The Occupational Safety and Health Administration (“OSHA”) has reopened the comment period on its June 2021 interim final rule establishing an Emergency Temporary Standard governing occupational exposure to COVID-19 in healthcare settings, codified at 29 C.F.R. § 1910 Subpart U (“Healthcare ETS”).

While this reopening reaches certain questions and issues presented by OSHA and not the entire rule, the reopening of the comment period signals the beginning of the effort to finalize a permanent standard by OSHA only three months after the agency withdrew the Healthcare ETS. The Healthcare ETS required healthcare organizations to develop a COVID-19 plan for its workplace that included health screening and management, masking, distancing, and support for vaccination. The Healthcare ETS was withdrawn in December 2021 because OSHA determined that its efforts to establish a permanent standard would exceed the six-month time period allowed under the Occupational Safety and Health Act.

The notice reopening the comment period gives stakeholders both an early view into potential regulatory outcomes of the final rule as well as a series of information requests. Continue Reading OSHA reopens comments on COVID-19 Healthcare Emergency Temporary Standard

In a March 11 advisory opinion the Department of Health and Human Services’ Office of Inspector General (“OIG”) permitted a medical device manufacturer to pay Medicare-reimbursable costs for subjects enrolled in a clinical trial sponsored by the manufacturer and involving the manufacturer’s therapy.

The OIG indicated it would not impose administrative sanctions, despite the fact that the proposed arrangement would generate remuneration prohibited under the federal Anti-Kickback Statute (“AKS”) and the beneficiary inducement prohibition (“Beneficiary Inducement CMP”).

Arrangement addresses socioeconomic barriers for potential participants while maintaining study integrity

The therapy, which involves the injection of the subject’s bone marrow cells into the subject’s heart as a potential treatment for heart failure, is currently available for clinical use in the United States pursuant to an FDA-approved Category B Investigational Device Exemption (“IDE”).

Studies involving an IDE device qualify for Medicare coverage of the device and routine care services and items so long as the study is specifically approved by the Centers for Medicare and Medicaid Services (“CMS”). The study at issue here was approved for Medicare coverage and was required to meet a number of criteria for approval, including a determination that:

  • The principal purpose of the study is to test whether the device improves health outcomes of appropriately selected patients;
  • The rationale for the study is well supported by available scientific and medical information, or it is intended to clarify or establish the health outcomes of interventions already in common clinical use; and
  • The study results are not anticipated to unjustifiably duplicate existing knowledge.

Under the proposed arrangement, the manufacturer would directly pay an institution for the costs of the Medicare-reimbursable device and costs of routine care services and items that Medicare beneficiaries participating in the Study would otherwise owe. These costs per Medicare beneficiary (estimated as upwards of $1,300) were considered to be cost-prohibitive for many subjects due to their socioeconomic situations. As such, the proposed arrangement would ensure that Medicare beneficiaries participating in the study would incur no additional out-of-pocket expenses other than any unmet deductibles under Medicare Part B.

Additionally, the manufacturer represented that information regarding this proposed arrangement would not be shared with subjects until they received informed consent documents. This would preserve the study’s blinding procedures and ensure that subjects were unaware whether they were part of the study’s control group. This last aspect was a result of the manufacturer’s desire not to have providers collect cost-sharing amounts from control-group beneficiaries because the control group subjects do not have the potential to receive any therapeutic benefit during the study.

Arrangement qualifies as remuneration under AKS and Beneficiary Inducement CMP

OIG noted that the proposed arrangement involved remuneration that would directly implicate the federal AKS and the Beneficiary Inducement CMP.

AKS defines remuneration as “the transfer of anything of value, directly or indirectly, overtly or covertly, in cash or in kind”. Similarly, the Beneficiary Inducements CMP defines remuneration as “the transfer of items or services for free or for other than fair market value”. However, the Beneficiary Inducements CMP contains an exception to the term “remuneration” for waivers of coinsurance and deductible amounts by a person if: (i) the waiver is not offered as part of any advertisement or solicitation; (ii) the person does not routinely waive coinsurance or deductible amounts; and (iii) the person waives the coinsurance and deductible amounts after determining in good faith that the individual is in financial need or fails to collect coinsurance or deductible amounts after making reasonable collection efforts.

