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The Department of Health and Human Services Office of the Inspector General (OIG) has released an advisory opinion permitting a technology company to charge health care providers “per booking” fees to participate in its online provider directory and to allow the same providers to bid on advertising that appears as specialized search results or banner ads within its digital “marketplace.” This is the second time that the OIG has opined on this particular arrangement, having approved an earlier, although slightly different, version of the arrangement by the same company in Advisory Opinion 19-04, which was issued in 2019.

In the most recent opinion, the OIG determined that, although the arrangement might violate the Federal Anti-Kickback Statute (AKS) and the Beneficiary Inducement Civil Monetary Penalty (CMP) law, the office would not enforce those statutes against the company because the nature of the revised fees and search functionality presents a sufficiently low risk of fraud and abuse. Important to the OIG’s decision was the requestor’s certification that the fees do not exceed fair market value of the requesting company’s services to providers related to its marketplace nor do they take into account the user’s insurance status or the volume or value of referrals to the providers.

The OIG’s opinion letter protects only the current arrangement described to it by the requestor, and the agency declined to opine on any continuing contracts under an older version of the program.Continue Reading OIG again approves online health directory’s use of appointment and advertising fees

The Drug Enforcement Administration (DEA) has published a new final rule regarding reporting of theft or significant loss of controlled substances. Through the final rule, the DEA amended the existing regulations governing the form and timing used to formally report these thefts or losses.

The rule, which goes into effect on July 24, 2023, adds a follow-up requirement to the initial requirement of all registrants to report the theft or loss in writing to the DEA field office within one business day of discovery. Under the new rule, the formal follow-up notice must be electronically filed with DEA within 45 calendar days of the discovery.Continue Reading DEA Adds Second Step to Reporting Procedure for Controlled Substance Theft or Loss

On May 3, New York Governor Kathy Hochul signed into law provisions that will require health care entities to submit a notification to the state Department of Health (DOH) providing information about any material transaction involving that health care entity.

The law, passed as part of the state’s budget, was originally crafted to give the DOH authority to review and approve those transactions. Ultimately, following several iterations during the legislative process, that approval power was stripped out by the state general assembly and replaced with the current notice requirement.

The law will take effect on August 1, 2023 and states on its face that it will apply to all “material transactions” involving health care entities that close on or after that date. That said, the requirements for transactions that close between August 1 and August 31 are a somewhat open question, given the 30-day notice requirement in the law. The DOH is tasked by the law with creating regulations that may address this situation.Continue Reading New York Passes Health Care Transaction Notice Requirements

The Centers for Medicare and Medicaid Services (CMS) released a pair of proposed rules on April 27, 2023 that make substantial changes to the structure of Medicaid and the Children’s Health Insurance Program (CHIP), both in the traditional fee-for-service setting and for services provided through managed care organizations (MCOs), and incorporate feedback from stakeholders in

The Department of Health and Human Services (HHS) has issued a notice of proposed rulemaking that removes an exception to the definition of “lawfully present” that would then serve to include in that term individuals who have obtained temporary immigration status under the Deferred Action for Childhood Arrivals (DACA) program.

The expansion of the the definition of “lawfully present” would allow DACA recipients as of November 1, 2023 to enroll in a qualified health plan (QHP) from a health insurance exchange as established by the Affordable Care Act. Additionally, the definition change would open up eligibility for DACA recipients to enroll in a Basic Health Program, or Medicaid and the Children’s Health Insurance Program (CHIP) in states that have elected to cover “lawfully residing” pregnant individuals and children.Continue Reading DACA Recipients Can Enroll in Qualified Health Plans under Proposed HHS Rule

On April 7, 2023, only minutes apart, two federal district courts issued rulings on cases challenging the Food and Drug Administration’s regulations governing mifepristone, a key medication for women seeking an abortion. Both rulings faulted the FDA’s handling of the approval and its subsequent restrictions on the dispensing of mifepristone, but the two rulings came to very different conclusions as to what the availability of the drug should be.

Judge Matthew Kacsmaryk of the U.S. District Court for the Northern District of Texas issued a 67-page opinion ordering that the FDA’s initial approval of the drug, which was approved in 2000, should be stayed pending the court’s full review of the merits of the case. The court then stayed its own order for seven days to allow the FDA to appeal to the U.S. Court of Appeals for the Fifth Circuit.

