FBA’s 2022 Qui Tam Conference Puts Annual Spotlight on FCA Enforcement Trends and Developments

On February 23, 2022, the Federal Bar Association (FBA) kicked off its fifth annual Qui Tam Conference to highlight key areas for False Claims Act (FCA) enforcement in the coming year. The conference opened with a keynote address by Gregory E. Demske, Chief Counsel to the Inspector General, Department of Health and Human Services (HHS), Office of Inspector General (OIG). Then, a series of panels analyzed the FCA-related developments from the prior year, recent efforts by the U.S. Department of Justice (DOJ) to combat cybersecurity fraud, and some of the schemes promoting alleged telehealth fraud during the ongoing COVID-19 public health emergency. Based on the comments of government speakers, all speaking in their individual capacities, below are key takeaways of what we expect the government to prioritize in 2022:

Pandemic-related fraud and telehealth fraud are key targets

Reinforcing the DOJ’s current enforcement priorities, we expect the DOJ to continue to focus its resources and enforcement activity on where it stands to recover the most dollars swiftly: pandemic-related fraud (e.g., misuse of CARES Act relief funds) and telehealth fraud.

During his keynote address, Demske similarly acknowledged these two areas of focus and added Medicare Advantage, the opioid epidemic, and nursing homes as ongoing priorities for OIG enforcement. Notably, Demske cited OIG’s Data Analytics Group as a robust resource for the agency to identify anomalies in large data sets (e.g., outlier distributions of CARES Act provider relief funds) that may lead to targeted enforcement.

For more information about the fraud and abuse implications of CARES Act provider relief funds, as well as practical tips for navigating the evolving CARES Act regulatory environment, please check this Reed Smith client alert. Continue Reading

OIG approves arrangement involving a testamentary gift to a nonprofit hospital to reduce costs for pediatric patients

On February 4, 2022, the Department of Health and Human Services’ Office of Inspector General (“OIG”) issued a favorable advisory opinion on a proposal by a nonprofit children’s hospital to enter into an arrangement with two individual donors, who intend on making a testamentary gift to the hospital that would be used to reduce and subsidize costs incurred by patients.

The OIG indicated it would not impose administrative sanctions, despite the fact that the proposed arrangement would not fall squarely within any safe harbor under the federal Anti-Kickback Statute (“AKS”) or exception to the definition of “remuneration” for purposes of the beneficiary inducement prohibition (“Beneficiary Inducement CMP”).

Arrangement created restricted endowment fund

Under the proposed arrangement, the hospital would be the beneficiary to a restricted endowment fund established through a testamentary gift from two donors. The fund would be used to subsidize bills for families with children who have an established care relationship with the hospital’s physicians and who receive services provided by the hospital’s programs.

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No Surprises Act Good Faith Estimates: What they are and when you need them

The No Surprises Act, effective as of January 1, 2022, aims to provide patients with accurate information regarding their expected health care spending. In many cases, the new law prevents health care providers from charging patients for costs not reimbursed by insurance. We previously covered the impact of these “balance billing” prohibitions on hospital contracting. However, for the 28 million people in the United States without health insurance coverage or for those seeking care that requires initial self-payment, such as most psychological counseling, these balance billing prohibitions lack relevance because the entire balance is payable by the patient or their representative. The No Surprises Act also includes a potential solution for this group–a mandate that “Good Faith Estimates” (GFEs) be provided to all uninsured or self-pay patients.

Unlike the balance billing restrictions addressed in our prior blog, GFE requirements apply to all health care providers in all settings.  Providers must now generate cost estimates when treating uninsured (including those with insurance who do not want a claim filed) and self-pay patients. Many providers will generate estimates using the same billing systems that existed prior to the No Surprises Act, but some changes may be necessary to meet new regulatory requirements. This post will highlight key provisions relating to GFE, including how to ensure that provider billing practices comply with the new mandate.

