On Tuesday, May 8th, the House held three hearings related to combating the opioid epidemic. The first hearing came out of the Energy and Commerce (E&C) Subcommittee on Oversight and Investigations, which examined opioid distribution and diversion by the pharmaceutical industry. The second hearing came out of the E&C Subcommittee on Health, which examined the current statutory restrictiveness on the medical profession’s ability to coordinate substance use disorder (SUD) treatment due to prohibitions on certain patient information disclosure. The third hearing came out of the House Judiciary Committee and examined best practices in international and domestic enforcement on drug traffickers in curbing the supply of opioids across the U.S. Continue Reading Congress Holds Hearings and Proposes Legislation to Combat Vexing Opioid Crisis

This week, Congress is back in session with the House continuing its work on addressing the opioid crisis. There are three hearings and a markup on several pieces of legislation intended to address the ongoing epidemic. Once the House finishes its work, focus will move to the Senate side where the prospects of passage become more challenging as we head into summer. On the Affordable Care Act, insurers are beginning to submit rate increase proposals for 2019 which could lead to some jaw-dropping increases as we saw in Virginia last week. We cover this and more in this week’s preview, which can be found here.

Mintz Levin has updated the Mintz Matrix, a comprehensive summary of the data breach notification laws that now exist in all 50 states (South Dakota and Alabama finally caved and enacted their own laws).  It’s critical that HIPAA-regulated entities monitor these state laws because they apply simultaneously, and often conflict with, HIPAA.  In the event of a data breach, regulated entities must fulfill HIPAA’s breach notification requirements and the requirements of applicable state law.  Large-scale data breaches, affecting individuals from multiple states, require the rapid analysis of multiple state laws along with HIPAA requirements.  But don’t wait for a crisis to review the Matrix.   HIPAA covered entities and business associates should use it to familiarize themselves with the breach notification requirements of the states in which they do business, and use the Matrix to inform incident response planning activities.  The Matrix is also useful for monitoring patterns and trends among state laws in this area.  For example, state data breach notification laws have historically been implicated by the loss of information that could be used for identity theft, such as name coupled with social security, debit or credit card numbers.  However, many states now require breach notification when health care information is used or disclosed without authorization, even if it is not associated with a social security number and even if HIPAA does not apply. You can learn more about the Matrix and download a copy on our Privacy and Security Matters blog.

There are now multiple proposals in the House and Senate for substantive changes to the 340B Drug Discount Program. The odds of a legislative “fix” to 340B are increasing. But independent of congressional action, is CMS signaling that additional changes to 340B may be coming?

The most significant recent change to 340B came courtesy of CMS, not HRSA. Effective January 2018, CMS, relying on its authority over the Medicare Hospital Outpatient Prospective Payment System (OPPS), effectively cut Medicare Part B reimbursement for 340B drugs in the hospital outpatient setting by almost 30%.  Most hospital and ambulatory surgical center reimbursement for Medicare Part B 340B drugs went from the standard ASP plus 6%, down to ASP minus 22%. Accompanying the new OPPS rule, CMS issued Frequently Asked Questions (FAQs), discussing the mandatory use of modifiers when billing 340B drugs under the OPPS.  While the OPPS rule implementing the payment reduction is the subject of ongoing litigation, to date the Medicare Part B payment reduction remains in full force and effect.  Continue Reading Will CMS Drive Further Changes to 340B?

As we highlighted earlier this month, CMS released both the Contract Year 2019 Final Rules for Medicare Advantage and Part D (Final Rules) and the 2019 Call Letter. These documents are not typically released at the same time, so there is a lot of information for Medicare Advantage organizations and Part D plan sponsors to absorb. One major topic area that CMS focuses on in these documents is the prevention of opioid misuse and abuse.

As you know, we have been following this topic closely in the last few months: first, we discussed how the proposed rules set out a framework for plan sponsors to monitor and reduce the potential misuse of frequently abused prescription drugs. We then discussed the Advance Notice and Call Letter outlining utilization review controls for Part D plans to use to address opioid misuse and abuse.

The Final Rules and 2019 Call Letter work together to establish a number of new policies aimed at helping Medicare plan sponsors prevent and combat prescription opioid overuse. There is significant discussion, including CMS’s response to commenters, in the final documents linked above. Here, we provide a high-level overview of the new policies.

