Category: Health Law Highlights

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Health Law Highlights

Accelerated Approval Process Is Not Without Risk: Placing Recent FDA Action in Context

Summary of article from Troutman Pepper, by Kyle Dolinsky, Judith O’Grady:

The FDA withdrew approval for Pepaxto, a multiple myeloma drug, after post-marketing studies failed to confirm its clinical benefit. The drug had been granted accelerated approval, a pathway for drugs treating serious illnesses that offer therapeutic benefits over existing treatments. However, post-marketing studies are required to verify the drug’s benefit, and failure to do so can result in withdrawal of approval. This was the first time the FDA implemented formalized withdrawal procedures under the Food and Drug Omnibus Report Act of 2022. Despite the withdrawal, the risk of litigation concerning accelerated approval drugs remains unchanged.

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Health Law Highlights

Using A Value-Based Enterprise to Integrate Specialists and Primary Care: Taking Value-Based Care to the Next Level

Summary of article from Nelson Mullins Riley & Scarborough LLP, by Mike Segal, Edward White:

Within the value-based healthcare model, the majority of medical expenses come from specialist sectors operating under traditional fee-for-service payment models. A potential solution to this challenge could be the implementation of a Value-Based Enterprise (VBE) that promotes mutually beneficial contractual relationships between primary care providers and specialists in a low-risk regulatory environment. Thanks to new regulations under the Stark Law and Anti-Kickback Statute, a VBE can act as an “Innovation Center,” allowing healthcare professionals to develop their own initiatives aimed at providing high quality, cost-efficient care. It is proposed that Primary Care Provider (PCP) Risk Arrangements embrace patient attribution, apply for capitation payment arrangements, contract with high-quality specialists, and pay these specialists under a value-based framework. This system can help control total care costs and improve patient outcomes.

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Health Law Highlights

Concurrent Call Coverage: Key Considerations for a Compliant Structure

Summary of article from VMG Health, by Holden Godat, CVA, Taylor Harville, Trent Fritzsche:

Concurrent call coverage, where a physician provides on-call services to multiple locations or specialties simultaneously, is increasingly being adopted due to a significant shortage of physicians and the growing demand for healthcare services. This approach aims to distribute work evenly and assure sufficient patient care. However, it brings about challenges in setting fair market value physician compensation, which needs to consider factors such as the burden of call, required specialty, physician availability, and sources of compensation. Each of these factors requires careful consideration to avoid overpayment and ensure regulatory compliance. Given the complexity and increased regulatory scrutiny, it is recommended to obtain third-party fair market value guidance for structuring compliant concurrent call coverage arrangements.

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Health Law Highlights

D.C. Circuit Holds 340B Program Does Not Prohibit Drug Manufacturers from Imposing Contract Pharmacy Restrictions

Summary of article from Foley Hoag LLP, by Patrick Brennan, Andrew London, Ross Margulies, Kian Azimpoor:

On May 21, 2024, the U.S. Court of Appeals for the District of Columbia Circuit affirmed a lower court’s decision in United Therapeutics Corporation v. Carole Johnson and Novartis Pharmaceuticals v. Carole Johnson, rejecting the government’s position that the 340B statute prohibits drug manufacturers from imposing contractual conditions on drug distribution. The court upheld that the manufacturers’ conditions imposed on contract pharmacies did not violate the 340B statute, but noted that some restrictions might. This follows a similar decision by the Third Circuit in Sanofi Aventis U.S. LLC v. HHS. There is still an ongoing case in the Seventh Circuit that could influence whether the case goes to the Supreme Court or if the Health Resources and Services Administration (HRSA) reconsiders its contract pharmacy policy. This decision is a significant win for drug manufacturers, but its immediate impact on the Section 340B program remains uncertain pending other appellate court rulings and potential Supreme Court review.

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Health Law Highlights

How State-Level Psychedelic Medicine Legislation Raises Equity Concerns

Summary of article from Healthcare Brew, by Maia Anderson:

The FDA is likely to decide on the approval of an MDMA-based psychedelic medicine this year, with multiple states considering legalization for therapeutic use. However, there is concern about equitable access to these treatments. Psilocybin, MDMA, and a form of LSD have been granted breakthrough therapy status by the FDA, allowing for clinical trials for potential therapeutic uses. States are taking varied approaches to legislation, with some legalizing or decriminalizing psychedelics and others allowing research. There are concerns about the high cost of these therapies and their accessibility, particularly for people of color, with initiatives ongoing to educate clinicians and develop non-hallucinogenic variants to increase accessibility.