Here, OIG determined that the proposed arrangement implicated AKS as the remuneration offered could induce Medicare beneficiaries to participate in the study to receive reimbursable benefits, and such benefits could be from a particular practitioner, provider, or supplier. Additionally, the Beneficiary Inducements CMP was implicated because the proposed arrangement involved the opportunity for investigators and sites to bill Medicare for items and services related to the study and offered a guaranteed payment of beneficiary cost sharing, which, in some circumstances, an investigator or site may not be able to collect in full.

OIG determined proposed arrangement was reasonable and of minimal risk of fraud and abuse

OIG’s analysis determined that the proposed arrangement would present a sufficiently low risk of fraud and abuse and be unlikely to lead to overutilization of services and increased federal health care program costs for the following reasons:

  • The proposed arrangement appeared to be a reasonable means of promoting enrollment, particularly where a portion of participating beneficiaries would not have the potential to receive any therapeutic benefit during the study. The cost-sharing subsidies offered would help facilitate sufficient enrollment in the study that would otherwise be hindered due to a participant’s financial constraints. The cost-sharing subsidies would also encourage completion of the entire course of the study as required follow-up clinical visits would, absent the subsidy, require beneficiaries to pay. By removing this financial barrier, the study could achieve accurate results and reduced the likelihood that beneficiaries would not complete the study in its entirety.
  • The proposed arrangement would pose a low risk of overutilization or inappropriate utilization of items and services payable by Medicare. The proposed arrangement included various guardrails that mitigate the risk of inappropriate utilization or improper increased costs, and the manufacturer certified it would not advertise the availability of cost-sharing subsidies. Such guardrails included the fact that beneficiaries had to satisfy enrollment criteria set forth in the study and execute an informed consent agreement, investigators had to follow study protocol and were subject to IRB monitoring and the study’s enrollment being capped at 260 subjects. Moreover, CMS approval of the study meant that the study met criteria to ensure appropriate patient protections and that the study design was appropriate to answer questions of importance to the Medicare program and its beneficiaries.
  • The proposed arrangement was distinguishable from problematic seeding arrangements, such as those in which manufacturers initially offer subsidies to lock in future utilization of a reimbursable item or service. While beneficiaries participating in the study may continue to receive follow-up services related to the therapy, the manufacturer is in no position to benefit financially from these follow-up services. The manufacturer indicated that the therapy is intended to be a one-time treatment and that it did not anticipate future utilization of the therapy or its other products by Study participants.

Health Industry Washington Watch previously covered an advisory opinion issued by OIG on February 4, 2022 involving approval of a similar arrangement involving a testamentary gift to a nonprofit hospital to reduce costs for pediatric patients. Although OIG has permitted this proposed arrangement, there is no guarantee that similarly structured subsidizations of costs would be immune from administrative sanction. Nevertheless, the analysis of the arrangement outlined in this latest advisory opinion sheds some light on how similar future arrangements are likely to be reviewed and analyzed by the OIG.

Should you have any questions related to this advisory opinion, or any other health care compliance issues, please do not hesitate to reach out to the health care attorneys at Reed Smith.

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 arrangements to advance value-based care, consistent with the recent Anti-Kickback Statute (AKS) value-based safe harbor rules, as well as the U.S. Department of Health & Human Services, Office of Inspector General’s (OIG) November 2020 Special Fraud Alert on Speaker Programs. AdvaMed issued a revised Code, FAQs, and a standalone guidance document.

Key updates in the AdvaMed Code include guidance with respect to:

  • Providing alcohol at Company-conducted programs and meetings;
  • Virtual meetings and programs;
  • Interactions and arrangements with HCPs relating to value-based care (e.g., results-based, outcomes-based, or performance-based arrangements); and
  • Leveraging data and technology to provide innovative solutions and cost-effective care.

AdvaMed’s newest guidance follows shortly behind an August 2021 announcement by the Pharmaceutical Research and Manufacturers of America (PhRMA) – which represents the nation’s leading biopharmaceutical research companies – that it updated its Code on Interactions with Health Care Professionals, to address many of the same topics. The updated PhRMA Code took effect January 1, 2022.

Medical technology companies would be well-served to review the revised AdvaMed Code and guidance and consider adjustments to their current compliance operations in light of the updates.

