? It certainly is not due solely to reporting the results of 13 rather than 12 months of law enforcement and regulatory efforts. It may be due generally speaking to having the new U.S. Attorney General, Loretta E. Lynch, officially in place for six weeks now and having the current Assistant Attorney General in charge of DOJ’s Criminal Division, Leslie R. Caldwell, on the job for a year.
More specifically though, it may be due to specific efforts that AAG Caldwell noted in speaking about the latest takedown:
Every day, the Criminal Division is more strategic in our approach to prosecuting Medicare Fraud,” said Assistant Attorney General Caldwell. “We obtain and analyze billing data in real-time. We target hot spots – areas of the country and the types of health care services where the billing data shows the potential for a high volume of fraud – and we are speeding up our investigations. By doing this, we are increasingly able to stop schemes at the developmental stage, and to prevent them from spreading to other parts of the country.
There are other strategies that AAG Caldwell noted in a speech last September, perhaps most importantly the new procedure that qui tam complaints would be shared by the Civil Division with the Criminal Division as soon as cases are filed. Whether that was at play here is not yet clear, but we should expect it given the invigorated efforts of DOJ and its partners not to mention the financial benefit.