Just minutes later, Judge Thomas Rice of the U.S. District Court for the Eastern District of Washington issued a 31-page opinion ordering FDA and HHS not to make any changes to the availability of mifepristone under the current operative Risk Evaluation and Mitigation Strategy (REMS) program, which requires the drug to be prescribed and dispensed only by certified providers, among other requirements. Unlike Judge Kacsmaryk, whose injunction has nationwide effect, Judge Rice limited the effect of his order to only the 17 states and the District of Columbia who brought the challenge in his court. The 17 plaintiff states in this lawsuit are: Arizona, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Mexico, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington and the District of Columbia.

The most difficult-to-reconcile aspect of the two orders is the fact that Judge Kacsmaryk’s order is a nationwide stay of the drug’s approval, while Judge Rice’s order to maintain the status quo availability only applies to the specific plaintiffs.  Notably absent from the Washington order’s applicability would be California, Massachusetts, New Jersey, New York, North Carolina, New Hampshire, and Virginia.Continue Reading Mifepristone Cases – Our Thoughts

Health care and health care-adjacent organizations are seeing a steep increase in risk arising from the frequently utilized third-party analytics and advertising services on their websites, mobile applications, patient portals, and other Internet-connected services. Those organizations should pay attention to new regulatory guidance, published settlements with regulators, and an onslaught of class action filings stemming

Centers for Medicare & Medicaid Services (“CMS”) published a proposed rule on February 15, 2023 that would require Medicare-enrolled skilled nursing facilities (“SNFs”) and Medicaid-enrolled nursing facilities (“NFs”) to disclose additional ownership and management information to CMS and state Medicaid agencies.

The proposed rule would implement Section 1124(c) of the Social Security Act, which was created by the Affordable Care Act to require the disclosure of information about ownership and oversight of SNFs and NFs. CMS first published a proposed rule in 2011 to implement the provision; after receiving public comments, that rule was not finalized. Twelve years later, CMS is trying again, citing concerns about the standard of care that residents receive in these facilities, including those owned by private equity companies and real estate investment trusts (“REITs”).Continue Reading CMS Wants to Know Who Owns Nursing Facilities

The three agencies that oversee the independent dispute resolution (IDR) process established by the No Surprises Act have notified certified IDR entities that they should not issue any new payment determinations while the agencies evaulate and update IDR guidance to comply with a recent court decision vacating provisions of the IDR rule.

The notice comes

[Note, this is Part 3 in an ongoing series of posts exploring substantive aspects of the Consolidated Appropriations Act, 2023 (P.L. 117-328) (referred to hereafter as 2023 CAA). Earlier parts covered Medicare Payments and the PIE Act]

The Modernization of Cosmetics Regulation Act of 2022 (MoCRA) is Subtitle E of the Food and Drug Administration Title of the 2023 CAA. The subtitle itself is a major change for the cosmetics industry, bringing almost all manufacturers and distributors into a regulatory and reporting structure similar to that currently used by the FDA to govern drugs and medical devices.

The Senate and House committee markups for both versions of the FDA User Fee legislation included a version of this law. However, the final version of that legislation had almost all policy riders stripped from it. But, it reappeared in the 2023 CAA and is now law.

So, what is MoCRA and what does it do? As with the previous posts on the 2023 CAA, we will go a little deeper on this than a regular blog post. That approach is particularly warranted here since this is an entirely new regulatory structure.Continue Reading Health Provisions of the Consolidated Appropriations Act, 2023: Part 3 Cosmetics Regulation

For the second time in 12 months, a federal district court has set aside provisions of the No Surprises Act’s Independent Dispute Resolution Final Rule on the grounds that the portions of the rule that provide guidance to arbitrators on how to weight price submissions violate the statute’s requirements.

This decision from Judge Jeremy D. Kernodle for the U.S. District Court for the Eastern District of Texas in a group of challenges to the rule, consolidated under Texas Medical Association v. U.S. Department of Health & Human Services (No. 6:22-cv-372), follows closely on the Requirements Related to Surprise Billing Final Rule issued in August 2022 (August Rule), which sought to address earlier criticisms of the independent dispute resolution process, and marks the second time that the rule has been vacated in part and sent back to the three agencies for another chance.

The previous remand was covered in an earlier post on this blog. In both that instance and in this one, the court took issue with the prominence of the “qualifying payment amount” or QPA. The QPA is a statutorily defined payment rate that represents the median contracted rates recognized by an insurer for the same or similar items or services in the same geographic area.Continue Reading Portions of No Surprises Act IDR rule procedures set aside by federal court again

The Biden Administration plans to put an end to the COVID-19 health emergencies on May 11, 2023, according to a Statement of Administration Policy submitted to the Rules Committee of the House of Representatives today.