Continue Reading CMS Continues to Focus Medicare Plans on Preventing Opioid Abuse

This week, the focus shifts back to the Congressional push around addressing the opioid epidemic after the President’s speech on drug pricing was postponed. Both committees of jurisdiction in the House and Senate are moving on opioid legislation this week, so that has our immediate attention. The speech delay offers a momentary reprieve for stakeholders, but there’s still a Request for Information of some kind pending at the Office of Management and Budget, so it is likely that there will be action in this eventually.

Additionally, on our radar are new Democratic proposals around expansion of health coverage as well as the Administration’s potential action regarding ACA nondiscrimination protections. We cover this and more in this week’s health care preview, which you can find here.

In 2017, FDA issued only 44 Warning Letters to medical device establishments. Of those, 11 were related to pre-market issues, which include investigational device exemption violations or lack of approval or clearance. Only 33 of the device Warning Letters in 2017 were issued for cGMP, Quality System, or MDR violations, a remarkable figure since FDA regularly sent over 100 device regulation compliance Warning Letters every year from 2011 to 2015.

One might expect that fewer Warning Letters means fewer inspections, but FDA’s inspection database shows that the number of device compliance inspections has remained fairly consistent from 2011 through 2017. The number of inspections has certainly decreased from a high of 1,859 in 2011, but FDA conducted 1,624 device compliance inspections in 2014, 1,533 in 2015, 1,539 in 2016, and 1,551 in 2017. Clearly, the sudden drop off in Warning Letters has been much steeper than the modest decrease in inspections.

What could be driving this decrease in Warning Letters? I briefly explore three possibilities below. Continue Reading Drop in Warning Letters for Medical Devices Raises Interesting Questions About the Industry

The all-too-common story of a healthcare company declaring bankruptcy in the face of aggressive Medicare recoupment actions before the company even has a hearing before an Administrative Law Judge (ALJ) may get a new ending – at least in the Fifth Circuit.  Although the Fifth Circuit Court of Appeals remanded the case, Family Rehabilitation, Inc. v. Azar, back to the district court and thus it is still too soon to tell the ultimate outcome, it reversed the district court and held that there is jurisdiction for a district court to enjoin CMS recoupment during the administrative appeals process.  This decision is a big win for companies navigating the difficult and seemingly one-sided process of Medicare recoupment actions. Continue Reading Fifth Circuit Decision is Rare Victory Permitting District Court to Enjoin Recoupment Before Provider Exhausts Administrative Remedies

On Monday, CMS published a number of policies changing the dynamics of the individual market, including the Benefit and Payment Parameters for 2019 Final Rule, guidance on hardship exemptions, and a bulletin on transitional (grandmothered) plans. When interpreting all of these policies it’s important to keep in mind the following: What is success? And who is defining it?

The Obama Administration managed ACA implementation with the clear intention of making sure the outcome met the goals of the law: more people covered, more choices of coverage for those people, and lower premiums.  While the success of their efforts can be debated, the intention was always known.

For the Trump Administration, it is not necessarily clear how successful implementation of this next rule will be judged.  Are they trying to maximize the number of people covered, maximize the number of choices available or lower premiums?  What is the organizing principle?  Is it as simple as providing additional regulatory flexibility?

There are two other stakeholders who also have to determine their definition of success in the face of this rule: states and insurers.  For states, they will have to determine if and how they will use the additional flexibility granted to them under their rule.  Insurers, with the loss of the individual mandate and CSRs, and the looming threat of STLDIs and AHPs, have to decide if the rule provides a stable environment for participation.

From now through the start of the next open enrollment period, we expect significant backstage drama as insurers, states, and the Administration answer these questions.  The offerings and premiums available to Americans six days before the midterm elections depend on these decisions. Continue Reading CMS Benefit and Payment Rule: What is Success for the ACA?

In a recent Antitrust Alert, our colleagues Dionne Lomax, Bruce Sokler, Robert Kidwell, and Shawn Skolky discuss the allegations in the consolidated class actions, In re Blue Cross Blue Shield Antitrust Litig., the court’s analysis, and its market implications.  In this antitrust case against the Blue Cross Blue Shield Association and various individual Blue Plans, a federal court recently ruled that certain allegedly restrictive practices are properly analyzed under the Sherman Act’s per se standard, which deems certain types of agreements inherently unlawful. The court’s April 5 decision, which relied on two Supreme Court decisions from the 1960s and 1970s, runs contrary to a recent growing trend to apply the rule of reason to modern business relationships by analyzing the competitive impact of restrictions and weighing the procompetitive benefits against the potential anticompetitive effects.