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This post was co-authored by Megan E. McWaters, a Reed Smith summer associate.

In a unanimous decision, the U.S. Supreme Court overturned a ruling by the U.S. Court of Appeals for the Fifth Circuit which had placed doubt on the continuing efforts by the U.S. Food and Drug Administration (FDA) to regulate the dispensing of mifepristone, one of the drugs used in a medication abortion.

The decision, written by Justice Kavanaugh, held that the doctors and associations who initially brought the challenge in the Northern District of Texas did not have sufficient standing to bring their claims before a federal court. The doctors involved in the suit do not prescribe or dispense mifepristone, and according to Justice Kavanaugh, nor would they be forced to provide even emergency abortion care to patients as a result of the FDA’s approval of the drug.Continue Reading Supreme Court Decision Leaves FDA Approval of Mifepristone Untouched, But For How Long?

The Department of Justice (DOJ) reported that its False Claims Act (FCA) recoveries for civil cases raked in approximately $2.7 billion for fiscal year 2023, representing a $450 million jump from 2022 recoveries.  Of the $2.7 billion recovered by the DOJ for 2023, approximately $1.8 billion (67%) came from the health care sector.

The real headline, however, may be the record-setting number of new FCA cases initiated in 2023 ­–– 500 initiated by the government and 712 initiated by private relators, for a total 1,212 new cases, over 250 more than the next-highest year (2022). Previous trends aside, this signals busy times ahead for the FCA.Continue Reading DOJ Announces $2.7 Billion in FCA Recoveries and Enforcement Priorities

On October 26, 2023, the Department of Justice (“DOJ”) announced that a Miami federal grand jury returned an indictment charging a Medicare Advantage Organization’s (“MAO”) former director of Medicare risk adjustment analytics with six counts of criminal fraud. DOJ alleged that the MAO received more than $53 million in overpayments from the Centers for Medicare & Medicaid Services (“CMS”) due to false diagnoses submitted on reimbursement claims for beneficiaries enrolled in the MAO’s plans.

What’s perhaps most notable about this matter is that DOJ declined to prosecute the MAO because of the MAO’s significant and timely self-disclosure, cooperation, and remediation efforts, in addition to the MAO’s agreement to repay CMS the full amount of the estimated overpayments.Continue Reading No Criminal Charges for Cooperative Medicare Advantage Organization

Shortly after Connecticut’s 2023 legislative session kicked off, Governor Ned Lamont announced a series of policy initiatives aimed at reducing health care costs and undertaken in collaboration with the Connecticut Hospital Association. “An Act Protecting Patients and Prohibiting Unnecessary Health Care Costs” (“the Act”), which was passed by the Connecticut Legislature in early June and signed into law by Governor Lamont in late June, implements some of those initiatives. Among other things, the Act targets pharmaceutical marketing practices and imposes extensive reporting requirements. These provisions apply to “pharmaceutical manufacturers” and come into effect on October 1, 2023.

Broadly, the provisions require “pharmaceutical manufacturers” that employ “pharmaceutical representatives” to register annually with the Department of Consumer Protection (“DCP”) as “pharmaceutical marketing firms” and provide annual reports to DCP containing various information about their employed “pharmaceutical representatives.” The provisions also require “pharmaceutical representatives” to disclose specific information to prescribing practitioners and pharmacists and provides DCP with the authority to impose penalties for non-compliance.

The nuance lives in the Act’s definitions, and several key questions remain open, including to what extent the Act applies to medical device and technology manufacturers.Continue Reading New Connecticut Law Targets Drug and Device Manufacturers who Employ Sales Representatives for Additional Scrutiny

On February 16, 2023, the Federal Bar Association (FBA) kicked off its sixth annual Qui Tam Conference with its customary “Year in Review” panel, which spotlighted the key False Claims Act (FCA) decisions and developments from 2022. Consistent with the annual press release and FCA recovery statistics issued by the U.S. Department of Justice (DOJ) earlier this month, the panel made clear that despite lower recoveries, 2022 was a busy and important year for FCA enforcement.

For the fiscal year ending September 30, 2022, total FCA recoveries surpassed $2.2 billion. Although this number represented a drop of more than 50% from 2021 when FCA recoveries exceeded $5.7 billion due to several high-profile settlements, 2022 saw a record amount of FCA enforcement activity, with 948 new FCA matters initiated, and 351 settlements and judgments under the FCA: the second-highest number recorded in a single year.Continue Reading FCA enforcement going strong in 2022, particularly in declined health care qui tams

The U.S. Supreme Court on July 26 issued its judgment in the case of Dobbs v. Jackson Women’s Health, officially setting in motion abortion bans in at least four states.

A “judgment” is distinct from the opinion and typically follows issuance of the opinion by about a month. This certified document from the clerk of The Supreme Court is usually simply a formality to allow the Court of Appeals from which the case originated to either close its docket or begin the process of implementing what was ordered on remand.

In the Dobbs case, the Supreme Court issued its opinion (142 S. Ct. 2228) on June 28, but the judgment issued from the clerk’s office to the Fifth Circuit about 30 days later.