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OIG permits retailer to use Medicaid enrollment as qualification for discount program

In the first advisory opinion of 2022, the Department of Health and Human Services’ Office of Inspector General (OIG) allowed Medicaid beneficiaries to qualify for a benefit available to low-income individuals, even though the arrangement would not qualify as a “retailer reward.”

The OIG stated it would not seek enforcement of the federal Anti-Kickback Statute or the Beneficiary Inducements Civil Monetary Penalty Statute (CMP Law) for an arrangement proposed by a web-based retailer that that sells a wide variety of consumer goods and services, and that offers fee-based membership programs with a number of benefits, including pharmacy-related benefits.

The retailer requested an advisory opinion from OIG to allow individuals to use Medicaid enrollment to qualify as eligible for participation in the discount programs that provided certain expedited free shipping, and discounts on food and grocery items. In issuing a favorable advisory opinion, OIG determined that allowing individuals to use their Medicaid enrollment status as a qualification presented a minimal risk of fraud and abuse to federal health programs.

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CMS health care staff vaccination rule enforceable as challenges continue UPDATED

UPDATE 1/20/22:

At the request of the state of Texas, the federal court has dismissed that state’s challenge to the Omnibus Covid-19 Health Care Staff Vaccination Rule. As a result, facilities within that state will now be subject to the requirements of the Rule. The CMS has set the following deadlines for compliance within the state:

Phase 1: As of February 22, 2022, all covered individuals must have either completed the initial dose of a primary series of vaccine or applied for an exemption for religious or health reasons.

Phase 2: As of March 21, 2022, all covered individuals must have either completed the primary series of vaccine or been approved for an exemption for religious or health reasons. The employee need not have passed through the two-week post-vaccination period that generally defines complete vaccination; they need only have received their complete series of vaccines.

The CMS Omnibus COVID-19 Health Care Staff Vaccination Interim Final Rule survived its initial trip to the U.S. Supreme Court on January 13 with a per curiam decision that stayed injunctions placed on the rule by federal district courts in December.

The Supreme Court took the rare action of holding oral argument and then issuing a full opinion (with dissents) on the emergency stay application that had been brought by the Centers for Medicare & Medicaid Services, asking the Court to allow the agency to enforce the rule while challenges to its validity continue in the lower federal courts.

The Court was definitive that the rule as published falls within the authority of the Secretary of Health and Human Services to promulgate based on the statutory authority conferred by Congress through the Social Security Act (SSA). Specifically, the court found that the various statutory provisions within the SSA allow the Secretary to impose conditions of participation on the receipt of Medicare and Medicaid funds that are necessary in the interest of the health and safety of individuals who furnish services reimbursable under those programs and the federal program beneficiaries that they serve.

However, the Court’s opinion still leaves some questions unanswered about whether the rule will be enforceable in Texas and whether eventually some facilities may be exempted.

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HHS issues Guidance on permitted HIPAA disclosures to prevent gun violence

According to the Centers for Disease Control and Prevention, firearm injuries are a serious public health problem in the United States. To combat this problem, many states have passed extreme risk protection order (“ERPO”) laws, otherwise known as “red flag laws.”

ERPO laws allow various individuals, including family members, health care providers, and law enforcement officers, to petition for court orders to temporarily prevent people in crisis and who pose a danger to themselves or others from accessing firearms. ERPOs generally require affidavits from witnesses or the petitioner to support the application. In some instances, those affidavits could rely on protected health information (“PHI”) that is prohibited from unauthorized disclosure subject to the HIPAA Privacy Rule.

On December 20, 2021, the Department of Health and Human Services (“HHS”) issued non-binding guidance (“Guidance”) to clarify the extent to which the HIPAA Privacy Rule permits regulated entities to disclose PHI” to help prevent individuals in crisis from temporarily accessing firearms. The Guidance explains the three circumstances under which the Privacy Rule allows PHI to be disclosed by witnesses and petitioners in ERPO proceedings.

