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Ellyn Sternfield is Of Counsel in the firm and practices in the DC office. She represents clients involved in administrative, criminal, and civil health care enforcement matters around the country. Ellyn also counsels clients on their compliance concerns, including conducting internal reviews and investigations and drafting compliance plans. Ellyn brings extensive experience in health care enforcement to her practice, having previously served for more than 15 years as the director of the Oregon Department of Justice’s Medicaid Fraud Control Unit.

In March, I posted about the Uncertain Future of the 340B Drug Discount Program.  When opining about What Could Happen Next I speculated about possible changes to government reimbursement for 340B drugs “so that government safety net programs share in 340B savings.”

I reasoned that CMS already knew that “Medicare pays more for 340B drugs than the covered entities’ acquisitions cost.”   Continue Reading Six Questions and Answers About CMS’ Recommended Changes to 340B Medicare Reimbursement

The latest installment in the ongoing saga over EpiPen Medicaid Drug Rebates came on May 31, 2017, when Senator Charles Grassley issued a press release stating that between 2006-2016 taxpayers may have overpaid for EpiPen by as much as $1.27 billion, “far more” than the announced-but-never-confirmed or finalized $465 million DOJ settlement with Mylan.

To understand what the latest news means in the ongoing saga over EpiPen Medicaid Drug Rebates, it is important to understand how we got here.   And why at the end of the day, the information Senator Grassley included in the May 31, 2016 release may be less important than the information he hinted at but omitted from the release. Continue Reading The Latest in the Epipen Medicaid Drug Rebate Saga – Where Are We Now?

On May 17, 2017 the American Bar Association convened its 27th National Institute on Health Care Fraud.  I have attended many of the past annual meetings, and always enjoy the presentations and the opportunity to network with colleagues from all sides of the aisle.  And I always come away with a few nuggets to share with those who did not attend.

Here are my seven top takeaways from this year’s Institute. Continue Reading Seven Takeaways from the ABA National Institute On Health Care Fraud

A bipartisan congressional effort is underway to convince CMS to reverse its biosimilar reimbursement policy implemented under the Obama administration. We discussed the current reimbursement policy in a March 2016 blog post when CMS initially released the guidance.  CMS implemented the controversial guidance as a final rule in October 2016.

The current policy requires all biosimilars that are related to a reference product to be given a shared Healthcare Common Procedure Coding System (HCPCS) code. For Medicare Part B, reimbursement is then calculated based on the average sales price (ASP) of all of the biosimilars with that HCPCS code plus 6% of their reference product’s ASP. Continue Reading CMS Urged To Reverse Obama-Era Biosimilar Reimbursement Policy

shutterstock_428983732Last week, the California Assembly Committee on Business and Professions voted in favor of Assembly Bill 315.  AB 315 seeks to amend the California Business and Professions Code: (a) to require PBMs to obtain licensure from the Board of Pharmacy, (b) to state that PBMs have fiduciary duties to their “purchaser” clients (i.e., health plans), and (c) to require PBMs to disclose to their purchaser clients data regarding drug costs, rebates, and fees earned. The favorable vote moves the bill to the Committee on Appropriations.

California is not the only state that is considering adopting a PBM “transparency” law.  New York’s Governor Cuomo released a proposal that seeks to require PBMs to both register with the State and obtain a license (from the Department of Financial Services) as well as disclose financial incentives or benefits for promoting the use of certain drugs and financial arrangements that affect customers.  The Governor would also like to impose price controls on pharmaceutical manufacturers.  New York has a long history of regulating PBMs through a handful  of systems because the services that PBMs offer often result in a PBM needing to hold a specific non-PBM license and to adopt a specific corporate structure.  In addition, Senator Wyden (D-Ore.) introduced the C-THRU Act to the Senate Finance Committee in March.  The C-THRU Act seeks to make PBM rebate data publicly available, require the Secretary of HHS to adopt a minimum percentage of drug rebates that a PBM would need to pass through to certain of its health plan clients, and amend the definition of “negotiated prices” under the Medicare Part D Program.  Continue Reading California Advances PBM Licensing and “Transparency” Law

In July 2015, we posted about the N.Y. Attorney General’s False Claims Act (FCA) settlements with Trinity HomeCare and its related entities, and how the case provided insight into the future of FCA enforcement.  We identified five key trends based on the settlements:

  1. The FCA cases were based on qui tams and pursued by the State Attorney General after federal government declination.
  2. The FCA cases were based on a narrow, single state or regional arrangement, as opposed to allegations of a national scheme or program.
  3. One of the FCA cases was based on conduct about which Trinity had previously been warned.
  4. The FCA cases were based on government billings for specialty drugs.
  5. All parties to the arrangement were named as defendants in the qui tams.

