Photo of Ellyn Sternfield

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.

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?

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

Before we all turn our full attention to the nominations of Representative Tom Price as Secretary of Health and Human Services, and policy consultant Seema Verma to lead CMS, we need to remember that there are still approximately 45 days remaining in the current administration. A perusal of the Federal Register reveals that in the wake of the election, federal agencies are issuing proposed and final rules at a swift pace.

So it may be wise to consider what HHS rules have been published, and what rules could still be acted on by the Office of Management and Budget (OMB) and published before the inauguration of the new administration.  And we also need to consider what action Congress may take on those rules. Continue Reading Forty-Five Days and Counting for Current HHS Leadership: Implications for Rulemaking

Our eyebrows were raised by Mylan’s October 7, 2016 announcement that it had reached a $465 million “settlement” with the United States Department of Justice (DOJ) and “other government agencies” over its Medicaid Drug Rebate obligations for EpiPen.  The timing of the announcement was especially eyebrow-raising:  close to 5 pm on a Friday afternoon at the start of a long holiday weekend (Columbus Day), which effectively forestalled any government comment on the announcement.

Let’s recap how we got here. Over the last few months, multiple state and federal government entities, including Congress, had raised concerns about the EpiPen’s classification for the purpose of Medicaid Drug Rebates.  Manufacturers pay lower Medicaid rebate percentages on generic drugs than on brand name or innovator drugs.  Manufacturers also face a Medicaid Drug Rebate “inflation penalty” when price increases for brand name/innovator drugs outpace inflation; generic drugs are exempt from the inflation penalty.   But the “Epi” part of EpiPen was the generic drug epinephrine; it was the “Pen” part, the distribution unit, which was patented and unique.  More than 18 years ago, CMS said that it was reasonable to base EpiPen Medicaid Drug rebates on the “Epi” part, as a generic product.  Thus Mylan paid Medicaid drug rebates on EpiPen at the generic rate and faced no inflation penalty.   But earlier this year, after media reports focused on dramatic price increases for EpiPen and the lack of competitor products, questions have been raised as to whether Mylan knew, or should have known, that it needed to revisit the EpiPen classification and pay the higher higher brand/innovator Medicaid Drug Rebate rates, and face the inflation penalty, for EpiPen.

Mylan’s announcement states that the $465 million settlement provides “resolution of all potential rebate liability claims by federal and state governments as to whether the product should have been classified as an innovator drug for CMS purposes and subject to a higher rebate formula.”   But in the days following the Columbus Day holiday, details on the specifics of the settlement have not been forthcoming from Mylan or the government.

So as a result of the Mylan announcement, what do we know and what do we not know about the purported settlement?  Here are our top five takeaways from Mylan’s announcement. Continue Reading Five Things to Know About the Mylan EpiPen “Settlement” – What It Is and What It Isn’t

Thus far, 2016 has been a relatively quiet year for the 340B program at the federal level.  Neither Congress nor the Health Resource and Service Administration (HRSA) has shown an appetite to take on the issues plaguing the program.  In fact, late last month, the Department of Health and Human Services indicated that the program is likely to remain in its status quo until at least the end of the year.  In its regulatory agenda released May 2015, HRSA stated it will delay the release of its final 340B Program Omnibus Guidance to the end of 2016.  HRSA also indicated it will delay its 340B manufacturer civil monetary penalty rule and proposed administrative dispute resolution rule.

Although HRSA has not provided any further information for the reason of the delay, it does not come as a surprise.  When the D.C. District Court invalidated HRSA’s orphan drug “interpretive” rule in October 2015, we hypothesized that this may call into question HRSA’s willingness to proceed on the Proposed Guidance.  The fact is, a number of the provisions in the Proposed Guidance impose duties in the name of compliance that go beyond statutory requirements, and under the Court’s decision, such provisions may be unenforceable.  This delay may be the first step in HRSA’s decision to eventually pull the Proposed Guidance and spare itself the attacks. Continue Reading Delays in 340B Mega-Guidance and a Recap of the Latest 340B Updates

It is hard to believe that it is now four days and counting until our May 10, 2016 Pharmacy Industry Summit, here in our DC offices.

Here in Washington, it seems everyone has an idea on a drug “fix”:  amendments to the provisions governing Medicare reimbursement, new rebate requirements, changes to price reporting measures, revisions to the 340B Drug Discount Program, etc.  Proposals are interesting, but will Congress actually do anything?  If anything is actually going to pass, it has to get through the Senate.

Our Summit’s working lunch presentation is a Congressional Staff Panel, moderated by Alex Hecht, VP of Government Relations at ML Strategies.  The scheduled panelists include Mark LeDuc, Staff Director for the Senate Special Committee on Aging; Grace Stuntz, FDA Policy Advisor for the Senate HELP Committee; and Matt Kazan, Majority Staff for the Senate Finance Committee.

If you are interested in hearing what they have to say about what may, or may not happen, in the coming months, it is not too late to register to attend the Summit.  Registration can be completed on our Summit Microsite.  We hope to see you there.

Five days and counting until our May 10, 2016 Pharmacy Industry Summit, here in our DC offices.

Following our first panel discussing Drug Pricing Challenges and Opportunities, the second panel, which Theresa is moderating involves a subject near and dear to the heart of many of our clients: The New Wave of Value-Based Pricing and Contracting.  Manufacturers, insurers, PBMs, and health care providers all would like to consider value-based options for pharmaceutical purchases, but may be intimidated by potential legal and regulatory roadblocks.

So we were thrilled when Josh O’Harra, Assistant General Counsel at Lilly, and Jennifer Kowalski, Vice President of Anthem’s Public Policy Institute, agreed to join Theresa to discuss the growing body of value-based pricing benchmark models and how payors and manufacturers are responding to the opportunities and challenges presented by value-based contracting arrangements.

It is not too late to join us and the other Senior Counsel and Policy Executives who are registered to attend the Summit.  Check out the Summit Microsite  and click on the registration tab to complete your registration.  We look forward to seeing you there.