Author: WadeEmmert

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Health Law Highlights

False Claims Act Settlements to Know from Q2 2024

Summary of article from Bass, Berry & Sims PLC, by Latazia Carter, Scott Gallisdorfer:

In Q2 2024, the Department of Justice announced significant False Claims Act settlements, highlighting ongoing enforcement in areas such as unlawful kickbacks, improper billing, and subcontracting violations. Notable settlements included a $27.9 million agreement with a laboratory owner for fraudulent cancer genomic tests and a $12 million settlement with Innovasis Inc. for paying kickbacks to spine surgeons. Cape Cod Hospital and a chronic disease management provider, facing Medicare billing violations, each entered into Corporate Integrity Agreements (CIAs) and paid $24.3 million and $14.9 million, respectively. Additionally, CityMD resolved COVID-19 testing fraud allegations with a $12 million settlement, and Sikorsky Services Inc. and Derco Aerospace Inc. paid $70 million for unlawful subcontracting practices in Navy procurement. These cases underscore the importance of compliance for entities engaged in government contracts and healthcare services.

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Health Law Highlights

OCR Settles Alleged HIPAA Violations for $950,000 Following 2017 Ransomware Attack

Summary of article from King & Spalding, by Elizabeth Kimball Key:

On July 1, 2024, the HHS Office of Civil Rights (OCR) announced that Heritage Valley Health System agreed to pay $950,000 to settle alleged HIPAA violations following a 2017 ransomware attack. The settlement includes a corrective action plan (CAP) to address compliance gaps, marking the third HIPAA enforcement action involving ransomware. The OCR’s investigation revealed several potential HIPAA violations, including inadequate risk analysis, lack of a contingency plan, and insufficient access controls for electronic protected health information (ePHI). As part of the CAP, Heritage Valley will conduct a comprehensive risk analysis, implement a risk management plan, update its policies and procedures, and train its workforce on HIPAA compliance. OCR highlighted a significant increase in ransomware-related breaches, underscoring its enforcement priority.

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Health Law Highlights

CMS’ First No Surprises Audit Targets Aetna, Finds Some Noncompliance

Summary of article from Healthcare Dive, by Rebecca Pifer:

The CMS’ first audit under the No Surprises Act found Aetna in Texas noncompliant with several key requirements, particularly in its calculation of qualifying payment amounts (QPAs) for air ambulance services. Aetna used incorrect methodologies, leading to both overestimations and underestimations of QPAs, and failed to provide necessary disclosures to providers. This lack of compliance could hinder the arbitration process, already burdened with backlogs. Aetna has since corrected its practices and must self-audit QPA calculations from 2022 onwards. The audit highlights ongoing disputes over QPA methodologies, which have led to legal challenges and delays in the arbitration process.

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Health Law Highlights

Addressing Patient Transportation Needs

Summary of article from Dentons, by Susan Freed:

A significant barrier to accessing healthcare services is the lack of transportation, with one in five patients forgoing needed care due to this issue, particularly in rural areas lacking public transport and ride-share options. Hospitals are increasingly offering free transportation to ensure patients, especially the most vulnerable, do not miss critical services. However, these programs must comply with the Anti-Kickback Statute and the Civil Monetary Penalty Law. This article references a podcast that explores these compliance issues and provides guidance on structuring compliant transportation programs, along with a sample transportation policy.

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Health Law Highlights

OIG Issues Favorable Advisory Opinion Involving Financial Risk Mitigation Arrangements for High-Cost Rare Disease Drug

Summary of article from Arnall Golden Gregory LLP, by David Blank:

On June 20, 2024, the U.S. Department of Health and Human Services Office of Inspector General (OIG) issued Advisory Opinion 24-04, favorably evaluating a refund and discount program for a high-cost regenerative therapy for a rare pediatric immunodeficiency disorder. The program, initiated by an international pharmaceutical manufacturer, aims to mitigate financial risks for treatment centers by offering refunds or discounts if insurers reverse coverage decisions or if the drug’s wholesale acquisition cost (WAC) increases. The OIG concluded that the program’s fraud and abuse risks are low due to its narrow scope, lack of therapeutic alternatives, and transparency measures, thus not violating the Anti-Kickback Statute or Beneficiary Inducement CMP. The discount program also meets safe harbor criteria, protecting it from AKS prosecution. This opinion provides a framework for similar programs, emphasizing the need for robust safeguards and compliance with regulatory requirements.