Those three circumstances are when the disclosure of PHI is:

  • Required by law (e.g., by state or federal statute or regulation, or by court order or subpoena) and complies with said law.
  • In response to a court or administrative tribunal order, subpoena, discovery request, or other lawful process in the course of a judicial or administrative proceeding. These disclosures can only be made within certain conditions as outlined in the Privacy Rule; for example:
    • Where a court order compels a provider to release an individual’s PHI to support an ERPO, the provider may only disclose the PHI that is authorized by the court order.
    • The Privacy Rule’s “minimum necessary” standard requires covered entities and business associates to make reasonable efforts to limit most uses, disclosures, and requests to the “minimum necessary” PHI to accomplish the intended purpose of the use, disclosure, or request.
  • Necessary to prevent or lessen a serious and imminent threat to the health or safety of a person or the public. As with responding to court/administrative orders, the health care provider must follow the “minimum necessary” standard.

In approving the guidance, HHS Secretary Xavier Becerra stated: “Too often, communities bear the weight of heartbreaking tragedies caused by the epidemic of gun violence in our country,” and that the guidance is an “important step . . . towards protecting communities from gun violence by allowing law enforcement, concerned family members, or others to prevent a person in crisis from accessing fire arms.”

Reed Smith will continue to track developments related to this guidance and other developments involving the HIPAA Privacy Rule. Please reach out to the health care attorneys at Reed Smith if you have any questions about this Guidance or any related inquiries.

Pending investigations/cases no longer prevent OIG advisory opinions

The Department of Health and Human Services’ Office of Inspector General (OIG) will be lifting its long-standing refusal to accept requests for advisory opinions if the request describes a course of action that is “the same or substantially the same” as a course of action that is either under investigation by OIG, or is the subject of a proceeding involving a governmental agency. As of February 10, 2022, a new final rule issued by the OIG will do away with that restriction and allow entities to request an advisory opinion, even if the requested course of action is the same or substantially the same as one under investigation or is the subject of a proceeding involving a governmental agency. Previously, the OIG’s policy deliberately left unsettled many fraud-and-abuse issues implicated by pending investigations or litigation.

As the final rule points out, however, seeking clarity during a pending investigation or litigation will carry risk: the mere fact that a course of action is the subject of a qui tam case or under investigation “will weigh against the issuance of a favorable advisory opinion because such circumstances generally indicate that the arrangement does not present a sufficiently low risk of fraud and abuse.”

This warning seems to assume that all investigations and litigation have equal merit, which is certainly not the case with matters initiated by self-appointed whistle-blowers under the False Claims Act, who often bring cases with very little merit. Nevertheless, the new rule provides flexibility, and provides opportunities for the OIG to provide guidance to health care companies seeking to develop business opportunities that, for example, a long-pending and/or declined qui tam case may have stymied.

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Future of discount safe harbor for prescription drugs remains uncertain

In November 2020, four months after the Trump Administration issued a series of Executive Orders reiterating its policy goals on reducing the costs to consumers for prescription drugs and directing the Department of Health and Human Services, Office of Inspector General (“HHS-OIG”) to implement those policy objectives, HHS-OIG issued a Final Rule to amend certain provisions in the safe harbor regulations under the Federal Anti-Kickback Statute (“AKS”). The Final Rule included three key provisions:

  1. Elimination of discount safe harbor protection for manufacturer rebates paid directly, or indirectly through a pharmacy benefit manager (“PBM”) to Medicare Part D or Medicare Advantage plans (the “Rebate Rule”);
  2. Creation of a new safe harbor to protect point-of-sale (“POS”) price reductions paid by manufacturers to Medicare Part D plans, Medicare Advantage plans, and Medicaid managed care organizations (“MCOs”); and
  3. Creation of a new safe harbor to protect fair-market-value (FMV) service fees paid to PBMs by manufacturers.

The Final Rule imposed a January 1, 2022, effective date for the Rebate Rule. However, in January 2021, two months after issuance of the Final Rule and in connection to a lawsuit brought by the Pharmaceutical Care Management Association challenging the Rebate Rule, the Biden Administration agreed to delay the Rebate Rule’s effective date to January 1, 2023, as reflected in an Order by the United States District Court for the District of Columbia.

