Last week, the Congressional Budget Office (CBO) concluded that a key piece of telehealth legislation, the CHRONIC Care Act of 2017, would not, overall, increase or decrease Medicare spending. This score is significant as it marks the first time that CBO has concluded that providing enhanced Medicare coverage for telehealth services would be budget neutral and clears the path for Congress to pass the legislation in a tough political climate. Continue Reading CBO Greenlights Telehealth Provisions in Senate’s CHRONIC Care Act
Carrie Roll is an Associate in the firm’s Washington, DC office. Carrie's practice involves a variety of transactional, regulatory, and fraud and abuse matters. Her transactional experience focuses on advising health care clients on joint ventures, mergers and acquisitions, service agreements, and corporate stock and asset acquisitions. She has served as corporate and regulatory counsel to pharmacy benefit managers, retail pharmacies, and health care providers in acquisitions, and also advises health care clients on a variety of regulatory issues.
Although telehealth has the potential to improve or maintain quality of care for Medicare beneficiaries, payment and coverage restrictions create barriers that prevent providers from fully utilizing telehealth technologies. That is the core finding of a report issued by the Government Accountability Office (GAO) this month on telehealth and remote patient monitoring use for Medicare beneficiaries.
The GAO report was issued as part of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), which included a provision for the GAO to study telehealth and remote patient monitoring. In compiling the report, the GAO interviewed representatives of nine provider, patient, and payor associations who provided feedback on, among other things, barriers to providing telehealth services to Medicare beneficiaries. Continue Reading GAO Report: Medicare Reimbursement Policies Impede Telehealth Adoption
In 2016 and now in early 2017, state legislatures and regulatory boards continue to enact laws and rules setting telemedicine practice standards. Such standards generally include clarifying the definition of telemedicine as well as providing standards related to prescribing in an online setting, patient informed consent, treatment of medical records generated during a telemedicine encounter, and confidentiality. A recent survey conducted by the Federation of State Medical Boards (FSMB) found that telemedicine standards are the number one priority for state medical boards going into 2017. Continue Reading States Continue Trend to Reduce Telemedicine Barriers
Last week, the Medicare Payment Advisory Commission (the “Commission”) debated a package of policy reforms that would change the way Medicare reimburses physicians for Medicare Part B drugs. In the midst of calls to lower drug prices, the Commission has been developing its Part B reform package over the last two years and now, finally, appears poised to move forward with a vote at next month’s meeting.
Medicare Part B drugs are a multi-billion dollar benefit and typically include higher cost specialty drugs that are administered in a physician’s office on an outpatient basis. Drugs covered under Medicare Part B are reimbursed through a so-called “buy and bill” approach. That is, the physician buys the drugs and bills Medicare for their use. Medicare pays the provider the average sales price (“ASP”) of the drug plus a markup of 6% of the ASP. The 6% markup is generally considered compensation to physicians for the storage, handling, and other administrative costs associated with these specialty drugs. Continue Reading Medicare Advisors Debate Part B Drug Payment Reforms
More than two years since issuing the proposed rule, the HHS Office of the Inspector General (OIG) issued the long-awaited and highly anticipated final rule (the Final Rule) that provides amendments to the Anti-Kickback Statute (AKS) regulatory safe harbors and adds protections for certain payment practices and business arrangements under the beneficiary inducement provisions of the Civil Monetary Penalty Law (CMP). These amendments and updates to the AKS and CMP regulations attempt to clarify the OIG’s enforcement position in light of changes due to health reforms, to streamline the OIG’s advisory opinion workload, and to implement long-existing mandates enacted in statutes. This post discusses the amendments to the beneficiary inducement provisions of the CMP codified in 42 C.F.R. Part 1003 (CMP Regulations). Continue Reading At Long Last, OIG Issues Final Rule for Beneficiary Inducement Safe Harbors
A Trump victory was not the only surprise on election night. California’s drug pricing initiative, which would have required state agencies to negotiate drug prices at least as low as those paid by the U.S. Department of Veterans Affairs, was defeated by a wide margin (46% to 54%). This clear-cut defeat came as a surprise to many considering that polls taken just a couple of months earlier showed widespread support for the initiative. The California ballot initiative was introduced last year in the midst of widespread criticism of soaring drug prices. The initiative had early support but floundered leading up to the election when major pharmaceutical companies expended considerable resources into the campaign to defeat it. Continue Reading In the Wake of the Election, What’s Next for State Drug Pricing Initiatives?
