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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?

In a final rule published on April 26, the U.S. Department of Health and Human Services (“HHS”) amends the HIPAA Privacy Rule to bolster protections for individuals’ reproductive health information. This final rule comes almost exactly a year after HHS published its draft rule on the subject.

The rule is part of the Biden administration’s effort to address the Supreme Court’s 2022 decision in Dobbs v. Jackson Women’s Health Organization. Dobbs’ reversal of Roe v. Wade resulted in a patchwork of state laws governing abortion, some of which require or permit health care providers to release personal information about reproductive health care to state authorities for patients who sought an abortion.

The rule is scheduled to take effect on June 25, 2024 and most provisions will be enforceable as of December 23, 2024. Below, we summarize in more detail some of the notable changes to the HIPAA Privacy Rule. Continue Reading HHS Modifies HIPAA Privacy Rule to Shield Reproductive Health Information from Third Party Access

Making good on its promises to enhance oversight of Medicare Advantage (MA) and Medicare Part D plans, the Centers for Medicare and Medicaid Services (CMS) has submitted for public inspection its Contract Year 2025 Final Rule. The final rule, published in the Federal Register on April 23 and taking effect on June 3, 2024, codifies existing MA and Part D sub-regulatory guidance, adds a number of new policies for Contract Year 2025 and implements provisions of the Bipartisan Budget Act of 2018 (BBA) and the Consolidated Appropriations Act, 2023 (CAA 2023).

The rule contains many substantive changes to current MA and Part D requirements. The most impactful sections of the rule include: (1) changes to the Part D formulary, including substitutions of biosimilar biological products; (2) modification of agent and broker compensation requirements for MA plans; (3) codification of consent requirements within the MA regulations for the sharing of personal beneficiary data between third party marketing organizations (TPMOs); (4) standardization of the MA Risk Adjustment Data Validation Appeals Process; (5) changes to the Part D medication therapy management program eligibility criteria; (6) changes to contracting standards and limitations on dual-eligible special needs plans; and (7) changes to the network adequacy standards within MA to add a new facility-specialty type called “Outpatient Behavioral Health”.

Also notable is what CMS does not address in the rule – CMS declined to establish what qualifies as an identification of an overpayment that needs to be returned to avoid False Claims Act violations. That potential standard has been in the works since the Contract Year 2023 rule, but stakeholders have to keep waiting as CMS notes that it may be the subject of a future rulemaking.Continue Reading Are you listening, Medicare Advantage and Medicare Part D Plans? It’s CMS (Again)

The U.S. Supreme Court heard arguments yesterday in the two consolidated cases challenging the U.S. Food and Drug Administration (FDA) approval of mifepristone. Throughout the questioning, the Justices focused on both the standing of the plaintiffs to bring the cases and on the suitability of the remedy sought.

The Court is expected to rule on the case in late June or early July. Although the Court has a 6-3 majority of justices appointed by Republican presidents, the questioning by the justices and the areas that they focused on seemed to indicate that any judicially-imposed limitations on both the FDA’s approval of the drug and the FDA’s current restrictions on the dispensing of mifepristone may be narrow.

At different times during the argument, both liberal and conservative Justices mixed together in the thrust of their questions in a way that could result in this case being a close decision with many different opinions or even resulting in a majority decision that would allow continued dispensation of the drug due to standing considerations.Continue Reading SCOTUS Arguments on Mifepristone Cases Focus on Standing and Remedy

Building on prior requests for information and an increased focus on Medicare Advantage oversight, the Centers for Medicare and Medicaid Services (CMS) has issued another request for information (RFI) seeking input on data needed for Medicare Part C, also known as the Medicare Advantage (MA) program. The goal of this RFI, which was published in the Federal Register on January 30, 2024, is to provide CMS with feedback on both the format and types of data that will allow CMS to have better insight into MA organizations and their operations and to consider future rulemaking. Responses to the RFI are due by May 29, 2024.