In the intervening time though, Congress passed the Infrastructure Investment and Jobs Act (the “Infrastructure Act”). That law, signed by President Biden on November 15, 2021, further delayed implementation of the Rebate Rule to January 2026. Thus the rule, which many thought would be eliminated as part of paying for the cost of the infrastructure bill, was still alive, if only delayed until the middle of the next presidential term.

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New and improved proposed national coverage determination on screening for lung cancer with low dose CT

The Centers for Medicare and Medicaid Services (CMS) is proposing significant and important modifications to its National Coverage Determination (NCD): Screening for Lung Cancer with Low Dose Computed Tomography (LDCT). Medicare pays for lung cancer screening, counseling, and shared decision-making visits, and for an annual screening for lung cancer with low dose computed tomography as a preventive service benefit under the Medicare program. CMS issued its NCD in 2015 initiating this screening benefit, but stakeholders have observed that many of the features of the initial NCD served as a barrier to the effectiveness of this screening program. The proposed NCD makes numerous improvements to this program and eliminates many of the barriers to qualified patients’ ability to gain access to important LDCT lung cancer screenings.

Last year, a formal joint request to reconsider the NCD was submitted to CMS by the GO2 Foundation for Lung Cancer, The Society of Thoracic Surgeons, and American College of Radiology (ACR), and CMS received numerous comments from various stakeholders, including from the Association for Quality Imaging. This new proposed NCD is in response to that request and the comments from stakeholders.

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SCOTUS to examine “good faith” defense in criminal opioid prescription cases

On Nov. 5, 2021, the U.S. Supreme Court consolidated and granted certiorari to a pair of cases involving physicians who were criminally prosecuted for prescribing controlled substances (specifically, opioids) in violation of the Section 841(a)(1) of the Controlled Substances Act (“CSA”).  The consolidated cases—Ruan v. United States and Kahn v. United States—present questions regarding the requisite state of mind for a jury to convict a prescriber under the CSA and the availability and nature of a “good faith” defense to criminal liability under the statute.  By agreeing to hear these cases, the Court positions itself to resolve, or at minimum weigh in on, the current circuit splits regarding these issues.

Under the CSA, as interpreted by the Supreme Court in United States v. Moore, 423 U.S. 122 (1975), practitioners who are registered to legally prescribe controlled substances can nonetheless be found to have violated the CSA if they prescribe in a manner that “fall[s] outside the usual course of professional practice.”  However, petitioners argue that the state of mind necessary to convict varies by circuit.  Judicial willingness to issue a specific jury instruction on the availability of a “good faith” defense similarly varies.

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CMS issues interim final rule on SARS-CoV-2 vaccination for health care workers

The Centers for Medicare and Medicaid Services (CMS) has published an interim final rule that changed the conditions of participation in Medicare and Medicaid to require vaccination of certain healthcare workers. The rule, title “Omnibus COVID-19 Health Care Staff Vaccination Rule” was published in the Federal Register on November 5, 2021.

The rule requires all employees of certain health care entities that are regulated by CMS to obtain their first vaccination shot or apply for a religious or other health or disability related exemption by December 6, 2021. Additionally, the rule requires either completed vaccination series or approved exemption by January 4, 2022.

Covered Entities and Individuals

The rule is not a blanket vaccine mandate for all health care workers and Medicare sites of service as had been speculated in various media reports. Instead the rule is limited to only those entities who are surveyed by CMS and have Conditions of Participation, Conditions for Coverage, or Requirements for Participation in the Medicare and Medicaid programs.

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HHS-OIG approves uniform chiropractic discount program for federal beneficiaries

Andrew and Quynh are law clerks at the firm and their work is supervised by licensed attorneys. Their admission to – respectively – the Washington, D.C. and California bar is pending.

On October 4, 2021, the Department of Health and Human Services Office of Inspector General (OIG) issued a favorable advisory opinion on a proposal by a chiropractic clinic operator to extend an existing discount program to federal health plan beneficiaries.