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Health Law Highlights

FTC to Sue Drug Middlemen Over Insulin Prices, Source Says

Summary of article from Reuters, by Jody Godoy, Mariam E Sunny:

The U.S. Federal Trade Commission (FTC) plans to sue UnitedHealth, Cigna, and CVS Health over their roles as pharmacy benefit managers (PBMs) in negotiating drug prices, including insulin, due to concerns about rebates and pricing practices. CVS has vowed to defend itself, while UnitedHealth and Cigna have not commented. The FTC is also scrutinizing insulin manufacturers Sanofi, Novo Nordisk, and Eli Lilly. This legal action follows President Biden’s Inflation Reduction Act, which capped insulin prices for Medicare recipients but not for those with private insurance or uninsured. An FTC report indicates that these PBMs, controlling 79% of U.S. prescription drug claims, have leveraged their position to benefit financially at the expense of smaller pharmacies and consumers.

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Health Law Highlights

Fourth Circuit Broadens TCPA’s Reach Over ‘Unsolicited Advertisements’

Summary of article from Faegre Drinker Biddle & Reath LLP, by Bridgette Lehman, William Wright:

The Fourth Circuit Court of Appeals has broadened the interpretation of “unsolicited advertisements” under the TCPA in the case of Family Health Physical Medicine, LLC v. Pulse8, LLC. The court reversed a lower court’s dismissal, ruling that a fax inviting recipients to a free webinar could be considered an advertisement, even without explicitly offering goods or services for sale. This decision, which contrasts with narrower interpretations from other circuits, allows for “implicit marketing” and considers the potential for future promotional contact. As a result, businesses face increased liability and may need to reassess their fax communication strategies to mitigate TCPA risks. The ruling’s implications could influence TCPA litigation strategies beyond the Fourth Circuit.

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Health Law Highlights

FTC Rule Addressing Noncompete Covenants: Impact of Senior Executive Exception on Health Care Entities

Summary of article from ArentFox Schiff, by Douglas a. Grimm, Moyosore O. Koya:

The new Rule, effective September 4, introduces potential confusion and regulatory risks for health care providers, especially concerning noncompete covenants for senior executives. Defined as individuals earning at least $151,164 annually and holding policy-making positions, the implementation of this Rule is complicated by legal challenges and ambiguities around what constitutes policy-making authority. For multi-provider systems, determining whether C-suite members or subsidiary leaders qualify as senior executives is particularly complex. Health care organizations must carefully review job descriptions and responsibilities to ensure compliance and consider executing or renewing noncompete agreements before the Rule’s effective date. Continuous monitoring and analysis by legal experts are advised to navigate these changes effectively.

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Health Law Highlights

Chevron’s End Means Uncertainty and Opportunity for the Healthcare Industry

Summary of article from Schwabe, Williamson & Wyatt PC, by Gary Bruce, Jon French:

The U.S. Supreme Court’s decision in Loper Bright Enterprises v. Raimondo, which overruled the Chevron Doctrine, will significantly affect the healthcare industry by allowing courts to independently interpret statutory ambiguities rather than deferring to administrative agencies. This shift is expected to increase legal challenges to federal health agencies’ regulations and actions, leading to greater unpredictability and slower rulemaking processes. Healthcare providers may face more litigation, particularly concerning reimbursement rates and enforcement of fraud, abuse, and privacy laws. Consequently, healthcare organizations should anticipate ongoing disruption, stay informed on legal developments, and be prepared to adjust their policies and procedures swiftly.

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Health Law Highlights

Chevron Runs Out of Gas: The Bumpy Road Ahead for Health Regulations After Loper Bright

Summary of article from Akin Gump Strauss Hauer & Feld LLP, by Anna Abram, Sudhana Bajracharya, Jenna Becker, Craig Bleifer, Nathan Brown, Kelly Cleary:

The Supreme Court’s decision in Loper Bright Enterprises v. Raimondo overturns the Chevron doctrine, which previously allowed federal agencies to interpret ambiguous statutes with judicial deference. This change raises the bar for agencies like CMS and FDA, requiring them to provide the “best reading” of statutory gaps rather than a “permissible” one. The ruling will significantly impact lower courts, which have continued to apply Chevron, and could lead to increased litigation challenging longstanding regulations. Additionally, the Corner Post decision extends the timeframe for challenging agency regulations under the APA, further exposing agencies to potential lawsuits. These developments will necessitate more precise statutory language from Congress and could constrain agency policy changes across administrations.