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.

On November 1, 2017, CMS announced that it is in fact cutting Medicare Part B reimbursement for 340B drugs to the tune of $1.6 billion.  To be accurate, what CMS announced is its intent to finalize proposed rule changes to the Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems Quality Reporting Program.  As part of the rule changes, CMS will be implementing, with minor tweaks, the proposal it first announced last summer to significantly reduce Medicare Part B reimbursement for 340B drugs paid to hospitals and ambulatory surgical centers.  The full text of the final rule with commentary is available now and will be published in the Federal Register on November 13th.   The reimbursement reduction, and other changes relative to 340B, are scheduled to go into effect on January 1, 2018.

The rule only impacts Medicare Part B reimbursement for 340B, and no other government or private payor reimbursement.  Still, the change will have major repercussions in the 340B world.  When the proposed rule was first announced, I posted answers to a myriad of questions about the proposal and its potential impact on 340B covered entities.  With the “rule” now in final form, I can revisit some of those questions and answers. Continue Reading CMS Finalizes Medicare Part B Reimbursement Cut for 340B – What Does it Mean?

Earlier this month the House Energy and Commerce Committee’s subcommittee on Government Oversight and Investigations held its second hearing on the 340B Drug Discount Program. The hearing followed on the heels of a July 18th hearing in which officials from the Health Resources and Services Administration (HRSA), the Government Accountability Office (GAO), and the Department of Health and Human Services Office of Inspector General (HHS-OIG) testified about the challenges faced in overseeing the 340B Program.

This hearing was called Examining How Covered Entities Utilize the 340B Drug Pricing Program.  Representatives of five different covered entities were asked to address three questions in their testimony:

  • How much do 340B Covered Entities save when purchasing 340B drugs?
  • How are those savings tracked?
  • How are those savings used?

However, it was the follow-up questions from subcommittee and committee members that may indicate where Congress is headed in legislating changes to the 340B Program. Continue Reading Six Key Follow-Up Questions Asked by Congress in 340B Hearing

On August 17, 2017, the U.S. Department of Justice (DOJ) announced that it had reached a $465 million false claims settlement with Mylan, the manufacturer of EpiPen, over the company’s alleged underpayment of Medicaid Drug Rebates for EpiPen. The settlement amount and terms were generally announced by Mylan in October 2016 – but back then DOJ refused to confirm the settlement.

Back in October 2016, we theorized that the announced “settlement” was likely a handshake deal, not yet reduced to writing and not signed off on by the necessary parties.  It’s not surprising that it would take ten months to finalize a health care false claims settlement.  In Ellyn’s government days, she worked cases that took years, not months, to get from handshake deal to announced settlement.

And in reviewing the EpiPen settlement and related unsealed documents, there were things we expected to see in the settlement; admittedly we are grizzled veterans when it comes to false claims settlements.  But there were some things about this settlement that raised our eyebrows. So we will (briefly) recap how we got here and the settlement terms, and discuss the four things that surprised us about this settlement.  Continue Reading The Four Things That Surprised Us in the EpiPen False Claims Settlement

On July 18, 2017, just days after CMS went public with its proposal to reduce Medicare Part B reimbursement to certain 340B covered entities, Congress held its first hearing on 340B Program Oversight since March 2015.  A common thread ran through the testimony of the three testifying witnesses:  Erin Bliss, Assistant Inspector General with HHS-OIG; Dr. Debra Draper, Director of Health Care at the GAO; and, Captain Krista Pedley, Director of the Office of Pharmacy Affairs at HRSA:  Congress needs to legislatively grant HRSA more administrative authority over the 340B Drug Discount Program.  Continue Reading Witnesses at Congressional Hearing on 340B Urge Congress To Give HRSA Broader Regulatory Authority

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