Trinity was already under investigation by the N.Y. Attorney General’s office for its billing of hemophilia drugs (the basis of the first 2015 settlement) when a second qui tam alleged that Trinity submitted false claims in connection with a specialty drug used to treat premature infants at risk for lung disease.  That second qui tam led to the second settlement and now, almost 20 months later, has led to a new Complaint. Continue Reading Five Trends in False Claims Act Enforcement: Take Two

Here we are in March 2017 and no one is sure where things stand with the 340B Drug Discount Program.   HRSA and its oversight of the 340B program are subject to the recent Executive Orders restricting issuance of federal regulations and the promised repeal of the Affordable Care Act (ACA) has the potential to impact 340B operations.  In fact, the only thing that appears certain for the 340B program is that nothing is certain.  So let’s review several recent 340B developments, and potential developments to come.

Omnibus Guidance

In June 2016, I predicted in this blog that the final version of the long-promised HRSA 340B Omnibus Guidance, which would have provided clarity on 340B program standards, would never actually be issued or implemented.  And in fact, at the end of January 2017, HRSA withdrew the final 340B Omnibus Guidance while it is was still pending at OMB.  Even if it had issued, the Guidance would have been subject to the terms of the regulatory freeze President Trump imposed by Executive Order immediately after his inauguration on January 20, 2017. Continue Reading The Uncertain Future of the 340B Drug Discount Program

Earlier this week, the Office of Inspector General for the Department of Health and Human Services (“OIG”) posted its fiscal year (“FY”) 2016 data about Medicaid Fraud Control Units (“MFCUs”) across the country.

Federal law requires each state to operate a MFCU separate and distinct from the state Medicaid Agency. MFCUs are charged with investigating and prosecuting fraud committed by Medicaid providers and in the state’s administration of the Medicaid Program, as well as patient abuse/neglect that occurs in a Medicaid-funded facility or at the hands of Medicaid providers.  MFCUs currently operate in 49 states and the District of Columbia (North Dakota presently has a waiver but proposals to create a MFCU have been introduced in the state legislature).  They are typically part of a state’s Attorney General’s office and are required to employ investigators, attorneys and auditors.  The OIG is responsible for overseeing MFCUs.  It annually recertifies MFCUs, assesses their performance and compliance with Federal requirements, and administers a Federal grant award that funds a portion of each MFCU’s operational costs. Continue Reading OIG Releases FY 2016 Statistical Data About Medicaid Fraud Control Units

For several years now, the public outcry over the issue of drug pricing and reimbursement has increased in frequency and fervor.   At least one government agency wants you to know that it has been listening and wants to help provide the information necessary to forge a solution.

On Friday February 17, 2017, the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) issued an Online Portfolio on Drug Pricing and Reimbursement, pulling together OIG’s body of work related to drug pricing and reimbursement in HHS programs, including Medicaid and Medicare, since 2010.  Continue Reading OIG Publishes Online Portfolio Highlighting its Body of Work on Drug Pricing and Reimbursement

Back in early October, we were all transfixed by the announced Mylan settlement with the U.S. Department of Justice (DOJ) over Mylan’s alleged underpayments of Medicaid Drug Rebates for the EpiPen.  Although Mylan indicated that its $465 million settlement resolved all potential liability to government programs over EpiPen’s classification for Medicaid Drug Rebate purposes, DOJ would not confirm the specifics of the settlement and it appeared that no actual settlement documents had even been drafted. We blogged our thoughts that the “settlement”  was actually a handshake deal that had not been reduced to writing, had not been agreed to by the states, and had left the extent of any releases and future compliance to be negotiated.  And we said Congressional scrutiny would not end due to the announced settlement.

Multiple state and government officials decried the announced settlement as inadequate. Senator Grassley went so far as to schedule a Senate hearing on the settlement, but was forced to postpone it when no one from DOJ or Mylan would agree to attend and testify.

Then the election intervened, and EpiPen rebates were yesterday’s news. However, Senator Grassley, for one, is not letting go.  But at this point, his focus is more on government action, or inaction, over drug classifications.  And depending on what his inquiry reveals, it may end up hurting, not helping, any government case against Mylan, and potentially other drug manufacturers, based on classification of drugs for purposes of Medicaid Drug Rebates.

Continue Reading Grassley Continues To Press CMS on Medicaid Drug Rebate Classifications: What Will Be the Fallout?