This RFI is an extension of CMS’s General MA RFI published in August 2022, which generated over 4,000 responses from various stakeholders. The 2024 RFI broadly seeks input on “all aspects of data related to the MA program—both data not currently collected as well as data currently collected.” The eventual goal is to make MA data commensurate with data available from Medicare Parts A and B to ensure appropriate transparency into MA organizations and to address perceived shortcomings through additional rulemaking.Continue Reading CMS Issues RFI for Medicare Advantage Data

UPDATE: Late in the evening of September 28, the House defeated H.R. 4368 by a vote of 191-237, with 27 Republicans voting against the bill. It was the only one of the four appropriations bills to fail.

Editor’s Note: This post was originally published at 11:15 PM EST on September 27, 2023 while the House of Representatives was still voting on amendments to other appropriations bills.

A group of conservative Republicans in the House of Representatives’ proposed Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2024 (H.R. 4368) would rescind the Food and Drug Administration (FDA)’s January 2023 change to the Risk Evaluation and Mitigation Strategy (REMS) program to allow certified retail pharmacies to dispense mifepristone as part of a medication abortion regimen. The proposal would effectively limit retail pharmacy dispensing of the only medication that is labeled for medication abortion.Continue Reading GOP House Bill Proposes Repeal of Retail Pharmacy Dispensing of Mifepristone

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

On March 27, 2023, two United States Senators, Bill Cassidy, MD (R-LA) and Jeff Merkley (D-OR) introduced the bipartisan No Unreasonable Payments, Coding, or Diagnoses for the Elderly (“No UPCODE”) Act to address perceived financial incentives inherent in the Medicare Advantage patient risk scoring reimbursement methodology. Senator Merkley alleges that the current reimbursement…

After a long line of opinions scrutinizing the use of rewards programs offered by providers, the Department of Health and Human Services’ Office of Inspector General (“OIG”) issued Advisory Opinion 22-16 on August 19, 2022– a favorable opinion for the provision of gift cards to Medicare Advantage (“MA’) plan enrollees who complete educational modules as part of an online surgical treatment learning tool.

The opinion adds flexibility to existing opinions on gift cards and patient engagement programs and, while binding only on the requestor, provides insight into the OIG’s evolving view of these programs.Continue Reading OIG Approves Rewards Program for Medicare Advantage Organizations

Shortly after President Trump declared a national emergency related to COVID-19, CMS issued blanket waivers under section 1135 of the Social Security Act that are intended to ensure there are sufficient health care items and services available to meet the increased need, as well as reduce related administrative burdens on health care providers.

Our comprehensive…

The Centers for Disease Control and Prevention (CDC) recently released official diagnosis coding guidance for health care encounters and deaths related to the 2019 novel coronavirus (COVID-19), potentially in anticipation of more frequent cases in the United States. The guidance identifies specific ICD-10-CM codes to be used to code encounters.

CDC advises that patients presenting…

According to the U.S. Centers for Disease Control and Prevention (CDC), although there have been imported cases of Covid-19 detected in the United States, “at this time, the virus is NOT currently spreading in the community in the United States.”[1]  However, on Tuesday, February 25, 2020, Nancy Messonier, the CDC’s Director of National Center for Immunization and Respiratory Diseases, urged American businesses and families to start preparing for the possibility of a large outbreak, noting that the virus spread quickly once it appeared in other countries.[2]  Although the World Health Organization (WHO) still has not called Covid-19 a pandemic, Mike Ryan, head of WHO’s health emergencies program, suggests that countries need to be doing everything they can to contain the virus, at least in order to buy some time.[3]

To that end, the CDC has been tapping some of its quarantine powers.  CDC has authority to oversee quarantine and isolation of persons who carry communicable diseases, derived from the Commerce Clause of the Constitution, and codified in section 361 of the Public Health Service Act (42 U.S.C. § 264).[4]  The CDC’s authority, however, is limited to persons arriving in the United States or traveling between states.  Each state has its own laws regarding quarantine powers, and the CDC also relies on state authorities to implement and enforce quarantine orders.  There is some risk that state health authorities could act in a manner that is inconsistent with the intentions of the CDC (to be more or less restrictive).  The CDC has not issued a large-scale isolation and quarantine since the Spanish influenza pandemic of 1918-1919.[5]Continue Reading Potential Tensions Lie Ahead Between Federal and State Authorities Over the Application of CDC Quarantine Powers