The requesting clinics initially offered various discount programs to their privately insured or self-paid patients, but not to Federal health care program beneficiaries. Many healthcare providers are hesitant to give federal beneficiaries access to certain discount programs because of concern that doing so would run afoul Federal anti-kickback and beneficiary inducement statutes. Specifically, the concern is that if the beneficiaries receive discounts, clinics would provide patients with something of value—a discount on self-paid services—in exchange for the option to seek federally reimbursed services through a specific provider.

To address these concerns, the chiropractic clinic operator requested an advisory opinion from OIG on a new discount model that would extend discount programs to Federal health care program beneficiaries. While OIG found that the proposed discount program could result in prohibited compensation to patients, it also stated that it would not pursue an enforcement action based on the nature of the requesting clinics’ specific discount model.

Although only the requesting chiropractic clinic operator may rely on this opinion, OIG’s analysis implies that equalizing discount rates across federally reimbursable and non-reimbursable chiropractic services reduces legal risk under anti-kickback and beneficiary inducement statutes. Providers offering similar discount programs should take note to inform their compliance strategies. Continue Reading

FDA codifies requirements for the medical device De Novo classification process

On October 5, 2021, the U.S. Food and Drug Administration (“FDA”) published a final rule to establish requirements for the medical device De Novo classification process under the Federal Food, Drug, and Cosmetic Act.

The final rule, which takes effect January 3, 2022, comes nearly three years after the FDA first proposed it and, notably, sets forth the procedures and criteria for a manufacturer’s voluntary submission and withdrawal of a De Novo request.  Additionally, the rule clarifies how agency staff intends to accept and review the requests, as well as how FDA staff will determine whether to grant or decline the requests.  Finally, the rule also provides a way for combination products to use the De Novo pathway.

Useful for novel, low risk medical devices

The implementation of the De Novo classification process is especially significant for manufacturers of novel, low-risk medical devices.  Prior to the De Novo program, which was created in 1997, any device that lacked a predicate automatically became designated as a Class III device and, therefore, required premarket approval to legally reach the market.  Because this premarket pathway is designed to regulate the riskiest category of devices, manufacturers typically had to endure longer than anticipated wait times for approval of their low-risk devices.

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FTC warns non-HIPAA covered entities to comply with Health Breach Notification Rule

In an increasingly digital and interconnected world, the privacy and security of personal information is a significant concern. Applications and connected devices collect a bevy of personal information from consumers, including sensitive information about consumers’ health. Because of the sensitivity of health information, the United States has developed a variety of legal protections and enforcement mechanisms regarding the privacy and security of health information, including state and federal law, regulations, and federal agency guidance. At times, these legal protections and enforcement mechanisms intersect, bringing the enforcement powers of multiple federal regulations and agencies to bear to protect the privacy and security of consumers’ health information.

On September 15, 2021, the Federal Trade Commission (“FTC”) released a policy statement addressing the scope of the FTC’s Health Breach Notification Rule with respect to applications and connected devices that collect health information. At first glance, the FTC’s Health Breach Notification Rule and the privacy provisions of the Health Insurance Portability and Accountability Act (“HIPAA”) and its implementing regulations appear to operate in similar spaces, both regulating access to health information. However, HIPAA and the FTC Rule apply to different entities. HIPAA applies to covered entities and their business associates (e.g. health care providers that submit claims electronically, health plans, and health care clearinghouses, and third parties that provide services for or on behalf these types of organizations that generally require access to protected health information) and the FTC Rule applies to businesses not regulated by HIPAA. Therefore, while the regulations operate in similar spaces, the scope of the regulations differs.

For further discussion on the FTC’s policy statement, the Health Breach Notification Rule, and its differentiation from HIPAA, please see our post on Reed Smith’s Technology Law Dispatch.

Biden administration looks to centralize pandemic response in preparedness plan

In a report released on September 2, 2021 the Biden administration announced its plan to help prepare the nation for future pandemic threats. In the report, named American Pandemic Preparedness: Transforming Our Capabilities, the administration described what it sees as the vital need to change the nation’s capabilities to better respond to any future pandemics or biological threats.