Because of the way the trigger bans in at least four states were worded, the issuance of the judgment on July 26 also started the clock on the enforcement of those states’ laws. The trigger laws in Texas, Tennessee, Idaho, and North Dakota will each take effect 30 days after the judgment was issued, i.e., on August 25, 2022.Continue Reading Supreme Court judgment triggers abortion bans in states, legislative action in others

In an opinion authored by Justice Samuel Alito and joined by four of the other conservatives, The Supreme Court in Dobbs v. Jackson Women’s Health Organization held that there is no federal constitutional right to an abortion, and that the decision to regulate abortion should be governed exclusively by state law. In doing so, the decision overruled The Supreme Court’s previous decisions of Roe v. Wade decided in 1973 and Planned Parenthood of Southeastern PA v. Casey decided in 1992.

The Dobbs opinion tracks closely with the previous leaked draft opinion from The Supreme Court and includes concurring opinions from Justice Thomas, Justice Kavanaugh, and Chief Justice Roberts, as well as a dissent by Justices Breyer, Sotomayor and Kagan.

The Chief Justice concurred in the judgment but wrote separately to indicate that he would have only upheld the Mississippi law, and stopped short of overturning the precedents of Roe and Casey.

Decision changes landscape of reproductive health care rights

The Court’s decision, which was effectively 6-3 given the Chief Justice’s concurrence in the judgment, changes the landscape of reproductive health care rights throughout the country.Continue Reading Supreme Court Overturns Roe and Casey

CMS recently issued updated Open Payments Frequently Asked Questions (FAQs). The FAQs are revised periodically to reflect the most up to date program requirements. This latest revision both added and removed FAQs, and also included some general edits.

The following FAQs were added: #2014, #2015, #2016, #2017, #2018, #2019, #2020, #2021 and #2022. Each new FAQ is reproduced in full below. They provide additional guidance regarding topics such as archived reporting years, salaries paid to covered recipients, reporting of device identifiers, valuing long-term device loans, debt forgiveness, and the definition of Nurse Practitioner.

Additionally, the following FAQs have been removed from the FAQ document “due to being no longer applicable, redundant with another FAQ, or of low utility” (according to CMS):
Continue Reading CMS Issues Updated Open Payments FAQs

On March 18, 2022, the Advanced Medical Technology Association (AdvaMed) – the world’s largest trade organization representing medical technology manufacturers – announced revisions to its Code of Ethics on Interactions with Health Care Professionals (AdvaMed Code). The effective date of the revised AdvaMed Code is June 1, 2022.

The AdvaMed Code was updated to address…

The Senate Finance Committee recently called for federal agencies to begin investigating physician owned distributors’ (PODs) alleged noncompliance with the U.S. Physician Payment Sunshine Act (Sunshine Act, or Open Payments). The letter is addressed to the head of the Office of Inspector General (OIG) and the Administrator of the Centers for Medicare & Medicaid Services (CMS). If acted upon, the OIG/CMS investigations could change the landscape of the Sunshine Act in an important way: any resulting public enforcement would most likely be a first.

How the Sunshine Act Applies to PODs

The Sunshine Act requires applicable manufacturers and group purchasing organizations (GPOs) to annually disclose payments or transfers of value to covered recipients (physicians and teaching hospitals), as well as to disclose ownership or investment interests held by U.S. physicians or their immediate family members (with an exception for publicly traded companies).

PODs, which distribute revenue to their physician owners in a variety of ways, generally have obligations to file such reports under the Sunshine Act in one of two ways:

  1. The POD falls within the definition of a “GPO.” CMS defines a GPO as “an entity that (1) Operates in the United States; and (2) Purchases, arranges for or negotiates the purchase of a covered drug or device, biological, or medical supply for a group of individuals or entities, but not solely for use by the entity itself.”1 CMS has been clear that it intends this definition to include PODs.2
  2. The POD qualifies as an “applicable manufacturer.” To the extent that a POD takes title to a product, the Sunshine Act implementing regulations make clear that PODs are “subject to the same requirements as all other applicable manufacturers.”3

Sunshine Enforcement Landscape

Under the Sunshine Act, the knowing failure to disclose reportable payments or ownership interests is punishable by a civil monetary penalty of up to $10,000 for each item not timely reported. However, despite nearly a decade since enactment and five cycles of data reporting (this year will be the sixth), there have been no public enforcement actions. (We must acknowledge, however, the possibility that investigations may be ongoing and merely not yet publicly disclosed, or were resolved without penalty and therefore not publicly announced.)

Interestingly, the March 19, 2019, letter, written by Senators Chuck Grassley and Ron Wyden (Chairman and Ranking Member, respectively, of the U.S. Senate Finance Committee), appears to imply that the authors have knowledge of specific violations by PODs: “It has come to our attention that some physician owned distributorships (PODs) may be failing to disclose physician ownership or investment interest as required by the Physician Payment Sunshine Act (Sunshine Act).”
Continue Reading Senate Committee Calls for Sunshine Act/Open Payments Enforcement