The novel coronavirus (2019-nCoV, also known as “SARS-CoV-2”) has been declared a public health emergency (PHE) by the U.S. Department of Health and Human Services (HHS).  This designation authorizes HHS to direct funding to: (1) enable the dissemination of information about the virus; (2) encourage research and development of diagnostic and treatment techniques; (3) improve…

A top Department of Justice (DOJ) official has recently issued a much-anticipated memo explaining the factors DOJ will consider when deciding whether to dismiss FCA suits brought by relators in qui tam cases. Specifically, the memo by Michael Granston, Director of the Commercial Litigation Branch within the DOJ Fraud Section sets forth seven non-exhaustive factors…

Medicare providers with pending cases at the administrative law judge (“ALJ”) level received positive news last week as a federal judge for the United States District Court for the District of Columbia (the “Court”) granted summary judgment in favor of the American Hospital Association (“AHA”) in its case against the Secretary of the Department of Health and Human Services (“HHS”).1

Since 2014, AHA has been litigating with HHS regarding HHS’ failure to meet statutorily-imposed deadlines for Medicare administrative appeals.2 On remand from the D.C. Circuit3 with instructions for further proceedings, the Court determined that there were equitable grounds to issue a writ of mandamus. The Court reasoned that even with certain good faith efforts made by HHS to reduce the backlog (such as a Proposed Rule4 issued this past summer), the appeals backlog was “still unacceptably high.”5 In its decision, the Court found that HHS did not “point to any categorically new administrative actions” and continues “to promise the elimination of the backlog only ‘with legislative action’ — a significant caveat.”6Continue Reading Court Orders HHS to Fix the Medicare Appeals Backlog by the End of 2020

Observers are digesting what the Trump Administration will mean for the health care and life sciences industry.  Forecasting is more challenging for this incoming Administration than most given the relatively sparse policy details released during the campaign and the lack of a government service record to examine for clues.  Today President-elect Trump’s transition team released a one-page statement on health care policy, but many questions remain.  Nevertheless, we offer below our initial observations and issues to watch in the months to come.

  • Potential Sea Change. Uncertainty is, as some like to say, the “obvious comment” that characterizes the whole prospective Trump Administration.  Other than an intended “repeal and replacement” of the Affordable Care Act (ACA), President-elect Trump has provided relatively few details on a proposed health care agenda.  Until these policies are fleshed-out, expect an environment where some business decisions and investments may be delayed, with a resulting impact on merger and acquisition activity. That said, other transactions may become more likely, as the threat of new restrictions under a Clinton administration are removed, along with the prospect of potential regulatory relief under a Republican-controlled federal government.
  • Affordable Care Act Repeal and Replacement.  Trump has repeatedly indicated his desire to repeal and replace the ACA, including a vow to summon Congress into a special session for this task.  If the law is repealed, however, what would take its place, and how would Congress address the roughly 20 million Americans currently covered in some way under the ACA (and the potential rise in uncompensated care costs that also would result)?  Despite the call for repeal, certain parts of the law are popular. For instance, President-elect Trump noted on the campaign trail that he was in support of the ACA’s prohibition against the use of pre-existing health conditions to deny coverage (or as a basis for premium-setting).  Other proposals offered by Trump as candidate include allowing for the sale of health insurance across state lines as long as plans comply with state requirements, various tax benefits, and more transparency in health care pricing.  In today’s policy statement, President-elect Trump added support for high-risk pools, which he characterizes as “a proven approach to ensuring access to health insurance coverage for individuals who have significant medical expenses and who have not maintained continuous coverage.”  Congressional Republicans have offered a number of alternatives that are likely to be a springboard for reform, most notably the “Better Way” plan proposed by House Speaker Paul Ryan.  In fact, according to the Speaker’s office, “in the 114th Congress alone, House Republicans have introduced more than 400 individual bills that would improve our nation’s health care system” – demonstrating that Congress is not reticent about legislating on health care issues.  The new Senate’s Republican majority will not have the 60 votes required to override a potential Democratic filibuster of legislation to fully repeal the law. While Congress could use budget reconciliation authority (which requires only 50 votes in the Senate) to make significant changes, the drawn-out pace of the budget process may not satisfy those who want quick action in this area.  Regardless of the legislative vehicle, after years of calling for Obamacare repeal while President Obama was in office, the Republican Congress will be under tremendous pressure to act quickly – even if it is a “down-payment” on reform — now that Republicans will control the presidency and the Congress.

