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Health Law Newsletter #2020-46

COVID CORNER

Stimulus Relief Funds: Strings Attached

Good FAQ and Cheat Sheet for CARE’s Act Provider Relief Funds, with upcoming reporting deadlines.

Office of the National Coordinator for Health IT Extends Compliance Deadlines under Interoperability Final Rule

In an effort to provide additional relief to a health care system strained by the COVID-19 pandemic, the Office of the National Coordinator for Health IT (“ONC”) released an Interim Final Rule with Comment Period (“IFC”) on October 29, 2020 that extends the compliance dates under the 21st Century Cures Act Interoperability, Information Blocking, and ONC Health IT Certification Program Final Rule (the “Final Rule”) and offers some technical corrections and clarifications.

CHOWs Continue to Puzzle Providers and HHS: Updated Provider Relief Funding FAQs Focus on Recent CHOWs

The updates reconfirm HHS’ position that a seller in an asset transaction may not transfer provider relief funding to the buyer. However, with respect to general distributions, where (1) an entity is acquired and merged with another entity or (2) a CHOW involves the purchase of stock or membership interest of a provider entity, then the entity resulting from the merger or the entity acquired, respectively, may use the funding. If providers are uncertain whether they may be eligible for additional funding, they should apply for Phase 3 by November 6, 2020.

PRIVACY & SECURITY

How does HIPAA affect medical devices?

There is no defined requirement for medical devices under HIPAA. Manufacturers need to study the compliance environment and create devices that help covered entities achieve compliance. Device manufacturers stand to lose by remaining noncompliant. PHI exposure often comes with investigations, loss of business, lawsuits and compensation to affected clients.

OCR Settles Tenth Investigation in HIPAA Right of Access Initiative

OCR received a complaint from a patient alleging that Riverside Psychiatric Medical Group (“RPMG”) failed to provide her a copy of her medical records despite multiple requests to RPMG beginning in February 2019. Shortly after receiving the complaint, OCR provided RPMG with technical assistance on how to comply with the HIPAA Right of Access requirements and closed the matter. In April 2019, however, OCR received a second complaint alleging that RPMG still had not provided the complainant with access to her medical records. RPMG has agreed to take corrective actions and pay $25,000 to settle a potential violation of the HIPAA Privacy Rule’s right of access standard.

Re-Setting the Clock for Responding to Individual Access Requests Under the Information Blocking Rule

HHS recently extended the date for compliance with the Information Blocking rule from November 2, 2020 to April 5, 2021, but covered entity health care providers may want to take steps now to account for the shortened response time for access requests that may meet the “infeasibility exception”. Reviewing and amending business associate agreements and HIPAA policies and procedures to incorporate faster turn-around times are good places to start.

DRUG & DEVICE

DEA Releases Long-Awaited Suspicious Orders Proposed Rule

There are four key regulatory changes being proposed by DEA: (1) new definitions, (2) expansion of the types of registrants required to report, (3) procedures for identifying and reporting suspicious orders, and (4) reporting and record-keeping requirements. Key to the proposed rule is the establishment of a “two-option framework” for registrants to deal with ORUSCs: namely, they could (1) decline to ship the ORUSC and immediately file a suspicious order report to DEA’s centralized database, or (2) conduct due diligence into the ORUSC and make a determination about the order’s validity within seven calendar days, among other requirements.

ANTITRUST

“Historic” Settlement of Blue Cross Blue Shield Association Antitrust Action May Significantly Boost Competition in Health Insurance Markets in 2021

After over 8 years of hard-fought litigation, the Blue Cross and Blue Shield Association, together with its 36 Blue Cross/Blue Shield members (“the Blues”), recently announced a proposed settlement of class action antitrust litigation (In re Blue Cross Blue Shield Antitrust Litigation) brought against them by a nationwide class of subscriber members. The settlement terms include both the payment of substantial monies to the plaintiff class ($2.67 billion) and significant agreed-to changes to the way in which the Blues operate.

The Price Transparency Rule Goes Into Effect January 1, 2021 – Is Your Hospital Ready?

Effective on January 1, 2021, the Price Transparency Rule (the “Rule”) requires all hospitals operating within the United States to make public a list of their standard charges for items and services via the Internet in a machine-readable format. Hospitals must also provide prices for a list of 300 shoppable services that must be made publicly available in a searchable, consumer-friendly format. This requirement is being enforced with the intent to enable healthcare consumers to make more informed decisions based on cost, increase market competition, and ultimately drive down the cost of healthcare services, making them more affordable for all patients. Many hospitals are spending time now to determine which “items and services” require price disclosure under the Rule, and some have found that the Rule does not provide sufficient guidance in all situations.

FRAUD & ABUSE

Former Texas Hospital Settles Fraud Case over $170 Million Loan

Recently, a former Texas hospital (the “Hospital”) settled a multi-million dollar False Claims Act civil lawsuit involving the acquisition and use of funds from the largest Federal Housing Administration-backed mortgage for a for-profit hospital. The case involved civil False Claims Act allegations brought by the United States over the misuse of proceeds from a loan backed by the U.S. Department of Housing and Urban Development’s (“HUD”) Federal Housing Administration (“FHA”). The Hospital settled for $13.6 million and three top executives of the hospital, along with the development company, will collectively pay $1.8 million to resolve the false claims allegations for the development of the project. An additional settlement was reached with the Hospital for $1.1 million to resolve allegations of false claims submitted to Medicare and Medicaid programs.

Texas man sentenced to prison for scheme to fraudulently bill health insurance of local residents

A Texas man has been sentenced to 51 months in federal prison for organizing a scheme that paid workers to solicit elderly and low-income residents for information used to fraudulently bill government medical programs. He would pay individuals $150 per patient to take DNA swabs from local low-income and elderly residents, which he would use to submit claims for fraudulent diagnostic tests.

Show me the money, and I’ll show you whom the government is watching

A lesser known but potentially more troublesome means of enforcement authority is the EKRA of 2018. EKRA was principally enacted to combat abuses arising from the opioid epidemic. However, due to its broad statutory language, EKRA may have a much wider reach than initially anticipated.

OPINION

And the Winner of the 2020 Election Is…Marijuana!

While state governments will now be tasked with establishing the various regulatory frameworks needed to implement these new adult use and medicinal marijuana programs, it is undisputed that proponents of legalized marijuana had a very big Election Day and with these new ballot measures, adult use cannabis is now legal in 15 states (and the District of Columbia) and medicinal use of cannabis is legal in 35 states (and D.C.).

Is the ACA’s Viability at Risk? Thoughts in Anticipation of the California v. Texas Supreme Court Argument

On November 10, right after the election, the US Supreme Court will hear arguments in California v. Texas, S. Ct. Nos. 19-840 & 19-1019. Those consolidated cases largely turn on two things: (1) the constitutionality of the individual mandate now that Congress has zeroed out the penalty for violating the mandate, and (2) the centrality of that penalty-less mandate to the rest of the ACA’s provisions. These and other issues presented in the case could result in little or no change to the ACA and its framework—or the complete invalidation of the statute

By Wade Emmert

Wade Emmert is a board certified health law attorney with more than 25 years of experience. He is a partner in the Dallas law firm of Carrington, Coleman, Sloman & Blumenthal, L.L.P. Please contact Wade at (214) 855-3040 or at wemmert@ccsb.com.