In an unprecedented administrative action, the U.S. Department of Health & Human Services Office of the Inspector General (“HHS-OIG”) penalized a medical billing company for preparing and submitting claims to Medicare for diagnostic tests that were never conducted. On September 19, 2016, the owner and operator of a New Jersey billing company entered into a $100,000 settlement agreement with HHS-OIG and agreed to be excluded from participation in federal health care programs for a minimum of five years under the Civil Monetary Penalties Law.
The medical billing company was responsible for preparing and submitting claims to Medicare on behalf of an OB-GYN practice based, in part, on “superbills” identifying the services purportedly performed during a patient encounter. According to HHS-OIG, the billing company routinely added additional CPT codes to Medicare claims for unperformed services that the billing company knew were neither performed nor identified as performed on the superbill. Continue Reading Billing Companies Beware – OIG Signals a Crack Down on Fraud and Abuse at All Levels
Last month, the U.S. Government Accountability Office (GAO) released a report in which it found that manufacturer drug coupon programs for privately insured patients could potentially cause the Medicare Part B program to overspend on certain high-cost Part B drugs. The pricing for most drugs reimbursed by the Medicare Part B program is based on each drug’s average sales price (ASP), which is defined as the amount that physicians and other purchasers pay manufacturers for the drug. Currently, the ASP does not take into account drug coupons offered to privately insured patients. Continue Reading GAO Report Suggests Discount Coupons Impact Medicare Spending for Part B Drugs
In another procedural defeat for the Texas Medical Board (the “Board”) over its embattled telemedicine rule, last week, a federal judge held that the Board waited too long to request certification of appeal to the Fifth Circuit. Thus the Board’s existing appeal will move forward under the collateral-order doctrine. The Board’s brief is available here. Though this is a procedural setback for the Board, its appeal of the decision regarding its ability to escape antitrust liability under the state-action immunity doctrine is still pending before the Fifth Circuit.
As we have been closely following, in January 2015, the Board issued an “emergency” proposed rule requiring physicians to perform a face-to-face or in-person physical examination of a patient prior to issuing a prescription or risk sanctions for unprofessional conduct. Teladoc, Inc. and other Plaintiffs subsequently brought an antitrust claim against the Board alleging that the new regulation violates Section 1 of the Sherman Act and the Commerce Clause. The Board filed a motion to dismiss arguing (1) that the Board is entitled to state action immunity; (2) Plaintiffs’ claims were barred by the statute of limitations; and (3) Plaintiffs failed to state a claim under the Commerce Clause. A federal district court denied the Board’s motion to dismiss on all three grounds and specifically found that the Board is not entitled to state action immunity because its actions are not actively supervised by the state.
As we previously reported, in 2015 and early 2016, bills and voter initiatives were introduced in several states that would impose drug pricing controls and transparency requirements on pharmaceutical manufacturers. Of approximately a dozen bills that have been introduced in state legislatures over the past year and a half, just one bill, Vermont’s, has made it into law. A bill in California passed the Senate on June 1st and is expected to be voted on by the Assembly by August 31st, and ballot measures to control drug prices in California and Ohio are expected to be on the ballots in 2016 and 2017. All other initiatives have died in committee and never made it to a floor vote.
Since their introduction, these drug price transparency bills have been fiercely opposed by the pharmaceutical industry to apparent effect. The latest casualty is a high-profile Massachusetts drug price transparency bill that Massachusetts lawmakers failed to vote on before adjourning on July 31st. According to an industry spokesperson, Massachusetts is a critical state for the biotech industry as many pharmaceutical companies have headquarters or major research operations in the state. And according to state lobbying reports, 27 pharmaceutical companies, plus PhRMA and the Massachusetts Biotechnology Council, lobbied against the bill in 2015.
The pharmaceutical industry has also launched a full scale lobbying effort against the California and Ohio ballot measures. The industry managed to thwart the signature gathering for the Ohio ballot measure through litigation and kept the measure off of the 2016 ballot. As of now, the California initiative is expected to be on the ballot in 2016, but the industry has spent approximately $68.4 million in a campaign against the initiative as well as lining up organizations including consumer and medical groups, to oppose the measure.
With the failure of many state drug pricing initiatives, the pressure will continue to increase for lawmakers at the federal level to contain drug costs – particularly in this election year.