Continue Reading Looking Ahead to a Trump Administration: Health Care and Life Sciences Industry Perspectives

Today the Department of Justice published an interim final rule with request for comments that applies an inflation adjustment to civil monetary penalty (CMP) amounts assessed by the Department, as mandated by the Bipartisan Budget Act of 2015.  Notably, the new maximum CMP for False Claims Act (FCA) violations under 31 U.S.C. 3729(a) is…

The Centers for Medicare & Medicaid Services (“CMS”) released today the long awaited final rule clarifying the statutory requirement under the Affordable Care Act for providers and suppliers to report and return Medicare overpayments within 60 days (the “Overpayment Final Rule”).  The Rule only applies to Medicare Part A and Part B providers and suppliers and will be effective 30 days after publication, which will occur tomorrow. Noteworthy provisions of the Overpayment Final Rule include:
Continue Reading CMS Eases 60-Day Overpayment Requirement in Final Rule While Raising New Questions

While attention has been focused on Medicare physician payment data released by CMS yesterday, upcoming Sunshine Act data will shine a new spotlight on financial relationships between physicians and pharmaceutical and medical device companies – with potential False Claims Act (FCA) implications.

Specifically, last week marked the deadline for pharmaceutical and medical device manufacturers and group purchasing organizations (GPOs) to register with and submit aggregate 2013 payment and investment interest data to the Centers for Medicare & Medicaid Services (CMS) on certain financial relationships between themselves and physicians and teaching hospitals, as required by the Physician Payment Sunshine Act. In May, manufacturers and GPOs will be required to submit to CMS detailed 2013 payment data. With some exceptions, CMS will be making these data public by September 1, 2014. While the publicly-available data are intended to provide more transparency for patients, to allow them to have a better understanding of the financial relationships between physicians and pharmaceutical and medical device companies, patients will certainly not be the only group interested in this public information. It is likely that the Department of Health and Human Services Office of the Inspector General, Department of Justice, and relators’ attorneys will utilize these data to initiate investigations and support complaints under the federal FCA.
Continue Reading Will Physician Payment Sunshine Act Data Usher in a New Era of False Claims Act Litigation?

The Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) issued an updated “Special Advisory Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs ” (Updated Bulletin) on May 8, 2013, answering certain questions the OIG has received from providers and suppliers regarding exclusions and addressing other issues related to exclusions. The Updated Bulletin follows on a Special Advisory Bulletin regarding the same topic published by the OIG in September 1999. Since the OIG issued the 1999 Special Advisory Bulletin, Congress has enacted various statutory provisions that have strengthened the OIG’s authority to exclude individuals from federal health care programs and impose civil monetary penalties (CMPs) related to exclusion. The OIG states that in the development of the Updated Bulletin, it also relied on comments it received in response to a 2010 solicitation of comments on this topic.

The Updated Bulletin reflects a continuation of the OIG’s expansive view of the scope of the federal exclusion authorities, particularly relating to the prohibition against employing or contracting with excluded individuals and entities. The bulletin explains the statutory background of the exclusion and CMP authorities; describes the effect of exclusion; emphasizes the implications of violations of exclusion by an excluded individual and the implications for violating the prohibition against employment or contracting with an excluded individual for the furnishing of items or services paid for by a federal health care program; explains the scope of what conduct involving excluded individuals may lead to overpayment liability and CMPs; and provides guidance to providers and suppliers regarding how to screen for excluded individuals.Continue Reading Updated OIG Bulletin on the Effect of Exclusion from Participation in Federal Health Care Programs