The report organizes the proposed actions under five pillars: (1) Transforming Medical Defenses, (2) Ensuring Situational Awareness, (3) Strengthening Public Health Systems, (4) Building Core Capabilities, and (5) Managing the Mission

The report calls for action to “not just refill our stockpiles, but also to transform our capabilities.” The report compares the proposed plan to the Apollo space program because of the importance that the administration is placing on the efforts as well as the proposed coordination among agencies and departments.

Ultimately, the administration is planning to create a centralized “mission control” that would work to coordinate resources and expertise from multiple agencies within the Department of Health and Human Services like the National Institutes of Health, Centers for Disease Control and Prevention, Biomedical Advanced Research and Development Authority (a component of the office of the Assistant Secretary for Preparedness and Response), Food and Drug Administration and the Centers for Medicare and Medicare Services, along with other cabinet-level departments such as the Department of Defense, Department of Energy, and the Veterans Administration.

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DOJ revises approach to publication and enforcement of guidance documents

On July 1, 2021, the Department of Justice (DOJ) released a memorandum signed by Attorney General Merrick Garland regarding the issuance and use of guidance documents. Addressed to the heads of all DOJ components, the memorandum rescinds two previous DOJ memoranda and outlines the principles governing the DOJ’s revised approach in evaluating guidance documents.

2017 Memorandum

On November 16, 2017, then Attorney General Jeff Sessions published a memorandum entitled “Prohibition on Improper Guidance Documents” (the “2017 Memorandum”). The 2017 Memorandum sought to address instances in which guidance documents published by the DOJ were being used to “effectively bind private parties without undergoing the [notice-and-comment] rulemaking process.” Under the 2017 Memorandum, Attorney General Sessions prohibited publication of guidance documents “that purport to create rights or obligations binding on persons or entities outside the Executive Branch (including state, local and tribal governments).”  The 2017 Memorandum directed the DOJ to also adhere to several principles in constructing and publishing guidance documents. These included avoiding the use of mandatory language, specifically noting that voluntary standard non-compliance would not result in enforcement action and including unambiguous statements that published guidance documents were not legally-binding final agency actions.

Brand Memo

Following the 2017 Memorandum, then Associate Attorney General Rachel Brand released a memorandum entitled “Limiting Use of Agency Guidance Documents In Affirmative Civil Enforcement Cases” (the “Brand Memo”). The Brand Memo built upon the publication principles outlined in the 2017 Memorandum and extended them to the DOJ’s legal actions, preventing DOJ lawyers from utilizing non-compliance with guidance documents as a basis for filing a civil lawsuit. While DOJ lawyers could still use guidance documents read by a party as evidence that such party had knowledge of a legal mandate, “that a party fails to comply with agency guidance [documents] expanding upon statutory or regulatory requirements does not mean that the party violated those underlying legal requirements.”

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Seventh Circuit adopts Safeco objective reasonableness standard in the context of false claims act cases

On August 12, 2021, the Seventh Circuit joined the Third, Eighth, Ninth, and D.C. Circuits in holding that the “objective reasonableness” standard for determinations of scienter, as set forth by the Supreme Court in Safeco Insurance Co. of America v. Burr, 551 U.S. 47, 70 (2007), applies in the context of False Claims Act (FCA) litigation.  In doing so, the Seventh Circuit observed that, under Safeco, a defendant cannot possess the requisite scienter under the FCA if: (1) it has an objectively reasonable reading of the statute or regulation; and (2) there was no authoritative guidance warning against its view.  This case has significant implications for defendants in FCA litigation by finding that an objectively reasonable interpretation of the law will defeat allegations of false claims.