Reed Smith is honored to serve as outside counsel to AdvaMed and we are pleased and available to provide additional information on and assistance with implementing the revised AdvaMed Code. Please reach out to the authors of this post or the Reed Smith attorneys with whom you regularly work for more information or guidance on these changes.

The House Energy and Commerce Committee seems poised to make substantial changes to the Food and Drug Administration’s (“FDA’s”) Accelerated Approval Program. The committee’s Democratic chairman, Frank Pallone, Jr. (D-NJ) and Republican ranking member, Cathy McMorris Rodgers (R-WA) have proposed competing bills that were featured prominently in the Health Subcommittee’s legislative hearing on March 17, 2022.

The Accelerated Approval Program was developed in 1982, largely in response to the HIV/AIDs epidemic, to expedite approval of novel drugs that treat serious conditions with unmet medical needs based on a surrogate endpoint.  Drugs that receive accelerated approval must undergo post-approval (Phase IV) studies to confirm the intended clinical benefit.  If the clinical testing does not demonstrate the intended clinical benefit, FDA has mechanisms to remove the drug from the market.

However, concerns have mounted regarding FDA’s ability to remove ineffective drugs from the market, and those concerns were punctuated during a February 3, 2022 Health Subcommittee hearing on the reauthorization of FDA User Fees. Dr. Patrizia Cavazzoni, the Director of the Center for Drug Evaluation and Research at the FDA testified that the program’s existing mechanism to withdraw accelerated approvals is cumbersome, resource intensive, and seldom used.

Continue Reading Competing bills propose amendments to FDA’s accelerated approval program

On February 23, 2022, a federal district court judge in Texas agreed with the Texas Medical Association that some provisions of the interim final rules implementing the No Surprises Act were promulgated in violation of the provisions of the Administrative Procedures Act (“APA”). As a remedy, the court ordered those provisions vacated and remanded the affected rules back to the federal agencies for further consideration.

In a memorandum issued February 28, the Centers for Medicare & Medicaid Services, one of the federal agencies that promulgated the rule (along with the Employee Benefits Security Administration and the Internal Revenue Service) indicated that it was still reviewing the court’s decision and considering next steps, which could include an appeal to the U.S. Court of Appeals for the Fifth Circuit. Additionally, CMS said that it was withdrawing any guidance documents based on the invalidated sections and will launch revised guidance and training for certified independent dispute resolution (“IDR”) entities and parties subject to the process. Those guidance documents will be edited to conform to the court’s decision and republished. Important to providers, CMS emphasized that the court’s order does not affect its other rulemaking related to the No Surprises Act. Continue Reading Portion of No Surprises Act IDR rule procedures set aside by federal district court

In its February 14, 2022 advisory opinion the Department of Health and Human Services Office of Inspector General (OIG) allowed a Home Health Agency (HHA), that predominantly serves Medicaid eligible children, to pay the nurse certification program tuition costs for new employees seeking to work as certified nurse aides (CNAs). According to OIG, the tuition payments are permissible under the bona fide employee safe harbor.

The Anti-Kickback statute prohibits a person from knowingly and willfully offering, soliciting or receiving any remuneration, directly or indirectly, overtly or covertly, in cash or in kind, in exchange for or to induce the referral of any item or services covered by a federal health care program. However, the statute includes exemptions for certain situations, one of which involves certain payments to bona fide employees.

In this case, the OIG stated that it would not seek enforcement under the federal Anti-Kickback Statute or the Beneficiary Inducements Civil Monetary Penalty Statute as the arrangement to pay the tuition costs would not be deemed prohibited remuneration under either law. However, the advisory opinion was warranted as the tuition program had the added wrinkle of potentially being a benefit to the relatives of medically fragile children using the HHA’s services and charging those services to Medicaid. Continue Reading OIG permits home health agency to pay nurse aide certification tuition costs

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

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.

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

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.

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

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.

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

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.

Continue Reading CMS health care staff vaccination rule enforceable as challenges continue UPDATED

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.

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.

Continue Reading Pending investigations/cases no longer prevent OIG advisory opinions

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.

Continue Reading Future of discount safe harbor for prescription drugs remains uncertain

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.

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

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.

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

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.

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

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 HHS-OIG approves uniform chiropractic discount program for federal beneficiaries

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.

Continue Reading FDA codifies requirements for the medical device De Novo classification process

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.