The statement was presented in opposition to two items that the committee was considering for submission to the full House: The Pandemic is Over Act (H.R. 382) and a resolution relating to a national emergency declared by the President (H.J. Res. 7).

The administration’s policy statement indicated that the plan is to end both the public health emergency (PHE) declaration that was issued by the Secretary of Health and Human Services in January 2020 and the related national emergency issued by President Trump in March 2020.Continue Reading Administration may end public health emergencies in May 2023

[Note, this is Part 2 in an ongoing series of posts exploring substantive aspects of the Consolidated Appropriations Act, 2023 (P.L. 117-328) (referred to hereafter as 2023 CAA). Part 1, available here, covered changes in Medicare payment rates.]

Buried in the “Miscellaneous” chapter of Subtitle F (“Cross-Cutting Provisions”) of the Food and Drug Administration Title (Title III) of the 2023 CAA is Section 3630, a provision without a short title called “Facilitating exchange of product information prior to approval.”

This provision was originally proposed as the Pre-approval Information Exchange Act (or PIE Act) in March 2022 and was included in the House version of the Food and Drug Administration user fee legislation before being dropped from that legislation along with almost all other policy riders in a deal to get the FDA User Fee program approved before it expired.

But the same language was included in the 2023 CAA that was signed into law on Dec. 29, 2022. And again, while it was not directly entitled as such in the law, it is the PIE Act and that is how this post will refer to it. So, exactly what is the PIE Act and what does it do?  Before assuming there is “PIE” for everyone, read more for important content on the boundaries of this law, and remaining challenges for companies seeking to exchange information under this statutory authority.Continue Reading Health Provisions of the Consolidated Appropriations Act, 2023: Part 2 The PIE Act

The Consolidated Appropriations Act, 2023 (P.L. 117-328) (referred to hereafter as 2023 CAA) runs more than 1,600 pages long in the official PDF version, so you would be excused if you missed a few key substantive health provisions that were included in the law.

Many of the substantive provisions of the law had been proposed as parts of other packages throughout the year, including the Infrastructure law, the FDA User Fee legislation and the Inflation Reduction Act. However, for one reason or another, these provisions were eliminated from the final versions of the laws that were passed.

The 2023 CAA included, among other aspects, changes to the Medicare payment program and sequestration requirements, additions to the accelerated approval process for drugs, a regulatory regime for cosmetics, and changes related to pre-approval communication of health care economic information to payors, formularies and similar entities.

This is the first in a series of posts exploring some of the more important policy aspects of the law. With part 1, we will explore the changes to Medicare payment rules.Continue Reading Health Provisions of the Consolidated Appropriations Act, 2023: Part 1 Medicare Payments

Health care and life science companies operating globally should be aware of the increased regulatory scrutiny in the U.S., the UK and Asia-Pacific when considering their obligations to monitor and retain business communications conducted through messaging platforms on employees’ personal devices. It is vital for these companies review the effectiveness of their compliance policies and

The Inflation Reduction Act included some very significant changes to the ways in which the Medicare program handles drug pricing.

Among the changes are a redesign of the Medicare Part D (prescription drug benefit) program, as well as requirements that certain drug prices be negotiated with the Centers for Medicare & Medicaid Services and a provision that drug manufacturers pay inflation rebates to on utilization of drugs covered by Medicare Part B and Part D in certain circumstances.

To address these changes to the law, Reed Smith has put together a series of alerts and webinars on the topics.Continue Reading Analysis of Medicare Prescription Drug Pricing Changes in Inflation Reduction Act

Following closely after the clarifying independent dispute resolution process Final Rule, the four executive branch entities tasked with implementing the provisions of the No Surprises Act, the Office of Personnel Management, the Centers for Medicare & Medicaid Services (CMS), Employee Benefits Security Administration and the Internal Revenue Service have issued a request for information to help the agencies craft the next stage of regulations for the surprise billing law.

The request is the latest effort by agencies to seek stakeholder input on the contours of the regulations implementing the No Surprises Act, this time with a focus on the requirements in the law for providers to issue a good faith estimate (GFE) to plans for services that their covered patients will submit for reimbursement and for insurers to issue an advanced explanation of benefits (AEOB) to their plan participants based on estimated charges relayed to them by providers.

Specifically, the entities are looking for information and recommendations on the process of transferring data from providers and facilities to plans, issuers and carriers to facilitate the GFE and AEOB processes, as well as the economic impacts of implementing these requirements. The notice was added to the Federal Register on Friday, Sept. 16 and comments are due to the agencies by November 15.Continue Reading Agencies Look for Input on No Surprises Act Good Faith Estimate Rules