Further, the decision is the latest victory in a spate of cases brought by the plaintiffs’ bar claiming that pharmacies are required to report special prices—such as membership club prices or matched competitor prices—as their usual and customary (U&C) prices. Virtually every pharmacy that has operated a membership club has faced scrutiny through actions under the FCA and consumer-class actions. The Seventh Circuit’s decision comes in the wake of the recent jury verdict in favor of CVS in the matter of Carl Washington (formerly known as Corcoran) et al. v. CVS Pharmacy, Inc., No. 15-cv-03504 (N.D. Ca. Jun. 24, 2021).   This victory will support pharmacies’ defenses in other similar litigation alleging the submission of false U&C prices, particularly when the alleged false conduct occurred before 2016, given that the Seventh Circuit found that reporting retail prices—as opposed to special prices such as price matches—was an objectively reasonable approach to U&C reporting.

The Lower Court’s Decision: Continue Reading

No Surprises Act: Time to revisit balance billing prohibitions in hospital-based physician professional services agreements with hospitals?

Effective January 1, 2022, common prohibitions against “balance billing” under hospital professional service contracts will likely become moot due to certain superseding federal prohibitions under the federal No Surprises Act enacted December 27, 2020.  As detailed below, certain hospital-based physicians, including radiologists, anesthesiologists, and pathologists, should keep these new federal billing prohibitions in mind when entering into new hospital professional services agreements (“PSAs”) and revisit their existing agreements to determine whether any changes are appropriate.

“No Surprises Act” Background.

The federal government’s growing focus on surprise medical bills reached a new high on July 1, 2021, when the Department of Health and Human Services (“HHS“), along with the Department of Labor and Department of the Treasury, released a consumer-focused interim final rule with comment period taking aim at surprise billing and excessive cost-sharing practices.  The rule, which also cites an ineffective “patchwork” of consumer protections under existing state laws, represents the first implementing regulation under the No Surprises Act.  Both the rule and the statute become effective on or after January 1, 2022.

Balance Billing Prohibition.

This article discusses two distinct but interwoven billing procedures that deserve clarification: “surprise billing” and “balance billing.”

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FDA clarifies evidence and knowledge requirements in intended use final rule

On August 2, 2021, the U.S. Food and Drug Administration (“FDA”)  published a final rule amending existing regulations (21 C.F.R. § 201.128 and 21 CFR § 801.4) that describe the types of evidence relevant to determine a drug or device’s intended use under the Food, Drug and Cosmetic Act (“FDCA”).  See 86 Fed. Reg. 41,384–85.

This final rule, which takes effect as of September 1, 2021, withdraws and replaces a final rule that FDA promulgated on January 9, 2017, but which never became effective due to an outcry concerning a problematic knowledge provision that was contrary to the statutory scheme of the FDCA and to physicians’ autonomy to use FDA-approved products in an off-label manner.

Prior to the 2021 final rule, FDA issued a proposed rule on September 23, 2020 that eliminated the 2017 rule’s knowledge provision and was much more aligned with FDCA intent and current FDA policy and practice.  FDA maintains, and we agree, that August 2021 final rule remains largely unchanged from the 2020 proposed language.

The following is a review of some important changes that FDA regulated entities should take note of as they develop and market FDA regulated products:

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HHS authorizes pharmacy technicians and interns to administer flu vaccines

The flurry of Covid-19 vaccine administration that marked the mid spring to early summer resulting in millions of doses administered daily has given way to a steady stream of approximately 700,000 doses of vaccine administered daily, according to some analysis of CDC data.

But now that August has arrived so has the need for regularly scheduled pediatric vaccines to be administered as schools open up again. Also, next month marks the beginning of flu season and its flood of vaccine requests. All of this demand for vaccine administration could threaten to overwhelm some of the pharmacies that have typically been a destination for quick and easy vaccine administration.

On August 4, the HHS officially amended the PREP Act declaration on medical countermeasures against Covid-19 in an effort to stave off any bottle-necking at pharmacies that administer flu vaccines. The declaration amendment, which took immediate effect and last until the end of the public health emergency officially included qualified pharmacy technicians and interns  as “qualified persons” permitted to administer seasonal influenza vaccines to adults age 19 and older. Additionally, the amendment officially identifies the same techs and interns as authorized to administer the Covid-19 vaccine as well as pediatric vaccines that are on the Advisory Committee on Immunization Practices (ACIP) schedule.

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