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Health Law Highlights

Louisiana Lawmakers Pass Bill Making Abortion Pills Controlled Dangerous Substances

Summary of article from AP News, by Sara Cline:

Louisiana is set to reclassify abortion-inducing drugs, mifepristone and misoprostol, as controlled and dangerous substances under a new bill that has received final legislative approval. Supporters of the bill argue it will protect women from coerced abortions, while critics, including numerous doctors, fear it will hamper their ability to prescribe these medicines for other reproductive health needs. The bill would place these drugs on the list of Schedule IV drugs under the state’s Uniform Controlled Dangerous Substances Law, requiring doctors to have a specific license to prescribe them and the drugs to be stored in certain facilities. Critics warn this could create barriers to treatment and cause unnecessary fear and confusion. The bill now awaits the signature of the conservative Republican Governor Jeff Landry, who has indicated his support.

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Health Law Highlights

Ransomware Attack on Texas Ophthalmology Practice Exposes Data of 80,000 Patients

Summary of article from The HIPAA Journal, by Steve Adler:

A Texas-based ophthalmology practice, encompassing Victoria Surgery Center, Victoria Eye Center, and Victoria Vision Center, was hit by a ransomware attack on March 21, 2024, compromising the personal and health data of 80,122 patients. The attack encrypted files, making certain systems inaccessible, and an investigation confirmed unauthorized access to patient data. Names, addresses, and medical identification details were among the compromised information. Affected individuals have been notified and offered a year of credit monitoring and identity theft protection services. In another incident, Texas Panhandle Centers, a Certified Community Behavioral Health Clinic, disclosed an unauthorized access to its systems in October 2023, potentially exposing the data of 16,394 patients.

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Health Law Highlights

Is Your Texas Data Protection Assessment Started?

Summary of article from Data Protection Report, by By David Kessler, Annmarie Giblin, Joe McClendon, Susan Ross:

The Texas Data Privacy and Security Act (TDPSA), effective from July 1, 2024, applies to companies conducting business in Texas, processing personal data, and not classified as small businesses. Unlike other state laws, TDPSA requires companies to provide an opt-out option for automated profiling that could significantly impact consumers, such as employment opportunities. The Act mandates “controllers” to conduct a data protection assessment for specific uses of personal data, including sensitive data and profiling activities that pose a risk to consumers. The assessment, which must be available to the Texas Attorney General upon request, should balance benefits against potential risks to consumer rights. Only the Attorney General can enforce the TDPSA, and violations can result in civil penalties up to $7,500 per violation.

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Health Law Highlights

HHS Agency Launches Program to Improve Cyber Resiliency in Hospitals

Summary of article from The HIPAA Journal, by Steve Adler:

The Advanced Research Projects Agency for Health (ARPA-H), a Department of Health and Human Services (HHS) agency, has initiated a cybersecurity program aimed at enhancing and automating cybersecurity in U.S. hospitals. The program, called Universal PatchinG and Remediation for Autonomous DEfense (UPGRADE), will invest over $50 million to develop software tools to bolster network defenses against cyberattacks. The software will help identify and mitigate vulnerabilities in hospital systems, intending to reduce the time devices remain vulnerable from several months to a few days. ARPA-H is seeking proposals for the creation of a vulnerability mitigation platform, development of digital twins of hospital equipment, and methods for auto-detecting vulnerabilities and auto-developing defenses. The UPGRADE program is part of HHS’s broader strategy to improve cyber resilience across the healthcare sector.

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Health Law Highlights

Twin Brothers Plead Guilty to $45 Million Healthcare Fraud

Summary of article from D Magazine, by Will Maddox:

Drs. Desi and Deno Barroga have admitted to a healthcare fraud scheme involving false claims for steroid injections that were never provided, defrauding insurers including Blue Cross Blue Shield, Cigna, and United Healthcare. The scheme involved monthly office visits for patients on addictive drugs, where they fraudulently claimed to perform costly treatments. Manipulated medical records and coerced patient statements were used to validate the fraudulent claims, leading to the doctors billing insurance for $45 million and receiving $9 million. Both doctors have a history of disciplinary actions from the Texas Medical Board related to improper prescribing and inadequate record-keeping. The brothers now face a maximum of 10 years in federal prison.